June 01, 2002
Meetings & Conventions: Newsline newsline.gif (8042 bytes)   DOES THE LUXURY CHAIN RISK OVEREXPOSURE?
Ritz-Carlton Grows in U.S.
Simon F. Cooper When Simon F. Cooper became president and COO of the Ritz-Carlton Hotel Co. in February 2001, the chain was enjoying a domestic building boom that continues today. The Atlanta-based firm plans to open five properties in the next 12 months. M&C talked to Cooper, who works in Washington, D.C., about the brand’s long-term plans.

M&C: A number of Ritz- Carltons are opening in the next 12 months. Is the brand in danger of overexposure?

Cooper: We are increasing our inventory, but the markets we are moving into, like New York City and Boston, have been underserved by us for ages. Our focus is getting into key cities and resort destinations where luxury travelers continue to go.

M&C: Will you continue to expand at the same pace?

Cooper: We will be focusing more internationally, especially on Europe. Frankly, Europe is the toughest market to crack, because it is a mature market. But we intend to do it.

As far as the United States goes, the number of cities we can develop in starts to get limited. We are less limited in terms of resorts, which are destination-driven.

M&C: How difficult has it been to overcome perception and sell luxury in a soft economy?

Cooper: There is a perception issue, but we focus our efforts on what the person will get out of staying with us.

One of our major clients just had this same issue with her senior leadership. She held a presentation to explain her choice and said, yes, she could go somewhere cheaper. But she would have to take six more people along to help pull off the meeting.

M&C: Ritz properties in San Juan and New Orleans, and new constructions in Coconut Grove, Fla., and South Beach, Fla., have run into financial problems. Why is this, and how does it affect the brand?

Cooper: It affects our reputation, no doubt about it; people hear the name Ritz- Carlton, but they don’t know the details. In the case of San Juan, of the $11 million the owners were short when they went into Chapter 11, $9 million was lost by them in the casino they were operating. New Orleans was a technical bankruptcy. The owner filed bankruptcy so he could get the attention of the contractor with whom he was having a dispute.

In South Beach, the contractor withdrew after he ran into cost overruns and could not complete the project for the fixed price. We are going to stick with it. And Coconut Grove will open in September.

M&C: With so many openings, is it difficult to find qualified staff?

Cooper: We have no challenges finding staff who have minimal guest contact. The toughest thing is finding leaders who know our culture and way of doing things.

M&C: What stamp do you want to leave on the brand?

Cooper: My stamp is going to be creating a sustainable organization for growth. If when I leave people say, “Boy, he is leaving a great team behind,” then that, to me, would be fine.


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