The Fairmont Interview

23rd Mar 2005

By Anna Gouldman

Chris Cahill, President & Chief Operating Officer, Fairmont Hotels & Resorts speaks exclusively to Breaking Travel News about where the Fairmont brand is heading in 2005.

Chris was appointed President & COO of Canadian Pacific Hotels on January 1, 1998 and President & COO for Fairmont Hotels & Resorts on October 1, 2001. He is a member of the Board of Directors of Delta Hotels.  As well, he is Vice-Chairman of the Canadian Tourism Commission.BTN: You reported positive financial results in January for 2004 with increased revenues. How can you improve on that for 2005?

CC: 2004 was primarily a recovery year. While we had very good Canadian portfolio year over year, we still feel that there is a lot of room for improvement before we get back to previous highs in terms of occupancy performance. At the same time our US international portfolio continues to enjoy the strong economic drivers in the US and in Mexico and for the last five years we have spent over $450 million on our properties and we are expecting to see a return on those investments, especially as the travel industry continues to improve.

BTN: Can you comment on your growth strategy? How does the addition of the Fairmont Heritage Place fit into that strategy?

CC: We are also looking at growing the properties under management as well as expanding the portfolio and to that end we have entered into a joint venture in Europe to acquire properties in major markets in Europe. We continue to look for opportunities to grow in North America, a market where we haven’t yet reached saturation point. We are only in 14 of the top 25 markets. We would like another resort in Florida and Atlanta is an important market.

The Fairmont Heritage Place is essential for us to grow. Almost all luxury resorts and hotels being developed today require some form of residential in order to make the investment more attractive from an investment perspective and we felt that if we didn’t have expertise and skill in that area that it would limit our ability to grow. We started with a property where we already owned the land and had hotels in Acapulco. We have developed this to gain some experience and we have been very pleased with our success there.


BTN: Can you explain some of thinking behind the Fairmont brand promise ‘places in the heart’?

CC: Our brand is based on three brand dimensions. One is a sense of unrivalled presence. Whether that is by location, by heritage, or by their community involvement are unrivalled. The second component is the authentically local hotels. Our properties always reflect either the architecture of the buildings they are in or the location. We aim to capture the essence of the destination for our customers so that when people stay with us they should get to experience part of the destination that they are in. The third component of our brand dimension is the engaging service. Our people are not programmed. They don’t speak up and they don’t speak down to our guests. They speak to our guests.

When you put those three brand dimensions together it tends to create experiences for our guests where they take something away. Drawing on places of the heart, it is as much what people take away as what they experience when they are at the location.

BTN: What features would define a Fairmont property for a potential acquisition?

CC: Our business model has been and continues to be that we acquire, re-position and then stabilise the performance of the hotel. Then we look to sell it to a strategic partner. We take the funds from that and grow the company.

When considering ‘what is a great Fairmont’, we look for those three brand dimensions that I mentioned. We tend to look for a hotel that has a sense of presence in the community. We don’t really worry too much about size, but look for a good balance between meeting space and guest rooms. We consider recreational facilities and the type of location and the needs of the guest. The marketplace will dictate a lot of what we look for and then we match it into the rest of our portfolio and into our brand dimensions. There is no real cookie-cutter formula.

BTN: What makes a great hotel room and what should every hotel room have?

CC: Guest rooms are really quite simple in many respects. There are a lot of basic things that go into ensuring that you have adequate guestroom for your consumer. A very good bed is essential - that is primarily the reason that people are there! Whether guests are on a leisure or business trip, the room has to enable people to conduct business and maintain their lifestyle.

Technology also comes into play today with add-ons such as high-speed Internet access. To me a proper work desk and good lighting has always been fundamental. People’s lifestyles change and you have to adapt to that and find a way of enabling people to conduct their lives while they are travelling away from home.

BTN: What are the three most important factors in creating an extraordinary guest experience?

CC: Good service and consistency with the brand promise so that as customers move from hotel to hotel, they realise that what they are getting is consistent across the portfolio. But that doesn’t mean sameness; the product itself is unique. The second factor is individualisation. For example the Fairmont’s Presidents Club enables us to customise our guests’ experience according to their needs rather than assuming that everybody is the same. The third factor is recognition; the fact that you know who each guest is, and what they want allows you to provide a level of individual recognition.

BTN: What are your goals for Fairmont in the short term and in the long term?

CC: We are looking to grow the portfolio and extend its distribution. The second goal is to establish the brand more prominently in the minds of our target audience by being more consistent with the standard of service we provide. And the third goal is to continue to enhance the overall standards so we can drive increased performance.

BTN: Which regions are you planning to expand to next? Can you reveal any new property openings?

CC: Our focus is North America, Europe and the Middle East. We have an office in Dubai. We have a hotel in Dubai that has already opened. Abu Dhabi is going under construction very soon. We have a hotel that will open in Palm Island, another one in Cairo. We have recently opened the Savoy and the Monaco, which are relatively new. We are under construction in Mexico and we are looking at a number of different opportunities in North America and will continue to add to the portfolio in 2005.

BTN: has won numerous awards. Can you comment on the importance of online strategy for the hotel?

CC: Marketing and exposure are the greatest benefits of online product. We get a significant number of unique hits on our site every year, which I believe is linked to growing the Fairmont brand in terms of its recognition, profile and consumer confidence in the brand.

The effective part is the ability for people to conduct transactions and from that end we have been able to see dramatic growth year over year and a shifting of growth to, which is consistent with what every other hotel is seeing today. The booking levels compared to overall global reservation is about 10%.

BTN: Fairmont Hotels and Resorts Green partnership programme -
Why is the environment important to Fairmont Hotels and Resorts?

CC: I think it fits with the culture of the company and the face values. We began the environmentally friendly program about 15 years ago. It’s something that’s very important to our colleagues in the hotel. They support it and want to improve upon the environmental applications within the property. It saves money, the environment and is something that our colleagues are very passionate about.
It is a very cultural thing.

BTN: Can you give me a financial outlook for the travel industry in 2005?

CC: There are very strong demand drivers in North America and I think we will continue to see good growth in US in particular. There is not a lot of new supply coming into the marketplace, which could dampen performance. I think international demand will continue to improve - especially European and Asian business into North America because of the falling US dollar. But generally speaking North America remains very strong. As for Europe, London remains a pretty strong market while Europe is patchy. I would say as long as the economy in Europe remains steady and eventually improves, that is bound to be a good sign for tourism generally.




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