Sunday, April 21, 2013

Luxury hotels - The Economist

Four Seasons seeks a new boss and a faster growth strategy

Some Four Seasons staff are nervous. They fear that rapid expansion may come at the expense of the top-notch service and buildings for which Mr Sharp was known. One of the challenges for any luxury-hotel brand is that the hotels carrying its name will typically be owned by someone else. To grow, it needs to persuade investors to put their money at risk, building a new hotel or enlarging a pre-existing one. This can create a tension between the property owners and the brand owners. In tough times, hotel owners may struggle to keep up the payments they have agreed to make to the brand companies, forcing them to cut staff. This can affect service, which may damage the brand.