How Pan Pacific competes with just three brands

INTERNATIONAL REPORT — For Pan Pacific Hotels Group, it’s not easy competing with the big hotel companies, some of which have brand numbers in the 30s and 40s compared to Pan Pacific’s three. However, CEO Peng Sum Choe sees some reasons for hope.

“It’s not easy. We are a small baby versus the big boys… We’re about 15 years since we started,” he said. “But there’s a glimmer of hope because, in the last five years, we’re seeing growth.”

Singapore-based Pan Pacific has three luxury brands: Pan Pacific, ParkRoyal Collection and ParkRoyal and has seen its portfolio has doubled over the past five years from 28 to 58. Choe thinks there are several reasons why.

“With so many brands [for other companies] … it’s not easy to differentiate some of these brands. That’s been helping us, even with three brands, to be very precise, to really go after our market segments very well,” he said.

Choe was interviewed as part of the “HICAP Conversations – Second Edition” virtual event on Wednesday. The BHN Group by Northstar is hosting several virtual events in 2025 as a prelude to its 35th HICAP (Hotel Investment Conference Asia Pacific) event in Singapore on October 22-24.

If we focus on differentiation and if we focus on what we mean to the customer, we have a better chance.

Peng Sum Choe

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When discussing why Pan Pacific can compete against larger hotel companies, Choe continued his analogy about many brands by citing a recent survey from Molded Mindset of 14,000 global travelers. The survey said 87% of respondents don’t see the difference between all the brands, and 79% say they don’t know which of these brands belong to which chains. He used another analogy of all the brightly colored boxes in the cereal aisle of a grocery store.

“They call it the sea of sameness … So, that’s been helping us in the sense that if we focus on differentiation and if we focus on what we mean to the customer, we have a better chance,” he said.

Choe also sees benefits for smaller owner-operators working with the current investment pool.

“Somehow, a lot of a lot of funds and owners and developers, they seem to want to turn to the small boys because they get more attention,” he said. “They seem to want to avoid the big [companies], so I think we have a good chance to grow.”

Choe spoke to Hotel Investment Today about growth in Asia Pacific and worldwide and the company’s continuing asset-light strategy. Here are highlights from the conversation.

Hotel Investment Today (HIT): I’ve read your philosophy is not to be content with the status quo, and you’ve always got to have a hunger for growth. Where will that hunger take Pan Pacific in the coming years?

Peng Sum Choe: We need to grow. If a company doesn’t grow, it’s going to be stagnant. We are an owner-operator. We own about 70% of our assets. So, that’s about S$4.5 billion in assets that we have.

The first tranche we go after is acquisition, which we’ll continue, but it’s not just acquisitions. We do asset reconstitution as well. Last year, we sold the Park Royal Kitchener. It was worth S$100 million and we sold it for S$530 million. So that’s a S$430 million of dry powder for us to reinvest. Acquisition is important, reconstitution is important, and we then move it to higher-yielding assets.

HIT: Can you talk about growth in Asia Pacific?

Choe: Asia Pacific is big for us. That’s where our main growth is in the next five to 10 years. There will be a shift [from other investors], over to this side, with some of the issues happening in some of the continents.

HIT: Can you talk about potential European expansion? 

Choe: We’re still working, and I need to work harder. We’ve got several sites in mind, but we’ve not yet inked the deals yet, but we want to be there right now. I must say… it’s not in the best shape right now. But I think where there is a so-called crisis, there are a lot of opportunities. So we’ll be there.

HIT: What are your U.S. aspirations and how important is a U.S. presence to your overall growth strategy?

Choe: The U.S. is also very important, but for us, investment in the U.S. is going to be very tricky, with the tax leakages and the whole union issue. Those are tough, but what we really want to do franchise. We don’t work with the third-party management that’s so strong there, but we want to be there. We’re pretty strong in Canada… and we’ll continue to grow there as well.

HIT: How important is an asset-light strategy for your future growth?

Choe: We’re pivoting to, I’d like to say, in two years [we’ll be at] 50-50 (he stated earlier that Pan Pacific currently owns about 70% of its assets)… and from then on, it will probably be major growth in asset light. Don’t forget that we can also turn to capital markets. There are several ways we can do it, but we’ll grow in our asset-light strategy.