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Ritz-Carlton President Simon Cooper talks economy, industry and luxury
I recently spoke with Simon Cooper, president and chief operating officer of The Ritz-Carlton Hotel Company, to get his thoughts on how luxury, by definition, has changed over the years, and I also got a sneak peak at what's to come in the next 100 years for the Ritz-Carlton.
How has the luxury customer changed--do they want the bells and whistles or does price matter?
Simon Cooper: Obviously, consumers have less disposable income today than they had 18 months ago. Demand has been constrained and we have more vacant rooms than we used to have. In 2009, by comparison, we filled more rooms than in 2008, but the average rate was lower. The point being that people are still traveling and looking for luxury experiences.
The luxury customer has changed. First, there is less disposable income so people are more focused on what they spend. Authentic, real products are going to succeed. Second, there is a certain degree that people don't want to flash their money around - a lot of people are suffering so others are asking themselves, "Should I really be doing this?" People are being a little more careful with their spending. From our point of view, we can live with that. We aren't a see-and-be-seen place; our guests come to relax and enjoy time with their families.
The number one household expense annually is the vacation - we knew that 2009 was going to be really challenging and we looked ahead. Consumers are making a choice to stay with us and it's not because the hotel down the street didn't have space - right now, everyone has space. Our philosophy: if you're going to take only one vacation, take it with us.
SC: We are more 'casually elegant.' It's been a long journey, but we didn't like what we were hearing, which was often 'the most traditional brand in your space.' We needed to be in a global space and as the traditional Ritz-Carlton guests were changing, we needed to shift off of their positioning.
It seems the Ritz is doing a lot of international development, specifically in the Middle East and Asia. Does that mean the development of luxury hotels in the U.S. is done for awhile?
SC: There is a trend - there aren't a lot of places in the U.S. where you can say, "This needs to be a Ritz." There aren't a lot of gaps in the U.S. so we've been working internationally and we're working to open two hotels in Shanghai in the next few months, and Cairo and Israel are coming.
Mr. Cooper shared with me details of the upcoming Kowloon [Hong Kong] Ritz-Carlton, which will rival Dubai's Burj as the world's tallest building. More on that later...
Meanwhile, the hotel business overall continues to weather the tough economic times. Earlier today, we announced the Ritz-Carlton Aruba resort, set to open in 2012, and the newest member of the family, the Ritz-Carlton Los Angeles at LA LIVE opens next month.
When it comes to luxury, The Ritz-Carlton has been the front-runner. While new hotels continue to pop up around the nation and globally, Ritz relies on its brand to be a success, and this brand is committed to doing it right.
Filed under: Hotels and Accommodations