Latest / Brand Insiders / Swire Hotels: “Houses, Not Hotels” and the Art of Staying Different

Transcript

Swire Hotels: “Houses, Not Hotels” and the Art of Staying Different · Brand Insiders

• 0:12
  SPEAKER_02: Welcome to Brand Insiders focusing on innovative hospitality brands.
• 0:20
  SPEAKER_02: I'm joined today by Dean Winter, managing director of Swire Hotels.
• 0:26
  SPEAKER_02: Dean, thanks for joining me.
• 0:29
  SPEAKER_00: Great to be with you again, honey.
• 0:31
  SPEAKER_00: Thank you.
• 0:31
  SPEAKER_02: So right now I'm recording in the evening from Toronto, and you are in Hong Kong in the morning.
• 0:37
  SPEAKER_01: It is 9 a.m.
• 0:38
  SPEAKER_01: Tuesday.
• 0:39
  SPEAKER_01: That's correct.
• 0:40
  SPEAKER_01: Yeah.
• 0:40
  SPEAKER_02: Right.
• 0:41
  SPEAKER_02: So you're literally in the future from me right now.
• 0:44
  SPEAKER_01: Yes.
• 0:45
  SPEAKER_02: So I guess that'll that'll come in handy when we get to our final section where we talk about the future of hospitality.
• 0:50
  SPEAKER_02: Literally tell me what the uh what the check-ins and checkouts are going to be for tomorrow.
• 0:56
  SPEAKER_00: Right.
• 0:58
  SPEAKER_02: I wish I could do that.
• 1:00
  SPEAKER_02: Yeah.
• 1:01
  SPEAKER_02: Um, so we always start.
• 1:04
  SPEAKER_02: Uh let's uh let's dive right in.
• 1:06
  SPEAKER_02: What is the elevator pitch for Swire Hotels?
• 1:10
  SPEAKER_02: Tell us about the brand.
• 1:12
  SPEAKER_01: Well, we're a subsidiary of Swire Properties, who are a kind of well-established property developer here in Hong Kong for some 15 odd years.
• 1:19
  SPEAKER_01: We started in 2006 with two brands, the House Collective and uh and East Hotels.
• 1:25
  SPEAKER_01: Um, and currently have a kind of you know owner-operator model.
• 1:29
  SPEAKER_01: Um, we are pitching House Collective, which was recently rebranded, and I'll come back to that later.
• 1:35
  SPEAKER_01: Yeah, um, we're really thinking we're we're pitching that with the sort of premium international brands on a competitive level, and East is a sort of lifestyle business hotel which fits really well within that um sort of commercial hub that that uh Swire Properties have, uh both here in Beijing and in Hong Kong, as well as um in Miami.
• 2:00
  SPEAKER_02: Right.
• 2:01
  SPEAKER_02: And talk about East Hotels and Upper House, now previously the House Collective.
• 2:09
  SPEAKER_02: What makes these brands innovative?
• 2:13
  SPEAKER_01: Well, I think we've always we've always approached them with a kind of thinking differently mindset.
• 2:18
  SPEAKER_01: Um, from the early days where we um went one of the first hotels to to um to have a kind of paperless environment that the whole arrival and departure process was was was was was paperless.
• 2:31
  SPEAKER_01: We're one of the first hotels in Hong Kong, if not the first hotel in Hong Kong to have Wi-Fi in the limousines.
• 2:37
  SPEAKER_01: Um so we've always we've always had that kind of desire to to think differently and and use technology with without technology being an interference, but more of an enabler.
• 2:49
  SPEAKER_01: Um so I think that's something that we've we've uh we've we've certainly benefited from.
• 2:54
  SPEAKER_01: But probably where I think we differ mostly is with our people philosophy, and um we have a very kind of uh um trusting management style, which I think uh um we sort of embrace the fact that every day is different, we embrace the fact that things are gonna go wrong, it's really about how you recover and um and how you keep it real, and um we try to sort of not work from a script or too many operating procedures and and uh and keep it real as much as possible.
• 3:25
  SPEAKER_01: And I think that's what our clients I think that's what they like the most about us.
• 3:30
  SPEAKER_02: Huh.
• 3:30
  SPEAKER_02: You know, it's it's very interesting because everyone's trying to keep it real or to empower their teams, but um a phrase that uh I've heard multiple times and actually heard today was culture eat strategy for breakfast.
• 3:45
  SPEAKER_02: So you can write an SOP about uh empowerment, but if it's not at the core of the brand, uh it won't happen.
• 3:53
  SPEAKER_01: 100% agree.
• 3:54
  SPEAKER_01: Absolutely.
• 3:55
  SPEAKER_01: That's a good one.
• 3:56
  SPEAKER_01: I'll make a note of that.
• 3:57
  SPEAKER_02: Yeah.
• 3:58
  SPEAKER_02: Um, so another interesting thing that I really like about East and Upper House is that we're moving away from defining who our guests are by segments according to demographics and more so into behavior, psychographics, attitude, interests, and tribes.
• 4:20
  SPEAKER_02: And really the buzz term in hospitality for that is lifestyle.
• 4:25
  SPEAKER_02: So um, can you talk to us about who the customers are for East Hotels in Upper House and how they're really propelling this whole idea of lifestyle hotels forward?
• 4:37
  SPEAKER_01: Completely agree.
• 4:38
  SPEAKER_01: I think you know, segmentation is something that we scratch our heads around constantly about you know where are the where are the lines being drawn, and it's it's changing a lot predominantly because of OTAs and distribution solutions and how business is coming to you.
• 4:50
  SPEAKER_01: You never really know are these are these guests here on business or are they here on leisure, you know, pleasure, family, shopping?
• 4:58
  SPEAKER_01: Um, so it's very difficult unless you've got a negotiated contract with a financial institution, for example, and it's very difficult to know the real reason why people come.
• 5:07
  SPEAKER_01: And we do see a wide range of demographic you know, ages and and and origins and so on.
• 5:13
  SPEAKER_01: So it's um it's certainly changing, but I think we certainly fit in with a um, I mean, from an East perspective, we we certainly appeal to to um how can I describe it, young young 50-year-olds and old 30-year-olds.
• 5:30
  SPEAKER_01: You know, I think there's that's that's probably the easiest way.
• 5:33
  SPEAKER_01: Uh, we've got people that that um that love the fact that we've got a rooftop bar with amazing views and and kind of a degree of tech, not too high tech, as I was saying earlier, um, and an informality, a kind of casual professionalism, which I think many people today, um, regardless of their age and their experience as travelers, really appreciate that we've we've sort of stripped out a lot of the bureaucracy, we've stripped out the barriers on arrival and departure, um, and I think our clients really like that.
• 6:04
  SPEAKER_01: And then for house collective, I should say, um, upper house hotels, um, it's obviously there is that expectation that customers are going to get a little bit more love than they would at least, and a little bit more attention.
• 6:19
  SPEAKER_01: Um, so we obviously play to that, manage their expectations and so on.
• 6:24
  SPEAKER_01: But I think that um again, we've got we've got 30% of our business comes from the Chinese mainland, um, some 40% of our business is on a repeat basis, and um, so so we obviously get to know these people, we get to know uh their reason their reason for coming, and it is very varied.
• 6:42
  SPEAKER_01: They can be coming to Hong Kong for a meeting, they can be coming to Hong Kong for shopping, um, um, they could be coming for the first time because they've been referred by a friend.
• 6:51
  SPEAKER_01: Um, but only about 18% of our business is is through at Upper House Hong Kong is coming through a sort of corporate negotiated contract.
• 7:00
  SPEAKER_01: So um I think that's that's pretty low for a for a Hong Kong hotel.
• 7:04
  SPEAKER_02: Wow.
• 7:05
  SPEAKER_02: So while we're on the note of Hong Kong, uh we should mention that Upper House and East follow in a very long and prestigious line of Hong Kong France, Langham Peninsula, Mandarin Oriental, Rosewood.
• 7:22
  SPEAKER_02: What makes Hong Kong so special when it comes to hospitality?
• 7:27
  SPEAKER_01: There's certainly a history here of Hong Kong being a gateway to China, um, both before the handover uh of 1997 and and beyond.
• 7:37
  SPEAKER_01: And I think that that's really how Hong Kong is going to continue to differentiate itself in the future.
• 7:43
  SPEAKER_01: It's going to be that gateway to China.
• 7:46
  SPEAKER_01: So, as a consequence of that, that history, um, the accessibility of the harbor, an incredible airport that was built very early on, um, Hong Kong was a very accessible destination in in the Orient, far more than say uh Indonesia or the Philippines or certainly China.
• 8:05
  SPEAKER_01: Um, so and those those brands that you mentioned, of course, are all probably all stemmed from real estate kind of origins.
• 8:14
  SPEAKER_01: And um Hong Kong was was and still is you know a very a very dynamic real estate market, and you know, Mountain Oriental, um Shangola, for example, um ourselves, Peninsula, as you say, um, I think have all benefited from those emerging real estate portfolios over the last few decades.
• 8:36
  SPEAKER_01: Um, obviously, Peninsula, of course, was was in the location of the original railway in Hong Kong, um, and and obviously benefited from that that the romance of rail travel, you know, 100 years ago.
• 8:48
  SPEAKER_01: Um, so I think yes, Hong Kong has always has always been a fertile place for luxury brands in general, and uh hospitality is no exception.
• 8:57
  SPEAKER_02: And uh you mentioned um a large percentage, I I actually forgot, uh, come from domestic China.
• 9:06
  SPEAKER_02: Um what what percent is that again?
• 9:09
  SPEAKER_00: Uh we are at close to 40 percent at uh Upper House Hong Kong.
• 9:14
  SPEAKER_02: Okay, 40 percent.
• 9:15
  SPEAKER_02: And uh we have to talk about how travel within China has changed uh since the lockdowns because you know I'm coming at it from a north more North American perspective.
• 9:27
  SPEAKER_02: We opened on a certain timeline, China opened on a different timeline, and we're seeing the growth since that of domestic luxury, a lot of family travel within China.
• 9:39
  SPEAKER_02: Tell us um how has Chinese travel changed within the past two years?
• 9:45
  SPEAKER_01: I I'd actually like to take you back a little bit further, um because the other interesting metric around our China business is when we opened the upper house in 2009, our our Chinese mainland business was five percent.
• 9:56
  SPEAKER_01: Five.
• 9:57
  SPEAKER_01: And it and it and that wasn't unique to us.
• 9:59
  SPEAKER_01: That was a that was a that was across the luxury hotel sector.
• 10:03
  SPEAKER_01: Um, it was single-digit everywhere, with the exception probably of Shangular, and that was because they had such a large footprint and brand awareness in the Chinese mainland.
• 10:11
  SPEAKER_01: Um, you know, things changed, you know, uh consumption behaviors changed, visas changed, and pretty much by 2015 those numbers were doubling every year.
• 10:21
  SPEAKER_01: And um, so it's really been a phenomenal uh uh sort of outflow of tourism out of the Chinese mainland, which was then you know stopped during COVID, of course, and um what we saw happening during that time was that the affluent Chinese traveller that would typically go overseas to frankly any leisure market that um you know whether they were um established or not, suddenly realized that they couldn't they couldn't leave the country.
• 10:50
  SPEAKER_01: So they looked for different experiences, different hotel brands that were perhaps a departure from the the ordinary, mainstream, popular international brands, and and looked for experiences, and that was where I think we we certainly benefited and we saw a lot of a lot of traction, most notably in in our hotel in Chengdu, Upper House Chengdu.
• 11:14
  SPEAKER_01: Um so that that that sits in the western part of the country, it's a beautiful, you know, rural setting.
• 11:21
  SPEAKER_01: The city of Chengdu itself is is fabulous.
• 11:24
  SPEAKER_01: Um, and uh I think many people have this notion of traveling to the west.
• 11:29
  SPEAKER_01: There's a lot of sort of ancient poems and stories about about uh about that part of the country that many people would have learned about when they were growing up.
• 11:36
  SPEAKER_01: So that journey to the west is a is a popular a popular activity.
• 11:40
  SPEAKER_01: And um, so we saw that happening during COVID.
• 11:44
  SPEAKER_01: Um, then since COVID, and you know the brakes are off, and people can people can travel again, and we've definitely seen a change in demand patterns.
• 11:53
  SPEAKER_01: But at the same time, there's a lot of domestic consumption.
• 11:56
  SPEAKER_01: You know, the government are promoting domestic consumption both in retail as well as tourism.
• 12:00
  SPEAKER_01: So we're starting to see now in late 2025 um some of those occupancy numbers pick up again as as people I think it's settling down, I think probably is more uh more the case now post-COVID.
• 12:14
  SPEAKER_01: Um people have perhaps gone overseas again and seen the sites that they used to see, or seen sites that they wanted to see but couldn't.
• 12:21
  SPEAKER_01: And now, as they plan for their next trip, they're now considering again a domestic option.
• 12:27
  SPEAKER_01: So um it's very varied, it's very dynamic, it's very sophisticated.
• 12:31
  SPEAKER_01: You've got a you've got um the whole gambit of of traveller from the budget traveller looking for something that's that's simply a place to put your head down while they go shopping or go eating.
• 12:44
  SPEAKER_01: Um, and then you've got the premium families, for example, that would be booking several rooms at a at a at a at a at a premium establishment.
• 12:52
  SPEAKER_01: Um and in and in in emerging destinations, not not just the typical big cities either.
• 12:58
  SPEAKER_01: So I think it's a I think it's a very interesting time for for tourism in the country, whilst still perhaps not getting back to the kind of pre-COVID international traffic numbers that the country was seeing.
• 13:13
  SPEAKER_01: But they're trying, you know, they've they've they've waived a lot of visas from many, many countries now, um, and that's making that's making a big difference.
• 13:21
  SPEAKER_01: So so um there there there clearly uh is a desire to to you know to welcome back the international traveler.
• 13:29
  SPEAKER_02: And you know, to focus a little bit more on the upper house in terms of drilling down to it, what I love is the tagline houses, not hotels.
• 13:39
  SPEAKER_02: And when you're talking about all these different segments, attitudes, different types of people that are arriving, realistically, the only way to have a house is to deliver that personal service and to allow for that adaptation, uh, as you said at the beginning.
• 13:59
  SPEAKER_02: So I'm wondering if you could unpack and maybe give us an example of how that houses not hotels is reflected not just through the attitude, but something like a specific service to offering that defines the upper house experience.
• 14:16
  SPEAKER_01: That's such a good question, Adam.
• 14:18
  SPEAKER_01: And we'll probably sit here till Christmas Day talking about it.
• 14:23
  SPEAKER_01: Um, you know, fundamentally we've we've tried to deconstruct culturally this notion of some sort of subservience and and and um and and the formalities of of service that is still found, where there's a lot of kind of hand rubbing and bowing, and how many times can I use your name in one sentence, and and all that kind of traditional forms of greeting in in hotels.
• 14:51
  SPEAKER_01: And we've tried to deconstruct that through through various means, probably most successfully at the recruitment stage, where we do hire based on attitude rather than ability.
• 15:03
  SPEAKER_01: And but the point I'm making is that the desire to actually make the hotels feel like they are more perhaps like a friend's apartment.
• 15:14
  SPEAKER_01: You arrive in Hong Kong, you're given the keys to someone's apartment, they've gone away for a few days, you've got the place to yourself, you can use the car, you can benefit from the maid service and come go as you please.
• 15:25
  SPEAKER_01: It doesn't feel like it actually feels like your own home, it doesn't feel like a hotel.
• 15:30
  SPEAKER_01: And that's that's the philosophy I think that we've tried to to to introduce.
• 15:35
  SPEAKER_01: And by the way that we do that is by stripping out a lot of the formalities and and recognizing people.
• 15:42
  SPEAKER_01: You know, we try to, if you were staying, we try to find out a bit more about you, whether that's just through a little bit of online research, you might have stayed before, you might have been referred to us by somebody.
• 15:52
  SPEAKER_01: So we would try and find out a bit about you, and then um, and then for example, you might be a golfer, you might love sailing, you you know, you might you like might love hiking.
• 16:02
  SPEAKER_01: So we we put a book or a magazine in your room with a note saying enjoy your stay, and and knowing that that would resonate with you because of because of your interests.
• 16:11
  SPEAKER_01: Um, so we do that quite a lot, and um, and we don't do the sort of ubiquitous fruit fruit bowl.
• 16:18
  SPEAKER_01: We if we if we know you like cherries, we we put cherries in the room.
• 16:21
  SPEAKER_01: So you know these are all these are all little touches that I think make it feel much more uh like like a residence um or a home than it does um than it does a hotel.
• 16:33
  SPEAKER_02: Oh your uh your CRM research team would have a field day on me, particularly the fruit bowl.
• 16:39
  SPEAKER_02: Uh you know, me myself, uh I've spoken publicly about um spoiler spoiler alert, uh, how unhealthy the average banana is.
• 16:49
  SPEAKER_02: So I dislike fruit bowls with bananas in them.
• 16:53
  SPEAKER_02: So that's just me.
• 16:54
  SPEAKER_02: I can I can drill into the bioscience of that a little bit later, but um, I would love to have one that's just purely you know dark cherries which have melatonin in them and are very very healthy for you.
• 17:06
  SPEAKER_01: Absolutely.
• 17:07
  SPEAKER_02: Yeah.
• 17:08
  SPEAKER_02: Um, so aside from my tangent there, uh when we're looking at the actual design of these hotels, and we've remarked that it's the people that embody the heart of house.
• 17:21
  SPEAKER_02: That's it, always comes down to that and making people feel at home.
• 17:25
  SPEAKER_02: Still, though, luxury does require a lot of thoughtful area planning and design.
• 17:33
  SPEAKER_02: And you look at each upper house and they are immaculate and not just opulent, I mean immaculate, timeless, like these are spaces that every little detail has a specific sense of place and feels like it's enriching the environment and the experience.
• 17:53
  SPEAKER_02: Can you talk to us about the thoughtfulness in the design that's gone into the upper house?
• 17:58
  SPEAKER_01: Yeah, absolutely.
• 17:59
  SPEAKER_01: I think you're absolutely right, and as much that it's it's really at the core of the upper house brand, you know, all the hotels are different.
• 18:06
  SPEAKER_01: We've we've we started out by calling them different names, we've changed that now, and we'll come back to that later, probably.
• 18:13
  SPEAKER_01: But um it you we like to use where we can different designers, certainly different architects.
• 18:20
  SPEAKER_01: Um, but even where we have used the same designer, um, it's someone that we've trusted to really go deep into the neighborhood, into the community, into the culture of what makes the city tick.
• 18:33
  SPEAKER_01: And we don't have brand standards.
• 18:36
  SPEAKER_01: That's I think really what drives this disruption that we go through every time we we get into the room with an interior designer and and project management teams because they'll say, Well, you know, what's your brand standard for how many cushions you want to have on the bed?
• 18:52
  SPEAKER_01: They're like, Well, we don't we don't have such a thing, that's ridiculous.
• 18:56
  SPEAKER_01: Um, and um obviously we have we have mechanical and and and and electrical, you know, technical guidelines, but we don't have brand standards, so that kind of liberates us.
• 19:07
  SPEAKER_01: Um, and when I say us, it really is myself and you know, head of operations, um, and you know, other senior colleagues that that join those kickoff discussions to to to and we write a we write a concept statement that is that is we take our time over that.
• 19:24
  SPEAKER_01: Um, and then it's really this thoughtfulness around the journey through you know the arrival experience, recognizing that we really don't have these reception desks, these these monoliths in the lobby where you queue up and and sign forms and so on, but it really is like arriving in somebody's home.
• 19:46
  SPEAKER_01: So, what does that journey feel like?
• 19:47
  SPEAKER_01: How you know what's what's what's the lighting, what's the what's the carpet, what's the what are the what what are the art installations that you engage with along along your way to to to the elevator?
• 19:59
  SPEAKER_01: Um we had a big debate recently.
• 20:00
  SPEAKER_01: We're opening, we're designing and opening a hotel in Shenzhen in 2027, and it's a tech metropolis, and we've we've wanted to kind of give a nod to the tech theme.
• 20:13
  SPEAKER_01: Um, so we've we've debated long and hard about whether we should have a conventional elevator call button or whether we should have something that is a little bit more sophisticated and you know, a touch screen where you just pass your room key over it, the elevator comes and takes you to your floor, um, which is not new technology, but it's technology that's probably more commonly found in not in an off in an office building.
• 20:38
  SPEAKER_01: Um but we've adapted it to have a more kind of residential interface and look better than an office building.
• 20:47
  SPEAKER_01: Um, so that's something that we've we've introduced for that property, which we probably wouldn't introduce in our other hotel we're designing, which is in Xi'an in central China, which is deeply cultural, historic UNESCO city.
• 21:00
  SPEAKER_01: Um, that kind of technology on as part of the arrival experience probably wouldn't work.
• 21:05
  SPEAKER_01: So, you know, I think every hotel is different, every journey is different.
• 21:10
  SPEAKER_01: Um, and then into the guest rooms, of course, there's a lot of discussion and a lot of sharing with stakeholders about about what is it we're trying to create.
• 21:19
  SPEAKER_01: Um, and and is it going to live?
• 21:21
  SPEAKER_01: Is it gonna be timeless?
• 21:22
  SPEAKER_01: Is it gonna be is it gonna go beyond 10, 15 years?
• 21:26
  SPEAKER_01: And we're we're now actually kicking off renovation discussions for Upper House Hong Kong, which is 16 years old now.
• 21:33
  SPEAKER_01: We and we haven't redesigned or done anything to that property in that time, and I think that's a testament to the thoughtfulness that was done at the very beginning.
• 21:41
  SPEAKER_01: Um, so we don't want to be kind of ripping ripping out carpets and curtains after after seven years.
• 21:46
  SPEAKER_01: You know, we want it to be as timeless as possible.
• 21:50
  SPEAKER_02: Yeah, there's a lot to be said with the thoughtfulness and attention to detail that goes into the beginning, so that way you're creating an experience that is timeless.
• 22:00
  SPEAKER_02: That is value that becomes a part of the community itself.
• 22:04
  SPEAKER_02: And it doesn't need to have a mandated soft goods refresh every five to seven years because everything's been designed from the beginning.
• 22:15
  SPEAKER_02: And that from a capital standpoint, that can actually save a lot of money in the long run and definitely a lot of headaches.
• 22:23
  SPEAKER_01: Completely.
• 22:40
  SPEAKER_02: Well, on the note of restaurants, you mentioned the Chendu property, which is in uh Sichuan, correct?
• 22:48
  SPEAKER_02: Correct.
• 22:48
  SPEAKER_02: Correct.
• 22:49
  SPEAKER_02: Which is uh ostensibly completely different than Cantonese style food.
• 22:55
  SPEAKER_02: And uh it's almost um me looking from the outside in, uh, it it appears to me like China almost has a travesty of riches when it comes to culinary options.
• 23:06
  SPEAKER_03: Yes.
• 23:06
  SPEAKER_02: Which then uh the question about the seven-year cycle for restaurants is how do you stay at the forefront when there's so many other incredible options for people to choose from?
• 23:20
  SPEAKER_02: And uh and that thereby make your restaurants a feature that drives hotel stays.
• 23:28
  SPEAKER_01: Yeah, it's a great question.
• 23:30
  SPEAKER_01: I think you know we we we we we get it wrong sometimes, and um, and you know, restaurants are restaurants in general in this part of the world, uh, is a difficult business.
• 23:41
  SPEAKER_01: You know, margins are squeezed, costs are increasing, you know, dining behavior has changed after COVID for sure.
• 23:47
  SPEAKER_01: Um where I think we we we do well is we we're not egotistical about our restaurants and bar business.
• 23:56
  SPEAKER_01: You know, we recognize that our hotels sit within a mixed-use development, currently owned by the same owner as us.
• 24:04
  SPEAKER_01: And we will look, we work with the retail leasing teams of what what restaurants and bars are are are are doing well within the mall, within the within the shopping center.
• 24:15
  SPEAKER_01: What's what's what trends are they seeing in terms of you know local local dining behavior?
• 24:20
  SPEAKER_01: Because you know something like 80 80 or 90 percent, very large proportion of our of our patrons are coming from the local community.
• 24:30
  SPEAKER_01: Um, of course, we have some guests that will stay in the hotel and use the restaurants, particularly more so the bar, probably, but but um dining is something that we want to do for the community.
• 24:41
  SPEAKER_01: So we want to make sure that we complement what is already in the shopping centre, not compete by by having yet another Sichuan restaurant.
• 24:50
  SPEAKER_01: So in Chengdu, we've we've we've we've had a lot of success to a to a degree where it's you know Michelin star level and Michelin and Green Star as well.
• 24:58
  SPEAKER_01: We're one of a handful of restaurants in the greater China area that have a green star.
• 25:05
  SPEAKER_01: Um and that's that's really been for the for the for the tea house concept, which is a which is a vegetarian uh um Chinese restaurant, Sichuan inspired, of course, but also inspired by the fact that we are adjacent to the to the to the Dachi Temple, which is over a thousand years old, which is still an active um monastery, and and the monks are vegetarian, and and and so we've we've we've kind of taken inspiration from that.
• 25:36
  SPEAKER_01: Um it was a slow burn, if I'm honest, at the beginning.
• 25:40
  SPEAKER_01: It took a little bit of time to educate the market about what we were doing.
• 25:43
  SPEAKER_01: Um, but now you it's hard to get a table, and I think that's a great story.
• 25:48
  SPEAKER_01: We're very we're very proud of that.
• 25:50
  SPEAKER_01: So, yeah, restaurants and bars, we we would definitely be looking at what's working in in the community.
• 25:56
  SPEAKER_01: I think we've also wanted to, you talked about capital investment earlier.
• 26:00
  SPEAKER_01: I think that's something that we're mindful of, not have not having too many restaurants.
• 26:05
  SPEAKER_01: You know, we're not a brand that has six restaurants, a banquet, a cake shop.
• 26:10
  SPEAKER_01: You know, we don't we don't feel that that's something that is necessary for us to have in our hotel.
• 26:16
  SPEAKER_01: Um, because chances are we take a Pacific place in Hong Kong, for example, that all of those types of restaurants already exist, whether they be in other hotels or in the shopping centre.
• 26:27
  SPEAKER_01: So we've always had a kind of restaurant, a light footprint with restaurants and bars in our in our in our in our hotels.
• 26:35
  SPEAKER_01: And would typically do in a in a in an upper house hotel, we would do um a sort of four-mule period signature restaurant and and perhaps a bar and lounge.
• 26:45
  SPEAKER_01: And um, and where where the real estate allows, we might do, we might do a second restaurant, um, and that's that's really about it.
• 26:53
  SPEAKER_01: Um in Shenzhen, where we're opening, we have we have an opportunity to do something quite incredible on the rooftop with views of the bay.
• 27:00
  SPEAKER_01: Um, and then we have a we have a Cantonese restaurant which is adjacent to a beautiful ballroom, and then we have a kind of European-inspired cafe on the on the on the ground floor, so so relatively small given the size of a hotel.
• 27:14
  SPEAKER_01: Um, and um it's we we try to sort of move away from the conventional hotel, coffee shop, lobby lounge kind of vibe.
• 27:26
  SPEAKER_01: Again, coming back to that arrival experience and trying to deconstruct how the hotel makes you feel.
• 27:31
  SPEAKER_01: We don't want people to walk through what is typically an empty lobby lounge for most of the day.
• 27:39
  SPEAKER_01: Um, so you're walking through a cavernous space on your arrival in the hotel, it doesn't feel like a residential premium experience very often.
• 27:49
  SPEAKER_01: There are exceptions, of course.
• 27:51
  SPEAKER_01: But um but what we were finding in in the Chinese mainland was there were a lot of very grand hotels that had these big cavernous spaces with nobody in them.
• 28:02
  SPEAKER_01: So we've we've we've definitely moved away from that formula of having having the sort of um uh formulaic approach to restaurants and bars and doing something quite different.
• 28:15
  SPEAKER_02: Just to backtrack a little bit, Michelin Green Star.
• 28:20
  SPEAKER_02: I I know what that is, but I don't want to assume that everyone does.
• 28:23
  SPEAKER_02: Could you explain what that is and some of the steps you've taken to achieve that?
• 28:30
  SPEAKER_01: Okay, well, it's uh it's uh something that Michel have introduced.
• 28:34
  SPEAKER_01: I'm not sure when they started it, but um 21, I believe.
• 28:37
  SPEAKER_01: Yeah, it's recent.
• 28:39
  SPEAKER_01: And there are, as I said, just a handful.
• 28:42
  SPEAKER_01: Um there's one in Hong Kong.
• 28:44
  SPEAKER_01: I think there are something like five restaurants in the Chinese mainland that have the Green Star.
• 28:50
  SPEAKER_01: And it it really is about provenance, it's really about what are you doing to minimize your carbon footprint?
• 28:58
  SPEAKER_01: What are you doing to support local vendors, whether that be a fishmonger or a farmer, or um, and and and what are the what are you doing to ensure that their practices, the practices and procedures of the vendor, are also of a sustainable nature in terms of you know not using fertilizers and you know organic certification and you know the right labour philosophy and and and so on.
• 29:26
  SPEAKER_01: So there's a there's a there is a there is a checklist, there is a rule book, um, you and and it's not easy to to get it.
• 29:35
  SPEAKER_01: It certainly takes so two or three years of inspections, documentation to demonstrate that that you're doing this, it's woven into to the tapestry of how you of how you run your restaurant.
• 29:50
  SPEAKER_01: It's not it's not a thing that's done to keep Michelin happy.
• 29:55
  SPEAKER_01: You know, this is something that is really part of your ethos, part of your DNA.
• 29:59
  SPEAKER_01: Um they look at they look at employees, they look at employee turnover, they look at they look at continuity.
• 30:05
  SPEAKER_01: It's a very, very detailed, incredible um process, and we're we're we were very, very delighted to to be honored with that.
• 30:14
  SPEAKER_01: And and and it's now two years that we've we've had that that star given to us.
• 30:19
  SPEAKER_02: So yeah, that it's it's worth mentioning because it's such an incredible accomplishment, but it also tells not just a story of sustainability, but uh of stewardship, which is one level higher, which is really the idea of preserving, um, because as you said, it was next it's next to the monastery, so it's honoring this millennia-old tradition, but it's also bringing it forward to the new generation and really inspiring people about looking at food just a little bit differently.
• 30:53
  SPEAKER_02: And I think that's really what Michelin's after.
• 30:55
  SPEAKER_02: It's not just a sustainability checklist, it's about timelessness and really you know stewarding the the whole neighborhood forward through food.
• 31:05
  SPEAKER_01: Correct.
• 31:05
  SPEAKER_01: And it's also not it's also not buying from the guy that's coming through on his bike with a dead chicken in a basket.
• 31:13
  SPEAKER_01: Do you know what I mean?
• 31:14
  SPEAKER_01: It's it's it's that isn't supporting a local vendor.
• 31:18
  SPEAKER_01: You know, the the vendors have become extremely passionate and extremely conscientious about what they do.
• 31:24
  SPEAKER_01: Um, and it's it's remarkable.
• 31:26
  SPEAKER_01: I I'd love to spend more time uh with these stakeholders, uh, in particular in Chengdu.
• 31:31
  SPEAKER_01: Um, if I if I if I could do so, it's it's a it's a fascinating part of our business.
• 31:37
  SPEAKER_02: Yeah, it's it's also a ton of work, as you said, to set up because uh you're not just buying off of some massive uh you know food merchant that uh is a click of a button on a vendor or another machine and all of a sudden it appears a week later in massive quantities.
• 31:54
  SPEAKER_02: It's very hard to manage those supply chains.
• 31:57
  SPEAKER_02: Um are you seeing customers come to appreciate the brand for the Michelin Green Star uh recommendation?
• 32:07
  SPEAKER_01: Yes, I think you know, certainly again, keeping in mind that much of our patrons, many of our patrons are in the local community.
• 32:17
  SPEAKER_01: Yeah, so I'm not gonna sugarcoat it and say that we're getting so many more room nights a year at the upper house Chengdu because of our green star.
• 32:25
  SPEAKER_01: Yeah, that would be that would be naive.
• 32:27
  SPEAKER_01: Um, but I think in terms of you know the the Chengdu dining community are extremely proud of the fact that their city has a green star.
• 32:37
  SPEAKER_01: The sort of local cognizenti uh you know dining people that know restaurants, um they're extremely proud.
• 32:46
  SPEAKER_01: So, yes, there's there's great support.
• 32:48
  SPEAKER_01: We're seeing that in the numbers, we're seeing that in the in the demand for reservations and so on.
• 32:53
  SPEAKER_01: Um, and it's a great story, a kind of little paragraph in our sustainability story that that we we lean on, um, not only for the Chengdu property, but for us as a brand and also Swire properties which which have their own you know sustainable sustainability objectives.
• 33:13
  SPEAKER_01: Um it's a it's more than a footnote, but it's it's something that we're all very, very proud of.
• 33:19
  SPEAKER_01: Um but it's would be naive to say that we're getting so many more room nights as a result as a result of that.
• 33:27
  SPEAKER_02: Yes, but the the key word there is it's part of the story, the storytelling.
• 33:32
  SPEAKER_02: And it is something that I do believe, and or I want to believe that guests feel.
• 33:39
  SPEAKER_02: Um and it's part of the tapestry, as you said, of each property, where it has a green key.
• 33:46
  SPEAKER_02: Uh, here's the ethos of the restaurant, which mixes with the ethos of the hotel, which is telling the story of the monastery next door.
• 33:54
  SPEAKER_02: And together it's creating this unique experience, not just for the not just for uh Chen Doo, but the entire world in terms of putting all those pieces together.
• 34:07
  SPEAKER_02: And I think that that alone, and when we've just unpacked it right now, speaks to the future of luxury in terms of it being completely local.
• 34:16
  SPEAKER_02: Uh the people, the planet, um and and and the place all coming together to tell to tell this story um that is almost like uh when you cross into the hotel, you're entering this.
• 34:31
  SPEAKER_02: Uh I don't want to use the term fantasy world because it's grounded in reality, but you're entering another world that you can inhabit and experience while still having the sense of being at home uh due to all the services that you have there.
• 34:45
  SPEAKER_01: I think it is just I completely agree with you, and I'll just add that you know, I think what a lot of the sort of travelers of my age have acquired that appreciation of what sustainability means when choosing a hotel through you know reading magazines and word of mouth, and and and but they've acquired that knowledge.
• 35:11
  SPEAKER_01: When I when I look at my children, when I look at my teenage and early 20-year-old children and their peers, it this it's more than acquiring, they're living in a world, they're living in a in a in a in a media environment which is informing them about the importance of sustainability that is that is that is part of their lives.
• 35:34
  SPEAKER_01: Um, obviously in some countries it's more prevalent than others, but I think it's fair to say that in sophisticated economies that there is this young generation of future travelers that that will be absolutely looking for what hotels are doing as part of their sustainability philosophy.
• 35:54
  SPEAKER_01: Rather than acquiring it through reading a newspaper, they're actually going to be believing it almost to a kind of like a religion in a way.
• 36:02
  SPEAKER_01: I think that's probably sounds a little exaggerated, but I think that the change in that in that generational step, I think, is is material.
• 36:11
  SPEAKER_02: Yeah, I I I wouldn't go so far as to say religion, even though for some it probably is, but I I just use the term voting with the with your wallet.
• 36:19
  SPEAKER_02: Right.
• 36:20
  SPEAKER_02: And uh uh you know what you're speaking to is that sustainability right now is it's only going to increase in terms of its importance for the overall hospitality landscape in terms of marketing, uh programming, opex, and uh and your capex in terms of how you actually build and plan areas.
• 36:43
  SPEAKER_02: Are you do you have low embodied carbon uh for your materials?
• 36:47
  SPEAKER_02: Where did you source your materials?
• 36:49
  SPEAKER_02: Um uh you know, are you using the new type of uh HVACs that are energy efficient, et cetera, et cetera?
• 36:57
  SPEAKER_02: And um the the green star is simply it's a star on the top of this sustainability tree in terms of something that embodies the present day of what guests are looking for as well as the future uh the future of travel across multiple segments, not just not just luxury.
• 37:19
  SPEAKER_00: Yes, correct.
• 37:21
  SPEAKER_02: So um we've been meant we've been mentioning the rebrand, we've been teasing it, but let's go back to it.
• 37:28
  SPEAKER_02: And uh before we do that, just tell us about for upper house, all the current hotels, and uh and what's in the pipeline.
• 37:38
  SPEAKER_02: You you've you've mentioned some, we've talked about the Chengdu and the Hong Kong one, but just give us uh uh uh a cold's notes on on what the entire landscape for upper house currently is and what it will be.
• 37:49
  SPEAKER_01: So so so our first hotel, uh first uh Upper House Hong Kong 2009.
• 37:55
  SPEAKER_01: Um then we we added uh a property in Chengdu, uh which was initially called the Temple House, now Upper House Chengdu, that opened in 2015, followed by uh what was called the Middle House in Shanghai.
• 38:06
  SPEAKER_01: That's now Upper House Shanghai opened in 2018.
• 38:10
  SPEAKER_01: And and then we had a mandate to to move away from relying on Sware properties, our owner, to build hotels for us and to and to go out to the market and and and take this brand that was punching above its weight and and um you know competing very well and talk to other developers, and and that's what we started to do in 2018, and then we had COVID and and you know all of that speaks for itself.
• 38:38
  SPEAKER_01: So, but we did sign uh two hotel deals during that time.
• 38:43
  SPEAKER_01: One was in uh Shenzhen, um, which is the third-party owner.
• 38:47
  SPEAKER_01: So that's going to be the Upper House Shenzhen, and that will um open in in sort of mid 2027.
• 38:54
  SPEAKER_01: And uh we also signed a hotel in Tokyo in Shibuya um at that during that COVID period, uh, which will open in 2029.
• 39:03
  SPEAKER_01: So that'll be uh Upper House Tokyo.
• 39:06
  SPEAKER_01: So excited about both of these properties.
• 39:09
  SPEAKER_01: We've also added a um uh with Swire properties, the hotel in Xi'an that I mentioned, which will be Upper House Xi'an.
• 39:16
  SPEAKER_01: That's that's part of a retail-led mixed use development opening in 28.
• 39:20
  SPEAKER_01: So we have 27, 28, 29 um as the pipeline uh signed management agreements, um, and and then we have some very interesting prospects, uh, which when I talk to you next, which hopefully won't be too long, um I can tell you more about about those.
• 39:37
  SPEAKER_01: Um the the it was an Asia-Pacific story.
• 39:40
  SPEAKER_01: We've got some prospects in South Korea, we've got another prospect in Japan, all the way down to Australia.
• 39:47
  SPEAKER_01: So so it's um you know, and everything in between.
• 39:50
  SPEAKER_01: So we we recognize though, Adam, that that um we don't we don't measure the success of Upper House by how many flags can we get in the ground in any given year.
• 40:02
  SPEAKER_01: It's it's really about being with the right owner in the right location, and and it may be that we kind of cap it at about you know 15 or 18 properties ultimately, um, to just keep it exclusive, you know, great locations, perhaps one or two resorts.
• 40:18
  SPEAKER_01: But the name change um came about from from this uh well there were there were there were two things really.
• 40:25
  SPEAKER_01: One one was you know, looking ahead, we sort of looked at the strategy and thought, okay, we've got these signed HMAs, what's going to be the naming convention?
• 40:33
  SPEAKER_01: And then came along this opportunity through Swire properties for us to to work with the with the joint venture um opportunity in Bangkok for branded residences.
• 40:44
  SPEAKER_01: And they wanted they being both SWARE and the JGU partner wanted us involved, they wanted us to to bring service philosophy, the houses, not hotels, ethos to this branded residence, uh, which is which is a mature concept in Thailand, as are you know premium condominiums, and uh so there was an opportunity for for extra value to be created by bringing in an organization like us, and upper house residences had a had a nice ring to it.
• 41:17
  SPEAKER_01: We don't have a hotel adjacent to it, which was a bit of a conundrum.
• 41:21
  SPEAKER_01: But actually, the more comfortable we got with that, we thought, well, actually, it makes sense now looking ahead to to to this brand is clearly evolving, and um and by doing this, it it it somehow liberates us to be able to work in a in a situation like Bangkok where there isn't a hotel, but there's an excellent residential opportunity for us to bring the brand.
• 41:44
  SPEAKER_01: Um and uh and and looking ahead, of course, it's it's it's a lot easier to make this kind of change when you're three properties than when you're 13 properties.
• 41:55
  SPEAKER_01: So it was it was definitely the right time to do it.
• 41:57
  SPEAKER_01: And it's been it's universally been accepted as being the right thing to do.
• 42:03
  SPEAKER_01: Uh we had a big campaign a couple of weeks ago and uh through various channels, and it was the comments we were getting, um it's it's been it's been quite overwhelming.
• 42:14
  SPEAKER_01: They're like, of course, you know, why didn't you do this before?
• 42:18
  SPEAKER_01: Of course, it's the right thing to do.
• 42:20
  SPEAKER_01: So we're very happy with with that.
• 42:21
  SPEAKER_01: We're a little bit nervous about doing it beforehand, but now it's out.
• 42:24
  SPEAKER_01: Uh we're we're very, very happy with how it's landed.
• 42:29
  SPEAKER_02: Yeah, um, you know, it's I I look at traditionally I came from an advertising uh background uh in my formative years, and I look at a rebranding exercise going, oh my god, I have so many different pieces of copy and advertising specifications that I have to update with all these new logo sizes.
• 42:51
  SPEAKER_02: And I'm looking at it going, well, all that has to happen within a 24-hour period as things are updated.
• 42:57
  SPEAKER_02: And it's you know, but as you said, um only uh three hotels to update uh with physical signage and logos versus 13.
• 43:07
  SPEAKER_02: So definitely the right time uh to do that change.
• 43:11
  SPEAKER_02: Um I also like the you mentioned uh you know, just the future of Upper House in terms of capping it around uh 18 or 20 properties, and that's something very similar to uh Kirzner International's uh outlook for one and only.
• 43:29
  SPEAKER_02: And uh again, if it going back to the future of luxury of it being exclusive of it being timeless and sense of place, and when you have not to mention any names, but when you have 300 or 400 luxury properties around the world, how how do you make your guests like feel like they're part of something special?
• 43:53
  SPEAKER_02: Right?
• 43:54
  SPEAKER_01: Yeah, I mean it's something we are even still now, um, it helps that we've got clarity, it helps.
• 44:00
  SPEAKER_01: That we've got you know this new strategy, new direction, but we are still preoccupied about how do we hold on to the nuances, those little nuggets that are that are delivered every day in our hotels.
• 44:13
  SPEAKER_01: How do we hold on to that as we grow?
• 44:16
  SPEAKER_01: How do we keep our arms around it?
• 44:17
  SPEAKER_01: And it's the same question that any organization is asking themselves as they as they look towards growth in the future.
• 44:24
  SPEAKER_01: Um, and we've been very preoccupied about that.
• 44:27
  SPEAKER_01: Fundamentally, it comes down to people, the feet, the people philosophy, and what's our employee value proposition, and so on.
• 44:33
  SPEAKER_01: Um, so the team have done a great job in in making the intangible tangible in terms of what do we hold on to?
• 44:41
  SPEAKER_01: What what what do we what are non-negotiable things that we will always do to ensure that we that we stay special?
• 44:48
  SPEAKER_01: And if that also means that we cap, then so be it.
• 44:53
  SPEAKER_02: Yeah, that's uh that's a great way to um segue into the other brand, East East Hotels.
• 44:59
  SPEAKER_01: Right.
• 45:00
  SPEAKER_02: Uh so with East, I was introduced to it um uh through the Miami property, and um one of the big concepts going back to this whole idea of lifestyle, attitude, interests, is that East is for alternative thinkers.
• 45:17
  SPEAKER_02: Could you unpack what that means?
• 45:21
  SPEAKER_01: I think it comes down to choice.
• 45:24
  SPEAKER_01: We talked before about you know how business comes to our hotels nowadays.
• 45:29
  SPEAKER_01: It's really less about the corporate negotiated situation.
• 45:35
  SPEAKER_01: We're not that kind of hotel that is trying to sign up as many corporate contracts as possible.
• 45:40
  SPEAKER_01: It's really about understanding the individuals that choose to stay with us.
• 45:47
  SPEAKER_01: Um and those choices are are made because of location, because of obviously the comfort of the room, the ease of coming and going in in during the arrival and departure process, the ease of of um extending your stay, uh or rather extending what you do during your stay outside of your of your of your bedroom.
• 46:12
  SPEAKER_01: So you know whether that's hanging out in the in the sort of domain, we call it, it's like a kind of social area, not really co-working, but there's a lot of laptops there.
• 46:24
  SPEAKER_01: Um co-working probably isn't the right adjective for a hotel, but my point I'm making is that we've created these spaces, whether it's the whether it's domain, whether it's the gymnasium, whether it's the whether it's sugar on the roof, where where where people want to spend time in the hotel.
• 46:40
  SPEAKER_01: And and these are we looked at the demographics, we looked at we looked at the kinds of tribes that that are choosing to stay with us.
• 46:48
  SPEAKER_01: And and it is interesting that we have a lot of fashion, we have a lot of creative types, um, and and we we do have these communities that that are around us that are incredibly inspiring, whether that's a whether that's a running club, whether it's a whether it's a band that are looking for a venue to jam, or you know, I think these are great sources of energy, creativity, spontaneity.
• 47:17
  SPEAKER_01: And when these events that we do pop up in the public areas of the hotel, there they really are moments of of uh of joy for people that are staying there.
• 47:28
  SPEAKER_01: Like, wow, I would never have imagined that there'd be a band playing, or there'd be a running club, or there'd be this quirky little coffee concept that origin originated in Japan.
• 47:40
  SPEAKER_01: Um, we had it at the property here in Hong Kong over the summer, and there was a rave on a Sunday morning um with this with this coffee company.
• 47:49
  SPEAKER_01: They they do it in Tokyo as well.
• 47:51
  SPEAKER_01: And um it came to Hong Kong, and it was, I mean, I I didn't know anything about this at all, but the director of restaurants and bars at the hotel, he's very into it.
• 48:01
  SPEAKER_01: And um just Sunday mornings, there were there was a DJ and people with with you know paper cups of coffee kind of you know raving in the lobby at um at 11am.
• 48:11
  SPEAKER_01: It was quite remarkable.
• 48:13
  SPEAKER_01: So probably a long answer to your question, but I think that what I'm trying to do is is is illustrate the the type of consumers that we that we that we attract.
• 48:24
  SPEAKER_01: And and and I I don't think I've mentioned age so far because it's really not it's really not part of our of our thinking.
• 48:33
  SPEAKER_01: You know, it's um it can be a you know a 20-year-old or a or an 82-year-old.
• 48:38
  SPEAKER_01: You know, it's uh it's quite incredible.
• 48:41
  SPEAKER_02: Yeah, it's uh this whole idea of tribes and um the right the right people for the right place.
• 48:48
  SPEAKER_02: Uh I've heard so many different terms, uh you know, gray, gray nomads, um old souls, I guess is an original one, yeah uh and then uh elderpreneurs as well describing.
• 49:02
  SPEAKER_02: Uh but uh realistically, um what we're seeing is is people who um with the dawn of longevity of people designing their lives around reaching triple digits, uh, we're seeing people plan accordingly by saying, Well, I'm 60 years old, I'm I'm still young.
• 49:24
  SPEAKER_02: I have I have another 30 years of work ahead of me, and I'm gonna enjoy it, I'm gonna be active, I'm gonna travel, I want to associate and learn new things from uh and be inspired by offhand conversations that I have at this quirky coffee shop and a hotel on a Sunday morning when I discover there's a rave down there, and uh you know that's but that's that's part of the beauty of great hotels, I find is is how we can create these environments for um the key word, I guess, is communities to form.
• 49:56
  SPEAKER_02: Community it's vital.
• 49:59
  SPEAKER_01: I mean, there are so many cases where hotels um are keeping themselves at arm's length from what's going on around them, but I think the successful ones doesn't matter whether it's three-star, four-star, five star.
• 50:12
  SPEAKER_01: I think you know, they they when they're part of the communities, then they they become loved and and places where you want to you want to spend your time.
• 50:21
  SPEAKER_01: And that's not that's not about us trying to extract more value.
• 50:24
  SPEAKER_01: I mean, of course, shareholders would say, well, you know, we need to extract more value, but that's it's all it's not why we're doing it.
• 50:31
  SPEAKER_01: I think that's an outcome.
• 50:32
  SPEAKER_01: Yeah, if you do it right, that's an outcome.
• 50:34
  SPEAKER_01: But you wouldn't, we're not, we're not, we're not sitting around a strategy table thinking, right, how can we generate more more more value here?
• 50:40
  SPEAKER_01: Oh, let's do a coffee rave on a Sunday morning.
• 50:43
  SPEAKER_01: You know, that's not how we're approaching it.
• 50:45
  SPEAKER_01: You know, I think these things happen, these things happen because we've got very talented people that that want to bring these experiences to to the hotel.
• 50:53
  SPEAKER_02: And and you're empowering them to do so.
• 50:57
  SPEAKER_01: Correct.
• 50:57
  SPEAKER_02: Yeah.
• 50:59
  SPEAKER_02: And uh, you know, I'm sure we could do a post-talk feasibility on a Sunday morning rave to make a good business case for it.
• 51:06
  SPEAKER_02: So yes, I'll send you the data.
• 51:08
  SPEAKER_02: Yeah.
• 51:10
  SPEAKER_02: Um, you mentioned uh run clubs earlier, and run clubs is the combination of fitness and community.
• 51:18
  SPEAKER_02: Um one other thing that is worth mentioning is uh I experienced this in the East Miami location, is just how incredible the gym is.
• 51:29
  SPEAKER_02: It's not some place that's relegated onto a sub basement uh that you have to go through the maintenance wing to get to.
• 51:38
  SPEAKER_02: And looks like it's uh it's rustier than uh than some car that's been left in uh in God knows where for 20 years.
• 51:47
  SPEAKER_02: These are the gym is massive, it has a functional room designed for group classes, the windows are expansive, overlooking all the brickle, uh, and it's an inspirational place to work out and also to have glass uh classes to meet other like-minded people.
• 52:04
  SPEAKER_02: And the the question in here is that still is a lot of capex to plan that from the beginning.
• 52:14
  SPEAKER_02: Yeah, how do you justify that?
• 52:19
  SPEAKER_01: Um, well, I think you know, the East, the East brand probably attracts, not probably, it does attract people that are have busy lives, they're they're doing other stuff, and they they want to stay at East because it's comfortable, they get recognized, it's you know, all the reasons we talked about before.
• 52:40
  SPEAKER_01: It's it's perhaps not a brand where you're gonna go and look for the spa.
• 52:45
  SPEAKER_01: There isn't so so if you if you're not gonna do a spa, then there needs to be something that that meets the expectations and requirements of travelers that that have a strong desire to stay in shape and and and and you know think about what's important in their lives.
• 53:06
  SPEAKER_01: And it's a you know, we we operate hotels in very crowded markets where all our hotels are.
• 53:14
  SPEAKER_01: There's a huge amount of choice.
• 53:16
  SPEAKER_01: So if we didn't we're not gonna have a spa and we we undercapitalized the gin option, then I thought that then I think well, we're not perhaps giving the customers the right the right reason to come.
• 53:31
  SPEAKER_01: And and I think that probably would still be the same case today, but certainly when we were starting out with our first East Hotel 15 years ago, we we wanted to make sure that we weren't compromising what what you know on people's expectations.
• 53:46
  SPEAKER_01: So we have a great gym at the property here in Hong Kong with a swimming pool.
• 53:51
  SPEAKER_01: Um, and um, and as you rightly say, you know, Miami's a great a great spot.
• 53:57
  SPEAKER_01: We've actually added that room, that that second room that you talk about that was that was added.
• 54:02
  SPEAKER_01: Um interestingly, it was used for for meetings before, but we had other meeting spaces, and it was the utilization wasn't high.
• 54:10
  SPEAKER_01: So we thought, well, let's let's use this as a class, as a as a as a as a room for classes, a studio to complement you know the um the fitness area.
• 54:21
  SPEAKER_01: So it's evolved, um, and as we look at now ahead at future properties, um getting getting our area program in with the right allocation of space early on with the developer is really important to say we need we need this amenity.
• 54:39
  SPEAKER_01: Yes, it's not, it's it's a cost center, it's not a revenue center.
• 54:43
  SPEAKER_01: There are occasions where you can have outside memberships, of course, and people will pay to become members of your of your gym and pay a premium over other local fitness operators, but it is a cost center at the end of the day, but it's an essential thing in order to ensure that we meet the expectations of these travelers.
• 55:03
  SPEAKER_02: And you know, for me, I'm uh I'm a fitness guy, so I look at that and I go, uh that to me, that feature is a primary decision for why I would book that hotel to have access to that great gym where I know I can do everything and I will design my day, even though I'm gonna be busy meetings, meetings, meetings, work, work, work.
• 55:29
  SPEAKER_02: I'll design my day to fit in an hour to do that.
• 55:32
  SPEAKER_02: And and I might look to do a class as well.
• 55:35
  SPEAKER_03: Yeah.
• 55:35
  SPEAKER_02: Um now, good luck measuring that uh in terms of me and my psychographic.
• 55:41
  SPEAKER_02: But um, you know, on paper, it's a it's a cost center, but with the growth of wellness and the diversity of what's possible within that term that is wellness, fitness is uh it has a very strong uh future, has a very strong future as a driver for uh travel decision making.
• 56:03
  SPEAKER_01: Absolutely.
• 56:04
  SPEAKER_01: And I think also you may correct me on this statement, but I think there are some fundamentals with fitness that that are really around great cardio, great weights and and exercise equipment, stretching, and so on.
• 56:25
  SPEAKER_01: And I think the notion of over-complicating some of the fitness equipment or or over-engineering some of the fitness equipment isn't something that we look to invest in.
• 56:37
  SPEAKER_01: I think it's really about people like yourselves that are that are looking for a gym experience, are looking for the right core elements.
• 56:47
  SPEAKER_01: And as long as you're investing in equipment that meets those core elements, I think that's good enough.
• 56:52
  SPEAKER_02: Yeah, you know, it's um the there are brands at the five-star level that are uh you know fitness resorts that have uh spent millions on their on fitness centers.
• 57:03
  SPEAKER_02: And uh when we're looking at an urban location, we have to think about guests.
• 57:08
  SPEAKER_02: And as you said, guests are on the go.
• 57:10
  SPEAKER_02: So realistically, it's it's about being very, very thoughtful uh and and conscious of what they would need to maintain and to stay healthy while on the go and not necessarily looking to have a uh something that a professional athlete needs to use or something like that.
• 57:26
  SPEAKER_01: Yeah.
• 57:26
  SPEAKER_01: And you know, I think also, and I'll give you an example, you know, our gyms are open 24 hours a day, seven days a week.
• 57:33
  SPEAKER_01: You access it through using your room key.
• 57:35
  SPEAKER_01: I stayed at a hotel in Japan earlier this year where the gym opened at 7 a.m.
• 57:40
  SPEAKER_01: And and it was it was such an odd experience to go down to the floor.
• 57:45
  SPEAKER_01: It was not in the basement, thankfully, but to find the gym locked at 7 a.m.
• 57:51
  SPEAKER_01: I thought was was a was a massive um kind of failure in a way.
• 57:55
  SPEAKER_01: I think you need to have it available to everybody all of the time.
• 58:01
  SPEAKER_02: Yeah, it's uh I mean, you know, who knows?
• 58:04
  SPEAKER_02: Maybe uh talk about community people that are in there at three in the morning, maybe there's only two people in there, but they form a connection because you know they're the only two people that are there, and they're obviously on a very similar um sleeping pattern, or who knows?
• 58:19
  SPEAKER_02: Maybe they maybe they just got in from a flight and they're just wired because it's their natural cycle, so they're just trying to burn themselves off.
• 58:27
  SPEAKER_02: Who knows, right?
• 58:28
  SPEAKER_01: Yeah, absolutely.
• 58:29
  SPEAKER_02: Yeah, it's the joy of communities that they uh and the happenstance at hotels.
• 58:35
  SPEAKER_02: Um so to close out here, uh we've talked about Upper House, we've talked about East.
• 58:41
  SPEAKER_02: What's the future hold for Swire hotels?
• 58:44
  SPEAKER_02: What where will the brand be in 2030?
• 58:48
  SPEAKER_01: 2030.
• 58:49
  SPEAKER_01: We will have uh we'll have six, seven properties open, including the residents in Bangkok.
• 58:59
  SPEAKER_01: Um that's what I know of today, um, and that's gonna happen.
• 59:03
  SPEAKER_01: That's HMAs signed and so on.
• 59:05
  SPEAKER_01: We may pick up one or two that could open in time by 2030.
• 59:11
  SPEAKER_01: So, so, but I think probably what's going to be more important is how many HMAs do we have signed in 2030?
• 59:17
  SPEAKER_01: You know, what is it, what is our secured pipeline going to look like in 2030?
• 59:21
  SPEAKER_01: And I think if you were to then fast forward that to 2035, I think you know, somewhere in the order of 15 to 18 um hotels opened and signed in the next 10 years, I think would be what what what we would look like.
• 59:35
  SPEAKER_01: Um and it's so that brings lots of challenges, um, most notably around leadership and you know strength on the bench and making sure that we've got people that are growing up with us as a brand that can then deliver it in leadership roles.
• 59:51
  SPEAKER_01: That's something that we're that we're figuring figuring out.
• 59:54
  SPEAKER_01: Um, there are risks around bringing people from the outside uh at senior levels, um, so we try to minimize that.
• 1:00:00
  SPEAKER_01: So we bring in people at sort of number two, number three levels and uh and groom them for those opportunities.
• 1:00:07
  SPEAKER_01: So I think that's but I think there's enough people around that that are passionate about what makes us special to ensure that when we are, let's say 2035, that we are still able to deliver what we're doing today in the houses, not hotels, thinking differently, mindset, being recognized, whether that's through Michelin keys or 50 best in the world or or whatever, um, for being consistent in what we do.
• 1:00:37
  SPEAKER_01: I think that's something that I would hopefully, I'm pretty confident that we can achieve that in 10 years' time.
• 1:00:44
  SPEAKER_02: And uh what markets intrigue you?
• 1:00:50
  SPEAKER_01: Uh well, I mean, intriguing.
• 1:00:54
  SPEAKER_01: That's a good question.
• 1:00:55
  SPEAKER_01: South Korea, Seoul, I think is an amazing city.
• 1:00:58
  SPEAKER_01: Uh, we've uh spent some time up there, the development team have a have a little list of uh opportunities they shared with us yesterday morning.
• 1:01:07
  SPEAKER_01: Um I've been there myself to to uh to visit both on business and leisure with my family, and it's uh it's remarkable.
• 1:01:14
  SPEAKER_01: The food, the people, the history, the accessibility, the countryside, the variety.
• 1:01:21
  SPEAKER_01: Uh South Korea is amazing.
• 1:01:23
  SPEAKER_01: Japan, I think we're always intrigued.
• 1:01:25
  SPEAKER_01: Um it's it's so um so incredibly deep-rooted in its you know, with culture, um, incredibly sophisticated.
• 1:01:36
  SPEAKER_01: Um there are you know, we talked before about rural parts of China, and I think those those opportunities are uh you know, when you get out of the urban chaos and you get into the rural areas, I think it's uh uh very intriguing.
• 1:01:51
  SPEAKER_01: Um and actually I think core markets where which are outside of that Asia-Pacific corridor that I was mentioning earlier, I think are intriguing for us as a brand.
• 1:02:00
  SPEAKER_01: Not maybe not maybe intriguing for a tourism destination, but cities like London would be an amazing.
• 1:02:08
  SPEAKER_01: There are great hotels in London, yeah, but there isn't an upper house in London.
• 1:02:12
  SPEAKER_01: And I think I think that if we could deliver the brand in London, I think that would be an amazing, amazing thing.
• 1:02:18
  SPEAKER_01: And I'm I'm deeply intrigued about about how the market would respond to to that opportunity.
• 1:02:25
  SPEAKER_02: Wow, yeah, London is uh a bastion of um of uh competitors for upper house already, so it'd be very very intriguing to see uh an upper house in London for sure.
• 1:02:39
  SPEAKER_01: Yeah, I mean there's been some great openings in the last two years.
• 1:02:43
  SPEAKER_01: Um but they're not us.
• 1:02:47
  SPEAKER_01: I think there's there's something that we could still we could still do something in London, I think.
• 1:02:52
  SPEAKER_02: Yeah, that's fascinating.
• 1:02:54
  SPEAKER_02: So uh to close out here, Dean, is there anything important that we haven't mentioned yet?
• 1:03:00
  SPEAKER_01: Thank you for asking, Adam.
• 1:03:01
  SPEAKER_01: I think um, you know we we are it's always good to chat with you.
• 1:03:06
  SPEAKER_01: You always get the best out of me, I think.
• 1:03:08
  SPEAKER_01: So um I don't really have anything else other than to hope that it's not too long before we catch up again.
• 1:03:13
  SPEAKER_02: Yeah, uh no, I I'm looking forward to everything with the upper house, uh, everything with East.
• 1:03:18
  SPEAKER_02: I'm a huge supporter, and uh I can't wait to hear more.
• 1:03:22
  SPEAKER_01: Thank you very much.
• 1:03:23
  SPEAKER_01: Good to see you.
• 1:03:23
  SPEAKER_02: Dean, thanks so much for coming on and uh just fantastic words of wisdom about the future of the industry.
• 1:03:29
  SPEAKER_00: Great.
• 1:03:30
  SPEAKER_00: Thanks, Alan.
• 1:03:31
  SPEAKER_02: Thank you.
• 1:03:31
  SPEAKER_00: Okay, bye-bye.