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SHANGRI LA conquers the world - an exclusive interview with CEO Greg Dogan
Analysis 10 June 2010
BUSINESS OF LUXURY has recently interviewed Mr Greg Dogan, President and CEO of SHANGRI LA Hotels. He speaks about the secret behind the success of the brand, the new advertising campaign and the future expansion plans.
What is the secret behind the leading position of Shangri La on the worlwide luxury hospitality market? Can we say there is a ‘’Shangri La DNA’’?
Yes, you could call it our DNA since it is really the core value that the company was founded on. The 'secret' behind Shangri-La's success is its special kind of hospitality of treating guests like family. This is based on our underlying belief of mutual respect and genuine care which is being demonstrated day after day in all our hotels and resorts.
Part of the success of the Shangri La hotels chain has been the choice of key properties in the most diversified markets. What are the key characterists which Shangri La is seeking in such a property?
When looking at a new market there are obviously a number of criteria that play into the selection process. The company has a very strong development arm that will first look at the overall picture, market conditions, potential for growth and of course the proposed site itself to see if a certain location/destination will fit into the overall portfolio. All Shangri-La branded hotels need to abide by strict guidelines that ensure that the brand is consistent, however, the local culture and aspects are always respected and incorporated to a largest possible extent.
Shangri La has been known as a luxury hotel management company ? To which extent Shangri La considers investing in future properties?
Shangri-La currently has over 40 projects in development in Austria, Canada, mainland China, France, India, Macau, Malaysia, Philippines, Russia, Quatar, Seychelles, Turkey and UK. Most of those projects are owned rather than managed. And we continue to look at new opportunities.
How has the relationship with owners changed in the past three years, given the context of the financial crisis? Shangri-La is one of the few hotel companies that actually owns most of its properties. The company is selective in signing managment contracts as the business philosophy and values of the owners has to match Shangri-La's own before a deal can be struck. Consequently there is a very strong link, trust and support between managmenet and ownership. Your expansion in Europe is gaining pace with Vienna and Paris opening this year. Which do you think will be the key competitive advantages of Shangri La hotels in Europe versus other long established luxury chains in Europe such as Four Seasons. Both Vienna and Paris are projects that are steeped in the history of their respective cities. Shangri-La respects and builds on that particular background and we believe that combined with our style of Asian Hopsitality we can offer a unique product that so far has not existed in Europe. While we will be newcomers in Europe, we believe that the brand has been well established over the years in Asia and earned the trust of travellers wordwide. Many international luxury hotel chains have been focusing their expansion plans on Asia. Shangri La is already a leader in this region. How will you counter competition? Yes, Shangri-La has been the leader in this region for quite some time and while other brands are just starting out in primary destinations (both business and leisure) Shangri-La is already looking at secondary and tertiary cities which will no doubt develop in the near future. With our strong network of locations across Asia we are well positioned within Asia and specifically China to anticipate the arrival of competitors. Which hotel chain would you consider as your direct competitor for your locations in the major capital cities worldwide? Different cities, different brands, different products - all those play into what constitutes our competition. Overall we can probably say that we compete with Westin, Grand Hyatt, Four Seasons, Mandarin Oriental - but again all depending on specific destinations. There have been many reports of luxury hotel chains cutting costs and compromising on their products and services. Have you considered measures such as being more flexible in the criteria for selecting a new property? Quite the contrary: throughout the financial crisis Shangri-La continued to invest in new projects, upgrading existing properties right along with the owners of some of its managed properties. What do you think about sustainability as part of the strategy of any top luxury days nowadays and on the long run? Sustainability has become part of doing business and a fact of life that we all have to tackle on a day to day basis. At Shangri-La we have strong conservation and sustainability programs in place that involve the community the hotels are based in. Shangri-La has a dedicated CSR officer reporting directly to the top level management to streamline and implement any new programs, guidelines etc. quickly In some of our hotels we have gone a step further and actually build around the sustainability aspect, i.e. the marine habitat at SL Mactan (Cebu) or the OrangUtan project at SL Rasa Ria in Malaysia Your company has recently unvelived an impressive advertising campaign. How is it received internationally ? Brilliantly. We believe that the positive reception demonstrates that the campaign resonates with what the company stands for and what people have experienced when they stay with SL. South America is the region with the lowest penetration of luxury branded hotel chains. What are your plans for this region? While we haven't actively looked at new projects in that market we are certainly aware that there is huge growth potential both in and outbound from South America. We just recently hired a GSA for Brazil and certainly will explore opportunities if and when they present themselves.
How has the relationship with owners changed in the past three years, given the context of the financial crisis? Shangri-La is one of the few hotel companies that actually owns most of its properties. The company is selective in signing managment contracts as the business philosophy and values of the owners has to match Shangri-La's own before a deal can be struck. Consequently there is a very strong link, trust and support between managmenet and ownership. Your expansion in Europe is gaining pace with Vienna and Paris opening this year. Which do you think will be the key competitive advantages of Shangri La hotels in Europe versus other long established luxury chains in Europe such as Four Seasons. Both Vienna and Paris are projects that are steeped in the history of their respective cities. Shangri-La respects and builds on that particular background and we believe that combined with our style of Asian Hopsitality we can offer a unique product that so far has not existed in Europe. While we will be newcomers in Europe, we believe that the brand has been well established over the years in Asia and earned the trust of travellers wordwide. Many international luxury hotel chains have been focusing their expansion plans on Asia. Shangri La is already a leader in this region. How will you counter competition? Yes, Shangri-La has been the leader in this region for quite some time and while other brands are just starting out in primary destinations (both business and leisure) Shangri-La is already looking at secondary and tertiary cities which will no doubt develop in the near future. With our strong network of locations across Asia we are well positioned within Asia and specifically China to anticipate the arrival of competitors. Which hotel chain would you consider as your direct competitor for your locations in the major capital cities worldwide? Different cities, different brands, different products - all those play into what constitutes our competition. Overall we can probably say that we compete with Westin, Grand Hyatt, Four Seasons, Mandarin Oriental - but again all depending on specific destinations. There have been many reports of luxury hotel chains cutting costs and compromising on their products and services. Have you considered measures such as being more flexible in the criteria for selecting a new property? Quite the contrary: throughout the financial crisis Shangri-La continued to invest in new projects, upgrading existing properties right along with the owners of some of its managed properties. What do you think about sustainability as part of the strategy of any top luxury days nowadays and on the long run? Sustainability has become part of doing business and a fact of life that we all have to tackle on a day to day basis. At Shangri-La we have strong conservation and sustainability programs in place that involve the community the hotels are based in. Shangri-La has a dedicated CSR officer reporting directly to the top level management to streamline and implement any new programs, guidelines etc. quickly In some of our hotels we have gone a step further and actually build around the sustainability aspect, i.e. the marine habitat at SL Mactan (Cebu) or the OrangUtan project at SL Rasa Ria in Malaysia Your company has recently unvelived an impressive advertising campaign. How is it received internationally ? Brilliantly. We believe that the positive reception demonstrates that the campaign resonates with what the company stands for and what people have experienced when they stay with SL. South America is the region with the lowest penetration of luxury branded hotel chains. What are your plans for this region? While we haven't actively looked at new projects in that market we are certainly aware that there is huge growth potential both in and outbound from South America. We just recently hired a GSA for Brazil and certainly will explore opportunities if and when they present themselves.