The Interview: Jennifer Fox, FRHI

Tom Otley talks to Jennifer Fox, president of FRHI (Fairmont Raffles Hotels International) and the Fairmont brand, about the company’s plans across Europe, the Middle East, Africa, India and Asia Pacific

FRHI has recently restructured its management – why was that necessary?
The catalyst for our reorganisation was our growth strategy. We need to have the expertise and the people where the action is – and that’s in the field. We were highly centralised around our brands with Fairmont in Toronto, Raffles in Singapore and Swissotel in Zurich.

So for me being president from Toronto – with 70 Fairmont hotels going up to 90 in the next four years, and all of that growth is outside North America – it made sense to reorganise around the areas of the world where we are expanding. We now have people in the regions who have the knowledge and in many cases the languages necessary, and who know the market extremely well.

So how many hotels do you have across the three brands?
In total, we have 110 properties today which is going up to 190 in the next five years. We have roughly 10 Raffles rising to 20, 28 Swissotels going to 45, and Fairmont will rise from 70 to 90. Predominantly the expansion is international, outside the United States.

But with this reorganisation, will the identities of the brands remain distinct?
Absolutely, we don’t want to lose our brand DNA and that comes from where they came from geographically. We’re a management and a brand company so they need to be differentiated from one another and from the brands they compete with.

How do those brands interact? Do you see the same person staying in each of the brands depending on what sort of trip or budget they are on?
We see a bit of that and we’d like to see more of it. We ran the brands very separately, now they will be run under the same geographical region. For example, there’s no Fairmont in Zurich but there’s a great Swissotel in Zurich, so we should encourage a Fairmont customer to take advantage of that.

There are cross-benefits and cross-marketing and that’s something we will work on. The systems are there, and your preferences would be recognised across the brands. Typically the cross-marketing would be through the loyalty programme and we are starting to think about building a loyalty programme and revitalising it. We expect we will probably launch something in about a year’s time.

For corporates, we have always sold the hotels together – although not for consumers. For business to business, we have gone out and sold the brands together for the last five years.

During the recession did you see corporate travellers trading down?
We see it sometimes. We opened a project in Manila in the Philippines, for instance: the Raffles Makati and the Fairmont which is actually one building with two entrances. Some of the business travellers have a corporate policy where they can’t stay in a Raffles, so they stay in the Fairmont, but then the executives and the board stay in the Raffles, and it has the same ballroom, so they can say they are having their conference at the Fairmont but they might be staying in Raffles or vice versa.

In Chicago, we have a Swissotel and a Fairmont across the road from one another and they work very well together and they co-exist in that market very well.

What was interesting during the recession was that demand for leisure travel outpaced business travel. Business travel decreased, but we didn’t ignore business travel and it has come back and rates are beginning to creep back up to 2007 levels after six years.

The meetings business is coming back. Raffles doesn’t have a lot of that because it offers high levels of personalisation. Fairmont has a lot of big conference hotels and Swissotel has some good meetings space as well.  

Given the challenges of the last few years why expand at this speed?
We want to be where our customers want to go and we don’t want to lose them because we can’t satisfy them in a place they are visiting, whether that is a business destination or a resort. In the major cities, there is room for at least one of each of the hotel brands.

Our strategy for Raffles is to be in mega-markets and important resort locations, for Fairmont it is to be in all the key cities, and Swissotel in all the primary markets and secondary cities. So we have all three in Beijing, and also in Istanbul very soon, and we would like to do that in all of those markets.

Every hotel brand wants to expand in those markets. Are you willing to invest in new developments?
Yes – we would look into going in with some form of equity if necessary.

The group was formed by bringing together three hotel brands. Would you look at adding other brands to FRHI?
Yes, absolutely. Our strategy is to stay at the top end of the market, but we would seriously study a high-end conversion brand or boutique brand, for instance.

frhi.com

The Interview: Jennifer Fox, FRHI