Rocco Forte Hotels has signed a hotel in Dubai and is eyeing expansion opportunities in Spain, the United States and the Middle East, following an injection of funds from Saudi Arabia’s Public Investment Fund (PIF).
Speaking at the IHIF EMEA conference in Berlin, Germany, on Wednesday, Sir Rocco Forte confirmed the group had Spain on its radar, as well as popular destinations in the United States.
“40 per cent of our business comes out of the United States, it makes sense for us to use that customer base,” he told Andreas Ewald, managing partner at Engel & Völkers Hotel Consulting. Sir Rocco named destinations such as New York, Los Angeles, Beverley Hills, and Miami as being on his list, “but it’s expensive to get in there”, he added.
He also confirmed the group had already signed a property in Dubai, and was looking at Marrakech as well as Saudi Arabia, with plans for “two or three” hotels there ideally.
PIF bought a 49 per cent stake in the luxury hotel group last year. As part of the deal – which valued Rocco Forte’s 14 hotels at £1.2 billion – Italian sovereign wealth fund CDP Equity sold its entire 23 per cent stake. Sir Rocco remains executive chair of the company, alongside his sister Olga Polizzi as deputy chair.
“They’re very good people to deal with, very professional and straightforward,” said Sir Rocco. “They have a very long-term view; you present your plans and then, as long as you keep to them, they’re happy to let you get on with it. I visited Saudi Arabia recently. To look at what’s going on there and if anybody hasn’t done it, they should, because it’s quite mind boggling what’s happened there, the ambition of the projects.”
PIF’s investment is set to accelerate the group’s expansion in both existing and new global markets, with plans to double the size of the Rocco Forte hotel portfolio over the next five years. This includes plans to open three new hotels this year and next, including The Carlton Hotel in Milan. The group has already signed a management agreement with fashion company Capri Group, with whom it is set to launch its first hotel, Palazzo Sirignano, in Naples in 2027.
Sir Rocco added: “You’ve got to see what other people are doing, you’ve got to keep up with what’s going on. The challenge for us is financing and expansion. You’ve got a lot of brands in the luxury sector coming in and spending a lot of money to get their presence, their flags up around the world. It’s much more difficult for me to do that. The deal with PIF, Saudi Arabia’s Public Investment Fund, has significantly raised our profile, strengthened our balance sheet, and also they’re a very strong partner, they have a long-term view, and will enable us to expand more quickly and internationally.”
The hotelier also spoke about his focus in other areas of the business, for example the importance of providing quality service against a backdrop of rising costs. He said that prices had “almost doubled” post-pandemic, but as a result, “you’ve got to up the grade of the service you deliver”. He said that the group intended to continue to run hotel F&B in-house to ensure service standards (“even if you ask for certain standards to be maintained in the restaurant, it’s not the same relationship with the customer [when run by a third party]”), and that as much as 70% of restaurant customers are external.
He also described Covid as “a bit of a wake-up call” to improve remuneration for staff and their working environment – as a result, the group has invested in its training and development as well as its induction programmes.
“In many companies, staff are taken as a commodity,” he said. “The lowest paid people are the ones directly in touch with the customer and they’re transmitting your company culture... they’re hugely important and need to be looked after.”
Staff inductions include educating staff about the history of the Forte family, the company, the specific hotel in which they’re working and the locality. He added: “When we started off, the whole sense of place and doing hotels that relate to the locality they’re in is something we strived to do. Everybody talks about it now, but not everybody necessarily delivers it.”