Peter Borer joined the group in 1981 and has been responsible for developing and perfecting the group’s high standards of customer service and operational excellence. Following various operational roles, he was appointed General Manager of The Peninsula Hong Kong in 1994, taking on additional regional responsibility for the group’s Asia hotel portfolio in 1999. Mr Borer was appointed as Chief Operating Officer in April 2004 and oversees the operation of the group’s assets globally.
Since the opening of the Peninsula Hong Kong in 1928, there are only 12 properties in operation in the world. When major luxury hotel groups are looking for a large coverage of the planet in the gateway cities, how do you justify a slow process of development?
You could be even more dramatic in your description of our slow development as we actually started the first hotel operation in Shanghai in 1866, 156 years ago, with The Majestic. A loss for the Kadoorie family who moved to Hong Kong for a new start with the opening of the Peninsula in 1928. Since that date, 95 years ago, the family has been involved to create a very small but fine hotel company that also plays the asset appreciation game.
The ownership of your property is definitely a strong element of your business model…
Indeed, The Peninsula Hong Kong is a classic example of that strategy. When it was built in 1928, it was an investment of about 8 million HKD. And today it's in our balance sheet for more than 12 billion. I would say that it is a nice appreciation. And hence each new opening follows the same strategy with a few exceptions such as Paris and Los Angeles where we only have a minority interest.
Is there another objective, apart from the real estate dimension, for that economic model?
We want to stay in charge of your own destiny and not have too many other influences. I am a firm believer of brand purity. I am a huge fan of Chanel, which has followed the same principle, or of Ferrari that stayed true to what Enzo Ferrari tried to do. To me, in today's world, it is not about quantity, it is about quality.
Would your mother company, Hong Kong and Shanghai Hotels, be willing to own and operate another brand to cater for a different segment of clients, as you did in the past with the Kowloon Hotel, adjacent to the Peninsula?
We had this experience for a while, but it doesn’t fit to our strategy of one brand purely addressed to the luxury segment. We sold the Kowloon hotel in 2004 and we made a very nice profit. Sometimes experiments fail, sometimes they succeed. It was a financial success, but it clearly did not match the rest of the brand. I was very, very adamant to get rid of that hotel, because it deterred from the brand. And I think if you look at our 12 hotels today, they are relevant and considered amongst the finest in each city where we are. To me that's very meaningful.
From a loyal client’s point of view, isn’t it frustrating not to find a Peninsula in each and every major international business or gateway city?
It’s true, we do not fulfill that expressed wish to find a Peninsula in every major city. We want and need to be true to our philosophy of extreme quality. It's nice if people seek you out, but if you become a common commodity, you lose your cachet.
Then, like many other hotel companies, you do not anticipate a goal of, say, 20 hotels before 2030, or 30 properties in 2050…
You know, we have limited financial resources. Each hotel represents a very large investment. And we don't want to work for the banks. We want to work to make a profit for ourselves.
Considering the strength of your brand and your financial results, investors should be please to assist your development…
That's the slippery slope where you no longer in charge of your destiny. So, we are not in a hurry.
And thus, you are opening two properties in less than six months, in London and in Istanbul…
That was a pure coincidence, and the Covid crisis has some responsibility with it.
So you are not increasing the pace for the next years…
Actually, we are taking a break. There's nothing on the horizon. We will concentrate in the near future on renovations that need to be done in some properties such as New York.
What about your project in Yangon, Myanmar?
Unfortunately, due to the political situation, we have postponed the project. I will be visiting Yangon in the very near future to see what can be done. There's no date for the opening, and maybe the project will just not follow.
Correct me if I am wrong, but I saw a sign years ago in Sydney announcing a future Peninsula…
Indeed, next to the opera House, there is a building that the people from Sydney called “The toaster”. It was supposed to be a Peninsula. And then unfortunately, due to some financial problems, that didn't come to a fruition, which is a great pity. It is still the best location today.
So, what is your next step(s) on your agenda?
Well, you know, to me the next step is to take care of the existing family members. As I mentioned they need reinvestment to stay relevant. They need product upgrades. They need training. They need all kinds of things that are not as visible as furniture and decoration but as important. What's happening in the back of house is something that we're taking very, very seriously.
So mostly working on your assets and staff…
We want our staff facilities to be at the highest level to adjust to a younger workforce who wants to be entertained, who has wants for gyms and hairdressers and maternity rooms. It's not just building a hotel and milking it; you need to keep up to date the facilities with the latest technology. And it is an intense business investment.
You mentioned the younger generation in terms of staff. Did you find it more and more difficult to recruit and to keep the staff in your company as many other companies do.
I guess you're asking that question because a lot of our colleagues in the industry would say: “we can't find staff anymore”. Complaining never leads to anything. You have to do something about it, and you have to invest in that. In the case of London, we had to fill about 600 positions and we received over 30,000 applications. I guess the word was spread that we are a good company to work for. You don't just pick up the staff to the competition. That makes no sense.
How do you convince this young generation to join the company? What's your main argument?
Well, I think if you want to join the hospitality, the only thing we can't train is the overall passion for this business. And if you have the feeling that serving others gives you joy, then you're destined to the hospitality business. If you don't have that, forget it. It is then our challenge to find young and old individuals who have that passion and the rest we can train. Hospitality is very simple.
But do you find this passion on the same level in every continent. In Asia, it's natural. It's part of the education. It's a philosophy.
I was incredibly impressed with the people from Turkey, by their passion and their warmth. Their generosity and their sense of hospitality are unbelievable. It was an absolute joy for me to spend months and months working with them, trying to help to open this hotel. Absolute pleasure.
Same feeling in Western Europe?
I shall refrain from making a pertinent answer to that question.
When looking at the career of many executives within the company, we can say that there is a strong sense of loyalty. Many have never changed to experiment other luxury groups. How do you justify that loyalty?
To me loyalty is still very, very important. For decades, I am working for a chairman who is the most loyal person you could ever wish for. We are all working for what is, most probably, the ideal hotel owner. Sir Michael is incredibly interested in quality; incredibly interested in the well-being of all of us and is the most wonderful person one could ever meet. May be that is the greatest differentiator between us and any other brand.
Thus, we are a very, very responsible employer. We are very committed to this culture that that took generations to build. And I make an enormous effort to show that on a daily basis, to lead by example. To have credibility and respect.
Coming back to this new generation, but this time on the other side of the operations. Have you seen the clients change over the past years?
Of course, I've seen clients change because that's evolution. But luxury, in my opinion, is always built on the same principles. And whether you're old or young, if you get very good service provided by staff that have passion, that have empowerment and that makes you feel welcome, that's a luxury that everybody likes. And especially after this period of Covid, where people have been locked up in their homes. Now, to have this human connection again and to feel it is a genuine moment, not a plastic moment, that is enormous.
Do you need to adjust your propositions to that trend?
Luxury is also about space, and we always build big rooms and then we fill them with all the amenities. When I was young, we used the telex and now we're using emails. That's evolution. But there is not a moment where we all go: “Oh my God, that's when the world changed”. No, that's not what you want. And again, let's go back to Chanel. The fabric that Virginie uses today is still based on what Coco had, the beautiful tweeds. It's all this handmade, incredible detail that has just evolved.
Focusing on the behaviors of the clients, don't you think that they don't behave the way they should in a palace?
No, not at all. You see, this is a wrong perception of what you're describing here. A hotel has to be a very cosmopolitan place that welcomes people from all ranks and from all nations. The beautiful and not so beautiful. And they all come together in an environment where they feel comfortable, and they can do whatever they like as long as it is legal. And to me, that's a good hotel. So, there is not something that I dictate.
How do you see the company in five, ten years?
Exactly on the same path as we are following now: continuous evolution, upgrade of products, bringing in new talents, whatever other services. But we're not going to change to throw everything out.
Sir Michael won't be there for another century…
It is a family business, and his son is already there as a board member. He will succeed his father to pursue the legacy.
