Four Seasons HotelBackgroundFour Seasons Hotels Inc. is one of the world's leading hotel management companies specializing in luxury and resort properties. The company manages over 40 hotels and resorts in North America, Europe, Asia, the Middle East, Australia and the Caribbean, with an additional approximately 20 more under construction as of 1998. The company owns its own hotels, principally under the Four Seasons and Regent names, as well as some others, including the Ritz-Carlton in Chicago and the Pierre in New Y ork. About half the company's earnings come from management fees, and half from properties it owns directly. Travel Leisure magazine and Zagat Survey rank the hotel chain's 89 properties among the top luxury hotels worldwide. Readers of Conde Nast Traveler magazine have voted the company's Golden Triangle property in northern Thailand as their favorite in the world for three consecutive years. The company has been named one of the "100 Best Companies to Work For" by Fortune every year since the survey's inception in 1998, ranking 53rd in 2011.DevelopmentCanadian businessman Isadore Sharp founded Four Seasons in 1960. While a young architect working for his father, Sharp designed a motel for a family friend that succeeded and inspired him to try creating his own hotel in Toronto.Sharp’s 126-room Inn on the Park opened in the spring of 1961. The final cost of the projec t totaled nearly $1.5 million.In 1972 Sharp approached the Sheraton division of ITT Corporation and proposed a joint Four Seasons-Sheraton partnership. The result was the Toronto Four-Seasons Sheraton, a 1,450-room establishment whose first year of operation was plagued by cost overruns, disagreements with city building inspectors, and a singles event which resulted in a temporary suspension of the hotel's liquor license.In the 1980’s, Four Seasons returned to its core luxury hotel business and took advantage of the booming economy by opening new properties in many countries.From 1980 to 1985, Four Seasons opened hotels with a value of over $500 million at a cost of only $15 million.By 1992, with the acquisition of Regent International Hotels Limited, a leading operator of luxury hotels in Asia and Australia, Sharp had created the largest network of luxury hotels in the world. Together Four Seasons and Regent International Hotels owned and operated 45 medium-sized luxury properties and resorts in 19 countries around the world.By 1997,Business Week declared that the company had never been healthier. Sales and profits were on the rise, and Four Seasons planned to run almost 20 more hotels over the next few years. In 2002,Four Seasons’ first hotel in China –“Shanghai Four Seasons Hotel” was opened and it opened a new hotel in Hangzhou in 2010 and Guangzhou in 2012, and nine more properties in cities including Beijing and Shanghai to bring its hotels in China to 14.Business modelFour Seasons does not own most of its properties; it operates them on behalf of real estate ownersand developers. The contracts between Four Seasons and property owners typically permit the company to participate in the design of the property and run it with nearly total control over every aspect of the operation.Four Seasons generally earns 3 percent of the gross income and approximately 5 percent of profits from the properties it operates, and the property owners are required to additionally contribute money for chain-wide sales, marketing and reservations systems. Four Seasons hotels have larger staffs than competing chains; therefore they create separate reserve accounts to cover upkeep costs. While profit margins are relatively low, the reputation of the brand and the value of the hotel for sale as well as loan collateral generates developer interest. Four Seasons also produces a complimentary magazine for guests that are supported by advertising revenue.Four Seasons has a fractional ownership division, Four Seasons Residence Clubs.Four Seasons bases its business model on four pillars: Quality, Service, Culture, and Brand. Golden rule and Global StrategyThe EnvironmentThere are two important features to consider when addressing the social component of the environment in which The Four Seasons exists: demographics and social values.Technology is an important tool for hotels to communicate with their customers. The technological environment in which the Four Seasons exists is currently focused on two major influences; the Internet and internal hotel computer systems.The current weakness in the overall economy and the travel and tourism industry are evidence of the impact of the terrorist attacks of September 11, 2001.Strategic alliances or mergers/acquisitions are becoming the primary vehicle for hotel industry international expansion.Investments in hospitality-related real estate have grown significantly, reflecting an increase in the development of tourism facilities internationally.When considering the globalization of the hospitality industry, the influence of politics must also be considered.The Luxury SegmentThe leisure customer has different requirements than those of the business traveler and differing definitions of luxury. The business traveler has different needs such as access to technology, good room service, business facilities, and amenities and service targeted at making the guest feel at home. The increase in leisure customers dictates a re-evaluation of services for the luxury segment.Luxury hotels differentiate themselves from upscale hotels and from other hotels in the segment through their brand name recognition, quality of service and quality of accommodations, location and room rates. In the luxury segment, individuality of these key elements is what differentiates each brand from one another.The luxury segment has been slow to differentiate itself through technology offerings to its guests or by technological systems which enable information gathering on their customers, opting for more human-based information gathering on their guests.The focus of competition is on increasing and improving guest services, which already stand at the highest in the industry.Frequent business is an important element in the segments success. Union activity is of concernwith regard to luxury hotel construction and staffing. Unions are dealt with on a local basis. Brand & CultureFour Seasons' strategic direction is based on the strength of their brand name. Four Seasons has become a dominant luxury brand that is defined by high levels of personal service and the creation of quality experiences for their guests. One of Four Seasons additional strengths is in their values, which is an important component of their operational expertise. Four Seasons believes that each of its employees needs a sense of dignity, pride and satisfaction in what they do. Four Seasons made the decision early on to focus solely on the high end customer and concentrate on hotel management rather than real estate.Management and OrganizationFour Seasons prefers to develop their senior management team from within the company to retain consistency, work ethic, and the culture that has made t hem successful. Mr. Sharp’s entrepreneurial spirit and vision of combining friendliness and efficiency with the finest traditions of international hotel keeping have transformed the Four Seasons from a modest motor hotel in Toronto to a leading global operator of hotels and resorts.Selling “Four Seasons”The marketing strategy addresses both building international awareness for the Four Seasons brand and developing local market potential for specific hotels. Four Seasons' marketing is targeted at the luxury segment of the global marketplace. Four Seasons estimates that it derives 69% of its business from business travelers and groups and 31% from the leisure sector.The local marketing strategy concentrates on developing luxury rooms and food and beverage sectors for hotels locally and regionally.One of Four Seasons' marketing tools is to take advantage of a superior reservation system and proprietary technology.Four Seasons' training program is reflective of the entire philosophy and the culture of Four Seasons Hotels & Resorts.Superior and consistent service are attributes synonymous with the Four Seasons brand. Besides formal training, employees learn by example from managers and by observing managers’ behavior.Four Seasons takes a collaborative approach with the union.Four Seasons recognizes that relationships with external stakeholders can help their bottom line. Four Seasons has established relationships with numerous institutional and private equity sources that invest in and develop luxury hotels.In all our interactions with our guests, customers, business associates and colleagues, we seek to deal with others as we would have them deal with us.。
