1998 Annual Report - Four Seasons Hotels and Resorts

ANNUAL INFORMATION FORM(continued)Vacation OwnershipThe Corporation is responsible for the sales and marketing of the vacation ownership units under the Four Seasonsbrand. For this service it is entitled to receive a fee based on a percentage of the gross selling price of the units.The Corporation is also entitled to receive a fee calculated as a percentage of the gross selling price of the units foruse of the Four Seasons brand name. In addition, the Corporation will receive an ongoing management fee from theunit owners for the management of the day-to-day operations of the completed projects.Sales and MarketingFour Seasons is responsible for the development of overall sales and marketing strategies for the portfolio of Four Seasonsmanaged hotels, which include building international awareness for the Four Seasons brand and developing local marketpotential for specific hotels. Four Seasons’ marketing efforts are coordinated through its headquarters in Toronto and aretargeted at the luxury segment of the market worldwide. Four Seasons’ customer mix consists principally of businesstravellers, groups (including corporate and incentive), and leisure travellers. These customer segments accounted for anestimated 41%, 28% and 31%, respectively, of total room nights in 1998. The corporate marketing staff also oversees theplanning and implementation of hotel marketing programs and organizes the training and development programs for theglobal sales force and the local sales and marketing staff.Four Seasons has a global sales force of over 80 people in 13 integrated sales offices in Atlanta, Chicago, Dallas, Frankfurt,Hong Kong, London, Los Angeles, New York, Singapore, Sydney, Tokyo, Toronto and Washington, D.C. Key objectives ofthe sales force are to attract groups and corporate business travellers for the hotels and resorts, as well as to establish personalcontacts with nationally recognized travel agencies. In addition, a total of over 275 salespeople are employed locally at hotelsunder management. The local marketing strategy concentrates on developing rooms and food and beverage business for hotelslocally and regionally, and promoting the hotel as a centre of community activity with a view to increasing local revenues.Four Seasons also provides an international corporate advertising program that develops and places advertising forthe Four Seasons hotels and oversees each hotel’s promotional programs. The Corporation’s advertisements are designedto enhance consumer awareness of Four Seasons’ luxury service and the value that such services provide to the businessand leisure traveller. A similar brand advertising program highlighting specific properties is coordinated among theindividual Regent hotels by Carlson.The Corporation staffs one reservation centre for Four Seasons branded hotels and resorts. The Corporation’s globalreservation service system provides reservation services in the local language in major North American, Asian andEuropean cities, in a total of 26 markets worldwide. Electronic reservations are another key part of Four Seasons’ globaldistribution network, as Four Seasons reservation systems are fully integrated with international airline booking systems.This enhances service to travel agents around the world by giving them access to electronically updated hotel inventoryand room rates. The Regent reservation system is operated by Carlson on behalf of all Regent hotels and provides a levelof service intended to be comparable to the Four Seasons system.The Corporation receives corporate sales and marketing fees, centralized reservation service fees and corporate advertisingfees from all Four Seasons hotels, thereby enabling it to recover substantially all of the costs of providing these services.24Four Seasons Hotels Inc.