With all the new purportedly top-quality hotels popping up in China, what’s the guarantee of service and taste? Very little, according to Clement Kwok, the chief executive of Hong Kong & Shanghai Hotels, which is placing an emphasis on quality over quantity.
Kwok criticised the star-rating system, as well as the rapid hotel expansion in China and other emerging markets by competitors during a media lunch at the company’s flagship Peninsula Hotel in Hong Kong.
The Burj Al Arab in Dubai, which claims to be the world’s only seven-star hotel, was “tacky”, he claimed. And the lack of a rigorous rating system in mainland China also meant that every single property seemed to be five-star, making it pretty confusing for guests who didn’t know that a hotel could be rated on whether it had a ballroom rather than the quality of its rooms and services.
Kwok wasn’t talking about the Chinese operation of any specific company but major international chains in general, which are often hired to manage properties rather than owning the building, and are in the midst of aggressive expansion in the China.
Marriot International plans to open a new hotel each month for the next three years, for example.
Kwok’s point, unsurprisingly, was that the Peninsula chain was right to keep the business small. There are only nine Peninsula Hotels in the world, with a tenth on its way in Paris. The creation of value is not driven by volume but by improving existing assets, he said.
It’s not necessarily the kind of message which does much for a company’s share price in the short term. HSH’s Hong Kong shares are still trading at around 20 per cent lower than before the global financial crisis. But Kwok said he was confident that the company’s policy of regularly refurbishing rooms would continue to stand it in good stead.
The 84-year-old flagship, for example, is over half-way through a major renovation programme which includes putting in a state-of-the-art room control system using tablet computers in every room.
Given the lack of hotels in Hong Kong at the moment, the Peninsula has raised the rack rate for a harbour-view suite from $1,800 a night to around $2,340 after the reburbishment.
