4 Seasons

CASE STUDY: FOUR SEASONS

MBA 609

03 October 2012

Cody Clifton

Simon Nyang

Chris Mount

Ward Green

CASE STUDY: FOUR SEASONS

The Four Seasons (FS) was designed and built in the 1960’s by architect Isadore Sharp. The first motel was located in Toronto, Ontario near the Canadian Broadcasting Company (CBC) which regularly flew in prominent individuals who needed a luxury night’s stay while in the city.

The chain grew to five properties in 1972. It was at this point that Sharp decided to pursue an international brand. FS had 50 properties in 22 countries by the end of 2000 while seven new properties were in development in seven different countries.

The Four Seasons was listed as one of the “100 Best Companies to Work For in America” for three years running. Its chief competitor was the Ritz Carlton (Ritz). The Ritz did more conference business, while The FS maintained a strong bond with individual travelers and vacationers. The typical guest was 45 years old, well educated, actively engaged in a career while living a rich, demanding life.

COST OF EXPANSION

The costs associated with expansion of the chain are astronomical when the costs of turnkey construction are considered. The text mentions a relative cost of $1 million per room to build a property from the first meeting to the opening of its doors. A way to cut the cost of construction would be to explore the cost of buying into a property that begins to approximate the values of Four Seasons and rehab it to exactly fit the values of FS. (This would probably entail the elimination of an entire staff because of the methods of the original owners but would be necessary in terms of eliminating old, bad habits.) The cost of rehab could conceivably be as low as $500K per room. This savings could represent a higher profit margin or the money saved could be invested in more amenities for the clientele at the outset, thus, attracting an extension of the existing...