- PHOTO: ARTHUR LEE
'I call them relationship negotiations, they're very long-term. It's not like buying a car, you're going to negotiate a deal with the owners and you're going to live with them for the rest of your career. It's like a marriage. You have to create the kind of relationship with those owners that's built on mutual respect and trust.'
- Ms Taylor on finding the right partner to go into business with
AS corporate counsel for Four Seasons Hotels and Resorts, Kathleen Taylor was instrumental in crafting deals that helped the Canadian group drive its expansion across the globe. Twenty-three years on, the "transaction kid" is doing more of the same but from a different office these days - that of president and chief executive officer.
"I call them relationship negotiations, they're very long-term. It's not like buying a car, you're going to negotiate a deal with the owners and you're going to live with them for the rest of your career. It's like a marriage. You have to create the kind of relationship with those owners that's built on mutual respect and trust," she says in an interview with BT at the Four Seasons Singapore.
Rising up the ranks over the years - she describes starting out in the group as the "No 2 in a two-person law department" - has helped hone the skills needed to head a world-renowned brand which operates in 36 countries. "(At the) time, Four Seasons was growing a lot. We weren't really there practising law, we were doing transactions to grow the company. It was all about developing new opportunities for the business," Ms Taylor adds.
She joined the group's in-house legal department in 1989 before climbing up the corporate ladder to executive vice-president of corporate planning and development in 1997, president of worldwide business operations in 1999, president and chief operating officer in 2007 and finally, chief executive in August 2010.
One of those transactions in question - and one of the most transformational deals in the group's history - was the acquisition of Regent Hotels & Resorts in 1992.
She explains: "We began scouting opportunities primarily in Asia-Pacific but also in Europe in those days. (Regent) had grown up much the same way the Four Seasons had in terms of philosophy around the guest experience but their footprint was primarily in the Asia-Pacific region whereas ours was primarily North America. So it was quite a good fit and really accelerated our presence in Asia."
Four Seasons was started by founder and chairman Isadore "Issy" Sharp who opened the first Four Seasons, a 125-room motel in downtown Toronto in 1961. Built together with his father, contractor Max Sharp, the first property aimed to deliver the personalised service that has become the bedrock of the Four Seasons culture today.
By the end of that decade, there were three hotels under Four Seasons' belt. In the 1970s and 1980s, the group branched out with hotels in North America and Europe, before making its foray into Asia in 1992 with the launch of a property in Tokyo.
Four Seasons primarily operates via management contracts, earning fees from the hotel owner for running the property, though from time to time, its partners may invite it to contribute as a minority investor.
In 1986, the hotel group went public with a listing on the Toronto Stock Exchange but it was taken private in 2007 by Mr Sharp, Bill Gates of Microsoft fame and Prince Al-Waleed bin Talal of Saudi Arabia in a deal valued at US$3.8 billion. Mr Gates and Prince Al-Waleed control 95 per cent of the group through equal-sized stakes while Mr Sharp retains a 5 per cent stake.
Today, about 40 of Four Seasons' hotels are based in the Americas, while the remaining 50 or so are evenly split between Europe/Middle East and the Asia-Pacific. In Singapore, the Four Seasons runs the Kwee family's Regent Hotel as well as the Four Seasons Singapore, which is owned by Ong Beng Seng-backed Hotel Properties Limited.
Four Seasons positions itself in the luxury sector, with properties in the 200-300 room range, though the concept may be tweaked to suit different markets and tastes. For instance, the group runs a safari lodge in Serengeti, Tanzania, and a luxury tented camp in Chiang Rai.
"If you look at our pipeline, we have about 60 projects in various stages of construction and development... all around the world. It's a vast array of projects, all designed to think about where our customers are going and where they could be going and how to make (our) capital partners' businesses successful. We see the growth coming predominantly outside of North America. South and Central America will also be a big region of growth for us," Ms Taylor says.
Among the projects in the pipeline is a 444-room luxury resort at Walt Disney World in Orlando, set to come onstream in 2014. But Asia, with the allure of emerging markets such as Myanmar and Indonesia, is also expected to play a significant role in the brand's continued march across the globe.
Last year the hotel operator launched seven hotels, three in China alone. Even as other hotel groups such as Hilton Worldwide and Marriott International head to the populous nation in droves, she reckons there is still room for more Four Seasons properties there. India is another country where the group plans to deepen its presence.
"China is a big market, very diversified. We have lots of plans, in addition to the hotels we have under management now. We also have plans for another 10 cities in China over the next five years. Ultimately, I can see many more beyond that as the country continues to grow."
As Four Seasons drafts plans to plant flags in new territories and more properties in existing ones, it does so with care, studying not just where customers are going today, but where they will go tomorrow.
"Four Seasons is well known for opening new markets. We were the first luxury brand to go to Istanbul. Today, that's one of the most explored international destinations. The two hotels we have there are two of the most successful luxury hotels in the world," she says.
Aside from finding the right partner, the group also needs to ensure the market in question has access to sufficient staff who are capable of providing the kind of experience that the Four Seasons strives to deliver - customised service at every point, from the website to the lobby to the guest room. An inability to deliver that vision would tarnish the brand name in a high-touch industry where service is the cornerstone.
"The need to attract and retain great people in this industry is going to be a constant," says Ms. Taylor. "I think that the competition for talent is going to become fiercer in the world as we go forward. Particularly in the luxury part of this business, the currency of the business really is in the emotional relationships and personal contact that staff have with guests - sometimes seen, sometimes unseen. People are a big part of what goes on in the business."
But finding and keeping talent is a challenge facing the industry worldwide. In Singapore, this is compounded by tightening foreign worker quotas and rising foreign worker levies, especially as the tourism industry continues to flourish. In the first six months of 2012, the local industry was running at a robust average occupancy of 86 per cent. Data for the second half of the year has yet to be released.
"We have just as many vacancies in our hotels in America in different situations because although you see these big numbers of unemployment, it's not market specific. You might have a high level of unemployment in a market where we don't have a hotel but a high level of skills shortage in (another) where we are operating. It's really a vexing issue for the industry everywhere. Sometimes it's driven by immigration policy in certain countries, sometimes it's driven by skill levels in other countries where there's no shortage of people but a shortage of skills," she explains.
The hotel landscape is also dynamic, constantly shifting and changing, which requires continual learning and adaptation for its people and of its products, especially as new brands and concepts come to the forefront.
With the nine-to-five work day now a distant memory, the boundaries between work and leisure continue to blur, changing the way people use hotels. For instance, restaurants and bars need to be areas where guests can both socialise and work at the same time, with sufficient Wifi coverage and the right kind of furniture. In guest rooms, amenities and entertainment systems are becoming as important as a good night's sleep.
"This is a business that is so different today than it was five, 10, 15 years ago. I venture to guess the skills set that we all need to master in the next five to 10 years are going to be more dynamic and more challenging yet again," says Ms Taylor.
Since the global financial crisis in 2008, which took a toll on both travel demand and projects under development, there has been a recovery in occupancies and revenue per available room (RevPar), an indicator of performance.
Where this year is concerned, the group is cautiously optimistic, expecting overall growth though individual markets may vary. Globalisation makes business travel necessary, while rising affluence in emerging markets, in particular, fuels the demand for travel.
"We think demand will continue to grow in 2013 over levels that we saw in 2012 but having said that, there's a lot of uncertainty that remains as a result of the macro issues. What we've also seen is, relatively speaking, not a huge amount of new supply in most of the markets that Four Seasons is operating. Ultimately, there's probably some room in many markets to grow rates further."
The usual suspects (such as China) are growing more rapidly than others, while in others (such as Europe), growth is more tepid.
But even amid the aggressive pursuit of a bigger portfolio, there is the recognition that the operator and hotel owner have to be on the same page before jumping into bed together. From conception to construction, a purpose-built hotel can take five to eight years, while its management contracts can span 60-100 years. The group, which signs 10-12 letters of intent each year, has up to 80 different capital partners across both its current portfolio as well as upcoming properties.
Not all partnerships survive the long haul, though this may also be driven by the changing needs of the individual market, so the portfolio is not just constantly renewed but also frequently reviewed to see if it needs to be rebalanced.
"The building of a Four Seasons hotel is a very, very long-term and complex undertaking. You've got to be sure when you choose a partner and a location and a destination that there is a philosophical meeting of the minds as it relates to the customer experience that we're trying to bring to life in that location. It takes a really good understanding of what Four Seasons is trying to achieve on behalf of the customers and a lot of support from the owners to make sure we can get that done."
Over the course of our 75-minute conversation, words like "trust" and "values" come up often. As when Ms Taylor, who by her account grew up in a big Catholic family in a small Canadian town, talks about being drawn to her first job as a transaction lawyer at a firm called Goodmans as she felt its values reflected her own.
"Treating other people the way you want to be treated was a thing (my family) talked about all the time. As a young person, I looked for that in other people - whether friends, or business groups or companies. Goodmans was very much a family-inspired law firm, with family values at the core. At Four Seasons, the environment was exactly the same."
The 55-year-old Canadian, who is married with three children, was in Singapore as part of a 19-day multi-city work trip. Her husband was set to join her in Beijing for a long weekend.
"It's a long way to fly for a long weekend," she acknowledges. "We sent our last one off to college - the kids keep teasing us that we have empty nest syndrome. One of them said to the other: 'Can you believe it? They're going to China for a long weekend!'"
But travel comes with the territory when one heads a group which operates over 90 hotels, says the woman who was hand-picked and groomed by Mr Sharp himself to be his successor. This, in an industry which is by and large male-dominated, where most chief executives - and general managers, for that matter - are men.
"He'd expose me to leadership opportunities and new business challenges that he thought would make me stronger, a better leader and a smarter business executive. He'd say, you've got to fly to XYZ city and meet with so-and-so. And I would think, 'By myself?' I look back now and I see that was his way of testing me, forcing me to work under situations of high stress and high stakes, sometimes on very little sleep, which is the nature of a global job. You're always flying around and expected to be ready to go whenever you arrive."
She is on the road about half the year, though travel also tends to be seasonal. (Non-travel periods usually coincide with the times of the year that most people don't want to see you, she quips). In a busy month, a work trip might take place every week, otherwise every second week. No wonder then that in her downtime, she is happiest sleeping in her own bed.
"It wasn't that I ever woke up when I was a young person and said I have a dream to be in the hotel business. But to be fair, when I came to work in it, I fell in love with it. Part of it is because it's exciting, a growing business, but the big thing for me was getting to work with so many fantastic people in literally all disciplines," she says. "It's a fascinating place to spend your time."
Kathleen Taylor
CEO of Four Seasons Hotels and Resorts since 2010
Born: August 25, 1957
1980: Bachelor's degree in political science from University of Toronto
1984: Law degree from Osgoode Hall Law School and Master of Business Administration from Schulich School of Business (combined) at York University
1984: Corporate Securities and Competition Law at Goodmans LLP, including a secondment to the Ontario Securities Commission
1989: Appointed corporate counsel for Four Seasons Hotels and Resorts
1992: Promoted to vice-president, General Counsel
1997: Became executive vice-president, Corporate Planning and Development
1999: Appointed president of Worldwide Business Operations
2001: Became director of the Royal Bank of Canada. Ms Taylor also chairs its Human Resources Committee and is a member of its Audit Committee
2007: Promoted to president and chief operating officer of Four Seasons
2010: President and chief executive officer
