1997 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 using the Four Seasons brand.For this service it receives a percentage of the gross selling price of the units. The Corporation also receives a fee calculatedas a percentage of the gross selling price of the units for use of the Four Seasons brand name. In addition, the Corporationwill receive an ongoing management fee from the unit owners for the management of the day-to-day operations of thecompleted projects.Sales and MarketingFour Seasons is responsible for the development of overall sales and marketing strategies for the portfolio of hotels, whichinclude building international awareness for the Corporation’s brand and developing local market potential for specifichotels. Four Seasons’ marketing efforts are coordinated through its headquarters in Toronto and are targeted at theluxury segment of the market worldwide. Four Seasons’ customer mix consists principally of business travellers, groups(including corporate and incentive), and leisure travellers. These customer segments accounted for an estimated 43%,27% and 30%, respectively, of total room nights in 1997. The corporate marketing staff also oversees the planning andimplementation of hotel marketing programs and organizes the training and development programs for the global salesforce and the local sales and marketing staff.Four Seasons has a global sales force of over 65 salespeople 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 of the sales force are to attract groups and corporate business travellers for the hotels and resorts, as well asto establish personal contacts with nationally recognized travel agencies. In addition, a total of over 260 salespeople areemployed locally at hotels under management. The local marketing strategy concentrates on developing rooms and food andbeverage business for hotels locally and regionally, and promoting the hotel as a centre of community activity with a viewto increasing local revenues.Four Seasons also provides an international corporate advertising program that develops and places advertising for theFour Seasons hotels and oversees each hotel’s promotional programs. The Corporation’s advertisements are designed toenhance 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 has 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 and Europeancities, in a total of 26 markets worldwide. Airline reservation systems are another key part of Four Seasons’ global distributionnetwork. Four Seasons reservation systems are fully integrated with airline booking systems worldwide. This enhancesservice to travel agents around the world by giving them access to electronically updated hotel inventory and room rates.The Regent reservation system is operated by Carlson on behalf of all Regent hotels and provides a level of serviceintended to be comparable to the Four Seasons system.The Corporation receives corporate sales and marketing fees, centralized reservation service fees and corporateadvertising fees from most hotels, thereby enabling it to recover substantially all of the costs of providing these services.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 team22Four Seasons Hotels Inc.