Four Seasons Hotels

Executive Summary

Four Seasons Hotels, Inc. is a Canadian-based international luxury, five-star hotel management company.

Market structure of the hotel lodging industry is monopolistic competitive. In a monopolistic competitive market, the firm can influence the market price by the price of its product by changing the kind of the product being offered. Four Seasons' unique high quality product and service enables them to charge much higher prices than competition, they are able to control pricing on market through unique product/service they provide.

Four Seasons growth strategy is to manage the privately owned properties, often by real estate investor or developer, under the Four Seasons name.

The major competitors are: The Ritz Carton (owned by Marriott International), The Leading Hotels of The World Association: Biltmore (Miami), Relais et Chateaux: Pitcher Inn and Spa (Vermont), Starwood: W Paris Opera, or St. Regis Hotels Worldwide.

Four Seasons always looks at its costs and performance in each value adding activity and wants to improve it. The hotel's management knows that the higher price per room customers are willing to pay can be only achieved through top quality service.

Four Season's strengths include worldwide reputation as a leading luxury class hotel and resort. Company great reputations as a good management company, no property owner ever have broken a contract with Four Seasons.

The weaknesses for the company include: undiversified target market (over 45 years old high income customers), high costs of employee training, difficulties with finding qualified employees providing high quality customer service in hotels outside North America.

The opportunities include the partnership with other top luxury hotels and resorts. There are also threats for Four Seasons, such as growing competition in top luxury markets of chain or privately owned hotels.

The objective of the Four Seasons is to enhance technology without losing the focus of customer satisfaction, repeat purchases, and an experience of the most luxurious and highest quality hotel chain. They want to maintain their current brand image without becoming similar to the other high-end hotels. The concern the Four Seasons had was the ability to utilize technology to enhance revenue or lower the costs.

Four Seasons creates an exceptional experience tailored to their customer's needs to maintain the company's long-term success. This marketing strategy ensures the company attracts and retains customers to the business and therefore, remains profitable.

Market Structure

Market structure of hotel lodging industry is monopolistic competitive. Characteristics of monopolistic competitive market are: many sellers, differentiated product, multiple dimensions of competition, easy entry by a new competition in a long run. In a monopolistic competitive market, the firm can influence the market price by the price of its product by changing the kind of the product being offered. Four Seasons' unique high quality product and service enables them to charge much higher prices than competition, they are able to control pricing on market through unique product/service they provide. The hotel and lodging market is much diversified and it is recognized based on the star or diamond ratings: one star (diamond) as acceptable standards, two stars (diamonds) as comfortable and more professional than one star, three stars (diamonds) good quality service and facilities (middle class), four stars (diamonds) as high quality and some degree of luxury in furnishing, décor, equipment, and service and five stars (diamonds) as luxurious accommodations through hotel, superior service, décor, furnishing. Four Seasons is recognized as the world's leading operator of luxury five stars (diamonds) hotel and resorts.

Market Growth

By the year 2000 Four Seasons managed 50 hotels in 22 countries with seven new properties in planning stage worldwide. The company growth strategy is not acquiring of other groups of hotel chains and diversifying price and quality levels, nor investing in related field such as assisted living. Four Seasons growth strategy is to manage the privately owned properties, often by real estate investor or developer, under the Four Seasons name. The market growth for the company is possible through targeting the top luxury hotels customers and convincing them to stay with Four Seasons properties. Additionally, Four Seasons can acquire the Country Club members or other sophisticated social groups and persuade them through the superior services and amenities to use Four Season as their social events and celebration coordinator.

Major Competitors

Four Seasons Hotels compete against top luxury hotels around the world. Some of the competing hotels are individually owned, and some are the part of a hotel chains or associations. The major competitors are: The Ritz Carton (owned by Marriott International), The Leading Hotels of The World Association: Biltmore (Miami), Relais et Chateaux: Pitcher Inn and Spa (Vermont), Starwood: W Paris Opera, or St. Regis Hotels Worldwide.

Four Seasons average REVPAR (revenue per room) is 39% higher than average REVPAR at its stronger competitor Ritz Carlton. The restaurant prices are one third higher than at the typical hotel chains such as Marriot, Hilton, and Hyatt.

Value Chain

Value chain is a chain of activities to create more customer value. Four Seasons always looks at its costs and performance in each value adding activity and wants to improve it. The hotel's management knows that the higher price per room customers are willing to pay can be only achieved through top quality service. The new technology is installed in the properties, in order to speed up the service and store customer's preference database. Additionally, the 24/7 business center is available due to different time zones, laundry service, twice daily housekeeping and overnight shoe repair available. There are no messages deliveries errors and all the employees always listen to customers. The value is added though "outstanding customer service" in order to create personalized relationship with every guests.

S.W.O.T. Analysis

Four Season's strengths include worldwide reputation as a leading luxury class hotel and resort. Company great reputations as a good management company, no property owner ever have broken a contract with Four Seasons. Lower employee turnover rate only 24% comparing to luxury segment of