How major emerging markets are redefining luxury hospitality (Part 1)

Russia, Turkey, China,U.A.E. and select countries in South America have gradually become priority markets for the major international luxury hotel chains, presenting both opportunities and challenges, sometimes turning into real tests of their business models and their approach to owners/developers.

In a series of exclusive interviews to CPP-LUXURY.COM, Mr Robert Gaymer-Jones, CEO at Sofitel Luxury Hotels, Mr Reto Wittwer, President & CEO, Kempinski Hotels & Resorts, and Mr Christopher Norton, President EMEA at Four Seasons Hotels & Resorts address several key topics related to development and what makes each hotel brand stand out, on the long term.

Mr Robert Gaymer-Jones, CEO at Sofitel Luxury Hotels

What are the biggest challenges in entering Russia for a luxury hotel management company? Is there potential for Sofitel Hotels, in Russia?

We are working on 2 projects right now in Russia both in Moscow. The issue in Russia on entering this exciting country is the level of bureaucracy that you have to deal with in making deals happen, it is unfortunate as I believe that  it creates a slowing down of the investment in the country

You have an extensive presence throughout MEA especially GCC countries. Why you opted for Dubai in UAE and not Abu Dhabi? With the new strategy of the Dubai Government to double number of visitors, could this be more of a mass strategy which could eventually put pressure on rates for the luxury hotels?

We have properties in both Dubai and Abu Dhabi, and both cities are of key importance. Last year saw the opening of Sofitel Abu Dhabi Corniche, a 282 room contemporary hotel within walking distance of the seafront and close to the business and financial districts. In Dubai we already have Sofitel Dubai Jumeirah Beach and in July 2013 we will open Sofitel Dubai The Palm Resort & Spa.

Sofitel Dubai The Palm Resort & Spa

As the number of visitors to Dubai increases, so will the demand for luxury hotels making this is a great opportunity for us. Of course as more hotels open, there is increased competition, but we see this as a fantastic challenge. We are the only French brand in the luxury hotel sector and we have strengthened our unique positioning to make us stand out from the crowd. We offer luxury hotels with a difference, individual and non- standardised, with a discriminating blend of French elegance and the very best of local culture.

How has the development process of a new property become more challenging nowadays? Also, are any of your announced future openings larger than 200 keys?

We have several future hotel openings that are larger than 200 keys primarily in Asia and more specifically in China where there is this demand. The important issue is not to allow the size of the building to diminish any form of creative luxury service..As far challenges during the development process, it is always challenging to select the  right partnership with a shared vision. The good news is that when we first started to reposition the brand of Sofitel we found it difficult to attract the right investor but now that we have completed the repositioning this has truly created a real interest in partners willing to work with us to identify and select only the best luxury hotels in the best locations worldwide

How important is the awareness of the brand prior to entering a new market?

Awareness of the brand is critical. Sofitel Luxury Hotels as a brand represents the French tradition of elegance, savoir-faire and hospitality blended with local culture. Our guests trust the Sofitel brand and we are focused on maintaining our reputation as we rapidly increase our presence across the globe.

SPAs and fine dining seem to have become an important differentiator for developers, many of which would scale down on the SPA investment and the fine dining (i.e. Michelin starred Chef)? In the case of Sofitel, in the properties which you consider best performing, what should be the optimal balance percentage revenue between rooms and non-rooms revenues, especially SPA and F&B?

Spas and fine dining are intrinsic to the Sofitel experience. We have a clear strategy of understanding the importance of the Spa and beauty experience, it is essential to the wellbeing area of our guests. Taking the time, (which is nowadays so precious to pamper themselves)… We have partnered with Thalassa Therapy Institutes in our hotels. Which is a true Salt water Spa experience that is uniquely French in design and concept. Our So SPAs offer therapies and treatments from around the globe with the expert technicians and the latest in French cosmetology, and we have now developed our own range of spa products.

As for fine dining, we strive to offer the best experience across all our hotels, with top Chefs who understand local ingredients served both creatively and authentically. Both local and French cuisine  including culinary rituals that are the core to the heritage of our brand .‘Stars, Food and Art’ events that have been established around the world taking Michelin Star chefs and working with local artists have been a huge success, promoting both the importance of taste and visuals in a surrounding that lights up the senses. These spa and fine dining initiatives are very important to our discerning loyal clients and they also help us attract new clients who are looking for something a little more special than the standard luxury hotel.

It is difficult to say as far as revenue splits are concerned as it is different from a resort location to an urban setting. Time being the true differentiator for Spa’s therefore you will see more  spa experiences in resorts etc. Dining typically represents 30%of total revenue but can also change dramatically in a resort environment.

You have been expanding with new properties in South and Latin America as well as renovating and upgrading news ones. What do you think makes Sofitel an attractive brand in this region? What are your competitive advantages over other luxury chains which have none or very few properties.

Many clients are attracted to the properties themselves. Sofitel Legend Santa Clara Cartagena is housed in a 17th Century former convent and is now a UNESCO World Heritage Site, with numerous archaeological artefacts on view for guests. Similarly Sofitel Montevideo Casino Carrasco and Spa is located in a National Heritage building in the centre of Montevideo. I would like to think that our advantages are that we blend the local culture with French refinement with a real focus on design and an “Arte De Vivre”  lifestyle that is so uniquely Sofitel.

For many, service is the most important factor. For us it is important to offer personal service with emotion, a non-standardized experience for guests, and it is our ‘cousu main’ service that sets us apart.

You had a successful market entry in India. What are the key strategic business approaches when you deal with strong local luxury hoteliers with a large presence and long-time established awareness.

We continue with our strategy and are respectful of our competition particularly those who have been in  a country for a long time. We can learn but will not copy

Do you think local luxury hotel brands such as those of Emaar in Dubai or the new local luxury developed by Kempinski in China, would have a better understanding of the local market or would have an edge in terms of HR, operations etc?

….  We are very proud of our Human Resource training and adapting the talents of our Ambassadors (Sofitel Employees) in the local market wherever we have our hotels. We are thrilled with the amount of CV’s we receive every week from the staff of our luxury competitors wanting to be part of the Sofitel Story. I believe it is a true reflection that we are known as a great place to work and  where the Ambassadors of Sofitel enjoy the experience of serving our guests.