The future of luxury rests on personal relationships

Last Updated
21 July 2020
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How will the luxury hospitality sector fare post-crisis? Helen Smith, Chief Customer Experience Officer of Dorchester Collection, joins David and Catherine to discuss this in the latest episode of The Future of Travel.

While Helen acknowledges that the sector will undoubtedly take a hit through this crisis, she explains that there will always be consumers who crave and seek out a luxury experience. These could be travellers who desire the traditions and the emotional engagement luxury offers or—perhaps most—the relationships it engenders between guests and staff.

In the case of some loyal guests, she added, these are relationships that have been built up over many years. Helen stressed that Dorchester Collection, like any brand, must remain flexible going forwards, but without losing sight of the core of the brand and its culture, because this is what guests love and come back for.

TRANSCRIPT

START AUDIO

David Keen 0:10
Hi, this is David Keen. At QUO, we’ve worked for the last 20 years with many of the world’s best-known travel brands. During this unprecedented global crisis, our world of travel has changed, possibly irreversibly. This series will see us speak with many global leaders to understand how they see the future of travel.

David Keen 0:44
Good morning, Helen Smith, Chief Customer Experience Officer of the Dorchester Collection. Welcome to The Future of Travel.

Helen Smith 0:54
Thank you very much.

David Keen 0:56
I’m here as always with Catherine Monthienvichienchai. The chief branding Officer of QUO. Helen, how is luxury? How do you feel overall the luxury is going to be affected by the virus itself?

Helen Smith 1:15
Well, I think that true luxury is all about emotion. And I think that luxury will never disappear. I think we’re probably in for a little bit of a hit because of the COVID crisis, and everyone’s regrouping and it’ll take time to find our feet. But as in when it happens, I think people who crave luxury and that emotional connection to it and the relationships they built, will want to return to the properties that they know and the staff that they’ve got to know over the years.

Catherine Monthienvichienchai 1:51
And with pre-crisis, what trends were you seeing in the luxury sector and how do you think those trends will perhaps change or evolve post-crisis?

Helen Smith 2:02
Well, I think that’s interesting, because not so long ago when we did a helicopter view of the industry, you could see a lot of companies amalgamating or being bought out. And the bigger entities getting bigger and bigger, and stronger and stronger. And quite often when that happens, luxury gets a little bit diluted. So we decided on analysis to actually track more of what happens in small luxury privately owned hotels, because they’ve got their individual style. And it seemed to us that they were offering an originality and a service level that we also like to offer. So we wanted to go more in that direction than following the trend of big business getting involved in the hospitality industry at the luxury end.

David Keen 2:52
Helen, you mentioned individuals. Obviously the Dorchester Collection is a collection of extremely well-known individuals. At a time like this, and as we start to exit the crisis, is it the individual that carries the brand, or the Dorchester Collection itself?

Helen Smith 3:13
Another good question, because when we went through this process we were definitely known as the nine individual properties. Everybody knows the Beverly Hills, the Dorchester Plaza, and very few people actually know the parent name. But what we wanted to do was to sort of form an umbrella, with Dorchester Collection being on the top of the umbrella and the hotels being the spokes. So that we could celebrate the individuality of the different hotels, but also figure out what the golden thread was that kind of linked them all together.

And that way we could say, okay, when you’re checking to see whether or not something you want to do is on brand, you kind of know what Dorchester collection values are all about. So yes, they’re famous in every Right, but there are certain circumstances that link them all together. And there’s a sort of things like the staff. I mean, we’ve got remarkable staff. We’ve got remarkable guests. And we’ve got service standards that you will recognise wherever you go through the company, but it always will be linked to the individuality of the property.

David Keen 4:22
Helen,obviously the hotels are some of the most-celebrated hotels in the world, and it’s fascinating to hear your opinion. And they’re servicing, presumably, extremely high-net-worth individuals on an exceptional level. As a function of the economic crisis, the pub after the virus, and the possible need for some people to save, are you and your peers talking about an evolution of typology, an evolution of—well, now so much demographic, but the type of person you’re going to be marketing to?

Helen Smith 5:04
I think that the global traveller who’s in that ultra-high-net-worth level probably will still be able to travel. The only thing that will stop them from moving around will be government and law—and then a degree of safety. But when we first open, I think we agree with what’s being said in the industry, that it will be a local drivable market that will be first attracted to coming back to stay. And that’s really easy in hotels like the two in Los Angeles, because their market naturally was almost 80% domestic. But even in this crisis, we’ve had people who have homes in Malibu who’ve asked if they can come and stay at the Bel-Air just for a change of scenery.

Catherine Monthienvichienchai 5:54
And when people start traveling again, Helen, how, what are they going to be looking for from that travel experience? And how much are they looking for maybe a greater sense of purpose or more authenticity, maybe a greater connection to culture, what sort of different things may be influencing their reason to travel.

Helen Smith 6:14
What we’ve understood in the past is living a global life anyway. I think the people who are our normal target market, when they get the opportunity, will go back to their global life. They’ll be interested in the arts and music and seeing their friends. I think that the local domestic market when they come, their first priority is going to feel safe, and to feel that they’re in the hands of people who can look after you well, so that you won’t have to see a perspex screen up. You’ll know that we’ve done social distancing. You’ll know by seeing that people are cleaning and keeping places hygienic and following all of the rules. You don’t have to question people. There’s a sort of understanding that if we’re told to do it, we’ll do it well.

But I think people who come to stay with us might not want to go off property, they might want to take more in-room dining than they have in the past. They might like the idea in London that even if you’re at the hotel, you can just cross the road and you’re in Hyde Park and you have public space. In France at the Maurice you can cross the road and be in the Tuileries Garden. I think people won’t want to stray too far away. And they’ll always want to feel comfortable and in safe hands.

I think they might use technology a little bit more. We want to see how close we could get to contactless check-out and check-in. We haven’t got it yet. But obviously we’ve got time to work on that. Our teams are talking about having iPads for ordering in-room dining, and possibly for menus in restaurants. And one hotel was even wondering if people would feel more comfortable having menus printed on photocopy Paper Paper, knowing that after they touched it, it would be trashed. And the next person would have a completely clean piece of paper.

So there’s all sorts of ideas. And sometimes you have to kind of hold yourself back a little bit because, certainly in the UK, and I think in most of Europe, the governments haven’t actually completely stipulated what they want hotels and restaurants to do yet.

Catherine Monthienvichienchai 8:23
It’s very interesting. And I think that one of the interesting things for the luxury sector in particular is it’s such a high touch part of the hotel world. I mean, there’s so much service. Much more service, personalised service, interaction with people, than when you go further down to mid-scale or economy. How do you see that changing, evolving going forward? Do you think that people will be still looking for that high touch experience, but maybe conceived in a slightly different way and when that comes back to what you’re saying about technology as well?

Helen Smith 8:52
I do. I think that you’re still… the reason people, you know, we have salespeople talking to travel agents, and agents that look after the group market in America still. And they’ve said to us, “Please don’t change your rates. Please don’t try and attract a different market. Our consumers feel comfortable and safe in your environment. So please don’t change anything.”

But we do know that when it all starts up, it’s going to go very slowly, and that there will be the space for social distancing that people are craving and governments might be requiring. So I don’t think at the beginning, it’s going to be difficult to make people feel safe and comfortable. Because there will be the space to have, you know, a large space of check-in. Corridors won’t be busy. Restaurants won’t be crowded. So I think it will be possible to give a luxury experience without frightening people, but actually trying to make them feel even more safe.

Catherine Monthienvichienchai 9:50
Right.

David Keen 9:51
Do you think in the ‘new normal’ and as you know, we talked about this time period as being a bridge between what we like to the Analog or the ‘Antique Age’, and what is going to be the future? What is going to be the ‘new normal’. Do you think, philosophically, there’ll be a major change, a major shift in the perception of luxury? And if I can just qualify that by you know, as to sort of refer back a little bit to Catherine’s question earlier. The word luxury has obviously become a horrible cliché over many years, or a difficult cliché over many years. And there are many that believe that different verticals within the hotel industry also talk about luxury. Whether it’s affordable luxury or something like citizenM, which has its own form of luxury. Do you think this will be a melting point? Do you see this as a watershed—rather than melting point—for the future of high-end experience… for not to worry about the word itself?

Helen Smith 10:56
I don’t know, because again, some of the travel agents have said their ultra-high-net-worth, who have private planes, have been talking about going to remote areas to feel isolated but to celebrate luxury. We’ve been told that some people have said, “Don’t talk to me about travel. Yes, I’m not ready.” Whereas others have been pining for the opportunity to travel again. I do think that people aren’t going to stop buying luxury cars. They’re not going to stop buying expensive watches. So I think there will be maybe a little bit at the beginning of sustainability, being really, really important to people. But I think that, you know, if you go back to other crises that we’ve had, where we’ve had Gulf Wars, or we’ve had the downturn in the economy, or we had 9/11. Everything sort of does a reboot, and then it slowly, slowly starts to work to what we would call the norm.

And I think although this is a hideous reboot, over time, I think it will come back. It might take longer, might take more than three, four or five years to come back. But I think there is an audience that also always harks back to the traditional luxury and the way they were looked after and the emotional engagement they’ve had. And they’ll want to experience it again. So I think it will come back. I think there will be new changes in there. I think the younger audience might come in with slightly different values as well. But that’s kind of what life is all about. It’s about having the bits that you know very, very well and then being sort of pushed in different directions; stepping into an area and thinking this isn’t comfortable and going back to something you know; or thinking this is a new direction that I want to absorb and I want to be part of.

So I think we have to be very flexible moving forward. But also, like I said right at the beginning, knowing what’s happening to your brand and your culture, and not moving too far away from that, because otherwise you lose your way. And you stop representing what people used to come to you to try and experience.

David Keen 13:16
So you’ll rest on the current narrative. You’ll rest on the balance between the individuals and the parents. And you’ll rest on the history…

Helen Smith 13:29
I think we rest on the fact… you know, our staff, we’ve let we’ve kept them all. No one’s been let go. It’s very important to us that when people do come back to the hotels, they see familiar faces, and it’s been that relationship—more than tradition—it’s been the relationships that have been built between guests and staff over the years that made us as famous as we are. And we don’t want to lose that. But of course, you get new staff starting all the time, and they build relationships with guests. You get old guests, new guests. It’s all about the relationship building for us. And yes, that sort of brings some traditional values. But I don’t think we like to think of ourselves as set too far back in time, but more moving with the time but knowing what matters to our guests.

Catherine Monthienvichienchai 14:18
And how has the current crisis impacted your longer term strategies and planning? Has there been a big shift in terms of what you’re, you know, what you’re planning a year, two years from now. Whether that’s, you know, expansion plans, development, or just in terms of your brand and how you’re progressing the brand.

Helen Smith 14:36
Well, I talked to our head of development, and he said, the market is just really, really quiet at the moment. So that’s what would be stopping us there. We still would like to grow but you can imagine that we want to be very careful in that growth strategy. But we will continue to look for opportunities. So we have talked about long-term plans and for us, we have a rolling five- and seven-year plan. We haven’t made any changes to those, although we think that maybe something that was planned for one year’s time might actually not start for two years, but the idea will still be there. So we’re constantly doing refurbishment of properties, enhancing them, and all of those are still in the pipeline. And there’s still every intention of following through with them. But again, we may have to go at them at a slower pace than we originally planned. So nothing’s really changed. It will just be a little bit slower than the original timelines.

Catherine Monthienvichienchai 15:36
And during this time, are you doing anything to stay in touch with your your loyal guests or those kind of returning guests, some of your different properties

Helen Smith 15:44
We are. So we’ve left with hotels that they should be in touch on a one-to-one basis, and sometimes it’s the GM and sometimes it’s the head of department. But they have in the case, say, of LA, they’ve been doing handwritten notes to their best guests, and they’ve been getting handwritten replies, which has been quite fun. And we sent a note from Mr Cowdray to all of our top guests and got some lovely, absolutely lovely replies from them. One saying, you know, and I wrote it down: “Your dedication to your teams is one of the reasons DC Hotels have always been amongst our favourite places around the world.”

So it truly is the relationship between the guests and the staff that is the key to our success and the thing that we don’t want to lose. But they’ve been doing Corporate Social Responsibility activities—again, very local. We haven’t wanted to make into press statements, because it’s supposed to be from the heart and not for publicity. But there have been a couple of fun things. The Dorchester has been illuminated in blue light, which is the colour of the NHS, on every Thursday night when we all come out to clap hands. In England, it’s a Thursday night at eight o’clock, and we all go outside into the street and clap hands. And they’ve flooded the Dorchester in the NHS blue lights with a heart to celebrate the workers. And for the first time ever—I don’t know if you know, there’s a green wall at the Beverly Hills Hotel with the name of the hotel written in the logo. And that’s been covered. And that’s also got a thank you to the local care workers.

So we’re doing activities in the local community. In some instances, guests have asked us if they can join in and be part of the delivery of us giving products—you know, sometimes it’s meals from our kitchens—and they’ve wanted to help them, the delivery of that to hospitals and to care workers.

David Keen 17:47
I think the democratisation, one of the things that this crisis has created, or the virus is created, is a massive humbling amongst all of us. I mean, we’ve all been brought down. It doesn’t matter who you are. And I believe in the democratisation of our industry. And it’s quite wonderful to hear that whether it’s in LA or in London or wherever it is, that the Dorchester itself the grande dame of them all, can come out and is absolutely humbled to talk to—to applaud and to come out in blue lights and and to applaud the NHS, which of course is amazing. The question then is: Do you see this as an opportunity? And again, not necessarily for your collection or for your individuals, but broadly in the high-end? Is this an opportunity, one as we were saying, to create purpose, but to form new topologies, to form new… to try and attract in those younger generations with higher disposable income into the fold?

Helen Smith 19:05
I do. And when we’ve, when we’ve talked to younger generations, because we don’t only have people over my age—you know, over 60—staying in the hotels. We do have younger generation and as well. And when we talk to them, it’s strange to hear that what they like coming to hotels for is the ability to interact with other people. And I know COVID’s kind of put a stop to that, but I think there’s a hunger for it. That will come when we’re allowed to meet up again. But they like the idea of running into like minded people in the hotels that they can socialise with them, that they can be sitting in the bar or sitting in a public space, confidently knowing that almost the person next door to them would have sort of similar minded interests. And I’ve been standing in the lobby of a hotel—and again, all ages but young people—who’ve been milling. They’ve heard someone maybe speaking in Portuguese, turned around to them say, “I’m so sorry, but I understood you’re speaking Portuguese. Are you from Brazil, or where are you from?” And conversations just start. And that’s, that’s across all generations.

But we would encourage more younger people to come. And to not sort of be intimidated by the fact that they are traditional older hotels, but just to feel—step in, enter this kind of atmosphere of conviviality, and know that you’re in like-minded surroundings with like-minded people. And you can be ageless in that. You can have an older person giving you great advice, or a young person giving you great advice. And so I think that it’s the mix that makes the difference.

David Keen 20:48
So you’re becoming a lifestyle hotel.

Helen Smith 20:50
Well, I think we always have been. I think we may have been kind of just… When I first started doing my work 15 years ago, and I did some surveys, people called us old museums. And I was so horrified by that. It’s the place of my grandmother used to go, kind of mentality. And I’ve worked really hard over 15 years to try and break that down to show people that it’s not that, you know. Everyone is welcome, doesn’t matter—race, culture—everyone helps to create that mix of business where like-minded people like to exchange ideas, and it’s certainly happening, and we’re working on it. And we’ll continue after COVID, but we’ll kind of put the brakes on for a little bit.

David Keen 21:37
Think it’s, I mean… I always talk about this in this situation. It’s kind of the Burberry situation, which we’re all from London, so which we’re familiar with, and where obviously Burberry’s rebranded. Because it’s customer base was ageing, and was dying, to a point. That’s obviously not the point though. The situation with the Dorchester Collection hotels. But I think it’s an incredibly relevant opportunity that was presented by the virus—by COVID-19—to act as a catalyst for reinterpretation of the values or whatever it is to cultivate that kind of desire for the hotel.

Helen Smith 22:28
I think that we’ve seen—I mean, before COVID, and especially our leisure in the United States—an increasing number of generational travel, with grandparents bringing children, maybe for graduating from high school or taking them to their first trip to Rome. Anything like that. And I think that sometimes that plants the seed, and we’ve talked to people who say, you know, “I came here with my grandfather for afternoon tea”, and traditions have stayed with them. So I think multigenerational will also help us in that, in introducing an increasingly younger market to the properties. So I hope it gives us that opportunity to keep growing, keep learning, keep morphing, but never going away from what really matters to the sort of culture of all of the nine properties.

David Keen 23:20
Helen Smith, Chief Customer Experience Officer—or CXO—of the Dorchester Collection. Helen, thank you so much for being our guest on The Future of Travel.

Helen Smith 23:31
I’m very grateful for the opportunity. Thank you so much. I enjoyed chatting

David Keen 23:34
That was a lot of fun. Thank you so much.

 

END