It's been almost a year since Jean-François Ferret stepped into the C-suite at Small Luxury Hotels of the World and sat in the CEO chair. While a new venture for him, there was nothing unfamiliar about the position. He had just spent a half-dozen years in the same post helming ultra-luxury membership group, Relais & Châteaux, pushing its collection of boutique hotels, resorts, villas and gourmet restaurants into the limelight within hospitality-industry and consumer circles, increasing sales and developing a digital platform to enhance brand awareness.
Ferret’s game plan at SLH has been similar, adding new members to the more than 500 hotels across 80 countries via a highly selective process that sees only 5 percent of some 1,000 applications submitted yearly accepted. Among the lucky ones recently making the cut in July, for example, were 46-key Twinpalms MontAzure on Kamala Beach in Thailand and 44-key Alex Lake Zurich in Switzerland.
In terms of growth, the CEO’s target is to have “around 600 properties” within his first three years, an addition of approximately 60 hotels to the number in the current collection. Ferret acknowledged “this is not very aggressive in terms of numbers because for me, what is most important is the quality. So I prefer to have reasonable development, reasonable growth, provided I can attract the best.”
Ferret is in his element when talking hotels, something he has been doing from a young age.
“I’ve always been interested in the hospitality industry,” said the CEO during a recent visit to Hotel Management's New York City offices. “When I started my studies, I wanted to [go to] hospitality school of management, but I didn’t, and went instead to general management.”
Indeed, his road to hotel executive was circuitous. Over some 30 years, he served as director general of Hertz France, managing director/president of Manpower France, deputy managing director of American Express Travel, SVP of Thomas Cook for West Europe and chief financial officer of Compass Group for Europe.
During his time with Hertz, he wanted to “boost” the car-rental brand and decided to partner with a hotel brand, “just because it was complementary between cars and hotels to make itineraries.” He discovered there had been earlier attempts to create synergies between his company and Relais & Châteaux, but no realization because “nobody took care of it.”
Perturbed, Ferret told his team “I will show you how to do it” and called the president of R&C to get a dialogue started. “I pushed him so much and I had so many discussions with him, at the end he told me, ‘OK, Jean-François, I’m OK with this partnership and if you want to join me as CEO I will be very happy. That’s how it started. I was not from the industry, but just by discussion and negotiating a partnership I was about to join Relais & Châteaux,” said Ferret, who chuckled he also kept the car-rental partnership in place.
The CEO is layering comparable strategies over SLH, where he sees “such potential for partnership. We didn’t work that much with partners, and I really want to push that because the added value that you can bring as a brand comes from yourself, and all the partnerships that you have provide to your guests the most incredible experience that you [can] build. So for me, partnerships are the key to be able to provide these added-value experiences.”
To keep with the sophisticated level of the SLH hotels, Ferret is eyeing luxury air carriers, yachts, limousines—“Any partners that can bring added value to our luxury brand, [those] with the same positioning, sharing the same values and able to really build a destination experience around the brands,” he said.
Earlier this year, SLH and Hyatt Hotels Corp. expanded four-fold an existing strategic alliance formed last November around loyalty that made available to World of Hyatt rewards members more than 200 participating SLH properties where they could earn and redeem points and receive on-property benefits. Ferret said the move is designed to draw guests to the SLH members, and described it as “such a big success,” citing complementary attributes and similar values between the two companies. “The is a perfect fit,” said the CEO, adding during the program’s ramping-up period there’s an estimated 50/50 split of cash/points. “We have already many millions in revenue coming from those guests coming to our properties,” said Ferret.
SLH also has its own loyalty program known as Invited, which remains proprietary without any crossover.
In describing his management style at SLH, Ferret explained, “You try to learn. This is very important to me. I respect people. The way I work is just by listening first. So I’ve tried to understand the culture of Small Luxury Hotels; I try to understand the people. Then, when you have this understanding of the brand you try to see what you want to do over the next three to five years.”
And what he wants to do is grow brand awareness and increase the number of members
Ferret said he sees the “power” of the global brand “everywhere,” and is “very happy because there’s a huge queue of hotels [that] would like to join the brand…it allows us to select only the best because our target is really, really the best quality. The attractiveness of the brand is very, very important all over the world,” said Ferret, emphasizing, “So is the brand’s credibility.”
Another key project is a digital transformation program. Toward this, SLH is developing a new website and mobile application along with creating a new database that will support and strengthen its loyalty program.
“Nowadays, digital is key and we need to be more efficient in terms of digital,” said Ferret. “Digital transformation is not only to have a nice website, not only to have a nice app; it’s to have a very strong database to be able to personalize your relationship with the guest. So the future—and what is at stake—is really the personalization of the relationship and making sure we are delivering according to the profile and the preferences of the guest.”
One aspect of SLH that is allowing for greater options in the selection process of member properties is varying interpretations of what constitutes a “small” hotel. Ferret noted in Europe the room count generally hovers at about 50 whereas in the Americas, the number can climb as high as 250. And in Asia, the room count is above 250, he said. The CEO reiterated, however, it will be the service level at an SLH property that will make a 150-room property feel as intimate as a 40-key hotel. To ensure all properties are meeting SLH’s standards, a group of 85 “mystery inspectors” fan out across the globe to check on new applicants as well as each existing hotel once a year.
If a property fails to pass inspection—there’s a 700-point checklist—it has three months to rectify any problems and is then reinspected. “If they fail again, they are out of the brand,” said Ferret. “We don’t compromise on quality.”
While Ferret sees all hospitality brands as potential competitors, hotel-chain soft brands, independents, Airbnb and its ilk, and online travel agencies and their distribution channels are those most impacting SLH’s market-share capture.
“Competition is everywhere, so we need to differentiate ourselves. Really, what is at stake here is our capacity to differentiate. ‘Authentic’ is everywhere. ‘Experience’ is everywhere. For me, I want to go a step further. It’s no more talking about the experience or delivering the experience. For me, the stop further is creating emotions and making sure through the experience we are delivering true emotions, truly intense emotions ... something truly memorable and something you will have in mind for your life ... And it differs from one property to another one. Sometimes it’s a service, sometimes it’s the location, sometimes it’s the experience you can have outside the hotel. We are working a lot on that and the experience you can have with different stakeholders (e.g., local purveyors). Or people who are just passionate about something and we [recommend] our guests meet [them] and then they have something special.”
For instance, on his trip to New York, he was at SLH member The Refinery, where the Manhattan hotel was presenting a special promotion for “Game of Thrones."
“I knew the name of the program but I did not know that for some fans the 'Game of Thrones' was so crazy," said Ferret. "So, I was surprised that they [the hotel] wanted to provide that type of experience, which was personalized and very intense. But, this is SLH, this is Small Luxury Hotels.”