Understated Luxury--The Lalu Hotel at Sun Moon Lake

Lai Cheng-i, who started his career in the travel industry in 1975, already had a head for business at a very early age. When he was 17 he converted his family's traditional courtyard home in Tsaoling into the Caoling Lodge, studying and founding a business at the same time. He also vied with the China Youth Corps and by 1980 had invested in the real estate business with the creation of the Shining Group.

A piece of history-the Lalu Hotel was once Chiang Kai-shek's country villa.

Competing with the CYC

Lai Cheng-i points out that in the mid-1990s when Taiwan's per-capita national income reached US$12,000, he knew the domestic tourist market would slowly develop toward a high cost model and that the law of supply and demand had set in.

Taiwan is an island nation, the Central Mountain Range is beautiful, and Lai Cheng-i conceived the idea that building a really first class hotel on Taiwan's best real estate required three things: first, it must have world-class scenery; second, even if it rained, weather should not have an adverse effect; and third, he hoped that it could be situated in the middle of the country and thus convenient for those coming from the north or the south. In 1997 the nationally owned Chiang Kai-shek presidential villa was opened for private purchase. On the recommendation of his company accountant, Lai Cheng-i immediately bought the property and finally achieved his dream of many years.

Following the Chi-chi earthquake of September 21, 1999 Lai Cheng-i fearlessly forged ahead with a decision to invest a huge sum of money to rebuild in the disaster area. He made changes from top to bottom to the old villa, searching out world-class architects to submit designs and inviting sister companies General Hotel Management and Amanresorts International, both of Singapore, to manage the hotel.

Today, two and a half years after the opening, the cost of a one-night stay has risen from NT$12,000 to NT$13,800. The deputy general manager of Shining, Ying Chih-te, at first worried that Taiwan consumers would not accept these high prices, but the facts have proved that a strategy of high price combined with top quality gives results. The current rate of returning guests is between 30% and 40%.

If Taiwan wanted to prove that it can rise from the ashes after the 9-21 earthquake, Sun Moon Lake would be apt testimony. Pictured here is the swimming pool of the Lalu Hotel, its waters merging visually with those of the lake.

Shuili pottery

Lai Cheng-i admits he has been greatly influenced by tourist hotels on the island of Bali as far as the character of his own hotel is concerned. Once while on vacation to Bali he saw the Amanusa hotel owned by Amanresorts International and fell in love with it. After he bought the Lalu he thought he would build a hotel just like it. Unexpectedly when he contacted the architect, Australian Kerry Hill, and explained to him why he wanted him to come, Hill refused him outright, saying he couldn't make a copy of his own work. Hill also said that Bali wasn't Sun Moon Lake. The climate, the scenery, the people and culture of the two places were all different. He would have to do a design from the ground up, and so the Lalu Hotel, specifically "made to order" for Sun Moon Lake, came into being.

Wandering through the Lalu Hotel it is not difficult to discover that the whole building is constructed of natural materials, like wood, glass, stone and iron. People who come here for the first time are enveloped by the peace and quiet of this beautiful scenic spot and get a sense of harmony and tranquility, as if the building had "grown" out of the mountain lake.

So that it completely blends in with nature, the Lalu Hotel has an interior where you won't see any decorations or furnishings that sparkle or glitter. To harmonize with the unique local culture, all the pottery, all the bowls and cups, are produced in the Snake Kiln of Shuili Township, Nantou County. There's no telling how many pieces of pottery were broken before successfully producing the avocado green pieces tinged with deep brown that radiate a deeply Zen feeling. Aside from assiduous attention to management, the Lalu Hotel also spends substantial sums aggressively advertising its brand name. The promotion budget for one year is more than NT$10 million.

"The Lalu Hotel takes in as much revenue with one guest as other five-star hotels do with three." How is this? In the early planning, the hotel figured on having 400 rooms, but later the figure dropped to the current 90-odd, breaking through the notion that numbers are all-important and instead leisurely taking profit on the basis of providing quality space.

"A hotel does not sell food, rooms, facilities or scenery, it sells atmosphere, it sells feeling, it sells the guest a unique experience every minute, every second," says Ying Chih-te.

Countless pottery vessels were discarded before these pieces were made. Shown here are the Lalu Hotel's pride and joy-dark chocolate and autumn colored pottery that simply exude a Zen aesthetic.

Coordinating with Formosa Star

Recently the Formosa Star tour has sold like hotcakes and has become a hard-to-find item, and because of the Lalu's reputation many people are willing to spend a lot of money to do a Taiwan island tour on the train. Lai Cheng-i says graciously that Formosa Star is a part of national policy and he is happy to cooperate, but because the program buys at group rates, prices are depressed and this influences profits. As a result, the Lalu splits a standard room (900 square feet) in half for a unit price of NT$7,700 for each of two small suites. But each suite does have its own separate balcony and bathroom.

But he can offer at most only 40 such suites at a time. When a Formosa Star tour is fully booked and there are not enough small rooms, a small number of lucky guests are able to move into the big 900 square-foot suites, which inevitably leads to resentment among the other guests. And Formosa Star advertises that there are no extra costs during the entire tour, so that when guests arrive at the Lalu most of them are not willing to spend any money on leisure facilities like the hotel spa. This represents a big loss for the hotel.

Despite this, the Lalu has been a solid ally of Formosa Star and its biggest selling point. Lai Cheng-i also feels he has a personal responsibility to improve the Taiwan tourist market. Now, as part of its plan to double tourist arrivals by 2008, the government is investing from NT$600 to NT$800 million a year to maintain Sun Moon Lake, with resources spurring on quality. In three to five years, however, this might all change.

Some travelers say that staying at the Lalu Hotel is more than worth the NT$25,000 price tag of a 3-night/4-day trip on the Formosa Star.

Taiwan stands up

The Chi-chi earthquake in 1999 caused great damage in central Taiwan but Shining in the end decided to build the Lalu "because we knew this area would recover," says Ying Chih-te.

Ying felt strongly that the disaster area should be rebuilt. If Taiwan was going to prove it could rise from the ashes, then Sun Moon Lake would be the best example because it had the most international recognition and had hosted the most international visitors.

The Lalu is planning for a yearly figure of more than 30,000 guests. Lai Cheng-i says that before the 2003 SARS epidemic, 25% of the Lalu's guests were from overseas. This year he estimates that figure could top 35% and in the next two years it could reach 60%.

As a result of the Lalu's success, Lai Cheng-i has set himself a new goal. Along the Hualien ocean front he plans to put up hundreds of vacation cottages and another group of international class hotels. We hope Lai Cheng-i's dream will once more become a driving force behind the development of Taiwan tourism.

Lai Cheng-I's next goal is the seashore near Hualien, where he is planning another world-class resort with over 100 leisure cottages.

The Lalu Hotel was constructed of all-natural building materials, including wood, glass, stone, and iron.

Taiwan has more than its share of the wealthy and discerning. Lai Cheng-i believes that if you make a name for yourself, customers will come.

The Lalu Hotel has infused new vitality into Taiwan's hotel industry with its successful selling of atmosphere and experience to its clientele.