“The hand of God is holding us up”: Choe Peng Sum on how Pan Pacific Hotels Group is ready to expand despite COVID
Tan Huey Ying & Karen Tan // June 8, 2020, 7:23 pm
“Many people say it’s a coincidence but I believe it is the grace of God. It was not through our own wisdom or scenario-planning," says Choe Peng Sum on how the group is managing to keep hospitality staff employed in the midst of the pandemic. All photos courtesy of Pan Pacific Hotels Group.
When hospitality veteran Choe Peng Sum, 60, took on his new role as the CEO of Pan Pacific Hotels Group in September last year, he was poised to execute a global expansion strategy for the brand.
The plan was to acquire another 15 properties, including the old Marina Mandarin, to the group’s current base of 50 hotels in two years. Ambitious, but not unthinkable for the hotelier with a stellar track record.
However, less than a year after taking the helm of Pan Pacific, Choe’s mettle as a leader is being tested in a very different way.
And this time, the stakes are the highest they have ever been.
This is not SARS
The impact of the COVID pandemic has reverberated throughout the world, but travel and hospitality have borne the brunt of the immediate fallout.
“You can only take so much from your bank of experience and no more.”
Still, when news of the first cases of the coronavirus broke in January, Choe was unfazed. Singapore had been through SARS in 2003, and the thought was: “We’re going to be ready.”
He soon realised that this pandemic was beyond comparison.
During SARS, 8,000 people were infected in 27 countries; paltry figures when put beside coronavirus statistics, where the infections are running into the millions and deaths are in six-digit territory.
At the time, there was a “V-shaped” recovery and business was “up and running” within a few months by mid-2003, said Choe, who was the first employee in Frasers Hospitality in 1998 and left as its CEO in 2019.
That would not be the case this time.
Economists predict an “L-shaped recovery” where the economy experiences such a slow rate of growth that a graph of it resembles the letter L.
In extreme de-globalisation and almost-instant evaporation of all forms of travel, he bears an immense burden.
As CEO, Choe is directly responsible for the livelihoods of over 6,000 people.
It is a significant responsibility in normal times, but keeping a hotel business afloat in a time of extreme de-globalisation and the almost-instant evaporation of all forms of travel, Choe bears an immense burden.
In mid-May, for example, competitor Hyatt Hotels Corp laid off 1,300 employees globally.
Each day, Choe receives a profit-and-loss statement of all the group’s properties worldwide. He said: “You can only take so much from your bank of experience and no more.
“My biggest challenge is, how do I keep all my staff,” he said. “In order to make sure we still have them with us after this is over.”
“It’s tough. I’m glad that as Christians we can turn to God,” said Choe, who is known to speak openly of his faith at work.
“I believe we have a contact with our Almighty God, and this is the time to cry out to God; this is the time to have a close intimate relationship with Him.
“Whatever the circumstances, at least we can go to Him.”
In this particular season, Choe holds Psalm 107 close. He explained that when the merchants were tossed into the sea, they were “at their wits’ end”, and they cried out to the Lord.
“In business conditions like this, companies can actually die because of cashflow problems,” Choe pointed out.
“I marvel at how God has helped us. It is unbelievable but I can see the hand of God there.”
But thankfully, Pan Pacific is still cashflow positive with low gearing levels of only 30%, meaning that lines of credit are still open should the need arise. Choe said that he knows of other hotel chains which have started drawing down on bank loans and are highly-leveraged between 100% and 130%.
Most of Choe’s business is in Singapore and Australia where government contracts have been a lifeline. The Pan Pacific hotels in both countries volunteered to house returning citizens – despite the risk of contracting the virus.
“Many people say it’s a coincidence but I believe it is the grace of God. It was not through our own wisdom or scenario-planning,” he pointed out. “Not when borders are closed, and you can’t even tap on your own local market for business.”
With rooms fully paid up for in April and May, Choe said: “I marvel at how God has helped us. It is unbelievable but I can see the hand of God there.”
Each time he prays, he starts with thanksgiving because he recognises that “the hand of God is really what is holding us up”.
“But we don’t take it for granted,” Choe cautioned, saying that he has had to make some tough decisions such as temporarily closing properties in China and Malaysia. “We look at whatever is necessary that we need to do. It’s the discipline.”
In China, when the virus first surfaced, Choe flew there to speak to the team. Having recognised the magnitude of the crisis, he did not mince his words. “We said, ‘Let’s bite the bullet.’
“They took a pay cut with no questions asked. But now that we are opened in China, everybody is still there.”
The condition of his flock
Closer to home, Choe knew his staff in Singapore were fearful. Cases were just beginning to spike, and returning Singaporeans, many of whom were staying in Pan Pacific hotels, contributed a large proportion of it. His staff would be on the frontlines and at risk even with protective equipment.
Many expressed the worries that their families had for them. “But they put on a bold front and said, no, don’t worry,” he shared, saying that just as many staff recognised the company’s efforts and were grateful to have jobs.
No amount of words you say can soothe that fear, Choe said. “So, every week, (the management) would go down and be with them, walk with them.
“Many times, it is about communication and understanding.”
“The trust (among staff) has been built up and this is something I am thankful to God for.”
In fact, Choe said that he was surprised by the staff’s initiative and enthusiasm to go beyond their duty, proposing changes to the menu by ensuring variety and even adding fruits. One guest in Singapore said that during his 14 day-stay, every meal was different – a suggestion by the staff at Pan Pacific.
“As a leader, you need to know the condition of your flock,” urged Choe, quoting Proverbs 27:23. He makes it a point to check in at least weekly with his teams around the world – staff in Myanmar even started a closed Facebook group where they post updates while on lockdown in April.
“We want to take care of people, including our own staff,” Choe said. “As I communicate, they all share as well. I thought, wow, this is something that will keep us going. The trust will be built up and this is something I am thankful to God for.”
A post-COVID world
Choe is cautiously optimistic about the future.
“Adoption of new methods is slow in the hotel industry, but we’re starting to do a lot of rethinking and reworking.”
“We’re beginning to break down bureaucracy and barriers, being less ‘territorial’ about work,” he observed. While each property previously had their own engineering department, this was consolidated into a hotel-wide team which responded as necessary without lines being drawn.
“And it works!” Choe said. “Adoption of new methods is slow in the hotel industry, but we’re starting to do a lot of rethinking and reworking in preparation for the end of COVID which is going to be very, very different.”
Expansion plans are still in the works – with property openings in London, Jakarta, Hanoi and Dalian in China progressing well. Full renovations in Singapore and Kuala Lumpur and a full revamp of the newly-acquired Marina Mandarin hotel are also happening.
It is a positivity sustained and energised largely by his personal trust in God.
Amidst the daily uncertainty and pressures that every business leader is subjected to in this season, Choe is finding comfort in God.
“We talk to a God who is living, powerful and sovereign. And that is powerful.”
He starts his days with 6am walks which he spends giving thanks, praising God and listening as God reminds him of past experiences of His faithfulness.
“Stories after stories!” Choe enthused. “My walks are getting longer and longer too.
“I only have one story: Turn to God.
“Each time we turn to God and we see Him answering our prayers, I tell you that’s the best joy in our lives, because then you know that He’s real, He’s alive.
“I really believe in Philippians 4:6-7. We don’t need to manufacture a feel-good kind of feeling. We don’t need to worry. We talk to a God who is living, powerful and sovereign. And that is powerful.
“So, if we are a believer, shoot a prayer to God and talk to Him.
“Enjoy your walks with God in the morning, talk to Him and let Him reveal His hand of favour.”