Costa Mesa Is New Base of Global Hotel Chain
Where does an international hotel company, building a Pacific-region chain, locate its world headquarters?
Tokyo, Singapore or Hong Kong? Try Costa Mesa.
The Orange County town is not known as a gateway to the Pacific, but Pan Pacific Hotels & Resorts relocated its headquarters to Center Tower in Costa Mesa from Tokyo last fall.
The move reflects a decision to try to position the chain better in the increasingly competitive Asia-Pacific hotel market.
“The theory is that North Americans, especially from the West Coast, now are ready to venture out beyond a four- to five-day vacation to Honolulu and are willing to go to the South Pacific or Asia for a longer commitment of time,” explained Steve Buckler, Pan Pacific’s vice president of marketing.
Industry analysts are estimating a 10% to 15% increase in the number of travelers to Asia over the next decade, according to Buckler, whose company is owned by the giant Tokyu group in Tokyo, which operates Japan’s largest hotel chain. Pan Pacific Hotels runs 15 hotels in 13 countries. The best-known are in Vancouver; Singapore; Kuala Lumpur, Malaysia; Jakarta, Indonesia, and Australia. In the United States, it operates the Pan Pacific Hotel in Anaheim and two Hawaii hotels, the Mauna Lani Bay and Bungalows on the Kohala Coast, north of Kona. A Pan Pacific Hotel will open in San Diego at year-end.
“Our decision, right or wrong, was, let’s go where we can get the strategic advantage. We identified the gateway U.S. cities to fill out our chain: San Francisco and Los Angeles,” Buckler said. Besides the geographic consideration, Pan Pacific had another reason to move the hotel’s offices out of Japan. “It is so expensive,” Buckler said.
He said the chain is negotiating to acquire a hotel in San Francisco, which he declined to identify. Pan Pacific also is looking for a hotel “to build, acquire or manage” in Los Angeles, Buckler said.
The move to Southern California was the second phase of a reorganization of two hotel units of Tokyu, whose holdings include railways, department stores, an airline, real estate and other business. In April last year, Tokyu decided to consolidate its Tokyo-based Pan Pacific Hotels and Emerald Hotels of Hawaii.
The two had operated independently, and neither had a strong brand name or identity. “It was as confusing to us internally as it was externally,” Buckler said. “There was no opportunity for us to compete with other hotels” by marketing accommodations as part of a network of hotels. “We didn’t feel we could expand as fast.”
The consolidation also was a response to the entry into Asia of such large chains as Hyatt and Sheraton. “When you have companies with that marketing power and reach, you can’t have a little company competing. It’s a question of distribution and access to the marketplace; you need to be heard and seen.”
Buckler said the strategy is to operate premium international hotels in the Pacific that have market strength, efficiency and operational consistency. Pan Pacific Hotels is not primarily targeting the Japanese businessman or traveler. Only 18% to 25% of its guests are Japanese.