BERLIN—Jean Gabriel Pérès, president and CEO of Mövenpick Hotels & Resorts, discussed the keys to the hotel operator’s operational success during a break at the International Hotel Investment Forum in Berlin.
What follows is a complete transcript of that interview:
Patrick Mayock: Why don’t we just start with the big picture. Give me a brief rundown of Mövenpick and where the company stands right now.
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Jean Gabriel Pérès |
Jean Gabriel Pérès: Mövenpick is a company which is upscale with strong roots in Switzerland and which was borne as a food-and-beverage company. We now are 60 years old. We grew the hotel business as of 1973. We today have 70 existing hotels, and we have another 30 under construction, which will be open by 2015. So basically the idea is to be only in the upscale segment and to have around 25 hotels existing per continent by 2015. We have 25 in Africa, 25 in Europe, around 15 in Asia today, but lots more in the pipeline, and 35 in the Middle East. It’s a very balanced portfolio. We are only upscale. We are not a listed company; we are a private company with no debt, so financially very solid and growing by the tune of 10 to 15 hotels per year. We are, for instance in 2012, we have exactly 16 hotels in an opening phase due to open in 2012.
Mayock: And that’s really impressive given how much uncertainly there’s been in the global economy right now. How have you been able to push those deals through—especially the new development?
Pérès: It’s very right for you to mention the difficulty and challenge of financing projects. Banks today have a difficulty to lend money to private investors. As you know we are not owners of these hotels. We are pure operators, and this is important to mention. The truth of the matter is that I think Mövenpick as a Swiss brand has established a very strong foothold in a number of continents. We are one of the leading brands in Germany, Switzerland, Jordan, North Africa today, Egypt in particular, Tunisia. And contrary to what people think, there are lots of pockets and destinations today which are still doing very well. Tunis, for instance, where we have a lovely hotel, was running 80% capacity back in 2011. So there’s a bit of a misconception about what does well and what doesn’t do well. … So of course we could do better. There’s no question about it. But we always have to look at the glass as half full and not half empty. There are not many hotels in the portfolio today which are really suffering financially.
Mayock: It’s interesting when you were talking about your development strategy. You have a very balanced approach across the global. Whereas other companies might try to be more opportunistic and try to really target one region aggressively now because that’s where they see the opportunity, why do you take the more balanced approach?
Read "Strong GMs key to Mövenpick’s success."
Pérès: We’ve always believed in the fact that the cluster strategy is something that has carried our success for the past 10, 15, 20 years. When we enter a new continent, a new destination, we have one hotel followed very fast by two, three, four, five. We are one of the dominant brands in Jordan today, and we started with one hotel but now have five. That happens in other countries such as Thailand for instance, where three years ago we had only one property and now we have five which are either close to or already open. So we feel that … we are not compelled to do things. We do things because they are right for the company, right for the owners we serve and right for the brand altogether. I’ve never promised anybody that I would have 500 hotels by 2012. So we prefer—we are not a chain of hotels. We are a collection of unique hotels, each one having its specificity and strong character and personality, and we want to keep it that way. We want to be free to grow with the right partners where we feel there’s a market for us. That is what is driving us.
Mayock: Let’s talk a bit about the operation outlook right now. You mentioned that the hotels you operate, each has its unique twist, its unique identity. Does that make it challenging to operate slightly different hotels in different regions around the world?
Pérès: When you are a Swiss company, you must absolutely mean top quality for your guest. So the common denominator for anything the world we do today is really to extend premium quality. We do it now only by the service we extend. As you know Switzerland is the cradle for the three best or among the best hotel schools in the world. So we make sure that we provide these premium-quality products. Mövenpick is not only hotels; it’s also ice cream, it’s also wine, it’s jam, it’s chocolate, it’s coffee. This has a very, very strong appeal to our guest, to know that as a company which soul comes from the quality of food-and-beverage enjoyment for the guest, we extend that to our guests everywhere in the world. So that’s the common thread and the common denominator to all our hotels: quality, quality of food and beverage and obviously premium-quality products.
Mayock: It’s funny you mention GMs. For whatever reason I think there’s been a strong emphasis at this conference on the importance of a good GM. Maybe that’s a reflection of the market. In a difficult operating environment, everyone starts to recognize how important doing the basics are.
Pérès: It’s a bit too late that people are realizing now. We started to say that years ago and decades ago. The first thing I did when 13 years ago I took over this company was to attract very, very good general managers that I had known in my previous life who were coming from the 5-star and very upscale segment. I also blended it with some long-timers of the Mövenpick family. So this mix of very good GMs that I inherited plus the new ones that we’ve managed to attract and that we continue to attract on a daily basis, makes truly the magic of this company. I really feel that at the end of the day when you realize it, these are people who have to take care of assets which are valued between $50 (million) and a $100 million each. A hotel is an expensive tool. You need to be able to motivate these people … I’m so pleased to see that 80% of the appointments I made and transfers last year came from within the company. This is good. This is something that I want to continue to really expand in Mövenpick Hotels moving forward.
Mayock: As an operator, what’s the one thing in the market right now that concerns you? I mean clearly it’s challenging out there, so what’s keeping you up at night?
Pérès: I think I’m like all the big guys in the world. It’s the control of your distribution. We maybe submitted to a form of being hostage of a number of players who are third-party players in this business and which is not good news for us. What these businesses absolutely must control is distribution. The airline business has become a commodity now. What happens is that you don’t really select your airline any longer. It’s very difficult to differentiate one airline from another. The worst that can happen to the hotel business is exactly that, that we become a commodity and that the brands are no longer in our control. So we must pay attention to the fact that we must absolutely control our distribution and make sure that most of the customers come through our website. I think that is the challenge which is given to lots of CEOs in the hotel business currently.
Mayock: Anything else you want to highlight?
Pérès: I think that what is important is that people in the company really enjoy and are completely passionate about what they’re doing. If they exude this passion, it’s transferred to the people they work with and to the guest ultimately. I feel we have forgotten a bit about inspiring that to the people working for our hotels in the world. Thank God we have not forgotten that. This is something that we have carried over the past 10, 15 years, and that pays back today. It’s the passion and the commitment of our people for the brand and for, at the end of the day, creating enjoyment for the guest worldwide. This is very important wherever we are: in Asia, in Africa, in Europe, in the Middle East. It has to be expressed with the local touch. At the end of the day, it’s got to be premium-quality.
Mayock: That’s a perfect note to end things. We can be in beautiful properties in different locations, but the one thing that ties it all together is that this is a people business.
Pérès: Exactly. I’m very sensitive to music. My family was born in music, and there’s a lot of music around me. I can feel when a lobby, when a hotel provides the right vibrations. You can feel it—harmony, vibrations. I lived 13 year in Asia. I’m very sensitive to feng shui. This is something I can feel when I enter into the hotel, is it right for the guest or not? We need to make sure that we inspire general managers to make it right. Every general manger should wake up on a daily basis and say, ‘How do I create a difference? How do I make a difference for my people, my guests? If my hotel were closed tomorrow, what would people miss?’ This is an important question that every GM should be able to answer.
Mayock: And it’s one that hopefully will help your company expand to new heights and keep guest coming back for years to come. So thank you very much for your time. I really appreciate it.
Pérès: Thanks a lot Patrick. I enjoyed it.