Tom Storey was named president of Fairmont Hotels and Resorts in May. Prior to that he was vice president of global expansion for the luxury chain. Hotels editor Jeri Clausing talked recently with Storey about the chain’s growth and the impact that the turmoil in the global financial markets is having on the industry.
Q: It seems that Fairmont is focusing its expansion on international properties as opposed to North America: Is that true?
A: Today, particularly from a luxury standpoint, you have to be somewhat opportunistic and you have to follow the flow of capital, No. 1. And No. 2, you have to be willing to operate in what I would call emerging destinations. At the high end of the market, particularly on the leisure side, people want to go to some of these places they have heard about, like, say, Bali 15 or 20 years ago. The list keeps growing, and I think part of what makes for an exciting luxury brand is the ability to go to these places.
Q: Speaking of emerging markets, Fairmont seems to be the leader among Western brands in Africa.
A: I would say that’s true. Probably the only other significant brand that has presence over there is InterContinental. But you don’t see that much of the U.S. brands. And we are principally involved in Africa because of our partnership with Kingdom [Hotels Investments, which owns the Raffles and Fairmont brands].
Q: What kinds of challenges do these emerging markets represent?
A: I think about it on a few levels. The first is colleague safety. I have to think about the safety of our own employees, be those locals or expatriates. The second discussion is safety and security for the guests. If you think about Israel, for example, it has a long history of various kinds of violence, and so if you are going to operate in Israel, you are going to have to recognize that is one of the challenges you are going to have to face. To some extent you face some of that in Africa.
Q: Just a few weeks ago at the Lodging Conference, you and several other hotel executives talked about how hotel companies should pursue international opportunities in light of the credit crisis. Since then, however, it seems that the crisis has spread. Has your outlook for international opportunities changed?
A: We are starting to hear that things are getting more difficult internationally, but it hasn’t flowed through yet to any of the projects we’ve been working on. But I do get a little bit of a sense that things have changed, even from two or three weeks ago. I am hearing it from Asia. In the Middle East the discussions have been a little more around [whether we are] developing a little too much inventory for the level of demand that might be coming from primary source markets, basically Europe and the United States. If those two economies are under pressure, who is going to buy all this inventory and rent the hotels?
Q: Tell me about this growth agenda and what changes travelers might see in the Fairmont brand.
A: Given that our current base of hotels is only 56, and we are going to be adding 20 to 30 hotels over the next five years, I think that the perception of what Fairmont is is going to change pretty dramatically. Our most recent destination resort is Mayakoba, on Mexico’s Riviera Maya. It has received AAA’s Five Diamond Award twice. When you are developing properties like that, I think it’s really going to change the perception of the brand. I think a lot of people think of the Fairmont brand as the iconic castle, like in Banff or Whistler. I think going forward, you are going to see a much more modern and in many ways more cutting-edge positioning of the brand.