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Mon 3 Mar 2008 04:00 AM

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Luxury, relaxed

Laura Collacott speaks to Simon Cooper, President of Ritz-Carlton, to find out how the luxury hotel brand continues to evolve and remain relevant in the modern marketplace.

Laura Collacott speaks to Simon Cooper, President of Ritz-Carlton, to find out how the luxury hotel brand continues to evolve and remain relevant in the modern marketplace.

You may think that the Ritz-Carlton Hotel Company is somewhat older than the 25 year anniversary that it will be celebrating next year. "Most people think that we are at least 100 years old because of Cesar Ritz, or Ritz Paris," agrees Simon Cooper, the company's president.

I don't think that it's necessarily the ease of travel that has broadened the customer base. I think it's the acquisition of wealth in different countries.

It is not, but the association with the established Ritz hotels in London and Paris and is not something that the company are attempting to shake off.

After all, it smacks of an established luxury brand that many try to emulate: Cesar Ritz was said to be 'the king of hoteliers and hotelier to the kings'. In spite of its relative youth, the name Ritz-Carlton is synonymous with luxury hotels, running a chain of 70 hotels worldwide.

This reputation is maintained largely through maintaining an exceptionally high level of customer care, carried out through careful training and constant appraisal of each hotel.

"Measurement is critical because you don't know where your weak spots are if you're not measuring," says Cooper. "[Analysing the results], you begin to pick up themes where you may be weak, where a hotel has issues."

"Then you get to work on the issues; are there fundamental product issues or is it just that we took our eye off the ball?" These may only be small matters like the valet parking system or the bathroom products used but the devil is in the detail, as they say.

The 'attention to detail' approach that Cooper professes to in terms of hotel management could also be used to describe his personal management techniques. When questioned about his preferred style, he joked: "I described it as bothersome recently. One of my executives laughed and said ‘I didn't know you knew you were bothersome!'

"But I like to have a detailed picture of what is going on. Fortunately, we have a tremendous culture in Ritz-Carlton and that culture is what really underpins our success globally."

Service is the crux of Ritz-Carlton's success and one that it has sought to capitalise on more recently with the establishment of a 'Leadership Centre'.

Companies in a number of sectors from banking to healthcare, to retail are calling on Ritz-Carlton expertise to help them keep their customers satisfied. The company is using its rich service resource to teach others how to stay a step ahead of the competition and develop staff and customer loyalty.

The hotels have traditionally had a more formal take on luxury service with dining dress codes, exclusive internal facilities and a strict service policy. Referring to staff members as the 'ladies and gentlemen' attests to such formality.

This was installed to cater for the mature, wealthy folk that patronised the hotels but Cooper points to a shift in the demographics of the clientele.

"You've got a younger luxury traveller staying in our hotels than 25 years ago," he says. Disputing my suggestion that this may because of the increased accessibility of travel these days, he puts his own theory forward for the change: "I don't think that it's necessarily the ease of travel that has broadened the customer base."

"I think it is the acquisition of wealth in different countries. And the acquisition of wealth at a younger age."

An alteration in clientele has forced a reconsideration of the image that the chain wants to project to its customers.

In the continual process of brand adjustment, Ritz-Carlton is making an effort to react to the increasingly global marketplace to ensure that its hotels remain as appealing as ever.

The difficulty lies in making this transition without alienating existing clients. The result is a change in design strategy and an evolution of the service philosophy.

Hotel design has swung from a classic look to a more casual, sophisticated elegance. Lighter, more neutral tones are used and highlighted by location-specific accessories in a design format that Ritz-Carlton call 'consistently inconsistent'.

"Every hotel is designed individually," Cooper elaborates.

"We don't have any hotels where we share architects or designers. Guests today are looking for individual experiences and they expect us to create a hotel in Istanbul that reflects the location. But it's got to be subtle."
Service standards have evolved concurrently. The strict set of service standards have now been relaxed to allow staff to interact with customers as they see fit.

Professionalism is maintained at all times but if guests want a more relaxed service approach, their needs are catered for. This all hinges on the change of client: "The whole thing was about being relevant to customers. Our customers are changing and we need to adjust our service delivery to that change."

Guests today are looking for individual experiences and they expect us to create a hotel in Istanbul that reflects the location. But it’s got to be subtle.

As well as the typical luxury traveller now being younger, they are also drawn from an increasing variety of countries: "Picture the lobby of the early hotels in China 25 years ago; the people in the lobby of the Sheraton Great Wall would have been Westerners. You go to the lobby of a hotel in China today, it's domestic travellers as well."

The development of markets globally is the reason Cooper cites for this change. "There are a number of emerging countries, China, India, Russia, and Brazil for example, which are strong and growing quickly," he continues.

"Large numbers of people are acquiring wealth in those economies." This subsequently means that people in the BRIC (Brazil, Russia, India and China) economies and beyond are able and willing to travel more, further and in style.

It is not just about having money, it is knowing what to do with it.

The speed and accessibility of communications nowadays means that it is very easy for the new breed of traveller to discover how to spend their newfound riches. Cooper explains; "Very simply, I think 25 years ago a fashion on the runway in Paris probably took two or three years to get around the world whereas now it's instantaneous. What's on the runway in Paris is going to be on your cell phone in Beijing."

Consequently, Ritz-Carlton has had to rethink the marketing policy.

The easiest way to reach the target audience before was through the media of dedicated travel magazines and the like. Matters are not longer that simple and executives have to find innovative ways of enticing business.

The most recent campaign involves several short films, or as one journalist put it 'very long commercials'. "We've gone from full colour-page pictures of the hotel in Conde Nast and Travel and Leisure to being in titles like Wallpaper and making short movies," says Cooper.

In these films Ritz-Carlton aims to alleviate the stuffy impression that some may have of the brand by staging more light-hearted, frivolous guest scenarios while emphasising the high service standard.

Bruce Himelstein, senior vice president of sales and marketing for Ritz-Carlton notes that, "The sophisticated customer of today turns to the internet for travel information and inspiration."

"We believe these short films will both entertain and encourage viewers to choose an experiential package at a Ritz-Carlton." Given the dizzying expansion plans that Cooper presides over, generating business is more important than ever.

From 2007-2009, the intention is to grow the global portfolio by almost a third, adding 30 hotels. A cluster of these hotels will be in China where the luxury market is booming in the wake of the economic explosion.

Choosing where to locate is a simply a matter of keeping an eye on the sector and a dedicated team is charged with the delicate task of selecting which locations to enter and when.

Being aware of where your target audience wants to go is a simple but effective way to keep momentum up in a period of expansion.

One of the flagship hotels in this expansionary phase, and one which Cooper is particularly excited about, is the Hong Kong project. "We've got Kowloon under construction," he tells me. "It's going to be the tallest hotel in the world: 118 storeys."

"Check in is at 106 and the hotel goes from 106 to 118. It will be quite something!" Arresting designs in prominent locations is the recipe that Ritz-Carlton is following in this push."

"The new Tokyo hotel is a fine example of this philosophy; housed in the capital's tallest tower in the middle of the business and entertainment district, guests have the whole city at their feet.

"It's a great example of what we do really well," affirms Cooper.
There is not infinite capacity in the luxury hotel market though. Is there a risk that the market will become oversaturated? Cooper does not think so: "There are always pockets [of saturation] but most often when that happens, the market corrects over time. Some markets from time to time are going to be ‘oversupplied' but that will adjust."

He may be assured of the safety of the market but a squeeze is undoubtedly going on: The 50_magazine.xml 52_magazine.xml 563_magazine.xml 56_magazine.xml 59_magazine.xml 5_magazine.xml hotel sector grows more and more crowded. Research published by PriceWaterhouseCoopers found that between 2005 and October 2007 18 luxury hotel brands were launched which, by time frame, is the highest number of introductions for 25 years.

As an American chain with a significant home-market, Cooper recognises the implications of forthcoming recession.

Commenting on the overall health of the hotel industry he says, "You've got to expect that maybe over the next year or two the US isn't going to be as robust as it would be and that's an important market for us. But these things are cyclical. All our hotels are going to be around 50 years from now."

Confidence in his trade is arguably an important facet of his success but it has not stopped Cooper taking precautions elsewhere. "We're trying to diversify much more," he reveals.

"There are a couple of reasons - one is that it's good for business, the second is that we don't want to rely long-term just on hotels. It becomes difficult to achieve the 15% growth that a public company is supposed to year in, year out if you're only doing hotels."

To this end, the group is beginning to expand its trade to include residences and other travel-based luxury products: "We want to continue to grow horizontally. By 2011, we'll have about 33% of our income coming from non-hotel areas."

As well as working on developments symbiotic to existing trade, the group is continuing its efforts to create sustainability in its current locations. Interestingly, Ritz-Carlton has had a tangible corporate social responsibility policy in place since well before it became 'fashionable'.

It is enshrined in the original mission statement of 1983 that the company, "will be known as positive, supportive members of their community and will be sensitive to the environment."

A good relationship with the wider community is seen as critical to the success of each hotel so each one is required to create a specific strategy.

This can mean both making sure that the facilities can be reasonably used by the local population and reaching out to the community in special projects. "It's a critical element of your success because you want to be the place that the people are."

"You want to be the place that Muscovites go to eat and to play," says Cooper of the former. Restaurants and bars open to non-residents, popular clubs, availability of spa facilities etc. mean that residents will be more inclined to treat the hotel as a hub, creating a feeling of inclusion for guests and locals alike.

As far as outreach projects go, the Community Footprints initiative organises and supports a plethora of projects in the areas of hunger and poverty relief, education and development and environmental conservation.

"You don't want to have this oasis where you are ignoring the social environment," says Cooper.

"You want to be embraced in the community, both for being emblematic of the success of the community and the people but just as importantly for what you are doing for the community. In some places we operate that's not easy."

By working on these two fronts to foster a good relationship with the neighbourhood, the hotels do all that they can to ensure that guests will get a truly authentic experience of the destination and positive interactions with the people that they meet.

Illustrating this point, Cooper says, "There's nothing worse than getting in a taxi at the airport, saying that you want to go to X hotel and the driver saying, 'are you sure?'

In a way, by looking after the community Ritz-Carlton attempts form a huge ambassadorial service for itself, where trade is generated by the good reputation that goes before it.

A combination of aggressive expansion, diligent consolidation and an awareness of the operating environment will surely bring the group continued successes. Spearheaded by Cooper, the group looks set to prosper.

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