Robert Cheng, Group VP Marketing at The Peninsula Hotels Group provides an insight into the inner workings of a family-owned empire which has survived the test of time.
Last year, in the height of the European summer, The Peninsula Hotels Group got tongues wagging when it launched its first-ever European location with a luxury hotel in none other than one of the most saturated hotel markets in the world – Paris.
Yet, despite a decision which surely would have had many raising their eyebrows, judging from the view of Robert Cheng, Group Vice-President of Marketing at The Peninsula Hotels Group, it’s a safe bet to say that there was no nervous fretting from the family-owned operation itself.
“We only have 10 hotels in the world, and that’s part of our overall strategy, because we only open hotels where we know that we can be the best in each of those respective markets. The one mantra that the [founding] Kadoori family has is: ‘If you can’t do it right, you better not do it’,” he says.
That same adage is applied across the company’s operations overall, and – in his role at the helm of marketing, incorporating branding, PR, e-commerce and guest engagement for The Pensinsula Group stable – Cheng is a strong believer.
“I think the biggest challenge, but also the greatest opportunity in my role, is how to represent the brand in a way that is authentic and true to its heritage, in an increasingly dynamic and increasingly communicative and global marketplace,” he adds.
Despite having come from an enviable background of work, including over four years with corporate behemoth American Express, Cheng gives a refreshing touch to The Peninsula Group’s strategy and is visibly passionate about the group’s selective string of hotels and their heritage.
“Obviously, we are quite a small hotel group, with only 10 hotels – because there are clearly much bigger players out there – but I think we do pretty well for ourselves,” he says.
“ If you can’t do it right, you better not do it ”
Tell me a bit about The Peninsula Hotels Group – how many hotels/markets you supervise in terms of branding, PR, e-commerce and guest engagement?
Well, I think we are very unique in the fact that The Peninsula Hotels Group, from the launch of our first hotel in Hong Kong, is about 86 years old – so it’s a great honour to head up marketing and kind of be the steward of the brand for such an illustrious company.
We only have 10 hotels in the world, and that’s part of our overall strategy, because we only open hotels where we know that we can be the best in each of those respective markets. We only choose global gateway cities, and within those cities, we only ever choose prime locations. And one mantra that the Kadoori family has is: “If you can’t do it right, you better not do it”.
What are your greatest challenges in this role, particularly in this digital age where consumers are constantly changing?
I think the biggest challenge, but also the greatest opportunity in my role, is: how to represent the brand in a way that is authentic and true to its heritage, in an increasingly dynamic and increasingly communicative and global marketplace. And I think one of the ways to do that by story-telling – because I do feel that we have a great story to tell – but how do I do that within a communication plan.
Obviously, we are quite a small hotel group – with only 10 hotels – because there are clearly much bigger players out there – but I think we do pretty well for ourselves.
I think that is a challenge but also a great opportunity because our heritage and the fact that we do have such a great history, and that we are a smaller but very selective group of hotels, means that we get to stand apart and differentiate our brand in a very effective way.
I think part of that also is really staying in touch with our customer and personalising the experience and staying true to that part of our legacy.
“ It’s very important to not just embrace technology for technology’s sake, but to do it for the customer ”
How do you manage to walk the fine line though, in terms of marketing, between evolution and staying true to the heritage roots of the founding Kadoorie family?
As I said earlier, we are very authentic and we are very proud of our history and obviously our branding and our message has to convey that, but I think we are very aware and it is a cornerstone of our strategy, not just in marketing but really at the hotel level where we do try and innovate, where we do try and bring in new types of experiences and services.
And we’ve never been a company which has been afraid of technology, so really in the guest rooms and in the communications, we try to convey these type of innovative experiences – but I think we are always aware that we have to keep it customer-centric when it comes to technology. I think it’s very important to not just embrace technology for technology’s sake, but also to do it for the customer, so that it adds something to their experience. So we check our technology very thoroughly and I think we are actually the only hotel group to have a dedicated research & development team – which we have had for 30 years.
So they are always investigating what’s out there, and thinking about whether it is a good fit for our clientele and our hotels, but also – equally importantly – they talk to our general managers at the hotels and listen to their experiences and then they actually create rooms to then apply the technology to see how it can improve the guest experiences.
Paris Peninsula, Lobby
Could you provide some examples?
One very interesting example, which we pioneered many years ago, was actually the reactive bedside panel, where one touch can actually turn all your lights off. And it may be a small thing, but I’m sure we’ve all had that moment in hotels, where you’re struggling to find that last remaining light switch! So very simple things like that, to something a little bit more quirky, to an example where one of our R&D team noticed one of our guests one day, kind of blowing on her fingernails in the lift, and then kind of went back to their lab and tested out a nail dryer, which we now have in the dressing rooms of our hotels.
So I think what’s important and what they do really well is balancing what’s out there in technology but also looking at things from the guests perspective.
And from a marketing perspective, we are always trying to do something new to inspire our guests – for example, recently we’ve been partnering with a lot of artists and celebrating local art. One example is Art Basel here in Hong Kong and we’re now in our third edition of Art Basel.
And I think that’s important – because in the case of our Hong Kong hotel, for example – because it is the oldest hotel in our group, it can sometimes get the impression that we’re a grand old don, so to speak, so it’s very important to keep it inspiring and new to all our guests.
“ I know that luxury has different definitions for everybody ”
You mentioned the importance of technology but also the need to maintain face-to-face, customer interaction– however, the former can often eclipse the latter. How do you tackle that split specifically?
I think that’s a very good point you’ve made. I think that we want to approach the way that we use technology very, very carefully and to make sure that we still have that personal touch and are really able to be where the guest needs us.
We actually just relaunched our website and just relaunched the mobile-optimized version of the website. And – on purpose – we did not do a native app. Because we felt that we wanted to make sure that we were at the guests’ disposal in terms of them being able to get access from their mobile device, but our guests didn’t want extra real estate on their phones dedicated to a Peninsula App, so we did the next best thing and gave them a mobile-optimized site.
And there, we actually wanted to put in functions that our guests wanted, like: Timely information, geo-location and easy contact for the hotels we also partnered with Luxe City Guides to develop weekly updates for each of our destinations so that rather than providing them with the same, known tourist destinations, we provide them with the latest updates on the hottest restaurant to eat at, the exhibitions on that week, etc.
And we also have cute little functions, so like: ‘How Not To Get Lost In Your City” – so, for example, you’re travelling around in Hong Kong and we have a very handy button so that when you press it, it tells your taxi driver in Chinese where to take you.
So as you can see, I think we do want to bring technology and innovation to our guests, but we want to make sure it’s actually a resourceful for them and that it’s a function that contributes something to their experience. And in maintaining that genuine hotel experience we are very aware not to do too much yet in taking away that human interaction.
“ I think we’ve done pretty well for the last 86 years, so I hope we can continue that ”
What other types of types of content are you creating at the moment?
Right now, we’re doing a mix we have some editorial, images of course – through Instagram – and increasingly we’ve ben dipping into video and using that too and basically, working with our hotels to tell stories and then working with that content to fit different social media channels and using our own network and our fans out there to push that content.
And I hope I’m not being to traditional here, but I think as long as that content is genuine, authentic and engaging, then our fans out here will watch it, like it, share it and people will talk about it.
This really being the digital age though, there is so much content out there – how do you differentiate yourselves – in terms of content but just as much, in your overall branding and the hotel experience itself?
Well, I think for us it’s about being truthful at the base, being true to our DNA and really knowing who we are.
And I think we believe in glamour overall and we really believe in pampering our guests. And I know that luxury has different definitions for everybody, but I really hope that our niche continues to inspire and continues to engender loyalty. And I think we’ve done pretty well for the last 86 years, so I hope we can continue that. But I think in a nutshell it is really about knowing who you are.
I think that there are other great, luxury brands and hotels out there, but I hope there’s still hopefully a market for something that spoils and pampers you and that makes you feel very special when you walk through its doors. I think for us, it’s a very personal brand… You know, we’re not overly cool, but we are going to make you feel special and hopefully people will come back to us for that.
The Peninsula Hotels Instagram Account
With so many avenues available to distribute content now, where do you distribute your content; and how do you choose what works best for Peninsula and its target market?
I think they key for us is to make sure that whatever we do we do it right, as is our mantra. Because we are small group, and there are a lot of different avenues out there, we are very aware that we can’t be everywhere at the same time, so I’d rather focus our efforts on where our guests are and make sure that we do that really well.
We distribute through mainly through own channels, and now, on a group-wide level, we do have Facebook, Twitter and Instagram – and I think Instagram in particular is a very interesting one for the luxury industry and for hotels in particular because you know, the things that people take pictures of most are views, and hotel rooms, and food – and, you know, we have all three.
In that vein we are testing at the moment working with influencers, and seeing with them how they can communicate their experiences to our audience and theirs through their own eyes –because there are some really great tastemakers out there that really can bring a new perspective to luxury hotels – but they have to be the right ones that really do have a real affinity with the brand.
The great thing is, that we do have a lot of these influencers who really do, legitimately want to tell our story and so we are able to do that in a very organic and natural way.
Specifically, it’s mostly a lot of bloggers ad a lot of Instagramers, but we have a very strict approach to the privacy of our guests though, and we want their story to be very natural, so on purpose we did not empty any formal celebrity ambassador – we’ll leave that to another hotel group to do!
“ I think that as a luxury marketer you have to be brave, put yourself out there ”
When you are trying out new and innovative communication strategies though – how do you assess the effectiveness of that and gage whether it will work for your customer base?
Well, as I said, we do invest in a lot of research and we really try to stay in touch with our fan an our customers to know what they want and what they will engage with, but I also think that as a luxury marketer you have to be brave, you have to put yourself out there and we have to believe in our message and in our brand.
For example we recently launched a partnership with Net-A-Porter and that was something new that we did, but it worked superbly well. It was a really innovative and exclusive partnership with an online luxury fashion retailer and publisher which really has a great following and fan-base and really understand the idea of luxury.
We launched that collaboration during Paris Fashion Week and with them created a series of stylish mini guides to the world’s most dynamic gateway cities, and we’ll soon be coming out with the next five of those during New York Fashion Week in the Fall. But I think there’s more to come there, so stay tuned!
But I spend a lot of time myself, at the hotels and I spend a lot of time also speaking with my fellow luxury marketers and I think that that also helps.
The Peninsula Hotels Group launched its first hotel in Europe, The Peninsula Paris, last year – why did the group wait until 2014 to enter the European market?
Well yes, but I don’t think that it’s so much that we waited, as much as that we really took our time. Not for lack of wanting to be in this market, but I think it also took a few years to actually restore this beautiful, heritage building that we now have for our hotel here in Paris and we took a massive amount of time and effort organising and executing that.
But now what you have beneath that very historical façade is a very modern 21st century hotel. We really ensured before we opened that we had proper back-of-house, a beautiful spa, a 22-metre pool, well-equipped guest rooms.. So behind that 1908 building we do have a very grand and modern hotel.
But it took the longest amount of tie to find the perfect location, and we have been looking for a location like that in Paris for about 25 years. But again, we wanted it to be grand, something with beautiful architecture, the best and most central location.. Which all also explains why it took us a little bit longer.
“ We have been looking for a location in Paris for about 25 years ”
Can we expect to see more expansion in the European market for The Peninsula Hotels Group?
We are looking at other locations, but again, we are willing to be patient in order to find a spot with the best views, the greatest location, central and the right type of building.
London is one of our next locations to open, in a few more years though. We have acquired a great site, in a beautiful location on Hyde Park corner, overlooking Buckingham Palace, but again we’ve been looking in that market for 30 years for that location. We are doing that in partnership with Grosvenor. We’re in planning right now, so I think that once we get through planning with the City of Westminster, we’ll be in a better position to know opening dates, because wit that one, it’s a building that we have to tear down and rebuild.
But it takes a lot of focus and energy to open new hotels, just as much in terms of the actual process as with the communications, and while I certainly admire my peers who can open 10 hotels, but having opened one that was plenty to keep me occupied!
But in terms of other markets, it’s about finding the right location, it’s about views, but it’s also about ownership structure, because we like to keep that control for our brand.
In 2013, the Peninsula Hotel Group celebrated the 85th Anniversary of its original property, The Peninsula Hong Kong, but financial reports released in May 2015 suggested that the Hong Kong flagship reported a 4 per cent decline in revenue per available room. To what do you attribute this decline?
We did begin to undergo a renovation in 2011 and for a period of time that many of our guest rooms were unavailable because they were in the process of being renovated and outfitted with new technology so I think perhaps that for that period that you are referring to, that might have had an impact.
So it’s partly because those figures were calculated on half of our inventory during that year, because half of it was under renovation.
But I think if you look at it from a long-term perspective we are still going up, but obviously in the 2012/13 timeframe, we were running at half inventory at that hotel.
The Peninsula Paris
The Peninsula Hotel Group inevitably operates in a very competitive space where competitors are flush with cash and constantly upgrading and expanding. What is your strategy in such a crowded sector with strong competition?
I think the difference with us is a couple of things. One is that we adopt a very long-term strategy. We always think it’s worth it to invest both the time and the energy to make sure that each of our hotels really is at the heart of the city – so if the time is not right, or the location is not right, then we’re very happy to just sit back and be patient and wait for the perfect opportunity. And that is a very long-term strategy and it comes from our owners and our history.
The other interesting and unique thing about our group is that we are owners and operators of our hotels – not just the operators of our hotels. We always have an equity stake. Because most hotels that you will find are not the owners they are just the operators, so they are linked to the hotel owners for investment. So that gives us a lot more flexibility and also a lot of control – not just over the brand, but the manifestation of the brand – inside the hotels. So we can say to any and all of the hotels, when we want: “You need to have light music you need to have fresh flowers, you need to have free wifi”, for example.
“ I think personally, that there is enough room out there for all of us ”
On the competition note – AirBnB recently caused quite a stir when it announced the company plans to make inroads into the corporate travel industry. Is this something on the radar of the Peninsula Hotel Group or something the company would keep its eye on?
I think that there is a great need in the market for that kind of product and that kind of offer, but in terms of a threat, I don’t think it’s that immediate for us. Because I think that while that might suit some travellers, I think for us and our clientele I think the element of service is very top of mind.
There are several quite futuristic hotels with eclectic designs, in some very interesting locations emerging for construction over the next few years – what does the future look like for The Peninsula Hotel Group?
I do think, as I sad earlier, that there are a lot of great luxury hotels out there and lots to come, but also consumers are becoming more and more mobile and global – travelling more, further afield and more often – so I think personally, that there is enough room out there for all of us.
For us, I think we are in a very lucky spot in that we are in a very unique niche, at the very top end of the market. For example, we just opened in Paris and there are already a lot of hotels in Paris, but I think Paris needed another hotel – and by creating a new hotel and providing anew offer we are shining a spotlight on the city and hopefully that will also draw more people in, so I think there’s great opportunity in that.
Looking forward, we are looking very intently at the evolution of the Chinese shopper, also, the Middle Eastern markets, and some South American markets such as Brazil and even Mexico, in terms of possible locations we are scoping for new hotels.
Luxury Society invites you to join us in New York City, on Thursday 25th June, to learn from these entrepreneurs and pioneers who are shaping the future of luxury:
- Robert Cheng, Group Vice-President of Marketing at The Peninsula Hotels Group
- Rachid Ait Addi, Global Industry Director, Luxury, Teads.tv
- Christophe Balaresque, Luxury Brands & Marketing Director, Arjowiggins
- Chondita Chatterjee, Senior Vice President, Lyst.com
- Monica Kirchner, Founder & CEO, .LUXURY
- Aslaug Magnusdottir, Co-Founder & CEO, Tinker Tailor
- Amber Venz, Co-Founder & President, Reward Style
- Geoff Watts, CEO, EDITD
For more in our series of conversations with Luxury Leaders, please see our most recent editions as follows:
Published on June 16, 2015 under Leaders