PENINSULA HOTELS Managing Director and CEO on expansion and strategic positioning
In an exclusive interview with CPP-LUXURY.COM, Mr Clement King Man Kwok, Managing Director and Chief Executive Officer, The Hongkong and Shanghai Hotels, Limited (HSH), the group which owns Peninsula Hotels, speaks about his company’s expansion plans, business philosophy and strategic positioning.
Peninsula is among the few international luxury hotel chains which has had a slower expansion. What has been the motivation behind your strategy?
Expectations on expansion have become different nowadays, from the family owned hotels which have strived to develop the best hotel in the respective city to the expansion of hotels through management agreements with developers and real estate owners. At HSH, we have a different proposition and we do things in a rather old fashioned way. We are extremely selective when it comes to deciding on a site and business partner for a Peninsula Hotel and we also prefer to take an ownership interest in our hotels. Our investment interest is not economically driven but rather from an ownership control point of view. For instance, even in the case of smaller percentage ownership, we sit down at the table with our partners as we are owners, not just managers. It is a very important psychological differentiation. Our goal is to make each project, each Peninsula hotel, unique.
What were the determining features of the Paris property, formerly the Majestic Hotel, that made you sure this is the right project to enter Europe?
The Majestic opened as a grand hotel over a century ago and we have taken a long term strategic approach when we decided to redevelop this hotel. We are seeking to develop the best hotel in Paris, for the next 50 years and we are known for the attention to detail in the construction of all our properties.
As this is first Peninsula Hotel in Europe, the stakes and expectations are very high, especially considering Paris is probably the most competitive luxury hospitality market worldwide. What will be the three most important competitive advantages of Peninsula Hotel in Paris, once it will be open?
My aim is to build the most luxurious portfolio of Peninsula hotels for the next 50 years and in doing so we will inevitably choose cities that are competitive markets; we are used to this. When the The Peninsula Paris opens next year, guests will find the same distinguishing Peninsula features as they would in other cities – for example, the entire Peninsula approach to guest experience, from arrival through to the interior design, personal service and the Peninsula family culture that we have instilled in our staff. Put together, all of these elements make up the unique Peninsula experience.
In the case of your Paris property, your company is a minority stake holder. Is this a business model you will be implementing in the future at other developments? Are you considering pursuing your collaboration with Qatari Diar on other future projects?
Yes, we are a minority owner of the hotel but what matters more is how much control we have over the asset. With The Peninsula Paris, we are a true partner in terms of control and management. We have a very good relationship with Qatari Diar and if the stars are aligned again, we might explore another opportunity for collaboration over a hotel project.
Your exceptional emphasis on human resources is known to be the foundation for the consistently very high level-service you provide at all your properties. How do you approach human resources challenges with new properties such as Paris?
As with the planned opening of any Peninsula hotel, we will be recruiting locally as well as transferring existing staff or sending them as a task force to assist with the hotel’s pre-opening preparations.
With the tremendous growth of social media and online communications in the past 5 years, the issue of engaging with consumers has become a top priority. What is your company’s approach?
Our hotel website is constantly updated from a visual and functional point of view. We have embraced Facebook in the way we engage with our guests and potential customers. We also have a dedicated team which monitors review portals.
Which are the most important innovations introduced at your hotels in the past three years which you are most proud?
We have opened two Peninsula hotels in the past four years, in Tokyo and Shanghai respectively and it is these two properties which are the most technologically advanced. At HSH, we have been introducing new and innovative concepts to the hospitality industry for decades, eg. we were the first luxury hotel group in the world to introduce Chef Tables in our restaurants, television screens in the bathrooms, helipad on the hotel’s rooftop, iPod docking station and fingernail dryer in the guestroom. Some of these great ideas were initiated by one hotel and then introduced to others, while sometimes these generated by the Group – we have a R&D facility in Hong Kong which is tasked with devising innovative features for our hotels.
Your company does not have a loyalty program like most other luxury hotel chains. Please comment.
The Peninsula is a luxury brand and to convey an exclusive feeling we don’t think it is appropriate to reward our loyal guests with points. We prefer to be on a more personal basis.
With the changing profile of wealthy travellers nowadays and new generations who travel more and have different motivations, what is your strategic target approach?
Generally speaking, the Peninsula hotels enjoy a higher percentage of leisure travellers because some of our hotels are destinations in their own right – for example, the iconic Peninsula Hong Kong is so special that a couple might choose to stay there for a special weekend. Although our hotels are classically designed, the IT in our guestrooms are probably the most technologically advanced in the industry and this appeals to guests of all ages. I have been speaking to many friends and guests and an increasing number of them mention how their kids have become Peninsula fans, and form a relationship with the Peninsula for life, frequently returning to stay or to dine and visiting with their parents or friends.
In recent media appearances, you have mentioned Peninsula Hotels is actively looking at India. Which is the criteria you are applying in terms of property, location, business model etc?
India is one of our identified markets but we have very stringent criteria for a Peninsula hotel, which makes the task even more challenging. Besides India, we have a number of cities on our radar screen, but it really depends on an exceptional opportunity presenting itself.
Clement King Man Kwok
Aged 51. A Bachelor of Science in Economics from the London School of Economics and a Member of the Institute of Chartered Accountants in England and Wales and the Hong Kong Institute of Certified Public Accountants, he joined the Group in February 2002 as Managing Director and Chief Executive Officer, and is a Director in most of the Group entities. Mr. Kwok’s career began with Price Waterhouse and Barclays de Zoete Wedd in the United Kingdom, following which he returned to Hong Kong in 1986 to work with Schroders Asia. Prior to joining the Group, he had served as Finance Director of MTR Corporation since 1996. He is an Independent Non-Executive Director of Swire Pacific Limited, a fellow of The Hong Kong Management Association, a Non-official Member of Harbourfront Commission and serves on the Boards of the Community Chest and the Faculty of Business and Economics of The University of Hong Kong.