TORONTO—The change in leadership at Four Seasons Hotels and Resorts could signal a change in direction for the Toronto-based luxury hotel chain, sources said.
The company last week named former Prudential Real Estate Investors CEO Allen Smith as president and CEO. He replaced Kathleen Taylor, a 25-year veteran of Four Seasons, who left the company in February. Four Seasons declined to comment on the management change.
“It’s quite a departure,” said Lyle Hall, managing director of consultancy HLT Advisory in Toronto, of Smith’s appointment. “Given the background of Allen Smith and the history of operations people in that role, you now have someone that’s very much more a real estate investment type.”
Ryan Meliker, an analyst with MLV & Company, said while it is too soon to know if or how the company’s strategies will change under Smith, “if Four Seasons chooses to move more into the direction of owning assets, that probably means they’re moving away from the direction of third-party managing or franchising.
“They’re being much more focused on management contracts and building through that route instead of a real estate portfolio,” Meliker said, noting the company’s two primary owners, Kingdom Holdings Company and Cascade Investment, have real estate as part of their portfolios.
![]() |
Allen Smith |
“They’ve tended to have their real estate positions outside of Four Seasons instead of within Four Seasons, so maybe this is an opportunity for Kingdom, Cascade and some of the other equity holders to combine some of their real estate holdings with Four Seasons,” he said
Meliker said in recent years the chain has been involved in litigation with some owners of its hotels over performance issues. In 2010, Four Seasons agreed to relinquish management of a 329-room resort in Carlsbad, California, following a protracted disagreement with property owner Broadreach Capital Partners.
“You really don’t make a lot of money owning a Four Seasons,” Meliker said. “Management at Four Seasons has always been relatively clear that priority No. 1 is the guest, priority No. 2 is the employees and the owner falls to No. 3. So it may not be the best brand to generate the returns you’re targeting, if you’re targeting on returns. This may be an indication Four Seasons is having difficulty building their platform from a management platform so they move to owning hotels.”
Hall said the change in leadership probably won’t disturb the company’s long-ingrained culture built by founder Isadore Sharp.
“Focused, single-focused, dogged and determined” is how Hall described the Four Seasons culture. “It’s a culture that is clearly walking the talk. They are what they say they are. The focus on serving guests and delivering service from a customer point of view is paramount.”
More on Smith
Smith, who assumes his new role on 23 September, joined PREI in 1997 and became CEO in 2008. Prudential has $53 billion in real estate assets under management, including a number of hotels. Smith received a master’s degree from the Cornell University School of Hotel Administration.
In a news release on Smith’s appointment, Michael Larson, chief investment officer of Cascade Investment, said, "We see great market opportunities to further expand the Four Seasons brand worldwide. Allen is a proven global growth leader and investor who fits well with our strong company culture and understands the value of preserving the quality of the existing brand. We are excited to work closely with our great partners and Allen to execute the established strategic plan for the company."
Four Seasons operates 91 hotels in 37 countries. Its most recent addition to the chain is the 151-room Four Seasons Hotel Lion Palace in St. Petersburg, Russia, which opened last month. It also signed an agreement to manage a Four Seasons in Johannesburg, South Africa, which opens in early 2014.