1998 Annual Report - Four Seasons Hotels and Resorts

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ANNUAL INFORMATION FORM(continued)ApproximateCommencementFour Seasons Resort Club Number of Units of SalesFour Seasons Resort Club Aviara 240 1997Four Seasons Resort Club Punta Mita 100 1999 (E)Four Seasons Resort Club Scottsdale 100 1999 (E)Regent Joint VentureThe Corporation also expects to earn fee income from its December 1996 alliance with Carlson, which is intended to enhancethe future development of Regent hotels around the world. The Corporation believes that the growth potential for the Regentbrand inherent in this strategic joint venture surpasses the level the Corporation would have been able to achieve for Regenton its own. Carlson is a global leader in hospitality services and marketing, and has been a successful brand franchisor.Under the terms of its December 1996 alliance, Carlson acquired the rights to the Regent name for newdevelopment and has created a luxury hotel division that is engaged in a development program to expand the chain ofRegent hotels through the addition of new franchise arrangements and management contracts under the Regent brand.Four Seasons continues to manage nine Regent hotels and has the opportunity, and in certain circumstances theobligation, to manage new Regent hotels that require management.In addition to its share of management fees from new Regent hotels, Four Seasons is entitled to receive paymentsfrom Carlson calculated as a percentage of the gross royalty revenue of the new franchise development effort. These paymentswill be nominal in 1999 and thereafter will be determined by the future success of the new enterprise to generate revenue.Carlson is responsible for the operating costs relating to the Regent venture. The goal of the alliance is to maximize theglobal value of the Regent brand name by creating a larger chain of Regent properties throughout the world.As at March 10, 1999, Carlson has announced the following new Regent projects:Hotel Number of Rooms Expected OpeningThe Regent Almaty, Kazakstan 290 1999The Regent Grand Palms, Las Vegas, USA 253 1999The Regent Grand Spa, Las Vegas, USA 287 1999The Regent Resort Las Cabos, Mexico 128 2001The Regent Mexico City, Mexico 94 2000The Regent Mumbai, India 508 1999The Regent, New York 140 1999The Regent Resort at Punta Maroma, Mexico 200 2001The Regent Vancouver, Canada 184 2001Cash Flow GrowthThe cash flow dynamics of the Corporation have changed as a result of its growth as a hotel management company.The Corporation does not require large amounts of capital to maintain existing management agreements or its hotelownership positions, which are typically minority interests. In 1998, the Corporation utilized most of its operating cashflow to make investments that allowed the Corporation to obtain new or enhanced management agreements.18Four Seasons Hotels Inc.
I N D U S T R YA W A R D SFour Seasons and Regent have each gained worldwide reputations for quality, service and innovation in the luxurysegment of the business and leisure travel market. These reputations have been widely acknowledged by the followingleading surveys of hotel properties:Institutional InvestorSixteen Four Seasons hotels were ranked among the world’s top 75 hotels in a survey of international financiers publishedin the September 1998 issue of Institutional Investor. The company also had 12 hotels in the “Top 30” RegionalAmerica’s Ranking.AAA Five Diamond AwardsFour Seasons properties received 15 of the lodging awards for 1999. The Four Seasons Hotel Vancouver has received theAmerican Automobile Association Five Diamond Award every year since the awards began in 1977. In addition, in 1999,four Four Seasons restaurants received the prestigious Five Diamond Award for Restaurants, including Truffles Restaurantat the Four Seasons Hotel Toronto.Condé Nast Traveler’s Readers’ Choice AwardsSeventeen Four Seasons properties ranked among the world’s top 100 list in the Condé Nast Traveler’s 1998 Readers’Choice Awards. Eleven Four Seasons hotels were ranked in the “Top 25 North American Hotels” category. The RegentHong Kong was named number one in the “Top 20 Pacific Rim Hotels,” and Four Seasons Resort Bali at Jimbaran Baywas ranked number one in the “Top Asian Resorts” category.Travel & LeisureTravel & Leisure’s “World’s Best” awards in September 1998 listed 18 Four Seasons and Regent hotels among the“Top 100 Hotels” including four within the top 15. Four Seasons Resort Nevis ranked number one in the Caribbeanfor the second year in a row.Andrew Harper’s Hideaway ReportTwelve Four Seasons properties received honours in the annual readers’ survey on “The World’s Best Hotels & Resorts.”Four Seasons Hotel Chicago led the “Top US City Hotels” list for the third year in a row. Seven Four Seasons propertieswere rated among the “Top Hotels in Major World Cities.”19Four Seasons Hotels Inc.
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