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Now more than ever guests have a choice

Simon Cooper
COO, The Ritz-Carlton Hotel Company, LLC

—So, what’s the upside of the downturn?
— I think it’s an ideal time to look at how to do things differently. I also think the larger brands will benefit as owners look at ways of securing their property. In the Middle East, for example, prices are going down 40 per cent compared to last year, so not only can you get things you couldn’t get last year, but they are also 40 per cent cheaper.

—And the downside?
— We are all facing the same challenges, the critical thing is how we handle them and we are focused on filling our rooms and keeping our ladies and gentlemen employed. You may only open three restaurants for dinner rather than five or not open one at lunch. However, despite our lower occupancies and amended business models we saw improved [guest satisfaction] Gallup scores in the first three months of this year. Everyone realises that, more than ever, guests have a choice and our employees are working harder than ever. Just because someone is paying less for a vacation this year it doesn’t mean their expectations change.

— Is luxury now more accessible, even cheaper?
— I don’t buy that. There are plenty of countries such as China that is growing at six per cent and has a very high level of savings. Our best performing hotel is Sanya in China. India is another economy where people are creating wealth, want to travel and are increasingly sophisticated about what brands to buy.

— But the concept of luxury is different for different nationalities?
— It would be presumptuous for us to think that we could educate the market. Experiences you look for in Tokyo are different to Beijing, but our properties in China, for instance, are as well equipped and beautifully finished as any in North America. In my opinion, Chinese people are more brand conscious than five years ago and have acquired the knowledge and willingness to experience a top class luxury resort. If, as a hotelier, you execute well, you are well rewarded. And there are differences between European and American luxury consumers.
Yes, Americans want a luxury hotel from the start, while certain European nations will stay at a three-star hotel and then go to a three-star Michelin restaurant for dinner.

— So how do you target luxury guests in such a difficult market now?
— I don’t think there has ever been a better time to enjoy a luxury experience. Our most recent campaign focuses on the likelihood you may only be taking one vacation this year, so make it a distinct experience with Ritz-Carlton.

— By doing what?
— We believe a vacation should relieve stress, not cause it. Hence the introduction of packages to provide more than just your money’s worth – your memory’s worth. “Peace of Mind” has a selection of offerings that are not just about spending less, but experiencing more.

— How will Ritz-Carlton evolve?
— Our philosophy is to develop the brand horizontally. We take our existing base and look at those areas where we can add value. About 5,000 people have invested around US$3 million dollars in a Ritz-Carlton Residence or a Ritz-Carlton Club.

— But what about your new Ritz-Carlton Reserve brand that debuts in September, surely that reveals a new upscale version of Ritz-Carlton?
— As a company we have honed the art of hospitality to levels of exceptional excellence and at a Ritz-Carlton Reserve this service philosophy has been carefully crafted to help individual guests unlock the secrets of individual places. It is a philosophy that successfully reveals the personality of each Ritz-Carlton Reserve to create unforgettable experiences that we believe will be received well by our existing Club Level and Suite customers.

— What does the future hold for the industry as a whole?
— The recovery will be slow and not without further impact. I think we will see more significant impact; some flag changes. You have to absorb new supply in certain areas. We will all be challenged to manage our margins.

— But you must have experienced these types of challenges before?
— Yes, but it is different this time. SARs and 9/11 saw temporary impact, this time it is sustained. You can’t have falling numbers for six months, then another six months, then another without having a significant impact.

— So what’s your priority?
— For me, the priority is keeping the brand’s integrity, making sure you deliver on your promise to your guests and to communicate as much as you can with your employees.

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Final Word

April 2009

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Wheels in motion

This year, the Bahrain Grand Prix promises to be bigger and better than ever before. But with the Kingdom hingeing its hopes on a month-long extravaganza for a three-day event, will it be able to live up to the hype? Scott Gybson investigates

As you make the trip from the business-driven Bahraini capital of Manama to the sand-rich site of Sakhir, you get the feeling that, were it any month other than April, you would be lost; destined for an undesired doze in the desert.

The road out to Sakhir – home of the Bahrain International Circuit – is a non-descript 30-kilometre drive: boring, bland and the antithesis of what Formula One stands for. There is little in terms of scenery and the journey will undoubtedly have you checking your map. But only for 11 months of the year.

For, in April, all roads lead to Sakhir – and the ones that don’t host lampposts peppered with F1 posters and paraphernalia.

The Gulf Air Bahrain Grand Prix takes place this month between April 24-26 and the event’s marketing team is once again moving at full speed. The Kingdom appreciates the tourism opportunities that hosting a race can represent and everybody is keen for their slice of the petroleum-fuelled pie.

Hotels, restaurants and bars, nightclubs, beach clubs and golf clubs: they all offer something special during Bahrain’s busiest week.

The five-star Ritz-Carlton, Bahrain Hotel and Spa is located in the centre of the capital and has, in previous years, hosted drivers and other members of the race teams. This year, to mark the sixth edition of the Grand Prix, the hotel is offering villa packages that include an afternoon off-roading in a Hummer, transportation to and from the circuit, corporate passes with access to the pit-lanes and, most interestingly, an “F1-themed in-room breakfast.”

When asked whether the F1-themed menu would feature such dishes as ‘Pan-fried Paddock and Chips’, Claudia Hardt, a director at the Ritz-Carlton, replied: “Our culinary teams are working on exciting food presentations to be presented in all outlets over the Grand Prix weekend, but the creations will be finalised closer to the F1 weekend.”

Likewise Bahrain’s national airline, Gulf Air, is title sponsor of the sporting spectacle and, in the run up to the grand prix, is offering a combined package deal, including flights and a ticket for the weekend’s action. The carrier expects a more diversified influx of foreigners this year after the Bahraini government recently expanded the number of countries that can obtain a visa on arrival. Residents of 10 countries, including Brazil (host of last year’s final grand prix), South Korea (set to host its inaugural Korean Grand Prix in 2010) and India (the Subcontinent’s first Grand Prix is taking place in 2011), can now arrive in the Kingdom and pass through its customs hassle-free.

Martin Whitaker, the CEO of the Bahrain International Circuit, says having the government acknowledge the importance of the grand prix in terms of tourism is essential to the continued growth of the Middle East as a hub for motorsports.

“Tourism is, I think it’s fair to say, not top of Bahrain’s list of priorities,” says Whitaker. “But they have just recently announced a new Ministry of Culture and Information so they are focused on promoting the Kingdom.

“The most important thing, for us, is that the race has generated awareness and changed people’s perceptions of the Kingdom and what it has to offer; it has changed people’s perceptions of the Middle East.”

It makes perfect sense for the country to court car enthusiasts. According to the most recent report, the race is estimated to bring into the country an additional US$540 million each year through direct and indirect investment in tourism.

Talal Al Zain, CEO of Mumtalakat, the Bahraini government’s investment arm and owner of the BIC, Gulf Air and a 30 per cent share in The McLaren Group – parent company of the race team featuring F1 World Champion Lewis Hamilton – says the Grand Prix increases revenue across several industries.

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