**INTERNATIONAL REPORT** — The hotel industry is a competitive arena filled with colossal players boasting numerous brands, often numbering in the 30s and 40s. In contrast, **Pan Pacific Hotels Group** operates with just three distinct luxury brands, yet it’s carving out a notable presence in the market. CEO **Peng Sum Choe** identifies a burgeoning sense of optimism in the face of such competition.
“**It’s a tough battle for us—a small player up against the giants**…but we’ve witnessed promising growth over the last five years,” he explained, painting a picture of resilience and potential.
Headquartered in Singapore, Pan Pacific encompasses three standout brands: **Pan Pacific, ParkRoyal Collection,** and **ParkRoyal**. Remarkably, the company’s portfolio has seen its numbers double from 28 to 58 properties in just five years. Choe credits this growth to a strategic focus on **brand differentiation**.
“With an abundance of brands out there, distinguishing ourselves has become a critical factor,” Choe noted. “Our focus allows us to target market segments effectively — and we aim to do this with precision.”
The Case for **Differentiation**
In an engaging discussion, Choe referred to a recent survey conducted by **Molded Mindset** that included responses from 14,000 global travelers. The findings were somewhat alarming: **87%** of respondents couldn’t tell the difference between various hotel brands, while **79%** were unaware of which brands belonged to specific chains.
**Navigating the ‘Sea of Sameness’**
Choe illustrated his point using an analogy about the overwhelming number of brands as a “**sea of sameness**,” akin to the colorful cereal boxes lining grocery store aisles. “**If we concentrate on differentiation and understand our value to the customer, our chance for success improves significantly,**” he asserted.
**Building Relationships with Smaller Operators**
Additionally, Choe highlighted the trend of smaller owner-operators attracting investment attention. “There’s a noticeable shift among investors who prefer smaller companies for the **personalized attention** they offer, steering clear of larger chains,” he remarked. “This trend presents a unique opportunity for Pan Pacific to flourish.”
**A Vision for Growth**
Choe expressed a relentless ambition for growth: “**To stagnate is to fail.** Our strategy involves not just acquisitions but also asset reconstitution.” For instance, last year, Pan Pacific sold the **Park Royal Kitchener** for **S$530 million**, resulting in a substantial influx of capital for reinvestment.
**Focusing on the Asia Pacific**
When discussing future prospects, Choe emphasized that the **Asia Pacific region** remains a primary focus for growth in the next five to ten years. “Given the current global challenges facing other regions, we anticipate a surge of investor interest in our corner of the world.”
**European Ventures on the Horizon**
As for European expansion, Choe expressed a desire to enhance Pan Pacific’s footprint there, describing potential sites under consideration. “**Despite current hurdles in Europe, crises often present unique opportunities, and we are determined to explore them.**”
**The U.S. Market: Challenges and Aspirations**
The U.S. remains a key element in Pan Pacific’s growth strategy, but Choe acknowledged the complexities involved. “**Investing in the U.S. poses challenges due to tax regulations and union-related issues**. However, we remain optimistic about establishing franchises and expanding our presence.” Boasting a strong foothold in Canada, Choe assures that growth in North America is on the horizon.
**The Power of an Asset-Light Strategy**
Choe outlined a pivotal shift towards an **asset-light strategy**, aiming for a 50-50 asset ownership ratio within two years. “Innovative approaches, including leveraging **capital markets**, will be fundamental to our growth trajectory,” he concluded.
In summary, Pan Pacific Hotels Group is not just surviving but thriving, navigating a competitive landscape with strategic insight and innovative approaches. As they focus on precise differentiation and fortified relationships, the hotel group is poised to elevate its mark in the hospitality industry while embracing future opportunities with a robust asset strategy.
