New World Hospitality EVP talks expansion, brand identity

HONG KONG New World Hospitality is relaunching its flagship New World Hotels brand, announcing expansion plans across Asia Pacific. Executive Vice Chairman Sonia Cheng discusses how the world’s 286th largest hotel company intends to raise its profile regionally and beyond.

What compelled you to reposition New World Hospitality and its three hotel brands—New World Hotels, Pentahotels and new brand under development? 

Cheng: We started by looking at the needs of the new generation of travelers—they’re sophisticated and diverse and their desires and demands break the mould of established patterns and perceptions. We felt if we could tap into this market and provide them what they’re searching for, we could create an Asian-based international hotel management company with a distinctive corporate culture and global appeal.

Looking at the industry today, hotels have become commoditized and product-oriented, but the truth of hospitality is that it’s all about relationships. It’s the connection between the host and the guest that makes a relationship special. So our vision is to revive the original meaning of hospitality by re-introducing a fundamental philosophy and simple concept: ‘relationship hospitality.’ Simply put, relationship hospitality focuses on building strong and lasting relationships with guests, each other and our communities. This is the heart and soul of our company and the bedrock of our culture.


What are your goals, and how will you measure success?

Cheng: Our goals over the next few years are threefold: First, we would like to establish ourselves as a global hospitality player that has marked a significant space for ourselves in the market. Second, we would like to build a culture that will inspire our associates and be one in which we share the same goals and aspirations so we can become an employer of choice. Third, we want to create the type of new benchmarks and standards that others will want to follow. In doing so, we want to become widely recognized for our unique brand and culture.


What are your expansion plans for New World Hotels?

Cheng: We are investing US$1.1 billion into New World Hospitality properties over the next five years. We will do whatever it takes to be competitive within the markets we enter. Our expansion plans are aggressive. New World Hotels will more than double in size by 2015. We are also expanding our Pentahotels brand and expect to have 30 in operation also by 2015. And we’ll be introducing a new premium brand. Looking at it from another perspective, we already have more than 20 new projects in development, spread evenly over the three brands. Overall, we are targeting to launch more than 40 hotels in five years.


What is your strategy—will New World primarily own or manage hotels?

Cheng: Both. We will dedicate resources towards our own new-build hotels and also grow by managing properties for developers. And, unlike a lot of hotel companies that are managers only, we bring an owner’s perspective and insight to the management function—that’s an invaluable competitive advantage for developers.


What is your outlook on the growth opportunity in China? 

Cheng: We anticipate that more than 50% of our revenues will be generated in China. We already have multiple projects under development, the majority of which are in China. We are fortunate through our parent, New World Group, to be able to leverage existing networks and deep familiarity and longevity in the country. We don’t underestimate the China market and we take a long-term view. In particular, we believe that the secondary and tertiary cities in China will be the economic powerhouses of tomorrow.


How are New World Hotels performing?

Cheng: Our hotels’ RevPAR varies from city to city. We always aim to be first or second in terms of RevPAR within our competitor set.

According to STR Global, hotel occupancy in the Asia Pacific region rose around 6% year-on-year, and New World Hotels’ occupancy showed double-digit growth. Our strategy is to build occupancy as we reposition the hotels. Our occupancy has helped drive RevPAR growth to around 14%, with Shanghai performing particularly well, helped by the World Expo in Shanghai.


What do you mean by “modern Oriental hospitality” in New World Hotels?

Cheng: Modern Oriental hospitality means a fusion of the best of what different Asian cultures are known for. We want to embrace the best of the region’s hospitality and introduce an enlightened culture that is more about attitude than design. After all, “Oriental” means much more than beautiful orchids, Chinese murals and lanterns.  

In bringing this concept to life, we were really guided by the next generation of Asian travelers who are more sophisticated and open-minded and do not see things superficially. They are also looking for something new and refreshing that isn’t a clichéd version of an Asian hotel.

It starts by the willingness to both build upon and reinterpret tradition. Take food and beverage, for example; rather than your typical, formal Chinese hotel restaurant, we will look to serve authentic Chinese cuisine within a welcoming, casual environment. This is an expression of a beautiful tradition that honors the same values but celebrates them in a more contemporary way. But more fundamentally, our service style is natural and engaging, which is itself a reinterpretation of traditional Oriental hospitality. 

Manifestations of this new culture will be felt by our guests in different ways, such as open-minded and creative means of solving problems for them and an adaptable style of service from empathetic hosts. You can even see this in our advertising, which is unconventional for hotels—for many, this will be the first place they see how New World Hotels is presenting Oriental hospitality with a contemporary appreciation and context.