June 2, 2010
Four Seasons, the luxury hotel chain, is starting to cut some costs.
My most recent experience with the Four Seasons, in Budapest, included fresh cut flowers, in house laundry, nightly shoe shines, and huge vases of beautiful flowers…. Every detail was looked after.
The impeccable signature features, such as the memories mentioned above, of Four Seasons may soon be just a memory.
According to the Wall Street Journal:
“The moves may seem small—and many guests won’t even notice them—but they are seismic for a brand like Four Seasons, which built its reputation on impeccable service and pioneered labor-intensive perquisites like in-hotel spas and free shoe shines.
In the past, the company, which holds long-term contracts with the hotels it manages, shrugged off downturns as passing cycles that didn’t warrant altering its expensive but successful formula. This time, though, Isadore Sharp, Four Seasons’ founder and chief executive, agreed to some concessions that wouldn’t hurt service.”
While Sharp says that “service” would not be hurt, there is no doubt that my fond memories of the Four Seasons centre around all of the features being cut.
But, it appears that Sharp may not have a choice. According to the WSJ, “of the 82 hotels that fly Four Seasons flags, at least a dozen are in financial distress. Last year, occupancy levels at the luxury chain’s U.S. hotels averaged 57%, and revenue per available room fell 26%. Even with room rates that average $400 a night, many Four Seasons hotels can’t generate enough cash to pay both interest and operating costs.”
Yikes. I wonder if purchasers at The Four Seasons Residences in Toronto will feel a difference when they move in?