Hospitality veteran Ho Kwon Ping is reinventing his family-controlled luxury hotel company to cater to more guests at different price points, moving beyond its home market of Asia.
Hospitality entrepreneur Ho Kwon Ping understands the perils of being pigeon-holed. “If you want to be standing, you cannot stay in a niche so small that you’re vulnerable,” the hotelier says. “You need a pyramid to grow.” It’s this thinking that has propelled Ho to embark on the largest-ever expansion at his Singapore-based Banyan Tree Holdings since its start in 1994. Ho has doubled the number of Banyan Tree’s brands, reaching beyond its traditional luxury offerings to embrace the midtier market, and entering multiple new markets outside Asia. The company also has shifted to an asset-light structure, bringing dozens of new hotels around the world under management. This go-wide strategy, creating diverse concepts for multiple regions and price points, underlines the executive chairman’s determination to reinvent the company while he also prepares the next generation to take on more responsibilities.
It’s “a big pivot,” admits Ho, 71, in an exclusive interview in July at his home, a resort-style villa in a leafy suburb in Singapore. “We must not just think of ourselves as a mono brand, like an Aman, Six Senses and Alila,” he says, referring to three high-end boutique-hotel companies that have been sold in recent years, two of them to multibrand companies. “If you don’t want to be eaten up … you have to broaden your base so that you can be stable financially,” he says.
Last year, Singapore-listed Banyan Tree, which Ho founded with his wife, Claire Chiang, 72, grew the number of brands in its portfolio to ten from five, with an emphasis on midmarket properties and on managing rather than owning hotels. (Of the 25 new hotels that Banyan Tree has added since the pandemic, the company has equity interest in only one). The strategy appears to be working so far, but it’s not without risks, including exposure to China’s bearish real-estate market and slowing economy, inflationary pressures, robust competition and, not least, worries about diluting the Banyan Tree reputation for exclusivity.
The issue of succession is also on the table. Ho is joined in the same interview by his daughter Ren Yung, a prime driver in the company’s expansion. The 38-year-old says she wears “many hats” as part of her job as senior vice president in charge of branding and digital strategy. “Brand can cover pretty much anything, which is why I also go into wellbeing, sustainability, talent,” she says. “One of my key roles now, also with being next-gen, is putting philosophy into systems that …. ensure longevity,” she says, adding: “My mom has always said, ‘Better to be a 500-year-old company than a Fortune 500 company.’”
Moving beyond luxury has served Banyan Tree well, says Alyssa Tee, a Singapore-based research analyst at KGI Securities in a March report. In the first half of this year, its net profit almost doubled to S$981,000 ($727,000), while revenue rose 21% to S$144 million, extending the post-pandemic recovery seen in 2022, when it returned to profitability. Revenue per available room, or RevPar, increased 64% over the same period. Its net gearing was 46% last year but is expected to drop to 25% by 2025, according to the KGI Securities report.
Banyan Tree owns and manages 10 brands and 72 properties in the luxury, upscale and midtier segments across 17 countries.
Banyan Tree declined to give occupancy rates for its hotels, but Tee’s report says they are close to pre-pandemic levels, thanks to the rebound in the travel industry. Global international arrivals soared 86% in the first quarter of 2023 from the year-earlier period, reaching 80% of pre-pandemic levels, according to the UN World Tourism Organization. Banyan Tree now owns and manages hotels in three categories: luxury, upscale and midtier. Among its luxury concepts are the founding Banyan Tree hotels and two new offshoots launched in 2022—Banyan Tree Veya, a wellness resort, and Banyan Tree Escape, an adventure resort—as well as its Angsana brand. Dhawa and Garrya fall into the upscale category, while in the midtier are Homm, Folio and service-apartment operator Cassia. It also owns three Laguna integrated resorts, in Thailand, Indonesia and Vietnam.
By 2025, “we should have up to 100 hotels,” says Ho. That compares with 72 properties now with 9,773 rooms across 17 countries, and 47 prior to the pandemic. Over the next 18 months, the company will add 19 hotels with 2,966 keys, almost half of which will be upscale or midtier. All 19 will be managed, not owned, by Banyan Tree. In 2022, fees from managed properties made up 17% of group revenue, while owned hotels contributed 50%. The rest came from extended stays and sales of branded residences.
Ho is confident in his vision for the future. “The traction we have had for these new brands has been nothing short of amazing,” he says, referring to Garrya, Homm and Folio, all of which debuted last year. The first two are Banyan Tree’s fastest-growing labels in terms of hotel openings and number of rooms. Garrya, which offers modern, minimalist spaces, has 374 keys in four hotels, while Homm, which touts the comforts of home combined with high-end service, has 496 rooms in five hotels. Folio, which has just one outlet, in Japan, with 48 keys, is a microhotel, with small, functional rooms.
“If you don’t want to be eaten up … you have to broaden your base so that you can be stable financially.”
Having a multibrand portfolio allows Banyan Tree to tap into an increase in intraregional travel in Asia, says Ho. “Twenty years ago, most [guests at Banyan Tree hotels] were long-haul travelers” who perhaps only came once a year, he explains, but more intraregional travel “means we are now within easy weekend reach of hundreds of millions of people and not only for one brand.”
Another prong to the expansion strategy is to go wider in terms of geography. Travelers may go to Prague or Phuket this year or Bali next, so “you have to be [present] … around the world,” Ho says. The company launched in Japan, Saudi Arabia and Greece over the past two years. Over the next two years, it will open hotels in new markets including Cambodia and Singapore, where it is headquartered but has never had a property. By 2026, it will expand further in Europe with a Banyan Tree in Greece and an Angsana in Spain.
Ho says that while the new brands will lead growth in terms of number of keys and openings, its flagship Banyan Tree hotels will continue to dominate revenue. A pool villa for two at a Banyan Tree in Thailand, for example, can cost $530 a night, while a beachfront suite for two at Garrya in the same country goes for $330, and at Homm, a seaview room costs $120.
Back to Life
Banyan Tree returned to profitability last year as the hospitality industry rebounded.
The hotelier is also using strategic alliances to grow the business. That includes an agreement with French hospitality company Accor to develop and manage hotels around the world. So far, they have two properties, a Banyan Tree each in Doha and Saudi Arabia. The two companies have also signed agreements in Greece and the Philippines, where they plan to manage a Banyan Tree hotel and residences and an Angsana hotel in a $3 billion luxury lifestyle resort called Hann Reserve, about 100 kilometers north of Manila.
In China, Banyan Tree partners with property developer Vanke. The alliance has 26 properties under various Banyan Tree brands and plans a further 13 over the next 18 months. As China’s property woes squeeze the country’s economy Ho declines to comment on the partnership other than to say, in China “[we’re] looking at restructuring a lot of things.”
It’s an important market for Banyan Tree, both for in-country stays and outbound travel, which was hobbled by pandemic-related restrictions until the end of 2022. “China remains a question,” says Govinda Singh, an executive director at real estate firm Colliers in Singapore. Hotels domestically are doing well, he says, but he doesn’t see the China outbound market recovering before 2025, “until the China domestic market, specifically real estate, recovers.”
Vanke and Accor each hold about a 5% stake in Banyan Tree, according to the company. Other shareholders include sovereign wealth fund Qatar Investment Autho-rity, with 24%, and Singapore’s Far East Organization, controlled by billionaire brothers Robert and Philip Ng, with 5%. Ho and family own roughly 45%.
“One of my key roles, being next-gen, is putting philosophy into systems to ensure longevity.”
High construction costs due to inflationary pressures seen globally could also dampen hotel supply, as this would mean fewer new hotels looking for management services. “Their best bet for growth is going to be conversions,” says Singh, referring to the rebranding of existing hotels. Conversions typically take six-to-18 months, while construction can take at least five years, he says. Indeed, at least a third of the company’s hotels opened over the past two years were conversions.
Competitors, however, are similarly poised. IHG Hotels & Resorts, an industry leader with 19 brands, says 25% of its signings last year were conversions. “They’re playing in a very competitive market,” says Singh, adding that other brands are also seeking to place as many flags as possible to take advantage of the travel recovery.
But when it comes to conversions, Ho says Banyan Tree has more to offer than the big players. The pandemic was “near-death” for many unbranded family run hotels in Asia, he says, and many of them don’t want to manage again. At the same, “they are not very comfortable with the mega brands,” which can’t offer the same level of attention and product differentiation as Banyan Tree, says Ho. “We see a real opportunity for us in that sector.”
Another touchy issue for Banyan Tree is the risk of diluting its reputation for luxury. The launch of its midtier hotels sparked internal friction initially, according to both Ho and Ren Yung. “I think that it’s possible that we do both, and that tension is healthy,” says Ren Yung. “As long as we are constantly communicating that there is no trade-off, we’re very clear that Banyan Tree is our flagship,” she says.
To address this problem, Ho says all the brands will be put under a new umbrella next year called Banyan Group to differentiate the new labels from the luxury Banyan Tree brand. Colliers’ Singh says it’s a challenging issue. “You just have to be careful … the messaging for each brand is clear,” he says, noting they’re “going to have to spend a lot on marketing.”
Banyan Tree shares are up 21% year-to-date, outperforming Singapore’s benchmark index, which is down 1% over the same period. Still, the stock is down about 80% off its all-time high in June 2007. “We are clearly underperforming book value,” Ho says, while noting that shares are only thinly traded.
“Better to be a 500-year-old company than a Fortune 500 company.”
Meanwhile, as both Ho and his wife enter their 70s (Claire Chiang is senior vice president and global head of learning and talent at Banyan Tree) Ho is looking to the future. He says their three children are committed to holding onto the family businesses (as well as Banyan Tree, the family has a sizable stake in listed Thai agribusiness Thai Wah, founded by Ho’s parents). But he makes a distinction between ownership and management, and says family members should only have key management positions if they want them and outside stakeholders agree. Indeed, Banyan Tree has long been run by a professional team, currently led by President and CEO Eddy See.
Besides Ren Yung, the Hos have two sons. Ren Hua, 41, spent seven years at Banyan Tree, growing its footprint in China, but relocated to Bangkok in 2015 to helm Thai Wah. He says by phone that his time at Banyan Tree taught him how to “lead a team, how to build a country business, how to work in China,” while at Thai Wah, he has “learned how to be a CEO.”
Ren Hua, who retains a seat on the Banyan Tree board, recalls that a clincher for taking the top job at Thai Wah occurred in a discussion over dinner with his father at the Vertigo restaurant and rooftop bar at the Banyan Tree hotel in Bangkok: “He said to me, ‘If you want in the future to be a good chairman, you need to learn how to be a CEO.’”
Younger son, Ren Chun, 29, is a lawyer based in London. He plans to return to Singapore this year and become more involved in the family businesses.
For now, Ren Yung will play the most active role at Banyan Tree, her father says. She joined the business in 2009 after graduating with a degree in sociology and economic development from the London School of Economics. She left in 2012 to set up a company offering coworking spaces, since shuttered, and an eco-conscious fashion line called Matter that is still sold at some of the company’s shopping galleries. She returned to Banyan Tree in 2017.
“Within [Ren Yung’s] career at Banyan Tree we hope to get to 200, 300 hotels,” says Ho. Her challenge will be “to ensure that the spirit of Banyan Tree, as it was when it was only 20 hotels, won’t be lost.”