PAUL KERR, GLOBAL CEO OF SMALL LUXURY HOTELS OF THE WORLD(tm), REVEALS THE SECRETS TO THE BRAND’S SUCCESS AND EXPLAINS WHY NOW IS THE PERFECT TIME FOR SMALL INDEPENDENT HOTELS TO JOIN.
The Small Luxury Hotels of the World(tm) (SLH) brand is an unrivalled collection of some of the world’s finest small independent hotels. Comprising almost 500 hotels in more than 70 countries, the diversity of the individual hotels, and the experiences that they offer, is exceptional. From cutting-edge design hotels to iconic lodges, city centre sanctuaries to working farms and sheep stations, historic country houses to idyllic beach resorts, SLH is internationally renowned for its commitment to a single standard of excellence across its whole portfolio.
HM spoke to Global CEO of SLH, Paul Kerr, to get the low-down on the latest developments and to find out how the economic downturn has affected business.
HM: What is the latest news from SLH?
Paul Kerr: The SLH brand continues to go from strength to strength. Each year we achieve a net growth of about 10 per cent in terms of the number of hotels in our portfolio. Contrary to what you would expect in an economic downturn, we have received an unprecedented increase in the number of enquiries from independent, luxury hotels wanting to be part of the SLH brand. SLH has welcomed 40 hotels in the first half of 2009 – on top of the 66 hotels at the end of last year. We believe that part of this is due to the fact that hotels look towards a brand like SLH to provide them with a safe haven when conditions are challenging. It is during downturns like this that the economies of scale and return on investment offered by a brand like SLH become critical to the success of small hotels.
We pride ourselves on the diversity and geographic reach of our portfolio and we make a concerted effort to ensure that we have different hotels to meet the varying needs of our customers. As part of our development strategy, SLH continues to identify hidden gems in destinations where we are yet to have a presence. As such, the first half of this year has seen a number of notable additions to the brand. The newest property to join the brand in this region is Taunovo Bay Resort & Spa – the brand’s only hotel in Fiji, which is nestled on a two-mile stretch of Viti Levu’s most stunning white sand beaches. We also welcomed our first property in Japan, Hoshinoya Karuizawa and China, India and Vietnam have also been areas of growth for us.
Although we are keen to grow, SLH places enormous emphasis on ensuring that the highest standards of excellence are consistently delivered across the entire brand. The credibility of the brand depends on it. Every hotel applying to become part of SLH must undergo a rigorous inspection process. We also have a carefully monitored ‘mystery guest’ programme with a team of inspectors around the world. The fact that only five percent of the hotels that apply to join are successful demonstrates the high standards SLH demands.
HM: What sets SLH – and the hotels in its portfolio – apart?
PK: Individuality is one of our core values and is central to the continued success of the brand – we celebrate the individuality of each and every hotel. It’s a win-win situation as our hotels can maintain their independent ownership whilst aligning their hotel with one of the world’s top luxury hotel brands. Our brand positioning matches exactly what luxury consumers want these days – individuality, memorable experiences and as sense of self-identity – consumers do not want cookie-cutter hotels. The average size of hotels is 50 bedrooms so owners of small, independent hotels can rest assured that they are never a small fish in a big pond.
HM: How has the economic downturn affected business?
PK: Over the past 12 months we have seen that, despite the global recession, travel has continued to be an important part of people’s lives – perhaps becoming even more so as people tried to escape the doom and gloom of the downturn. The luxury end of the market has not been immune to the effects of the economic crisis but it is more resilient. Luxury travel is not something our clientele will ever compromise on. Many of our guests are cash rich and time poor so this means holidays are even more important and are seen as a necessity rather than a discretionary purchase. Our corporate guests are also loyal to the brand as they know they can rely on our hotels to provide consistent levels of personalised service and comfort. Our hotels offer a ‘home away from home’ which is very attractive for frequent travellers. Although travel has been down across the board, the feedback from our hotels is that they are beginning to see the ‘green shoots’ of recovery and our figures for some key markets reflect this so we are expecting an upturn before the end of the year.
Throughout the economic downturn we have continued to look for ways to add value for our hotels and our guests.
As a luxury brand we are not about cost cutting – we are about adding value for our guests through memorable experiences. We are continuing to roll out initiatives such as ‘Country Houses by SLH’, ‘Thailand by SLH’ – and our new range of unforgettable experiences, ‘Gourmet by Small Luxury Hotels of the World’ which offers a wealth of tantalising delights from private tutorials with Michelin-starred chefs to truffle hunting in Umbria to a Maori food trail or a private wine tasting at a family-run winery. We are currently working on our ‘Beach Resorts by SLH’ programme which will feature a number of properties in this region including Kims Beach Hideaway in Towoon Bay, north of Sydney, Pacific Resort Aitutaki in the Cook Islands on and our new member – Taunovo Bay Resort & Spa. Because every one of our hotels is different we ensure that they are included in at least one marketing programme such as ‘Gourmet’, ‘Spa’ or ‘Country Retreats’ which are all targeted at different market segments. At property level our properties continue to offer authentic and truly unforgettable, ‘money can’t buy’ experiences such as the ‘Station Muster Experience’ at Wharekauhau Country Estate in New Zealand. As well as traditional marketing channels, we are always looking ahead and, as a brand, we are committed to innovation. We are now focusing on creating a dialogue and engaging our customers and building loyalty through social media marketing.
As a mutual organisation, we are also continually looking for ways to add value for our hotels. One of the ways we have been doing this is through our investment in technology – both in terms of communicating with our hotels and guests and helping with revenue management. We recently launched our intranet – myslh.comand a dedicated travel agents’ website www.slh.com/travelagents. We offer our hotels a web booking engine which can be used on their individual website. We have a ‘one stop’ distribution solution and our reservation platform can handle all GDS, voice, online and third part website distribution. Our GDS code, LX for LuXury, is recognised by the travel trade across the world. In addition to this state-of-theart reservation system hotels have access to a global network of dedicated Account Managers, sales, PR and marketing support. Our global directory promotes our hotels to a worldwide audience with 330,000 copies distributed to qualified travel agents, The Club of SLH Members, customers, media and every SLH property in the world. A copy sits in every bedroom of every SLH hotel! We have multi-lingual reservation agents covering 18 countries including China, Russia, UK and the USA offering toll-free hotel information and bookings. Annually over USD$100m in net room revenue is driven through our reservation system at an average net room rate of nearly USD$400.
However, being part of the SLH brand is not just about driving bookings through our channels – it is about offering instant recognition and quality assurance to help hotel owners and management to position their own hotel in the market and to gain exposure which will help drive direct bookings.”
Industry recognition continues to match the brand’s growth and success. On top of a number of international awards for its website, www.slh.com, SLH was named ‘Brand Management Company of the Year’ for the third consecutive year at the 2008 HM Awards for Hotel & Accommodation Excellence in Australia. Most recently, SLH was awarded top honours for the third year running in the New York-based Luxury Institute’s annual Luxury Brand Status Index survey, when it was voted number one luxury hotel brand by wealthy consumers beating off 21 other luxury hotel brands, including Ritz Carlton and Peninsula.
We asked a number of representatives from SLH properties across the region to give us their views on the benefits of belonging to a brand such as SLH – and what advice they would give to hoteliers deciding on how to spend their marketing budgets over the next 12 months…
Hotels interested in becoming part of the Small Luxury Hotels of the World brand can contact Alison Roberts-Brown, Area Director – Asia Pacific, on +61 (0)2 9468 7105 or by emailing alison.robertsbrown@slh.com for more information.