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  1. Analysis
June 30, 2007

Rocco Redux

A decade after the opening of Rocco Forte Hotel's first property, Sir Rocco Forte reflects on success and future plans. Christopher Kanal reports.

By cms admin

March was a month of mixed feelings for Sir Rocco Forte, as he celebrated a decade since Rocco Forte Hotels took control of its first property, The Balmoral in Edinburgh, while mourning the death of his father, Sir Charles Forte.

Despite the sad news, Rocco Forte Hotels can look back on a decade in which it established itself as a major player in the luxury European hotel market, with an eclectic and expanding portfolio.

“Rocco Forte Hotels can look back on a decade in which it established itself as a major player.”

The hostile takeover of Trust House Forte, the company he took over from his father and ran for less than four years, by British TV company Granada in 1996 broke up the Forte empire, but amazingly he started again, creating his own niche luxury brand. By 2006 the group was making £13m, with a turnover of £93m, and it now has nine properties in nine key cities across Europe, with two new hotels due to open in the autumn: Le Richemond in Geneva in September and The Charles Hotel in Munich in October.

Tanned and athletic with dark hair and beard, he certainly looks full of energy and ideas when we sit down at his elegant headquarters in St James’s, London. Taking a short break from his busy schedule, a voluble Sir Rocco expounds on a range of topics, from his father’s legacy and the art of building a luxury brand to his relationship with his sister and his hotel managers.

HMI: Your father was a legendary figure. What did he teach you?

RF: Everything. My father was an extraordinary man – what he achieved was amazing. What made him special was his drive, his honesty and integrity, his concern for people working in the business, and his ability not to take no for an answer. He inspired a lot of people. I have received so many letters from people explaining how my father helped them at some point in their lives.

HMI: It has been ten years since the founding of Rocco Forte Hotels. What do you think you have learnt?

RF: It’s quite tough starting a business from scratch. When you are used to working in a big organisation you can concentrate on big issues and resolve them more easily. With a smaller organisation you don’t have that luxury – a lot of things you have to do yourself.

We started off with a collection of individual hotels, each with their own identity, but as the group has got bigger, we have had to get the hotels to work together more effectively. As a result, the Rocco Forte brand has become more and more important.

HMI: How do you decide which cities to open hotels in and which properties to take over?

“The soul of the hotel is the atmosphere you create within it. A hotel needs to be alive and vibrant, not a mausoleum.”

RF: I want to be in the major cities. I am becoming more aggressive in the way I look for sites, although the market is extremely difficult at the moment. However, sometimes you can’t wait. If I had waited for a London property before doing anything else, I would not have the group I have now.

HMI: Are you looking to expand more into Central and Eastern Europe, building on the Hotel Astoria in St Petersburg and the new hotel opening in Prague next year?

RF: Budapest is a city I would consider. Obviously Moscow is an important destination. It’s a question of picking the right time. At the moment I don’t want to be too big because I would lose touch and the spirit of the company would change.

HMI: You concluded your keynote speech at the annual meeting of the European Hotel Managers Association in February by saying that ‘every hotel needs a soul’. What did you mean by that?

RF: A lot of people see hotels as bricks and mortar, but that is not what they are about at the end of the day. The soul of the hotel is the atmosphere you create within it. A hotel needs to be alive and vibrant, not a mausoleum.

HMI: Has your philosophy changed from ten years ago when you started the group?

RF: In the beginning I did not understand the design element of the hotels, which my sister [designer Olga Polizzi] handled. I thought we would take on a few hotels, do them up a bit and run them. Olga really understood the design element. We have expanded our central team, but we are trying to resist moving towards a more regional approach, which can weaken the message. We still have one guy reporting to me in charge of operations for all the hotels, so we are not that far removed.

HMI: The Verdura Golf and Spa Resort in Sicily is quite a departure from your previous hotels. How did you decide on that and will you be opening any others?

RF: I always wanted to do a golf resort, and I don’t think there is a really high-quality example in the Mediterranean. I looked at a number of potential sites over a three or four-year period before settling on that one.

We have 1.8km of coastline attached to the site, 550 acres of land, so we can create the right sort of environment. And as southern Sicily is just below the North African coast, the winter climate is very good. I’ve been down there in December and there have been temperatures of 75º F.

Recently, we also announced a management contract for a hotel just outside Marrakech that has a golf club attached and I would be interested in looking at other, similar opportunities.

HMI: Do you get involved in the daily running of your hotels?

“When they [Granada] raised their offer to £700m, I watched their share price collapse.”

RF: It’s important that I’m in touch. The guys running the hotels on a day-to-day basis are under a lot of pressure. I have the luxury of having a bit more time, so I can see things with a fresh pair of eyes. I think my job is to identify problems before they occur.

Before a hotel opens, I talk to the staff so they can hear directly from me what my philosophy is, what I believe in and what I expect from them. This shows an individual who cares about things.

HMI: What did your experience with Trust House Forte teach you and how did it influence Rocco Forte Hotels?

RF: I was surprised when I started up again how much I did know. Trust House Forte was quite a bureaucratic organisation and that was something I was determined to avoid. There was also a very strong cost control culture there, so when I asked for service standards nothing happened.

Then I realised that the managing directors of the various businesses were ringing up the managers at the end of the week saying ‘Your gross profit percentage is too low and your wage percentage is too high.’ So the managers were saying ‘The boss is talking about services, but what he really wants is a bottom line.’ So I was determined to make sure that there was not going to be a conflict in the messages.

At Rocco Forte Hotels we have a system of rewarding managers on service delivery. If you get the top line right, deliver the service and keep the customer happy; the bottom line will come automatically.

HMI: How did the hostile takeover affect you?

RF: At the end of the day, Granada paid a big premium and that is why they got the company. When they raised their offer to £700m, I stood in front of the screen and watched their share price collapse. The tragedy was that they then broke it up. It was a complete waste of time as far as they were concerned and they destroyed what was a pretty good business.

HMI: What makes a luxury hotel a cut above the rest?

RF: The ultimate thing is service delivery, and that has to be at a very high level to justify the prices that you want to charge. If the service delivery is bad, then people will not want to pay the prices you are asking. It’s a long-term business, so you have to have continuity.

HMI: What are the strengths and weaknesses of the group?

“If you get the top line right, deliver the service and keep the customer happy; the bottom line will come automatically.”

RF: We have established ourselves as a brand, but people don’t automatically think of us if they are visiting a particular destination. Our customer relations management isn’t good enough, and it’s something that we are beefing up.

There’s not a lot of cross-fertilisation of the customer base across the hotels. It has been difficult in the past, but now we have got a system of a centralised inventory, so it’s easy for us to pick out which customers are using more than one hotel and who our best customers are.

HMI: What is it like working with your sister? Is there any sibling rivalry?

RF: I let her get on with it. She has a very good sense of taste and, although my ideas of décor have evolved, I didn’t really have any idea at all when we started. I tend to look at rooms from more of a guest comfort point of view.

Olga is on the management board and participates in discussions. If there is a problem she voices it and makes me think again. I think some of my senior management use her to lobby me when they don’t like what I want to do! One of the nice things about this business is working closely with my sister, which I wasn’t able to do in the past.

HMI: Do you have any plans for retirement?

RF: I have no plans for retirement. If you are fit and healthy and have the energy, you carry on going. When my father merged with Trust House he was 62, and he went on for another 15 very active years after that. So there’s hope for me yet!

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