1998 Annual Report - Four Seasons Hotels and Resorts

Hotel Management ResourcesEach Four Seasons hotel is managed by a general manager and supported by an area vice president or by a regional vicepresident (who also is a general manager) and other corporate vice presidents. The size of each hotel’s management teamand its hourly staff varies, based on the size and business volume of the particular property. Hotel management monitorsstaffing levels on a daily basis to optimize labour productivity and minimize costs.A general manager is responsible for supervising the day-to-day operations of a single hotel and is compensated in partbased on the operational performance of that hotel. Four Seasons general managers report directly to one of seven regionalvice presidents or directly to an area vice president. A regional marketing director, an area controller and a regional humanresource director complete the regional support team. The majority of these individuals are full-time employees of aFour Seasons hotel, with a portion of their time being devoted to regional activities. The Corporation believes its regionalmanagement structure is a key component in Four Seasons’ ability to deliver and maintain the highest and most consistentstandards of product quality and service at each of its hotels in a cost effective manner, especially as it expands globally.From the corporate level, the Corporation provides each hotel with the benefits of management services that are deliveredby a network of experienced executives, corporate personnel and area managers. The Corporation also provides or arrangesassistance and training to each hotel’s employees for administration, operations, rooms and guest service, reservations,maintenance and engineering, human resources and benefits. Other services provided by the Corporation include advice andassistance with accounting, tax, legal, risk management, treasury, information technology, internal audit and credit services.EmployeesFour Seasons directly employs and is responsible for approximately 275 people at the worldwide sales offices, the centralreservations offices and the corporate offices. In addition, there are approximately 23,000 employees located at the43 hotels and resorts managed by Four Seasons. All costs relating to hotel employees, including wages, salaries and healthand insurance benefits, are the responsibility of the hotel owners and are generally paid out of the operating cash flow of thehotels. Hotel management and corporate staff share responsibility for the selection and training of hotel employees and forensuring, through progressive career development, an adequate supply of mobile, qualified and experienced staff to matchthe growth of the Corporation’s operations internationally. Maintenance of employee communication, motivation andmorale at high levels is necessary to meet the expectations of Four Seasons’ clientele. A significant effort has been devotedto developing customized hiring practices, training and career development programs and approaches in this context.Of the 43 hotels and resorts under management, 17 are covered by collective bargaining agreements.H O T E L O W N E R S H I P O P E R A T I O N SFour Seasons holds an ownership interest in, or has loans in respect of or to, 11 of the 43 hotels and resorts currentlyunder management. Four Seasons’ most significant ownership interests are: 100% leasehold interest in the Four SeasonsHotel Vancouver, The Pierre in New York, and the Four Seasons Hotel Berlin, 10 and a 25% leasehold interest inThe Regent Hong Kong. The Corporation also holds secured cash flow loans in connection with the transactionsinvolving the Four Seasons Hotel London 11 and has a loan outstanding in connection with the Hôtel George V in Paris. 12During the year, the Corporation also made loans to The Regent Sydney 12 and the Four Seasons Resort Scottsdale.10 See discussion under “Four Seasons Hotel Berlin” on page 35.11 See discussion under “Four Seasons Hotel London” on page 36.12 See Note 4 to the consolidated financial statements.25Four Seasons Hotels Inc.