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The power of one with an eagle eye

HONG KONG: From his lofty vantage point on the top floor of the Great Eagle Centre in Wan Chai, Dr Lo Ka-shui — chairman and managing director of property and hotel company Great Eagle Holdings — is a keen observer of fashion on the streets far below.

"They are crazy about Monki. M-O-N-K-I," he observes with a smile, and then raises his eyebrows when he discovers his young guest has never heard of the brand. "It's a sub-brand of H&M which is really hot among young people," he explains.

Not that one should be totally surprised by the fashion lingo that rolls so easily off the tongue of the impeccably dressed 63-year-old businessman. After all, here is the man who brought Langham Place, an office-commercial-hotel complex, to the heart of Mong Kok and transformed the sleazy district into a chic address.

That process began more than 20 years ago when Lo wowed the business and wider community of Hong Kong by investing a staggering HK$10.5 billion (RM4.26 billion) on a project that took 15 years to finish.

His resilience and strong sense of innovation earned him the SCMP/DHL Business Person of the Year award in 2005.

Two years ago, Lo's Great Eagle sold the offices, shopping centre and car park of the Langham Place project to its Champion Real Estate Investment Trust, but kept the Langham Place hotel in the listed empire.

Lo shows no sign of relaxing into quiet contemplation of his achievements. Instead, with trademark steely determination, he has spent the past six years building up the sales office network of Langham International Holdings and invested hundreds of millions of dollars building up the brand's image.

Great Eagle now operates 10 hotels around the world, including the legendary Langham hotel in London, which was built in the 19th century. The group owns an equity interest in some of them.

"My ambition is to build an internationally recognised hotel brand," Lo says, and pulls out book after book on branding strategies for the three hotel brands of the Langham group: Langham, Langham Place, and Eaton. He has rebranded his Great Eagle hotels under the Langham name.

"I have spent six years on the task and spent more than a hundred million dollars every year without making any profit, to build the hotel network around the world. A lot of people, especially the analysts, were asking me, `What are you doing? Why do you bother with the hotel business?'.

"But I have kept to my conviction. In the next three years, we will be operating 24 hotels and five years later you will see the fruits. But in between, for 10 years, you have to persevere and stick to your convictions — especially when people keep questioning your decisions."

The group is now winning contracts to operate and manage hotels under the Langham brand on China, as well as to develop and manage a mixed-use Langham Place hotel complex in Dalian.

That expansion is not coming at the expense of the group's high standards, and Lo takes evident pleasure in noting that, in a recent hotel review survey by online travel site TripAdvisor, Langham emerged second in the luxury hotel sector to the Peninsula brand in customer satisfaction, and on a par with such long-established names as Four Seasons, Shangri-La, and Mandarin Oriental.

"Compared with Shangri-La, we are more than 30 years behind, and a lot of premium locations were already taken up by other developers when we came onto the scene. So we had to think of an alternative strategy and act quickly."

The group has a two-pronged approach to the hotel business, he says, operating as an owner-developer and also manager.

"I believe that in the long run, hotel management will be a much bigger focus than hotels I own and build. The return on equity is much higher, and the investment is much lower. And we can also penetrate into prime locations which have already been bought by other developers by investing in and operating the Langham hotel brands in the districts."

When one is steering a company down a road less travelled, one must hold onto a vision and keep a steady course, or the whole plan goes bust. Lo is relentless in his execution of his plan, say those who know him — he is on top of every board meeting, communicates his vision clearly and matches his words with an incentive system that rewards only those staff who follow his vision.

How well they perform, and how big their year-end bonus will be, is measured against how well they comply with his vision.

"The most important thing in management is — I am on the top. I give clear directions to where I am going. You have to follow me unless you can convince me this direction is wrong," he says. Sometimes, he confesses, he is persuaded that he has to change his business direction. He gives an example where he invested in a coffee chain a few years ago. The model was simple, he says — selling coffee at a price way higher than the actual cost of the coffee in some of the key locations of the city and taking a brand position on par with Starbucks and Pacific Coffee. However, a few years later he became convinced that vision was not going to work, and he decided to fold the business.

"Sometimes you have to confess that you can't do it. For the coffee business, it was not only about branding, but the real estate models that were already in place in the market. A lot of developers have already marked their territories, and if you want to enter into the game on your own, it will be too costly, so I gave up."

To ensure that his Langham retail project succeeds, Lo has gone against the norm of seeking to maximise rental yield and instead rents space at lower rates than he might charge major names, to brands he judges to be compatible with the mall's image.

It is also important to find capable and like-minded people to run the show, he says, and the same principle applies to his hotel business. Talent has been hired across the hotel industry and brought into the group.

To ensure standards do not slip Lo makes regular visits to local and overseas hotels and keeps in constant contact with his managers.

"Innovation is very important. When the world changes, you have to change," Lo says, clicking away at the mouse to show pictures of the latest hotel concepts around the world, posted by Langham staff on the intranet. "I am a doctor and I studied genetics in university. Some creatures can survive and some can't. And the reason is some know how to change with the world and some don't. You don't necessarily have to be young, but you must be young at heart." — South China Morning Post
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