3 things to know when opening a luxury hospitality business | Sir Rocco Forte

Our hotels tend to be individual, so they each have their own personality. People always talk about how beautiful, how much money has been spent on the rooms and so on, but the underlying thing in hotels is the service you give the customer.

Yes. They reverse everything they've done so far. We're in a very similar period now where everybody thinks the UK is finished and this was the case in the '70s. Mrs. Thatcher came along and created an entrepreneurial spirit in the country. I wanted to go back into business and decided to start a luxury hotel group. I spent a year trying to find a hotel and eventually the Balmoral Hotel came along. Two months later, the chief executive of Bank of Scotland rang me up and said, 'Mr. Forte, you'll be wanting to expand.' I said yes. He said, 'Well, how does 50 million sound for the next hotel?' I made a mistake.

Well, there's a culture to the company that pervades all the hotels. Our hotels are individual, each with their own personality and a strong sense of place. That was one of the first things we focused on when setting up, and my sister Olga has a big impact on that. She looks at each hotel and decides how to make it feel local, working with designers to create a similar yet unique feeling. There's a sense of detail in the decor that you don't get from big chains, which tend to repeat the same things. But most important is the service we give. People talk about beauty and money spent, but the underlying thing in hotels is the service to the customer. In luxury hotels, the customer must feel like an individual, with personalized service. There must be genuine warmth towards the guest, which we try to instill. Every staff member is inducted to learn about the family, company history, the hotel, and its destination. They feel part of the process and believe in the project. The lowest-paid staff, in direct contact with customers, must believe in what they do and enjoy coming to work to make the stay correct and right for the customer.

Values, because I think we're naturally hospitable people. If someone comes into your home, you want to look after them and make their stay pleasant, making a big effort. That should be what we do with every customer. The family aspect is important. My children are involved; they worked in hotels during holidays and developed a passion for the business. I didn't force them; they wanted to join. As a family, we're in the hotels regularly, so people know us, see us, and see our care for service. That pervades the organization. Also, they know who they're working for—not a big organization where people change—but for us, who are there long-term. Visibility is important for someone like me; I appear in the press and on television, which gives staff a sense of pride.

I think there's entrepreneurial resilience in my genes. My grandfather was born in a small village near Cassino between Rome and Naples. At 14, he went to the US alone, returned at 21 with enough money to build a house, but couldn't make ends meet, so he went to Scotland in 1911. On my mother's side, she was born in England to Italian parents; her father walked from northern Italy to England working along the way. Her mother ran a delicatessen in Soho until she was 84, then moved to Venice to buy and let apartments. She started a new business at 84. Her mother dragged her back to England at 90, and she lived with my parents until she died at 104. There was no way I wasn't going to be an entrepreneur with resilience in the genes.

My father was extremely entrepreneurial in many ways. He opened the first motorway service area, went into inflight catering at airports, and was one of the first in the '50s and early '60s to recognize the value of companies with undervalued assets. He bought companies like the Waldorf Hotel, did the first sale-and-leaseback, and built up the Forte Group. It merged with Trust Houses to become Trusthouses Forte, but there was a big row, and he ended up as chairman and chief executive.

Crowder, the chairman of Trust Houses, had agreed to retire after a year, but started reneging. My father got busy, engineered a takeover bid by Allied Breweries which failed, so they resigned, and he took over. Trust Houses was bureaucratic, but my father's approach was entrepreneurial.

Yes. We had 100,000 employees in Trusthouses Forte, a big group, but as a family, we gradually diluted our shareholding. With the merger and rights issues, my shareholding dropped below 20%. When Granada made a takeover bid, we had about 5%.

Chairman, CEO. The bid came out of the blue, so we started defending. A takeover bid is about creating value for shareholders. We forced the bidder to raise the bid, which we did unconventionally, and it forced the price up. Granada's share price tumbled as people knew they were paying more. The institutional shareholders decided to sell, but individual shareholders, including our 5%, hadn't agreed. In the end, it was a big blow. I had big ambitions for the group but couldn't rationalize it. I remember coming back to High Hoben, where there were television cameras and microphones, asking what I would do. I said, 'I will return,' like MacArthur.

Yes, because I couldn't use the Forte name. They had the name. Compass ended up with it from the catering company, but they weren't using it, and in honor of my father, they gave it back to us. A guy called May was chairman then.

Yes. During the takeover bid, Granada had said the city didn't think they could run five-star and four-star hotels, so they should sell them. I tried to buy them back, raised a billion in the city, but it took too long. Granada changed its mind, so I couldn't do that. I was 51, had worked all my life, and had some money from shares, but not enough to keep my wife happy, so I had to go back into business. I decided to start a luxury hotel group, spent a year trying to find a hotel, and eventually the Balmoral Hotel in Edinburgh came along. Trusthouses Forte had been running it under management contract, but it had gone bankrupt. I bought it after long negotiation, taking it back from Granada, which was satisfying. Two months later, the chief executive of Bank of Scotland rang and said, 'Mr. Forte, you'll be wanting to expand.' I said yes. He said, 'How does 50 million sound? Twenty years money, no amortization, 1% over base.' I pretended not to be excited and said, 'Let me think about it.' I rang back and accepted, which doubled my capital because I had 25 million, my sister put in five, and my father put in 20.

I made a mistake. I thought with devolution, Cardiff would become an opportunity, so I built a hotel in Cardiff and one in Manchester at the same time. Wales was the only country in Europe without a five-star hotel, and I tried to break that tradition. It didn't work because I couldn't get the rate to justify the service, so I sold it. Rodri Morgan, the first minister of Wales, wrote me a handwritten letter thanking me for what I'd done for Cardiff, which I was taken aback by. Then we opened in 2000, this hotel in Rome, and in Florence. This hotel had been vacant for eight years, and through a cousin, I was introduced to it. I fell in love with the courtyard and garden and took a year and a half to persuade the owners to let me convert it into a hotel. It cost 15 million euros, which I borrowed from the bank and repaid in three years because the hotel did so well. It put me on the map internationally, especially with the American market, which is the most important for luxury hotels. In Italy, it's 55% of our business; as a company, it's 45%. The luxury travel agent community in the States is very important, and I've always had good relationships with top agents. They trust me and always support new hotels without waiting to see how they do.

Yes, I tell them about our philosophy, how we look after staff, the importance of service, and how we're improving it. I'm sort of like a film star with them, which I can't believe because after all, we're only 15 hotels.