Peninsula Luxury Hotels Owner Seeks to Expand in India, China

Apr 13, 10 | 1:54 am

By Nadja Brandt

The luxury Peninsula hotel chain plans to open properties in China and India, where expanding economies and rising consumer wealth promise demand for high-end lodging, said Clement Kwok, chief executive officer of owner Hongkong & Shanghai Hotels Ltd.

With nine locations around the world, Peninsula is also interested in a London location after making its Paris debut in 2012, Kwok said in an interview at the hotel's Beverly Hills location. The company's five- to 10-year plan calls for operating a maximum of 15 properties, he said.

Peninsula signatures include Rolls-Royce limousine service in a market segment where luxury hotels have been hurt by declining business and leisure travel. While the chain has had lower occupancy rates, Kwok said he generally expects the properties to pay back returns on their investment in the second decade of operation.

"We look at our hotels as long-term investments," Kwok said in the April 8 interview. "Many investors, many of which are big institutions, appreciate the long-term strategy."

Hongkong & Shanghai's stock has more than doubled in the past year, compared with a 49 percent gain in the benchmark Hang Seng Index. The shares closed at HK$12 on April 9 on the Hong Kong stock exchange.

The company, based in Hong Kong, is looking to expand the Peninsula in "secondary" markets in China, where it currently has locations in Shanghai and Beijing, Kwok said. He declined to say where he would like to open the first Peninsula in India.

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Source: businessweek.com