LA Times goes behind the scenes of luxury destinations and luxury hotels, focusing on the Four Seasons. As we usually stay at a Four Seasons, we agree with the positioning of Four Seasons — they are guardians of the brand and experience.
But Four Seasons is known for maintaining high standards. The company doesn’t discount rooms, and it keeps tight control over decisions on how to run any hotels it agrees to manage. In this recessionary climate, that means less profit for Broadreach Capital Partners, which is the controlling owner of Aviara and has a contract with Four Seasons to manage it. “Four Seasons and Ritz-Carlton have spent a lifetime developing the power of their brands,” Brudney said. “Customers have the highest expectations when they go, and those customers historically have been loyal.”
Four Seasons guards that reputation by securing elaborate contracts with owners that ensure it will be able to maintain the property according to its standards.
Hotel operators such as Four Seasons, Marriott and Hilton typically receive about 3% of a hotel’s income for management fees, said industry attorney Jim Butler of Jeffer, Mangels, Butler & Marmaro. But that’s just the beginning. Operators also pay from hotel revenue all the costs of operating the hotel, including employee wages and benefits, utility bills, food and beverage costs, marketing, reservations systems and a host of other items.
Brands also dictate owners’ spending on capital improvements such as carpeting, wall coverings, televisions, furniture, linens, towels and other operating supplies and equipment. In total, about 12% to 14% of a branded hotel’s gross income is controlled by the operator, Butler said.
– from Latimes
Bloomberg has analysis and discussion with Isadore Sharp of Four Seasons Chairman & CEO.