‘The Grand Dame of the Far East’ – a fitting moniker for The Peninsula Hong Kong, the flagship hotel of The Peninsula Hotels and the oldest hotel in Hong Kong. For nearly a century, The Peninsula Hotels has been raising the standard for luxury hotels. Today, the brand boasts 10 of the most elegant and timeless luxury hotels in the world. To understand the story of The Peninsula Hotels and where its future lies, EHL invited four executives from The Hongkong and Shanghai Hotels, Limited (HSH) – the owning and operating group of The Peninsula Hotels, for a webinar:
- Peter Borer, Chief Operating Officer
- Gareth Roberts, Group Director, Brand & Operations Support
- Mark Kobayashi, Senior Vice-President, Sales & Marketing
- Lynne Mulholland, Director, Group Corporate Affairs
What defines the Peninsula brand?
Hotel brands have long espoused the value of their ‘brand promise’ – an assurance of a certain level of quality and standards. This is especially relevant for brands with a large global footprint, which necessitates some degree of standardization. For a brand like The Peninsula Hotels, however, Peter explained that it is a little different:
“As a small group, you don't have a common thread that you know will be there from the beginning, especially in our case, we started in Hong Kong in 1928, when The Peninsula opened. You can talk to anybody in Hong Kong and they've been to The Pen. […] You become an integral part of the fabric and that is our desire in every city where we go -- that we become part of the fabric so that the citizens of that particular location feel proud to have a Peninsula amongst them. And only then can you be successful: if the local crowd buys in. For example, [we’re about to] set foot into London. [But] we don't just want to go to London and build a big palatial hotel just for foreign visitors.”
Having a small, select portfolio of hotels emphasizes HSH’s commitment to quality over quantity, investing innumerable hours into the design and conceptualization process of each hotel.
Gareth explained, “We don't want to just show up on the doors [of London] and say, ‘We’ve been operating hotels since 1928, so we're now going to bring it here and do it the same way.’ We have spent the past six, seven years developing the hotel, but also doing a lot of market research and really getting to know the people of London and how we can bring a lot of the UK elements into the operational philosophy of what we're putting together there. We have a stakeholder engagement plan and over the past few years, we've been reaching out to various verticals and sectors of life of London, to really learn about how The Peninsula can become part of the fabric of society.”
The Peninsula London. Expected opening: 2022. Source: The Peninsula Hotels website
"We will always have the foundation of Asian heritage, but this will be enhanced by the local culture in a genuine way" – Peter Borer
Over the last years, going ‘glocal’ has been become a buzzword for many consumer brands around the world – how can we retain elements of our brand DNA in our global portfolio whilst incorporating local elements into our operations? At HSH, this is certainly a key consideration for their international expansion.
Peter revealed, “[For our London property,] we have the great pleasure of working with Peter Marino, the interior designer. And when he came to do a presentation to Sir Michael and myself, he walked in with a massive poster that had a martini glass on it and he said, "The Peninsula London is going to be like a martini." And we were like, ‘What?’ and he said, ‘Yeah. Two-thirds is going to be English heritage architecture, one-third is Peter Marino and the olive is Asia.’ I think that's what we will present to London when we open.”
Creating a distinct, yet localized employee culture
Beyond the grand chandeliers and immaculate architecture, how do you care for the people who care for your guests? “To me, it's all based on respect. If I feel respected, I will behave accordingly. When we go into a new place like London, we try to provide the finest staff facilities there are. And to me, that starts with the staff entrance, which has to be looking very welcoming and warm; it goes into a locker room that you could compare to a private fitness club; a staff dining facility that is managed by a manager, has menus, has specialty weeks, and is designed by a designer; and uniforms that, in the case of London, are done by a very famous British fashion designer,” Peter explained.
A key feature of being small creates the opportunity to build a close-knit community where every employee can feel valued. As Mark pointed out, “What was amazing that I experienced as a pre-opening employee [in Tokyo] with The Peninsula Hotels and HSH, was the amount of attention and support that was provided not only by the headquarters but globally, by all of the sister hotels. [We received] support on a weekly basis, where people were coming and spending months at a time with us and being able to speak all the way up to our chairman, Sir Michael, who would come and visit and speak to the staff.”
The Peninsula Tokyo. Source: The Peninsula Hotels website
Positioning The Peninsula Hotels amongst other (Asian) luxury hotel brands
A unique characteristic of The Peninsula Hotels is its flexibility and agility as a hotel owner and operator. Peter described, “[Being small] allows us to control things in a very diligent manner and we are owners of most of these hotels, so it's maybe easier to maintain a common standard and outlook, because we're not subject to too many different owners’ views. To me, that's quite an advantage.
At the same time, the brand has a strong focus on retaining and accentuating its identity, especially in a climate where the number of brands continue to proliferate, and there is growing pressure to expand. “We are trying to be amongst, what my chairman would say, ‘the finest’. But we will never say that we are amongst the best because the word 'best' is such a subjective word. We're trying to be a humble but serious player and we never try to be a trend. We're trying to be timeless and a classic hospitality brand and we're trying to keep this brand as pure as possible,” Peter continued.
“In today's world where brands change and have sub-brands and sub-brands, for the consumer, The Peninsula should be just one door and they know what to expect. And that's very much in line with the overall philosophy of the Kadoorie Family, so that will continue for years to come.”
Remaining timeless amidst consumer changes in luxury travel
In an ever-evolving consumer landscape, brands must continuously innovate to keep up with the competition. Following HSH’s commitment to their guests, they spoke to both current Peninsula guests and potential luxury travellers around the globe, and identified one key area to enhance the guest experience: creating more guest engagement.
“So, over the past 18 months, we've been crafting a program and we're going to be rolling that out with our team over the next 12 months. To really allow [our employees] to bring a bit more personality into the interactions and as well, a little bit more of themselves when they're serving a guest and I think that's also very important as we're hiring a new generation of hoteliers. […] We still are in a luxury environment but within that framework, we want you to be who you are. That's the direction that we're planning to take this, and we're quite excited about it,” Gareth revealed.
Going beyond points-based loyalty programs
Many consumers and hotel brands tend to turn to points-based loyalty programs to lure customers to return. But especially in a luxury environment where price and monetary benefits are not necessarily the key driving factor, brands need to get a little more creative. As Mark explained:
“We are planning to launch a global as well as a China-specific CRM (customer relationship management) program before the end of this year, where the idea is to bring that Peninsula human touch digitally to our guests. We're going to create a highly personalized, interest affinity CRM program that's based on the service and events [they enjoy]. Our belief is that this long-term kind of relationship through this affinity-type CRM program -- that is going to have a more lifetime value than say, you stay one night with us and you get 500 points.”
Mark continued, “[We have a program that allows flexible check-in and check-out times called] The Peninsula Time and it anchors a concept we launched in November called ‘The Peninsula Promise’. If you go to our competitors and become a 'loyalty member' of their programs, you might get a flexible check-in. Whereas The Peninsula Time [is available to everyone].
Brand extension: Launching The Peninsula Boutique & Cafe at Isetan in Shinjuku and beyond
Luxury brands like Louis Vuitton and Gucci made waves when they recently revealed plans to tap into the hotel and restaurant sectors. After all, the different sectors within the travel and leisure industry all function on the premise of delighting customers. The Peninsula Hotels, however, has already been involved in the retail game for decades.
“Peninsula Merchandising started with a small boutique here at the Pen Hong Kong, way before my time. Then I took it over in 1985 and concentrated on chocolates and we have [had] phenomenal success, particularly with the Japanese consumers. We went all the way to Osaka, we went to Sapporo and so on. So the Japanese consumer who had no clue what Peninsula was, over time, started to understand what we're all about.” Peter described.
Gareth added that, “we opened six new boutiques last year, including in Taiwan and further boutiques in mainland China. And again, we're always looking at doing extensive product research and development, and looking at all of our markets to find, ‘what is the next [big] thing?’. The boutiques here are very well-known for their mooncakes during Mid-Autumn Festival and that really is a big revenue stream for us. But we want to diversify, so we're always looking for what is perhaps the next mooncake. There's a lot of work in that realm at the moment.”
Tackling sustainability through a multi-pronged approach
Sustainability is and has been a hot topic around the world. Given the transient nature of the industry, there is no doubt that sustainability is an even bigger responsibility for the hospitality sector.
Lynne mentioned that sustainability and care for the community are the cornerstones of The Peninsula Hotels brand. “We're actually now working on our Sustainable Luxury Vision 2030. This falls under three key areas, one of which is our guests: We look at things like green buildings, water efficiency, energy efficiency. But more important to us is really looking after our people: How do you make sure that employees feel safe and cared for and also, how do we give back to the community? Our majority shareholders are the Kadoorie Family who are among the largest philanthropists in Asia, and they have been based in Hong Kong for over 150 years. In the past year, while sustainability budgets might have been cut around the world, we've actually implemented a new “one-for-one meal” program: when anyone purchases a meal in any of our hotels, we donate one meal to a charitable organization. We were the first hotel group to ban shark fin, which used to be a very popular dish in Asia, and then other hotel companies followed suit. And now, we are still very committed to sustainable seafood sourcing, sustainable chocolate sourcing, as well as tea and coffee. We make sure that all the items that we procure are sustainably sourced.”
To emphasize this, Gareth further exemplified the lengths that HSH has gone to in order to fulfil this commitment to sustainability. “As part of The Peninsula Promise which Mark mentioned earlier, we also launched a new line of guest bathroom amenities. The packaging is 99.9% petroleum plastic-free. It was a global search to find the latest and greatest – that would allow our guests to feel that it was sanitary, hygienic but be nearly 100% recyclable, and we were able to achieve that. On the local element, we went to each of the cities where we operated, to find a fragrance curator who was from that destination. They came and stayed with us, got to understand the feel of the hotel, and built a bespoke scent unique to that destination.”
The Peninsula Hong Kong. Source: The Peninsula Hotels website
Service excellence in a post-COVID world
The impact of COVID-19 on the hospitality industry is unquestionable, as many hotels face single-digit occupancies and cash flows remain scarce. But there is one thing that remains clear: the industry will recover. And when that happens, as Peter believes, delivering service excellence and delighting guests through the human touch will be more important than ever before:
“I think more than ever, when travel resumes, it [will be] important to delight our guests. It doesn't always have to be about a bottle of Don Perignon that waits for you. It can be a person taking you to the night market and helping you with your shopping and maybe translate in the right language. And that doesn't cost much. It's really up to the moment to delight.
To me, [this crisis] was like a massive reset button. For me personally, in the past, I would travel 100, 120 days a year and I haven't left Hong Kong now for 13 months and life has continued. Not that I'm planning not to travel ever again, but it was a massive reset button and I think many people feel the same. And when they come out of this, they have a different expectation and I believe that the desire and the need for human behaviour -- real, genuine human behaviour that comes from the heart -- will be even higher than it was in the past.”