WEBVTT - Four Seasons Alejandro Reynal Talks Travel Outlook

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<v Speaker 1>Turning to travel, and really this is the reason why

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<v Speaker 1>we wanted to highlight travel this particular week. We're seeing

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<v Speaker 1>a real discrepancy between high end travelers and low end

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<v Speaker 1>travelers in terms of their.

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<v Speaker 2>Position to spend.

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<v Speaker 1>Is there a change in that four season? CEO Alejandra

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<v Speaker 1>right now saying his company has seen in strongest year ever,

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<v Speaker 1>writing this short term uncertainty given the current geopolitical and

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<v Speaker 1>macroeconomic pressures are impacting traveler sentiment, but the luxury segment

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<v Speaker 1>is more resilient, Alejandro joins us. Now, Alejandro, thank you

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<v Speaker 1>so much for being with us. Pleasure to have you

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<v Speaker 1>here in studio. I want to start there. Is it

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<v Speaker 1>true that you're not seeing any slowdown whatsoever in the

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<v Speaker 1>luxury element?

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<v Speaker 2>Good morning, Thanks for having me. It's a pleasure to

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<v Speaker 2>be here. And I love the fact that we're talking

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<v Speaker 2>about luxury hospitality. Yes, I mean, we had a really

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<v Speaker 2>strong first half of the year compared to last year,

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<v Speaker 2>much better. When I look into the booking trends for

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<v Speaker 2>the second half of the year, even going on into

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<v Speaker 2>twenty twenty five, they look very strong as well. You know,

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<v Speaker 2>I think there's two things that are happening there. First,

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<v Speaker 2>and for most is that the luxury guest or a

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<v Speaker 2>luxury consumer continues to be very resilient. They continue to spend,

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<v Speaker 2>you know, that desire for experiences to explore continues to

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<v Speaker 2>be there. But also I would say that from a

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<v Speaker 2>four seasons angle and from a four session's point of view,

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<v Speaker 2>we do offer a very clear value proposition to our guest.

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<v Speaker 2>I mean, we do have very proud to say that

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<v Speaker 2>we have the very best hotels in the best locations

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<v Speaker 2>and we provide the best service to our guests. And

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<v Speaker 2>when you have that as the brand proposition, and that's

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<v Speaker 2>what we do at four Seasons, there's a demand for that.

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<v Speaker 2>And by the way, this is not new of this year.

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<v Speaker 2>We've been operating down for sixty years and has been

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<v Speaker 2>the constant all throughout the period.

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<v Speaker 1>So what has changed? And I'm wondering not just from

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<v Speaker 1>the consumer who is able to spend, but also from

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<v Speaker 1>the employees and who you're able to recruit. For a

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<v Speaker 1>long time, there is this earth of people willing to

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<v Speaker 1>work in hospitality in the direct aftermath of the pandemic.

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<v Speaker 1>Do you see it as being much easier now to

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<v Speaker 1>hire people and sort of easier to also retain them

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<v Speaker 1>without massive price increases wage increases.

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<v Speaker 2>Yes, I mean, obviously, for us, a key component of

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<v Speaker 2>what we do is through our people. I mean, we

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<v Speaker 2>are a service company and the most important asset is

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<v Speaker 2>the people that we have with us. So we place

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<v Speaker 2>a lot of emphasis in making sure that we are

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<v Speaker 2>the employer of choice in every single market that we operate.

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<v Speaker 2>We do spend a lot of time training people, developing them.

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<v Speaker 2>For us, we do measure employee engagement twice per year.

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<v Speaker 2>We are at the two percent across all industries in

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<v Speaker 2>terms of employee engagement. So it's a topic that we

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<v Speaker 2>spend a lot of time because we do believe that

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<v Speaker 2>we need to have the best and most engage employees

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<v Speaker 2>with us. We haven't had. I mean, obviously, right after

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<v Speaker 2>the pandemic there was a little bit of pressure from

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<v Speaker 2>a labor point of view. We don't see that anymore,

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<v Speaker 2>but again it's because of the force that we place

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<v Speaker 2>in making sure that we are the employer of choice

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<v Speaker 2>in the marketing where we operate.

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<v Speaker 3>I want to know about more about your customer, but

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<v Speaker 3>specifically like the ultra luxury and there, I know you

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<v Speaker 3>have a private jet service something like one hundred and

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<v Speaker 3>fifteen thousand dollars for charter a day. How much demand

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<v Speaker 3>is there for that?

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<v Speaker 2>Yes, you know, it's interesting. And just to give you

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<v Speaker 2>the context of this is, obviously Four Seasons started as

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<v Speaker 2>a hotel and a resource company, and we are now

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<v Speaker 2>the leading luxury hospitality company and that's where our guests

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<v Speaker 2>experience the brand. What we found over time is that

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<v Speaker 2>because our second business is the residential brand, the residential

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<v Speaker 2>so guests they stay with us, they experience the brand,

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<v Speaker 2>and then they are willing to buy a residence with us.

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<v Speaker 2>So that's sort of the journey that they start experiencing

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<v Speaker 2>with Four Seasons. And then the third piece is what

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<v Speaker 2>you just said is the journey's experience based travel that

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<v Speaker 2>we prom as a third line of business. So if

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<v Speaker 2>you think about the whole analogy, guests they stay with us,

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<v Speaker 2>they live with us, and they travel with us. They

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<v Speaker 2>developed such a comfort with the brand and with the

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<v Speaker 2>brand promise and the brand proposition that they're willing to

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<v Speaker 2>spend that amount of money in traveling for twenty days

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<v Speaker 2>through ten four Seasons in Africa, in Europe and so forth.

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<v Speaker 2>So for us, it's been more around creating this luxure

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<v Speaker 2>ecosystem for four seasons that our guests are eager to travel.

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<v Speaker 2>By the way, we have all the intineraries for this

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<v Speaker 2>year sold out for the rest of the year, so

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<v Speaker 2>it's a very successful property and it taps into that

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<v Speaker 2>desire to experience, to explore that we find in our guests.

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<v Speaker 3>You're saying we're too late for it, then yeah.

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<v Speaker 2>Twenty twenty five, we're opening the.

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<v Speaker 3>Good To keep in mind, I mean, just talking about

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<v Speaker 3>the different mix of your businesses, You're not the only

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<v Speaker 3>one doing in this space, and it obviously is an

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<v Speaker 3>exclusive space of those who can offer this, but you

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<v Speaker 3>think of the online resource trying to give also experiences

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<v Speaker 3>to what does competition look like right now?

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<v Speaker 2>Well, competition because of the attractiveness of the luxuries space,

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<v Speaker 2>there's a lot of competitors coming in. I think we

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<v Speaker 2>have as a four seasons the advantage of the brand.

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<v Speaker 2>I mean, we are the most We continuously measure brand preference,

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<v Speaker 2>brand awareness in terms of our brand and we continue

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<v Speaker 2>to be the number one luxury hospitality brand, and I

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<v Speaker 2>think that carries a lot of weight, but it's because

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<v Speaker 2>at the end of the day, we're able to deliver

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<v Speaker 2>that value proposition to our guest. I mean when it's

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<v Speaker 2>interesting because I do interact with a lot of our

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<v Speaker 2>guests and when I ask them what do they like

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<v Speaker 2>about the four Seasons, the first thing they tell me

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<v Speaker 2>is that I know what to expect and I've been

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<v Speaker 2>able as a guest to explore remote destinations. So for example,

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<v Speaker 2>I've been able to go to Garabora. But because there's

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<v Speaker 2>the four Seasons, I feel comfortable because I know what

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<v Speaker 2>to expect, and to have that level of consistency and

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<v Speaker 2>that brand power is very, very unique. So I think

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<v Speaker 2>we're uniquely a very well positioned.

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<v Speaker 3>Where do you see demand right now in terms of

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<v Speaker 3>the hot spots top five people are traveling too.

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<v Speaker 2>Yeah, you know, it's interesting because and I'm gonna say

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<v Speaker 2>something which is a little bit of contrariant. When I

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<v Speaker 2>look into the history of four Seasons over the last years,

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<v Speaker 2>travel patterns haven't changed much. For example, fifty five percent

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<v Speaker 2>of our revenues come from the Americas, the majority of

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<v Speaker 2>in the US. More than fifty percent of our guests

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<v Speaker 2>they are from the US. And whether they travel to

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<v Speaker 2>the US right now during the summer time, they travel

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<v Speaker 2>to our South Florida collection, they go to Hawaii. Beyond

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<v Speaker 2>the US, they go to Mexico and then Europe. The

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<v Speaker 2>fact is that this has happened for many, many years.

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<v Speaker 2>Americans are going to go to Europe probably once a

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<v Speaker 2>year every summer. I mean, that's so we're seeing that

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<v Speaker 2>again this summer, but it happened last year, prior year,

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<v Speaker 2>prior year. But again, America's representing fifty five percent of

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<v Speaker 2>revenues for US in the Europe, and the Middle East

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<v Speaker 2>represents twenty five percent of the revenues, and there the

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<v Speaker 2>dynamics are similar. Europeans they mostly stay within Europe. They

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<v Speaker 2>ventured into the Middle East or Africa. And then we

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<v Speaker 2>have the APAC, which is twenty percent of our business.

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<v Speaker 2>Three percent is only China and that's mainly regional travel.

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<v Speaker 3>Do you still see the Chinese consumers spending as much

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<v Speaker 3>in luxury hotels the same way the US consumers.

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<v Speaker 2>No, they have not come back. I mean when I

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<v Speaker 2>look into what was the spend prior to the pandemic,

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<v Speaker 2>it's less. It's interesting because they are spending less in China,

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<v Speaker 2>so we still don't have the same race that we

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<v Speaker 2>used to have prior to the pandemic in China, but

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<v Speaker 2>they're starting to spend more internationally, but internationally within the region,

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<v Speaker 2>meaning Japan for the most part, because of visa issues

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<v Speaker 2>and many other things. They still have not come back

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<v Speaker 2>to Europe or the US, which is where we saw

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<v Speaker 2>them prior to the pandemic. There's a real.

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<v Speaker 1>Question here about how much and towards this lack of

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<v Speaker 1>Apollo called us out for us this morning. He said,

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<v Speaker 1>all you people in media, and I'm paraphrasing, just keep

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<v Speaker 1>using everyone as an anecdote to try to paint the

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<v Speaker 1>macro picture. Your company has been around for sixty years.

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<v Speaker 1>How independent of the macrocycle, is it?

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<v Speaker 2>Right?

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<v Speaker 1>I mean, we're talking about something that is a complete

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<v Speaker 1>microcosmon to itself of people who have disposable wealth and

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<v Speaker 1>are going to travel no matter what, versus a company

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<v Speaker 1>that does have some sort of sensitivity to what's going

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<v Speaker 1>on in the underlying consumer centivacy.

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<v Speaker 2>I mean, I would be lying if I would say

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<v Speaker 2>that we are immune to any microeconomic geopolitical impacts, because

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<v Speaker 2>we are. I mean, at the end of the day,

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<v Speaker 2>that uncertainty impacts travel or sentiment, and people don't travel

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<v Speaker 2>because of that. But obviously we've been operating for sixty years.

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<v Speaker 2>Have we've gone through these cycles and they go away,

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<v Speaker 2>and at the end of the day, what we see

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<v Speaker 2>in is year or a year that the market continues

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<v Speaker 2>to grow in travel and tourism has been growing for

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<v Speaker 2>many years now, that desire to experience, to explore continues

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<v Speaker 2>to be there. I think it's really interesting when you

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<v Speaker 2>look into the luxury consumer that our composition of about

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<v Speaker 2>twenty percent are boomers, forty five percent are Gen X,

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<v Speaker 2>thirty five percent already our millennials, so that transfer of

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<v Speaker 2>wealth is starting to happen, but we're not losing the

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<v Speaker 2>boomer so it means that the market is expanding. So

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<v Speaker 2>always year and year there's going to be more demand,

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<v Speaker 2>more growth. And at the end of the day as well,

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<v Speaker 2>we as as a hotel and resource company, need to

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<v Speaker 2>be at the forefront in terms of creating amazing experiences,

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<v Speaker 2>so we can't satisfy the demand. So I don't think

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<v Speaker 2>at the end of the day that the demand just

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<v Speaker 2>comes by itself. We need to have, like we do,

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<v Speaker 2>a very special product, a very special service proposition to

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<v Speaker 2>our work guests, so at the end of the day,

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<v Speaker 2>they are eager to come to a four seasons.

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<v Speaker 1>So you're doing great with the baby class. I hear

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<v Speaker 1>that you really crushing it, you know, particularly south of

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<v Speaker 1>the US.

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<v Speaker 2>Paid actor. No, it wasn't, you know, But that's one.

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<v Speaker 2>It's a tremendous learning experience because sometimes we spend so

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<v Speaker 2>much money on marketing that doesn't provide any outcomes. But

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<v Speaker 2>then these special authentic moments are the ones that the

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<v Speaker 2>consumers value the most. This was a complete viral moment,

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<v Speaker 2>but it was completely authentic. We had nothing to do

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<v Speaker 2>with it. In the end, we have more than three

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<v Speaker 2>hundred million views through various digital platforms on the four

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<v Speaker 2>Seasons Baby Obviusly we got a spike on on searches

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<v Speaker 2>on four Seasons Orlando, so it was very good. But

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<v Speaker 2>again it was very authentic, which ultimately is what people like.

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<v Speaker 2>I love it.

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<v Speaker 1>I wonder how many board meetings for about the four

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<v Speaker 1>seasons Baby all right now four seasons c H. Thank

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<v Speaker 1>you so much for being with us.