How Small Hotel Brands Are Making A Big Mark In Luxury Travel

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At the recent Virtuoso Travel Week in Las Vegas, the network’s over 20,000 travel advisors who last year sold more than $26 billion in luxury travel, voted Montage’s resort in Los Cabos as the best new hotel.

Last year, its Sagamore Pendry Baltimore was voted by the readers of Conde Nast Traveler as the best hotel in the United States.

© 2016 Bloomberg Finance LP

“I don’t normally look at awards,” says Alan Fuerstman, the founder, owner and chairman of the two brands, adding, “But that was nice.”

While Fuerstman might have been surprised, he wasn’t shocked. He lives in one of his nine hotels and typically spends over 300 nights a year at a Montage or Pendry between multiple visits to each.

Pendry Hotels

Since he appears on a video loop played on televisions in the rooms, he’s often stopped in the hallways from guests who want to share a story about one of his employees who went above and beyond, often from another hotel, they stayed at previously.

For Victoria Tollman, January each year means helping her mother Bea start the coming year’s holiday gift list. Each employee of The Red Carnation Hotel Collection gets a personally selected present and a note from the group’s founder and matriarch.

That might not be a surprise to regular guests. Each time they arrive at one of the family’s 19 hotels, like members of the team, they get something different, usually picked with acute knowledge of what they like, and what they don’t. Unsurprisingly, the daughter says her mother’s philosophy is “no request is too large, no detail is too small.”

Red Carnation

In 2018, Red Carnation placed second with the readers of Travel + Leisure in its ranking of their favorite hotel brands. Hotel 41 in London not only received five stars from Forbes Travel Guide but was one of only two properties in the city and only 58 in the world to be anointed to this publication’s 2018 World’s Most Luxurious Hotels list.

Red Carnation hotels regularly place atop the rankings of Trip Advisor, a difficult trick among the website’s many fickle raters who are known to be harsh on luxury hotels that charge high prices but don’t deliver high value.

Red Carnation Hotel Collection

In speaking with the Tollman scion and Jonathan Raggett, managing director for the hotels, credit goes to the team, maybe why The Sunday Times ranked Red Carnation third on its list of Top 100 companies to work for. However, it’s also clear that involved and passionate ownership is an integral ingredient when competing with the big boys.

Chris Hamaway, Montage’s executive vice president of sales and marketing, sits across from Fuerstman in a now-empty dining room at the Bellagio in Las Vegas. It’s a Wednesday afternoon and the third of four lunches in as many days for its top-producing travel advisors has just ended.

Montage Los Cabos was selected best new hotel by Virtuoso’s over 20,000 luxury travel advisors. Last year they sold over $26 billion in travel.

Montage Hotels & Resorts

As I ask about how small hotel groups are seemingly outgunning the mega-players of luxury when it comes to racking up awards, he points to his boss, saying, “How many owners do you see here for all four days, and you know, it’s the same at IMEX (a conference for meeting and incentive planners). There are a lot of employees. I’m an employee, but here’s the owner, not just flying in and flying out.”

It’s the second year I’ve sat in on the off the record lunch where Fuerstman spends part of the meal telling the advisors about deals he is working on, not yet signed, but since they are part of the extended Montage family, he wants them to know about them, before they read about it in the media.

Montage Hotels & Resorts

It’s also the 17th straight year he has spent a week in August in the Las Vegas heat working the hallways, helping drum up business and making sure there are no complaints, looking for ideas and suggestions on how his properties can raise the bar higher.

On her way back to meetings after the lunch, Anne Morgan Scully, president of McCabe World Travel leans over the back of my chair to tell me, “Some hotels, I book my clients, and the first thing they see when they get to their rooms is a promotion encouraging them to book direct. Montage makes me look good. They’ll thank my clients I book with them for me. I’ve had managers tell my clients how smart they are to use a travel advisor. It’s not just a one-off. They respect what advisors do. It’s not a marketing program. It’s in their DNA.”

Auberge Resorts

Chris Gabaldon recently joined Auberge Resorts Collection as the chief operating officer after spending over two decades with Marriott International, most with The Ritz-Carlton Hotel Company, where he served as chief sales and marketing officer and recently oversaw its 37 Ritz-Carlton, Luxury Collection, St. Regis, and W Hotels in the Western U.S. and Canada.

In his new role, his portfolio, while growing, includes a mere 19 properties stretching from Fiji to Santorini. Three of them – Solage, Auberge du Soleil, and Calistoga Ranch – take up half of the top six spots in Travel + Leisure’s most recent reader poll naming best California resorts. Earlier this month USA Today named Auberge “Best Luxury Hotel Brand” on its 10Best list.

Asked if he thinks there has been a tilt towards the smaller group, Gabaldon says, “Absolutely. It’s more than a tilt, it’s a very strong shift.”

Auberge Resorts

He adds, “Consumers want authentic.” He says for the privately held management company, that means more collaboration with the owners of its hotels. “For the bigger companies, a lot of the ownership is financial (companies), whereas for us, it’s local entrepreneurs. They bring lots of relationships and insights about their local communities.”

Like other small and successful groups, a common denominator is private ownership, in this case, Dan Friedkin (Forbes Billionaires list #504, $3.9 billion ), who owns Gulf States Toyota, with exclusive distribution rights in Texas, Arkansas, Louisiana, Mississippi and Oklahoma, according to his profile on the list.

Auberge Resorts

Continuity seems to be another factor. Tollman says her Red Carnation managers average over 10 years in their current locations. Whereas bigger groups see rotating executives as opportunities for advancement once they have accomplished their missions at their previous post, Raggett bristles, and says, “That’s hogwash. You can always do better. You’re only as good as your last guest. The mission is never done, nor accomplished, that’s what makes it so fun. The challenge never stops, and it’s always right where you are standing. You don’t have to go someplace else to find it.”

He says hotel managers are expected to be out with the guests. “If somebody tells me they need to do reports, yes we have reports, yes this is a business, but let’s hire a junior accountant to help.”

Red Carnation

For food and beverage managers, breakfast is the most important meal of the day, particularly during the peak rush. “Some people want to be in and out. Others want to linger for hours. If you do a good job, you pick up reservations for dinner. If you mess up somebody’s breakfast, you blow their whole stay, and everything else everyone has been doing. Details matter.” Raggett expects his F&B directors to be in the hotel and in the dining room during breakfast.

He says, in an industry, which has high turnover at entry levels, that means lots of training, including mentorship where new employees are twinned with top performers who aspire to be managers. It helps underscore the way to move ahead isn’t by buttering up the boss, but by mentoring and supporting newcomers.

Red Carnation Hotel Collection

Raggett points to Adam Lake who joined 20 years as a linen porter at The Rubens Hotel in London. Three years ago he became general manager of The Chesterfield. Gregory Mutambe started as a dishwasher eight years ago in South Africa. He told his mentor and managers he aspired to be a sommelier, and with the support from the company to fund his training he has not only achieved his dream, but last year was named best in the country.

On a regular basis, employees are hosted at lunches and teas. They try the same dishes on the menu customers enjoy, and share champagne toasts. “For some, it’s the first time. We really want them to know they are part of the family. We constantly ask, ‘What do you want to get out of this? How can we do better?’”

Not entirely altruistic, Raggett says with a severe labor shortage for entry-level positions in markets like London, minimizing turnover at all levels is critical to maintaining high levels of service.

In fact, the situation is so severe, some big luxury hotel companies are outsourcing housekeeping to third party contractors.

For Raggett, every quarter he spends a day cleaning guest rooms with the housekeeping staff, scrubbing toilets, and trying to keep up.

“It’s easy to sit in a meeting and talk about asking people to do more, so it’s a good idea to actually do what they do on a regular basis, so you don’t forget how important a well-cleaned room is to the guest experience, and that if you want to get to every corner and crevice, you can’t feel like somebody is standing over you with a stopwatch. Sometimes you have a series of rooms on one day that needs extra attention. You need the time to clean them correctly,” he says.

While big groups engage big name design firms they can leverage for media coverage, most rooms in a hotel share a common aesthetic, perhaps with the exception of a few signature suites. At Red Carnation, with a few exceptions, each and every room is separately designed.

“That’s my mother and my sister,” says Tollman. It means different draperies, original furniture and art for each room. It’s the same on Uniworld, the family’s river cruise line.

“Sometimes my mother, or sister or father, will see a painting or piece of furniture they love, so they buy it, and then we store it until we figure out where we can put it,” she says.

Naively I ask, “So you don’t order furniture for an entire hotel, made in China or India?”  Tollman and Raggett answer simultaneously, “No!”  Then again, if you call down to the front desk looking for cold medicine, not only will you find one of the staff procuring it for you, you’ll likely get a knock on the door with room service bringing you a bowl of “Bea’s magical chicken soup.”

For Fuerstman, it may not be bowls of soup, but it’s quick decision-making. At Montage, there is no matrix of managers who have to check off boxes for each request. If something needs to be upgraded or replaced, or there is something guests want that’s not being offered, you don’t fill out forms and requests, you call Alan.

Fuerstman points to social media and review sites as being helpful to smaller companies. “There’s so much more transparency today. We don’t have the dollars to spend on marketing and PR (compared to big brands), but if we perform, our guests will say so, and others will read about it online. So everyone is always thinking about each and every guest, and what they can do to make their experience memorable and enjoyable.”

One former executive with a global luxury group told me, “If you’re talking about Ritz-Carlton or Four Seasons, there is a lot to praise the big players for. When you are opening one or two hotels a month you need a different approach than when you open one or two a year. The big brands are great training grounds. You can learn a lot. In some ways, it’s a catch 22. Their strengths have become their weaknesses.”

Grand Velas

Karen Weiner Escalera, a public relations executive who specializes in hospitality and represents Grand Velas, a three-property group of all-inclusive resorts in Mexico rated #1 by Trip Advisors,  puts it this way: “Brands are predictable, and people like variety. Maybe at one time, if you stayed in luxury hotels 10 times a year, eight or nine of those stays was with a single brand. Now, you might stay a couple times a year with that brand, but you want to try something else, and sometimes you like what you try, and that becomes a new favorite.” Virtuoso advisors this year voted her client’s Riviera Maya location as Best Family Program.

A former luxury CEO says, “You can spend a lot of money on research firms, focus groups and consultants, and the big brands do because they need data to back up their decisions. They need to have it validated. Then they need finance to run the numbers. They don’t have the flexibilty of a family owned company,” he says, adding, “(For smaller companies) you’re more likely to see senior managers and owners in the hotels talking to the employees and guests and walking the halls. If they hear something that sounds like a good idea, if it makes sense, they can try it quickly. In big companies, that rarely happens.”

Whatever is happening, one thing is clear, and that’s small brands are making a big impact on luxury.

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