The interview was featured in Global Views Monthly, issue 418, published on April 1, 2021.
CHM has grown from the ground up, rapidly expanding with a "one hotel per year" strategy. By the end of last year, they ventured into theme park operations for the first time. How Phyllis Chuang, the Hotel Queen, Navigated the Pandemic's Headwinds
How did a hotel brand that didn't even exist eight years ago manage to expand at a rate of "one hotel per year," even in the face of the pandemic's unexpected blow in 2020—a year when the hotel industry was struggling to survive?
Taiwan's newest hotel industry player, Cathay Hotels and Tourism (CHM), achieved this remarkable feat!And behind this success is the experienced hotel industry veteran, Phyllis Chuang, CHM President.
In January22, 2021, as the "MOHW Taoyuan General Hospital Project(部桃專案)" expanded and nearly 5,000 people were placed under home isolation, public sentiment turned against the city of Taoyuan. This significantly impacted business opportunities in the Qingpu Special District(青埔特區). Among the affected businesses, the COZZI Blu—located next to the X-Park—saw its nearly full occupancy rate drop to rock-bottom levels after just six months of operation. Fortunately, Phyllis Chuang had already made contingency plans, dividing the staff into two groups to work in shifts.To boost morale, she not only sent internal letters but also personally visited Taoyuan to comfort her employees.
After the "MOHW Taoyuan General Hospital Incident" subsided, the Taoyuan City Government quickly launched a tourism stimulus plan, including a subsidy of NT$1,000 per room for independent travelers, announced on March 10. The Qingpu Special District was even highlighted as a key area for day trips. Phyllis Chuang expressed her joy, saying, "This period was too dull; finally, we can do business again!"
Phyllis Chuang's Hotel Journey Began at 18
At just 18 years old, Phyllis Chuang entered the hotel industry. With experience at Hilton Hotels (now Caesar Park Hotel Taipei) and Leofoo Resort, she has accumulated 26 years of expertise.
Eight years ago, Cathay Real Estate Development recruited Phyllis Chuang, partly due to the fact that Cathay Life Insurance was the landlord of The Westin Taipei, establishing a key connection.After taking office, the elegant Phyllis Chuang swiftly showcased her determined ambition, opening hotels at a fast pace with the goal of "one hotel per year," swiftly claiming market share.One of the most notable achievements was that, despite the pandemic in 2020, CHM managed to open both COZZI Blu and Chiao-Hu Wonderland.
Many were curious: what made CHM the winner in securing the Chiao-Hu (Shima Shima Tora No Shimajirō) hotel IP (intellectual property) license?
Expanding from Hotels to Amusement Parks, Seizing Diverse Business Opportunities
"Three years ago, there was an empty lot next to the hotel that we could use to create added value. Initially, I considered LEGO, but the space was too small. After several evaluations, Chiao-Hu Wonderland seemed like a perfect fit." She took the initiative to approach Benesse, the Japanese company behind Chiao-Hu (Shima Shima Tora No Shimajirō), proposing a partnership and persuading them to grant a license. Within three years, she created Chiao-Hu Wonderland in Taiwan, covering 300 pings(991.74 square meters), with the expectation that it would become a key attraction in the Qingpu Special District(青埔特區), linking the hotel, movie theater and aquarium.
Here, with ocean exploration as the central theme, families can easily immerse themselves in the experience through specially designed attractions and performances. Visitors can join Chiao-Hu (Shima Shima Tora No Shimajirō) and his cartoon friends, dressed in exclusive sailor outfits unique to Taiwan, on exciting missions.
However, the licensing, construction guidance and other related costs totaled a staggering NT$30 million, making the inclusion of Chiao-Hu at the hotel a high-stakes gamble.
Shih-chen Li, Deputy Director of the Commerce Development Research Institute, analyzed that while cartoon collaborations may boost appeal, IP licensing fees are substantial. With rising operating costs, balancing profitability with service quality becomes a challenge.Additionally, focusing on family-friendly themes requires frequent updates to both hardware and software facilities to keep things fresh, which tests the creativity of the management team.
Phyllis Chuang is well aware of this challenge. She understands that relying solely on intellectual property (IP) for short-term profits is unsustainable. To address this, she established an internal creative brainstorming team and regularly collaborates with Benesse to ensure continuous innovation.In the past, Phyllis Chuang demonstrated a burst of creative brilliance that led to surprising results.For instance, at HOTEL COZZI Ximen Tainan,the most well-known outdoor children's race track was originally planned as a jogging path. However, Phyllis Chuang had a sudden inspiration after looking down from the top-floor window before the inspection and decided to transform it into a racecourse. Today, it has become a popular playground that draws repeat visits from families.
Unfazed by Strong Competitors: The Little Minions Charge Ahead Without Burden
Thanks to flexible strategies and quick decision-making, CHM hotels achieved a revenue of NT$1.2 billion in 2019. However, in 2020, revenue dropped by 30%. Phyllis Chuang expressed regret, stating that without the disruption of the pandemic, the company would have entered a profitable phase in 2021. Despite this setback, with a total of 1,231 rooms across its brands, the young Cathay brand has already positioned itself as a competitor to some of Taiwan's largest hotel groups.
Looking back over the past year, when competitors were still grappling with the full impact of the Covid-19 pandemic, Phyllis Chuang had already communicated with her team, focusing on cost-saving measures and energy efficiency. She was adamant about not cutting personnel—no layoffs, salary reductions or unpaid leave.
We are a big family, fighting side by side. We need to survive together before we can continue to fight, Phyllis Chuang emphasized. The hotel industry involves significant investments and long payback periods and talent development is difficult. For a new brand, this is a critical factor for gradual growth. This key factor was deeply felt by Yen-chen Chuang, Manager of HOTEL COZZI Ximen Tainan. "If the general manager (Phyllis Chuang) had cut staff from the beginning, we wouldn't have been able to respond as quickly when domestic tourism rebounded in June, because our team needed time to train."
In the second quarter of last year, many companies encouraged employees to travel domestically. Then, in August, COZZI Blu in Qingpu, Taoyuan, surrounded by popular attractions like the Ｘ-Park Aquarium and Shin Kong Cinemas, experienced a surge in visitors, resulting in fully booked rooms. Fortunately, there was enough manpower to provide support across various hotels and departments.Meanwhile, Phyllis Chuang swiftly implemented a three-pronged strategy: first, collaborating with other hotels in the brand to increase customer visits; second, strengthening the membership program by offering exclusive loyalty rewards; and third, enhancing staff service efficiency and adaptability.
Additionally, the AMAZZING CLUB membership program, launched in 2017, was part of the company's long-term plan to expand into an international hotel chain. By the end of February this year, membership had reached 175,000.In 2020, the revenue generated by memberships alone accounted for 31% of the hotel's total income. Before the opening of Cozzi Blu in Taoyuan in 2020, members were given priority for bookings, attracting over 11,000 new members in a single month. This led to a surge in daily traffic, reaching 200,000 visits at its peak.
In contrast to the average hotel occupancy rate in Taipei, which dropped to only 20% due to the pandemic, CHM achieved a 40% occupancy rate thanks to its effective membership program.
Bringing Local New Brands to the International Stage
Phyllis Chuang smiled and said that her mind is always filled with two or three ongoing projects. With each new hotel opening, she's already planning what to do over the next two years.
The general manager sets the big strategy every year, with a clear direction.Yu-wen Hsueh, Assistant Manager of HOTEL COZZI Kaohsiung Zhongshan, who joined the company at its inception and was transferred two years ago, highly agrees with Phyllis Chuang's leadership style.
Phyllis Chuang then focused on integrating a comprehensive, all-age tourism market. For example, at HOTEL COZZI Ximen Tainan, over the past four years, they targeted the family market, collaborating with Cartoon Network to introduce themed rooms featuring characters like The Powerpuff Girls and Adventure Time, creating a unique and innovative family-oriented travel experience in Taiwan.
We don't want Taiwan to just become a replicated model, identical to the rest of the world. We want it to have its own distinctive features! Phyllis Chuang looks forward to welcoming guests once borders reopen, ensuring that they feel their visit was worthwhile.