Business Model
Four Seasons does not own most of its properties; it operates them on behalf of real estate owners and developers. The contracts between Four Seasons and property owners typically permits the company to participate in the design of the property and run it with nearly total control over every aspect of the operation.
Four Seasons generally earns 3 percent of the gross income and approximately 5 percent of profits from the properties it operates, and the property owners are required to additionally contribute money for chain-wide sales, marketing and reservations systems. Four Seasons hotels have larger staffs than competing chains, therefore they create separate reserve accounts to cover upkeep costs. While profit margins are relatively low, the reputation of the brand and the value of the hotel for sale as well as loan collateral generates developer interest. Four Seasons also produces a complimentary magazine for guests that is supported by advertising revenue.
Four Seasons has a fractional ownership division, Four Seasons Residence Clubs.
Four Seasons bases its business model on four pillars: Quality, Service, Culture, and Brand.
Read more about this topic: Four Seasons Hotels
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