Four Seasons Hotels And Resorts - Essay Example

Four Seasons Hotels And Resorts Four Seasons Hotels, Inc. is a Canadian-based international luxury hotel chain consisting of hotels and resorts aimedat the higher end of the accommodation market. It is considered among the best luxury hotel chains worldwide.Four Seasons is a publicly traded corporation headquartered in Toronto, Canada.It has grown from single hotel to a prestigious company with 74 luxury hotels and resort properties several of which include a residential component. These properties operate under the Four Seasons brand name in principal cities and resort destinations in 31 countries in North America, The Caribbean, Europe, Australia, Asia, The Middle East and South America. The business-oriented hotels (as opposed to the resort properties) are typically mediumsize, located in major business and commercial centers, either in downtown areas or in suburbs with significant business infrastructures. Founded in 1960 by Chairman and Chief Executive Officer, Isadore Sharp, Four Seasons traces it roots to an idea that proved to be revolutionary: what the global business traveler wanted most was personalised service, available round-the-clock. Frequent international travel, now so commonplace, was an emerging trend in the 1960's and '70s. It set the stage for a new kind of luxury hotel experience. Sharp had the opportunity to capitalize on this trend when the company opened its third hotel, and its first in Europe, the Inn on the Park, now known as Four Seasons Hotel London. In a market dominated by classic, traditional hotels, the new arrival was an instant success. Key features included spacious rooms equipped for both business and relaxation, as well as a friendly staff to make every guest wish a reality. The success of London made Sharp realize that what was really lacking in the marketplace - were hotels of exceptional quality, with exceptional service levels. He decided to focus his efforts on this and thus set the future course for the company. Most of all, however, the employees of Four Seasons set the experience apart. As the company expanded, Four Seasons became the first in North America to introduce now-standard items such as bath amenities, terry-cloth robes, hairdryers and multiple, 2-line telephones in the guest room and bath. Four Seasons was also the first to provide European-style concierge services and room service 24/7, offer innovative choices in cuisine, taking the hotel dining experience to a new level ,and to make all of these services available at every hotel it operated. Mission To provide Exceptional service in unparalleled settings Goal The main goal is to be an undisputed global leader in luxury lodging. Objectives Provide economic returns that would help sustain the portfolio. Enhance the value of Four Seasons reputation and brand name globally. Generate premium shareholder returns over the long term. Values: Consistently superior quality, exclusivity, a measure of enhanced social status, and a measure of the ability of a brand to make a customer "feel special". The Four Seasons' firmly believes in the golden rule, "treat others, how you would like to be treated". Portfolio The 1990's brought a new avenue of growth, the opening of the company's first destination resort, Four Seasons Resort Maui at Wailea, extending the company's unique approach to the leisure experience. An early pioneer of spa as an integral part of the luxury hotel experience, Four Seasons first introduced a full-service spa in 1986, at Four Seasons Resort and Club Dallas at Las Colinas. By 2001, every Four Seasons resort included a distinctive spa experience and every property worldwide offered on-site spa services. Four Seasons launched a new extension of its brand in 1997. Today, Four Seasons Residential Properties to provide full or fractional ownership of city and vacation homes in some of the most desirable locations around the world. Four Seasons Private Residences in San Francisco, Nevis - soon in Miami and Punta Mita - offer fully deeded hotel ownership of condominiums or resort homes, combined with the personalised service of a Four Seasons hotel. Four Seasons Residence Clubs, a fractional ownership product, offer fully appointed vacation villas and a stress-free, maintenance-free alternative to vacation home ownership. This enables owners to bask in the services and amenities of Four Seasons - whether it is in-villa dining, spa treatments, or concierge services - while enjoying the spaciousness and comfort, more typical of a private home. Strategies Four Seasons Hotels is an example of a hybrid type of service (Kotler,1994) wherein the offer consists of equal parts of goods and services. It has a benefit positioning which is well indicated in the punchline "Beyond Compare." Brand Extension Strategy (Schiffman, Kanuk, 2000) is followed. The group uses the existing brand name to launch a service in new category. The well-known brand name of Four Seasons gives the new product instant recognition. Service excellence is the hallmark of the Four Seasons experience, from Bangkok and London to Tokyo and New York. While each hotel and resort in company's portfolio is unique to its setting and the particular needs of its guests, it is the consistency of service that keeps guests coming back repeatedly. (Kuhn, 2004) The company's strong development pipeline and expanded portfolio of hotels has solidified an already strong brand loyalty. Four Seasons was the first to introduce the notion of the modern 24-hour luxury hotel, and now the corporate traveller finds that experience available in more of the world's leading business centres than ever before. Four Seasons was the first hotel company to offer amenities that are considered regular standards today. From shampoo and bathrobes to 24-hour concierge service and complimentary shoeshines, Four Seasons led the way to making life on the road easy for the well-travelled business executive. Gourmet to go, a service that enables executives to have a meal of their choice ready and waiting for them in the time that it takes to get from the airport to their hotel room door. The corporate traveller looks for the kind of support network they have at home that allows them to focus on their work and the comforts of their own homes. Arriving at a hotel where employees recognize the particular needs of guests takes a great deal of stress out of any business trip. With the number of hotels increasing day by day, it is now easier than ever before to "cross pollinate" the Four Seasons culture, as employees move from one hotel to another, teaching by example and by their enthusiastic commitment to the company's standards. In fact, the tenure of general managers in this organisation is 15 years, a standout in an industry known for attrition. Product Differentiation One means of gaining a competitive advantage is by a differentiation strategy (Thompson and Strickland, 1998) to provide a better product that buyers believe is worth the premium price .Since good quality service generally costs more; Four Seasons has incorporated product differentiation in its general corporate strategy in order to command a higher price. The impeccable, warm service illustrates the strategic use of product differentiation to gain a competitive advantage in the hospitality market. Brand loyalty Developing brand loyalty (Schiffman, Kanuk, 2000) is another strategic move to strengthen competitive advantage. Four Seasons made substantial efforts to gain a favourable reputation and image with buyers' .Smooth, courteous service keeps the professionals loyal to the brand. These people are ready to pay a premium for a courteous service. Four Seasons signature elements are quality, sophistication, style, and luxury. These elements come through in everything they do. Their commitment to personalized guest service, along with the truly unique amenity programs that they offer, continues to win over more and more chain-loyal guests each year. Four Seasons acquires and then renovates old hotels; as a result of this unique strategy , they not only save on valuable investment resources, but also start the business sooner, thus earning revenues on their investment at an earlier date.This strategy is called Mongoose Strategy (Abramovitch, 1995). It has successfully used this strategy to effectively buy properties that fit their plan. Implementation of this strategy has allowed the group to financially benefit from their acquisitions by paying a dramatically low price for a piece of property that is worth much more. The Group looks for a specific type of hotel that fits its plans and then goes after that hotel or building, and renovates it as per their style. Establishing strategy-supportive policies (Stacey,1993) . Each resort offers an imaginative (and complimentary!) Kids For All Seasons programme. The pools are always appreciated - as are the separate children's pools and play areas at our resorts. From urban chic to resort escape, each spa at Four Seasons finds ways to give a rejuvenating "Four Seasons In One" treatment. Four Seasons Hotels and Resorts has introduced the "Call Us Home" program for guests who stay more than 14 days at select Four Seasons or Regent properties. The program includes a range of services, such as personalized menus and computer hookups, that cater to the needs and preferences of each guest to create a home-away-from-home ambience for the duration of their visit.. (Elliott, 2000) Four Seasons fitness centres gives unlimited access to state-of-the-art cardio- and weight-training equipment - plus lounge facilities with steam room, sauna, beverages and towels. Four Seasons cooking schools lets one share the culinary secrets - from inspired entertaining to regional cooking and spa cuisine - to enhance any repertoire Menus are a result of chefs' imaginative artwork, with the freshness and regional flavour of local ingredients. Innovative and varied tasty cuisine is a part of the heavenly experience. Expert communications support, with in-room convenience from speakerphones to data ports. In every corner of the globe, Four Seasons is designed to be a 24-hour office and home away from home, with comprehensive personal and business services. Meeting suites and private dining rooms offer confidential settings. Four Seasons Residence Clubs allows one to schedule time to reconnect with family, friends, each other. Available on a shared ownership basis, the collection of Four Seasons Residence Clubs combines the best of both worlds: the quality of a Four Seasons experience with the convenience of a fully equipped second home. One can own Estate home or villa; townhouse or condominium with a lifetime of Four Seasons service, around the clock, with whatever you need. One of the most commonly used examples of gaining strategic advantage through the application of internet is the online reservation facility. The company has one of the best websites through which the customer can book their rooms online. External Analysis Customer Analysis The first step of external analysis involves identifying the organization's customer segments and each segment's motivations and unmet needs. In the case of Four Seasons,the segmentation scheme is on the basis of social class (Schiffman, Kanuk,2000) . It focusses on the upper class customers who require all the amenities and believe in a price quality relationship. Unlike wannabe luxury consumers, the rich are very savvy and unforgiving with respect to value for money. This group serves as a reference group to others. The needs of the guests could vary from comfort, fun relaxation or adventure. The hotel has arrangements to fulfill all these. Competitor Analysis The main competitors for Kimpton are: Ritz Carlton,Westin , Sunstone Hotel Corporation Wyndham Worldwide Corporation etc. The competition is based on brand name recognition, location, and quality of service and accomodation. Competitive factors also include relationships with hotel owners and investors , marketing support , reservation system capacity and ability to make investments that may be necessary to obtain management agreements. Environment Analysis Using PESTEL Technique Political The hotel operates in 31 countries around the world. In some of the countries, the related assets and revenues may be exposed to political and other risks associated with foreign investment.(www.fourseasons.com/investor_information) Economic: The hotel has management agreements with respect to hotels throughout the world and thus earns revenue and makes investment in many different currencies. So there is a risk involved due to the foreign currency fluctuations. When the economy is down, travel, especially business travel, also turns down. .(www.fourseasons.com/investor_information) Social Four Seasons operates in countries which are culturally very different. Some practices which are common in one society are not permissible in other. Even the workforce has to be manged differently due to their diverse backgrounds. Thus the cultural environment affects strategic judgments in many contexts. Technological: An important trend in luxury hotels is business suites that include a host of amenities, such as a living room/den with a library of books and VCR movies, Internet access, a well-stocked refrigerator. There is a constant pressure on the organisation to keep pace with the various gadgets available to fulfill the demands of its tech savvy guests. Environmental As the corporate world becomes more environment conscious, there is a strong pressure on the organisations to become environment friendly. The corporates now believe in developing properties that add value to the community.In one of its hotels in Boston, the kitchen did not include a system that eliminated cooking odors, smoke, and grease emissions before being released into the atmosphere. Then Boston Properties chose United Mr Specialists' Model PSG Smog-Hog system as a method to eliminate smoke and thus create an environment friendly image. (Engineered Systems,2005) Legal Four Seasons has a number of trademarks, service marks and logos . A considerable sum is spent on the protection of these trademarks. In case of any infringement , there could be a loss to the company. .(www.fourseasons.com/investor information) Thus there is a considerable risk in the environment in which the hotel operates. Internal Analysis Internal analysis aims to provide a detailed understanding of strategically important aspects of the organization. Internal analysis consists of: Performance Analysis Profitability and sales provide an evaluation of past strategies and an indication of the current market viability of a product line.. Sales is another performance measure that can reflect changes in the customer base that have long term implications. In the hotel industry generally RevPAV (Revenue per available room) is calculated. In the year 2006, RevPAR increased 11.8% at majority of Four Seasons core hotels as compared to 2005. Gross Operating revenues of Four Seasons worldwide hotels increased 10.5% for the full year. Net earning through shares was$ 50.3 million as compared to net loss of $28.2 Million in 2005.(www.fourseasons.com/investor_information) Other, non-financial performance measures often provide better measures of long-term business health: - Customer satisfaction/brand loyalty - This has been achieved through the warm and impeccable service which is valued by the customer and makes them come to the hotel again. Four Seasons has claimed first position on many prestigious lists; recent honours include top ranking in the J.D. Powers Guest Satisfaction Survey; AAA Five Diamond awards (receiving more than other any hotel company for the 20th consecutive year), and the Zagat Survey 2001 (ranked as "Top Hotel Chain in the U.S." and Top Hotel Chain" internationally). (Business Wire ,2001) - Employee capability and performance - The company nurtures personal growth within the workplace through mentoring and various HR policies. The company-wide level of dedication adds a unique dimension to the workplace, helping to create exciting opportunities for employees. The overall health and well being of employees helps to create a productive, motivated and loyal team. (Andrea,2003). FSH attributed its success to its organizational culture, which did, and continues to embody, the dedication to great service and luxury hospitality. Part of this culture is to recognize that the employees are the key to success, and that in following the "Golden Rule", do unto others, as you would have them do unto you, an atmosphere of fairness, respect, and consistency is established. The success of their philosophy on how to treat employees was, and continues to be, evident in their consistent run on Fortune Magazine's list of the "Top 100 Best Companies to Work For". FSH is also committed to treating employees well, through ongoing training, recognition systems, and a predisposition towards internal promotions.Four Seasons promotes internally when possible, and that is believed to be a major reason that the company has some of the industry's lowest turnover rates--25 percent for all Four Seasons employees, 19 percent for managers.(www.naukri.com) Key Success Factors of FourSeasons - Customer Segmentation - Global Presence - Brand Management - Low-cost purchase land and buildings - Customer Service - Effective Utilization of technology - Brand Loyalty - Employee training and development - Strategic alliances - Conveniences in making reservations Future Plans The Group has entered into an acquisition agreement with Cascade Investment and Kingdom Hotels International owned by Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud and Isadore Sharp ; to take Four Seasons in private hands. (www.marketwatch.com) Walt Disney World Resort President Meg Crofton announced two new projects as part of an expansion plan for the resort in Central Florida: a new 900-acre luxury resort anchored by Four Seasons Hotels and Resorts, and a 450-acre retail, dining and lodging district on the western edge of the resort. ( www.intercot.com) Suggestions The Group should start to expand out in to the Asian continent in a big way. This successful hotel would do well in major cities where people strive to look for such soothing and impeccable service. Its further expansion into other parts of the country will not impact is strategy at all. The Group can maintain its strategy that it was founded on while still expanding in to other parts of the country. Crafting a strategy is a market-driven activity, while implementing this strategy is an operations-driven activity revolving around the management of people and business processes. Although the attririon rate is quite low at Four Seasons,some more employee friendly policies should be formulated so that there is minimum attrition. Losing a manager after a decade of working can be a big loss to the organisation Conclusion The story of Four Seasons Hotels and Resorts, which opened its first hotel in 1961, is a tale of continuous innovation, remarkable expansion, and a single-minded dedication to the highest of standards. The Canadian-based company has, over the past forty years, transformed the hospitality industry by combining friendliness and efficiency with the finest traditions of international hotel keeping. In the process, Four Seasons has re-defined luxury for the modern traveller.The Group has set high standards for itself and due to the relentless contribution of its dedicated workforce, it has been successful in not only creating strategies but implementing it too.With some ambitious plans , this company would further position itself in some of the world's most desirable locations.But it is not the time to be complacent as there is still a considerable room to improve its knowledge about customers further and put some more efforts into seizing the opportunity of continuous quality improvement and thus achieve business excellence in the competitive hospitality sector. Bibliography Kotler P, Marketing Management, 8th edition, Prentice -Hall,1994 Thompson, Arthur A. Jr., Strickland, III, A.J. Crafting and Implementing Strategy, Text and Readings, 10th edition. Irwin McGraw-Hill, 1998. Stacey, R. D. 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