Passion and patience guide bid for Regent's Hong Kong return
Steven Pan, whose Formosa International bought the storied brand, is hunting for the right location to restore Regent's golden era in the city
Steven Pan Si-liang’s passion for the legendary Regent hotel in Tsim Sha Tsui – now the InterContinental – is underlined by his decision to stay in Hong Kong and his relentless search of a choice location to restore Regent’s heyday in the city.
The chairman of Taiwan’s biggest and most profitable hotel operator – Formosa International Hotels – which bought the Regent brand from America’s Carlson Group three yeas ago – is now looking to flex its muscles in Hong Kong and on the mainland.
But prime locations in Hong Kong are limited, and expensive too, following the record-breaking sale of the Murray Building hotel refurbishment project last month to Wheelock & Co’s hotel unit – Marco Polo Hongkong Hotel.
Pan conceded that Regent’s property developer partner had lost out in the bidding.
“The Murray Building bid is very high, which means it is not easy to make a good financial return,” Pan told the South China Morning Post in a waterfront suite on the 14th floor of the InterContinental.
“When I came to the hotel from the airport this morning, the taxi driver was still describing it as the Regent,” he said. “It was the views that made this hotel known to the world more than 30 years ago, and even now the views are still great except that the opposite shore gets a bit closer.”
Regent was founded by hotelier Robert Burns and Japan’s Tokyo Group in 1970 but was taken over Four Seasons 22 years later, despite attracting bidders such as Wheelock.
The Regent in Hong Kong, which opened in 1981, was renamed the InterContinental in 2001 when then owner New World Development sold the property to British hotel operator Bass Hotels & Resorts for US$346 million to reduce debts.
The Regent brand was subsequently sold to Carlson in 1997 and changed hands again in 2010 when it was sold to Pan’s family company.
“[Frequent ownership changes are] not positive to the brand,” Pan said. “I would have never sold this hotel if I were the owner.”
In Pan’s eyes, the InterContinental Hong Kong is “a timeless masterpiece, which still looks good”.
“It is like a lady so beautiful that she does not need any make-up or decoration,” he said.
Regent, which now operates seven hotels, was rated one of the world’s top five small- to medium-sized exclusive luxury hotel chains last year by research and market intelligence firm Digital Luxury Group, trailing first-placed Four Seasons, Lowes, Shangri-La and Mandarin Oriental.
“I was surprised that we were even ahead of some big names,” Pan said.
Pan, an investment banker by training and a second-generation member of a family with big investments in real estate, promised keep looking for an opportunity to return Regent to its heyday in Hong Kong.
He is equally keen on establishing a Regent presence in Shanghai despite a protracted supply gut and punishing competition.
It has been a search of three years since you told the Post in an interview in 2010 about the return of Regent to the city. What obstacles have you encountered?
There are very limited choices in Central. A site with great sea views like this hotel [the InterContinental in Tsim Sha Tsui] is very difficult to come by. Over the past three years, nothing like the Murray Building was available, but it was sold, and at a very high price.
"We have to wait and see another opportunity.
Given your expertise in real estate, do you see any bubbles in Hong Kong’s real estate market? Has it gone crazy in terms of prices of commercial and residential properties?
Many super cities such as New York, London and Hong Kong have seen prices rise out of control as long as interest rates stay low. Things may change next year, but there is no way the interest rates will go down any more. The low interest rate regime we enjoy will end.
What’s your plan on the potential Regent in Hong Kong – in terms of market positioning, what type of design and how would it compete with incumbents?
Regent came to Hong Kong as a glamorous, grand and huge hotel with about 500 rooms. Over the years, the clientele has evolved to be more private. New luxury hotels are smaller and provide discreet privacy. The future Regent may halve its size to about 250 rooms. It also depends on the location. If it is in a non-urban location, it will be a resort.
If it is in the Central Business District, it has to be the best location, second to none – great sea views, easy accessibility, associated with retail, office and luxury residential elements.
Another option is looking for a district say a train station stop away from Central, such as Sheung Wan, as an iconic brand like Regent can make the location work. For example, the International Finance Centre complex has extended Central to the west from Landmark.
We need to bring in a new concept to Regent while retaining its heritage. We want to bring it back to the standard it used to be in Hong Kong, the best of luxury comparable to Four Seasons and Mandarin Oriental hotels.
It has been about four years since your company took over the Regent brand, what have you done to polish the brand? How much has been invested in it and what about the future?
We just hired Mark Lettenbichler as our chief executive, a new position. Mark was so loyal to Ritz that he spent almost his entire career there. Just before he joined us [earlier this week], he was chairman of the Hong Kong Hotels Association and the Joint Council of the Travel Industry of Hong Kong. He was a board member of the Hong Kong Tourism Board.
He is known as a brand-maker, too, and will be based in Taipei and take charge of managing the Regent hotels.
Formosa owns and runs the Regent hotel in Taipei and other hotel chains such as the Silks and Just Sleep in Taiwan. But our international strategy focuses on Regent. We get ourselves involved in the overall hotel project, more than just a brand manager, by taking a back seat and thinking like a hotel property owner.
We examine the hotel site and see if we can make best use of the environment by checking on details. For example, it makes guest rooms warmer in winter and cooler in summer if they face the east instead of north.
As cross-strait economic ties intensify, what is Regent’s plan on the mainland?
We want to have a hotel in Shanghai, where Formosa has a number of real estate investments. Like other first-tier mainland cities, Shanghai is best suited with a residential-cum-hotel model. Regent Club, which combines deluxe residences with hotel rooms work well. The developer hopefully sells the residences and raises cash before opening the hotel. This helps the hotel achieve a higher return and lowers risks.