Small hotels, big experiences
Small Luxury Hotels of the World (SLH) is an exclusive collection of premium boutique hotels and resorts from all around the world. Each property – whether a city hotel, country house, spa retreat, beach resort or ski lodge – has been individually assessed for quality and only the very best qualify for SLH association. First and foremost, SLH is about guaranteeing guests exceptional experiences; each one unique and unforgettable.
Over the past 20 years, SLH has come from the brink of failure and through a global recession to achieve massive success. Here, Juliet Langton speaks to the man who guided the organisation through this incredible journey – SLH chief executive Paul Kerr.
JL: Paul, I understand you’ve been working in Hospitality for 25 years. How did you first come into the industry?
PK: I began my career as an accountant at PricewaterhouseCoopers. However, I’ve long had a passion for the luxury market and this ended up leading me away from accountancy and into the hotel business when I took on a position with Forte Hotels in the 80s. I enjoyed accountancy but I always thought that the ideal career would be combining accountancy skills with my passion for the luxury hotel business. I then became financial director of Cunard Hotels & Resorts, looking after properties including the Ritz Hotel in London and Dukes Hotel, which is a member of SLH.
JL: What twists and turns has your career gone through to get you to where you are today?
PK: I’m someone who always has a plan. And if things don’t work out, I make a new one. The original strategy was to be a doctor, but when I didn’t get the required A-Levels [pre-university qualifications in the UK] I looked around the family and decided to follow in the footsteps of my godfather, who was a chartered accountant. In 1989, the property market crashed and it was during this time I joined Cunard Hotels & Resorts as financial director for the Ritz, Stafford and Dukes hotels. The owner of the hotels was a property company called Trafalgar House. My job was to break up the group and sell them individually.
I had to ensure the hotels were running at a profit, reorganising balance sheets. They were part of Small Luxury Hotels of the World, a recently formed, non-profit organisation, limited by guarantee. SLH wasn’t doing well because the hoteliers who were running it had inherent conflicts of interest. They wanted cheap reservations for their hotels, but the brand has to make a profit. I was paying cheques to this company and I didn’t know what it was all about. So I asked the general manager of the Ritz how it was going and he said “not very well”. I said I’d look into it with my financial hat on. I took two weeks holiday to do so and decided it was going bust.
It was following this that I founded Hill, Goodridge & Associates [HGA] with Brian Mills to act as the outsourced management company for SLH. We purchased the rights to manage the brand. We had our assets on our balance sheet, and they had the cash to pay us our fee. So in effect, we tipped the balance sheet into the P&L [Profits and Loss Statement] and paid ourselves via SLH.
Our number crunching eventually led to huge success. My proudest moment professionally was when SLH hit 500 hotels, more than US$100,000,000 [AUD$95,968,696] revenue and more than 100,000 club members.
We started with only 70 hotels in 12 countries and only US$2,000,000 revenue in 1991. The portfolio has grown to more than 520 properties in 70 countries, with more than 170,000 club members.
JL: Why was Small Luxury Hotels of the World created?
PK: The main purpose was to create a brand with which small, luxury, independent hoteliers all over the world could associate themselves and to provide a global base of customers for those independent hoteliers to which they would otherwise simply not have access.
Our target as a company for this year is to have 550 member hotels by mid-2013 and to continue to find the finest hotels around the world.
JL: In which ways has SLH changed and grown since its creation?
PK: The business plan I wrote more than 20 years ago hasn’t really changed and it has helped SLH grow to what it is today. What started out as a ‘club of hotels’ run by hoteliers is today a ‘club of members’. From having 70 hotels in 12 countries in 1991, we now have more than 520 hotels in more than 70 countries. Our success lies in the fact that even during a period of huge growth, we strongly maintain our famously high standards of excellence. We have had 21 years of full growth and every year it gets better, even in a recession, which is an achievement.
Our loyalty program continues to go from strength to strength. Club membership reached more than 170,000 members in June, representing a 60 per cent growth in club members compared with this time last year.
As the world is increasingly becoming more social and mobile, here at SLH we have launched a dedicated iPad-friendly format to make browsing and booking luxury holidays on the go even easier. The new fast and convenient version of our website is compatible with all iPhone, Android, Nokia and Blackberry operating systems. Currently SLH receives more than 9,000 visits every week from iPad users. SLH is currently receiving 4,000 visits a week from iPhone users and a further 900 visits a week from Android users, both of which are expected to continue to grow. Social media has also been an important area of growth in 2012 for SLH, as it has more than 13,000 twitter followers and more than 53,000 Facebook fans. We’ve received 2,728,478 visits to our website, which is a 28 per cent increase year on year and 22,677 reservations so far this year, a 26 per cent increase year on year.
JL: What qualities make a small luxury hotel?
PK: Firstly, the hotel must be the best of the best in the area and independent. We have a very diverse portfolio. A third of our hotels are city centre properties, a third are resorts and a third are country houses.
It must offer high standards of excellence across all areas of operation. It must reflect its local surroundings and culture – we’re looking for authentic character, not cookie-cutter hotels. Perhaps most importantly, the hotel must offer exceptional experiences – we are all about small hotels and big experiences.
The average size of our hotels is 50 rooms and this has remained so until today. This allows us to offer the highest levels of personalised service. Some of the other hotel brands have an average of 200 rooms at each property so they cannot match this level of service.
JL: How does a hotel become part of the SLH group?
PK: We have a very strict selection and inspection process – only five per cent of the hotels that apply are accepted into the brand. Firstly, the hotel must be the best of the best in the area and independent. It must offer high standards of excellence across all areas of operation. It must reflect its local surroundings and culture – we’re looking for authentic character. Perhaps most importantly, the hotel must offer authentic experiences – we are all about small hotels and big experiences.
Our development team visits each shortlisted hotel and they are then approved by me personally and the Board of Small Luxury Hotels of the World. We have a team of mystery inspectors all around the world and we visit our hotels every 18 months to ensure standards of excellence are being maintained.
JL: What are the benefits of being an SLH hotel or an SLH club member?
PK: There are many advantages of being part of the SLH group, however one of the most important is that all SLH hotels get access to more than 170,000 SLH club members globally, who are signed up to our guest loyalty program.
The Small Luxury Hotels of the World Club consists of three tiers – Special, Loved and Honoured memberships and is free to join. It offers instant benefits from the members’ very first stay. The more you stay with SLH, the more great benefits you will receive – you can even enjoy complimentary nights. Our hotels can load special Club rates for members and also look at each of our club member’s data which gives them great insight into people’s travel preferences, special requirments and so on to ensure their stay will be as personalised as possible.
JL: Who is SLH’s target market?
PK: Our target market is the discerning traveller looking for a premium luxury travel experience. Luxury refers to the freedom of choice for these travellers to be flexible with their travel arrangements and to enjoy unique, memorable experiences. Our top five customer source markets in 2011 were the US, the UK, Germany, Australia and Canada, with Brazil and Singapore forming the strongest growing areas. We are also seeing the Chinese in our top 10 source markets.
JL: How would you say the hospitality sector, particularly in Australia, is faring in the current economic environment?
PK: Given the economic downturn, the luxury hospitality business is faced with a lot of challenges globally and not just limited to Australia. This means that there is a constant need to innovate offerings to attract more business. The market is very competitive and innovation is the key to which will be the winning differentiator.
JL: Where do you think SLH will be in the next five years?
PK: SLH will continue to grow as long as the properties are of good quality and if they fit what our customers want. China and South America are huge areas for growth. In the last 12 months, we have seen particularly buoyant growth in China, Latin America and Scandinavia.
JL: Finally, what does ‘luxury’ mean to you?
PK: I think the term ‘luxury’ now equates with ‘choice’ – customers now demand flexibility when it comes to travel; be it when to book, what room type they want, or when and where to have their spa treatment. So at SLH we provide total choice for the customers within our brand, but with a consistent message that they’re going to have a high standard of experiences. Our customers look for a high level of personalised service in order to make sure their holiday is exactly how they want it.
Every SLH hotel must be able to meet the needs of the most discerning traveller whilst delivering unique, thrilling and unforgettable experiences. Our hotels are consistently receiving world-renowned awards, which is testament to our very high standards of excellence. To make sure our hotels maintain our high service standards, we’ve executed a highly successful ‘mystery inspector’ program whereby all properties are regularly checked with an eagle eye.
To find out more, become a club member or apply to become part of SLH, visit www.slh.com