Trained at the Ecole Supérieure d’Hôtellerie de Saint Cergue in Switzerland, François Delahaye has worked in several hotel groups, Savoy, Sofitel, Warwick and Westin, where he held different positions as general manager. In December 1999, he became general manager of the Plaza Athénée where he gradually took on more responsibilities within the Dorchester group until he became Chief Operating Officer for the entire Collection.
It is nonetheless necessary to remember that we experienced a drop in activity already in September 2008 and that the year 2009 was very difficult. On the other hand it is true that the way back up was faster. Whereas it took three years to regain previous levels after the Gulf War and SARS epidemic, it took only one year after the drop in 2009.Can this be explained through a renewal and an expansion of the international clientele base, particularly those from the BRIC countries?It is necessary to be careful about market changes. The base that you mention is constantly changing and to varying degrees. At our properties we welcome more Chinese clients. For a long time Brazilians have been faithful and very present, especially at the Plaza Athénée. Russians already represent close to 10% of our clients, on the other hand we have no Indian clientele. There is still a base of Middle Eastern clientele and Americans are reacting to the solidity of their currency. With the dollar’s rise in strength, they are returning to Paris in greater numbers, and to Le Meurice in particular for our group.Nonetheless the luxury hotel segment is in excellent health. Does the crisis have no hold on you?It is true that we continue to grow by 3 to 7% depending on the property with respect to last year, which was a good year. International clientele does not appear to be truly affected by the economic crisis and the revenue of accommodations is up. I cannot say the same about our activities that depend on the local Parisian market. The crisis is having a strong impact on the upscale restaurant segment.And yet there was a new supply with the arrival of Asian chains… didn’t that create tension on Paris’ market?It is quite impressive that the “classic” hotels were able to resist the arrivals of Raffles, Mandarin and Shangri-La the way they did. I believe that their arrival created a great deal of curiosity about Paris as a destination and that it generated new traffic into the capital. It must also be recognized that the city did some great operations such as the Biennale des Antiquaires and a certain number of major exhibitions that drew a fine following of clientele. There are real reasons for coming to stay in Paris… more than in Geneva or Milan where I often have to go to supervise our hotels. I see that in Paris our activity is strong on weekends starting Thursday night, which is not the case at our other destinations.And yet we tend to say that Paris has lost some of its appeal, that attractions have moved to London, Barcelona and Berlin…For night-clubbers this may be a reality, but that is not the main appeal for those who stay at palaces. In the end, Paris is a formidable destination for culture and high-end shopping. New accommodations are well received… even more so than in Milan or London.Are your London hotels feeling the impact of the Olympic Games?We will in fact have no vacancy for the period and this is good news for the middle of Ramadan, which generally has a negative effect on the occupancy of luxury hotels. I am convinced that the Olympics’ effects will overflow into Paris. We will adopt an attractive pricing policy because of the absence of Middle Eastern delegations in August.Has the arrival of newcomers on Paris’ luxury market precipitated investments in your properties?We are lucky to have owners who are very attached to the heritage value of hotels. They are sensitive to any opportunity to increase it. For 12 years I have been at the Plaza Athénée, I have made it my policy to maintain this legacy by doing works on a regular basis, floor by floor to maintain a certain quality of services that justify our prices. In the same way, without ever closing, we have just completed the renovation of all the rooms at the Meurice. The major investments we’ve made have nothing to do with the arrival of Asian chains, although it strenghtened our argument. The purchase of the three contiguous buildings of the Plaza Athénée is an old project and for the long term. In order to fully integrate them into the historic building, it will undoubtedly be necessary to close for just a few months in winter 2013. Construction in Paris is very complicated and requires many authorizations.The arrival of these Asian chains also heralded a new dimension in terms of service. What did that mean?It is necessary to overturn certain myths, in particular that of service in France as being of a lesser quality. I am particularly proud every day to see that we have remarkable personnel who are enthusiastic about service, including among the younger generations. It is necessary to stop castigating ourselves under the pretext that we are “grumpy and dissenting”. For 50 years French personnel have come from good hotel schools and there is a real pride for work in the luxury hotel world. Through the operations at the Dorchester hotels in the other countries I see that we have nothing to be envious of. In the United Kingdom, personnel are all foreign, in the United States they are motivated by tips, in Switzerland service is high quality but the ratio of personnel per room is clearly lower than in Paris. What is true for our group is also true for other “traditional” palaces in the capital that are fully on a par with the reputation of “Asian” service. I simply see that our clientele pay a fairly high price in Paris and share their satisfaction. These clientele are demanding and are accustomed to travel and would not return with the same regularity if this were not the case.In order to further the evolution of the Dorchester Collection, will you continue to grow and how? We are a very small group with nine hotels, even if each of them is a reference in its city. The will of the shareholders, the Brunei Investment Agency, is to expand the real estate portfolio with new prestigious acquisitions, “trophy assets” as we call them, at fashionable destinations. I have just returned from a trip to Istanbul, for example, where I was exploring the market. As you know, we sold the business of the New York Palace, which no longer corresponded to the group’s philosophy with its 900 rooms. But now we are short of a New York address so we are very actively trying to replace it. There are not so many opportunities and the quality of the buyer makes sellers inflate their process impossibly. At the same time, the management company, the Dorchester Collection, also has the will to increase its perimeter. We have begun to do so with the management contract of the Richemond Hotel in Geneva. Our shareholder is very pleased to be able to spread out its overhead costs across a larger management portfolio, while the notoriety of properties in the Dorchester Collection offers our independent owners a real added value in terms of marketing.Is the notion of profitability of operations and investments as strong as in a group with no problem at the end of the month?The profitability of operations is a primordial issue for our shareholders as well. We are very proud to be able to post a very strong GOP. Each property has precise goals in terms of numbers and is ambitious. We are also thinking about each investment as only being justified if it rapidly reaches its break-even point. Spas, which are an obligation in the luxury hotel industry, are no exception, although it is necessary to find the right economic model. We always chose to invest and heavily, even when activity has been slow, in Milan, Paris, London and Los Angeles. Today, operations and our shareholders are benefiting from these choices, while other properties will have to close completely to undertake these works.Considering the increased volume of the supply for luxury clientele, how does one justify average daily rates close to 1,000 euros in Paris?This is our daily challenge. Everyone talks about an experience to offer or share with clients who often have the means to buy all they want. And yet, spending 1,000 euros should not be disqualified, even for very wealthy clients who understand the value of things. It must be justified with a real difference in very personalized services. This means, for example, having 560 employees at the Plaza Athénée for 193 rooms or 420 employees for 160 rooms at the Meurice. But the result is there in the end. I’m thinking about very wealthy Chinese clientele in particular who are enamored of the luxury symbols that are French brands. In order to compete, it is necessary to offer an experience that money alone cannot make possible: dine in the kitchen of one of our Michelin threestars, enjoy wine tasting in a wine cellar surrounded by 40,000 bottles ….Last year you celebrated the Plaza Athénée’s entry into the limited circle of businesses awarded the “Living Heritage Enterprise” status. Are your clients sensitive to such a distinction, as sharing a piece of history?It was not its goal and quite honestly I am not sure they understand the significance of this label. On the other hand it was a formidable in-house challenge and motivation and a valorization of teams and positions that are not in the limelight but contribute to the meaning of the word palace, such as silver polishers, the stewards, and even the concierges.
