REPORT FROM THE U.S.—After restructuring the management team and solidifying its financial position, the new Kerzner International is poised for significant growth as an asset-light brand and management company, said Alan Leibman, who was appointed CEO at the beginning of 2012.
Leibman took over from Sol Kerzner, who remains chairman of the company.
Development of the company’s two main brands—Atlantis and One & Only—will continue, said Leibman, who is hoping to announce a third Atlantis resort in the first quarter of 2013.
In April, Kerzner handed ownership of its flagship Bahamas properties to its creditors, Brookfield Asset Management and Dubai World. Kerzner also sold a 50% stake in Atlantis The Palm in Dubai to resort co-owner Istithmar World for $250 million. /Articles.aspx/8145/Caribbean-hoteliers-face-issues-opportunity
After the asset sales, Kerzner, in essence, became a resort management, development and branding company; Leibman told HotelNewsNow.com that the company will remain asset-light as it expands.
“We’ve never been more confident about our brands,” he said. “We went through a period where we were stable with not a lot of growth. Now we have a tremendous board that is very supportive of our executive team and customers who love our brands so we are in an excellent position to grow.”
Leibman said Kerzner does maintain equity in a number of its properties. In fact, he said Kerzner is taking a hard look at takeovers of existing properties.
“The financial markets seem to be pretty good right now as far as the traditional banking relationships,” he said.
Leibman said the corporate restructuring included, in addition to his own appointment, the naming of Ali Tabbal as CFO and the return of Helen McCabe-Young, who had been with the company several years earlier as executive VP of sales and marketing for One & Only.
“We now have people who will be able to be innovative and come up with concepts that set us apart in the luxury segment,” Leibman said.
Growth plans
Kerzner currently operates Atlantis resorts in the Bahamas and in Dubai; seven One & Only resorts in the Bahamas, Mexico, Mauritius, the Maldives, South Africa and Dubai; and a Mazagan Beach Resort in Morocco.
The next One & Only resort will open in the city of Sanya on Hainan Island in China in 2014, Leibman said. “We are building incredible pools and villas,” he said. “Chef Jean-Georges Vongerichten will do an outdoor pool restaurant with a strong Asian flair.”
Leibman said the China resort will be extraordinary in its attention to detail.
“One & Only operates at the very high end of the market,” he said. “It will appeal heavily to the Asian market, but we expect more international guests as well. Developing markets like Russia continue to be strong.”
Urban hotels also are an important part of Kerzner’s strategy, Leibman said.
“It will be important to have city-based One & Only hotels if they are the right products in the right locations,” he said. “We are actively working on some options, though nothing concrete is yet in place. We do think that the One & Only concept can absolutely be translated into an urban setting.”
Strategy
Leibman said the key for Kerzner is to understand the customer and to do unique things in a unique atmosphere.
“For instance, in the Maldives, we have an amazing herb garden where the chefs harvest herbs and vegetables to prepare in the restaurants,” he said. “At One & Only Palmilla in Mexico, we are doing exciting things with Jean-Georges that is bringing a new kind of Mexican cuisine.”
Despite the focus on innovation, Leibman said it’s not all about the “next big idea.”
“Sometimes it’s about coming back to the small details and delivering on them,” he said. “We’re also trying to be different on the spa side of the business. We have people with real expertise in the area of personal training, which we have developed to be part of the DNA for that brand.”
He said the magic in the hotel business is constantly understanding the guest but not overburdening them with information or contact.
“Especially with multigenerational travel, it’s important to understand the needs of guests from every age group,” he said.
Some of Kerzner’s resorts are in far-flung places including the Maldives and Mauritius. Leibman said the company sees luxury travelers today willing to travel distances to grow and educate themselves in different cultures.
“You might have a family that comes from New York and then goes to Dubai and to the Maldives,” he said. “They will do it as long as they feel relaxed and everything works the way it’s supposed to.”
While the Morocco resort operates under a different brand, Leibman said it does well, particularly due to the fact that it houses the largest casino in North Africa.
“The gaming market continues to be an important part of our businesses,” he said. “We continue to add new facilities like a new sports book area in the Bahamas. The high-end casino customer wants the same high-end services as other guests.”
On the subject of distribution, Leibman said he’s a big believer in balance among Kerzner’s distribution partners.
“It’s critical to have solid relationships with (online travel agencies) and travel agents because the consumer will ultimately decide how they are going to book,” he said. “From a Kerzner perspective, we spend personal time on every one of these relationships and work to grow them.”
While revenue managers have a very senior seat at the table and play an intricate role in the business, they don’t have the final say, Leibman said.
“Yes, you need to revenue manage your business, but there is an art to this as well and revenue management can’t operate in isolation,” he said.
Leibman said his company watched the recent presidential election closely, saying the key for Kerzner was that with a president in place things would settle down.
“The incentive market is important for us and that means strong corporate results,” he said. “On the international front, with our holdings in the Middle East, we are hoping for stability in that part of the world.”