2004 Independent Hotelier Of The World: Ali Kasikci
By Jeff Weinstein, Editor In Chief -- HOTELS Magazine, 11/1/2004
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Ali Kasikci is a 21st-century hotel leader. Don’t simply call the managing director of The Peninsula Beverly Hills a hotelier; it is no more than a title and a bit of a misnomer for the 48-year-old Turkish-born perfectionist who prefers to focus on “the business of the hotel business,” forever thirsts for reinvention and absolutely will not tolerate coins clanging in the pockets of his staff members.
“Don’t compliment me and tell me something I am doing well because I am employed and paid to do it well,” says the slightly graying leader of one of the few properties to have won the 5-star and 5-diamond awards within the first year of operation. “I just want to hear what I am doing wrong and how we can do it better. I am hard and demanding on myself, which can make me a miserable human being because I can never find the satisfaction in anything.”
It is this imposing trait—perhaps inherited from his authoritative father—that has driven Kasikci from the start of his career, which took off in Germany, moved to South Africa and finally to the United States, where he spent five years with Four Seasons before joining the then-struggling, less-than-a-year-old Peninsula Beverly Hills in 1992.
The Peninsula was losing about US$500,000 a month when Kasikci arrived in Beverly Hills with what seemed to be the nearly impossible brief of setting a budget that allowed for no more than a US$100,000 net cash loss a month the following year. “I had to do this to remain employed,” says Kasikci, who pulled together his new management team (many plucked from his previous employer, the Four Seasons in Newport Beach, California, and still with him today) and set the 5-star, 5-diamond goal as a must-do to separate the hotel from the luxury pack.
Long story short, the hotel won the designations inside of a year, successfully wooed business from the neighboring Beverly Hills Hotel, which was closed for renovation, raised its occupancy from 52% to 74%, raised its average rate from US$232 to US$286 and went from a US$6 million net loss in 1992 to a US$1.8 million net profit in 1993. “From then on, we never looked back,” says the proud Kasikci, who underneath his humble and polished veneer seems to bask in this accomplishment—and with good reason.
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“What has helped me be successful is the fact that I am not truly a hotelier,” says Kasikci, who prefers to be described as a hotel leader. “The training we had as hoteliers includes never having to say ‘no.’ However, operating a hotel in the 21st century requires a very different approach. The fundamental thing behind this strategy is actually knowing when to say ‘no.’ Strategy is all about ‘no, I am not going to advertise there, or deploy my sales force here, or deal with those suppliers.’ Strategy is not as much about preparing a to-do list as a to-don’t list... It is about creating an organization that knows where it is going and does not want to waste resources and time.”
The Learning Curve
All of this might have never come to fruition if it weren’t for Kasikci’s insightful father, who for no clear reason was fascinated with the concept of his son attending a hotel school. In fact, Kasikci never fashioned himself a hotelier until his teen years when his father took a position as a doctor with the Turkish airline, which opened the door to travel and stays in nice hotels.
Shortly thereafter, the plan was put in motion to start hotel school in Germany. At the time, however, Kasikci did not have the credentials to gain admittance but he did have the good fortune to find an apprenticeship at the Bayerischer Hof in Munich, where he learned the business before cracking his first book. After finally earning his hotel school diploma, Kasikci was looking for any excuse not to return home to Istanbul as he was approaching military age. The blessing came in the form of Peter Iwand, who was planning to open more than 20 Holiday Inns across Europe. He was starting in Germany and recruited Kasikci out of school in 1973 as an accelerated management trainee. Only a few months into his career, a huge oil crisis hit, the dollar devalued against European currencies and Iwand’s plan to build 20 hotels was curtailed.
While Kasikci remained in Germany, Iwand moved on and became a managing director for casino resorts in South Africa. Shortly thereafter, Iwand offered Kasikci an opportunity in South Africa, but Kasikci would not accept it until he learned English. So it was off to Oxford in England for intensive language training. Six months later, with the last few dollars in his pocket, Kasikci bought his ticket to South Africa. By 1979, Kasikci had worked his way up to the top food and beverage position for the opening of the Sun City resort, and about a year later mentor Iwand told him he was ready to take on his own hotel. Little did the confident and cocky 26-year-old know what he was in for next.
Kasikci became the opening general manager of La Montagna, an unknown commodity outside Durban, South Africa. He thought he was thoroughly prepared and knew everything necessary to run the very best hotel—except marketing, which was no more than a vague concept in 1980. Kasikci just assumed once the doors opened, guests would magically arrive. Needless to say, three months into the project, he was fired. No one came to the hotel, and it nearly went bankrupt. “Even if they gave me a chance to fix it, I wouldn’t have known what to do because I had no marketing experience,” Kasikci says. “I didn’t know where to find guests for the product. As it turns out, it was the best experience for me at the time. It was a big shock, and I analyzed very hard where I went wrong.”
As often is the case for winners of the Hotelier of the World award, fate was on Kasikci’s side again as the chairman of the construction company that built La Montagna had taken a liking to the young hotelier and offered to introduce him to the managing director of the swank Royal Hotel in Durban. He accepted a job as a special projects manager in the corporate office and, as luck would have it, three months later in 1982 he was named acting general manager when the managing director who hired him decided to leave the hotel. For five years thereafter, Kasikci ran what was considered the best hotel in Durban, lived a great life at the top of the market and learned the important lesson that “the business of the hotel business is business,” much different than the notion that the business of the hotel business is hospitality.
When Kasikci turned 30, he was ready for a new challenge. He wanted to come to the United States, where he knew he would be at the cutting edge of management practices and could attain the height of success in his chosen field. In fact, he was willing to take a step backward and did so by taking a job as F&B director at the Four Seasons in Newport Beach, California. A year later, he was named hotel manager but, at the same time, knew he would have to wait quite awhile for his turn to become a GM. “At Four Seasons I learned what luxury was truly all about. It was the next phase of my education,” Kasikci says.
This phase of life and education also included night school at Claremont University’s famed Drucker Graduate Management School, where he earned his MBA, and marriage in 1987 to Donanne, who he met at a Laura Ashley store while trying to furnish his first apartment. It was while attending Claremont that Kasikci was approached to join The Peninsula Beverly Hills, and in February 1992 he started what has turned out to be a great run at the hotel. “Now it shows clearly it was the best decision I ever made,” he says.
Developing The Advantage
Kasikci applied everything he was learning in school to his new business. “I was managing the hotel, using it as a lab. The results from the hotel were rehashed at school, and I came back with adjustments. It was from then on that I realized to effectively manage a hotel you must constantly educate yourself.” And as it turned out, Kasikci has taken education as a serious hobby, teaching top-level hotel management courses at Cornell University for the past eight years. “I want to give back to the industry and if I don’t prepare myself to teach I am not learning. In order to learn, I am forcing myself to teach.”
Perhaps the best lesson Kasikci learned from his ongoing education is to never look at the hotel industry as a distinct discipline. “You must look at what works in other industries that can be translated, applied and leveraged in the hospitality industry,” Kasikci says. “When you do that, you amend the rules of the game. Because other hoteliers don’t look at their businesses this way, if they try to play your game, you have the advantage and will always come out the winner. When you feel they are closing the gap, you change the rules again and constantly keep the game as yours.”
Currently at the Peninsula, Kasikci is focusing on reinventing the hotel’s management structure and how information flows from top to bottom. He no longer chairs the operations committee meeting, which is left to his top two executives. Instead, he works on the standards committee with lower-level employees, training them on how to become and think like managers.
As for attending to the hotel’s loyal customers (who he expects will deliver US$14 million gross operating profit in 2004 and US$15.4 million in 2005), Kasikci and his close-knit management team focus on exceeding expectations in every sense. Kasikci calls it “satisfy the sixth sense.” “If you ask guests why they choose the Peninsula time and time again, they will not be able to give you one reason—they will give you many reasons and not be able to prioritize because it is the combination of experiences that creates something,” Kasikci says. “This is the nicest part of our competitive advantage because if your guests cannot describe why they are attached to the hotel, it means they are addicted. The minute you create an addiction, you are assured of return business.”
Crucial to Kasikci’s operating style and a big part of the Peninsula’s equation for success is going beyond anticipating guests’ needs because, he says, customers do not articulate clearly what they want. “This is why this industry gets left behind while other industries move ahead,” Kasikci says. “Here we are customer-led when we should be leading the customer.”
For example, customers did not ask for 24-hour check-in/check-out, but Peninsula management extracted data and used instinct to create a system that allows for this flexible system. “When you collect data and use your instincts, you will find that even when you are 100% sold out, by 6 a.m. 5% of your rooms are vacated and available,” Kasikci says. “So you have an idea, combine it with data and create the operational system. This creates the true, modern understanding of hospitality. Historically, great hoteliers were great innovators. They did something customers never asked for. They built the entire business model around innovation. Hospitality in the true sense is innovation. That is all.”
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Wisdom, Integrity
With such a passionate and disciplined approach to hotelkeeping, Kasikci has gained a reputation as a tough manager. But at the same time, he walks around the hotel and the back offices with a smile and likes to use affectionate nicknames to address many on his management team, from “Small Fry” and “The Commish” to “Jimminy Cricket,” the money-conscious controller. “With age comes the wisdom of knowing when to be a manager and when to be a leader; when to be a role model and when to be a tough manager; and when to control things and when to let go,” Kasikci says. “There is no formula but it comes through intuition and experience... The only thing you must do is stay true to your integrity, ethics and values.”
Heinrich Morio, general manager of One&Only Le Touessrok in Mauritius, worked for Kasikci from 1992 to 1995 as an executive assistant manager and says he still draws from his experience at The Peninsula. “Working for Ali was a daily pleasure,” Morio says. “AK has a very simple and clear vision and that is to make The Peninsula Beverly Hills the very best business hotel in the United States while making a profit for the owners. AK is an innovator, a free spirit and is never afraid to try out new ideas. He challenges the traditional for the sake of improving it.”
With such praise and what has become a great track record, one might think Kasikci has contemporaries he likes to emulate. Not so. Instead, he says he finds qualities in individuals and picks up things that work with his personality. “A carbon copy of a carbon copy makes a lousy copy,” he quips. At the same time, Kasikci does recall some good advice given to him while working at the Royal in Durban by then-Chairman Russell Stevens, who said one needs two things to be successful: Wisdom and integrity. “He told me integrity is delivering on what you promise,” Kasikci says. “Under promise and over deliver. If you are going to lose money yet promise you are going to deliver, wisdom is not making such idiotic promises. This is where hospitality and business come together.”
Challenges Of The 21st-Century Hotelier
One of Ali Kasikci’s endearing traits is his desire to give back to the industry and his ongoing affiliation with Professor Kathy Enz at Cornell University, where he teaches a course each year based on the needs of the new-breed hotelier. He offers these three management principles, which he also lives at The Peninsula:
- You have to be willing to destroy everything you have built to this point, a process which Kasikci calls “creative destruction.” “If you are unable to destroy what you have built, you will never be able to move on with the new because change is first and foremost off with the old,” he says.
- You must constantly renew yourself with education from cradle to grave.
- You must reinvent yourself from scratch every so often before it becomes necessary and you are “smelling the breath of your competitor.” Reinvention is not responding to a one-time crisis; that is being reactive, according to Kasikci. “Reinvention is actually learning to do something you have never done before so well that it becomes your core competency.”
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