Four Seasons Hotels and Resorts founder, chairman and CEO Isadore Sharp—who launched the luxury hotel brand from the single 125-room motor hotel he opened in Toronto in 1961—recently spoke with MeetingNews editors David Meyer and Michael B. Baker about the challenges of maintaining luxury meetings and his outlook for the meetings industry.
MeetingNews: What is your strategy in continuing to market luxury meetings to corporations in light of the economy?
Isadore Sharp: Time is a valuable asset people have, so if they're devoting that time for a business purpose, it's crucial they get the most use out of that time. People are leaving their office, getting away for two or three days or even a few hours in the same city. That's really what we have been able to hold out: the consistency of making sure that the customers' needs are always met. If they're not, that's what we double down on. Meetings or business travel is more important now than ever before, because they are trying to cut back in cost, but they're also trying to be sure they spend their money wisely. As you're getting together for a purpose, it's very important that we help you in succeeding in that purpose. That's what the brand has been able to do and what it's been built on: meeting the promise every time. Every time is really the key, because you only have to miss once.
MN: What are meeting planners focusing on in terms of amenities?
Sharp: They're always negotiating and looking to cut back on their costs, and we're finding ways to try to meet their demands. We're sensitive to the fact that our customers are under pressure. The history of the company has been that whenever we try to put forward the amenities, they are things of value to the customer. Nothing is a gimmick. It should be useful in view of what the traveler needs when away from office and home.
That was the genesis of all the many things we've initiated over the years, whether it's bathrobes or 24-hour room service or having a fitness center. We were the first company to put shampoo in the bathrooms, in 1961. You don't think about it today because every hotel has a line of shampoos and face creams in the bathroom, but the first hotel we built, we put in these little plastic packages. It was a simple thing that, growing up with three sisters, I knew women would never wash their hair with soap. To me, it was just common sense.
MN: What's your outlook on meetings and will they remain a vital part of your strategy?
Sharp: Every hotel, no matter the size, requires group, meeting and incentive business, corporate accounts and individual separate accounts. You have to be able to cover the market, and that's what our push to marketing the company is. Every aspect of travel or needs of a hotel have to be addressed. Even if it's a 200-room hotel, we make sure we have the proper meeting accommodations and all the backup to support that.
MN: Will the shares between those types of travel remain constant?
Sharp: It's changing now because people have cut back dramatically on incentive travel and group meetings. That's natural. That always does happen. Then, you recognize that you must start treating your people in a manner that helps your business. As businesses develop their own needs, they know travel is a great perk to help their business.
MN: How does the current economic cycle we're in compare with others you've seen?
Sharp: The main difference is that it's global. There aren't any sweet spots anywhere. It's everywhere, and that global recession has put more fear into the economy, people wondering. We had 9/11. That was traumatic. The fear that prevailed after that wasn't just the economic factor. It was fear for one's life, which was much more serious. That was short-lived, and therefore the economy slowly got traction again. Now, the unprecedented global aspect of it is making it linger. I don't think it's much deeper, because we've had unemployment reach these levels before. It's just going to take a little longer. People are saying by year-end we'll have a stalk of life, but people are going to be very conservative coming out of it.
MN: Do you expect a year-end turnaround?
Sharp: It's settled down. People aren't making more bookings, but we're planning on 2009 to be a pretty flat year. By the time we get through this, I think we'll become more aggressive at looking at our forecasting. Once people stop worrying, they start looking forward, and then they get back to acting naturally. When that happens, people go back to traveling for business as they should and then start making plans with family because the stress that's being built up now needs some release. Once it starts moving forward, we'll continue on that upward cycle.
MN: Is there a pent-up demand created in a time like this, when people can't do the traveling they need to do?
Sharp: As soon as they sense that they're going to keep their job, their business is going to be OK, and they will be able to borrow money to improve their station, then they get back to doing what they've always done. That's our experience, whether it's back in 1981, 1991 or 2001.Nobody goes backwards in lifestyle. They want to continue moving up that success ladder.
MN: Your strategy in down times has been to keep investing in growth, either with renovations or new properties. Is that the strategy you're pursuing right now?
Sharp: We're conscious that business is down, and the cash needs of the hotel have to service the operations first. We make sure that there's no compromise in the product, meaning the guest experience is very much preserved. The integrity of the brand is vital, more vital now than when times are good because people are stressed out. We hold onto the mandate: Control without compromise. Be creative; managing your business now will take the best skills management has, but do not compromise what the guest is expecting. We don't cut back on the services that you expect or the standards. We find ways to do it with less, but we make sure the guest experience is always preserved. That's what people expect of Four Seasons.
MN: What markets are you interested in breaking into?
Sharp: Fortunately, we're in almost every major destination we have to be. We have a very robust pipeline, and that hasn't slowed down at all. We've got almost 50 projects that are in one stage of development or another. There has been, as there should be, some delays. Some people don't have their financing in place. They're deferring. They're delaying until markets will turn, but we're still writing new business deals. Our growth opportunities are continuing unabated.
MN: How many will open in 2009 and 2010?
Sharp: This year, we're going to open three. One is already open in the Seychelles. Next year, it could be anywhere from eight to 10. They're under construction, so they're moving. Those don't get delayed. It's the ones that have yet to go into construction that may be delayed.
MN: How many are in North America?
Sharp: The only one this year is Vail, Colo. Into next year, there's probably going to be one in Denver and Baltimore. A lot is happening in Asia. China and India are a vital part of our future.
MN: How important are green practices?
Sharp: People expect you to act responsibly and address the environment now that we're aware of how we might damage it. We're a part of the hotel associations' organized effort to understand what we might do with existing situations, and, as we build new buildings, to build them to incorporate the means to preserve the environment. It will become much bigger as we go forward because everybody's aware of it now. Therefore, people will not let something start without recognizing if it's good for the green world.
MN: What do you see as the future of luxury?
Sharp: What some people are trying to do is gild the lily, go over the top and do things that aren't practical to travel. That's not the route at all, and we've never done that. We've always tried to build what was necessary, what I call the next generation of five-star hotels that embodies everything the traveler today has come to appreciate. It's not just a place to sleep but a place to do business, meet and to have all the other food and beverage facilities. Today, spas are becoming a normal part of hotels. We were the first to do one in the beginning of the '80s, and it was a very special thing. Today, that's a part of a lifestyle. People want to relax and get that hour massage, and they want to have that benefit. We've never looked at luxury through the architecture and décor. We've always looked at true luxury as service, and the more we can continue to refine and make sure we can add to that element, that is where luxury is going. More companies today are recognizing that architecture will never keep you ahead of the game, because there's always a new one being built. It's the people part of the business, and companies will come around to that aspect of it.
MN: Is this through training as well?
Sharp: Training is automatic. We do it through the hiring process. It's a two-way street in making sure you're putting together a team that will be able to perform at a very high level. We're very conscious that you have to hire the right people who have the right attitude who want to do that job in a manner that gives the customer what they need. That is what the Four Seasons brand stands for.
MN: Recently, we've seen a heavy proliferation of brands. How do you keep above the fray?
Sharp: Brands can't be automatic. They can only be developed over a long period of time based on the results of the customers who tried it and continue to use it. Calling yourself something and saying you're going to be such-and-such as a brand means nothing. Brand is only valuable when you consistently deliver on a product that the customer expects every time. With McDonald's, their French fries will never be different. We have built the brand on this exceptional quality of service that has become fail-safe in terms of the customers recognizing that they'll know what they're going to get every time. Brand is only as good as performance meeting that promise. If you don't meet it every time, you don't have a brand. You just have a bunch of advertising.
Originally published May 25, 2009