Series 6: Ricco deBlank, CEO, Hotel Division, Sun Hung Kai Properties LTD (SHKP), Hong Kong

Ricco M. de Blank

CEO, SHKP HOTELS,  SUN HUNG KAI PROPERTIES LTD., HONG KONG

 by Lily Lin

INTRODUCTION 

Ricco de Blank was a graduate of the Hotelschool The Hague (1992).  He joined Sun Hung Kai Properties (SHKP) in 2009 as the CEO (Chief of Executive Officer) of the Company’s Hotel Division.  Ricco is responsible for ten top of the line hotels with internationally recognized brand names.  These hotels are either partially or wholly-owned by SHKP.  Before his appointment at the SHKP, he worked for Disney and then as the GM at various Ritz-Carlton hotels, including The Ritz-Carlton, Tokyo, Japan.

SHKP is one of the largest property companies in the world.  Its core business is the development of residential and commercial properties for sale and investment. It achieved more than six billion Euros revenue in 2010/11 and 4.6 billion Euros in profit.  The company also has complementary operations, including hotels, property management, telecommunications, information technology, transportation, infrastructure and logistics.

Because Ricco has been interviewed on a number of times, to give the interview  a fresh perspective, I tried to ask questions that have not been asked before and yet, some of the important business issues and personal reflections are still included.

INTERVIEW 

Would you briefly describe the organizational structure of the SHKP’s Hotel Division?

I have an eight-member executive team that includes finance, F&B, marketing & sales, project development, purchasing, asset management, operations, and HR that reports directly to me.  In addition to the regular hotel management structure, each hotel --- and we have ten properties to date --- also has an asset manager who is an owner representative, who makes sure that owner’s interests and functions are properly carried out.  In total I have 6000 employees working in all our hotel operations

Is the Hotel Division a profit center; meaning is it managed autonomously, that the Hotel Division is responsible for generating its own revenue, paying its own costs and retaining certain amount of profit within the Hotel Division?

The Hotel Division generates approximately US$ 600 MM revenue and US$100 MM profit per year --- and we better be profitable as this is one of my core responsibilities!  The SHKP Company empowers its leaders.  I report to the Joint Chairmen of the Company and SHKP has over 50,000 employees.  They don’t micro manage me, but of course, you have to earn their trust.  In the beginning I was a bit scared [of the responsibility].

Personally, I also don’t micro manage my employees but I do try to run an efficient and effective organization.

You were the GM of one of the most amazing hotels in Tokyo, the Ritz-Carlton Tokyo, and I am sure you are familiar with the Japanese tradition when greeting guests.  For Westerners, who are not used to service personnel lining up in a row and bowing to guests at 90 degrees while saying welcome, it could be overwhelming.  As an hotelier, how did you like this custom? 

As a Westerner, bowing for me really takes some effort!  But having lived and worked in Japan for six years, I do appreciate the gesture in which the mannerism the [Japanese] people show respect.  It is a part of Japanese life style.  For example, one time I witnessed a minor car accident.  Both drivers came out of their car and immediately started bowing and apologizing to each other.  As a Westerner, it was unbelievable seeing this!  You know if this had happened in the West, people would yell at each other or even start a fight!  Japanese learn to respect life, rules and regulations.  If you live there, you will appreciate it.

Should hotels, at least luxury hotels, in Europe and America adopt a more elaborate greeting approach to their guests?

It all depends on your customers’ expectation.  I don’t think it’s going to work with the same greeting approach in the West.  Every country has its own way of greeting.

The most elaborate Japanese social custom to me is the ancient ritual of greeting and serving samurai.  In modern day Japan, some of the same approach is adopted to serve upscale hotel and restaurant guests.  How did you find this custom?

You mean Geisha houses?  In Geisha houses, it is very much appreciated; and it is almost normal.  Again, you have to adapt to the customers’ expectation.  In Japan, you learn to be a service professional --- and not just be a servant. 

It is interesting to notice that a number of Japanese luxury and upscale hotels employ GMs from Europe and America.  Yet at the same time, Japanese take great pride for their approach to customer service and some even consider Western approach inferior.  So, why do they hire foreigners to run some of their top hotels?

I think the best person should run any hotel, may it be a Japanese or other nationality. For example, I bought the Hyatt Hakone Hotel in Japan last year, and we have a female Japanese GM.  She is fantastic!  She is one of the best GMs we have in our hotel portfolio.  I guess, when I worked in Tokyo my company found me the most suitable person at that time, but it would have been a Japanese national if that person was more suitable.

Disney is an American company that incorporates a lot of pop culture in its hotel and entertainment services.  Comparing to the traditional Japanese approach to service, the difference is considerable, and yet, the Disney’s style of services is very popular with its guests, especially with the younger generation.  You have extensive experiences with both --- and I am going to put you on the spot --- if you were not an hotelier but a hotel guest, which approach would you prefer?

I’ve seen both worlds.  I’ve seen the hotel side and the entertainment side of Disney.  There are three times in your life you must go to Disneyland:  when you are a child, when you are a parent and when you are a grandparent.  The Disney entertainment tries to cater to all three generations.  On the hotel side of the business, Disney [compared to Japanese hotels] is more informal.  As a guest, I prefer the way I run my hotels, which is more warm, relaxed, yet, refined.

There must be quite an adjustment moving from Disney to The Ritz Carlton .  How did you do it?

In some ways it was very difficult to adjust but there are similarities.  For example, both are American companies.  Both are high-quality organizations.  Both understand that happy employees will lead to happy guests, and happy guests tend to spend more money.

Traditionally, Singapore and Hong Kong share some similarities as city-states and major business hubs in Asia.  At the same time, they are considered rivals.  Do you feel that Hong Kong hoteliers must compete with Singapore for business and leisure travelers?

Mainland Chinese are the predominant travelers in Hong Kong.  It is just like Holland or any other country, the Tourism Bureau tries to attract people to their country and cities.  A number of years ago, Singapore legalized gambling.  Hong Kong has not.  On the hand, Macau [which is situated practically next door to Hong Kong] is known for casinos.  Therefore, Macau [and Singapore] are able to attract certain type of travelers.  This helps to generate higher occupancy rate, which pushes up the room rates.  But competition is healthy . . . .

“Saving face” is extremely important to Hong Kong Chinese, especially business people.  Elaborate dinner parties in expensive hotels and restaurants with an overabundance of food and drinks and extravaganza are often their way to impress their business associates, colleagues, families and friends and even competitors.  As a Dutch person --- in which frugality and simplicity is a part of Dutch life style --- how did you adjust to such a different culture?

I am Chinese [well, practically!].  I just have a Dutch passport [and a Western face]!  When we play soccer [football], my blood is orange [the color of Dutch National Football Team].  Otherwise, my wife was born in Hong Kong and my children go to school here in Hong Kong.  I am very satisfied with the life I lead here.  It has been good!  I love Holland but I will live the rest of my life in Hong Kong.

You mentioned in one of your interviews that you make every area in your hotels measurable.  What performance measurement metrics do you routinely use?  Can you give a few examples?

If you don’t set measurement, you cannot make improvement.  I learned this early on.  You need to know:  “Where am I now?  Where am I going?”  Running a hotel is a process.  For example, when a customer checks in, it’s a process.  Employees must complete the check-in process within a given time.  They should not take too long, otherwise, customers will become impatient or too short because then some parts of the process will not be done or will be done hastily.  [If measurements are well-defined], every employee knows what is expected of him/her.

How do you measure “quality”?

Quality is a big word.  It reminds me of my boss.  He asks me one thing:  “Make it great!“  When you talk about quality, first, you must employ the right people, who can deliver quality output, not just occasionally but consistently.  Second, you must explain what is expected of the employees, may they be chefs or front office employees.  Third, the entire organization must strive for quality and continuous improvement.

In Hong Kong, food is a passion.  It is no wonder that the City has 60 Michelin restaurants, in which two of the only 3-star Michelin Hong Kong restaurants are a part of your hotel portfolio.  In what ways do the Michelin-Star restaurants contribute to the success of your hotel business?

Michelin just came out with its 2012 ratings.  I am happy to tell you that both of our 3-Star Michelin restaurants retained their 3-Star status.  Both restaurants, French restaurant Caprice and Cantonese eatery Lung King Heen, are located in one hotel; our Four Seasons Hotel --- the only hotel in the world with two 3-Star restaurants.

If you focus on excellence, you can do it!  But it’s really about the fundamentals and hard work!  We give them [the restaurants management] fine restaurants [facilities], the best employees, quality food [raw materials] and great selections of wine, so that they can go out and deliver!  Amazingly, after getting 3-Star from Michelin they want more improvement, still!

Modern technology allows virtual traveling and conferencing.  In time, more and more people will utilize technology to substitute actual traveling and attending of meetings and conferences.  Will this development affect the hotel business?  In your opinion, should hotels make changes to accommodate the new technology?

When I worked in Tokyo, Cisco installed the TelePresence infrastructure [a software that makes virtual conferencing possible] in our hotel.  But I feel that there is nothing better than going somewhere, sit down with people and talk face to face.  I don’t think the new technology will replace business traveling.

As an hotelier, people skill is important but it cannot be the only thing.  After all, the world is full of people with good people skill but very few become successful hotel executives.  If you were to bag your success factors, what will they be?

[When you are young and inexperienced], if you want to standout, you must be willing to work hard and long hours --- and in the hotel business you know you are getting less pay than your friends.  I remember my father told me that I should always volunteer to take on extra tasks.  In time, people will notice that you are a team player and your value.  I was willing to sacrifice in order to get what I wanted --- I dreamed of being a GM.  But of course I loved  what I did.  I enjoy working in the service industry.   Luck, being at the right place at the time, is another factor.  Sometimes, you can make your “luck” but it is not always the case.  

As the top executive in the Hotel Division of your company, and if you must rank the following characteristics, how would you rank them?

Ø Excellent management skills

Ø Hardworking

Ø Highly intelligent

Ø Know the hotel business inside and out

Ø Loyalty

Ø Networking ability

Ø Strong leadership skills

Ø Visionary

Hardworking is very important.  Of course, the harder you work, the more you will learn about the hotel business.  So, hardworking and knowledge in the hotel industry are two sides of the same coin.

Highly intelligent is important but “smartness” is more important.  There is a difference between the two.

Loyalty, of course, is important.  People cannot rely on you or trust you if they don’t feel you are loyal to the company.

Visionary is important.  You must be able to communicate to your organization where you are going --- any employee would like to know that and follow your vision.

Leadership is important.  A good leader has charisma and people skill, so that people can trust you --- and willing to follow in your foot steps.  You have to be a leader.  Your customers, employees and shareholders all judge you [in your leadership ability].  You can only do your job better than anyone if they place their trust in you.

Management skill is important and that you learn through hard work and working along the side of right mentors.  Always be willing to learn more.

Are there any characteristics you would like to add to this list?

1)     You need to be humble.  Walk with your chin up but not your nose up.  In other words, walk with confidence but not with arrogance.

2)     Never forget where you come from.  Give the younger ones a chance.  Remember when you first started, someone gave you a chance.

3)     If I hire smart and intelligent people, I create an environment for quality performance.

Do you have any advice for our students who have the ambition to achieve senior hotel management position?

1)     I am still going to say, willingness to work hard.  Some young people believe that if they have a mentor, it will make things easier.  In fact, it’s more likely that having a mentor will make things even more challenging.

2)     Always have the attitude that “I can do better than this!”  I’ve never taken anything for granted.  I always want to improve myself.  Last summer, I went to Harvard Business School, summer course, because I thought I could improve my knowledge.

3)     You do things that you feel comfortable doing it.  For me, it’s hotels; I love hotels.

Now you have reached the top, what’s next?

I’ve never had the feeling that I’ve reached the top.  I still have so much to grow!  The last couple of years I’ve been involved in charity work.  There is so much you can give back.

Would you work for a manufacture industry?

Currently, I have no interest in working for another industry.  However, I do see that there are similarities between hotel industry and manufacturing industry.  It’s all about managing the process and people and getting the results.  It reminds me of an airline company executive who was offered the top position in an auto manufacturing company.  He was asked that since he knows nothing about the auto industry, how he can possibly run an auto manufacture.  His answer was that a car has 1000 parts and it doesn’t fly.  An aircraft is much more complicated than cars, and it has a lot more parts --- and it flies.  So, if he could make airplanes fly; he could run a car manufacturing company!

Would you be involved in education?

I have no immediate desire to be involved in education other than giving seminars to students here and there.  But I do believe that hotel management schools must teach social media.  If you don’t teach social media, you are doing something wrong!  The younger generation of hotel guests is educated in social media by using it and exposing themselves to new developments every day.  Hotel graduates must know social media from the business perspective.

Finally, were you a good student?

I was not the best student.  For me, it was difficult to get in [the Hotelschool the Hague] because of the selection process, and it was difficult to get out because I was a member of the student union.  I was involved in too many activities.  Although in the end, I always got my grades but I did not get excellent grades.  It almost made me unsuccessful in my career!  Everywhere I went, my future employer always wanted to see my degree and my grades as the local work permit depended on it.  Eventually, I came to realize that to be successful, I must acquire self-discipline and focus --- and have a strategy for everything I  do.