Kao San Baan Shang 2018 v.1 Kao San Baan Shang 18 | Page 2

Note from GM Dear Colleagues, Half of the year has gone already and I encourage all of you to reflect on what we have achieved so far and where we stand with our Key Performance Indicators (KPIs). The very strong performance from the first quarter was unfortunately shadowed by the poor business in the second quarter. It appears to be an overall trend amongst all five star hotels in Chiang Mai, which tend to be preferred for lower category (and cheaper) properties. It is therefore essential, more than ever, to be aware of these dynamics and adapt our business models accordingly. This is not the time to protect our prices, but we ought to protect our margins. The budget for the second half of the year looks very challenging and we all have a responsibility to make it. Challenge the way you have been operating and explore any uncovered stone to generate business. Many changes are occurring in our head office, with new processes being implemented. I want to mention here our new mobile app, launched on 21 January, and the importance to drive as many downloads as possible via our QR code. You are as well all aware about the strategic role played by our unique Golden Circle loyalty program, whose enrollments, activation and points redemptions have to be our daily bread and butter. TrustYou is another word which has entered recently our daily vocabulary, and which tells us how well we are doing with our guests. The measuring approach has shifted from a quantitative analysis to a qualitative perspective, where the emotional intelligence (ie: guest’s sentiment) is calculated against all reviews talking about us. The benchmarks have changed and the platform got bigger. We are still falling short, far too often, with basics, although we have reached that maturity to go beyond a process-driven organization and focus on engagement. I therefore urge all of you to question the scope of your respective roles and consistently embrace our four Shang Care pillars. We are a great team, working with passion and dedication, with seasoned managers, and I don’t see why we should not outpace our competitors in terms of quality performance. It is all about being disciplined and focused. Thank you for your great contribution for the first semester and I look forward to an even better second one. Sincerely Yours,