Mandarin Oriental’s New CEO: His Plan to Double in Size

07.10.2024 - 19:21 / skift.com / Sean Oneill

A year ago, Mandarin Oriental appointed Laurent Kleitman as Group CEO. Now, the venerable luxury hotel brand is poised for what it hopes will be accelerated growth — without sacrificing the attention to detail that has made it a favorite among the global elite.

Today, Mandarin Oriental manages 41 hotels, a number Kleitman intends to double. “There is room for more,” he asserts, envisioning a “sweet spot” of “80 to 100 properties.”

Kleitman has a pedigree in luxury goods, with previous roles at LVMH’s Perfumes Christian Dior and Coty. “I’ve discovered a world of experiential luxury,” he said to Skift in his first major interview as CEO. “Experience is what will define luxury in the future.”

When asked about Mandarin Oriental’s brand DNA, the Hong Kong-based executive recounts when he and his family were guests at the brand’s Bangkok property restaurant more than two decades ago. It was a simple act — the discreet laundering and pressing of his young son’s stained shirt after the boy had spilled tomato sauce on it during dinner — that wowed him.

“It stayed with me forever as an exceptional level of service delivery, an exceptional level of guest centricity.”

Kleitman framed this anecdote as both origin story and mission statement for his tenure at Mandarin Oriental. His strategy is threefold: elevate the brand, accelerate portfolio growth, and drive innovation.

Mandarin Oriental is 80% owned by Jardine Matheson Group — a Global Fortune 500 conglomerate whose largest shareholder is the Keswick family.

“Jardine Matheson Group and the Keswick family [are] very, very supportive and extremely keen to see how we can realize more growth from luxury hospitality,” Kleitman said.

In the first half of the year, Mandarin Oriental generated $23 million in profit — about the same as a year earlier on an adjusted basis.

The company has been slowly in selling the hotels it owns. It made $216 million on a Paris hotel this year and $77 million on a Jakarta property in 2023. The asset shedding has helped reduce pandemic-related debt. The company halved its debt to $110 million during 12 months through June.

Kleitman insists that property growth will be strategic, focusing on key markets where the brand lacks presence — without becoming commonplace.

“It’s like in consumer goods — if you’re not distributed, you’re not seen,” Kleitman said. “We open next year in Vienna, we’ve signed Budapest, we’re going to be in Rome soon. If you’re not present in those very important hubs for luxury and tourism, you’re not part of the game.”

Some experts warn that when ultra-luxury brands expand, they dilute the quality of their bespoke services. The average size of ultra-luxury hotel brands is about 25 properties.

Yet Kleitman is adamant