Carlos Flores
Sonesta International Hotels Corp. in January named Carlos Flores, a top executive at the company during the past two years, as its new president and CEO, replacing retiring president and CEO Bill Sheehan. Flores steps to the helm of Sonesta at a time of rapid growth, as the company—which has a total portfolio of 55 hotels in eight countries—has grown since 2012 from three hotels to 25 hotels in the United States. Much of that growth came from the launch of a new extended-stay brand, Sonesta ES Suites, which Sonesta developed following its conversion of several former Staybridge Suites and Residence Inn properties owned by Hospitality Properties Trust. Flores this month spoke with Business Travel News senior editor Michael B. Baker about his goals in the new position and what Sonesta's growth has meant in terms of its placement in the corporate travel market.
What are your first priorities as CEO?
I've been entrenched in the organization since I started in 2012. Although we're 78 years young, who we are today has a lot to do with the efforts that we have been afforded during the last three years, for most of which I've been along for the ride. I don't have as great a compulsion as a lot of leaders who step into their roles to change a bunch of stuff to make it mine because my signature is already in the fabric of where we are today. It really has more to do with the plan that we already put into place and making sure it's executed. For us, it's all to do with the prerequisite work that started on Feb. 1, 2012: building infrastructure that was going to provide us a management platform. All that was necessary to do what we wanted to do with our physical project, which is a pretty significant renovation. You can make a box look pretty and people will come and stay with you once, but it will be a short ride if you don't figure out how to deliver on that high-level guest service. I'm very proud of our close-to-$300 million renovation, which we'll be largely wrapping up in the next quarter. It's about execution, making sure we're focused and don't get distracted and that we continue on with the plan and get out there. It's really about getting people to come in and appreciate for themselves. It sounds simple, but it's not easy.
Sonesta has grown from three to 25 hotels in the United States since you joined it. How has that changed the company's dynamics?
Yes, and most of it came in the first six months. It's pretty staggering growth. The organization and the infrastructure was really designed to support three hotels, so a lot of the work I was referring to was really prerequisite work as it related to the larger vision and aspiration for Sonesta and the brand. Let's get this done, do it the right way, that doesn't just answer the needs for our existing portfolio but gives us enough roadway to do the next 100 to 200 hotels.
Has this resulted in the company going for more corporate business?
We made a significant investment in both our sales and marketing teams. We have built a pretty sizeable global sales organization. It's making sure we have our messaging down and have identified who is the best fit for us as an organization, getting in front of them and educating them on the product and getting trials. Our product and the service delivery will sell themselves on the repeat side. The global sales offices are out there making sure that the Accentures and the Schlumbergers of the world both understand us and know that we're around and also in other areas. A lot of our industry is driven through intermediaries, both on the meeting side but also on the transient side. You've got your American Expresses and all the consortia out there, and we're making sure that they are educated and we're on their radar, and we leverage those as much more strategic partners, making sure it's mutually beneficial for both of us. Some say, "Well, I want to do business with someone that can do all of my business." Yes, you can do business where any of your travelers can go with one particular vendor or strategic partnership, but what have you gotten in return? You have convenience—one throat to choke and one contract—but what have you lost? In most cases, you've probably compromised quality, and that's what the end traveler ultimately wants.
Did you see a growth in requests for proposals during negotiations for 2015 hotel programs?
The answer is yes and no. Yes, in the sense [that] we saw a wonderful amount of submitted and inviteds. Our acceptance has gone up relative to last year in key segments, but those are just stats. Even accepted doesn't do anything to your P&L. It's a predictive indicator at best. Where it's no is some of the accounts, particularly on a few of the intermediaries where maybe a year or two ago we were more inclined, if anyone wanted to do business, to do business. We have focused more of our attention on true strategic partnerships. When we use the word partner, it means something more than, "Yes, we have an agreement." We're putting a lot more sincerity around that term partner, and on some of those, it means we didn't engage with some of the accounts because it didn't make sense for either of us.
How is development of your extended-stay brand going?
Sonesta never had an extended-stay product prior to three years ago, so we created a brand and a concept. The assets we got were conversions; they had been extended-stay products elsewhere. During the past year, what we've done is in product design and delivery and the synthesization of a full-service property into one more befitting for an extended stay. There's a very different relationship that's formed. All the things that you think about in a traditional hotel setting apply, but there's a new layer of familiarity because of the extended-stay nature. I'm going to know about you, my guest, that you've had all this wine during the course of time. There's a much more human interaction. I'll put our product up against anybody's right now. It's modern, it's well-appointed, and it's well-designed. Food is an important part of that delivery, too. It's not the same culinary experience you might come to expect at a full-service property. There's no Bananas Foster, but it's got to be good, healthy and well-prepared. It's not maintenance; it's part of the experience. We've done it both in the physical design of the space, where it's served and prepared, and in how it's experienced and enjoyed by the guest. Where municipalities allow it, we put a bar in.