Roxy-Pacific Holdings, a homegrown publicly listed property and hospitality group in Singapore, is managed by four brothers. The eldest, Chris Teo, a hotelier at heart, is primarily responsible for Roxy-Pacific’s hotel ownership business, which is expanding into the upscale boutique segment with a new brand, Noku Roxy.
Teo graduated from Michigan State University with a bachelor of arts in hotel, restaurant and institutional management, but his school of hospitality might well be the luxury hotels he worked for in managerial positions before joining Roxy-Pacific as executive director and managing director. These stints, including with what was then the Oriental Hotel in Singapore, and the Amanpuri in Phuket and Amandari in Bali, inevitably influence how he shapes Noku Roxy. But Teo remains down to earth, insisting that while Amanresorts’ visionary Adrian Zecha is his mentor, profit lies in offering customers a more affordable upscale product.
Teo talked to HOTELS about his vision for Noku Roxy.
HOTELS: The property market in Singapore has been soft the past few years. How important is the hospitality division to Roxy-Pacific as a result?
Chris Teo: We actually did fairly well in the property market, both commercial and residential, in the last five to six years, but like all property markets, it has its ups and downs, so we needed to build a base of strong income stream.
That’s where the hotel (its first, Grand Mercure Roxy Hotel Singapore) plays a part. We’re happy with the product. Its size (500 rooms), positioning and model make it efficient and flexible. You don’t have to overstaff it like you do a typical luxury hotel; you don’t need to understaff it like you do a typical 3-star. Three-star hotels have a lot of ceilings. Once you’ve reached a price point, you can’t go beyond it – you can’t turn a 15-square-meter or an 18-square-meter into a 30-square-meter. But with a 30-square-meter room, we can go lower than 4-star, mid-4-star with pricing. We also have a lot of capacity to take different forms of business. In big cities, size is a huge advantage.
As hotels are a big contributor of recurring income, we are trying to build more hotels.
H: Your second hotel is the newly opened Noku Kyoto, with just 81 rooms. What’s the thinking behind the acquisition and your aim to grow Noku Roxy as a brand?
CT: I always have in mind the upper-scale 4-star boutique hotels, as I believe there is still a lot of room in Asia for a product that offers the local character and personalized service, but at non-luxury prices.
In selecting where to invest, I look first at the destination, as I believe people travel not to stay in a hotel unless it is a destination hotel, but to experience a place.
Next comes the software – the people, how you run the hotel and what value-add you bring. Today, you can create an authentic hardware anywhere as long as you can bring in the materials and hire great craftsmen, but at the end of the day it’s trained people who will make the difference.
Kyoto is a great destination because of its rich history and culture, while the Japanese people have the right service attitude and the capacity to learn. Our location (right across from the Kyoto Imperial Palace and next to Marutamachi subway station) is a great value-add. I like the scale of the hotel; it’s manageable and is a fairly reasonable investment, plus, when you venture into new places, you need to learn and understand the rules and regulations in operating hotels there. I was lucky – it took me four years to find it. The timing is also right. If you buy an old asset and add value to it, it’s faster (to open) and less risky, as the property is already there.
H: What does Noku mean?
CT: (Laughs) No meaning beyond sounding Asian. We just want to give people local experiences, personalized services and affordability. People are willing to pay a bit of a premium for an upscale boutique hotel, but not too high a premium.
H: Is there the temptation to bleed up? You’re building Noku Phuket and Noku Maldives, and they are villas.
CT: We’ve acquired 10 villas and some land in Phuket, and we’re redeveloping them as a hotel with 90 rooms while keeping five villas (completion is expected in 2018).
In the Maldives, it’s an existing property with 50 villas, 45 minutes away from Male, and we’re working with designers to revamp and reposition it in line with Noku’s concept of value for money.
The Phuket project could easily take 200 rooms but that’s not sustainable of what we want to achieve. With those numbers, can you provide the software?
We are disciplined in our approach. And we put a bit more money in places which count – certain public spaces and in rooms, with guest comfort in mind, not in OTT (over the top) design.
Sometimes you are being tempted, all right. I’ve assets sent to me every now and then, and they are very nice properties. But we’re a public-listed company, we need to stay focus, make sure we know our limitations and consistently work on the software. With two new projects, we’re already quite busy. We’re a small team and getting it right is important, especially if you’re a new brand.
H: What were the biggest lessons you took from the early years with the Oriental and Amanresorts that are still relevant today?
CT: From the Oriental, it’s the focus on attention to details, the way service was executed, how it really looked at the guest history, for example; and the planning and organization of events. I was in F&B, which is always the most complicated but most interesting aspect of hotel operations because each situation, planning, set-up is different.
At Amanresorts, I had a lucky break. I was fairly young, 28, and was hotel manager with Amanpuri, then Amandari a year later. That changed my mindset, as I moved from a 500-room hotel to 40 rooms. Yet the intensity was greater. There was so much more interaction between guests and staff, and management and staff. In big hotels, you don’t even see some staff. The rate was US$500 higher than Oriental and there was so much expectation in those days. You had to train inexperienced staff from the villages, talk to village chiefs to build relations – it’s just a completely different setup. In Ubud, it was even more complex because of the village culture, and you learn how not to upset traditions.
I’m trying to apply some of that experience here today. As a hotel, we have to be responsible and respectful of local cultures and traditions. Sometimes we lose the plot; we are so high-tech and connected all the time that we lose touch of people. In Asia especially, everyone and everything is so fast-paced. So we want to try and bring back the local experience. Why do you think Airbnb is booming? They do connect tourists to the place and create local experiences. And you don’t need to be ultra luxury to be able to do so. You can do it at any level. Even at Grand Mercure Roxy in Singapore, I tried hard to do that. I wanted a more local/Asian feel to the large hotel. I tried to create the sense of being in a small hotel. Being in the Peranakan (straits-Chinese) neighborhood (of Katong in the east) helps. We have lots of Peranakans coming to our hotel to eat Peranakan food.
There is still a lot of room for independents to create a local experience.
(At Noku Kyoto, Teo and his wife, Joanne, created a tailored map of the Kyoto city center that recommends favorite local haunts and hidden gems, aside from arranging for guest access into artisanal houses and best-kept F&B restaurant secrets.)
H: Why do you say there’s still a lot of room for independents to create a local experience?
CT: The big chains have better scale and efficiencies, but the independents, being smaller, are in touch with the local environment, can make quicker decisions and are more nimble.
Even as a company we are not that big but we know our staff, we know our suppliers, we build relationships and look at things in a more in-depth fashion.
H: Were you and your brothers groomed from young to take over the business?
CT: No, we decide what we’d like to do and we enjoy what we do.
It’s difficult for people to be able to do what they love. That for me is always a blessing.