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Are Hong Kong’s Global Luxury Hotel Brands Headed for an Identity Crisis?

Category: Opinion|Hotels, Posted:02 Aug 2020 | 08:50 am

Hong Kong’s position as one of the leading worldwide host cities for luxury hotel brands has long been an envious one. The line-up that includes Mandarin Oriental, Peninsula, Shangri-La, Rosewood and Langham is rapidly finding that the unique sense of corporate place has become a perilous balancing act.

Mind you, I sit on no political fence and readers need to understand this is a hotel analysis piece that transcends political agendas. But cutting to the point, the issue that these hotel groups will face sooner or later is a challenge of how to recast their future luxury brandscape as part of a greater mega-brand that is Mainland China.

I think we can pretty squarely say that rapid pace of change in Hong Kong is accelerating the integration of a bigger agenda and the incredibly unique positioning of Hong Kong’s brands abroad are going to shift from being home alone to one of going into a pace car’s slipstream in the lead up to a Formula One race.

Hotels are not the only ones who will have to contend with the change. From Cathay Pacific to HSBC our perception of Hong Kong is on the move and in reality no one knows where it will land. There are those who say Hong Kong’s reputation and legacy can carry on for decades as it’s too big to fail, while others would opt in that in the decade ahead it will be relegated as just another tertiary city within a bigger picture. I’d imagine the reality falls between the two.

But for the luxury hotel brands, there is no firm roadmap ahead given the Mainland’s limited overseas success with their own top-end hospitality brands. The question now for the Big 5 Hong Kong owned, based or controlled groups given the current business and political climate  is what impact will transpire with their unique identities?

Some may say that the hotels either be forced to somehow manage the process and retain the current status quo, though the long-term reality is if they will continue to use Hong Kong as their flagship properties, that they will become in time Mainland Chinese brands. I’m not saying this is bad or good, but with certainty we can say it’s different.

What is a disconnect is that even Chinese travelers abroad look to foreign icons like Four Seasons, Ritz-Carlton and others as preferred luxury cocoons. The entire idea of global hotel chains who created China specific brands has not gone as expected. The Mainland thirst to experience new and different things is at the cornerstone of their adventures abroad.

It’s not unthinkable that some of these brands may shift their homes or others may align move deeply into the Mainland as part of a bigger vision but 2020 is in essence the sounding of a drum that decisions must come sooner than later. Covid-19 will delay this but the pace of political change and potential volatility between the East and the West are creating a perfect storm that even a luxury Hermes umbrella might have a hard time keeping the driving rain off of them when walking near Victoria Harbour. Expect this year to be the trigger of brand angst for the Big 5 and where they land, no one really knows.

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