In Hong Kong, we build a global business empire

Chapter 699 Using their own methods against them (First Update)
Undeniably, the hotel industry does not account for a large share of Li Ka-shing's businesses.

However, this is an industry that Li Jiacheng is very optimistic about, especially the high-end hotel industry.

However, there aren't many industries that these individuals can currently collaborate on.

The real estate industry is an option, but even super conglomerates like Hong Kong Land Group, which are centered around real estate, are reducing their investments in the real estate sector these days. The same goes for companies like Hong Kong Electric Group and Wanqing Group.

Therefore, it makes no sense for them to unite against Lin Haoran in the real estate sector.

As for other industries, such as supermarkets, neither the Kadoorie family nor the other two companies have ventured into them.

In other words, ParknShop has no choice but to rely on itself to compete with Wellcome.

"If we want to concentrate our firepower to compete with the other side, I have an idea," Li Jiacheng said with a smile.

"Oh? Mr. Li, if you have any ideas, please speak up." All three looked at Li Jiacheng, and Brown spoke up directly.

"Hong Kong has a well-developed hotel industry with numerous hotel brands, but there are actually not many high-end hotel brands. Apart from the Hilton Central under Cheung Kong Holdings, the Peninsula Hotel under the Hong Kong Grand Hotel Company controlled by the Kadoorie family, the recently opened Regent Hotel, Hong Kong Sheraton Hotel, Miramar Hotel, etc., there are only a few hotels under the Mandarin Oriental Hotel Group under Hongkong Land Group, plus the soon-to-open Shangri-La Hotel in Tsim Sha Tsui under Kerry Group. The competition is neither too big nor too small."

Mandarin Oriental Hotels Group has added a new Mandarin Hotel in Hong Kong in the past year, showing its great ambition. It now has a total of four hotels in Central, Causeway Bay and Tsim Sha Tsui, including two in Central, one in Causeway Bay and one in Tsim Sha Tsui. Recently, its market share has inexplicably increased.

Luxury hotels don't have a large target customer base to begin with, and the Mandarin Oriental Hotel Group's market do indeed squeeze the market space of other high-end hotels. In particular, the Hilton Central, under our Cheung Kong Holdings, is a long-established luxury hotel, and its occupancy rate and revenue have declined recently.

"I wonder how the Peninsula Hotel and the Hong Kong Grand Hotel, owned by Mr. Kadoorie, are doing now?" Li Jiacheng said slowly.

When Li Ka-shing mentioned the Mandarin Oriental Hotel, Henry Keswick, the head of Jardine Matheson, unconsciously frowned, and his face instantly darkened.

Mandarin Oriental, the internationally renowned luxury hotel brand, embodies the hard work of three generations of Jardine Matheson. It can be said that Mandarin Oriental Hotel Group is essentially Jardine Matheson's "own son".

As the head of Jardine Matheson in the 1970s, Henry Keswick personally oversaw the acquisition of the Oriental Hotel in Thailand, perfectly merging the two luxury brands to create the Mandarin Oriental Hotel Group of today.

In his eyes, this was not only a successful business investment, but also a symbol of the Keswick family's success in operating Jardine Matheson.

However, one wrong step can lead to eternal regret.

Because of the cross-control plan for Jardine Matheson created by Niu Bijian, Lin Haoran secretly absorbed a large number of shares in Jardine Matheson Group, thereby achieving control of Jardine Matheson Group and eventually even taking control of Jardine Matheson.

And just like that, control of the entire Jardine Matheson system fell into the hands of a young Chinese man.

In order to regain control of Jardine Matheson, the consortium behind Jardine Matheson, including the Keswick family, had to relinquish a great deal of profits.

For example, giving up shares in Hongkong Land Group, transferring the Mandarin Oriental Hotel to Hongkong Land Group, and transferring Kwai Chung No. 5 International Pier to Hongkong Land Group, etc., can be described as heavy losses.

Therefore, Henry Keswick hated Lin Haoran to death.

Now, whenever Henry Keswick hears Li Jiacheng mention the Mandarin Oriental Hotel, he can't help but recall that shameful history.

Thinking of this, Henry Keswick couldn't help but slam his hand on the conference table, his expression turning extremely ferocious.

The air in the conference room froze instantly.

Li Jiacheng, Brown, and Laurence Kadoorie all looked up at the same time, their eyes turning to the distraught Henry.

After a brief moment of surprise, they quickly understood the reason from Henry's ashen face and the sensitive word "Mandarin Oriental"—it was Jardine Matheson's eternal pain.

The three exchanged a knowing glance, their eyes filled with a subtle pity.

After all, who among us hasn't experienced setbacks and failures in the business world?

The tragic lesson of the Keswick family, whose ancestral legacy nearly fell into the wrong hands, is truly lamentable.

After all, when Henry Keswick served as chairman of the board of Jardine Matheson in the early 1970s, it was arguably the peak of Jardine Matheson's power; even Huifeng Bank was not as strong as Jardine Matheson at that time.

Later, if Huifeng Bank hadn't used its methods to cause Jardine Matheson to lose Kowloon Wharf, Huifeng Bank might not have been able to become the dominant force in Hong Kong's business world.

Of course, Huifeng Bank's dominant position in the business world lasted less than two years before Lin Haoran directly ousted it from its throne, and it has now become a subsidiary of Standard Chartered Bank.

Both Jardine Matheson and Huafeng Bank met with incredibly difficult endings.

Henry Keswick also knew that he had lost his composure in front of the other three.

He stood up and said, "Sorry, I just remembered something and I'm in a bad mood for a moment."

“I understand Mr. Henry’s feelings,” Brown said at the opportune moment.

At this moment, Li Jiacheng tapped the table lightly to attract the attention of the other three before he began to speak: "Gentlemen, since we are all interested in starting with the hotel industry, why don't we unite all the luxury hotels in Hong Kong and form a luxury hotel alliance?"

Since the Peninsula Hotel, owned by Mr. Kadoorie, has also experienced a decline in performance in the past month, just like the Hilton Hotel in Central, I boldly speculate that other luxury brands in Hong Kong, such as the Sheraton Hong Kong Hotel under Marriott International, the Regent Hong Kong Hotel under New World Group, and the Miramar Hotel under Mr. Yang Zhiyun, may also be experiencing similar declines in performance.

While I cannot yet understand why the Mandarin Oriental Hotel has seen such a surge in performance over the past month, given that luxury hotels in Hong Kong are all experiencing a decline in revenue, I think other hotels such as the Sheraton, Regent, and Miramar are also in dire need of addressing this issue.

Therefore, we proposed joining forces with them to form an alliance to jointly counter Mandarin Oriental's market expansion, which they should not refuse.

"The hotel industry is just the beginning. If we win this battle well, we can replicate it in other industries as well." A glint of shrewdness flashed in Li Jiacheng's eyes as he tapped his fingers lightly on the conference table and spoke slowly.

Henry Keswick had calmed down by now. He narrowed his eyes slightly and said, "Mr. Li, do you mean we should unite all the high-end hotels in Hong Kong to form an alliance and jointly fight against the Mandarin Oriental? Then, using the hotel industry as a breakthrough point, and after gaining a foothold, gradually nibble away at Lin Haoran's other businesses?"

"That's right. A few days ago, I had someone compile data on the high-end hotel market in Hong Kong. Currently, there are 12 luxury hotels in Hong Kong. Mandarin Oriental owns 4 of them, while Peninsula, Hilton, and Hong Kong Grand Hotel, which are owned by Mr. Kadoorie and me, together own 4. The remaining 4 are operated by brands such as Marriott, Regent, and Miramar."

If we can bring the remaining four hotels into the alliance, our share of Hong Kong's high-end hotel market will reach two-thirds, and all of them will be located in the most prime locations in Hong Kong, such as Central, Tsim Sha Tsui, and Causeway Bay. This would allow us to completely encircle and suppress the Mandarin Oriental.

Laurence Kadoorie pondered, "But how do we persuade these hotels to join? After all, they each have different financial backers."

Li Jiacheng's lips curled up, revealing a confident smile: "When we get to the point, it all comes down to two words—profit. I'm not afraid to be frank with Mr. Kadoorie: the occupancy rate of my Central Hilton hotels has generally declined by 20%-30% compared to last month."

I specifically had people investigate. The occupancy rates of the four hotels under the Mandarin Oriental Hotel Group have surged by over 30% in the past month. Apparently, these four hotels are achieving over 97% occupancy every night, with the Mandarin Oriental on Queen's Road Central even reaching 100% full occupancy every day. Keep in mind that the customer base for high-end hotels is inherently limited. A significant increase in the occupancy rate of the Mandarin Oriental means that the occupancy rates of our other hotels will correspondingly decline.

At this point, Laurence Kadoorie nodded in strong agreement.

Li Jiacheng continued, "Mr. Kadoorie, I'm not quite sure what the occupancy rates are like at your Peninsula Hotel and Xiangjiang Hotel, but I imagine they're not much different from our Hilton Hotel, they're not doing much better."

We're all anxious, and I'm sure Sheraton, Regent, and Miramar hotels are also very anxious. If we could come up with a practical solution, we could implement joint marketing, resource sharing, and customer exchange.

For example, with a joint customized membership points system, members can freely share and redeem points earned at any hotel within the alliance, and also enjoy unified discounts.

We have even launched high-end concierge services across hotels, allowing guests to enjoy meticulous and unexpected service experiences at any of our alliance hotels, greatly increasing customers' reliance on our alliance hotels.

As a result, our occupancy rate naturally increased gradually. With such a good opportunity, how could they possibly refuse?

"Ladies and gentlemen, I know why the occupancy rate of the Mandarin Oriental Hotel has surged," Laurence Kadoorie suddenly said.

Immediately, the other three people focused their attention on Laurence Kadoorie, waiting for him to continue.

After all, Li Jiacheng was unaware of this matter; he had even previously believed that it was Lin Haoran's revenge against him.

“As the most representative luxury hotel in Hong Kong, our Peninsula Hotel has accumulated a huge customer base over the years, but recently it has indeed been impacted by Mandarin Oriental,” said Laurence Kadoorie with a solemn expression. “Through follow-up visits to the high-end customers we have recently lost, we have discovered a key issue: most of these customers are executives of global partners of Lin Haoran’s companies.”

He paused for a moment, then continued, "Mandarin Oriental recently launched a 'Strategic Partner Program' to provide exclusive discounts and customized services for these companies' executives. More importantly, Mandarin Oriental has deeply integrated hotel accommodation discounts with business cooperation among its subsidiaries, forming a closed-loop ecosystem."

Henry Keswick frowned: "This is a classic case of business collusion! Lin Haoran is using the group's resources to inject capital into the Mandarin Oriental."

Li Jiacheng pondered, "No wonder their occupancy rate can remain above 97%. This approach of deeply integrating the hotel business with the group's commercial network, coupled with the Mandarin Oriental's existing clientele and walk-in guests, is indeed difficult to break from a purely hotel industry perspective."

Brown added thoughtfully, "This move is indeed brilliant. Among the giant companies in Hong Kong, such as Hengsheng Group, Hong Kong Land Group, Hong Kong Electric Group, and Wanqing Group, Lin Haoran's companies account for nearly one-third."

Therefore, they have numerous international partners and even important clients, and senior executives from overseas markets frequently travel to Hong Kong on business. It's easy to imagine how many partners these companies have globally.

Brown suddenly continued, "These corporate executives, supplier owners, and others choose Mandarin Oriental not only because of its competitive prices, but also because they value their business relationships with Lin Haoran's companies."

A glint flashed in Li Jiacheng's eyes: "Since that's the case, why don't we give him a taste of his own medicine? The combined resources of our four companies—no, three of them—may not be less than Lin Haoran's."

Jardine Matheson has already withdrawn from the Hong Kong market, so it naturally cannot be included.

Brown immediately understood: "Mr. Li means that we should also establish a similar business alliance?"

“Exactly!” Li Jiacheng said decisively. “We can establish the ‘Hong Kong Business Partners Alliance’ to include all the partners of our three subsidiaries. All senior executives of member companies who come to Hong Kong can enjoy exclusive benefits and services from our hotel alliance.”

Laurence Kadoorie added, "And we can offer even greater discounts, such as 30% off, combined with a better service experience."

Brown said thoughtfully, "That's a good idea, but we need a killer feature, such as providing these executives with business networking services to help them expand their business in Hong Kong."

Li Jiacheng exclaimed in admiration: "Brilliant! In this way, their choice of our hotel is not just for accommodation, but also for business development. That's where the real value lies!"

"Besides our Standard Chartered Bank and HSBC, there are also Mr. Li's Hutchison Whampoa and Cheung Kong Holdings, as well as Mr. Kadoorie's CLP Power. I can make other arrangements."

Given Standard Chartered Bank's current influence among British-owned enterprises in Hong Kong, we can certainly act as an intermediary to connect you with Swire Group, Wheelock & Co., Hong Kong Tunnel Company, Harbour Enterprises, Hutchison Whampoa Group, Po Fook Development, and Harbour Development, among other British-owned enterprises, to join this business alliance.

These companies have a vast business network and customer resources, and countless international partners. Many of their customers choose to stay at the Mandarin Oriental Hotel or other hotels for convenience or because of their habit of visiting Hong Kong.

"As long as we attract these customers, your hotel's occupancy rate will naturally be guaranteed. In your China, this is called 'fighting fire with fire.'" Brown said, then burst into loud laughter.

Although Standard Chartered Bank does not appear to have a direct connection with these companies' hotel businesses, giants such as Cheung Kong Holdings, Hutchison Whampoa, CLP Power and Swire Group are all core clients of Standard Chartered Bank.

These companies rely on the financial services systems of Standard Chartered Bank and HSBC for their financial transactions, loan business, and investment management.

Brown naturally understood that only if these companies maintained their market competitiveness could Standard Chartered Bank's position in Hong Kong's financial sector be secured.

If Lin Haoran continues to expand and gradually erode the market share of these traditional British-owned enterprises, it will eventually threaten the foundation of Standard Chartered Bank's business.

The four men looked at each other and smiled; a complete counterattack plan was taking shape.

"By the way, I've also learned something that might be useful for our operation as well," Li Jiacheng said after everyone's laughter subsided.

"Oh? Mr. Li, please speak." The three men's eyes immediately turned to Li Jiacheng.

“As far as I know, Mr. Simon Murray, the president of Hongkong Land Group, has been secretly contacting Raffles Hotels in Singapore multiple times in the past two months, preparing to acquire the Raffles brand. I learned about this unintentionally through my intelligence sources.” Li Jiacheng paused here.

Laurence Kadoorie frowned: "Raffles Hotel? That's the most prestigious hotel brand in Southeast Asia."

Li Jiacheng nodded slowly and said, "That's right. The history of Raffles Hotel can be traced back to 1887. It is known as the 'last bastion of the Eastern aristocracy.' If Mandarin Oriental successfully acquires this brand, their position in the Asian high-end hotel market will be even more unshakable."

Henry Keswick nodded, his face grim, and said, “We must not let Lin Haoran succeed! The Raffles Hotel holds the same position in Singapore as the Peninsula Hotel, owned by Mr. Kadoorie, holds in Hong Kong.”

Although Jardine Matheson withdrew from the Hong Kong market and lost the Mandarin Oriental Hotel, they still have other hotel brands in Southeast Asia.

In fact, after Jardine Matheson withdrew from the Hong Kong market and lost the Mandarin Oriental Hotel, it also coveted the Raffles Hotel in Singapore and even inquired about the price. However, the hotel had no intention of selling, so Jardine Matheson chose to give up the acquisition.

Coupled with his hatred for Lin Haoran, his first instinct upon hearing the news was to stop the acquisition.

The reason why Mandarin Oriental Hotels wanted to acquire Raffles Hotel Singapore was that Lin Haoran and Simon Murray had discussed the idea of ​​developing Mandarin Oriental Hotel Group into an international hotel giant as early as last year. This idea became even more firm after Lin Haoran returned from the United States.

Therefore, Simon Murray now plans to rapidly expand Mandarin Oriental's global footprint by acquiring internationally renowned hotel brands.

Raffles Hotel became the first target of Mandarin Oriental Hotel.

(End of this chapter)