The Ritz-Carlton Hotel Co. sticks to its promise of superior service—and weathers the worst downturn in decades.
Ezzat Coutry, senior vice president, The Ritz-Carlton Hotel Company, is the top Ritz-Carlton executive for the Southeast, the Caribbean, and Latin America, currently overseeing 21 hotels. Regina Baraban caught up with him at The Ritz-Carlton Insurance Advisory Board meeting in August to talk about trends in the luxury hotel segment.
Financial & Insurance Meetings: Financial and insurance conference planners know well that the luxury segment took a big hit in 2009—particularly in regard to meetings business—and Smith Travel Research predicts it will be hit even harder in 2010. How is Ritz-Carlton responding to this?
Ezzat Coutry: Overall, we actually saw some improvement in the third quarter of this year, and we think some hotels will continue to improve next year. However, this downturn is lasting longer than expected—longer than the last one we experienced, after September 11, 2001.
In regard to meetings business, of course we have seen plenty of cancellations. Most of our group business in 2009 has been last-minute meetings. But we remain committed to group business. At Ritz-Carlton hotels, 40 to 50 percent of the business is focused on meetings, depending on the property. Our hotels average 350 to 500 rooms, with a lot of meeting space that is continually being renovated and expanded. I think that starting next year, there is going to be pent-up demand both forand .
FIM: We're still dealing with the huge perception issue of the public equating "luxury" with "excess." Do you see the so-called AIG effect becoming less important any time soon?
Coutry: I think that the perception issue is gradually going away. Right now we are hearing less and less public comment about meetings being held at luxury properties. The efforts being made by industry associations [such as the U.S. Travel Association's Faces of Travel contest, the Keep America Meeting petition, and the Meetings Mean Business campaign launched by an industry consortium] are doing a good job articulating the value of meetings business—to communities and individuals as well as to companies.
FIM: And yet the stigma attached to meeting at luxury properties is particularly bad for financial companies. Do you think that those financial companies who are having meetings at Ritz-Carlton properties will try to "stay under the radar" indefinitely?
Coutry: I think that very few companies are really holding their meetings completely under the radar. Financial companies, like other types of companies, hold meetings for very specific purposes—to motivate employees, to bring in customers, etc.—and most develop business cases to justify their meetings.
FIM: The perception issue is so damaging to the luxury segment that some hotels have taken "resort and spa" out of their names. What do you think of this as astrategy?
Coutry: I think this is a response to the public rhetoric and might make it easier for some companies to justify holding a meeting at a specific hotel. At Ritz-Carlton, it is not something we are doing or considering. Our hotels are typically destination driven—The Ritz-Carlton, Philadelphia; The Ritz-Carlton, Cancun, and so on. The destination is part of the name and it is what attracts the customer.
FIM: Has Ritz-Carlton changed its mission or its message to the meeting planner as a result of the perception issues attached to a luxury brand?
Coutry: We have not. Our focus is simple: Meetings are good for business. We support any company trying to develop a business plan to justify meeting at our hotels. This is no different from the past. And we really focus on our relationships with our meeting planners and on delivering their objectives. The economy has not stopped us from continuing our annual industry-specific client educational events such as the Ritz-Carlton Insurance Advisory Board.
FIM: How has Ritz-Carlton weathered the downturn in the luxury segment?
Coutry: Our leisure business has been spectacular and has saved the day. We’re also seeing a strong wedding business.
FIM: Are new hotels still in the pipeline?
Coutry: Although some projects have been abandoned or delayed, and some flags are changing, Ritz-Carlton development has not stopped. Several projects continue moving forward, as well as new hotels opening in 2009 in Lake Tahoe, Tucson, and Charlotte—and, three openings in Asia. In general, the luxury segment is a small one. Recently, supply has exceeded demand. But this is not going to continue.
FIM: What final words would you like to leave with FIM readers?
Coutry: I would say that our commitment to service, both group and leisure, has not changed. You will see it in every guest interaction. Despite the cost-cutting that everyone is going through today, we have not cut costs in a way that impacts service. In fact, our guest service-satisfaction studies are higher than ever, with scores that improved this year compared to last year.