Four Seasons Keen to Keep its Place in Market

Four Seasons Hotels & Resorts opened a research-and-development studio in late October to give its managers and designers opportunities to experience the proverbial dry run, but its expansion push is absolutely real.

The Toronto-based luxury hotel operator, which oversees more than 100 properties globally, is poised to finish 2016 with nine new properties, the most it has opened in a single year in its 55-year history.

In addition, it has about 50 more hotels in its development pipeline. Since September, the company has debuted hotels in lower Manhattan; Kyoto, Japan; and Anguilla, West Indies.

Four Seasons and its development partners are investing in a luxury-accommodations sector whose US room rate average of some $280 a night is more than double the overall average, and whose RevPAR increase of 20% over the past three years is about even with the US accommodations industry, according to hospitality-research firm STR.

The privately held company, which does not release revenue or occupancy figures, insists that its approach to growth remains unchanged, noting in a statement that its focus continues to be "on destinations of importance to luxury travellers, key outbound markets where establishing a local presence helps build brand awareness and markets where Four Seasons already operates successfully and wants to increase our representation”.

Founded by Isadore Sharp with a 125-room Toronto motel in 1961, the company grew to US$2.9 billion in revenue in 2006 before being taken private the following year by a partnership that included Microsoft chairman Bill Gates, Kingdom Holding Company (the investment vehicle of Saudi Arabia's Prince Alwaleed Bin Talal) and Sharp.

Now, the company, which last year debuted its branded private-jet excursions, appears to be attempting to ensure that it either maintains or increases its presence within the luxury sector, which in 2016 was marked by consolidation.

This summer, Paris-based AccorHotels acquired FHRI Hotels & Resorts from Qatar Investment Authority and Kingdom Holding Company for US$840 million, bringing AccorHotels' Sofitel luxury brand together with FHRI's Fairmont and Raffles brands.

And in September, Marriott International completed its US$13 billion acquisition of Starwood Hotels & Resorts, making siblings of the JW Marriott, Ritz-Carlton, Edition, W, St. Regis and Luxury Collection brands.

With the acquisition, Marriott almost doubled its luxury portfolio, to 283 properties worldwide.

"Four Seasons has a stellar reputation for meeting demands from travellers that expect the finest of luxury, and they've had it for a long period of time," said Mark Woodworth, senior managing director at CBRE Hotels.

"But when a traveller seeking out that luxury lodging experience goes to a market that doesn't have a Four Seasons, there's a greater chance that they're going to run into something under the Marriott umbrella, so that puts the [potential] Four Seasons guest at risk."

Against that background, the company is pushing beyond its North American base while boosting its research and development investments.

Footnote: The Nam Hai, the luxury resort in Central Vietnam, has reopened under the management of Four Seasons. The newly-rebranded Four Seasons Resort The Nam Hai, Hoi An, marks the luxury hotel group’s entry into Vietnam.

The Nam Hai was previously managed by GHM and is a member of the Leading Hotels of the World.