It all started with a hotel bathroom, says Steven Pan, chairman of Taiwan-based Formosa International Hotels Corp., which paid US$56 million in April to buy the international Regent luxury hotel chain. "The Regent realized that the bathrooms, not the bedrooms, were where guests spent the majority of their time. So they expanded its size to almost one-third the size of the room," says Mr. Pan. This level of understanding customer needs is what's "going to make the next breakthrough in the hotel industry." Regent—acquired from Carlson Hospitality Group of the U.S. and Brussels-based Rezidor Hotel Group—comprises seven hotels from Beijing to Berlin. Formosa previously operated just one hotel, the Grand Formosa Regent in Taipei.

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