In 1960, people called him mad. They even had a term for it: "Barton's Folly."

Hugh Barton wanted to build Hong Kong Island's first luxury hotel.

Six decades later, that "mad dream" is Mandarin Oriental.

The brand operates 41 hotels, 12 residences and 26 luxury homes across 26 countries and boasts 28 Michelin stars across its restaurants.

The hotel group is now being taken private for $4.2B ($5.7B SGD) by Jardine Matheson, a Hong Kong-based conglomerate and investment company.

🏗️ The folly that started it all

Hugh Barton was an Irishman who had joined Jardine Matheson in 1933 as a tea taster, meticulously learning the company's traditions, including raising ponies that raced under Jardines' silks.

By 1953, he'd become Taipan, the firm's most powerful position.

The title "Taipan" is a Chinese term meaning "great manager" or "big boss," traditionally used for the head of a foreign trading house in China.

In 1958, Barton sat in the boardroom of Hong Kong Land Company with an audacious idea: build a luxury hotel on the site of the soon-to-be-demolished Queen's Building.

At the time, building a brand-new luxury hotel on Hong Kong Island sounded absurd.

The Peninsula already dominated in Kowloon across the harbor, and property developers had a rule: never go first. You waited for someone else to try, fail, and sell cheap.

The plans were dismissed as "Barton's Folly."

The project actually started as offices and shops, but halfway through construction, Barton changed his mind and decided on a hotel.

This sudden pivot only made them doubt him even more.

But Barton believed in leading, not following.

As Chairman of Jardine Matheson, he saw Hong Kong's emergence as a gateway to Asia. It needed a landmark hotel to match.

The risks were enormous: prime land, soaring costs, and guaranteed scrutiny.

Barton pressed ahead. His conviction won over Harold Lee of City Hotels, and together they pushed the project through endless board meetings.

In 1962, an American tourist survey prompted a telling decision: the hotel would be named The Mandarin, something Eastern, evocative, and instantly memorable. Not the originally planned "Queen's Hotel."

The construction costs told their own story: HK$42M for the building, but HK$66M for interior decoration, more than the structure itself.

Barton had hired Don Ashton, art director for "Bridge Over the River Kwai" and "Billy Budd," to create something Eastern, memorable, and like no other.

💸 Over budget, under water

By 1963, panic set in.

The hotel was supposed to open in September, and it clearly wouldn't be ready. Then Hong Kong's water crisis hit in summer 1963.

The city faced severe shortages, and here they were building a hotel with a bathtub in every room (an unheard of luxury in 1963 Hong Kong) and a rooftop pool.

Gerard D'A Henderson, a flamboyant young Spanish artist, was painting panels furiously in his chaotic, hot, paint-splattered studio in Gloucester Building.

Antonio, another artist, worked from his organized studio in Kowloon Tong, both racing against the opening deadline. The smell of oil paint and turpentine filled the corridors as workmen carried wet canvases into position.

In late August, the decision was made: open anyway, but quietly.

The Mandarin had its soft opening on September 1, 1963, followed by the official opening on October 25.

Hugh Barton never saw his dream fully realized. He retired and left Hong Kong in 1963, just as the hotel opened, becoming an influential diplomat in Europe, representing Hong Kong businesses' interests there.

The man who defied consensus was gone before the triumph or potential disaster could unfold.

The hotel would be managed by Intercontinental Hotels until 1974, but ownership remained with Hong Kong Land, a Jardines company.

🌟 Setting a new standard

At 26 stories and 650 rooms, The Mandarin was the tallest building on Hong Kong Island.

It was the first hotel in Hong Kong with direct-dial phones and the first in Asia to include a bathtub in every guestroom. Every room was air-conditioned, a luxury most Hong Kong residents couldn't afford at home.

The interiors became legendary.

Don Ashton had transported a golden figurehead from the film "Billy Budd" to stand guard in what he named the Clipper Lounge.

Gerard Henderson created 15 murals throughout the hotel, including the famous lobby piece that would later be restored with gold leaf.

The hotel's signature scent of freesia and osmanthus filled the lobby, a detail that would become as much a part of the experience as the Murano glass chandeliers and ivory-flecked marble columns.

The timing proved perfect. As Hong Kong emerged as Asia's financial stronghold, visitor numbers exploded from 315,000 in 1963 to 2.8M by 1983.

The Mandarin became the front door to Asia.

Singer Eartha Kitt performed at the Harbour Room in 1973. Christian Dior hosted a fashion show there in 1977.

By 1984, The Financial Times and Executive Travel voted it "best hotel in the world."

🇹🇭 The perfect marriage

In 1974, Mandarin acquired a 49% stake in Bangkok's Oriental Hotel, which had been operating since 1876 with literary heritage and old-world elegance.

The partnership was unusual: one hotel represented modern Asian luxury, the other carried nearly a century of history.

Writers like Somerset Maugham and Graham Greene had made The Oriental their home. Joseph Conrad had recovered from illness there.

The hotel's Authors' Wing would later honor these literary giants.

In 1985, the company merged them under a single name: Mandarin Oriental Hotel Group.

The iconic fan logo was launched, with each hotel receiving a unique fan design to represent its individual character.

The brand was officially born and ready to expand beyond Asia.

📉 The crisis that nearly killed them

In 1987, Mandarin Oriental opened its first American property in San Francisco. That same year, it floated on the Hong Kong Stock Exchange.

But growth was painfully slow. By the mid-1990s, the group had only 10 properties globally while Four Seasons and Ritz-Carlton surged ahead.

Then the 1997 Asian financial crisis hit. Hong Kong's GDP shrank 5.5% in 1998. Property markets deflated by half. The Hang Seng Index fell more than 60% to 6,660 points by August 1998.

Tourism dried up across Asia.

At the Hong Kong flagship, occupancy plummeted. The hallways echoed emptily. Staff whispered about layoffs.

But management made a crucial decision: maintain service standards at all costs.

While other hotels cut corners, Mandarin Oriental kept every detail intact, from the fresh flowers to the full breakfast service, betting that when recovery came, they'd be ready.

By the late '90s, Mandarin Oriental risked becoming a museum piece: admired, but irrelevant.

📈 The Rafael gamble

By 2000, Mandarin Oriental faced an existential choice.

With just 14 properties, they were too small to matter globally. Other luxury hotel chains had triple or more the properties they had.

The Rafael Group offered a solution: six European luxury hotels for $142.5M, a chance to significantly expand the portfolio overnight.

The board debated the risk.

Would growing this fast dilute the brand? The Rafael properties in Munich, Geneva, Cannes, and Washington D.C. were historic buildings that needed major work.

For example, the Munich property alone, an 1880 Neo-Renaissance building, needed massive renovations. They approved the deal, betting that staying small would just be a slower death.

They raised $150M through stock and bond offerings.

The integration took years. Geneva's Hotel du Rhone wasn't fully refurbished until 2008.

But the gamble worked.

The Rafael acquisition increased their portfolio from 14 to 20 properties, and the expanded footprint made Mandarin Oriental credible as a global brand, not just an Asian one.

🎭 The fans who became legends

With an expanded new portfolio, they had global credibility. Now they needed the world to know it.

How do they stand out? Most luxury hotel ads showed beautiful rooms and pools. But for guests spending $1,000 ($1,360 SGD) a night, those were baseline expectations. They needed something different.

In 2000, Mandarin Oriental launched the "Fan" campaign with a radical rule: only feature celebrities who were already genuine guests. No paid endorsements.

Dame Helen Mirren, Jerry Hall, and Vanessa Mae were among the first to join, photographed by Lord Patrick Lichfield. The brand made charity donations instead of payments.

The campaign worked because it flipped the script: it celebrated the guest, not the hotel.

Instead of focusing on the hotel, each celebrity was photographed in a location that represented well-being to them, with the simple tagline "She's a fan" or "He's a fan."

The campaign achieved what celebrity endorsements rarely do: people remembered both the person and the brand.

Ad recall hit 57%, the highest ever recorded by Ipsos Mori. Over 100 celebrities eventually joined, from architect I.M. Pei to actress Michelle Yeoh.

The campaign ran for over 15 years.

🏆 The price of perfection

While competitors raced to open everywhere, Mandarin Oriental stayed disciplined.

Each new hotel had to meet strict criteria: exceptional location, local culture reflected in design, economics that didn't compromise service.

Excellence became their growth engine. While others chased numbers, Mandarin chased nuance.

They opened Prague in 2006. Paris in 2011. Shanghai and Guangzhou in 2013, both winning the Hurun "Hot Hotel" award in their opening year.

By 2024, Mandarin Oriental operates 41 hotels globally. Four Seasons has 125 properties. Ritz-Carlton commands over 110.

Mandarin Oriental remains deliberately the smallest major luxury brand, with room rates regularly exceeding $1,000 ($1,360 SGD) per night and 28 Michelin stars across its restaurants.

Yes, the trade-off was clear.

Fewer properties meant less revenue, but every property could maintain the service standards that defined the brand.

🔄 Full circle moment

The Keswick family, descendants of Jardines' founders, had bought out controlling shares in 1959 but sold most during the 1961 public offering, retaining only about 10%.

Through decades of changes, Jardine Matheson remained connected to the hotel that embodied its ambitions.

This October came the final step: Jardine announced it would buy the remaining 11.96% of shares for $3.35 ($4.56 SGD) per share, taking the hotel group private.

The $4.2B deal was funded partly through asset sales elsewhere in Jardine's portfolio.

Today, Mandarin Oriental targets 80-100 properties over the next decade.

The tea taster who became chairman, who ignored everyone who called him mad in 1960, would barely recognize the empire built on his conviction.

Six decades later, Barton's 'folly' has become a $4.2B empire with 41 hotels and 28 Michelin stars.

Turns out, the mad dream wasn't so mad after all.

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Takeaway Scoop

Lessons founders and builders can learn from the Mandarin Oriental story.

• Start with conviction, not consensus. Hugh Barton's proposal was called "Barton's Folly" because it defied conventional wisdom: never be first with a luxury hotel. He pushed forward anyway, even changing course mid-construction. When you see an opportunity others dismiss, sometimes trust your vision more than their doubt.
• Excellence creates its own demand. The Mandarin didn't meet luxury standards. It even defined new ones for Asia. They were the first hotel with bathtubs in every room and the first with direct-dial phones. They also spent more on interiors than construction. When you're pioneering, going halfway isn't enough.
• In acquisitions, preserve what made each asset valuable. When Mandarin Oriental acquired The Oriental Bangkok, they didn't force uniformity. They let each property keep its distinct character while uniting under one brand. The best M&A strategies enhance both parties' strengths rather than erasing what made them special in the first place.
• Growth should enhance, not dilute, what makes you special. Mandarin Oriental took 24 years to reach 14 properties, then significantly expanded through the Rafael acquisition, going from 14 to 20 properties. Yet, it never lost its soul because every new property met strict standards. Being everywhere meant being nowhere special.
• Make your customers your best marketing. The "Fan" campaign succeeded because it featured genuine guests who happened to be influential. When you build something worth talking about, your happiest customers become powerful advocates.

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