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Banyan Tree: Global growth stemming from ASEAN

Interview - November 15, 2018

Founder and Executive Chairman Ho Kwon Ping of Banyan Tree Holdings speaks to the increasing importance of tourism throughout ASEAN and how far the luxury brand has come using its Singaporean base to expand globally.



The ASEAN growth story is widely known and tourism is becoming one of the main drivers, especially in economies developing in Thailand, the Philippines, and Vietnam. What’s your view on the potential of the tourism sector in the region?

Tourism has a really strong, virtuous cycle. There's enough evidence in economic development theory to show that after particular per capita income is achieved in a country, domestic tourism starts to boom, as does outbound tourism. ASEAN has 600 million people that are arriving to a middle-class level and China is experiencing an unprecedented boom. Now you're seeing not just one country, but the whole region arriving at that level of development. Tourism has a very strong economic multiplier effect, stronger than most other businesses, so a single dollar spent on tourism has a huge impact on retail, restaurants and accommodations.


Without having natural resources to rely on like Thailand or Indonesia, Singapore has had to adapt to keep up with regional competition. What role can Singapore play within the overall tourism ecosystem in the region?

Singapore has little tourism resources of its own and has mainly benefited in the past by being the aviation hub. That role is probably reducing now. As a hub, Changi Airport is still important, but it's not the biggest hub in the world or Asia. But Singapore, as it's developing, is continuing to be a world-class city. People visit Singapore in the same way that they visit Tokyo, New York and London.

Singapore is developing its own tourist attractions, not like great beaches or temples, but because it's a global city, it's a place that continues to attract people for the whole experience similar to when you go to Tokyo. Tokyo doesn't represent all of Japan but it’s an experience. Singapore as a top global city has its own attractiveness.


Can you give us an introduction to Banyan tree, perhaps its brand and uniqueness in comparison to others in the region?

From a single boutique resort in Phuket that launched in 1994, Banyan Tree has grown into a multi-business operator globally. Listed on the Singapore Stock Exchange since 2006, the Banyan Tree Group has 46 hotels and resorts, 62 spas, 75 galleries and 3 golf courses in 25 countries.

With our ethos of “Embracing the environment, empowering people”, we foster our ongoing commitment towards corporate social responsibility.  Sustainability has been something that's been ingrained as part of our corporate DNA from the very beginning and it is one of the key areas that we are truly proud of. 


What should people identify as the definition of the brand?

While I say we're proud to be an Asian brand, I’ve also said that we will not be seen as an Asian brand. We have certain core values, like infusing a very strong sense of place, a focus on design and culture of the country we are in. For example, in Mexico, our Banyan Tree Mayakoba has been named “Best of the Best” in this year’s edition of the Hotels Awards by Travel + Leisure Mexico publication. If you go to our hotel in Mayakoba, you will not know it's an Asian company that is managing it because it's strongly Mexican-inspired. Our emphasis on service might be a bit more Asian in style, but it's not going to be so Asian that you feel that you're in Mexico staying in an Asian hotel. It's more probably a sense of the Asian hospitality and values that we have as opposed to specifics that we do.


As you continue your international journey, how important is it for you to be able to scale up in the region?

Well, one of the reasons we went into this business is because it's very brick and mortar and very location-based. The same negatives about that slow growth protect us in some way from the necessity to be a dominant global player within the fastest period of time possible. Today you can see some hotels in Switzerland, Germany and elsewhere in Europe that have existed for the last 300 years with one family, one owning company, one hotel, and they still survive very well. To that extent, scalability is not an imperative for survival, but it is at the same time something that's increasingly necessary because even in the hospitality sector, after many years of non-consolidation, you’re beginning to see consolidation.

Everybody thought AirBnb was going to be a real problem. It will absorb a lot of the growth in global tourism, but if you are unique, if you can provide a unique experience, unique service in a unique location, you'll survive.


What have been the advantages for you as a private sector group to be based in Singapore with an international agenda?

I think you would find that Singapore is still continuing to grow very much as a regional headquarters because of its inherent advantages. Top executives like to live here because of safety, because of education for children, and the ease of living here basically, plus transportation and communications. I think for business, Singapore is a far stronger hub than it is for tourism.

If you're trying to run your ASEAN operations from out of Paris or New York, it’s a very different thing versus running it out of Singapore. You need to have a window to the world and it can’t be from Paris or New York looking at Asia, you have to be in Asia. All the global multinationals that have manufacturing operations all over Asia generally have Singapore as a hub rather than Hong Kong.