CORAL GABLES, Florida — As more hotel brands enter the luxury, all-inclusive segment, Sandals Resorts International’s CEO is focused on staying relevant by understanding the consumer’s needs and wants and anticipating what’s next.
Speaking with Hotel News Now during an interview at the recent Caribbean Hotel & Resort Investment Summit, Gebhard Rainer, group CEO of Sandals Resorts International, said staying relevant has been made possible through the people it employs.
“We are blessed to have team members who are truly passionate and committed to the brand and committed to delivering those experiences very authentically, we don’t script them. Our team members are building these emotional bridges with our customers, and that’s what brings customers back, that’s what makes them remember the brand and appreciate the brand. I think that’s where we have an edge,” he said. “It’s a lot easier to do this with a company of our size and privately owned because we have agility.”
Sandals Resorts International is an all-inclusive resorts operator. It operates 24 resorts throughout the Caribbean under four separate brands, including Sandals Resorts, Beaches Resorts, Fowl Cay Resort and Your Jamaican Villas.
For more on Sandals Resorts International’s growth in the all-inclusive space, recent accomplishments and CEO Gebhard Rainer’s outlook on the industry, read through this Q&A.
What are some recent wins that Sandals has achieved?
The biggest highlight I would say that we have is we opened Sandals Dunn’s River in Jamaica, [it’s] our ninth property in Jamaica. The reason why this is a highlight and so important is because it’s very emotional for us as a brand [and] for the Stewart family because our [late] founder and former chairman [Gordon ‘Butch’ Stewart] grew up on the beach where that hotel is. Also, because Sandals used to operate that hotel as a lease, then had to leave it because there was no capital that went in by the owners.
Then, in 2020 during the pandemic, we finally decided to buy it back. We had an opportunistic approach to it, then we proudly opened it [May 19 for a grand opening celebration and officially on May 24].
Where is Sandals looking to invest now?
In general, from a development point of view, we are opportunistic. We look at what opportunities present themselves in the market. Particularly, we look for distressed assets because that’s a specialty of ours; we can do those conversions, as we call it ‘Sandalize’ a property.
There is a focus, from a development point of view for us, definitely in islands where we are not yet present. The Dominican Republic, for example, is an area where we would like to be because it’s the largest tourism country in the Caribbean itself, with the most tourist arrivals. Mexico has become interesting to us as well.
But it’s new destinations [we are eyeing], and the reason why [it’s] new destinations and new islands is because that’s what our customers are looking for. They’re looking for new experiences, they’re looking for the next new destination.
Are there any new traveler trends you are noticing?
One of the big realizations in our business today is the fact that most people who can afford an all-inclusive vacation in the upper-upscale and luxury segments where we are, [they] are world travelers. They have seen other destinations around the world and they compare you with the international standards.
You’re competing with the world. And that’s a realization for management as well as staff, to constantly push yourself for the next level in terms of service delivery and quality that we can provide.
Consumer behavior in general has changed because of the pandemic. A lot of people have come to realize finding their own true values in life [is important to them]. Consumers today spend a lot more on themselves in leisure and on experiences.
Every year, the number of travelers is increasing globally. Every year you have more affluent demographics who can afford things and are willing to spend the money on these experiences, and that impacts our industry quite a bit. Yes, there are going to be some limitations once the excess savings that have been accumulated during the pandemic have gone, but I think the behavior itself, that people have moved away from spending money on goods and shifting it to services, that’s going to stay.
Next generations, specifically Gen Z and thereafter, they’re much more focused on the intangible rather than the tangible from a spending point of view.
How would you describe the labor environment in the markets that Sandals operates in?
It’s a real issue globally, it’s one of those additional phenomena that came out of the pandemic. There’s people who are just staying home and don’t want to work anymore because they think life can be lived without having to work.
There is a real shortage because now the market has become a lot more competitive, and specifically for more physically intensive jobs, you have a much smaller pool of people available today. The more affluent [these] societies become, the less these affluent societies want to work in physically intensive jobs. That creates a challenge.
The war in Ukraine has posed a huge problem for the cruise industry, because the cruise industry used to recruit heavily in Eastern Europe. Now they cannot recruit. If [cruise lines] do recruit, they go to the Caribbean and recruit in the Caribbean. We’ve have 20,000 people in Jamaica being recruited by the cruise industry from resorts. That’s a big impact we have on our industry because that labor pool has suddenly shrunk and has become extremely competitive.
It’s cyclical as well to some extent, these types of shortages come once you go into an economic downturn and life becomes a little more difficult. Then, you get some of that labor force back into the workforce again and people will be looking for these jobs again because they have to earn a living.
Does it impact our decision as to where [operate]? It’s one component, yes. It’s a component that impacts the negotiations that you have with governments because often it’s not just the labor pool itself, but it’s the population itself. When you go to some of the islands where populations are very small, when you have a population of 60,000 or 100,000, the labor pool naturally is very restricted. Unless the government allows you to import labor, to a certain extent, it’s very difficult to operate. We pre-negotiate all those things with the government, get agreements in place, making sure we have the ability to supplement what we can’t find locally.
In 2021, Sandals announced it was launching a hospitality and tourism school in honor of the company’s late founder. Can you speak to the progress on that?
The Gordon ‘Butch’ Stewart School of International Hospitality is going to be a landmark in the Caribbean. The reason why I say that is because the Caribbean today unfortunately does not have any professional education institution that develops professionals in the hospitality industry, which is a real drawback when you think about tourism being the No. 1 income provider in the Caribbean.
Of course, it’s also very important in light of the fact that there is a shortage of labor. The more we can develop professionals and make the industry attractive [the better]. The industry has more to offer than just waiters and cooks; we have a whole load of different trades, from professional accountants to lawyers to trades that people don’t think are associated with our industry.
It’s not yet open, we are in the phases of development and [is projected] to open in the beginning of 2025.
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