John Scott joined Orient-Express Hotels as CEO in late 2012 to help oversee the financial turnaround of the company, whose 45 global properties include hotels, luxury trains, safaris and river cruises. More recently, the former CEO of Rosewood Hotels & Resorts has headed the Bermuda-based company's rebranding efforts after it changed its name to Belmond last month. Scott spoke with hotels editor Danny King.
Q: Your company had a world-renowned name in Orient-Express, which was actually licensed from SNCF, France's state-owned railway company. Why change it?
A: Our properties had very high individual recognition, but the guests had very low awareness of all we had to offer. So that was the genesis of the strategy: How do we get our guests to visit multiple properties? And you do that with a brand that does two things: It conveys all that you have to offer, and not just our legendary trains, and it celebrates the names of the individual properties while working with all of our products and our existing brand names. Our crossover visitation was extraordinarily low, about 2% to 3%. If I can take that to 6%, that has an enormous impact on our revenue generation.
Belmond is derived from the term "beautiful world," which is really what we're about. Orient-Express is still a great name for our legendary trains, but we couldn't do what we wanted to do with it because we didn't own it.
Q: Why Belmond, instead of going with a name derived from an existing property, like Hotel Cipriani?
A: Our first look was internally, to go with something we have in our portfolio, but we concluded that we didn't have the perfect name that would work with all of our properties in all of our languages.
Q: The company reopened Santa Barbara, Calif.'s El Encanto last year after an estimated $130 million refurbishment. How has that property performed?
A: From a market perspective, we did very well in our first year, and we positioned ourselves well against competitors such as San Ysidro Ranch and the Four Seasons Santa Barbara.
Q: The company turned down a $1.2 billion buyout bid from Taj Hotels parent Indian Hotels Co. in late 2012. Was that the right decision?
A: The board went through a very thoughtful process in evaluating that prospect, and that was very important to me in joining the company. Today, our stock is trading in the $15 range, and that's up from about $9 [during the time of the initial offer], so I think our investors are quite pleased with the decision.
Q: When do you see the company returning to profitability?
A: Our investors are focused on EBITDA [earnings before interest, taxes, depreciation and amortization] and cash flow growth. With a company that has as much property as we do, there's very high depreciation and amortization, so while our earnings are not always positive, the EBITDA has grown dramatically and has provided us with positive liquidity.
Q: Where are you looking to expand?
A: We are focused where we've been successful. We've got the best hotels in Rio, so we could do one in Sao Paolo and thoughtfully expand our footprint in South America and Latin America. And if you look at Europe, we have properties in Florence, Venice and the Amalfi Coast, so clearly, we could be very successful with a hotel in Rome. And we think we can do another train experience in Europe.
Follow Danny King on Twitter @dktravelweekly.