Business Traveller attended the International Hospitality Investment Forum (IHIF) at InterContinental Berlin last week, to hear from the industry’s top executives on the hotel world under the theme ‘Fortune Favours the Bold’.
Co-CEO of Maybourne Hotel Group, Marc Socker, was interviewed by Alexi Khajavi, president of hospitality and travel for Questex, on May 17, with topics spanning everything from the hotel group’s heritage and growth to rising rates and today’s definition of luxury.
The Maybourne Hotel Group has three hotels in London – Claridge’s, which has recently undergone a huge renovation project, The Connaught and The Berkeley – plus two international properties, The Maybourne Beverly Hills in Los Angeles and The Maybourne Riviera in the south of France.
The group will open its sixth property this winter: The Emory in London’s Knightsbridge.
Speaking on the growth of the group and its pipeline of properties, Socker stated:
“I don’t think we are going to go off the beaten path too much. We are looking into some resort markets and we feel that resorts are very powerful revenue stream going forward.
“At the end of the day we want to be in those key gateway cities that will last the test of time, that will generate the high rates, that are truly luxury in nature.”
He added that hotels are set to open in Paris and Miami and that the company is “looking at something very seriously in New York”.
Socker, however, noted the challenges with finding such deals.
“Also let’s face it, it’s very hard to find assets in some of these gateway cities. Supply is very difficult, these cities are full of hotels already so it’s very hard to build a new hotel, especially with ESG requirements.”
“We’ll be very selective. We’re not going to grow for growth sake. That’s really important. We don’t want to dilute what we’ve got and have created over the past 200 years. We’d like to, I think, end up with 15 hotels, maybe 10-12 branded residences.”
While Maybourne is predominantly an owner-operator, it is also looking at management agreements, recently signing a contract in Asia.
“Going forward we absolutely are focused on management agreements as well… I’d imagine when we get to a stabilised position, we’ll probably be 50 per cent managed and 50 per cent owned. Clearly, however, the most important thing is dealing with the right owners and people that have the same approach to luxury and values as us.”
A common theme at the conference was the growth in technology and the impact this will have on hotel groups, with the CEOs of Accor and IHG also quizzed on the topic. Socker was largely in agreement with his competitors, highlighting the importance of the human connection.
“It’s tricky and something that I’m constantly battling with every day with the teams. At the end of the day, luxury hotels are about the human connection in my mind. I don’t think that will ever disappear. Some of our guests have been coming for generations.”
“Technology is obviously an enabler. It enables us to predict customer preferences, trends. That’s very important. It also allows our operational teams to really prioritise and give that best-in-class service, almost predicting what the customer wants before they even know it.”
“So technology is an enabler but it does not at all take away from what we do every day with that physical human connection.”
Continuing on this topic, Socker highlighted the importance of staff and customer service.
“We are luckier or better than most in our ability to attract and retain staff for some of those reasons. We didn’t let anyone go during Covid, so we didn’t have to start from scratch.”
“The staff are the most important. They are critical. There’s no guest service, no luxury without the staff that set the foundation… That is the stakeholder we need to take care of the most.”
“The product is the expectation – you need to provide a great product and great physical conditions – but at the end of the day that’s nothing unless you give that [exceptional] service.”
“The challenge clearly is that, in such a marketplace as today, you need to maintain that at all times. It takes one bad experience for the guests to go somewhere else and we know there’s a lot of luxury supply coming into the market, especially in London where the majority of our hotels are, so we have to keep on our toes.”
The ever-changing concept of luxury was also discussed, with Socker noting the growing importance of ESG and younger generations.
“I’m not sure you really can define [modern luxury]. The traditional paradigms of luxury are fast evolving, now they are going at incredible pace – environmental and social behaviours, ESG etc. has a big part to play there.
“Luxury today is not so much about physical product, it’s about that emotional connection, I hate using the word experience but that is what it is. People want experiences today…
“But the user of luxury today is going to get younger and younger. It is changing. It’s about experiences but it’s also [about] maintaining that heritage. Trends come and go, but I don’t think luxury heritage of service will ever change.”
Staying at a Maybourne property will set you back a pretty penny, with most entry-level rooms costing from £1,000 at any point in the season.
“Pre-covid if we got nights above £1,000 ADR, it was a good week. Now if we don’t get that, we’re worried – what’s happening? What’s changed?”
Quizzed on whether there are any signs of this changing, Socker replied:
“Not at the moment. We have a constant challenge internally with the management team – at what point do you stop raising the rates. At what point do you feel that, if you continue to do this (as an industry, not just us), you will get pushback? At the moment you can get away with it, there’s very little price sensitivity.”
What is clear, however, is that luxury travel is not seeing any slowdown, particularly with the reopening of Asia.
“The world is very global today. Luxury is very global. The user of our services and hotels are coming from all different parts of the world, all very different industries…
“China is only just opening up now. That’s a whole new market that’s about to explode again and will want to spend money on hotels, travel and experiences… And the ultra-high-net-worths, who are growing at a very fast rate all around the world… want to spend money on travel and leisure.”
