18 - A Hotelier's Perspective

Summary

Mr Tsang provided a Singapore hotelier's perspective on running a chain of hotels in New Zealand. He was appointed managing director of Millennium & Copthorne New Zealand, CDL Investments New Zealand and Kingsgate International in July 2001. He was also instrumental in Singapore property giant CDL or City Development's foray into New Zealand in the early 1990s. Under his tenure Millennium & Copthorne profits rose from $1.5 million in 2000 to $23 million in 2005.

CDL acquired its first chain of Quality Hotels in 1992 followed by the Kingsgate hotel chain in 1994. Subsequently CDL Hotels adopted the name of the parent company Millennium & Copthorne Hotels which is listed in London. Millennium and Copthorne New Zealand Limited is also listed on the New Zealand Stock Exchange.

Presently, they are the largest owner-operator of hotels in New Zealand with a portfolio of thirty hotels, which are owned, leased, franchised and/or managed, with around 4,000 rooms in fifteen locations across Australasia. The company also has extensive land and property development interests in both New Zealand and Australia under its subsidiaries CDL Investments New Zealand Ltd and Kingsgate International Corporation Ltd.

Mr Tsang pointed out that when CDL had plans for expansion in Australasia, the New Zealand market was favourably viewed as a great tourist destination with a hospitality sector which was less saturated than Australia's. They were also attracted by its transparent laws and ease of communication being a fellow commonwealth country.

On the downside, New Zealand's population of four million made it have a small domestic market. Nevertheless, the group got around the problem by focusing on foreign tourists and promoting holidays within New Zealand to great success. There was also a lack of a skilled and motivated workforce. The unions had initially prevented hotel staff from taking on more than one role. However in a small hotel, staff often had to multitask. Fortunately following negotiations, the unions relented and rules were relaxed.