Insights for Global Hotel Network About HSH The Hongkong and Shanghai Hotels has enjoyed a long and established history spanning more than 150 years since its establishment in 1866 and we believe our company to be the oldest hotel company in the world that has been in continuous operation. Our flagship hotel property The Peninsula Hong Kong celebrated its 90th anniversary in 2018. Whilst we have witnessed profound political and economic changes over this long period both in our home market of Hong Kong and around the world, our company remains steadfast in our key philosophies and values which are: - to conduct business with the highest levels of integrity; - to build on our heritage while continuing to invest in and develop our people; - to maintain and enhance the quality of our assets, - to continuously improve the service we offer to our guests, and - to contribute positively to the cities in which we operate. These values distill into a simple vision for us, which has not changed in the 17 years that I have been CEO of the group: to develop, own and operate a small number of the highest quality hotels which are considered to be amongst the finest in the world. Having ownership or part-ownership of each hotel is an important part of our strategy and allows us to maintain control or joint control over the design, quality, operations and capital spending in our hotels. We are therefore not willing to undertake hotels on a management contract-only basis without ownership. By taking such a long-term view and by maintaining and enhancing the quality of our assets and operations, we seek to create significant value for our shareholders from the long-term appreciation in the capital value of our properties, as well as from the increasing operating yield as each property grows its income over time. Business overview Our group currently owns and operates ten Peninsula hotels which are located in the key gateway cities of Hong Kong, Shanghai, Beijing, Tokyo, New York, Chicago, Los Angeles, Paris, Bangkok and Manila. Throughout the years we have maintained a significant investment programme to enhance the physical condition and quality of these properties, most recently by completing major renovations at The Peninsula Hong Kong in 2014, The Peninsula Chicago in 2016 and The Peninsula Beijing in 2017. The level of quality in our hotels is such that in February 2019 we were awarded Forbes Five-star ratings for all ten of our hotels; the only hotel group in the world to achieve such a rating across its entire hotel portfolio. We believe the fundamentals of luxury hospitality do not change over time. In addition to the beautiful décor, large spaces and elegant design of Peninsula hotel guestrooms and the specifications and attention to detail of both our front of house and back of house facilities, we seek to provide our guests a high level of personalised service, attention to detail, graciousness, and warm hospitality. A vision for sustainable luxury We are committed to sustainability in an environmental as well as a business context – we believe that our success is inextricably linked to the success of the cities and the communities in which we live and work. Through a variety of platforms, training workshops and initiatives, we aspire to create awareness and buy-in towards sustainability throughout our company so that it becomes a living and breathing topic that matters personally to our employees and is integral to how we conduct all our businesses and operations. We also approach sustainability in a way that makes business sense where possible. We calculate paybacks and returns on investments made into environmental initiatives, and we look at what value drivers our sustainability initiatives could contribute. We have the opportunity to offer our guests sustainable choices without compromising on the quality of our products and services. In 2018, we took the significant step of announcing a global ban on plastic straws in our operations. This is the first phase of our plan to eliminate single use plastics by 2020 which we believe is necessary to address the significant issue of plastics pollution. We strive to source only sustainable seafood and we have created a Naturally Peninsula range of dishes focusing on healthy, nutritious cuisine from locally harvested sources. We are also focusing on ways to reduce food waste. We strive to use only Forest Stewardship Council (FSC)-certified paper for all our products and packaging. Industry Outlook In terms of outlook for the coming year, although we are facing uncertainties around the world and geopolitical instability in some of the regions we operate in, our current business trends are generally stable and we are cautiously optimistic. We are implementing a number of new strategies to drive business in the year ahead, including promoting our Chinese mainland business, enhancing our food and beverage strategy and improving data analytics. We are confident in the continued growth of Hong Kong’s tourism sector and we believe the opening of the Hong Kong section of the Express Rail Link and the Hong Kong-Zhuhai-Macau Bridge will positively impact overnight tourism arrivals. We are optimistic for Japan as the country prepares to welcome the Rugby World Cup in 2019 and the Tokyo Olympics in 2020, and we are already seeing advance bookings for these events. We believe there is a relatively stable outlook for luxury hospitality in the US and the Chinese mainland. We are committed to maximising the growth potential of The Peninsula Beijing following its major renovation. We continue to monitor the impact of the gilets jaunes or “yellow vests” in France which has been negatively affecting our hotel in Paris. We expect that the new hotels in London, Istanbul and Yangon will further enhance the Peninsula brand presence when they open from 2021 onwards. About Clement Kwok Mr Kwok joined The Hongkong and Shanghai Hotels, Limited (HSH) as Managing Director and Chief Executive Officer in February 2002. Over his 17-year tenure as CEO of HSH, Mr Kwok has spearheaded the growth of HSH with the openings of the Peninsula hotels in Tokyo, Shanghai and Paris, as well as undertaking numerous other projects for the group. He has personally led the Company’s efforts in corporate responsibility and sustainability and in technology transformation. Mr Kwok’s career began with Price Waterhouse and Barclays de Zoete Wedd in the UK, following which he returned to Hong Kong in 1986 to work with Schroders Asia, where he was appointed as Head of Corporate Finance in 1991. From 1996 to 2002, Mr Kwok served as Finance Director of MTR Corporation. He is currently a Council Member of the World Travel & Tourism Council, a Member of the International Advisory Council of the Faculty of Business and Economics of The University of Hong Kong, and an Honorary Adviser to the Financial Reporting Council. Over his long career in Hong Kong, he has served on the Stock Exchange Listing Committee, the Takeovers and Mergers Panel, the Securities and Futures Appeals Tribunal, the Hang Seng Index Advisory Committee, the Harbourfront Commission, and the boards of Swire Pacific and Orient Overseas (International) Limited, as well as the Interpretations Committee of the International Accounting Standards Board in London. He holds a Bachelor of Science in Economics from the London School of Economics and is a Member of the Institute of Chartered Accountants in England and Wales and the Hong Kong Institute of Certified Public Accountants.