Mr. Ho Kwon Ping, Executive Chairman, Banyan Tree Holdings – From dissident student-cum-journalist to businessman, and back to academe

By Sammy Peh and Lim Wei Di (ECONews Reporters)

Mr Ho Kwon Ping is a man with a most unusual career. It took him nine years in three universities to complete an Economics undergraduate degree. As an Economics student in NUS, he also worked as a freelance writer. Some articles he contributed to the Far Eastern Economic Review (FEER) led to him being placed in detention under the Internal Security Act, and he was released from detention after confessing to be a Marxist. Later, he joined his family business in Thailand which ultimately led him to set up the Banyan Tree Group. He is currently the Executive Chairman of Banyan Tree Holdings. Mr Ho is also Chairman of the Singapore Management University and was the inaugural SR Nathan Fellow at the Institute of Policy Studies (IPS). He said it was the first time the NUS Economics Department extended an invitation to him when it invited him to an alumni dinner in November last year. He recently shared glimpses of his colourful life with ECONews.

Why did it take so long for you to complete a BA in Economics?

I was born in Hong Kong and lived in Thailand because my father had a small business there. I attended an international school in Bangkok and my parents sent me to Tunghai University in Taiwan to learn Chinese. After a year there, I was admitted to Stanford University. It was during the period of the Vietnam War and anti-war demonstrations. I was involved in all kinds of political activities and was suspended from the University. I received an offer to move to Cornell University but I chose not to go. Instead, I decided to return to Singapore and serve my National Service (NS). After finishing NS, I could have gone back to Stanford or Cornell but I felt that I never really understood Singapore and enrolled in NUS. In those days, Singapore was too British. They accepted credits from Cambridge or Oxford but not from US universities. Stanford was no exception even though some Economics faculty members were using textbooks written by Stanford professors. I had to start over from year one. So it took nine years for me to get a BA in Economics; one year at Tunghai, three years at Stanford, two years in NS, and three more years at NUS.

What did you do in NUS after you had already spent four years as an economics student in the US and Taiwan?

I have to admit that there weren’t a lot of specific college memories with NUS. I seldom attended lectures or tutorials because lessons were mostly a repetition of what I had already learnt. Nevertheless, during the time I was in class, I was vocal and, being older than other students, I would disagree on a lot of stuff that was taught by teachers. Some tutors even told me not to attend their classes because I wouldn’t stop talking and arguing with them. Most of the time, I was freelancing and writing articles. I was riding on a motorbike earned from my writings. I became a correspondent for the Far Eastern Economic Review (FEER) at the age of 23. 

How did you become a correspondent for the FEER as a university student?

I can still remember the first article I wrote as a freelancer. I am very proud of it. It was a story about what happened in Singapore between midnight and 6am. It wasn’t about the red light district. I covered interesting stories about a whole part of Singapore that comes to life while the rest of us are sleeping. People like security guards and places like fish markets. It was forty over years ago and I still remember it really well. I did it out of the blue one night when I couldn’t sleep. My article got rejected many times before a travel magazine picked it up and paid me $100. The first $100 was so rewarding. After that I continued to write. I even wrote for an oil and gas magazine on issues I knew nothing about. I got on my motorbike and went out to take pictures, wrote articles and sent them in to every magazine I could think of. That was how I eventually became a correspondent for the FEER. I was also working as a news producer for the Television Corporation of Singapore (TCS) and I had to get up at 5am in the morning to produce the news. 

You were detained under the Internal Security Act (ISA). Was it due to your writings?

I wrote a series of articles for the FEER. Some of them were quite critical of the People’s Action Party (PAP). I was detained with a whole bunch of other people when the PAP was about to be expelled from the Socialist International and the Government suspected there was a conspiracy behind this. My colleagues in the FEER were also detained. 

What was it like to be detained?

I was detained in my third year of study in NUS. I spent two months in solitary confinement in a prison detention centre before confessing to being a Marxist. It was close to my examinations and after my confession the authorities allowed me to have my textbooks. I got A+ for all the subjects I took during my detention. I jumped from being a marginal student to being the best student in the Arts Faculty in my year. So if you are a failing student, I recommend you to get detained. Having nothing to do but study for 24 hours, you can succeed spectacularly in exams. I disliked microeconomics, theory of the firm and anything to do with quantitative economics and mathematics. But I still managed to do well on those subjects while I was detained because I studied them repeatedly. Thanks to the detention, I also got married. I made a most unromantic marriage proposal to my wife. 

What was that “unromantic” marriage proposal?

From my freshman year, I dated a girl – now my wife – who was in her honours’ year though we were of the same age. I used to take her on my motorbike, which she thought was quite romantic. When I was detained, my parents could visit me but my girlfriend couldn’t. Only immediate family members were allowed to visit detainees. Shortly after my release, I said to her, “I think we’d better get married so that you can visit me next time if I am jailed”. It wasn’t the most romantic proposal but she accepted it, but after we got married, she promptly banned me from riding a motorbike…(laughter). 

What did you do after graduating from NUS?

I could not stay in Singapore. Wherever I went, people recognized me. My arrest and confession kept playing on television. So we went to Hong Kong and wrote for the FEER for another three years. 

We could not afford to live on Hong Kong Island, in Kowloon, or in many other places.  We finally found a small fishing village on an island called Lamma. The village, which had no cars and mainly farmers and fishermen, was called Yung Shue Wan. That’s Cantonese for Banyan Tree Bay. Years later when we wanted a name which had deep meaning to us, we thought of those idyllic years as poor but very happy young people. So the values of Banyan Tree are not about luxury but romance and intimacy. And I was later offered to be a research fellow at INSEAD in France. 

You only had a Bachelor’s degree. How did you get an offer from INSEAD to become a research fellow?

I had already written serious pieces about export-oriented industrialization of East Asia and topics on economic growth. In the 1970s and the early 1980s, there began the whole Asian Tiger phenomenon. Many universities offered short-term fellowships to do further research. My dream during that time was to become a serious writer; to become a person like Anthony Sampson who was a quasi-academic and commentator on world affairs. I accepted the offer and that was where I thought my career was heading.  

How did you then become a businessman?

I didn’t enter the business world by my choice actually. I didn’t want to be an entrepreneur. My wife always said she would never marry a businessman. We were more footloose. If we had done anything, we would have become backpacking academics. We weren’t interested in business. My wife was interested in development sociology. I was interested in development economics. But my father had a stroke before I flew off to France. I had to turn down the offer. Being the eldest son meant that I had to take over the family business. 

What was your family business? Was that how Banyan Tree started?

At that time, our business was a microcosm of a typical Southeast Asian conglomerate; jack of all trades, dominant in none. We had an engineering company that partnered with Hyundai to produce components for MRT trains, a joint venture with Samsung to produce TVs, trading companies, agri-businesses and all kinds of things. I spent ten years running the business but I was dissatisfied with our business model, which was dependent on contract manufacturing. To me, there are two types of businesses. One is based on relative cost and the other is based on proprietary competitiveness. The problem with contract manufacturing was that whatever advantages you have are relative. You can go cheaper but you don’t own “cheapness”. If you have proprietary competitiveness, it’s different. There are two types of proprietary advantage: brand and technology. I was not into technology, so the only other option was to create and grow a brand. When you own a brand, you have customer loyalty. Banyan Tree came after the lessons learnt from running the family business.

So how did Banyan Tree start?

I had a wakeup call one day when I had to close a sports shoe factory I set up in Thailand less than a year after we opened it because everybody left for China where cost was a lot lower. That was my epiphany. Better get out of these businesses as soon as possible and start my own brand. I had no idea what the brand was going to be. It could be shoes, jewellery or food. If you talk to entrepreneurs, you would realise that none of them woke up one night and realised that they were going to create something incredible for the world. Well, maybe you can do it if you are Bill Gates or Steve Jobs. However, most of the time entrepreneurs only have a general idea of what they want to create and the rest is a confluence of luck and intention that makes it happen. For me, it was the intent to create a strong brand from Asia, and not just to be a price taker. What was it going to be? I had no idea. It was purely by luck that we got into the hotel business, and gradually I came to realise that this could be the industry in which I could create my own brand. And that’s how Banyan Tree started.

What were the challenges you faced when you first started Banyan Tree? 

Well, nobody wanted to lend us money. Nobody wanted to manage our hotels. To put it simply, a total lack of credibility.  

How did you overcome them as a new entrant to the hotel business? 

You eventually gain credibility. There is no easy way out. The power of word-of-mouth is really important in business, whether it is business-to-business or business-to-consumer. Even for subcontractors, you gain immediate credibility when somebody recommends you. A recommendation from somebody is, to me, ten times stronger than an advertisement. 

What do you think has made Banyan Tree so successful?

We were selling something different from what was in the market at that time, and that helped us to stand out. If you do something everyone else is already doing, you don’t stand out above the noise. So do something that stands above the crowd, and make sure people who experience it talk about it. That was how I passed the hurdle and gained credibility. With credibility, things get easier. But challenges never end there. When you hit against a wall and overcome it, another wall will be waiting. 

So what are the challenges Banyan Tree is facing now?

Right now, we are trying to move from regional to global. We have about 40 hotels now, and we are like antelopes crossing a river with many alligators wanting to eat us up. Some antelopes make it across and some don’t. We are now in the middle; we can’t go back (to the boutique hotel model) but we are not at the other end yet. Maybe when we reach 100 hotels, we can cruise for a while, but there will still be other predators waiting for us.

The question for us when we go global is how to maintain our brand identity. Banyan Tree has been associated with tropical villas and spas, so two problems happen when we expand. One is when we go into a new area, what do we do? Another is what happens when we go into city hotels? The long and short of it is that we need to define the essence of our brand and it must never change whereas outer features may change. 

For example, one of the core brand values of Banyan Tree is a strong sense of place, so that we are not like a Holiday Inn. Because we are largely in Southeast Asia, you feel like you are in Bali or Phuket when you visit our hotels. But if we open a hotel in Mexico and we furnish it like a Thai style hotel, it then breaks all the values. However, if we make a hotel that really showcases the beauty of Mexican culture, it is still quite “Banyan Tree”. 

When we first went to Mexico, we were quite surprised. The bulk of resorts in Mexico were not Mexican at all, they were mostly catering to American tourists and were totally “Tex-Mex” in food and style. They thought hotels should be built like American hotels if they wanted to attract American tourists. But we built Mexican-style hotels. That was appreciated even by Americans. One of our hotels was voted as the top hotel in Mexico by the US News and World Report and another was ranked fifth out of a few thousand hotels in Mexico. All these were possible because we believe in our values. The Mexicans that we hired gave the best services from what they consider Mexican hospitality. The design and culture in our resorts are truly Mexican and yet we retain certain aspects of it to be “Banyan Tree” like. 

You were able to do so many things even though you had no experience. Were you ever daunted by your lack of experience?

No. Many Singaporeans are daunted by this or that because we really are very coddled. You go to China, Indonesia or Thailand and look at how people survive there. If you grow up in a place where there are a billion people and you don’t take initiative, you don’t survive. When I first began writing as a freelancer, I had no experience. But I quickly adapted myself to the situation and wrote for people who wanted cheap writers. That was how I gained experience. It was also how I eventually became a correspondent at the age of 23. The moral of the story for young people is that you can’t wait for things to land on your lap. You just got to do what you want to do and chase it.

What do you think of our current Economics education system? What is your advice for teachers and curriculum planners? 

Economics is one of the most exciting subjects in the world. Whether you are reading Karl Marx or Adam Smith, it makes you really excited because you realise that Economics is what drives the world. It is the engine of growth and also the engine of disaster. It is such an incredibly dramatic field. If you get your economics wrong, you get a huge recession as has happened. It is full of drama, so full of pathos. However, the problem is that schools teach quantitative stuff at such early stage. It depresses you 95% of the time when you first study it. 

My point is that the Economics curriculum should seek to excite students first. It should make students understand the relevance of Economics in your everyday life, and in the lives of nations. Then should you teach all that technical stuff. If you start learning without passion, it will be the most boring thing on earth. I didn’t particularly like all the quantitative stuff but I knew Economics excited me and therefore I understood the need to acquire these tools. 

In Singapore, many professors and deans don’t realise that when young people are going from Junior College to University, their minds are so receptive, and they are waiting for their minds to be blown by new thoughts, new ideas, and the excitement of thinking and seeing new things. When you are blown away, the passion is there and you want to study.

What advice do you have for students who want to start their own business?

I am a sounding board for some SMU students who want to start their own business. My job is to throw cold water at everything they plan to do. Don’t expect me to encourage you; that is the role of your friends and family. I give them 150 reasons why they shouldn’t do it. But if they can come back to me next week and counter all my reasons rationally, and still say that they want to start up, then I say they have a 75% success rate. The other 25% depends on execution. 

This article was first published in ECONews in August 2015