Last week we celebrated two Canadian companies that have a significant impact in Canada; Lee Valley Tools and Dufflet Pastries. This week we celebrate a company that has a presence on a global scale; the Four Seasons Hotels and Resorts.
In 1961 a young architect named Isadore Sharp, who knew nothing about the hotel business, built his first hotel on Jarvis Street in Toronto. Called the Four Seasons Motor Hotel it triggered Isadore’s passion for the hotel business. Just 50 years later the Four Seasons has over 80 luxury hotels and resorts around the world and continues its expansion into China.
When asked what his original vision for Four Seasons was he had to admit: “There was not a vision or grand scheme. I approached the business from a customer’s point of view. I was the host and the customers were my guests. If we give them good value they will pay what they think its worth and come back for more.”That has been the cornerstone of the Four Seasons success ~ service.
The core strategy behind the company’s excellent service is to train AND empower all staff regardless of position to willingly and immediately solve problems as they arose. Not to shove the problem up the line to their supervisor or manager but to solve it themselves if they can. As Isadore wrote: “It’s not the problem the customer remembers; it is the outcome.”
While Isadore was passionate about providing the very best service to his customers he faced many challenges; particularly from his own staff. Most of them were very skeptical. They could not connect the dots between outstanding service and profitable hotels. They could not believe that hotel staff, in many cases minimum wage earners, would respond by providing the customers with outstanding service. So slowly but surely Isadore undertook the painful process of replacing hotel managers and executives with people who truly shared his vision of outstanding service. The rest as they say is history.
But like any business the Four Seasons did not grow without huge risks. By the mid 1970’s cost overruns from new hotel development were killing the business and bringing it close to bankruptcy. The situation resulted in a major change in the business model. Rather than build and operate their own hotels they now build and operate hotels under the Four Season brand FOR OTHER PEOPLE. The Four Seasons revenue comes from a fee plus share in the profits. This means Four Seasons can focus on what they do best; building luxury hotels and providing customers with a level of service unequalled in the luxury hotel industry.
Through these past fifty years there have been the usual economic ups and downs for the luxury hotel industry. But none that was as huge as post 9/11. The fill rate for all hotels fell dramatically and the luxury market got especially hard hit. And yet Isadore refused to cut room rates because he believed it would hurt the brand in the long term. While the owners screamed blue murder because they were losing money he refused to budge and they all eventually recovered. It was the right decision for the long term brand if painful for the short term profit.
In 2007 the Four Seasons was bought by Microsoft and Prince Al-Waleed bin Talal, a very successful Saudi Arabian investor. The company continues to expand, particularly in China. While Isadore owns 5% of the company it will be interesting to watch its future now the visionary is no longer active. Recently in Toronto there were staff layoffs; the first in the company’s history despite all the economic downturns it has been through.
One cannot leave the story of the Four Seasons without mentioning the Terry Fox Run. They were one of the founders of the run in 1981 and it has since grown into the largest single day cancer fundraiser around the world. To date is has raised more than half a billion dollars for cancer research.
