Hotelier of the Week: Peter Wynne (December 13 2009)

Peter Wynne is general manager of projects and developments for Swire Hotels, which has opened the Opposite House in Beijing, the Upper House in Hong Kong and, next month, East, also in Hong Kong, Quarry Bay

Why did Swire launch Swire Hotels?

We’ve always had interest in hotels but we have never managed our own hotels. At Pacific Place in Hong Kong, for instance, we have the: JW Marriott, the Conrad and Shangri-La, for instance.  But this is the first time we have gone out and created our own management company. And we have done so with a slightly different objective. We don’t want to go out and repeat what’s already out there in the marketplace. We want to go out and do things differently. Sometimes better, but not always. It’s all about having a slightly friendly approach, less hotel-y. What we want to do with the Opposite House in Beijing and the Upper House in Hong Kong shows the direction. Generally Swire developments are looking at mixed use developments.

So the ones Swire owns which are under hotel management, could they be brought into?

No, I don’t think so. Swire Properties are very focussed with working with partners and long term deals. We are all about recognising new opportunities, and Swire Hotels’ modus operandi is to go into new markets where Swire Properties are looking at mixed use developments such as the one in Beijing. And we assess the property to be suitable for an East, while in Shanghai it should be a “House” property. And in some cases it might not end up being a Swire Hotel, we might end up recommending a different, third-party brand. That’s the case in Guangzhou, which is our mixed use development and is going to have one hotel, but it isn’t actually going to be ours. 

So do you have to pitch along with everyone else?

Pretty much. It doesn’t come to us by default. We have to make a business case how the hotel is going to work, where the market is going to come from, what we see the points of difference are going  to be. Frankly we have the same relationship between ourselves and Swire Properties as any hotel management company would have. There are contracts in place and obligations and so on.

But all your properties – whether they are the Opposite House in Beijing, the Upper House in Hong Kong or East in Hong Kong are completely different, so what’s the brand of Swire Hotels?

We don’t want all the properties looking, feeling and being the same. In Beijing the Opposite House has a very unique style which suits the environment it is in and wouldn’t necessarily suit Hong Kong. That’s the key to it, each one should be an individual, a personality with a strong sense of style and service.

So how would customers respond to that?
   
We think they would – we aren’t talking huge volumes, it isn’t hundreds of thousands of rooms you are trying to sell. It’s a hundred rooms in each destination. And it’s not just the physical hardware, it’s the software, the people. And having that consistent from one place to another is a consistent.

So what are the brands?

We have East hotels, and we have these individual hotels. The House Collection will be the unofficial name, but each one of the brands should speak for itself rather than being “The Upper House - a Swire Hotel”. Swire Hotels is the common bond between them, but they are individual. We are working on Customer Relationship Management at the moment, but we won’t have a points programme. We can offer that sort of rewards such as Asia Miles with Cathay Pacific being part of Swire.

There can’t have been a worse time to open the Upper House with its rates than this year?

We’ve been open two months now and the occupancy is better than expected. RevPAR is excellent. It’s difficult to say in some senses because we are still bedding down and have had some opening offers but it has been very successful. We are right up there with the competition.

The Upper House used to be apartments – why not keep them that way?

We wanted it to be more of a hotel service but not have the hotel spirit. Obviously the restaurant is very important as well, and that’s been a huge success. It’s been received very well. And you can’t really do that with serviced apartments. And it’s not just about one location. We want to do a couple more in similar style in coming years.

A room at the Swire Island Eas

Tell us about East, your new hotel in Hong Kong which opens in January

A five star hotel for a four star price is going to be the mandate. It is a lifestyle business hotel which is quite modern, contemporary and urban, design-led like the Upper House and Opposite House with a strong people culture in a business environment. The location is very strategic because there’s so much office space, back office and middle management. RBS is there, LVMH has a back office function there, and there are lots of media and retail back office fashion businesses, design houses,  interior designers and architects as well. It’s very successful for office space but it has never had a hotel on the doorstep. There is food and beverage there as well, but no hotel restaurants.  And you can walk out of the MTR into the hotel. There’s not been any fresh product onto the market in recent years so it’s quite an exciting time at the end of Hong Kong. And there’s been a little bit of a move of office and retail to that side of Hong Kong because of the prices in Central. So to follow up and have this kind of lifestyle hotel directly in the vicinity will be hugely successful.
The next one will probably be East in Beijing roughly last quarter 2011. We have a project underway in Shanghai, in Pudong, a mixed-use site, probably a “House” of some description but we don’t have a designer for that yet.

A view from the Swire Island East

Your first property in Beijing – how has that market performed?

The first half was pretty dismal, but the whole market has been the same. Nobody was expecting the whammy of the financial situation, the visa situation and the H1N1, but after that the forward bookings for September/ October has been strong and it seems to be coming through and we are seeing quite a confident recovery there. I think it’s going to get to a certain level and flatten out there because there’s so much more supply in the market. There are another 12,000 rooms that weren’t there three years ago. We’re confident about Beijing for both leisure and corporate, both international and domestic, and ultimately meetings and incentive. Our property, East is well positioned for that because of the new exhibition centre out by the airport.

And East in Hong Kong?

Good strong forward bookings. It’s always strong to gauge it before you’ve opened, because a lot of people won’t book you until you’ve opened. But there is huge interest from the corporates we’ve shown round.  They want somewhere to go for a drink at night, somewhere to put their executives travelling from their regional offices and that’s exactly who it’s been designed for. We have to remain conscious of the market and what others are doing in the area and it will be very sensitive to rate but that’s Hong Kong for you.

www.swirehotels.com