A LIFE IN HOTELS. Sir Rocco Forte is a hotelier and the Chairman of Rocco Forte Hotels.
Rocco Forte, because of the Corona virus you were not able to open the hotel Villa Igiea in Palermo. It has been a great damage for you?
Because of the virus the work programme for the refurbishment was delayed and the hotel will open in April 2021 rather than this June.
What has been damaging has been the effect of the virus on the whole business. All my hotels were closed and there has been no income since the middle of March. Despite all the cost savings we have implemented we are still facing losses of 5 million per month.
You have hotels in Europe and Russia. Are they all closed?
Yes. Effectively they are. We have laid off the majority of our staff utilising the government schemes that are available in each country, so the Cassa Integrazione in Italy and the Furlough scheme in the UK. Whilst the staff who have continued to work have taken a 20% cut in salary, including myself.
When are you going to reopen your hotels?
This will vary according to the destination and the demand of our customers. At present the intention is to open the Hotel de Russie in Rome and Torre Maizza in Puglia on June 19th whilst Verdura Resort in Sicily will open on June 26th. The German hotels will open late June and early July, the Balmoral in Edinburgh on August 1st and all others in September. Our hotels rely on international travellers so it would be pointless to resume operations until they return to travel.
You come from a family with a tradition of hotels. Is it a good business?
Yes, it is a good business if you are efficient at running it. But it is a business you have to have a passion for, like I do, like my father did and now my children, as it is very demanding.
“The first hotel we bought was The Balmoral in Edinburgh. I now have 14 hotels and we are continuing to expand.”
Rocco Forte Hotels’ award winning Balmoral Hotel at 1 Princes Street gazes over to Edinburgh Castle.
Rocco Forte, your father Charles Forte developed a large business which was then taken over.
At the end of 1995 Granada made a hostile takeover bid for TrustHouse Forte, the company my father founded. By then he was no longer involved. The bid was eventually successful and the company was sold. TrustHouse Forte employed 100,000 people at the time and was a kind of institution in the UK. After the takeover Granada broke up the company and sold its various businesses for less than they paid for it, therefore destroying a good company for no real reason.
It was then that I decided to set up my own hotel business. I invested all the money I had, my father also invested as did my sister Olga who is involved in running the business with me. Our invested capital amounted to 50 million pounds sterling. The first hotel we bought was The Balmoral in Edinburgh. I now have 14 hotels and we are continuing to expand.
Why do you have so many hotels in Italy?
Italy is the most attractive tourist destination in the world and there is great opportunity. 66% of the world’s culture is to be found in Italy, it has good weather, wonderful food and a great lifestyle. Above all its people are naturally hospitable, and therefore good at delivering high quality service in a most natural way.
Americans love Italy and make up about 40% of customers in luxury hotels. They take the highest rated rooms and suites and are therefore an important factor in the hotel industry. Sadly because of the virus they will not be coming this summer. Most of my hotels in Italy and UK are dependent on Americans.
Are you going to cut prices?
We will not cut prices as such, although we will offer special deals with added value and upgrades.
How do you feel about all this?
This is the most devastating situation I have ever faced in business, and it is so for the whole of the tourist industry which is suffering more than other industries. The summer months are very important, it is when most of the profits are made. This summer will be a poor one as international travel will not yet have recovered and the impact on the various economies will be terrible. Many smaller hotels will not survive, with a consequent loss in jobs. In countries like Italy, Spain, UK and France, 10% of the workforce is employed in tourism.
In their reaction to the virus governments have seemed to ignore the economic effect of lockdowns and the millions of livelihoods which will be destroyed as a result. At the outset the virus was not understood and there was a real fear of the kinds of plagues which beset the Middle Ages when large proportions of the population died. Now it is clear that the impact has been principally on the old and those with underlying illnesses. Of course every death is a terrible tragedy, but for most people the virus poses no real danger and governments should bring things back to normal as quickly as possible to minimise the massive damage to the economies.
“I am pleased to have a considerable business in Italy.”
Rocco Forte, will the UK suffer tremendous poverty in the months to come?
The UK, like most other countries, will see a huge drop in GDP in 2020 as a result of the lockdown. There was virtually no unemployment in the UK prior to the crisis, and numbers will increase dramatically. But the UK has the advantage of not being tied to the EU and therefore has greater flexibility in manoeuver and creating the stimulus needed to encourage recovery. It has its own currency and is in full control of its fiscal policy. Italy does not have these advantages.
What are you major worries for the future?
I worry most about the people who work for me. I spend a lot of time in my hotels and I know many of the employees and care a great deal about them. They look to me for support. At the moment I am able to keep all of them because of the various government support schemes, but if those should end prematurely some might lose their jobs and that would be devastating.
People say things will not be the same again. They always say this when there is a crisis, but I think people will go back to travelling as they did before. It may be 2022 before we see the levels of travel seen in 2019, but by next summer we should be back to a more normal environment.
Why did you buy Villa Igiea in Palermo?
I was already in Sicily with my Verdura Resort, and very much believe in the region as a unique tourist destination. Villa Igiea is an iconic property built in the Sicilian Liberty style but has suffered from past management and lack of investment over the last 10 years. Palermo itself is undergoing a sort of revival and must have a top quality hotel. I am in partnership with Cassa Depositi Prestiti (CDP) in restoring the property to return it to its former grandeur.
Is it difficult to work in Sicily?
In the development of Verdura I encountered a great deal of difficulties because I was not familiar with the bureaucracy and people did not really know what to expect from me. I now have a good reputation in the region and I am receiving a lot of help from the various authorities. In fact after Villa Igiea I would like to develop further hotels on the island.
CDP, through their branch of CDP investments, are shareholders of my company and have 23%. Maurizio Tamagnini, who was CEO of Fondo Strategico Italiano at the time, was much criticised because of his choice of a UK company, but since then we invested a lot in Italy, bringing work and creating opportunities. The idea was to create a new luxury hotel group like the old CIGA, with significant coverage of the country.
We now have seven properties in Italy with more on the way, and when Villa Igiea opens 50% of my turnover will be in Italy. Maurizio therefore made a good move, and is now fully vindicated.
Your father left Italy for the UK and made his fortune there. Are you going back to Italy?
My father arrived in the UK at the time of my grandfather, so he grew up there. However he always maintained his Italian roots and became a kind of alternative ambassador for Italy in the London. We were brought up as an Italian family and I never forget my Italian roots. I married an Italian girl and my children speak Italian fluently. I am pleased to have a considerable business in Italy.
Did your father have hotels in Italy?
Yes. TrustHouse Forte owned the Eden in Rome, the Gallia in Milano, the Palazzo della Fonte in Fiuggi. He had Forte Village in Sardinia, and in the early nineties he bought the hotels of the AGIP group from ENI.
Villa Igiea is a turn-of-the century palazzo at the perimeter of Palermo, Sicily.
Master bedroom in The Westbund Hotel in Shanghai.
Brown’s Hotel is an iconic destination in the heart of Mayfair, London.
The garden of the Hotel de Russie, one of the Eternal City of Rome’s most prestigious luxury hotels.
The Verdura Resort near Sciacca, Sicily.
The Canova Suite of the Hotel de la Ville, Rome.
“Each customer must be cared for individually and made to feel special.”
Rocco Forte, what is the secret of the hotel business?
The secret of the hotel industry, if it is a secret, is first of all the location, which is very important. If you are in the wrong place, even if the hotel is wonderful it won’t work. You have to be in the centre, next to the shops, the galleries, the museums, the theatres and so on. It becomes more and more difficult to find the perfect city centre locations. The décor and the ambiance is also very important, and we are lucky as my sister Olga is an expert in this field. She decorates herself or works with outside designers, and has the ability to create an intimate space, adding extra value to the experience the guests have. But most important is the service you give and the warmth and welcome you create for the guests. Each customer must be cared for individually and made to feel special. Our training programs help the staff understand our values and communicate naturally with our guests. Technology plays a great role of course, as when effective programs are in place it impacts reservations and booking systems and helps the revenue management team.
How do you make money with hotels?
Rooms and suites bring the greatest revenue. Restaurants and bars also contribute, but mostly they create the local market and add to the atmosphere. For instance the Hotel de Russie in Rome is very popular among locals.
Are you still happy about your job?
Rocco Forte Hotels is still a very young company and I am still very ambitious to grow it, to improve the service delivery to our customers and become more efficient in the way we operate. I am proud of the culture we have created in the company and the service orientation. It is a family business with family values, and apart from myself and my sister Olga, my three children are involved in the company. I have been working now for 60 years, since my jobs during school and university holidays, and I still have the enthusiasm I had in those early days.
Did you meet many interesting people?
A business which has a turnover of 250 million is not huge, but we have a profile that has allowed me to meet many fantastic people, amongst which are presidents and prime ministers, artists and musicians, and marvellous people from all walks of life with stories to tell. I am lucky and always had an element of excitement in my life. Many people who have experienced the lockdown period have reflected on their lives and want to change them. In my case it has given me more enthusiasm for what I’m doing, and the determination to make my company even more successful.
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