“I’m a total fan of Rosewood, and everybody in Hong Kong cannot wait to have our own,” says Goodwin Gaw, a major hotel owner and investor. “Rosewood is like a Four Seasons for Millennials. It’s really connected to young travelers, especially Asian.”
Hong Kong hotel-and-property company New World Development bought U.S.-based Rosewood in 2011, and in the third quarter of next year it expects to finally open the chain’s first Hong Kong hotel. It knocked down the New World Centre on Salisbury Road in Tsim Sha Tsui overlooking the harbor and is putting up a 66-story tower with 398 hotel rooms and 199 long-term residences.
New World is part of Chow Tai Fook Enterprises, founded by Cheng Yu-tung, who died last September just after his 91st birthday and left a roughly $15 billion fortune. He had come from China as a teenager and his rags-to-riches tale began with his transformation of a Macau gold shop into Chow Tai Fook, one of the world’s largest jewelry chains. Unlike many Hong Kong tycoons whose family dynasties end up hobbled by succession disputes, he carefully plotted his own transition. Son Henry Cheng took over and groomed his four children, Adrian, Sonia, Brian and Christopher, to run the family businesses.
Rosewood Hotels is the ‘baby of 36-year-old Sonia, or rather, one of four babies. Hailed as a model Millennial, she’s the chief executive and also a mother of three under the age of 5; her husband runs a restaurant company. Under her, Rosewood has become one of the world’s fastest-growing luxury hotel brands, especially thanks to the ability to actually invest in the hotel properties and not just provide third-party long time management for other owners / developers.
Among its prized properties are the historic Hôtel de Crillon, in Paris and the Carlyle Hotel on Manhattan’s Upper East Side – each property only operated by Rosewood Hotels. There are now a total 26 Rosewood Hotels & Resorts globally (ex.: 8 in the U.S. , 5 in Mexico, 3 in Europe and only 2 in China) and but that number is set to double within a few years. In all, as the head of Rosewood Hotel Group, New World’s hotel-management company, she oversees 59 hotels in 19 countries, under the Rosewood, New World and Pentahotel brands. New World owns many of these hotels, including the Rosewood Beijing and the Carlyle, and it will own the new Hong Kong hotel.
Cheng took over New World’s hotel-management business in 2008, while still in her 20s. She says her plan all along was to create a new luxury tier aimed at well-heeled New Age travellers, but the Rosewood deal provided an unexpected path. “They had a wealth of knowledge and experience, and what they did over the last 30 years was amazing,” she says. “But it was not so well marketed. Only a small audience knew about it.”
Sonia Cheng started her professional career at Warburg Pincus and Morgan Stanley in New York and Hong Kong doing real estate valuations after her education at St. Paul’s Co-educational College in Hong Kong, boarding school in Connecticut and then Harvard. “I did a major in applied mathematics in economics. The reason I did that was no one else did it,” she says, breaking into laughter while noting that many of her peers were majoring in economics or East Asian studies. “I like to be a little unconventional. I wanted something challenging, I didn’t just want to go the easy route, and that’s always been my life, always trying to find the challenging route.”
She’s often tapped to speak at conferences on the interests of affluent young travellers, but confesses a shyness of the spotlight. “I speak at the conferences to help promote the brand,” she says. “When people label me as this star or something, this young woman CEO, I don’t enjoy it. I don’t think I deserve it, yet.” She’s also in demand to speak at schools and universities about women in the workplace and other topics, which she finds a better fit. “That I enjoy, because I hope my experience can inspire a lot of young students.”
But running hotels is different from staying in them. “It was overwhelming at first, because I didn’t have the standard Cornell University hotel degree or 20 years of hotel experience,” she says. “I did a crash course. I literally went from department to department to try to understand how everything works. I learned a lot in a very short period.”
As she methodically spent two years visiting each hotel and talking to staff, she also mapped out her idea for a luxury brand appealing to travellers like herself. “The audience we are targeting is looking for a different experience,” she says. “These are the affluent explorers, and they are looking for an adventure, a sense of surprise, of discovery. They don’t want the expected anymore. We’re delivering the unexpected.”
The acquisition of Rosewood was different as it already had a rich history, but a limited reach. It was founded in 1979 by Caroline Rose Hunt, herself a rich daughter (of early U.S. oil tycoon H. L. Hunt). Her first hotel was Rosewood Mansion on Turtle Creek in Dallas. The luxury brand spread across the U.S. and the Caribbean, commanding a loyal following, but its growth had plateaued and it was exploring its options.
She wants her hotels to be hip destinations in each city; so she focused on creating lively lobbies and facilities rich in local color. “She didn’t come to this with a lot of baggage. She knew hotels, grew up in them, but she really brought a young mind-set to this. We’re prepared to do things differently.”
Occupying 43 floors of a 65-story skyscraper, the Rosewood Hong Kong which opens March 17th, 2019, is just one of the newest projects from Cheng, 38, a Harvard grad and investment banker–turned-hotelier. It is itself part of a larger Hong Kong development, Victoria Dockside, which promises to remake an entire stretch of the sweeping Tsim Sha Tsui waterfront overlooking Victoria Harbour.
Victoria Dockside also represents an ambitious bid by Cheng and her older brother, Adrian Cheng, 39, to take on the mantle of their grandfather, the Hong Kong–based business magnate Cheng Yu-tung, who died in 2016 at the age of 91. “We want to reinstate the glamour and romance of Hong Kong in the ’80s and ’90s,” says Adrian.
The new project is built on a nearly 70-acre plot that was purchased in 1971 by Yu-tung, who made his fortune through the Chow Tai Fook jewelry chain, property, infrastructure, hotels and department stores. In 1978, on this very site, Yu-tung opened the New World Centre—including retail, office and residential spaces—and the luxury hotel Regent Hong Kong.
His son, Sonia and Adrian’s father, Henry, once worked as general manager of the Regent before succeeding Yu-tung as chairman and executive director of the family-owned New World Development Company Limited, which now has a market cap of almost $15 billion and total assets of $61.4 billion. In 2012, Sonia was named executive director of New World Development; Adrian, who also graduated from Harvard, was anointed executive vice-chairman in 2015.
The Chinese millennial generation is on a fast track, Adrian Cheng says. “It’s competitive; they want to accumulate as much as possible, be successful as fast as possible,” he says. “They’re racing, they’re hungry. They need to compete with knowledge: Because they’re young, they cannot compete with experience.”
While Hong Kong has recently seen a slew of high-profile cultural projects, including the Tai Kwun complex on Hollywood Road and the Xiqu Centre for Chinese opera that just opened in December, this $2.6 billion project, to be completed in the fall of 2019, promises to be even bigger. Overseen by New York–based architecture firm Kohn Pedersen Fox and landscape architect James Corner, one of the designers of New York City’s High Line park, Victoria Dockside will encompass K11 Atelier offices, the Rosewood hotel and the high-end long-stay Rosewood Residences—a first for the brand—in addition to luxury apartments and the K11 Musea retail and art exhibition space.
Adrian has even wrangled a redevelopment contract to spruce up the adjoining Avenue of Stars, a promenade modeled after Hollywood’s Walk of Fame. So far, the big bet looks promising: It has contributed to a jump in New World Development’s profits of more than 200 percent in 2018 from the previous year, with revenues also rising 7 percent to about $7.75 billion.
Millennials and Gen Zers are the Chengs’ prime targets as they envision the next generation of their grandfather’s company, and Hong Kong is just the beginning. They anticipate that the next chapter of New World Development’s growth will depend on expanding beyond Hong Kong into mainland China. Like many others of their generation, both Adrian and Sonia are seeking to disrupt their respective industries.
‘[Chinese millennials are] competitive; they want to accumulate as much as possible, as fast as possible says’ Adrian Cheng. “We use technology as a medium to reach our customers and to analyze them. Across our entire New World portfolio, [we look at] people who bought our residential units, who bought from our K11 retail outlets, who stay in our hotels,” Adrian says, referring to the so-called K11 Future Taskforce that he set up to perform this research. “We are getting a very cross-disciplinary set of data—a lot of deep learning to understand what they want.”
For her part, Sonia is focused on a group that she has dubbed “affluential explorers.” These are wealthy, discerning travelers who she says are underserved by larger luxury hotel chains. “I think in the industry there are a lot of lifestyle hotels, but they’re lifestyle from a design point of view, not really from a programming point of view,” she says.
Adrian’s residential developments in Hong Kong feature landscaped rock arrangements by Zen priest Shunmyo Masuno, a sculpture park with marble pieces by Gao Weigang and braids of cast aluminum by Jean-Michel Othoniel. In the center of the densely packed Mong Kok district is his 28-story Skypark building, where the less-than-1,000-square-foot apartments have been selling for nearly a million dollars each.“I don’t really care whether it’s a Western or Eastern philosophy—what I’m creating is an international way of living,” Adrian says.
Like the late Japanese developer Seiji Tsutsumi, Adrian has pursued a spectacle-driven “museum-retail” concept with his five K11 Art Malls in Hong Kong and mainland China. The first branch opened in 2009, a short walk from the Victoria Dockside site, followed in 2013 by a Shanghai location. The K11 Art Museum there made international headlines in 2014 when it drew more than 350,000 visitors to China’s first major Monet exhibition, jointly organized with Paris’s Musée Marmottan Monet. The K11 Art Foundation also exhibits and promotes younger Chinese artists in galleries within the malls while pursuing partnerships with prominent contemporary art institutions abroad, such as New York’s New Museum and the Palais de Tokyo in Paris.
“When I created K11, it was always a brand I was thinking of, not just museums and retail,” says Adrian. He has made a variety of recent investments through the venture capital fund C Ventures and K11 Investment, including in fashion companies such as Armarium and Bandier and in London-based publisher Dazed Media. The highest-profile of these was an undisclosed amount invested in retailer Moda Operandi, which raised $165 million in 2017 in a round co-led by C Ventures and K11 Investment and private-equity fund Apax Digital.
Adrian also collaborates with his sister – “Sometimes we have to align projects,” says Adrian. “We’re so close that I will just tell him, ‘Look, I don’t agree with this,’ or he will just tell me the same,” Sonia says
They are already bringing their generational observations to bear on strategic choices, including China’s so-called 4-2-1 phenomenon—the demographic crisis, arising from the former one-child policy, wherein one child is now responsible for two parents and four grandparents.
“For the first 30 years they just pamper you. For the next 30 years this kid has to support the grandparents,” says Adrian. New World is already pivoting toward medical, health-care and wellness services. It invested in the 500-bed private hospital Gleneagles Hong Kong, opened in 2017 as a joint venture with Singapore’s Parkway Pantai, with Adrian sitting on the board, and also acquired medical clinics in Beijing and Shanghai.
adapted from WSJ, Bloomberg & Forbes
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