HAMILTON, Bermuda—Belmond’s new CEO has held the post for less than seven weeks, but he’s already hit the ground running, by his own account.
Roeland Vos attributed that rapid ramp-up to his time spent previously on Belmond’s board, which allowed him to dive in head first when he was named president and CEO on 21 September, succeeding John Scott.
“I am joining Belmond at a very important juncture,” Vos said Thursday during an earnings call with analysts, which was webcast.
While the existing team did a good job creating a strategy for growth, what was lacking was the execution, Vos said.
“There’s a lot more that we can still do. … We have a strong and solid strategy in place to realize growth. We just need to get there at a faster pace than we’ve been doing so far,” he said.
Vos also acknowledged that Belmond is a relatively small company. The Hamilton, Bermuda-based group owns, part-owns or operates 46 luxury hotel, restaurant, tourist-train and river-cruise properties.
“As such, (we) will need to keep a razor sharp focus on those opportunities that have the greatest likelihood of success,” Vos said.
He named three in particular.
1. Drive top-line growth
“This isn’t rocket science,” Vos said. “I believe we can do a better job of driving top-line growth and bottom-line results.”
Of particular focus in that pursuit is Belmond’s revenue-management and sales-and-marketing departments.
On the revenue-management front, “We have a great opportunity to review and enhance our systems to ensure we’re driving the max potential rate and occupancy out of our extraordinary properties,” Vos said.
Executives also need to refocus the sales effort, he added.
Whereas in the past sales associates only sold the properties at which they worked, they must work more holistically to drive revenues across the entire portfolio, the CEO said.
“Each person thinks of the entire Belmond collection as one entity, and one for which success is the only option,” Vos said.
2. Building brand awareness
“Second, we have more work to do on building brand awareness among all the relative parties,” Vos said.
The company changed its name from Orient-Express Hotels Limited to Belmond in February 2014 in an effort to boost cross-visitation between properties.
“The company has done a great job positioning the Belmond brand in the travel trade, in the media and with existing customers, but we can do more—a lot more,” he said.
That means clarifying Belmond’s niche of luxury travel experiences, not only for travelers but for the company’s own associates at the property level. Employees need to “live and breathe the brand,” Vos said.
In doing so, they will bring the Belmond brand to life for guests, which will set the company apart in the luxury travel space, the CEO said.
3. Expand the footprint
“When you become the brand of choice for the niche of customers, it becomes obvious for the third-party owners to want your brand to be the flag on their hotels,” Vos said. “That’s when all the pieces start coming together, when momentum builds, and when we can start expanding our footprint in a meaningful way.”
He said Belmond needs to become more flexible with its third-party management contracts.
“We will consider all the relevant opportunities,” he said, including joint ventures, sliver equity, key money and more, “as long as the returns make sense.”
One thing the company will not do: “We are not going to go on a buying spree,” Vos said.
While executives will always review the portfolio to determine which assets, if any, they want to market for disposition, they only have one actively being marketed at present, he said.
“We’re not in the business of selling assets. Our focus is on accelerating the growth. Footprint growth you don’t get by selling assets, unless there’s a very good reason,” Vos said.
“I don’t foresee in the near future we would put additional assets up for sale,” he added.
Belmond sold its stake in one asset thus far in 2015—a 50% interest in the 167-room Hotel Ritz by Belmond in Madrid to a joint venture between Mandarin Oriental International Limited and The Olayan Group. At the same time, the company ended its agreement to manage the hotel.
So far so good
Coming off relatively soft comparables, Belmond reported strong results for the third quarter.
Same-store revenue per available room was up 13% over the prior-year quarter on a constant-currency basis, exceeding the company’s guidance range of 5% to 9%.
Third-quarter total revenue was up $13.7 million, or 8%.
Executives expect the positive trend lines to continue. They issued a RevPAR guidance range of 8% to 12% for both the fourth quarter and full year.
Vos and the executive team plan to announce 2016 guidance on future earnings calls.
Shares of Belmond (NYSE: BEL) were down 0.5% in the day’s trading as of press time. The Baird/STR Hotel Stock Index, by comparison, was up 0.4%.