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Interview - Choe Peng Sum, CEO of Pan Pacific Hotels Group
CHOE PENG SUM has been a hotelier for his entire working life, so it’s safe to say that whatever crises the hospitality industry has faced over the past three decades or so, he’s been through them all and come out stronger for it.
It’s this kind of experience that’s going to come in handy as the newly-installed CEO of Pan Pacific Hotels Group leads the way through the troubling and uncertain waters ahead as the swiftly spreading coronavirus wreaks havoc across the world.
Fear and irrationality are not in the vocabulary of the clear-headed veteran who spent 15 years with the Shangri-La hotel group and the next 22 years at Frasers Hospitality which he has been credited with building up from a fledgling serviced apartment operator into a full-grown international hotel group. Instead, tenacity, foresight, team-building, passion and compassion are the words that you might associate with this soft-spoken gentleman who lives and breathes hospitality.
That’s why, for one who’s just been at his new job for barely six months, Mr Choe - who will be 60 this year - has been firing on all fronts with his plan to grow the 50-hotel Pan Pacific Hotels Group into an worldwide name in hospitality. Besides the recently announced plans to refurbish the newly-acquired Parkroyal Collection Marina Bay to the tune of more than S$45million, the group is expected to add 15 more properties over the next two years, which, by the looks of it, are just the tip of the iceberg.
But for Mr Choe, it’s not about adding hotels like notches to his belt. Rather, it’s about creating a brand that people can trust, which has the guests’ interests at heart, and at the same time building a team that believes in and epitomises hospitality.
Has the escalation of the coronavirus outbreak affected local and international plans for expansion and how will the group weather through this difficult period?
Currently, we’re still on track to opening 15 properties in the next two years. Our first footprint in Europe, Pan Pacific London, is on track for opening this Autumn. Other openings in Jakarta, Hanoi and Bangkok are progressing well too. That said, we’re keeping a close eye on developments in China where our first PARKROYAL is set to open in Dalian in the fourth quarter. At home, we’re going ahead with a full renovation of Pan Pacific Serviced Suites Orchard in Singapore and a 110-room extension of PARKROYAL Kuala Lumpur. The current situation has adversely affected world economies, not just the hospitality industry. We’re staying vigilant and working through mitigating strategies to ensure continued business performance through this season.
Given your experience with SARS, how do you compare it with Covid-19 which is causing global panic and what can be done about it?
During the SARS outbreak in November 2002, visitor arrivals rebounded in June after a low in May, when Singapore was declared SARS-free. The current situation is still evolving, but we’re confident to work through it with the relevant bodies in the industry.
But we have weathered through ups and downs in the volatile hospitality industry, and it’s moulded us to be more resilient, resourceful and tenacious. If we remain positive and united, there will be light at the end of the tunnel. While our teams have been looking into mitigating strategies to sustain business, they’ve also come together in two critical areas: 1)heightened precautionary measures to ensure the safety and comfort of guests – our top priority; (2) Consolidated team spirit! Our staff are creating their own ways to keep everyone’s spirits up – one of the hotels sends herbal tea daily to corporate teams; colleagues bringing lunch or snacks for each other and separated work teams sharing positive news and hand sanitisers!
Even without bad news like the coronavirus, the hotel business is a tough one. For one who’s been a hotelier for over 30 years, how has the industry evolved?
It’s getting harder. There are two main things happening - one is Airbnb and the disruptive economy, and the other is the rise of the millennials. There was a time when you just had to build a beautiful hotel and people would come. But not any more. There must be an experience. The reason that millennials go to Airbnb is because there’s a surprise element. That’s why you see all the big hotel chains changing with more (boutique or design-oriented) concepts. No more cookie-cutter hotels.That’s why we’re going to develop a new lifestyle brand - we’ll be bringing in a consultant and millennials for brainstorming sessions. It will still be a hotel but will be all about hanging out, being more edgy - checkin could be at the bar, or a living room in the lobby, basically more lifestyle elements.
There aren’t many Asian hotel brands with an international influence apart from, say, Shangri-La. So what are your plans in this direction?
Yes we want to fly the Asian flag. There aren’t many hotel groups in Asia that have close to 50 hotels, 70 per cent of which are owned. So we do want to grow. After our property in London, we’re looking into Europe, the US, Australia and Japan. In Japan, we tied up with Tokyu hotels to have a Pan Pacific partnership with the Cerulean Tokyo in Shibuya. I wanted to have something for the 2020 Olympics so I’m very happy to have this.
We’re also talking to them to do more partnerships with some of their high-end hotels. We’re also planning more serviced apartments in emerging markets because there’s still a demand for them, but not so much in developed countries so our focus will be purely on hotels.
How would you describe your business style?
I normally fire on two barrels - acquisition and management. For acquisition, it’s always about the location, which is why I always look for prime locations, for example Bishopsgate in London, or Shibuya and Shinjuku in Tokyo. When you get a great location, the value is high and the yield may be low, but the upside - of course you only realise it when you sell – is superb. Of course, we also study the market and look for ways to increase the yield. The other is management, which is not easy, but is scalable. People have to trust the brand. So I have two teams, one for acquisition and one to look for management projects. So when we fire on both barrels, we can grow.
You’re known to be a very hands-on hotelier. Even though it’s not really your job, you personally look into things like design details, looking under carpets, etc. Why?
I learned from a very wise general manager at ShangriLa, Randolph Guthrie, when I was just a young man starting out. He took me to a room and asked me how I would check it. I just said, “Uh, I just check it”, but he went to the bathroom, sat on the toilet seat (of course it was clean) and he said, “Do you see the cracks on the floor? The cobwebs in the corner?” You will never know unless you’re a guest. And that was a big lesson for me. Even today, when I go to a hotel, I will always check out the public toilets. Because if they keep it very clean, then you know the rest of the hotel will be very clean too.
For you, building up a team that cares for each other is very important to you.
Let me share an example. During SARS, business was very bad, and people were dying from the disease. I told my executives, let’s be prepared to roll up our sleeves.
We went to see the housekeepers and engineers and told them, we know it’s life and death so if you don’t feel like going in to clean the room we won’t force you. You’ll still be part of the work force and we (the executives) would go and clean the rooms. And I remember they were all very quiet and then one by one they said, “It’s ok Mr Choe, we will clean the room, just give us the masks.” In the end they were all okay but what this tells me is that we can’t do what we do without the people.
Of course, if we had to clean the rooms it would take a lot longer! But in the end, it’s all about people and that’s what hospitality is all about.