Paul Jones, president of One&Only Hotels and Resorts, talks to Tom Otley about the group's first new opening for more than three years and why progress is so slow
What is the history of One&Only?
The genesis goes back some 40 years to South Africa when Sol Kerzner started his hotel career in the Umhlanga rocks in Beverly Hills outside Durban. He then built quite a large hotel empire in South Africa which migrated offshore to Mauritius when we opened the St Geran in 1975. We then took on another hotel in Mauritius which we've since sold and we built another hotel in Dubai, the Royal Mirage, which was a great success. Then when Sol went to the Bahamas, alongside the property that became the Atlantic, there was a place that we added rooms to and which became another small St Geran-style property. We took on the Palmilla on the west coast of Mexico on the Baha Peninsula at the tip of the sea of Cortés, which was 112 keys at the time and we rebuilt that as well and it became another expression of what we'd been doing at the St Geran in Mauritius.
Were these branded at the time?
No. We were doing these lovely hotels but operating under the name Sun International, which was more like a trade name. At one time we ventured calling them Sun Hotels, but Sun is so generic, and it's very difficult to own the sun. We might have thought we owned the word in South Africa but to own it worldwide was going to be difficult.
How did you come up with the brand One&Only?
Around 200 and 2001 Sol, Butch his son, and myself were discussing where we'd come from and where we were going and we nourished the idea of giving ourselves much more of an identity which we could leverage into a brand which would encompass everything we had stood for over the years. So we spent around a year on the process with a small boutique branding group called the Fourth Room and we were also working with the PR agency Matthew Freud. To that we added Pentagram design agency and also M&C Saatchi. So they were all the consultants with the various disciplines and we got all our executives involved.
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One&Only Palmilla |
The name One&Only came up very early. All branding firms walk you through the process, they make it technical, perhaps that's why they earn big fees, but it was an interesting process. We considered One and Only but we parked it and got another name. Then right at the death, after we were ready to launch and had all the collateral and the advertising, Butch called a meeting and said I just wanted to make sure we've got the right name, and said One&Only, and, almost simultaneously, we all said yes.
The great thing about the name is it actually means something. You can't be indifferent to the name, you have to express something through that name. The site, the location, the building, the service, the food. Very few brands do mean something. It really came out of the fact that we felt we were unique because all the sites were different. We don't have a book which is the One&Only design bible. We didn't want to lose the legacy of the St Geran or the Royal Mirage or the Ocean Club so we kept those names as icons that are known in the world. But now we are using the geographic locator, so Cape Town in this case which is our new property due to open next year. Core attributes of design, energy and activity and genuine hospitality. We focus on getting people to do things they wouldn't normally do on holiday, not forcing them like a Club Med organised activity thing, but in a more subtle way. So we try and bridge the gap making it easy for you. So if you've never been to a spa before, why not try these things.
What are you equity stakes in the properties?
We have equity stakes in all the properties apart from the Royal Mirage, and some we own outright such as the St Geran.
Why has your expansion been so slow?
We have been busy planning other resorts, but we haven't opened any since Reethi Rah three and a half years ago. Cape Town should have opened earlier, but we had to put a hold on it while the planning issues were resolved. It's 130 room keys.
Costa Rica has been put on hold largely because of the economic situation in America, which is understandable. In these times, that particular project was partly funded by real estate sales, and that has gone for the moment but it will come back. And with the other projects we have been working on, it's a similar story and we have other projects we are working on. But for us, it's not all about growth, it's about looking after the hotels that we've got and making sure that they perform to and above the standard. You want to make sure that your loyal customer base stays with you. We only have 1000 rooms in all, so we have less to focus on from a sales and marketing point of view, and from an operational point of view. We aren't rolling out properties.
The properties we have announced Costa Rica and Zanzibar will happen, I think, though with a delay. That's my feeling. Both have great sites and sound plans but there will be a delay. And then the others which we have been working on, I'm hopeful.
You have only five properties at present, scattered around the world. Is it a profitable business?
It's a very good business model and is very successful. We think our profitability is probably ahead of many of our major competitors. I don't think there's anything wrong on focusing on being small as long as you are successful. To be true to the name we've almost got to have that rarity factor. As far as the operation is concerned, we benefit from being part of Kerzner International, which because it's got the Atlantis brand has that kind of organisation. So we plug into the central IT, the central HR team and we've largely amalgamated our sales and marketing teams. Generally we have a small team and so don't have a huge overhead and we have consciously kept it very small. We have four offices around the world, the largest of which is in Fort Lauderdale which is the main back office for Atlantis, but it also has quite a bit of our infrastructure, finances, some of our marketing. Then Gerrards Cross, which is really more of a sales office. I sit there as does Sol when he's in England, but both of us travel extensively. Then we have an office in New York.
What is the typical size for a One & Only resort?
Well the smallest is Ocean Club at 100 keys, with Royal Mirage having 500, but then you break it down into three properties: The Palace with 230 rooms, the Arabian Court with 220, and a 50 key boutique hotel, the Residence in the middle. We wouldn't build a 500 room One&Only resort, but the Royal Mirage works because it's broken down into these separate hotels. For new developments, a minimum would be 100 rooms and the maximum would be 250-300, with most being between 100-200 rooms. We have 1000 rooms in all before Cape Town opens in May 2009.
What split are the properties between business and leisure?
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One&Only Reethi Rah |
It's predominantly leisure, apart from the Royal Mirage in Dubai which has about 20 per cent business travellers and the new property in Cape Town, which in the off season will have around the same split of business and leisure. I think business travellers will adopt the Cape Town property because it has the largest rooms, the best facilities in terms of spa, fitness and restaurants, as well as offering great service, plus we'll have a ballroom, meeting rooms, and we will have some specially-tailored services for business travellers with secretarial assistance, computers. And I think our location is perfect for a business traveller in the sense that he's in town but also out of it. The property is broken up into 90 keys on the mainland and 40 keys on the island, which can help you.
How will you promote the hotel to business traveller and corporate?
I think it will require a new focus to sell Cape Town to business travellers and we will need to speak to new people, but we don't want to be perceived more as a business travel hotel than a leisure hotel. It offers great opportunities for food and beverage, it's got Nobu, and another restaurant with a glass wall with a small chef's table within for wine tastings, private lunches and dinners. We are paying a lot of attention to our wine selection, which will have at least 20 references by the glass.
How will those economic conditions affect your business? Will you discount rates?
I don't like the word discount. I think our rates are reasonable although obviously we will have regard to the market and be realistic, but we will also ensure that our properties represent value to the customer. So we will look to add value to the offer, and it might come by adding an extra night or an amenity.
How will things look in the luxury sector generally?
I think in the luxury sector those hotels with a loyal customer base and repeat business will weather the storm and do better than those who are new and haven't had the chance to establish a customer base. Over 25% of our customers have been to more than one of our properties so I think we will be all right. Generally, I believe the luxury sector and the cheap end of the hotel market will withstand this period better than the middle. Properties that depend on the North American market have felt more of an impact than those which rely on the European market because America went into recession earlier. But hopefully America will be the first to come out. That said, everyone will suffer from the fact that people are tightening their belts. Our booking pace has been affected between three and five points, though it depends on the property.
Now's the time to focus on what you've got. We're not too concerned about growth; we just want Cape Town to be a great success. Cape Town will open in May, earlier than intended. We are opening it at the end of the season, which runs from October to May, and will open it at the beginning of the low season. It means we can get it run in and known, so that when we hit the season we will hit it running.
www.oneandonlyresorts.com
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One&Only Le Saint Géran |