Banyan Tree’s KP Ho has done time in a Singapore jail, survived the 2004 tsunami and built a famous Asian brand

FEW LUXURY HOTEL tycoons can say they’ve been kicked out of one of the world’s elite universities. Fewer still have spent time in prison for political subversion.

But KP Ho, executive chairman of Banyan Tree Hotels and Resorts, has always had a rebellious streak. He built his first hotel on a former tin mine site in Phuket that was considered irrevocably polluted. In 1977, as an idealistic young journalist, Ho ran afoul of Singaporean authorities for writing critically about the government. During two months spent in jail, he says, he reexamined his beliefs. Criticizing government policies was easy, he decided. Far harder – and a far truer test of one’s convictions – was building something from the ground up, whether a country or a business. It’s an insight that served Ho well as he built from his family’s manufacturing conglomerate a global hotel chain known as much for progressive environmental and social policies as its posh villas.

How are you doing these days?
Well, it’s interesting. I was just having breakfast with one of our partners from Macau. They’re doing a casino there. And they were talking about perfect storms. For him, it was a perfect storm of how the Chinese government basically restricted traffic into Macau. And then right after that they had the recession. Everybody’s got the recession as a backdrop. But the other element that made it a perfect storm for us was that Thailand went into political crisis with the airport [being closed] and so on.

So nowadays we all commiserate with each other. But I guess being businessmen, we always see a glass half full rather than half empty. It’s second nature. If you go through life looking at a glass half empty, you’ll be gone. So we were chatting about why his glass was half full. It’s the same for us. Ultimately, all I would say is we’re pretty resilient. We’ve been through SARS, bird flu, the tsunami, which was really bad. So this one we’ll take in stride.

The tsunami hit your hotels at Laguna Phuket, right? How bad was it?
Well, there’s “business bad,” so to speak. And then there’s the human part. We were really fortunate that we didn’t lose a single life. But we saw so many places that did. Recently, I was caught in the earthquake in Sichuan. I was on an airplane and we were grounded for 12 hours on the tarmac. And I’ve gone back recently to see the aftermath of the earthquake. When you travel as much as I do and you get involved in all these things, when you see human devastation, which is really of tragic proportions, then anything to do with this financial crisis, you realize, is just money. And I do mean that: it’s just money. Now, money’s important. But we’ve kept all our staff together. We haven’t retrenched anybody. We went into a mode we’ve done before with SARS, which is no paid leave, so that we conserve cash. Then when times get good again, we share the rewards with everybody. It’s really just taking it in stride. We’ll get through this.

Did your family’s company start in New York or in Singapore?
It depends on what permutation you’re talking about.

I was thinking of your grandfather.
My maternal grandfather was actually a mining engineer from Hunan province. (This is sort of family lore more than anything else.) He was the creator of tungsten carbide, which is an alloy. He was the first Chinese graduate of the Royal School of Mines in the UK. To cut a long story short, he basically went to the US and started the family business in tungsten mining. And it got really big during World War Two because tungsten carbide is an alloy used in airplanes. But he had two wives. My mother is from the second side. Then my mother married my father and they went to Thailand and they set up my father’s business. So it was in New York originally, but we don’t have anything to do with that anymore. My father set up a business in Thailand and that’s where I grew up.

Did you grow up only in Thailand, or in Singapore as well?
No, I grew up in Thailand. I went to Singapore when I was about 20, and since then I’ve been Singaporean.

Then you went to Stanford and a number of other places, right?
Right, I went to three universities without graduating. Claire [my wife] tells me, “Don’t tell my children to follow your example.”

You actually got kicked out of Stanford.
Yeah, I got kicked out. It’s a real achievement. Stanford will tell you it’s easy to graduate, but very difficult to get kicked out. Only three or four people in the history of Stanford have been kicked out.

That’s some elite company.
But like every university, now that I’m somewhat successful, I get the alumni newsletter appealing for donations.

That was because of your activism? Were you radical as a student?
You’re younger than me. But people of the Baby Boom generation like myself, people in their 50s today, would have been in their early 20s during the Vietnam War period. And you’ll probably find quite a few businesspeople today of that same generation who were pretty idealistic, because that period was actually really very political across the world.

There was the student uprising in France in 1968, there was the Czech uprising. The Vietnam War was going on. I arrived in the US from Thailand when Kent State happened, which was actually a very epochal period in American history. For the first time ever, American policeman actually shot and killed student protestors. That ignited a huge wave of protest. Nixon had just bombed Cambodia. So I got into America as a student when it was probably the most political period of American university history.

What did you do to get kicked out?
Technically I didn’t get kicked out. I was suspended for a year and decided to leave. I was involved in a lot of anti-Vietnam War demonstrations, for which I was never kicked out. It was very coincidental what happened. I had friends in the Black Student Union. And they were protesting against a Nobel-winning scientist called William Shockley, who was an advocate of eugenics and basically said that all blacks should be sterilized. He was a brilliant guy, but a bit off. So the Black Student Union decided to disrupt his classroom and ask for debate. They were walking across the campus. I knew them quite well and they said, “Hey Ho, come and join us.” So I said, “Ok.” I was 19. So we walked into the classroom and Shockley was all prepared.

He had a camera and took pictures of everybody: 40 blacks and one single Asian. They had a trial and he could not recognize a single one of the blacks – because he said blacks all look alike – but this guy. I was tried and convicted of disrupting the class and was suspended for a year.

But the real irony was he came up to me afterward and gave me a signed copy of his book. He said, “Mr. Ho, if only you’d read my book, you wouldn’t have disrupted my classroom.” On page 42, it says Jews and Chinese people are the most intelligent people in the world. I find it ironic that I got kicked out for that. But that’s when I learned that life is all about things that happen, timing. It all depends on what you do with it.

So eventually you became a journalist?
Again, as with anything, as with the founding of Banyan Tree, I’ve always believed whatever you do in life is partly intent and partly coincidence, or luck, or whatever you call it. My interest has always been in economic development. Even today, with Banyan Tree, it’s a vehicle for me to get involved with economic development. It’s not luxury that I’m interested in. Because I had been kicked out of Stanford, I had to reenroll from year one at the University of Singapore. It was pretty boring doing everything all over again. So I started freelancing for magazines, including one based here, the Far Eastern Economic Review. That’s how it got started.

When you were at the Review, you got into some trouble with the Singaporean government. Can you tell me that story?
You’re going into a lot of history.

It’s an interesting episode.
I was stringing for the Review, and then I became full-time because I was cheap. And I got into trouble with the government because I reported on an aspect of Singapore government that was considered to be subversive. So I was detained, and eventually released.

You were critical of the government at that point. Now you’re very successful and well regarded in Singapore. What’s changed, you or Singapore?
One of the things I learnt when I was in solitary confinement, and also part of the growing up process of being kicked out of Stanford, is that I think you have to take a good look at yourself and ask yourself who you are and what you want to be. I was idealistic. But to a great extent I was posturing. I was an upper middle class kid, coming back from the West with a whole lot of western ideas about what constituted democracy, human rights, and so on. And therefore that got me into trouble with the Singapore government.

One of the things one has to realize is that if you really want to follow what you believe in, you have to take on the consequences. I’m no Nelson Mandela. I’m not going to sit in jail for 35 years. Whereas I think Lee Kuan Yew was willing to sacrifice his life, and if he had fought the Communists wrongly, would have been in jail for 35 years. Then you have to realize where your priorities are and that your views of other people have come out of a certain privileged background – views that are idealistic in origin but not rooted in reality. And that’s changed my views.

I guess today in Singapore, I wouldn’t be considered critical. But I would be considered iconoclastic. I don’t express views that are like everybody else’s. But being a lot older now, and running my own business, and being involved a lot more with government entities, I can certainly see that being a foreign journalist, it’s very easy to criticize things. It’s very, very difficult to build something. I think with that realization, you really recognize that the people who are charged to build something have a lot more responsibility than those who are just critics.

Speaking of building things, how did you build your first hotel? The site was a tin mine originally, right?
It was very polluted in a very strange way. We were looking for property in Phuket for a second home, and we continued walking up the beach. And then we came across this … I would pretty much call it a moonscape. Essentially, a totally barren place as far as the eye could see with a lot of sand dunes. Piles and piles of sand, and a lot of lagoons. The lagoons were cobalt blue, this beautiful blue. So we thought, “This is fantastic, let’s buy it.” We bought it. It was very cheap. I’d never heard of the words due diligence, being a stupid journalist. Oh, sorry.

That’s okay.
I didn’t mean that. I meant being a stupid journalist like me. I only found out afterward there’s this thing called due diligence. You’re supposed to do research. So I did research and found out that this place was totally polluted. When we tried to put in cast iron pumps to take out the water, in three months, they disappeared. The water was cobalt blue because the waters were so acidic because of all the chemicals they put in. And the bright blue was the result of chemicals leeching from the soil.

So from there, we rehabilitated this totally destroyed land. And I guess that’s the origin of our pro-environment ethos.

How did you go from wanting to build a vacation home, to rehabbing the land and building a resort?
Again, I think that’s a confluence of intent and luck. I had already left the Review and joined the family business. And the family business was a microcosm of a typical overseas Chinese company. We were jack-of-all-trades, into everything but masters of none. [We had] a little bit of property development. We had trading. We had contract manufacturing companies where we assembled televisions for people. We made garments for others.

One of the things I was concerned about was we did not seem to own anything. We had no proprietary advantage. So I was searching around for something I could do that would have a proprietary advantage. We’d been mulling this idea for a number of years already when we came across this beach, and it clicked: why don’t we try a hotel? My brother is an architect, so he designed the first hotel. He designs all our hotels. The first, we gave it to somebody to manage. The second one we gave to Sheraton to manage.

By the time we got to the fifth hotel, nobody wanted to manage it because it didn’t have a beach. So we said, “We’re going to have to manage it.” And we said, “Well, if we’re going to manage it and there’s no beach, what can we do to make people come?”

We thought of pool villas and we thought of spas. And that was how Banyan Tree was born. And that again confirms to me the cliché that necessity is the mother of invention. It’s really true. We had to do something different.

How important do you think the environmental focus is to customers?
I think it’s important to the brand for two reasons and not just for customers. I’ve always thought that beyond paying people a good and decent salary, people like to feel proud of the company they’re working for. They like to feel that they’re working for a company that has values and shares their own values. So our commitment to corporate social responsibility [CSR] and to the environment is important for our own values, for our own colleagues, not just as PR to outsiders.

For me, I think the values of a company are very critical. I think maybe now companies will begin to realize it as they’re collapsing all over the world. People who were just focused on maximizing profits don’t have that sense of values. Banyan Tree is pretty strong on values. I hope to think that there’s a lot of pride among all our associates. And that pride translates into very strong service standards, because everything comes from the heart. That’s one reason for our commitment to CSR and the environment.

The second thing is that to the extent that consumers like their purchases to reflect their own values, then I think being pro-environment and pro–CSR are useful. That doesn’t mean that if you have a shoddy product or over-expensive product that people will overlook all that just because you’re green. But if you have values and somebody thinks that spending their $10 on it is expressing their values, they’ll choose you.

Tell me about some of your environmental or CSR projects.
We’re trying to be really practical about carbon emissions. Some hotels have talked about how they want to make one single resort in a remote location carbon-neutral, for example. Our view is that’s not very realistic. So what we’ve done instead is we’ve actually created an internal audit for every hotel to be able to audit its own carbon footprint. We’ve actually shared that with the Pacific Asia Travel Association, and PATA has now given that to any member organization that wants to do that.

So instead of hiring an expensive consultant, you can conduct your own carbon audit and find out the most practical ways you can reduce your footprint by about 30 percent in three or four years. Our belief is that there’s a lot of low-hanging fruit in every hotel in terms of cutting your carbon footprint. But then the marginal gain gets less and less. You can cut out the easy stuff. But to be 100 percent carbon free is very tough. So our feeling is it’s more beneficial to grab the low-hanging fruit.

Your wife is trained as a sociologist, right?
Yes, she has a sociology background. Mine’s a political activist background, very much an economic development background. She did her master’s in sociology here at Hong Kong University. She did her thesis on electronics workers, where basically she worked for six months on an assembly line in the electronics industry.

She’s now a vice president? What is her area of responsibility?
She runs two things very specifically. She runs Banyan Tree Gallery, the whole retail arm. And she also runs the whole corporate social responsibility program. She oversees that as chairperson of the CSR committee.

What have you learned from working so closely with your wife? Do you have any advice for other couples in business?
Know who’s the boss: she’s the boss. Actually, we talk to a lot of young people who work as husband-and-wife teams. There are upsides and downsides. The upsides are great, because you’re partners in life in many ways. You share common aspirations. The downside is if you don’t have a clear idea of roles, everything to do with business is generally more emotionally charged. So you have to be very careful about delineating the lines.

Where do you see the company in five years?
I’ve always said that my fundamental belief strategically for Banyan Tree is we need to be in a niche, but we need to be global within our niche. So we remain a relatively small and focused company, but we have to be global. To be global is not a luxury or a hyped up claim, but an absolute necessity. To not be global in a globalized world is like being half-pregnant: you’re neither here nor there. It’s not sustainable. So we’ve made the decision to go global. We’re partly there. We’re now in the Middle East, we’re in North America. We’re clearly very strong in China. In five years time, I think we could easily see another 20 to 30 projects opening. So we will have achieved a certain degree of scale. We’ll probably have about 50 to 60 hotels around the world. That will give us scale. And that’s where we want to be.