One bright, sunny day in November, 2006, Isadore Sharp, chairman and CEO of the Four Seasons hotel chain, made a $3.7 billion sale netting him, after all regulatory and shareholder approvals are met, a cool $288 million. A really sweet deal. And the culmination of a lifelong work ethic that had the most humble of beginnings. Here’s his story.

Located in some of the most desirable spots the world over, the Four Seasons hotels have become famous for opulence, elegance, and attention to detail. Ranked among the best worldwide by Zagat’s and Travel & Leisure, the Four Seasons is also an AAA five-diamond hotel chain, one of just a handful. The company operates more than 70 hotels in more than 30 countries, all over North America, Europe, Asia, the Middle East, Australia, the Caribbean, and South America. But luxury, at least in this company’s culture, is not just about the finest things money can buy. After all, with enough hard work and attention to detail, any company could outfit its properties with fine furniture, pillow-top beds, plunge pools, and top-rated spas and restaurants. What makes the Four Seasons head and shoulders above the rest?

For one thing, no gilt-edged detail in a Four Seasons hotel is just for show. The founder of the company, Isadore Sharp, has spent forty years in pursuit of excellence, all the while thinking about his customers and anticipating their needs. He tolerates no empty frills. “We never do anything that’s just excessive,” Sharp explains. “When you’re charging a high price for your product, you’re usually dealing with people who are quite successful in their own businesses, and what they don’t like is waste.”

The other key to Sharp’s success is his company’s one-of-a-kind service. Years ago, Sharp made a commitment to achieve 100 percent guest satisfaction. “Every dissatisfied customer talks about their experience with an average of 10 other people,” Sharp says. “One percent of dissatisfied customers could possibly lose us one million potential customers a year. Ninety-nine percent satisfaction is not enough.”

‘A Business Deal’
The son of an immigrant who started his own plastering business, Sharp grew up in Toronto working construction jobs with his father. Eventually he earned a degree in architecture. His first project was a motel in Toronto, which he built for a friend. The job posed a number of challenges. For one thing, the site was alongside a highway, virtually in the middle of nowhere. “It was very small, like 14 rooms,” Sharp recalls, “with seven rooms on each side, so it looked like a big house. I asked, ‘How do you expect people to even find this place?’” Sharp’s friend assured him that he knew what he was doing. Sharp was not convinced. He suggested leaving some of the rooms unfinished, and making the motel twice as long. “We’ll just build the outside with windows,” he told his friend. “But then you’ll have a big roof and on the roof you can put your sign, Motel 27, so people several miles away will be able to see there’s a motel somewhere.” Not more than a month after opening, Sharp got a phone call. His friend wanted him to finish the other rooms. The motel was full every night.

“I used to go back and watch him and his wife operate this thing, and it just intrigued me that they could make this small motel a great success. I thought, ‘Well, if it can work here along the highway, what if it was right downtown?’ A motor hotel downtown to me just sounded like, ‘How can that miss?’”

Five years later, in 1961, Sharp did open a hotel of his own, in what was then the seediest district in Toronto. Everyone said it was a bad idea. No one wanted to stay in that part of town, and those who did would probably use it as “a flophouse.” Still, the area was close to a major hockey stadium and a growing television station, and it was convenient to nicer areas of the city. The land was cheap, and Sharp devised a way to work around the derelict surroundings: He built a charming interior courtyard with a swimming pool and outdoor café, which meant guests would never have to look out at the wrong side of the tracks. “Aesthetically, it was beautiful,” Sharp says. “When you were in the hotel, it didn’t matter what the street outside looked like. It was a little gem. And it took off like a rocket.”

That was lucky, because Sharp had borrowed heavily and still owed his creditors. The rooms, he says, were priced at a typical rate, somewhere around $12.50 a room. But he never imagined the venture as the start of what would become the leading luxury hotel company in the world. In the beginning, however, Sharp simply took it one room at a time. “When I started the company, there was no vision,” he says. “There was no grand dream. I can’t look at what Four Seasons is today and say I could see a picture [of it] when it began.”

“The ability to predict the future is really based on background and experience. I came from a poor immigrant home. My background was limited, as was my experience. So, I was just into building a hotel as a business deal.

Caring for Customers
After the Toronto hotel, Sharp started building a Four Seasons hotel in London. At the same time, he accepted a contract with Sheraton to build a 1,600-room convention hotel in Toronto. The London project was a medium-size, boutique hotel, beautifully designed, with spacious rooms. Designer Tom Lee purposely gave the rooms a homey feel; one of his innovations was to conceal the television set within an armoire, a practice that’s now de rigueur in the industry. The convention hotel, on the other hand, was built for mass consumption. The entire design concept revolved around thousands of people leaving and arriving each day. The contrast between the two projects gave Sharp a clear idea about the kind of hotels he wanted to create.

“[The convention hotel] made it very hard to deal with every person as an individual because you have so many people coming through the door,” Sharp says. “That’s why I decided to only build and operate medium-size hotels of exceptional quality.”

Sharp’s definition of exceptional quality included concepts foreign to North American hotels. He was the first to introduce concierge services, for example, a practice he borrowed from European hotels, as well as round-the-clock room service. In a quest to offer the “best sleeping experience,” he hunted for the most comfortable mattress, which he found in Germany. He purchased them for all his rooms in 1970.

“This was something we started way back, 35 years ago, and the principle was, ‘What will the customer appreciate?’” Sharp says. “We were the first company to put shampoo in the bathrooms. We supplied large towels made of 100 percent cotton, and soft toilet paper. We put two telephones in the room, one by the bedside and one in the bathroom. This was before cell phones, so what would the guest do if he was expecting a call but happened to be in the bathroom? It was all about doing things to create an experience the customer would benefit from.”

At the time (the early ’70s), the decision to specialize in boutique hotels was “audacious.” The Four Seasons only had three or four hotels to its name. And Sharp’s ideas often shocked the industry. Complimentary bathrobes in rooms?
“That was considered an outrageous expense,” he says, “because people assume that [guests] would take them. So they thought, ‘How can you afford to lose bathrobes?’”
But part of Sharp’s magic formula is to anticipate and fulfill needs the guest never knew he had. After all, no one ever complained about a lack of bathrobes in the rooms. Sharp got the idea because he thought long and hard about what guests might need and enjoy. The bathrobes were part of a strategy designed to provide the utmost in value,

“Usually, when you are traveling across different time zones, you are going to wake up at two or three in the morning,” says Sharp. “You’re not ready to get dressed for the day. So, you might take your shower, put on a bathrobe, do some work or reading. Nobody would ever think of traveling with a bathrobe. It’s too big to pack.”

Sharp considered the expense worth it, because he knew his customers were motivated by value. Today any guest staying at a Four Seasons hotel pays a premium for his room, somewhere between 30 to 40 percent higher than competing hotels (and 80 percent higher than the top end of the market in general). Even so, Sharp says his company maintains one of the best ratios of room occupancy to room rate. Early on, Sharp decided he wanted to operate as a management company and avoid investing in real estate. Although it takes small equity positions in about 20 percent of its hotels, the company functions by way of long-term management contracts (50 to 60 years, on average), under which the Four Seasons assumes responsibility for sales and marketing, reservations, accounting, budgeting, and hiring and training on behalf of the owner. In exchange, the Four Seasons receives a percentage of gross revenue and, in many cases, incentive fees based on performance.

“I figured that we would rather invest our money into building a brand name that would become more valuable than the ownership of real estate,” says Sharp. “As a company, we have a very solid balance sheet, rock solid in terms of [our] ability to withstand any downturns in the economy.”

Five-Star Service
Of course, competitors soon copied his style of service, but Sharp made another key decision, one that would allow the Four Seasons to keep its edge. Other hotel chains might operate a two-star hotel in one city and a four-star hotel in another, but the Four Seasons always offers the same top-notch service in each of its hotels. How? Standardized employee training. All Four Seasons employees are interchangeable – a manager in London can be transferred to Toronto and not skip a beat.

“It would be very difficult to take a person who is accustomed to working in a three-star operation and then move that person into a five-star hotel,” Sharp says. “Can that person really understand what is expected of them? It’s like taking a person who might be selling a car at a mid-range price and then putting [him] into a Rolls Royce showroom. It’s unfair. It’s not that the person might not be able to do it, it’s just that they haven’t been trained to think of the customer and the customer’s expectations, and how to meet them. And the higher those expectations, the more challenging it is for the employee.”

In fact, the Four Seasons routinely moves employees from one site to another as new hotels open (currently there are 60 in development). When the Four Seasons opened in Las Vegas, everybody wanted to go, and 160 employees from other locations were transferred there. “We have within the company an unusual bench strength of people. We can open a hotel anywhere in the world – anywhere – and we can bring that hotel up to a level of service that’s as good as any other of our hotels,” says Sharp.

Fundamentally, excellent service is about the way employees treat customers. Sharp wanted his service to be the best of the best. After he had about 20 hotels up and running, he decided to make a commitment to customer service that went above and beyond all expectations.

“Now, when I told this to [employees], they looked at me as if I was smoking something,” Sharp says. “They said, ‘How can we ever do that? We’re not manufacturing television sets that we can take off the production lines if they’re not 100 percent quality. It’s a service. Things go wrong every day.’ And I said, ‘You’re absolutely right. As we speak, I’m sure something is going wrong, It’s the nature of this industry. Things happen that are way beyond your control.’ I said, ‘I’m not talking about that. What I’m talking about is, what do you do about it?’ What do you do, working at the front desk, when something happens and you can’t give the customer what they came for? And they are irate and berating you? If you make a sincere attempt – and I emphasize ‘sincere’ – to try to help, that person more than likely will understand things go wrong that you can’t help. More than likely, they will say, ‘Okay, I understand.’ But if you turn your back on that person and say, ‘Well, I’ll have to get the manager to call you tomorrow, sir,’ then you have surely lost a customer.”

When customers receive excellent service, they don’t spread horror stories. Even if their demands were never met, they’ll talk about how they were treated with kindness and courtesy. “They become our best word-of-mouth salespeople,” says Sharp, “because they can’t believe that people would put so much personal effort into their job.”

The Higher Hire
To consistently provide a level of service above and beyond that of competitors, Sharp trained his employees to follow the golden rule of customer service: treat the customer as you would want to be treated. This simple precept is the core of the Four Seasons’ culture.

“‘Do unto others as you would have them do unto you,’” Sharp says. “There is nothing to memorize. There are no rules for you to stop and think about when something comes up. You just stand back and use your common sense and say, ‘What is the right thing for me to do here?’

“In life, you make many more important decisions dealing with your own family than you’ll ever make in business,” Sharp adds. “If you’re capable of that, then you’re capable of dealing with difficult customer service situations. Many times, you can’t do anything about what’s happened. But most people will say, ‘Well, thanks for trying. Don’t sweat it.’”

In many cases, employees rise to the occasion to find solutions to seemingly insurmountable problems. When the 2004 tsunami hit the Maldives, the Four Seasons resort on the island of Kuda Huraa was completely full. There was no time to instruct the 300 employees and tell them what to do. The hotel ended up being wiped out, but, thanks to the quick response of the Four Seasons’ staff, not one guest was hurt.

“Every employee acted intuitively, the way they were brought up to behave,” Sharp says. “And they were credited with saving lives. Some swam out into the ocean to help people. People were dragged into the swimming pool, and people dove in to get them. They did everything in their power to do the right thing. The employees worked together, they organized, they got a plane chartered, and they flew all guests off the island and got them home safely.”

The dedication and effort shown by the employees in the Maldives is not unique to that one property, says Sharp. The Four Seasons attracts the most resourceful, dedicated employees by hiring based on attitude, work ethic, and career aspirations. Experience in the hospitality industry is low on the list of considerations. In 1990, when the Four Seasons opened in Maui, they faced a small applicant pool, thanks to Hawaii’s low unemployment levels. The Four Seasons manager went to the sugar fields, where people were performing back-breaking work.
He interviewed people and asked them, “Look, do you want to keep doing this for the rest of your life, or would you like to make a career out of learning something about the hotel business?” Many of the workers took him up on the offer, and by its second year of operations, the Four Seasons in Maui was ranked the number one hotel in Hawaii.

Not surprisingly, the Four Seasons enjoys high levels of loyalty among its employees. Sharp says he is surrounded by high quality, talented, competent people in whom he has the utmost trust and faith. The top 150 positions in the company are filled by people who have been with the Four Seasons for an average of 17 years. “If you look at the most senior management of the company, which we call the Management Committee, the average is even greater than that,” says Sharp, who adds that the Four Seasons is at the top of every headhunter’s list. Naturally other hotel chains make offers to employees, but Sharp says the Four Seasons seldom loses anyone to competitors and has never lost any employee in the top echelons of the company. “They choose to stay here for many reasons,” he says. “Compensation must be fair, but that’s not why they stay. They stay because the company culture and work environment gives them what they need. Studs Terkel once wrote, ‘In peoples’ work, they need daily meaning as well as daily bread.’ And the meaning, I think, is what people have here more than elsewhere.”

To learn more about the Four Seasons’ properties, go to www.fourseasons.com. •