Becoming Belmond

John Scott, president and CEO of Belmond, is extremely passionate about how luxury is delivered to the guest.
John Scott, president and CEO of Belmond, is extremely passionate about how luxury is delivered to the guest.

Ask John Scott, president and CEO of Belmond what true luxury is about and you’ll soon learn he’s got several strong opinions. “True luxury is about understanding your guests. It’s customization,” says the executive, who has spent the past few months morphing Orient-Express Hotels to the entirely new Belmond brand. “Give me what I want. Give me the fruit basket or something that I’ll use. Don’t give me a bottle of wine when I’m staying there on business for one night when you know for certain that bottle’s not going to be touched. I’m not going to drink that by myself. If I’m traveling with my wife, give me the champagne.”

Let’s not even get into the mini-bar. Scott, a self-proclaimed Diet Coke junkie, can’t fathom why, then, a hotel would have his fridge filled with regular Coke, or, God forbid, Pepsi.

“Put the Diet Coke in there, and by the way, you can get rid of all the other stuff because I’m not going to drink it.”

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Luxury, he says, is also when a hotel responds to a guest who has forgotten his toiletry kit by asking the specific brand and type of toothbrush (soft, medium or hard) he uses at home, rather than just quickly serving up a generic brand emblazoned with the hotel’s name on it as a solution.

“You can clearly see I’m passionate about this stuff, and we do some of it very well. But I think we’ll be able to do more of that well with our new Belmond brand,” says Scott, who joined the company in November 2012 after serving as president and CEO of Rosewood Hotels & Resorts for nine years.

The rebranding of Orient-Express to Belmond, which means “beautiful world” if you know your Latin, has been the buzz of the luxury business since it was announced in February. The move was primarily prompted by the fact that the Orient-Express name was licensed from French transportation company SNCF and so there were limits as to what could be done with it. Belmond is 100 percent organically grown and owned; it’s a brand that can be shaped and evolved and crafted as its executives see fit, and that’s just what’s about to happen. First up is bringing together a group of luxury products that are wedded through the sheer fact of their iconic status. There’s the Venice Simplon-Orient Express (which will retain the Orient Express name), but did you know that in the same family is a line of adventure safaris in Botswana, river cruises in Myanmar, and perhaps even more notably, the legendary Hotel Splendido in Portofino, Hotel Cipriani in Venice, the Copacabana Palace in Rio, the Hotel Ritz in Madrid and the Grand Hotel Europe in St. Petersburg, Russia? There are about 35 other hotels of a similar ilk in the international portfolio.

Belmond has already grabbed its toehold in the marketplace. Hotel Cipriani is now Belmond Hotel Cipriani, Grand Hotel Europe is Belmond Grand Hotel Europe. You get the picture. But even though the Belmond name is right up front, it’s meant to be a subtle addition to its accompanying very well-known hotel monikers. “Belmond will certainly not be flashing in bright lights,” says Scott.

That’s as it relates to hotel titles, but the Belmond brand will be shouted out loud and clear in the market as Scott and his chief sales and marketing officer, Ralph Aruzza, use a war chest of $15 million over the next four years to promote it—$5 million is set for 2014 alone. The first-ever brand-wide promotion to attract new guests and build cross-visitation throughout the portfolio is already in the works, social networking touting the new brand is evident on all the networks, there’s even an Instagram photo contest for Belmond employees who are being encouraged to take photos of moments that define the Belmond brand. (The winner will get an all-expense-paid trip to a Belmond property.) It’s likely a similar contest will follow for consumers.

“We think there’s a lot of ways to really extend the concept of a ‘Beautiful World,’” says Aruzza. “It’s one of the reasons we really liked the name. It absolutely connected with what our traveler experiences are.”

Scott, meanwhile, is loving the full control and flexibility he, Aruzza and team have with the name. “And that gives us great confidence to invest in the brand.”

The plan is for consumers to “get” the fact that, say, the Cipriani hotel in Venice is related to the Villa San Michele in Florence and Maroma Resort on Mexico’s Riviera Maya. That apparently did not happen with the Orient-Express brand. According to the Wall Street Journal, just three percent of visitors stayed at more than one property within the portfolio.

“They didn’t make a connection of all that we were,” says Scott. Now, instead of being promoted as individual assets, hotels are touted as part of an amazing collection, so the guest will “connect the dots and really understand that if you liked Belmond at one location, you’ll like it at the next location,” said Scott.

Who is the Belmond customer? Right now, they skew older by simple virtue of the price points of the hotels, cruises and safaris. That’s okay by Scott since this group has the means and time to travel. “And they’re looking for those experiences, which is what we sell. The affluent traveler is looking for more experiences because you can get the same marble bathrooms and the same large rooms anywhere. What makes it different and unique? I think we appeal to that customer.”

He also has his eye on a younger active and affluent set, skewing 35, 45, to 55 or so. The challenge there is keeping the hotels, most of them historic, relevant to that age group as renovations and updates are done while remaining faithful to the nostalgic aspect of the hotels.

“There’s a great trend towards nostalgia. You want to do that experience you did with your parents and do it with your family. If I were a 35- or 45-year-old, I’d want to take my kids on an experience on the Venice Simplon-Orient Express. Wow. I’d know they’re going to remember that and talk about it. Nostalgia works for a younger generation so we need to make sure we’re relevant for them,” said Scott.

That issue will be addressed as the Belmond portfolio expands, a strategy that’s very much on the agenda.

The company’s business model has been to own all or a portion of its hotels, but it’s starting to dip its toe into third-party management contracts, which requires less capital. That tactic led it to sell off The Inn at Perry Cabin on Chesapeake Bay, Maryland, but Belmond is still managing it.

“We’ll do more of those,” said Scott. “We have the sales and marketing infrastructure. We’re great operators of hotels and we have very loyal customers. [Hotel] owners like that and we can offer them those resources without having to own and build every hotel in our portfolio.”

Ownership is still very much an attractive option as well, says Scott. “Will we acquire hotels? Will we develop other hotels? The answer to that is yes. We’ll do it opportunistically, where we see a fit.”

That might mean adding rooms in an existing location or adding a new hotel in a region like Italy where Belmond already has a strong presence. “Could we develop a hotel in Milan or Rome by developing or buying or redeveloping it? The answer is yes.”

A development team in Belmond’s London headquarters is pursuing those fronts; there’s also an architecture, design and technical services team working on renovations and additions to existing properties. For example, late last year, a $7.5 million renovation of the 81-key Miraflores Park Hotel in Lima, Peru, was announced; that hotel reopens this month in top form in time for high season.

Pumping up existing assets to garner additional revenue is a sound practice, in Scott’s mind, or as he prefers to put it: “Look in your backyard first for growth.”

Case in point: A new excursion was added onto the Venice Simplon-Orient Express, a move that generated nearly $1 million in revenue. A new river cruise in Myanmar that leveraged existing guests who’d sailed on the Road to Mandalay program and wanted to do something different had similar positive results.

On the hotel front, Villa Sant’Andrea in Sicily is getting six new luxury suites added to its inventory which affluent travelers are likely to vie over as the trend toward larger accommodations continues.

“I can grow my business by going to each one of these properties and adding a villa or some new suites, restaurants and amenities.

The employees love that because you’re investing in your existing businesses. Investors love it because there’s a good return on that and it makes sense,” says Scott.

Moreover, consumers are demanding it. At Belmond, suites and villas are selling out first. “I wish I had more of them in my locations because I have more demand for our best product than I have for anything,” says Scott, noting that that bucks the trend of how hotels used to sell inventory from the bottom up, only to give away suites that hadn’t been tapped.

At the Grand Hotel Europe in St. Petersburg, Russia, rooms on the first floor have ceilings that are 20-feet high but the rooms are tiny, almost bigger vertically than they are horizontally. They’ll be turned into what Scott says will be extraordinary suites, “the best in St. Petersburg.” Included will be a three-bedroom presidential suite.

He cites the needs of his own family, which includes three young children. “If I them in one hotel room together, and you’ve got a lock off like hotels traditionally have had, and my wife and I are in the other room, it’s a disaster. I need a villa, not because I’m affluent and I want one but because I need to enjoy my vacation.”

Another trend he sees as a strong influence on hotels is the blending of business and leisure travel. A couple might travel together on a spouse’s business trip if it’s to a great city like London where they’ll enjoy the hotel’s fine dining restaurant, the spa and then head to the theater. And let’s face it: on leisure trips, we’re all working, meaning the need to stay connected with the office is paramount. That affects how a suite should be laid out.

“If I wake up in the morning and my wife says, ‘I want to sleep until 10 a.m.,’ and I’m sitting there doing conference calls, that doesn’t work. So we’ve got to provide the right product, a location to go to, whether it’s a business center—that’s old fashioned—or an ante-room in the suite—I actually have a room like that at my house. That way I can go to work for two hours before the kids get up. It’s also got to have great wireless, and the wireless has also got to work at the beach. We need to think of ways to enable people to stay connected when they’re on vacation. Luxury is about giving people options.”

And Scott is looking forward to delivering those options within an amazing array of luxury products united under the Belmond brand.

“I’m often asked what makes an iconic hotel,” says Scott. “Some people think it’s how long it’s been around. Some say it’s the architecture. Others think it’s more about who’s stayed there. Then it dawned on me—it’s really all of those.”

An icon is also irreplaceable, he adds. “You couldn’t replace the Hotel Cipriani today. You couldn’t replace the Copacabana Palace or the Hotel Ritz Madrid.” Having 45 such products makes the entire portfolio iconic, he said. “To have all this under one company, it’s quite rare.”

Belmond

Former brand: Orient-Express Hotels

Chairman of the Board: Roland Hernandez

President & CEO: John M. Scott III

Chief Sales and Marketing Officer: Ralph Aruzza

Portfolio: 45 hotel, rail and river cruise experiences and ‘21’ restaurant in New York City

Travel Advisor Programs: Bellini Club

Headquarters: London

Website: www.belmond.com

The Belmond Promise

When the news broke of the new Belmond brand, Ralph Aruzza, the company’s chief sales and marketing officer, hit the ground running to get the word out to the travel advisor community. The feedback has been positive; in fact, the consensus of the company’s travel agent advisory board, which had been alerted that a major change was about to occur, was, “What took you so long?”

Seems that advisors in the past had been frustrated, said Aruzza who, like John Scott, also hails from Rosewood Hotels & Resorts.

Ralph Aruzza pictured at the “21 Club” in New York.
 
Ralph Aruzza pictured at the “21 Club” in New York.

“Advisors were telling us, ‘We can sell the Cipriani, but when we tell them it’s Orient-Express, our customers look at us with a blank stare and ask what that means.’ They could never make the connection when they tried to link our tours or multi-hotel stays that it was all part of the same [company] experience.”

The voice that links the hotels, trains, safaris and river cruises will now come from a singular collection, as opposed to just the individual property. Supporting that is the first “Discover Belmond” promotion that runs through June with select 15 percent off rates, and another will pick up as summer ends.

“We will still run individual product promotions as well, but they will all be under the Belmond name,” said Aruzza.

What are the values of the Belmond brand? “There’s a sense of discovery within our informal, but appropriate, service delivery. We like to say we are eclectic. We have eclectic characters and personalities working within our products. It’s a local approach to service that really binds us together,” said Aruzza, who said at the property level the local experience will be curated for guests. “That will all feed back into our brand values.”

Watch for a Belmond app to launch next year that encourages guests to visit more than one property or product within the portfolio. In fact, there will be plenty of Belmond in the marketplace as the company spends $15 million over the next four years to energize the brand.

Aruzza echoes CEO John Scott’s promise of growing Belmond. “We’re looking at specific markets. Rome, London and New York are very important to us. We’re very focused on those markets. With this brand approach, we now have a vehicle to talk to investors about, to say, ‘Here’s what our brand represents, here’s what we can do for your asset.’ You’ll see us looking at management agreements in that respect. We’ll look at various models. We’ll still look to acquire. We’ll have joint ventures, but we’ll also look at management in the right market.”

Perhaps most exciting is the potential development of the 21 Club name, which has long been a part of the Orient-Express, (and now, the Belmond) portfolio. The iconic New York restaurant is retaining its own brand without Belmond being added to it and the thought is that it might just have legs for dining establishments in other markets, such as London, and perhaps in certain cities in the United States, said Aruzza.

Meet The Belmond General Manager

Watch for upgrades and additions at Belmond hotels to continue; a relatively new practice is to have the company’s general managers heading up Belmond’s hotels report to London headquarters several times a year to pitch ideas to corporate for additions or renovations to their hotels in what Scott says resembles a “Shark Tank” environment.

“Our team collaboratively vets the best opportunities. If it’s not accepted it doesn’t mean that your idea wasn’t great. It just means it may not happen this year, it may happen the next year,” he says.

It’s natural for general managers to be strongly involved in their hotel’s physical offerings;  that’s the company culture.

“There’s an individual, entrepreneurial spirit at each of our properties and the general managers who run our businesses are a unique breed,” says Scott. They’re given a luxury template, he says, but the manner in which each general manager delivers five-star luxury is unique.

Global Meeting: Belmond’s executive team and general managers from all over the world met in Charleston, SC recently to strategize on the new branding.Pictured: Global Meeting: Belmond’s executive team and general managers from all over the world met in Charleston, SC recently to strategize on the new branding.

He feels that varies widely from some of the bigger brands. “They’ll give you a map and say we want you to go from point A to point B. They’ll tell you what road to take and how fast to drive and they’ll give you all the rules of engagement. They’ll say stay on that road and don’t go off of it. If you go off of that you’re not one of us. In our culture we will tell you we’d like you to get from point A to point B by a certain time. You pick the road and you navigate that journey.”

The global group of general managers recently headed to Charleston, SC, to engage with senior management on the move to the Belmond branding.

“It is really about getting them excited about being a part of something bigger,” said Scott, who believes the connectivity the brand brings to all of his hotels will also attract new employees as they see the opportunity to develop within the network. “There’s a great opportunity for us to transfer culture by being able to move people from property to property. They’ll see it as a long-term career. That is a cultural change, but I think it’s a good cultural change.”

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