Newsletter - May 10, 2002
 

CNBC INTERVIEW WITH SIMON COOPER, CEO RITZ CARLTON HOTELS

 
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

LIZ CLAMAN, CNBC ANCHOR: The name alone makes you think of grand luxury. It's the Ritz Carlton.

CARL QUINTANILLA, CNBC ANCHOR: Last night the hotel held a ribbon cutting at its latest property, Central Park South in the heart of Manhattan. The chain  now has 40 properties.

Joining us from that new hotel just about 15 blocks from where we are in Times Square is Simon Cooper, President of the Ritz Carlton Hotel Company. Mr. Cooper, thank you so much for being with us today.

SIMON COOPER, CEO, RITZ CARLTON HOTELS: Thank you for having me. Good morning.

QUINTANILLA: Tell us about the new property.

COOPER: It's a stunning property. It's a very intimate property. It is certainly in the more traditional vein of Ritz Carlton, very much a European style hotel. And it is absolutely superbly appointed. I think you'll find the interiors, as you look behind me, absolutely stunning. It's exquisite.

QUINTANILLA: As we continue to look at these pictures of the rooms here, I want to give our viewers some golly gee whiz facts here -- 277 rooms of lovely art collection, Pertazi (ph) sheets in the suites with a 700 thread count cotton -- so much for the old 200 count Egyptian cotton you thought was so cool -- four types of pillows that you can choose from, data ports, high speed Internet access, 24-7 technology butler. What is the price point for the average room here at this Ritz?

COOPER: Well, the introductory rate is $ 425. But hurry because that will not last for too long, I don't think. The rates after that will be much more around the $ 550, $ 650 mark.

CLAMAN: Mr. Cooper, we're in the middle of a recession, or at least trying to struggle out of it. The stock market has not come back yet, the economy in fits and starts. What makes the Ritz and your leadership feel that there is truly a market to fill these rooms?

COOPER: Well, this is New York, and in our opinion New York is coming back. Everywhere I travel -- I just come back from Asia and Europe -- I believe that New York is coming back. Strong demand to come here. The kind of luxury appointments that we have in this hotel, there is definitely a market for it and we think that this hotel will set a new standard in New York.

QUINTANILLA: Is it -- I guess this is a reflection on the high end of the lodging industry or the lodging industry doing better than, say, the middle or the low end of the spectrum?

COOPER: Well, surprisingly, generally after an economic slowdown, the luxury end tends to come out a little bit slower. But I think pretty much all segments of the market are coming out at the same time. And certainly the luxury is not lagging at the present time any other segment of the market.

CLAMAN: I want to ask you about your Florida operations, because there are three new Ritzes or on the verge of opening Ritzes that are in the Miami area. Some people feel that there's a bit of a saturation there. What is the status of that? And, also, two of the Ritz Carlton projects, the one in South Beach and Cocoanut Grove, are behind schedule and we understand the builder has left the project. What's the status there?

COOPER: The status is that Coconut Grove is back under construction and will open in September. It's a smaller hotel at about a 115 rooms, so not particularly large. We opened Key Biscayne, which is the other one you referred to, last year, and it has been doing extremely well. We're very, very pleased with the response there. South Beach is delayed. The contractor was unable to complete. So currently we're in negotiations to get that hotel started again. We anticipate a mid '03 opening. It is an absolutely outstanding location. Whenever one does a project, you know, a renovation project in an area with strict zoning like that, inevitably there are costs that possibly one does not anticipate in advance. And with the contractor pulling off the job, obviously that's something that we have to review. It's not something we can find a solution to immediately. There are a number of recourses that we have. We're working through that and we fully expect that next summer would be the opening date for that hotel.

CLAMAN: Good luck with the new hotel, Mr. Cooper. Thank you for joining us.

COOPER: Thank you very much, indeed.

CLAMAN: Simon Cooper, President of the Ritz Carlton Hotel Company, at the new just opened Ritz on Central Park South.

WHAT IS A BOUTIQUE HOTEL?

By Harry Nobles & Cheryl Thompson    www.optimumrating.com

What specific attributes qualify a hotel for this appellation?  What makes one hotel a boutique while another is not?   We believe there are several characteristics that contribute to the accurate application of the term.  One is size.  What is the maximum number of rooms allowable for a boutique hotel?  In our opinion, and in the opinion of some others,  100 rooms seems to be the upper limit.

Is atmosphere a factor?  We believe atmosphere is a very important component of all boutique hotels.  If atmosphere is considered the sum total of the physical facilities and all the intangibles that comprise a memorable hotel experience, this may be the single most critical factor.  Our definition of atmosphere includes decor,  ambience,  personalized service, the attitude of management and staff, and how all these ingredients must combine to create a genuine sense of intimacy.

An intimate atmosphere may be the one absolutely essential component without which a hotel cannot be called boutique. In our opinion, the difficulty lies in creating an atmosphere of intimacy without familiarity.  We define intimacy as caring, warm, personalized,  yet totally professional.  Familiarity involves  using guests' first name,  hugs,  excessive hand shakes, and other physical contact.

The boutique environment also includes anticipating  guests' needs and desires rather than simply responding to a request.  Knowing what a guest wants, when they want it, and how they want it is a major difference between  good service and great service.  The goal of any fine hotel, boutique or otherwise,  must be great service.

We suggest that a unique theme is one important component of "boutiqueness".  We are seeing a variety of interesting themes around the country , ranging from a library concept in New York City to a hotel in Washington, DC for guests interested in the occult.

We find this quite interesting and feel that a segment of the public will respond positively.  Our only question is where does a trend end and a fad begin.

So, what is a real boutique hotel?  Can you create a checklist of  very specific characteristics that will apply to every property?  Can you develop a profile that applies to all? 

We suggest it is a hotel that makes guests happy to be there, makes them feel special, makes them want to return soon, and makes them want to tell others.

That description makes a boutique hotel sound like any other fine hotel, only smaller, right? 

As  with many intangibles, "boutiqueness", like beauty may be in the eye of the beholder.

Harry Nobles & Cheryl Thompson

www.optimumrating.com

info@optimumrating.com

TOURISM DEVELOPMENT IN EURASIA CREATES OPPORTUNITIES FOR U.S. COMPANIES

WASHINGTON, DC (8 May 2002) -- Tourism and hospitality projects valued at more than $350 million will be presented at an upcoming U.S. Trade and Development Agency (TDA) conference in Istanbul, Turkey. The May 29-31 event will help match U.S. companies with more than 30 tourism, hospitality and infrastructure projects in 12 Eurasian countries.

"Destination Eurasia: Building Infrastructure for Tourism" will provide participants with information on projects involving development and construction of hotels, resorts, golf courses, ski resorts and spas. The agenda will also include presentations on water supply and road projects.

Project sponsors attending the conference will be seeking suppliers of architectural, engineering and construction services; hotel furnishings, fixtures and equipment; management information systems; construction materials; heavy equipment; water supply/waste water equipment; as well as construction services and supplies for pools, bowling alleys, tennis courts and other recreational facilities. Several related investment opportunities will also be discussed.

Organized by TDA, in cooperation with the U.S. Department of Commerce, the conference will highlight opportunities in Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan, as well as Turkey. The projects will be presented by representatives of state-owned and private-sector enterprises in the region. A series of pre-scheduled one-on-one meetings will also enable U.S. company participants to meet privately with the project sponsors.

Also expected to participate are senior government officials from the U.S and the Eurasia region, U.S. Commercial Service officers, and representatives of local companies interested in partnering with American firms. Representatives of public and private international lending institutions, including the U.S. Export-Import Bank and the Overseas Private Investment Corporation, will also be on hand to discuss financing and loan guarantee programs available for projects.

Each U.S. participant will receive a comprehensive resource guide and CD-ROM outlining the projects presented, as well as 30 additional projects with similar needs. Included in the guide will be critical economic information, export potential, time lines, equipment needs and key contacts. "This conference will provide an unprecedented opportunity for U.S. companies to learn about a wide range of opportunities and meet with decision makers who have indicated an interest in buying U.S. products and services," said TDA Director Thelma J. Askey.

Trade and industry organizations supporting the conference include the American Council of Engineering Companies, the American Resort Development Association, the American Road and Transportation Builders Association, the Electric Power Supply Association, the Water and Wastewater Equipment Manufacturers Association, the American-Turkish Council, the American-Georgia Business Council, the American Uzbekistan Chamber of Commerce, the U.S.-Azerbaijan Chamber of Commerce, the U.S.-Kazakhstan Business Association, the U.S.-Ukraine Foundation, the U.S.-Russia Business Council and DEIK – the Turkish Foreign Economic Relations Board.

The U.S. Trade and Development Agency helps form mutually beneficial partnerships between U.S. private-sector companies and overseas sponsors. An agency of the U.S. government, TDA provides assistance in more than 60 nations around the world each year.

For registration or more information about the projects and the agenda, visit the conference web site, www.trademeetings.com, or contact Dan Lamey at telephone 1-866-636-4729. Email address: tda@mfmgroup.com.

INDIA’S APRIL FOREIGN TOURIST ARRIVALS FALL 16 PERCENT

NEW DELHI, May 6 (Reuters) - India's foreign tourist arrivals fell 16.2 percent in April from a year earlier, hurting an industry already hit by a decline in global tourism after the September 11 attacks on the United States, government data showed on Monday. Arrivals dropped to 155,378 in April from 185,338 a year earlier and 225,568 in March, the government said.

The slide in tourism hit foreign exchange earnings in January-April, which fell 14.1 percent to $1,004.7 million from the same period last year. Tour operators, airlines and hotel managers say religious violence in the western state of Gujarat state since the end of February has prompted many to cancel holidays. India's peak holiday season is between the cooler months of October and March. Tourism drops in the summer months when temperatures soar as high as 47 degrees Celsius.

India, with the Himalayas, jungles, a rich history and sun-soaked beaches, attracts just 0.4-percent of the global tourist market. About 2.6 million foreign tourists -- mostly budget travellers and backpackers -- visited India in 2000. Tourists numbered 2.4 million in 2001. Travel officials say India could draw more tourists to its ancient Hindu, Muslim, Buddhist and Christian monuments especially if they were better cared for. Crumbling infrastructure, particularly roads, expensive air travel and limited hotel rooms deter visitors, they say. 

VIETNAM TOURISM DEPT TARGETS 2.5 MLN FOREIGN VISITORS THIS YEAR

HANOI, May 06, 2002 (AsiaPulse via COMTEX) -- Vietnam's tourism service has set a target of 2.5 million foreign visitors and 12 million local tourists this year. In the first four months of this year, the service welcomed over 870,000 foreign tourists, a 9.1 per cent rise over the same period last year. To achieve the set annual target, the Vietnamese tourism service started at the the beginning of this year to increase investment in infrastructure at tourist sites. The service has closely coordinated with the aviation service to market Vietnam tours in other countries and open new flight routes.

Foreign tourists coming to Vietnam by air have increased remarkably and many have come from new markets such as Israel, Germany, the Netherlands, China, Spain, and Japan. Vietnamese tourist businesses have started building a trademark with typical characteristics for the country's tourism service by providing new and diverse tours such as eco-tours, cultural site tours, sea-diving and mountain-climbing tours. Vietnam has been known widely as a safe tourist destination for foreign tourists since the September 11 attack on the U.S.

The service has since late last year welcomed VIP foreign tourists to sea resorts, including the family of Finland's President, the family of the General Secretary of the Communist Party of China Jiang Zemin, and families of American, German and Japanese millionaires. The number of local visitors rose to 11.7 million last year from 10 million in 1999. Revenues from tourism increased to VND 20,500 billion last year from VND 15,600 billion in 1999. 

SURVIVAL, A LA GRAND DAMES

By EDWIN McDOWELL  New York Times

Only a few of America's grand old hotels, or the Grand Dames, as they were affectionately known, have managed to escape the ravages of time and changing vacation patterns. They have done so mostly by preserving the best of what made them grand and adapting.

That has frequently meant developing their extensive property with privately owned homes. The 100-year-old Mount Washington Hotel in Bretton Woods, N.H., with 200 guest rooms, now has about 150 such houses on its 2,600 acres and will soon add more. Thirty houses have been built on the grounds of the Greenbrier hotel in White Sulphur Springs, W.Va., which has 739 guest rooms, while an additional 70 or so lots have been sold (at prices ranging from $280,000 to $2 million).

The Cliff House in Ogunquit, Me., owned by the same family since 1872, with 194 rooms, has sold 22 lots on its 70 acres for private homes over the years. But it no longer does because "preserving the acreage and keeping up with change are the keys to our survival," said Kathryn Weare, the current owner. Those changes include a conference center and, as of May 17, a new oceanfront spa and health club, as well as 32 new oversized guest rooms.

Last December, the 133-year-old Mohonk Mountain House in New Paltz, N.Y., with 251 guest rooms, opened a large refrigerated ice rink — just in time. Lake Mohonk, which runs through the property, and on which guests have skated for years, froze over only a few days the entire winter.

NEW YORK TOURISM BLITZ


NYC & Co., the city's tourism organization, is launching a national marketing blitz that will involve sending out 100,000 postcards inviting Americans to come visit New York.

The effort is designed to boost the ailing tourism business, and will feature messages from quintessential local characters, including police officers, a Rockette and a New York chef.

HONG KONG HOTEL ASSOCIATION CHIEF: DORMITORY IDEA “ABSOLUTELY LUNATIC”

South China Morning Post    -  The chairman of the Hong Kong Hotel Association yesterday described as "absolutely lunatic" the idea of using university dormitories and serviced apartments to help cope with the influx of mainland tourists.

Mark Lettenbichler said he believed there were enough hotel rooms in Hong Kong to cater for tourists in the coming years. He said what the industry really needed was to import highly trained staff from the mainland and other regions.

His comments came after many tour operators complained last week they could not find rooms for tourists. The Federation of Hong Kong Hotel Owners suggested the Government should ask universities to offer rooms for tourists and allow serviced apartments to be rented out in the short term.

But Mr Lettenbichler yesterday described the idea as "absolutely lunatic" and added that it would only tarnish the reputation of the territory's hotel services.

"Universities are not hotels. Hong Kong is renowned for its world-class hotel services. We have to maintain our qualities to keep that reputation," Mr Lettenbichler said.

He admitted that rooms were fully booked last week when a record number of mainland tourists flooded into Hong Kong to enjoy the week-long Labour Day Holiday on the mainland.

But Mr Lettenbichler said this was a rare event and many factors had coincided to leave rooms fully booked.

"We had the Golden Week (holidays) in Japan; the Kitty Hawk aircraft carrier made a port call and a lot of Taiwanese tourists arrived. Such occasions happen once or twice a year, but that doesn't justify saying we don't have enough rooms."

He said the room occupancy rate had picked up to 80 per cent since the September 11 terrorists attacks, but returns for the hotel business were still suffering because of the economic downturn.

Mr Lettenbichler said the biggest challenge was to recruit people fluent in English, Putonghua and Cantonese to work as frontline staff.

Hong Kong needed to import trained staff from the mainland and the rest of the region to solve the problem.

"Of course we will first look for staff in Hong Kong. But we find it quite difficult to find workers with good language skills. We have offered English classes to staff but that is not enough."

He said the Government must do more to raise English standards if it aspired to build Hong Kong into a world-class city.

Mr Lettenbichler estimated the Disneyland theme park, due to open in 2005, would need hundreds of highly trained staff, adding that universities in Hong Kong were not producing enough talented people to fill the gap.

"Even if we start to open more classes now, we will be still short of talent by then," he said.

ACCOR TO SET UP NEW HOTELS IN ARABIAN PENINSULA

Gulf News  -  By 2005, Accor aims to have almost 30 hotels - with more than 6,000 rooms - on the Arabian Peninsula, it was revealed yesterday at the Arabian Travel Market.

Accor currently has 20 hotels with more than 4,000 rooms in the region, but it is developing more because of the strong growth in business and leisure travel, said Christophe Landais, regional director of operations and development, Accor.

The Ibis Dubai and Novotel Dubai, which are under construction at the site of the Dubai World Trade Centre, are included in the plans for a total of 28 hotels by 2005.

Both hotels are expected to open in April next year in preparation for the IMF convention which will be held at the site next September.

Accor decided to build the two hotels at the site because it recognised the need for an alternative level of accommodation - the Novotel will be four-star while the Ibis will be an "affordable" business style hotel.

Growth for Accor has not been restricted to the region, added Christophe Jeannest, vice president, worldwide sales. In the next year, the group will open 200 new hotels internationally.

"Accor's performance in the Arabian Peninsula last year resulted in a 20 per cent increase in net profit, with 16 hotels and 3,000 rooms now in the UAE,Saudi Arabia, Qatar and Oman," said Jeannest.

"In 2002, we will open four new properties increasing our number of rooms in the region to 3,669, expanding into Bahrain, Yemen and Al Ain for the first time."

The group also announced at ATM that it had formed a partnership with Dubai's Emirates Academy - which focuses on hospitality training - to give specialised Accor training courses 

DEDEMAN HOTEL CHAIN EYES FOREIGN PARTNER

Ankara - Turkish Daily News  -  Dedeman Holding, owner of Turkish hotel chain Dedeman, announced that it would welcome alliance with a foreign group in the hotel industry, Reuters newswires reported yesterday.

"We are open to alliance with an internationally renowned brand provided that our brand name is used as well," Dedeman Holding chairman Murat Dedeman told a news conference in Istanbul.

Dedeman said talks between the hotel chain and a foreign investor have failed earlier as the foreign company didn't accept to include the Dedeman brand in its operations.

The group's hotel business Dedeman Turizm's general manager Unsal Sinik predicted that visitors to Turkey would number some 11.5 to 12 million and tourism revenues would amount to approximately $10.5 billion this year.

Dedeman Holding is active in construction, tourism and mining sectors. The holding has planned to make a listing of its tourism investments and filed with the capital market watchdog for this purpose before the crisis. "But we decided to wait because the stock market collapsed. Our filing expired after six months in line with the routine procedure. Now we are waiting for a more appropriate timing," Dedeman said.

Dedeman opened four new hotels in the first four months of 2002, raising the number of its chain hotels to 16. The company plans to secure management and franchising deals at home and abroad. The first Dedeman hotel that will become operational abroad is Dedeman Grand Chisinau in Moldova. Sinik said the hotel would open in November this year.