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MANDARIN ORIENTAL Group continues its strategic expansion, aiming to create legendary hotels
Review 14 June 2010
Christoph Mares, Director of Operations for Europe, Middle East and Africa speaks to BUSINESS OF LUXURY about MANDARIN ORIENTAL's strategic expansion in the region and explains how the luxury hotel chain maintains its leading position worldwide.
How would you define luxury hospitality nowadays ? With rating systems varying from country to country and hotels claiming upper ratings of six and seven stars, which are in your view, the defining aspects of a true luxury hotel ?
There is no recognised global ranking system in place by which consumers can judge one hotel’s rating against another from one country to the next. Whilst there are ranking systems available in certain countries which can act as useful pointers – the Michelin Guide and the American Automobile Association’s Star Ranking being two examples - they are not international and so it is not always possible to state where five-star luxury marks out one hotel as better than the rest. At Mandarin Oriental, rather than focusing on star-ratings, we are in the business of creating legendary hotels.
We believe that the way to achieve special status is not via standardisation of luxurious products and services, but through the right combination of tradition, quality and innovation over a period of time. A legendary hotel must always be a reflection of the best things in the city or country where it is located. Without a strong sense of place, it will never become truly great. The best luxury hotels in the world are renowned for providing exceptional services and for the sincerity of the people who deliver those services. We believe that luxury hotels should offer opportunities to work, relax and enjoy in impeccable yet warm, hospitable surroundings with a discreet, charming and highly personal service that allows guests to concentrate on experiencing the best that life has to offer.
The financial crisis has undoubtedly had an impact on luxury hospitality with consumers shunning excess design and lavish expenditure and preferring products and services that offer quality, refinement and understatement.
With the exception of few locations, the majority of Mandarin Oriental hotels worldwide top the charts of review publications both in print and online. For instance, how important are the reviews of your hotels on the leading online site TripAdvisor?
Mandarin Oriental is exceptionally proud of the many awards that the hotels win year on year. Such recognition in leading publication’s awards and listings is important as it demonstrates to our existing and potential customers that Mandarin Oriental is at the top of its field in the luxury hotel market. Our e-commerce teams keep a close eye on sites such as TripAdvisor to see what our guests are saying about us and I’m delighted to say that more often than not the comments are positive. These sites are tremendously influential in today’s digital world and that is why we continue to make significant investments in this area of our business.
What makes Mandarin Oriental stand out as a luxury hospitality product ? How have you managed to maintain a consistent strategy?
Our hotels are a combination of 21st century luxury with Oriental charm and the culture of our Group lies in our legendary service qualities. Our hotels and resorts are encouraged to develop their own personality with a distinctive sense of place, thereby reflecting the best of their city or country.
Mandarin Oriental offers creative hotel design and architecture and as a group, we have built an enviable reputation in delivering award winning restaurants that compete in major cities with stand-alone concepts.
We have established a name for our holistic spas and wellness centres and we are leading the field of providing customer centric technology and highly sophisticated in-house entertainment systems. Our reputation for outstanding services to our guests is non-negotiable.
Your strategic expansion internationally has been including major cities, most of them capital cities. Is this purely determined by the higher financial performance ?
We are constantly reviewing opportunities for new hotels in our target markets and these can include both city centres and resorts. Indeed in the past year we have opened a resort hotel in Sanya on the Chinese island of Hainan and two city centre hotels in Barcelona and Las Vegas. Our objective for each new hotel is to select the right project, in the right location, with the right sponsors in order to ensure each project is consistent with our luxury brand and reputation for excellence.
How important is for a hotel group such as Mandarin Oriental to own fully or partially the properties it manages? To which extent Mandarin Oriental owns the newly opened properties and what is the long term strategy in this respect?
We currently have equity in 15 hotels in operation and under development. Being both an owner and manager of hotels is important for us. Ownership ensures control of our brand and builds credibility with third party hotel developers. Our owned properties are unique investments with potential long-term capital appreciation.
Going forward the majority of our growth will come from management contracts. These require limited or no capital investment and provide an additional source of income from branding and management fees. What is the method you apply to measure the performance of your managers? How do you motivate them? We have robust processes and systems in place to measure the performance of our managers including guest satisfaction scores, employee satisfaction scores and financial performance data. In terms of motivation we have annual bonus schemes in place and we also have a strong reward and recognition culture running throughout the company. How do you evaluate the readiness of a market for opening a Mandarin Oriental ? To become a truly global player, our strategy has always been to develop legendary hotels in key cities and resort destinations around the world, that are able to support a luxury Mandarin Oriental property. Which are the best and worst performing Mandarin Oriental locations in Europe? (one of each – and why) We do not comment on the performance of the individual properties, Mandarin Oriental hotels are positioned within the top 3-4 performing luxury hotels in every market with rates being dictated by market conditions. When will the Paris Mandarin Oriental be open and what will be its unique features in competing with the other top luxury hotels. Mandarin Oriental, Paris will be positioned as one of the city’s palace hotels and is planned to open in 2011. The hotel will have 138 rooms including 45 suites and all the rooms are a minimum of 45 sq metres. The architecture of the hotel is such that it will wrap around a spectacular inner courtyard, for outdoor dining throughout the year. Guests will also be able to enjoy a pampering spa with an indoor swimming pool and fully equipped fitness centre. One of your upcoming openings is a resort hotel in Marrakech, a destination already crowded with five star properties. What will be the competitive advantage of the Mandarin Oriental? Mandarin Oriental Jnan Rahma, Marrakech has a spectacular location at the foot of the Atlas mountains offering breathtaking views over the snowcapped peaks. Its spacious 161 rooms and suites are lavishly and exquisitely designed blending Moroccan and Oriental influences and each room has its own private terrace with daybeds. The property has a main ‘Palace’ building and four riads, or self-contained buildings of 16 to 20 guestrooms arranged around an interior courtyard. An eclectic selection of local and international cuisines will be provided by a variety of restaurants and bars, while the expansive 2000 sq.m Spa will feature 15 private treatment rooms, relaxation areas and water and heat therapies. After Marrakech, which are your expansion plans in Africa ? Do you envisage opportunities in leisure more than corporate ? We have a continual pipeline of development opportunities around the world, but have nothing to announce in this region at present. Why you chose top open your first hotel in the Middle East in Abu Dhabi and not in Dubai ? Which are the cities in the Middle East with the highest potential for Mandarin Oriental? Which are you targetting for future openings The announcement of Mandarin Oriental, Abu Dhabi was the Group’s first foray into the Middle East, providing the Group with an exceptional opportunity to extend its brand to one of the Arabian Gulf’s foremost business and leisure destinations. The Middle East is an important destination and we are actively pursuing a number of opportunities in this region, as we are elsewhere in the world. We have nothing specific to announce at this time. Abu Dhabi is one of the regions most important cities. Mandarin Oriental, Abu Dhabi which is currently scheduled to open in 2013, is located on Saadiyat Island, which is set to become one of the world’s foremost leisure and cultural destinations. Saadiyat Island will comprise 19 kilometres of white sandy beaches, two championship golf courses and a marina. The island will also be home to the world’s largest concentration of cultural institutions, including the, Guggenheim Abu Dhabi, the Louvre Abu Dhabi and the Zayed National Museum, all of which will also be open in 2013.
Going forward the majority of our growth will come from management contracts. These require limited or no capital investment and provide an additional source of income from branding and management fees. What is the method you apply to measure the performance of your managers? How do you motivate them? We have robust processes and systems in place to measure the performance of our managers including guest satisfaction scores, employee satisfaction scores and financial performance data. In terms of motivation we have annual bonus schemes in place and we also have a strong reward and recognition culture running throughout the company. How do you evaluate the readiness of a market for opening a Mandarin Oriental ? To become a truly global player, our strategy has always been to develop legendary hotels in key cities and resort destinations around the world, that are able to support a luxury Mandarin Oriental property. Which are the best and worst performing Mandarin Oriental locations in Europe? (one of each – and why) We do not comment on the performance of the individual properties, Mandarin Oriental hotels are positioned within the top 3-4 performing luxury hotels in every market with rates being dictated by market conditions. When will the Paris Mandarin Oriental be open and what will be its unique features in competing with the other top luxury hotels. Mandarin Oriental, Paris will be positioned as one of the city’s palace hotels and is planned to open in 2011. The hotel will have 138 rooms including 45 suites and all the rooms are a minimum of 45 sq metres. The architecture of the hotel is such that it will wrap around a spectacular inner courtyard, for outdoor dining throughout the year. Guests will also be able to enjoy a pampering spa with an indoor swimming pool and fully equipped fitness centre. One of your upcoming openings is a resort hotel in Marrakech, a destination already crowded with five star properties. What will be the competitive advantage of the Mandarin Oriental? Mandarin Oriental Jnan Rahma, Marrakech has a spectacular location at the foot of the Atlas mountains offering breathtaking views over the snowcapped peaks. Its spacious 161 rooms and suites are lavishly and exquisitely designed blending Moroccan and Oriental influences and each room has its own private terrace with daybeds. The property has a main ‘Palace’ building and four riads, or self-contained buildings of 16 to 20 guestrooms arranged around an interior courtyard. An eclectic selection of local and international cuisines will be provided by a variety of restaurants and bars, while the expansive 2000 sq.m Spa will feature 15 private treatment rooms, relaxation areas and water and heat therapies. After Marrakech, which are your expansion plans in Africa ? Do you envisage opportunities in leisure more than corporate ? We have a continual pipeline of development opportunities around the world, but have nothing to announce in this region at present. Why you chose top open your first hotel in the Middle East in Abu Dhabi and not in Dubai ? Which are the cities in the Middle East with the highest potential for Mandarin Oriental? Which are you targetting for future openings The announcement of Mandarin Oriental, Abu Dhabi was the Group’s first foray into the Middle East, providing the Group with an exceptional opportunity to extend its brand to one of the Arabian Gulf’s foremost business and leisure destinations. The Middle East is an important destination and we are actively pursuing a number of opportunities in this region, as we are elsewhere in the world. We have nothing specific to announce at this time. Abu Dhabi is one of the regions most important cities. Mandarin Oriental, Abu Dhabi which is currently scheduled to open in 2013, is located on Saadiyat Island, which is set to become one of the world’s foremost leisure and cultural destinations. Saadiyat Island will comprise 19 kilometres of white sandy beaches, two championship golf courses and a marina. The island will also be home to the world’s largest concentration of cultural institutions, including the, Guggenheim Abu Dhabi, the Louvre Abu Dhabi and the Zayed National Museum, all of which will also be open in 2013.