Luxury Hotel Chain Corinthia's Sights Set On U.S. Buyers, Expansion

Since taking over as CEO of Malta-based luxury hotel chain Corinthia Hotels International in December 2006, Tony Potter has overseen an expansion in business with U.S. corporate customers, thanks in part to a joint venture with Wyndham Worldwide established a few months before Potter arrived that has allowed for an expanded global reservations system and more sales reach in the United States. Potter and Business Travel News hotel editor Michael B. Baker recently discussed the brand's expansion, including possible entry into the United States, and the demands of corporate travel buyers in the luxury hotel market.

BTN: How is the Wyndham joint venture progressing?

Tony Potter: Wyndham is highly involved in the operation of Corinthia Hotels International. Obviously, there is a very strong marketing and sales link, which we are working at continually. Really, CHI is one team, which includes our colleagues at Wyndham, and it's very much a work in progress. You will see us getting closer together as time goes by. We've been working this year on a lot of operating standards. We've been learning about the well-established, fine Wyndham brands, such as Ramada Plaza, and we hope to be in the process in the next two or three months of converting some properties to the Ramada Plaza brand.

BTN: Hotel rates are soaring in North America, but they're rising faster in some international spots, particularly in the luxury tier. Will this continue?

Potter: Generally, hotels are more expensive in Europe. There's a lot of reasons for that, mainly commercial, cost of land, cost of labor, et cetera. The important thing is that hotels deliver value. We've all seen cities and areas where demand way outpaced supply, and then you get an acceleration of price. To some extent, it's just the law of economics, and people are becoming more understanding. If they are going to experience true luxury, then there is a price tag to it. Prices will not necessarily get any cheaper, but I think customers will demand more value for money. Hoteliers need to make sure that all their strategies include ways of delivering that.

BTN: What are Corinthia's expectations for growth?

Potter: The Corinthia brand is positioned for growth based on the fact that the brand is now coming into its own in terms of identity. It's 40 years old. We have seven luxury hotels, or 5,000 rooms, together as true five-star hotels, and we now believe that product looks good and feels good, and the customers like it. We're always continuing to work on it, but it's time to roll that brand out, especially in the European, African and the Middle Eastern theater, but we would not, as Corinthia hotels, rule out further extension into wider markets. We're very conscious that our notoriety and our brand at the moment are primarily known within Europe. A lot of our customer base is American and will continue to be American, so the thought of actually coming into North America is actually very interesting to us.

BTN: Is expansion into North America on the horizon?

Potter: North America is a great market to be in right now. I've had the pleasure of living and working here for four years. For Corinthia, not only would it be exciting, it would be extremely fortuitous. Our North American segments of use are high, and we want it to be a lot higher. We think it could be double. Therefore, having a presence here would not only be very good for the side of operating a hotel, but it would be good because it would fly a flag and get more American recognition. Corinthia seems to be a product that the Americans do like. I think it's because although our properties are very modern, there are also traditional elements to our service, which I think they like.

BTN: You've said Corinthia has been ahead of the curve in entering hot business economies like Prague. Where are the next untapped major luxury hotel markets?

Potter: The entire African continent is interesting. Corinthia has a particularly strong claim there. We operate in Gambia, Libya and Tunisia, and we're opening in Algeria. We feel comfortable in being the pioneer there. We've got the business model. Africa will be expanding tremendously in the next five to 10 years, both commercially and in terms of leisure. For Corinthia, providing the entry is cost-effective.

BTN: Are there any other areas of interest for Corinthia's growth?

Potter: Mainland Europe is still very open to us, because we are not in several key cities: London, Paris, Rome. I'm not suggesting all of the cities are saturated, but the big brands already have a presence there. As the new kids on the block, those cities that are perhaps more mature also have great attraction.

BTN: How big of a role does corporate travel play in Corinthia's strategy?

Potter: Our main hotels are primarily 33 percent conference, 33 percent business and corporate and 33 percent leisure, so about 60 to 65 percent is business-oriented. The interesting thing about the leisure part of our business is that a lot of our leisure customers book direct, and they probably are corporate customers in a different world. That's another reason we are taking special care to develop leisure products, such as very high-quality food and beverage with a wide range and also as we focus on the spa, which we believe is going to be very important and integral to people's activities in the five-star market.

BTN: What are corporate clients demanding the most from Corinthia?

Potter: From a business travel perspective, there is a demand for very high standards in the meeting segments. People no longer are prepared to book a hotel that converts a banquet suite into a meeting room for the convenience of that business. They're looking for very good facilities. They're looking for tables that don't require tablecloths. They're looking for 24-hour or 18-hour chairs that are comfortable. They also are looking for a level of service that goes beyond whether you can fix the overhead projector. They're looking for a level of service where people have confidence that there are individuals in the hotel who are well-trained and understand the need of the business traveler and who, in the event of needing to be flexible, are very flexible.

We, for example, have just introduced at the very high-end of Corinthia hotels the concept of a personalized butler. This isn't a butler who, in a traditional Jeeves sense, just delivers service. It's somebody who, 24 hours a day, will deliver the needs of anyone in the hotel. That may be a VIP, the chairman of a multinational company or it may be a conference organizer. The point is, the person is always available to solve your issues, so for everything you need, you can talk to one person. We're finding it's a very interesting service people like.

Finally, people are expecting from hotels a much higher quality of food and beverage than they ever did before. I'm talking about more casual dining, much more higher-quality food products. People now are very well-versed in eating, and they are used to eating not just expensive or ornate food, but daily food at a very high standard. That is becoming very relevant to business and leisure travelers. The hotel that doesn't adapt to that simply won't do business, because they'll do what they've very often done, which is to go out and eat.

BTN: Upscale hotels are constantly adding new amenities and services, and we hear a lot about blurring the lines between upscale and deluxe. How do properties in the deluxe tier remain distinctive?

Potter: It's about service, about people and about attention. A lot of people say it's about attention to detail, and I agree, but it's the important details to the consumer, which is slightly different than attention to details the operator thinks are important. At the high end, you will need to continually get better at the detail. It's also about customers feeling that a hotel is the product which they are used to using and that the provider is used to having that customer. There is nothing bigger for me than getting return business to high-end hotels. Apart from anything else, in marketing terms, repeat business is very cost-effective. If you can get into that in terms of it being a big percentage of your business, it can be very profitable. It goes back to the fact that you have to work hard. Repeat business comes because a hotel delivers what a customer wants.