‘Success is a team effort’
It’s what many preach, yet fail to practice: treat others as you would wish to be treated yourself.
But at the Four Seasons, this philosophy is adhered to as a Golden Rule. Right from the very top.
More than two decades ago, when Wolf Hengst was barely a year and half with Four Seasons as the general manager of a not-yet-completed Four Seasons Hotel Washington, he suffered a heart attack. With three small children at home, Hengst was shaken. But it was not just the doctor who helped him get back on his feet: chairman Isadore ‘Issy’ Sharp was immediately on the phone to Wolf’s wife assuring her that her husband’s job and future was safe.
Today, Wolf is the president of the company’s worldwide hotel operations, incontrovertible proof that the Four Seasons’ Golden Rule – to treat others as you would wish to be treated – does not exist merely on paper.
Sharp believes that companies which keep their eye on profit and not on the people who make the profit are like soccer players who keep their eye on the scoreboard and not on the ball. Not surprising, then, that the Canadian-headquartered Four Seasons – which has 63 hotels and resorts in 29 countries around the world – not only has one of the lowest employee turnover rates but also boasts one of the strongest balance sheet in the business.
In a candid interview with TTN, Sharp speaks about his life, his beliefs and the future of Four Seasons.
You were a stellar athlete in school and studied architecture at Toronto’s Ryerson Institute of Technology before joining your father’s construction business. How did you land up in the hotel business?
In the 1950s, when I was in the construction business, I had an idea to build a small motor hotel in downtown Toronto as an alternative to the roadside motels that were the craze at the time. I had a hunch that it would work, but it took me about five years to convince some investors to back me. After the first deal I did a second and I started to think that this would be a good business to pursue. I didn’t have a grand vision at the time. My objective was to get that first deal signed and I went from there.
Would you have done things differently if you were to start all over again?
At the time, I didn’t have the experience to be fearful of any pitfalls and that worked to my advantage. I just kept plugging away until I signed that first deal. If you’re satisfied with the result, you should accept the decisions you’ve made along the way, because to change anything might take you down a different path and you might not be where you are today.
What were Four Seasons’ greatest strengths when it made its debut in Toronto?
We offered something completely different. That first project combined the best aspects of a motel and a hotel. It was a place where you could feel as though you were a guest in a private home, not a hotel. We even provided some of the comforts of home with amenities such as shampoo, hairdryers and bathrobes. No one else was offering this at the time.
The opening of the Inn on the Park in London in 1970 set the course for future years. What did you do to measure up to London’s other famous luxury hotels, like the Savoy and the Connaught?
The Inn on the Park gave us an opportunity to provide the business traveller with a completely unique experience. We weren’t as concerned with measuring up to other hotels. We thought about what people need when they are travelling and we provided all the conveniences they would expect in their homes and their offices. We made out rooms larger than other hotels and we had large writing desks so business could be done in comfort.
London was where we first introduced our custom-made beds and equipped rooms with everything a guest would need to ensure a good night’s sleep, including blackout curtains for those wishing to nap during the day. We also introduced 24-hour dry cleaning, one-hour pressing, complimentary overnight shoe shine, round-the-clock in-room dining … services we knew would save precious time. Today, many of these things are standards, even in smaller hotels.
BUILDING A LUXURY BRAND
Do you have any regrets turning down ITT Sheraton’s offer to join hands with it after building Four Seasons Sheraton, a major convention hotel in Toronto?
No at all. That was a turning point for us and solidified our direction: we made key decisions which have come to define the company. First, we decided to operate only medium-sized hotels of exceptional quality. Secondly, in a more intimate environment we knew we could focus on the kind of personalised service we excelled at. We also decided to make our employees a significant company focus, and established a mission statement based on The Golden Rule.
What did you gain?
We gained the ability to control our operations and deliver service in such a way that would never be possible in a larger hotel. Smaller hotels also afford us the opportunity to build a dynamic, tightly knit workforce.
What prompted the move away from property ownership to management in the 1980s?
Our expertise is in management and operations, not real estate, so we decided to focus on what we do best and leave the ownership issues to our investors, who not only bring resources to the table, but specialised experience and expertise on the development side.
What was the response after you set up Four Seasons’ first ‘destination’ resort in Maui?
The resort was an immediate success and we continue to feed the hunger for Four Seasons resorts all around the world. In the last year, we’ve opened resorts in Great Exuma, The Bahamas, Costa Rica, our first mountain resort in Jackson Hole, Wyoming and our first resort in Europe at Terre Blanche in Provence. Today we have 16 resorts, including Sharm El Sheikh. We have plans to open resorts in Langkawi, Malaysia and Bora Bora in French Polynesia.
Four Seasons was one of the first companies to manage hotels in mixed-use and residential developments. Has that decision paid off?
This was a logical extension. We believe our key competitive advantage, the delivery of superior customer service, is as viable in a residential setting as it is in a hotel. It also makes good economic sense for our developers. We now have a residential product that our customers love, so from that perspective, yes, it has paid off. Our Residence Club customers are now looking for more residential options so they can have more opportunities for exchange and we are working towards meeting that need. Where it makes sense, many of our projects going forward will have a residential component.
What can discerning guests expect from Four Seasons in the years to come?
The sky is the limit. We continue to introduce new innovations, because we empower our people to be creative. We recognise that today’s traveller is more stretched for time than ever, so we’ve developed creative ways to help them make the most of their precious time. For example, guests can order meals from the car on the way to the hotel from the airport to be served hot when they arrive. We offer guests fitness clothing so they don’t have to travel with bulky workout gear. We also allow frequent guests to store personal items or luggage for their next stay.
THE MIDDLE EAST
Why did it take so long for Four Seasons to make a foray into the Middle East?
It can take as many as 15 years from the time a deal is signed to the time a hotel opens, so while you are seeing the fruits of our labour today, our plan to expand the brand in the Middle East has been in the works for some time.
Since the opening of the Cairo hotel in 2000, the company has been rapidly expanding in the region to include Sharm El-Sheikh, Amman and Riyadh. Now you plan to open five more hotels by 2006. Is that not too much, too fast?
We believe there is tremendous opportunity in the Middle East. No other hotel company in the region can provide the exceptional service that we do. Judging from our initial successes, we believe the market can sustain a healthy complement of Four Seasons properties. The pace of our expansion in the Middle East mirrors our expansion in other parts of the world, such as Europe, for example, where we are in the midst of introducing new properties in places such as Provence, Budapest, Hampshire and Geneva.
In the next few years we will open hotels in Doha, Damascus, Alexandria, Beirut and in the next few months, a second hotel in Cairo. We go into a new market when it’s the right time, with the right product, not to be the first there, so we don’t feel like latecomers to the market. In fact the timing of these openings is in line with our overall strategy. As our guest has needed to travel to various destinations in the Middle East for business or leisure, we’ve opened hotels there.
One would have assumed that the UAE would have been on top of the wish list. Why haven’t you decided to open a hotel in Dubai as yet?
Dubai is a very attractive market. We’ve actually been looking for the right opportunity there for about 15 years and even though a deal hasn’t crystallised, we are closer to opening a hotel there today than ever before.
Are Middle East guests particularly demanding? And are there any facilities that you offer especially for guests in this region?
Our goal is always to do everything we can to meet the specific needs of a country or a culture as well as a guest. In that respect, we do have some services that are unique to the Middle East, but for the most part, our guests in the region can expect the same personalised and anticipatory service that our guests receive in Asia, Europe, South America or North America.
Over the next 10 years, Four Seasons plans to double in size. What are the core areas of your expansion plans?
We plan to expand in nearly every corner of the world ... We will focus on Asia, which is a growing market and South America. And we still have room to grow in North America, the Caribbean and Europe.
Your management contracts are famously long term. Is that a deterrent for property owners?
No, in fact, our development partners see it as a benefit. They can be assured that Four Seasons is committed to their project for the long term providing them with financial stability, consistency and quality well into the future. Also, it gives our partners confidence that while the political and economic landscape may change, Four Seasons will remain a constant.
As companies reduce travel budgets, do you think luxury hotels are in for trouble?
There’s no question that the challenges of the past few years have put a strain on the industry but people will always need to travel for business. The good news is we’ve actually seen an increase in travel budgets recently. As long as we continue to provide exceptional experiences and consistent service, we can weather any storm. In fact, we’ve come out of the past three years stronger than ever.
How do you manage to have the one of the strongest balance sheets in the business?
In general, our focus on hotel management versus hotel ownership is what has helped us build a solid financial foundation. As a management company we are able to generate significant cash flow from operations. We have a relatively small corporate infrastructure which doesn’t grow significantly as we add new hotels. This structure has helped to make our balance sheet the strongest in the industry.
Four Seasons does not discount. Has it made life more difficult when competitors think nothing of discounting up to 50 per cent?
Not at all. In fact, our decision to maintain rates has put us in the best possible position coming out of the downturn. It has enabled us to maintain the service that our guests have come to expect. Despite our higher rates, our occupancy numbers actually stayed in line with industry trends. We’ve maintained or enhanced market share in nearly every market we operate. So rate integrity is an important part of our overall strategy.
To sum up, after 40 years in the business, what are the lessons you have learnt, both as a person and as a professional?
What I’ve learned is about people. People who are trusted achieve remarkable results. I’ve also learned that talented, qualified people can be found in every country. Everywhere in the world where we operate – whether it’s Thailand, New York or Paris – we have found people with the drive and ability to do an outstanding job.
Something else I’ve learned is that achieving great success is a team effort, where each and every person makes a significant contribution. In the context of a hotel, that means the front-line staff are every bit as important as the management. When everyone pulls together, it’s remarkable what we can accomplish.