From selling groceries in Santo Domingo to CapitaLand in Singapore, Miguel Ko has had a remarkable journey to the top

IT was a love affair that started in 1979, and even though he left hospitality per se in 2012, after departing from Starwood, Miguel Ko always kept his ties with the industry. The recipient of the HICAP Lifetime Achievement Award 2021 speaks to Yeoh Siew Hoon about his journey that took him from Swatow to Singapore, via Hong Kong, Santo Domingo and the US and his take on hospitality, technology, real estate and, of course, people.

He may have lost his voice for about six months in 2019 when he was
being treated for Stage 3 cancer, but his voice still rings as true and clear
as it did when I last interviewed him in 2004 when he was president Asia
Pacific of Starwood.

Then, at the height of Starwood’s glorious days in the region, Miguel Ko
told me, “I love Asia, I love Singapore, I love the hotel business.”

Seventeen years later and now chairman of CapitaLand and deputy chairman of CLA Real Estate Holdings (Ascendas-Singbridge) since April, Ko’s still living out his love for Asia, Singapore and his voice as a leader, hotelier and human remains true to him – if anything, it’s even more resolute and defined, given his personal battle with cancer.

“I feel like a new man, like I’ve been given a new life, I am very appreciative,” said Ko who was born in Swatow, China, and moved to Hong Kong with his parents when he was five years old.

Funan (DigitalLife) Mall: “There will be a whole transition of retail to more offline-online experience stores.” (Image credit: capitaland.com)

He’s appreciative too of the honour of being bestowed the 2021 recipient of the HICAP Lifetime Achievement Award, which will be presented at the 32nd annual HICAP, scheduled to be held October 20-22, 2021 at the Fairmont Singapore & Swissotel The Stamford. “Hospitality is in my heart,” he says.

Even though he left Starwood in 2012 as chairman and president Asia Pacific for personal reasons – he went to Canada to spend time with his ailing father – Ko has always kept one foot in hospitality. He remained as non-executive chairman of Starwood for three more years and stayed involved in hotel REITs, through his time as group CEO of the former Ascendas-Singbridge until its combination with CapitaLand in 2019, and now as chairman of one of South-east Asia’s largest diversified real estate companies, of which lodging (The Ascott Limited) is a major business pillar.

I met him in his predecessor’s office in the corner of a very
large building (CapitaLand’s headquarters of course) in downtown Singapore. You
can tell that Ko is still getting used to the new office. “I get awfully lonely
here,” he laughs. With Covid restrictions, there are not many people in the
office anyway and he’s on the side of a floor with only four people at the best
of times.

Ko, you see, is used to being with people. He loves people. He
knows they are what’s gotten him through all the good and bad times, and to
where he is today.

When his family left Swatow, China for Hong Kong, they also left
all their wealth behind. “We lost everything,” said Ko. At 16, he was sent to
Santo Domingo, capital of the Dominican Republic, to work with a distant
relative at his provision store. “I lived in Santo Domingo, that’s how I got
the name Miguel,” he laughs.

He saved enough to go to the US, finished high school and educated
himself – he doesn’t talk about it but he holds
a B.A. in economics from the University of Massachusetts and a Master of
Business Administration from Suffolk University. He is also a Certified Public
Accountant by the State Board of Accountancy in New Hampshire in the US.

It was accountancy which got him into hospitality and back to Asia. He was recruited to join the internal audit team of ITT Sheraton headquarters, and from there was offered a controllership of Sheraton Hong Kong in 1979. He rose up the ranks to become ITT Sheraton Asia Pacific president at 38 years old.

“I fell in love with hospitality,” he says of
that time. But what gave him grounding was the “understanding of financial
metrics”.

“That’s always helpful to make business decisions. In the hotel business it is easy to fall in love with the bricks and mortar ­­­– beautiful design, and luxurious amenities – but profit and loss orientation is important for hotel owners. You know that old saying, deliver six star service and one star profit?” Ko grins.

It was his ability to speak the hotel owner’s
language that gave him the grounding to expand Starwood’s portfolio when he was
recruited by chairman Barry Sternlicht to rejoin the company in 2000.

Between 1992 and 1999 Ko took a break from hospitality to run Pepsi-Cola International in the region. “I took a detour, it was a fun business, competing with Coca-Cola was packed with adrenalin. I learnt a lot about marketing, branding and thinking very strategically and when you are in a number 2 position forever you learn how to compete in adverse positions.”

But he missed hospitality and returned to
Starwood, cognisant of the fact that Asia, in particular China, was at the
start of an economic trajectory which would change global power in the world. “My
first visit to China was in 1983. I believed in China, that it would lead in
innovation and its growth has exceeded even my own expectations – and I was
considered the outlier in those days. Now in most MNCs’ boardrooms, China is
taken very seriously.”

Ascott Raffles City Chongqing: “I believed in China, that it would lead in innovation and its growth has exceeded even my own expectations – and I was considered the outlier in those days.” (Image credit: The Ascott)

In three years Ko took Starwood on an exponential growth path, opening almost one hotel a week to become the leader in five star hospitality in the region. But he’s proudest not of the number of the hotels but “the people we developed”.

Today, if you look at most of the hotel companies in the region, many of
the key positions are occupied by former Starwood executives who left post-the
Marriott acquisition of 2016. That $13 billion deal grew Marriott but the necessary
integration sucked the heart out of a well-oiled team.

“I am most proud of the culture and values that were engendered. Mostly,
we had a lot of fun,” he says.

“Hospitality has emerged into a shared economy – can you think of one
area that is not shared today?”

But as fond as he is of the good, old, fun days, he is looking forward because, even before Covid happened, things were already changing. “Like every industry, hospitality has emerged into a shared economy and hotel companies need to open up their four walls to share with everyone – everything is now shared. Rooms – distribution, F&B – delivery, guest comments – social media, revenue management – centralised externally. Can you think of one area that is not shared today?”

Ko’s love for hospitality and building people were important reasons
that lured him back into a fulltime job with Singapore’s Temasek Group to help
it integrate its two groups, Ascendas and Singbridge. “The company was involved
in industrial parks, business parks and the hospitality arm was important for
me. We created a lot of value and four to five years later, the combined group
with CapitaLand has S$135b of AUM (Assets Under Management).”

Now CapitaLand is in the midst of a major corporate restructuring that will see the asset management company split from property development. “We are privatising the property development to be 100% Temasek-owned and place the asset management business under a separate listed vehicle. It’s an asset-light, capital-efficient model. It’s not that different from hotel companies – like Starwood – the same playbook but in many other asset classes.”

In his time with Ascendas-Singbridge, Ko had to learn about other asset classes, beyond hospitality. “When I take on any new project, I look at three things – I need to contribute, I need to learn, I need to have fun. Ascendas-Singbridge ticked all three boxes.”

Now taking on the new challenge of being chairman of CapitaLand, he
says, “What I want to achieve is not individual but to work through people and
teams. I love building teams, building people, building culture. I love being
part of growth. There is nothing as boring as status quo.”

Well, Covid has certainly shaken status quo for every industry, not only
in hospitality but across all real estate and asset classes. 

“No one can say they were prepared to handle a pandemic like Covid,”
says Ko. “Every executive learnt along the way. It’s a matter of understanding
you are going to come out it of one day. Yes, it’s longer than SARS but you
will come out of it, and so managing the longterm integrity of the business is
very important.

“It shouldn’t be a slash and burn approach. You don’t panic, otherwise
all the staff will panic, then you make short-term tactical adjustments with
longer term strategy – short-term decisions that are anchored in ensuring the
business will be stronger coming out of Covid. This is why we took the
advantage to restructure the company, we will come out of it stronger. We have
a great team, great CEO, great people.”

He admits there were difficult moments when “we had to shut down malls,
hotels, especially in France, and then business parks in India, when most
people did not go to work”.

“But when you run a multinational across different parts of the world,
you go through different stages, and you use the experience of one to help the
other.”

In February 2021, CapitaLand
Limited announced a net loss of S$1,574.3 million for FY 2020 against a profit
of S$2,135.9 million in FY 2019. The net loss was mainly attributed to
revaluation of investment properties, and impairment of projects and equity
investments totalling S$2,498.1 million, which are non-cash in nature.

Hospitality has a bright future – “I am positive about the demand side”

Going back to his comments
about how the four walls of hospitality had been breached by the shared economy,
he says, in the day of old, a strong hotel company required three things –
strong brand, strong distribution and strong loyalty.

“Today, it’s gone beyond
that. Now challenge is coming from everywhere. In accommodation, we have
Airbnb, unique lifestyle hotels, hotels that are one of its kind within a
destination. Everyone wants to maybe not eat your lunch but share your lunch.
It’s a very different business now where hotels no longer have captive
audiences, but you are sharing everything.”

In hospitality, there is
also divergence taking place between the investor who wants to invest in hard
assets (like REITs – real estate investment trusts) and asset-light management
companies (brands such as Marriott).

Says Ko, “Some companies try
to go between the two but that’s a tough spot. If you are asset-light, you need
scale to earn the fees. If you have anchor assets, there’s the lower but
steadier return – that’s where a REIT comes in. So where do you pivot? That
decision is critical. It’s always been a tough balance, but it’s been
crystallised during Covid – you can’t do both.”

He did not say it outright
but it is clear he is referring to a fairly common model in Asia – owner-run
management companies that try to do both – own assets as well as run their own
management company which manages other people’s assets.

Having said that, he believes hospitality, as an asset class, will grow
bigger and faster than other assets after Covid. “There is so much pent-up
demand in leisure travel. People will travel a lot more, especially in emerging
markets. And people are dying to gather at conferences again. I am positive
about the demand side.”

Even with business travel, he sees pent-up demand in the initial period
where people will travel to see staff and customers. “But once that stabilises,
there will be more efficient travel. Business travel will be a slower growth
sector.”

Technology will transform hospitality in “how we will deploy staff to
serve you in the way you value. Check-in may not be of value anymore but in
value-added services, staff will play a crucial role. I don’t think it will go
to minimal staff. Maybe in two- or three-star, there will be a move towards
having fewer staff but in the higher end, people still want to be pampered.”

Retail, office space will change as offline-online blends

Real estate is also not going away but the usage of space will be different. Using CapitaLand’s new Funan (DigitalLife) mall as an example, which is more lifestyle and experience than just retail, and also houses Ascott’s co-living brand, Lyf, Ko said the offline-online connection will become more and more blended – a place where e-commerce stores will have physical spaces to provide consumers with “touch and feel”.

Funan (DigitalLife) Mall: “There will be a whole transition of retail to more offline-online experience stores.” (Image credit: capitaland.com)

“Transactions may not happen in the mall. People are still social animals,
they still want to go to the Apple Store to touch, feel and then maybe buy
online later. There will be a whole transition of retail to more offline-online
experience stores.”

Interestingly, the biggest innovation in the retail space is happening
in China and the offline-online explosion has accelerated in the last five
years, led by consumers, says Ko.

In office spaces, while Covid has certainly upended the notion of
working from the office, Ko says it was a trend that started much earlier where
people saw offices as not just a place to work but a social space for
collaboration. “It is not new and interestingly, real estate companies were
more conservative in providing the workspace of the future.”

Not anymore clearly. CapitaLand has its Bridge+ product offering plug-and-play workspaces. “Office space will be different – fewer fixed offices, more open spaces, more flexible spaces. How much physical space a company takes will be determined by how much the employee enjoys going back so you have to make it worth their while to go back to the office.”

Personally, he likes to work in the office. “I find every opportunity to
be in the office. Of course, I can do many things on Zoom and Teams, but I like
to be around people.”

As for when he will travel again, he says, “I have many bookings. Many
have lapsed, I am just waiting.”

And with that, he echoes all our voices.

Featured image credit: Getty Images