1997 Annual Report - Four Seasons Hotels and Resorts

and 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 inpart based on the operational performance of that hotel. Four Seasons general managers report directly to one of sevenregional vice presidents or directly to an area vice president. A regional marketing director, an area controller and a regionalhuman resource director complete the regional support team. The majority of these individuals are full-time employeesof a Four 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 adviceand assistance with accounting, tax, legal, risk management, treasury, internal audit and credit services.EmployeesFour Seasons directly employs and is responsible for approximately 260 people at the worldwide sales offices, the centralreservations offices and the corporate offices. In addition, there are approximately 22,000 employees located at the41 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 ofthe hotels. Hotel management and corporate staff share responsibility for the selection and training of hotel employees andfor ensuring, through progressive career development, an adequate supply of mobile, qualified and experienced staff tomatch the growth of the Corporation’s operations internationally. Maintenance of employee communication, motivationand morale 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 41 hotels and resorts under management, 16 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 made loans to, 11 of the 41 hotels and resorts currently undermanagement and has made, or expects to make, investments in, or loans to, eight of the hotels and resorts underconstruction or development. Four Seasons’ material investments relate to a 100% leasehold interest in the Four SeasonsHotel Vancouver, The Pierre in New York, and the Four Seasons Hotel Berlin, 12 and a 25% leasehold interest inThe Regent Hong Kong, and a 25% investment in The Ritz-Carlton Hotel Chicago. 13 The Corporation has loansoutstanding of £27.5 million in connection with the Four Seasons Hotel London. 14 The Corporation has made a loan ofFrench francs 161.6 million (approximately $38 million) in connection with the Hôtel George V in Paris.12 See discussion under “Four Seasons Hotel Berlin” on page 31.13 The Corporation expects to reach an agreement to dispose of its interest in The Ritz-Carlton Hotel Chicago in exchange for the elimination of certaintermination provisions in the management agreement for that hotel.14 See discussion under “Four Seasons Hotel London” on page 32.23Four Seasons Hotels Inc.