Four Seasons Hotels and Resorts

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Four Seasons Hotels Inc.
Type Private
Industry Hospitality, tourism
Founded 1961
Headquarters Toronto, Ontario Canada
Key people Isadore Sharp,
(Founder & Chairman)
J. Allen Smith,
(President & CEO)
Christopher W. Hart,
(President, Hotel Operations-Asia/Pacific)
Christopher Norton,
(President, Hotel Operations-Europe/Middle East/Africa)
Sarah Cohen,
(Secretary, Executive Vice President & General Counsel)
John Davison,
(Treasurer, Executive Vice President & Chief Financial Officer)
Susan Helstab,
(Executive Vice President, Marketing)
Chris Hunsberger,
(Executive Vice President, Product & Innovation)
Nick Mutton,
(Executive Vice President, Human Resources & Administration)
Scott Woroch,
(Executive Vice President, Development)
Revenue Increase US$ 3.7 billion (2012)
Owner(s) Cascade Investment
Kingdom Holding Company
Triples Holding
Employees 37,263 (2013)[1]
Website www.fourseasons.com

Four Seasons Hotels, Inc. is a Canadian-based international luxury, five-star hotel management company. Travel + Leisure magazine and Zagat Survey rank the hotel chain's 92 properties among the top luxury hotels worldwide.[2][3] 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.[4] 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, and is lauded for having one of the lowest turnover rates in the industry.[5][6]

Business model[edit]

Four Seasons does not own most of its properties; it operates them on behalf of real estate owners and developers. The contracts between Four Seasons and property owners typically permits the company to participate in the design of the property and run it with nearly total control over every aspect of the operation.[7]

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.[7] Four Seasons also produces a complimentary magazine for guests that is 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.

History[edit]

Four Seasons Hotel in Florence, in the historic Palazzo della Gherardesca
Four Seasons Hotel (left) and Marina Tower (right) in Beirut Central District

Canadian 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. As the only large parcel of land he could buy was in a disreputable area, he designed the hotel as an oasis for business travelers; the Four Seasons Motor Hotel opened in 1961. Sharp built more hotels, but upscale luxury did not become part of the brand until the company expanded to London. When a developer approached Four Seasons about building a hotel in London, Sharp argued that the hotel should compete with the city's old-world, elite hotels, such as Claridge's and The Connaught, which he felt treated customers based on their social class. The hotel opened in 1970.[7]

Four Seasons Hotel and Tower in Miami, Florida

In 1974, cost overruns at a Vancouver property nearly led the company into bankruptcy. As a result, the company began shifting to its current, management-only business model and eliminate costs associated with buying land and buildings and instead begin earning profits once the hotel opens. The company went public in 1986.[7] In the 1990s, Four Seasons and Ritz-Carlton began direct competition, with Ritz-Carlton emphasizing a uniform look while Four Seasons emphasized local architecture and styles with uniform service; in the end Four Seasons gained market share.[7]

The first full-service spa was introduced in 1986 at Four Seasons Resort and Club Dallas at Las Colinas and today, nearly all Four Seasons hotels and resorts have spa facilities, and the remainder offer spa services. In recent years, restaurants at Four Seasons hotels and resorts have been recognized by Zagat and Michelin. The latter has awarded at total of 12 stars to six of the company's restaurants, including Hong Kong (two restaurants), Macau, Paris, Florence and Los Angeles.

Recent economic downturns have affected the company. When the September 11 attacks caused the collapse of the travel industry, Four Seasons refused to cut room prices in order to preserve the perceived value of the brand, which caused tension with property owners who were losing money.[7] The company recovered and, in 2007, it agreed to a buyout by Microsoft Chairman Bill Gates and Prince Al-Waleed bin Talal of Saudi Arabia for $3.8 billion.[8] The pair owns 95 percent of the company, in equal shares, Sharp owns the rest.[7]

Challenges returned again during the financial crisis of 2007–2010. The company made its first corporate layoffs in its history, cutting 10% of its Toronto workforce. In April 2010, after a year-long dispute with Broadreach Capital Partners and Maritz, Wolff & Co., owners of the Aviara resort near San Diego, an arbitration panel ruled that while both parties contributed to the demise of the business relationship, "Four Seasons didn't violate its management agreement, as Broadreach had alleged, according to a joint statement released by the companies. The panel ordered that Broadreach pay Four Seasons to terminate the contract."[9] The resort is no longer a Four Seasons.

Four Seasons continues to add more hotels and resorts to its portfolio, notably in China. It opened a new hotel in Hangzhou in 2010 and Guangzhou, Beijing and a second property in Shanghai in 2012. It will also open new hotels in India to add to its one hotel in Mumbai.[10] In 2013, it opened its first hotel in Russia in the Lobanov-Rostovsky Residence in St. Petersburg, and announced an opening in Moscow in 2014.[11] In October 2012, Four Seasons opened a new Toronto property in Yorkville. At 259 rooms this "marked the renewal of an iconic Canadian brand in its hometown. It also heralded the entry of celebrity chef Daniel Boulud."[12] This property also hosted the sale of its vaunted penthouse to entrepreneur Robert Österlund, the founder of Xacti, LLC and Inbox.com, for a Canadian record price of over $36M. This penthouse was designed by Isadore Sharp's personal designer, William Mockler, of Toronto's Drawing Room Architect, Inc.

Philanthropy[edit]

Interior of the Four Seasons Hotel & Resort in Macau. The lead consultant was the architecture firm Aeadas [13]
Four Seasons Hotels in Amman

The company and its hotels and resorts have long been involved in philanthropic programs, with a focus on Supporting Sustainability [4], Building Communities [5] and Advancing Cancer Research [6]. Notably, Four Seasons was one of the founders of the Terry Fox Run in 1981, which has since grown into the world's largest single day cancer fundraiser, with events around the world every September. To date, the Terry Fox Run has raised close to half a billion dollars.

In 2011 Four Seasons celebrated its 50th Anniversary and announced through their livingvalues.fourseasons.com website that they had decided to launch their 10 Million Trees campaign in which they committed to plant 10 million trees around the world over the next few years.

On June 19, 2002 the Canadian Opera Company announced Four Seasons Hotels as the naming donor for the COC's new Opera House, also home to the National Ballet of Canada, the Four Seasons Centre for the Performing Arts, located in Toronto.

References[edit]

  1. ^ http://money.cnn.com/magazines/fortune/best-companies/2014/snapshots/95.html?iid=BC14_fl_list
  2. ^ World's Best 2006, Travel+Leisure.com
  3. ^ Zagat Survey Rates, Hotel-online.com
  4. ^ The Best Hotels & Resorts in the World : Condé Nast Traveler. Concierge.com (2012-10-16). Retrieved on 2013-07-26.
  5. ^ http://money.cnn.com/magazines/fortune/best-companies/2014/snapshots/91.html?iid=BC14_fl_list
  6. ^ 100 Best Companies to Work For, fortune.com
  7. ^ a b c d e f g David Segal, Pillow Fights at the Four Seasons, The New York Times, June 28, 2009, Accessed June 30, 2009.
  8. ^ Staley, Oliver. Four Seasons Hotels agrees to bid from Gates and Alwaleed. Bloomberg News, February 13, 2007.
  9. ^ [1] Hyatt Takes Over Management of Aviara Resort From Four Seasons, online.wsj.com, April 20, 2010.
  10. ^ [2] Luxury Four Seasons Hotel to Expand in China, May 18, 2010.
  11. ^ [3]. press.fourseasons.com.
  12. ^ "New five-star hotels raise the bar in Toronto, Vancouver". Globe and Mail. Retrieved February 12, 2013. 
  13. ^ "Project page: Venetian Macau Parcel 2 - Fourseas Hotel & Podium MEP Works". byme.com.hk. 

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