SIMON COOPER, president & COO The Ritz Carlton Hotel Company, caught up with SHALU CHANDRAN
What are the expectations for 2009?
We expect that the year will continue to be slow with no real turn-around anywhere. It will be challenging for most major markets like UK and the US. It’s a period of slow recovery. For Ritz Carlton as a company, all of our developments will go ahead as planned. We have signed new agreements. New deals are happening in this part of the world too, but it could be slower and most of these hotels will be open only by 2013-14. One has to assume that the credit will begin to flow a little better towards the end of the year.
In January, the Ritz-Carlton took over Cairo’s old Nile Hilton, which it plans to spend two years refurbishing before opening in late 2011. It will also open its second Dubai hotel up at the end of the year at Dubai International Financial Centre. More hotels will open in the next few years in Abu Dhabi, Toronto, Los Angeles and Mexico City.
Many travellers are now choosing budget brands over high end luxury. How does Ritz maintain its share in the market?
The buzz word for a business traveller might be to be as thrifty as possible but a family taking a vacation isn’t worth the compromise. People who go away on vacation as a family, as a couple, as an individual, they are not expecting anything less than a Ritz Carlton today than last year and they will not compromise on that.
Most of the luxury hotels are pricing attractively anyway because there is a lot of availability in the market, and I think people are taking advantage of that. It’s a really good time to be a consumer.
What kind of value added services does Ritz offer?
There is no doubt about it; we are adding value, making it as attractive as possible. In the US we just launched our summer programme. The whole idea is to offer our guests ‘peace of mind’, offering more value bundled in one price.
That sort of a package will appeal to people as value oriented. We have resort credit too – so if you buy a package you will have a $100 credit for the spa etc, without trying to impact rate.
The profile of our guests also has to remain constant. Our luxury guests are still booking into our hotels, but their spending habits have changed - they are looking for better value rates. There is a lot of competition, a lot of availability out there. If a guest can access Ritz Carlton at the price that meets their needs, they will buy it.
What are the new initiatives undertaken by the company?
Internally, one of the things we have done a lot is our footprints programmes like Getback Getaways and Meaningful Meetings.
Meaningful Meetings is where you can have a meeting and part of it is to partake in a socially responsible exercise.
Getback Getaways is where hotel guests can access our many environmental programmes where guests and employees do things together. There is less interest from this market but we are encouraging the movement that way.
What about cost cutting across the group?
You have to be very smart about costs. There are cut backs in terms of people because you have got to adjust with volume. Cut backs are also prevalent in our daily operations. It is crucial to look at various options without affecting the guest satisfaction. Guests are there for their Ritz Carlton experience and we need to give it to them.
What are your top tips to survive 2009?
2009 is going to be a rough year. We serve three constituencies – our guests, our employees and our owners. We need to manage them as well as we can through these challenging times. Every decision we make is in someway a trade off offering.
Our employees are important for us and we need to come out on the other side with as many of them intact as possible. We have had to reduce some of our staff, because this recovery is going to take some time. And then there are the owners – the people who own our hotels. We will maintain our integrity, our support, our engagement from them.
We believe the Middle East & North Africa will recover relatively quickly. In fact the effects of the downturn in the regions were not felt until the later part of 2008. Obviously Dubai is the most impacted, but markets like Egypt, Qatar and Bahrain, which are more business hubs, aren’t doing too badly. When Dubai’s major source markets like the UK and Germany bounce back we will see the effect in Dubai as well.