Making his own mark at Capella Hotel Group

Capella Hotel Group is now headquartered in Singapore after its founder, legendary hotelier Horst Schulze, sold the group to the Kwee family. Its new CEO, Nicholas Clayton, is his own man eager to make his own mark.

Nicholas Clayton

How is a single shareholding of the Capella Hotel Group by the Kwee family members an enabler to move the Capella, Solis and Auriga Spa brands forward?
What it allows for is a single view of how the brands should be positioned. We control the destiny whereas before, it was more collaborative, which is fine too, but with a single shareholding, decision-making can be quicker and more nimble.

And with our HQ being based here (Singapore), we can have an Asia-first viewpoint, which of course does not mean we exclude the rest of the world. It means we are operating from a place in the world that is most attractive for hotel development and operation.

Nicholas Clayton

There is no doubt that certain parts of the world, say Europe, are in some degree of saturation, and the barrier to new development is high. In Asia, in contrast, new destinations are being created. This is distinctively Asia – look at Indonesia, China, India, Sri Lanka; or Laos, Cambodia, Myanmar which are almost untouched by mainstream hotel business, and therefore offer years of opportunities for new hotels.

Asia is where we feel the hotel business can be profitable.

The Capella brand has Horst Schulze’s fingerprints all over it. But he’s no longer in control. Will that affect owners’ view of the brand?
No, it’s very helpful that he remains part of our strategy (as chairman emeritus). We have not seen evidence at all, that anyone is taking the view we’re less than worthy, because of the change. He’s available, is a tremendous supporter of ours; he would want to see this company successful, it’s a legacy issue for him, one would assume.

Schulze launched the Capella brand more than 10 years ago. How has it evolved and what would you like to do?
The essence of the brand remains relevant. Its hotels are of the smaller size, 120 keys, 150 keys – the point is to have a manageable number of guestrooms that allows us to curate the customer stay.

Although we do operate in urban centres and we do handle corporate business, our real focus is on luxury leisure travellers – individuals, couples, families – people who are going on holiday, so it’s their funds they are using and their expectations are higher. If I go on a holiday, I want it to be a ‘wow’; if I am on business, it’s more functional.

What we want to do is to enhance is the innovation around wellness and F&B, because these areas complement the accommodation experience for our guests. A room has limits to its impact. What then? Programming is key and, separately, it can be linked to wellness and F&B. May be a complimentary GM wine and cheese tasting, or rum tasting as we do here (Capella Hotel Singapore); what we are trying to do is enrich the experience, surprise our guests with something memorable that goes beyond breakfast, lunch and dinner.
It’s harder to be successful in leisure, but that’s where the premium pricing lies.

What’s your goal for the hotel group?
A milestone goal for us is focused around the year 2020 and specifically for the Capella brand growth in Asia.

We will have, at the minimum, a Capella hotel in Bangkok, the Maldives, Ubud and Sydney, on top of the ones now open in Singapore and Shanghai, and each one of them unique and successful.

Look at Shanghai (distinctive shikumen buildings that first appeared in the 1860s), or Ubud (Capella camp luxury accommodation). It is important to open those hotels successfully, and when we have six interesting hotels in the biggest population centre of the world, Asia, that will be a step change in our history.

By the time we achieve that, we will have a better view on life after that. It does not mean we don’t think longterm. Clearly we want to proliferate the brand, and build up brand equity in the longterm.

I would like to make Capella Hotel Group a famous company of course, but you have to have steps in that process. The Ritz-Carlton Hotel Company started with one hotel, it wasn’t until there were more that they were successful.

So we need to get to a bit of critical mass, and with nine Capella hotels by 2020 (including three outside Asia in operation) we would have established ourselves clearly enough in the key destinations to be known and respected. And I’m not counting the others, only those that are certain to open – Bangkok, a year from now. Ubud, probably April, it’s three-quarters built. The Maldives, the developer is Pontiac (Land, owned by the Kwees), I don’t concern myself whether it’s going to open! And when it does, it’s going to be as spectacular as this (Capella Singapore, owned by Pontiac).

Schulze once told me jokingly, poignantly, he was ‘jealous’ of you running the company going forward.
(Laughs) He did something with Ritz-Carlton (where he was CEO for many years). He is core to the Ritz-Carlton story. There were no other American luxury hotel companies at the time than the Ritz-Carlton and Four Seasons, that everyone wanted to be whatever they were and the success enabled them to pivot outside the Americas.

Ritz-Carlton is getting into cruises now; Horst talked about doing cruises 25 years ago. He had the vision, they are realising it a lot later. Horst’s quintessential contribution to the industry is hard to beat.

Aren’t you lucky he laid the foundation for Capella?
There are some principles that are hard to ignore. I’ve worked for a few companies over a long career and from what I can tell, most great companies in our industry want to achieve similar things: satisfy customers and owners, take good care of colleagues, be well followed in the trade, and be economically successful.

We are our own unique selves. I see in our company a bit of Mandarin Oriental Hotel Group (MOHG), Four Seasons, Ritz-Carlton, etc, as we want to take the best of the best. In other words, what is it that MOHG does that I admire and think is relevant for us, but that doesn’t mean I’m going to steal their playbook. We take principles from our past and apply them to the present and future and that’s what Horst did, and that’s what we’re doing now. It’s hard not to have some degree of association, but too much is not helpful.

You worked with Ritz-Carlton during Horst’s tenure for 13 years. What’s the one thing you got from him?
The one thing I admire and try to emulate is, when this man talks to a group of people, be it in an internal meeting to open hotels or during his visit at the hotels, he is extremely motivating. He makes things clear to me. The consistency and the passion with which he communicated his business, our industry, a particular hotel, profoundly impacted me for 13 years.

I used to think he’s only talking to me in a group, because he’s so mesmerising. And he’s always concerned that people get it. He does not want them to be the same; he wants them to go back and be better.

Because of that relationship, coming into this role made this exciting. I understand what he is trying to achieve.

How do you differ from him?
We’re all shaped by our past experiences. I joined Four Seasons and it gave me my first view of quality hotels. Then I joined Ritz-Carlton and later, MOHG based in Hong Kong, as I wanted to be in corporate and was in a senior position looking at spa, fitness, restaurants in Asia/Europe. My time with Viceroy also shaped me; it’s a bit more hip and its orientation was lifestyle. I was CEO of operations at Jumeirah Group before joining Capella.
How we might differ is probably I have a bit of a different view about our hotels – what they should look and feel like, the experience of our customers – because I’m simply younger than he is. Someone who is 20 years my junior would be able to understand and interpret the new wealth in the traveller and what he/she wants better than I can because he/she is more of that generation.

So having a more rounded view, being of a different age group, having gotten different exposures, I differ in that I might be a bit more avant-garde than he.

What’s your management style(s)?
Collaboration is important, but not to the detriment of process. I value the perspectives of, and feedback, from talented people, but it has to be decisive and moving forward.
I definitely am a person who believes talented people are very challenging to find and those are the people that make a company successful. We have a long-term relationship that started may years ago with TalentPlus and I’d like to increase that and be more dogmatic about it.

I believe owners are important and valuable and I always tell our owners, please know that in our company, we respect you as the owner and we mean that. It’s your hotel. Sometimes operators like to act like it’s their hotel. They should from a responsibility standpoint, but they have to have the ultimate respect for the owners who are putting their capital at risk and putting them in charge of the development. Many of the brands we talked about today were built on the back of other people’s money.

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