Sonia Cheng: The luxury leader
The luxury leader
Published Wednesday, XX May 2019 12:00 AM ET
onia Cheng is sitting in the Rosewood Hong Kong, housed in 43 floors of a 65-story skyscraper on the city’s new Victoria Dockside district. It’s a location that’s close to her heart.
The Rosewood is on the site of the former Regent Hong Kong, an upscale hotel managed by Cheng’s father Henry on land bought by her tycoon grandfather Cheng Yu-tung in 1971. It was part of the New World Centre, opened by the Chengs in 1978, that included a shopping mall, offices and residential space and is a site that has contributed to the Cheng family’s fortune, now estimated at $22.5 billion.
Cheng, 38, was raised in the Regent hotel’s apartments, and now, more than four decades since her grandfather bought the land, she is the chief executive of Rosewood Hotel Group.
“I spent a lot of my childhood days (here) including … riding my bicycle for the first time in this location. We (had) sleepover parties with my cousins. We would gather with my grandfather in this location,” Cheng told CNBC’s “The Brave Ones.”
Rosewood Hong Kong is the latest in a series of properties that Cheng has built or refurbished since becoming CEO in 2011, when her family’s business, then called New World Hospitality, bought Rosewood from its Texan owner for $229.5 million. Cheng renamed the company Rosewood Hotel Group and set her sights on global expansion and reinventing the Rosewood brand for a younger generation. The Cheng family is one of Hong Kong’s wealthiest, with Yu-tung retiring in 2012, before passing away in 2016 at age 91.
“(Sonia Cheng is) a name that represents the new generation of these big families that somehow carried on with a family's heritage, but also took it to a new era and (made) it modern,” said Angelica Cheung, the editor-in-chief of Vogue China, speaking to “The Brave Ones.”
“It's not easy, you know, for a company or a family of that kind of size and that kind of tradition to move very quickly … along with the changes that (are) taking place in China,” Cheung added.
The group owns or operates 27 hotels under the Rosewood name, with 21 more in the pipeline, including in Sao Paolo, Venice and in London’s Grosvenor Square, on the site of the former U.S. embassy. High-profile names that use the Rosewood brand include the historic Hotel de Crillon in Paris, which the group took over in 2013, and the Cheng family-owned Carlyle in New York, which it is currently refurbishing. The group also owns or operates New World Hotels and Resorts as well as Penta hotels and business travel brand Khos.
“It's not easy for a company or a family of that kind of size and that kind of tradition to move very quickly.”
Cheng Yu-tung was born in 1925 in the Shunde district of Guangdong, China. Moving to Macau in 1940 during the Japanese invasion of China, he joined a jewelry company named Chow Tai Fook, working for owner Chow Chi-yuen as an apprentice. The first Chow Tai Fook store opened in Hong Kong in 1946 and Cheng Yu-tung established sister business New World Development Company (NWDC) in 1970.
The Cheng family’s interests range from jewelry to infrastructure and real estate. Chow Tai Fook Enterprises now has more than 2,800 jewelry outlets in China and is the parent company of Rosewood Hotel Group.
NWDC operates hotels, department stores and infrastructure and has more than $16 billion of investments in China. Overseas, the family’s Knight Dragon company is managing the $8.4 billion redevelopment of London’s Greenwich Peninsula.
Cheng Yu-tung died in 2016 at age 91 with a net worth of $14.5 billion, according to Forbes. He had four children. Son Henry, 72, is chair of Chow Tai Fook and NWDC, and his brother Peter is among other family members working across the family’s empire. Henry Cheng has six children of his own — two of whom, Sonia and Adrian, have key roles in the family’s businesses. Sonia and husband Paulo Pong, founder of fine wine group Altaya, have four children.
Outside owning or managing Rosewood hotels, the family has ownership interests in Asian properties managed by Hyatt, and bought a stake in London’s Marriott hotel in Grosvenor Square in 2014. The Chengs also have extensive private holdings — in 2015, Cheng Yu-tung transferred personal stakes in six companies, worth more than $400 million, to a family vehicle, according to the Financial Times.
fter attending high school in Hong Kong, at 14 Cheng moved to study at Taft in Connecticut, a co-ed boarding school, with a focus on academic rigor as well as artistic development and volunteering.
Although she was from one of Hong Kong’s wealthiest families, Cheng was raised to be unpretentious. “It runs sort of from my grandfather to my father, up until this generation. When we're running a company, humility is something that's very important. So, that was (from) the early age of my school days.”
Family values were important. “Both my grandfather and father are very successful businessmen in Hong Kong. And I grew up in that environment of them being the role model. And I've seen firsthand how they build the team, how they gain respect and loyalty around the team, and how they build a vision,” Cheng told “The Brave Ones.”
After studying applied math at Harvard, Cheng worked as a real estate investment banker at Morgan Stanley and then went to private equity firm Warburg Pincus, again working in real estate investing.
“That's the firsthand (knowledge of) how … small companies work and how they grow into listed companies. And so that also gave me a lot of training in … how a management team is being built, how an operating business (grows) from small, how is it being built (into) a large company and addressing different issues,” she said.
New World Hospitality was a relatively small company when Cheng joined in 2008 but she had big aims. “It was really not easy in the beginning, because it was a small company, and at the time, I (hadn’t) even acquired Rosewood. So, we only had New World Hotels, which was more of a regional Asia brand. So, to be able to convince people from … all sorts of multinational hotel companies to join me in a much smaller company was a challenging task,” she said.
Being a young CEO wasn’t so much of an issue, Cheng said. “I think that one of the reasons why … these experienced professionals that have great careers in other companies … took a leap of faith to join me was because I probably brought … a different perspective to the industry.”
“I think the way I managed the company and the way I approach things is, it's very much of a collaboration, so I think people see that and I think they respect it. And I know that I don't have the 20 years of experience in hotels, and I tell the team up front that I need them to be a partner,” Cheng told “The Brave Ones.”
But when Cheng became CEO of Rosewood in 2011, there was some skepticism about the brand from rivals, according to Marc Brugger, the launch managing director of Rosewood Hong Kong and a longtime luxury hotel manager.
“The brand was not well-known in Asia. I would say even unknown. There was a little bit (of) this image that oh, Rosewood, yes, we've heard of it. And that came from our competitors … There was also the element from the competitors that we were talking to of: ‘Well, here comes the daughter of a tycoon, playing hotel.’ There was … a doubt of what Rosewood would be able to achieve,” Brugger told “The Brave Ones.”
Brugger joined Rosewood in 2012 before the company had opened any hotels in Asia, and Cheng herself was looked upon with some skepticism. “Sonia (was) this young, 30, 31-year-old newcomer to the market. And I think everybody was expecting a bit of a flash in the pan … What is amazing to look back on (now) is how many of those other brands, other presidents, other CEOs, that were maybe not the kindest … are now only a few years later, actually really looking at what we're doing,” he said.
Cheng’s approach was to immerse herself in the industry. “I spent the first two years literally … spending time in hotels and learning how different department works, including … from housekeeping to human resources to sales and marketing to operations,” she said.
At the time, the brand had 18 hotels, largely in the Americas, the Caribbean and Mexico, including its original hotel, the Mansion on Turtle Creek in Dallas, Texas (see “The history of Rosewood”).
Rosewood Beijing was the brand’s first opening in Asia, a key point for the company given the family’s Chinese roots. Brugger was general manager for the launch, in 2014. “When we opened Rosewood Beijing, I (can) confidently say that we've taken the market by surprise. Nobody saw us coming. And that … was kind of the pivotal moment for the brand,” he said.
The first Rosewood hotel was established in Dallas, Texas in 1980, when hotelier Caroline Rose Hunt converted the Mansion on Turtle Creek, a 1920s estate that had hosted President Franklin D. Roosevelt and Tennessee Williams. Hotels in the Caribbean and Mexico followed, and by 1999, the group numbered 10 properties.
In 2000, the group bought the Carlyle in New York, which is now being refurbished. In 2006, its first northern California property opened, the luxury CordeValle golf resort in San Martin. After being bought by the Cheng family in 2011, Rosewood Hotel Group announced its expansion into Thailand, the U.K. and China. In 2018, the group announced hotels in Munich, Houston, Yangon, Shenzhen, Shanghai, Venice and Hermana Mayor, an island in the Philippines.
hen Brugger met Cheng for the first time, he asked: “’Who are you going to build that brand for?’ And she basically looked at me and said: ‘For me,’” he told “The Brave Ones.”
“(It’s) an environment where you feel that you're actually staying in someone's home away from the traditional hotel feel, which very often is impersonal. I think that's what made the difference, her initial vision of creating a hotel for her,” Brugger said.
Tony Chi, the decorator behind Rosewood London, designed the Hong Kong hotel interiors and is working on the Carlyle, set to reopen later this year. Cheng has an eye for detail, he told “The Brave Ones.” “Which part she doesn't want to get involved (in)? Sometimes I say to Sonia, ‘Sonia, let me do my job,’.” There is a level of trust between Chi and the Cheng family, given that Chi designed the family’s home many years ago.
Each property is designed to fit with its locality. “The way we work … we treat each of the hotel(s), it's not a cookie-cutter approach. We really want to take the beauty of the city and weave it into the hotel,” Cheng said.
In London, Rosewood’s bar features drawings by British illustrator Gerald Scarfe and an antique book collection from the city’s Portobello market, while Rosewood Hong Kong has a Chinese restaurant, The Legacy House, serving Shunde cuisine, the region where Cheng Yu-tung was raised. Its 40th floor Manor Club bar has tables decorated with etchings of horses and jockeys, as horseracing was one of Yu-tung’s interests.
“Every corner and every tea towel in this … property has a meaning. And that's how we crafted the hotel,” Cheng said. Rosewood also collaborated with publisher Assouline on a photography book showing Hong Kong locals such as architect Marisa Yiu and art director Claire Hsu.
Part of Cheng’s push for hotels to represent their locality is to encourage people to spend more time in them. When Rosewood refurbished the Crillon in Paris, it took the unusual step of replacing its Michelin-starred restaurant Les Ambassadeurs, with a bar, explained Radha Arora, president of Rosewood Hotels & Resorts.
“I mean, for us, we all thought about it — ‘Wow, that's creative.’ Actually taking away the restaurant that's been an institution, it's been part of the hotel for so long. She said: ‘No, I want to make it a bar.’ When you walk into the hotel, it opens its doors to the local community. It's a place you want to be. You hear the buzz of the locals, the fashionistas coming in to the bar,” Arora told “The Brave Ones.”
Cheng has also pushed colleagues to work differently, including the group’s president, Radha Arora. Arora has worked in the luxury hotel industry for 30 years and has known the Chengs since 2004 when they hired him as general manager of the Beverly Wilshire — which they own. “Within the first few months of working with Sonia, I realized that all the … experience and the logic that had applied to my work life had to be thrown out of the window. And to ask questions in a different way. And so it … suddenly kept me youthful to work with a millennial CEO,” Arora told “The Brave Ones.”
Writer: Lucy Handley
Design and code: Bryn Bache
Editors: Matt Clinch and Spriha Srivastava
Executive producer, The Brave Ones: Betsy Alexander
Producer, The Brave Ones: Kelly Lin
Images: CNBC and Getty Images
Arora says the hotel arm of the family’s interests represents their imaginative side. “They have several holdings, be it a jewelry business, be it (an) aviation business (or) property business. And hotels have always been sort of the glamor aspect of what they do, the passion, desire to make it their playgrounds to be creative,” he said.
Cheng has not been afraid to push forward. When tackling the refurbishment of Rosewood London, she had to make it into a destination where locals would go and guests would want to hang out during the day. The hotel is in Holborn, a less desirable location than Mayfair, where many luxury hotels are located, Arora explained. “Rosewood London when it first opened … people were concerned about the location. They thought, for us, it was a big risk. For Sonia it was a big risk to finally own the site, own the property. It's a beautiful hotel when you look at it today,” Arora said.
When Cheng was planning the group’s Beijing property, it needed extensive renovations, according to its designer Stewart Robertson, principal at BAR Studio. “I saw the existing building, and I thought, existing building, your aspirations, two entirely different things,” he told “The Brave Ones.” Robertson discussed the nature of the work with Cheng, but the rest of the team deemed it “impossible,” he said. “And Sonia just turned to them and she said: ‘But that’s what I want.’ And that’s what she got.”
Why the challenging route? “I think it's just a personality (trait),” Cheng told “The Brave Ones.” “When I entered to Harvard, I didn't want to follow the general population of studying economics. I found a challenging route to study applied math, not only because I love math, it's because I just don't want to be in the norm.”
“Same with building this brand and building this company … we want to be known as the most progressive and most innovative hospitality company out there.”