Hongkong and Shanghai Hotels preparing to pass the test of time

Clement K.M. Kwok, managing director and chief executive officer of The Hongkong and Shanghai Hotels

The Hongkong and Shanghai Hotels' chief Kwok outlines the philosophy that drives the company

Clement Kwok seems a little tense when he first enters the room for the interview, which is understandable. He's in town for the unveiling of the newly renovated Peninsula Beijing, and he must be feeling the weight of millions of dollars on his shoulders.

To be precise, $135 million.

The Hongkong and Shanghai Hotels, Limited has invested 890 million yuan to meet the expectations that arise "if you dare call yourself one of the best hotels in the world".

The hotel, after being a leading one in the capital city since 1989, was beginning to tire a little and losing its attractiveness as other luxury hotels opened one after another. The company decided on the renovation in 2013, aiming to keep it at the cutting edge in the currently oversupplied market.

Engineering expertise was utilized to reduce the previous 525 rooms and suites to just 230. They are now among the largest in Beijing, and fine materials such as jade, white marble and red sandalwood, as well as high-quality craftsmanship have been employed to ensure the hotel has the necessary appearance to match expectation.

The money has also been invested to ensure the guest experience is enhanced by technology and in-room amenities, including bedside and desk tablets that can be pre-set in 11 languages to control all room functions and gain access to room service menus with a simple tap.

Managing director and CEO of HSH, Kwok has been up since early in the morning going round the hotel trying to ensure that everything is ready, or at least as ready as can be, for when the curtain goes up.

"If you are Peninsula, you can't afford to fail," he said.

While an interview is probably one of the last things he feels like doing at the moment, with the media gathering to pass judgment on whether it thinks that money has been well spent or not, once he has established that he doesn't want to talk about himself－"I would prefer to just focus on my professional life"－fears that he might be somewhat tongue-tied, prove to be unfounded. Indeed he talks eloquently about his role and the business with almost boyish enthusiasm.

Which is apt, since he said the company is still in the youthful stage of its development and growth strategy, even though it is celebrating its 150th anniversary this year, and the Peninsula Hong Kong, which first gave birth to the high expectations, is 85 years old.

"The legacy is added-value, of course, but by itself it's not enough," he said. "You are always judged by your latest product."

With three new hotels in the pipeline－London, Istanbul and Yangon－he's probably in for a few more stressful mornings.

But he said the company is building for the future; and "it's an exciting time for us as a group".

He credits this to the leadership of HSH Chairman Michael Kadoorie, who, he said, has "a vision for the Peninsula brand and what it represents".

The most fundamental principle, Kwok explained, is it is committed to being an owner as well as an operator.

"We are not trying to have just as many hotels as possible; we want to be at the ownership table every time. Preferably with at least 50 percent, as then you have control."

He said that this means the company has a completely different philosophy and a different complexion compared with most of the hotel companies, which now operate as management companies relying on volume for economies of scale.

The Peninsula Hotels portfolio comprises only 10 hotels in operation, with the three aforementioned projects in development. Other major hotelier brands such as Marriott or Hilton offer thousands of hotels worldwide.

To make this work, he said, "one of the most important things is for our staff and our people to understand what it is we are trying to do".

As the group has expanded around the world, he said that is something that has been reinforced and strengthened, and this is clearly something he takes pride in－"I have been here for 14 years, and during this time I certainly feel that I have increased the quality of communication.

"As a publicly listed company we don't forecast results, but we are optimistic for the outlook of the global hospitality industry in 2016, and our commercial properties division is holding up well and we expect a stable performance," he said.

Close-up

Clement K.M. Kwok, managing director and chief executive officer, The Hongkong and Shanghai Hotels, Limited

Age: 56

Career: Began with Price waterhouseCoopers in London, then moved to Barclays de Zoete Wedd. In 1986, he returned to Hong Kong to work with Schroders Asia where he was appointed head of corporate finance in 1991. From 1996 to 2002, he served as the finance director of MTR Corporation. He joined HSH in 2002.

Honor: He was made a Chevalier de l'Ordre National de la Légion d'Honneur by the French government in 2015.