Mandarin Oriental keeps laser focus on luxury
 
Mandarin Oriental keeps laser focus on luxury
19 JUNE 2018 8:08 AM

Group Chief Executive James Riley shares insights into why development is so important for Mandarin Oriental Hotel Group and why the company will not launch new brands in the near future.

Editor’s note: Hotel News Now’s interview with James Riley took place on 4 June, two days before a fire broke out at the Mandarin Oriental Hyde Park, London, which had just re-opened following a renovation. Click here to read the latest update from Mandarin Oriental Hotel Group on the status of the hotel.

NEW YORK—Mandarin Oriental Hotel Group has grown to 31 properties internationally in its 55-year history, and current Group Chief Executive James Riley said the company is poised to take that growth up a considerable notch while continuing to be thoughtful and deliberate about brand objectives.

“While I don’t want to see the group grow exponentially, I would like to move from a position from the one-a-year (expansion) we’ve been doing for the last 20 years, to something more akin to three to four properties a year,” Riley told HNN during a break at the recent NYU International Hospitality Industry Investment Conference.

Riley—chief executive of the Hong Kong-based company since 2016 and in leadership roles since 1993 with Mandarin Oriental parent company Jardine Matheson Group—spoke about the direction he’s taking the company to help it grow.

Growth isn’t without setbacks, though. Two days after Riley’s interview with Hotel News Now, fire broke out at the Mandarin Oriental Hyde Park, London, which had just re-opened in late May following an extensive renovation that Riley called one of the highlights of the last year.

The hotel remains closed for repairs following the fire, but the company’s statement says that all guests and colleagues were safely accounted for and that damage was restricted to an outdoor courtyard area and has had limited impact on the building’s interiors.

Riley spoke of the project as a renovation 20 months in the making, resulting in “a really magnificent product—a much more contemporary and fresh product—that I think guests are really going to love.”

Opening and pipeline highlights

The renovation of the London project—as well as the ongoing renovation of The Hotel Ritz, Madrid, which the company acquired in 2015 in a partnership with Saudi Arabia-based Olayan Group and operates under its original name—represent examples of the company’s growth and change, Riley said.

“Twenty years ago, (Mandarin Oriental) did have a property in San Francisco, but nothing outside of Hong Kong and Southeast Asia,” he said. “Today really we have a presence in most of the major markets of the world.”

That footprint today includes 31 hotels, with 13 in the Asia Pacific region (including three in its headquarters city of Hong Kong), 10 in the EMEA region and eight in the Americas.

This August, the company’s portfolio in the Americas will be reduced by one when the Mandarin Oriental, Las Vegas, rebrands under Hilton’s Waldorf Astoria flag as a result of the April sale of the property and adjacent retail by CityCenter Holdings to an unnamed buyer.

However, Riley said “a major priority” is adding a Mandarin Oriental to the West Coast of the United States, ideally in Los Angeles.

Finding the best locations in “a wide range of cities where Mandarin Oriental would add significantly to that city” is the top priority, he said. Much of that focus will be on what Riley calls “our Asian heartland,” specifically with the evolution of mainland China to be able to support more “real luxury opportunities.”

Coming up next in terms of openings for the company are Mandarin Oriental, Doha, later this year, and Mandarin Oriental Jumeira, Dubai, in 2019.

Changes in luxury travel

Riley said that while the heart of Mandarin Oriental’s business falls in high end of the luxury segment, the brand continues to evolve to meet the needs of today’s travelers.

“The traditional luxury hospitality industry, (which is) a very formal style of luxury … is on the wane,” he said. “We are seeing luxury as a much more relaxed concept in my mind—not relaxed, but more relaxed. And in that sense I think it’s important that how we deliver our service varies and adjusts to fit with that.”

That means appealing to the “enormous range” of guest profiles that choose Mandarin Oriental, whether by age, ethnic background or travel purpose, he said.

“It’s important that we can recognize and meet the service needs of (the uber-luxury) guests, as well as … those who just want to have a pleasant stay, a luxury experience, whether for work, for business-leisure crossover or for pure leisure,” he said.

Industry health

Data showing rises in travel and hotel stays around the world are a positive bellwether for the global hotel industry, Riley said, but how companies take advantage of that growing number of travelers is what will determine winners and losers.

“Adapting to changing trends is important,” he said. “And recognizing that however well you’re positioned in a segment, getting into a segment at the right point of the market is important as well.”

To that end, he said Mandarin Oriental remains laser-focused on its eponymous brand.

“We as Mandarin Oriental are and will remain very much focused on the luxury segment,” he said. He added that when people ask whether the company will launch additional brands, he’s very clear in his response: “We need to focus our attention on development, the very powerful brand we have that is as yet underexploited.”

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