Marriott’s purchase of Starwood and AccorHotels’ continued appetite for dealmaking highlight the potential for mergers and acquisitions in the hotel sector but one company won’t be changing hands anytime soon.
J. Allen Smith, CEO of Four Seasons Hotels and Resorts said that although the brand would likely be attractive to buyers, it was off the the table.
“I don’t think there’s any doubt that Four Seasons would be a target if it was available – it’s not available,” he said at the Skift Global Forum in New York City on Friday.
Bill Gates and Saudi businessman Prince al-Waleed bought Four Seasons for $3.8 billion back in 2007 and have sufficiently deep pockets to make Four Seasons a potential buyer but Smith, who will leave the company later this year, said any deals would have to be carefully thought through.
“We’re obviously a unique single brand focused exclusively on luxury,” he said. “We’ve remained very true to that and for the time being I expect we will continue to do.”
Smith said buying another company was “not out of the realm of possibility” but that the company would have to it was “nothing that dilutes the perception of our primary brand.”
Four Seasons has been around since 1960 and currently has 110 hotels and resorts, and 39 residential properties in major city centers and resort destinations in 46 countries.
The residential side of the business might be less well known but it is crucial for the hotel business, Smith said.
“Residential is absolutely central to our business strategy. When I arrived at Four Seasons I would describe it as…it was almost as if they treated it as a hobby,” he said.
Smith said that many hotel projects would not get built but for the economics of scale of the residential properties.
Luxury Travel’s Identity Crisis
Changing consumer behavior has given luxury travel something of an identity crisis: do today’s nigh-end travelers really want the same thing as they did 10, 20 or even 30 years ago. This puts a luxury hotel company like Four Seasons in something of a bind.
For Smith, the solution is to push ideas such as “authenticity, “”localism,” and “quality.”
“I think what you’ve found is that there is this commoditization of luxury, in many respects there’s [an] intense need to invest in personalization.”
Smith said the company had seen plenty of success with products such as its Four Seasons Jet, which have a certain amount of flexibility built in.
“It’s a life experience they will never forget,” he said.