John Girard is general manager of the Regal Kowloon Hotel and vice-president development for Regal Hotels International.
How have things changed in Hong Kong?
I first lived here in 1971, left in 1976 and then returned and have been here since 1987, and in all that time for all the hammering the economy has taken, I have never seen things not recover. One of the obvious reasons for that is because of China being next door. There are two billion people, 25 cities of over 20 million people and the mind boggles, that’s what’s pulled us out. Besides that, Hong Kong is renowned worldwide for its great banking, quick technological advancements, the rule of law and people can take in and out any amounts of money. The authorities are interested in huge investments and the equation works. I feel that next year will be a much better year than this year and this year has been very good. Our revenue per available room (RevPAR) is industry-wide 30% ahead of last year. Last year wasn’t a very robust year, admittedly, but our RevPAR is 12% above 2008, which is a more important benchmark, because 2008 prior to meltdown was a very strong year.
Where are your guests from?
Our guests mainly come from North Asia, Japan, America and China. In the old days when you mentioned China people used to think it was leisure groups, but it’s a more mature market, and we are bringing in a lot more corporate travel. There are huge portfolios and lots of liquidity. People are constantly looking for better corporate hotels to stay in. This has changed in recent years because China has become so much more open and in the future I think we will have a lot more of the same type of customer coming in. The China leisure market travels to Europe and the States.
Our percentage of guests from Europe has increased, America and Japan also, although America because of the economy setback is taking a little longer than normal. We have about 12% from the US, 25-30% from China, another 15-20% from Europe including the UK, and the rest would be North Asia, Japan, Australia, Thailand and Philippines. The reason why we get a lot of US guests is because of our location in town which is the toy and rag trade location, and most of the companies that do business in that sector are in the US.
How will that change?
There will be a strengthening from China, and two new destinations for Hong Kong are South America and Russia. The Russians are coming in droves for Macau and the South Americans are starting to travel to Asia in numbers. Our business mix is 50% business, 50% leisure. The Kowloon side traditionally has mixed leisure and business parts of the market – particularly electronics and toys. The Island side is corporate and banking.
How do you cater for business travellers?
We have an Executive Floor and we have 240 Club Floor rooms. We have recently renovated two more Club Floors and we differentiate through the floors. We also have seven restaurants, which stands out in comparison with some of our competitors.
Who is your competition?
Our competition is the Royal Garden Hotel, the Grand Stamford Intercontinental, the Niko, the Shangri-La, the Gateway and Prince Hotels (Marco Polo Hotels) and two more secondary – the Royal Pacific Hotel and Towers and the Harbour Grand. There is also a new one coming on, the Icon, which opens in April.
How important is loyalty to the brand?
It is extremely important, not just for Regal but for the entire industry. In our company we have several loyalty programmes. We have one called the 925 club which provides huge incentives for corporate supporters for room business and MICE business and we have something like 30 to 50,000 members, most of whom are quite active. The loyalty programme site is live and members can go to it and make their own bookings. We also have one called the Regal Rewards – end user based. Our guests as far as the Regal Kowloon are concerned are 15% from 925 Club (corporate membership) and 18% from Regal Rewards Program.
How well known do you think the Regal Hotels brand is?
Well, Regal has been in China for more than 30 years and is also in Hong Kong and North America. Regionally and internationally, the branding that the group has as a result of those 30 years exposure brings instant recognition and credibility to its properties. We have a very clear market positioning and a consistent brand. Our brand has remained unchanged for 30 years, and so we provide the guests that know the brand, in the geographical areas I have mentioned, a no surprise experience, particularly with those business partners who have the confidence to select us whenever they visit
As far as Regal is concerned, it is a publicly listed company, a member of the Century City Group which has been around for a lot of years. We have more than 6,000 rooms here in Hong Kong with 50 restaurants – making us probably the largest locally owned operator in Hong Kong. If you take that and marry it with the 30 years of hotel management experience that we have, it’s a pretty serious statement.
Most of your growth seems to be taking place in Greater China...
We are committed to a very long term growth in Greater China, yes. We are actively looking for hotels in China as we speak. We have people travelling all over China looking for that. We entered China more than 13 years ago, into Shanghai, when we started managing the Regal International East Asia Hotel.
In China the brand is as instantly recognisable as it is in Hong Kong. We now have six hotels in Hong Kong – the Regal Airport Hotel, Regal Hongkong Hotel, Regal Kowloon Hotel, Regal Oriental Hotel, Regal Riverside Hotel and the boutique hotel the Regal I Club that appeals to the younger more hip generation.
We have one in Chengdu in China, the Regal Master Hotel with another in development, the Regal Xindu Hotel. We have one in Dezhou, Shandong, the Regal Kangbo Hotel; and three in Shanghai, the Regal International East Asia Hotel, Regal Jinfeng Hotel in Pudong and the Regal Shanghai East Asia Hotel with the Regal Plaza and Residences in Shanghai under development. Then we have the Regal Yuhong Hotel in Zhengzhou close to Zhengzhou Xinzheng International Airport, and the Regal Fanhua Centre Hotel in Suzhou, in the Xiang Cheng District. These are major cities of 10 to 20 million people with huge potential for more hotels.
You are also in charge of hotel development...
I have twin titles, yes. I am general manager of this hotel and also international hotel development as well, which is any hotel development outside China.
Where are you looking?
I’m looking at Scotland and Sunderland in the UK, and Ireland, where there are huge opportunities for people who want to invest their money. We are also looking at Pattaya in Thailand, Vietnam, and at Tripoli at the moment. There are waves of stuff coming in but one has to be realistic. We are very keen on the UK.
Normally people in your position reel off London, Paris, New York. Your list seems a little more realistic.
Well yes. We’d love to have hotels in those cities, but those places cost a bomb in terms of land prices and you would need to find an investor, and if you don’t have a big name like Hyatt, Mandarin or Starwood, you have to work a little harder.
With the backing of your company could you not just buy the land?
No. The strategic plan or road map of the group is pure management. We don’t do equity as a group. All our China hotels are management contracts. We look for interested parties who want to take an equity position and we try and bring the developer and the equity position potential together and we manage the hotel. We are in it for the long term – five to 15 years. That’s why to an investor and a developer it’s interesting.