Four Seasons Hotels and Resorts founder, chairman and CEO Isadore Sharp spoke with BTN editors David Meyer and Michael B. Baker about economic change and the lessons of the past.Business Travel News: How important do corporate accounts remain to your business?
Isadore Sharp: Very important. We're very conscious that we need to cater to the major corporations that have travel coordinated within their organization and negotiate all business. If they're proposing to give us many thousand room nights a year, our job is to make sure we give them a proper price for that guarantee. Every hotel, no matter the size, requires group business, meeting business, incentive business and corporate and individual accounts.
BTN: 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. We've always tried to build what was necessary that embodied everything the traveler today has come to appreciate. 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. 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 add to that element, that is where luxury is going. Architecture will never keep you ahead of the game, because there's always a new one being built.
BTN: How does this economic downturn compare with others?
Sharp: The main difference is that it's global. There aren't any sweet spots anywhere. That global recession has put more fear into the economy, and the pundits don't help it at all. We had 9/11. That was traumatic. The fear that prevailed after that wasn't just the economic factor. People were worried about not going into a shopping center for fear of their lives. That was short-lived, and therefore the economy slowly got traction again. Now, the unprecedented global aspect is making it linger. People are going to be very conservative coming out of it.
BTN: When will that happen?
Sharp: We're planning on '09 to be a pretty flat year. Once people stop worrying, they start looking forward. 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 their family and getting away again, because the stress that's being built up now needs some release. Once it starts moving forward, we'll continue on that upward cycle.
BTN: Are you continuing to invest in your properties?
Sharp: To the degree that financing is available. We don't own these hotels. We're in a managing position. We're conscious that business is down, and the cash needs of the hotel have to service the operations first. We make sure there's no compromise in the product, meaning the guest experience is very much preserved. 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.
BTN: What markets are you interested in entering?
Sharp: Fortunately, we're in almost every major destination we have to be. We have a very robust pipeline. That hasn't slowed down at all. We've got almost 50 projects that are in one stage of development or another. There have been some delays. With the financial squeeze, some people don't have their financing in place, but we're still writing new business deals. We're more reactive. People are coming to us, and we evaluate whether that opportunity is adding value to Four Seasons. Our growth opportunities continue unabated.
BTN: How many properties will you open this year and next year?
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.
BTN: How many in North America?
Sharp: The only one this year is Vail, Colo. Next year, we'll probably open in Denver and Baltimore. A lot is happening in Asia. China and India are vital to our future.
BTN: How has the new ownership model
(BTNonline, Feb. 12, 2007) benefited Four Seasons?
Sharp: It really hasn't changed much in view of what's happening now, but it wasn't intended to. One of the financial reasons of my going from public to private was an opportunity to control the change of ownership in a manner that would allow Four Seasons to continue to grow as it has in the past. If something had happened to me, my family at that time would have been forced to put the company up for sale, and then it's a jump ball as to who might own it. This was an opportunity to put together a partnership that really was long-term. With my family's ownership and with Kingdom and Cascade, the legacy of Four Seasons truly has a solid foundation on which to continue.
BTN: What are some of the biggest changes you've seen in lodging over the past 25 years?
Sharp: It's been a constant improvement in facilities and services. What was a good for a budget hotel back in the '60s and '70s doesn't work anymore. Accommodations must serve people's purposes better than in the past, whether it's the technology or learning people's habits and preferences to keep improving the product line.
BTN: What changes apply specifically to business travel?
Sharp: For people to do business, technology carries it so far, but there's still the face-to-face need for people—the body language and the eye contact—more so today than ever. That aspect of it alone has brought hotels to build in many different locations. The hotel industry has grown up from what initially started as an inn on the roadside. Now, it's way beyond that. It's a bedroom that's more of a place to do business than just a nice accommodation to sleep, with all those things you have in your room today: the large desk, good lighting, the interconnections for all technology at one's fingertips.
BTN: One thing we've seen is the proliferation of brands. How do you remain above the fray?
Sharp: Brands can't be automatic. They can only be developed over a long period of time based upon the results of the customers, who tried it and continue to use it. Calling yourself something and saying you're going to be a brand means nothing. You have to identify what is you're offering. At McDonald's, their french fries will never be different. The brand has to be an attraction to the customer, and we have built the brand on this exceptional quality of service that has become sales-safe. Customers recognize that they know what they're going to get every time. If you don't meet that promise every time, you don't have a brand. You just have a bunch of advertising.