Constant evolution is the key to luxury sector’s growth, says LHW president Ted Teng
Leading Hotels of the World (LHW) represents more than 450 luxury, independent properties with a small, select band vying for membership each year.
TTN spoke to LHW president and chief executive officer Ted Teng about what makes a leading hotel and the challenges for the sector...
How would you define luxury? How do the Leading Hotels differ from other five-star brands?
Leading Hotels of the World began 82 years ago with the purpose to attract US travellers to the hotels and created a representative office in New York. We now have 450 members around the world which are mostly individual, luxury hotels. Many of our hotels are more famous than we are. The hotels are masterpieces and we are the museum that makes them accessible.
To my mind five-star luxury – and I believe the labels of six- and seven-star are superfluous – is the best of the segment, it can be the size of the rooms, the furniture etc, a lot of the time it is driven by the quality of the service. Luxury should always be leading the way and evolving. What’s luxury today can become simply a commodity, for example air conditioning was once a luxury, today even the lowest economy hotels have it. In the old days only the very best hotels had a concierge, today all the upscale brands have them. As luxury providers we should always be opening up new territory and starting up new services that have not been available before.
 |
The Observatory in Sydney: This Leading Hotel of the World enjoys a superb location in the Australian city’s central business district |
We also look at architecture, location and history – things that are not easy to replicate. What interests us is that our hotels are mostly independents. The chain brands are going for consistency but we are more about allowing operators to have a blank canvas, they are the artists and they are usually locals who are keen to give their properties a sense of place. That’s not to say that is the only way but it gives our guests more options.
What is the criteria to be a member of Leading Hotels and what are the benefits?
We are looking for hotels that match from a quality standpoint. We get more than 1,000 inquiries per year about membership. For most of these we can say no straight away, it’s not going to fit. We send out approximately 50 applications and accept around 25 new members, we are looking for iconic, one-of-a-kind properties. There’s also the inspection process and the board of directors makes the final decision.
We do consider location, if you already have a member in a place we have to take a critical look at new applications from that area. We do have areas where there are multiple members but if two properties are close and are offering the same level of quality then we will not be adding value to both of them so we would rather not have that type of situation.
We offer our members global recognition. Because most of them are individuals, rather than part of large brands, and are well-known in their marke-place but not worldwide, we can offer that recognition and also provide global reach to drive revenue for which there is a host of programmes. We have also started initiatives such as training programmes for management teams because they don’t have the same kind of access to this resource as the chains.
 |
Are you seeing a decline in the number of luxury properties from the Middle East region with so much focus now on the budget and mid-scale range?
The numbers compare favourably. Most of our Middle East properties are fairly new because of the levels of development. We have a reservations and sales office to cover both inbound and outbound.
The hotels in the Middle East are world-class in service and are clearly world-class in design and construction as well as in terms of the experiences they offer – for example Al Maha with its falconry and oryx, that’s the kind of welcome we want. I am very impressed with what I have seen so far and we have lots of interest in joining from the region.
What has been the biggest challenge for the luxury segment post recession?
For the last decade, the focus of this market has been on luxury. I think any destination, to be successful, needs a broad range of products to bring a diverse offering to the market place. If you look at aircraft, they are not all first and business class, for example Emirates is bringing in many economy travellers. I think the mix of products gives a good opportunity for developing our segment.
There is not a decline in the segment, though there may be fewer luxury properties built going forward as the area has spent a decade building them.
I think the problem for the industry as a whole is those who don’t take a long-term view of their business or do not have the right quality and are discounting to bring in more customers. These are not sustainable prices and the operators will find it hard to get back to normal. Some of our hotels chose not to discount but rather to put on added value, they will find it easier to get back to normal pricing because if you keep discounting, people’s perception of what’s a fair price changes.