5 Minutes With Matt Sparks

Balancing The Fairmont Raffles Brands

By Staff -- HOTELS Magazine, 4/1/2007

To call Matt Sparks a veteran of corporate hotel development is a considerable understatement. Sparks, 46, has served in development capacities for Wyndham, Starwood, Marriott, Lodgian and Westin. He joined Fairmont Hotels & Resorts as a consultant in 2005 before being elevated to Fairmont Raffles Hotels International's vice president for brand development this January. The Michigan State University-educated Sparks originally planned to study medicine, until a college ski trip exposed him to the excitement of the hospitality industry, and his passion for the business has not wavered.

HOTELS: How has the culture at Fairmont changed since the merger with Raffles took the company private?

SPARKS: Well, the challenges have been very few. When you compare it to the restraint of operating in the public environment, it's just a much more relaxed atmosphere. It's easier to focus on creating and fi nding the best deals for our brands. You're not concerned with quarterly earnings, and you're looking for the best deals for your company. Our management team has remained largely intact, with the addition of our Swissôtel and our Raffl es personnel, a terrifi c group. It's just gone so smoothly.

HOTELS: How do the Raffles and Fairmont brands complement each other, and what does each bring to the table that the other didn't?

SPARKS: Geographic diversity. Raffl es has such a great base in Asia and Europe, but it's not as well known in the Americas as some of our other brands. Swissôtel is extremely strong in Europe, and in Asia as well. People don't think about Swiss being a very strong Asia presence, but it's very well regarded there. Fairmont is incredibly well regarded, particularly in the U.S. and Canada, but as for right now there are no existing Fairmonts in Asia. We're introducing some, and we'll have more news on that next year, but we think we'll have great success in rolling that out in Asia.

HOTELS: How will your similar-segmented, 5-star brands-Fairmont and Raffles-differentiate themselves in the marketplace?

SPARKS: Raffl es is our absolute 5-star top-of-market luxury brand. It's defi ned as a small, intimate sanctuary for our guests seeking a very luxury experience. You contrast that with Fairmont, which has larger meeting spaces and larger dimensions. We think of Fairmont as having unrivalled presence in the markets they're in, and having a historic local presence. They're iconic, signifi cant assets in the markets they're in, whereas we view Raffl es as more of a subtle presence. Raffl es competes with the larger 5-star operators. Fairmont can play in the luxury arena, but it's a bigger hotel and competes better with the big brands, what we call the pack hotels.

HOTELS: How do you expect the Fairmont Raffles portfolio to grow in the coming years?

SPARKS: We have sold a signifi cant portion of our real estate and have retained as part of that long-term management agreements. The Fairmonts that we've sold, we plan on them being, basically, Fairmonts forever. In terms of the company, subsequent of the sale of the real estate, we plan to double the EBITDA of the company over the next few years. Most of our products are not going work well in secondary or tertiary markets, so we're going to focus on the major areas and resorts, where our guests really want to be.

HOTELS: How much new-build versus acquisition is planned?

SPARKS: It is a little bit based on the market conditions right now. There's a signifi cant amount of new construction products out there, particularly in city centers and major resort locations, and almost all have private residential components to them. We are growing our branded residential business, and that's a natural evolution of how resort and urban developments are being built right now. Ideally, we'd probably have a fi ne blend of new builds and real estate acquisitions.

HOTELS: What is the biggest obstacle to new deals?

SPARKS: Available existing quality product, or product that works for our brands. There is not a lot of product that fi ts our brands that is available for sale or branding and management now.

HOTELS: You've worked in development capacities for a number of companies. What factors have the successful ones had in common?

SPARKS: They have strong brands that are well supported. They have a capable operating team to manage the assets within those brands. And they have an acquisition strategy that focuses on long-term relationships with quality partners and quality assets.

HOTELS: So, without naming names, what have the unsuccessful ones had in common?

SPARKS: Taking a short view, our industry requires big, expensive assets in quality markets. It is not like an offi ce building, where you make a lease of fi ve or 10 years and your sales are basically done. We have to sell rooms every night. You can't rush into a real estate transaction in one year and expect to have results. You have to have patience.