Interview | Tuesday, 12 November 2008

Frik and the Intercontinental economic climate

As different industry players voice out diverging opinions, David Darmanin persuades Intercontinental Malta General Manager Marco Frik to talk about how the current economic turmoil is affecting five-star tourism. What are the real threats?

A year after being given the keys to the General Manager’s office at Intercontinental Malta, Dutchman Marco Frik is still unfazed by this country’s eccentricity. Perhaps, after his various hospitality management postings in Egypt, Nigeria, Prague, Dubai, India, Nepal and the UK – it is unlikely for Frik to feel threatened by culture shock as much as any other Northern European with less exposure to the world would.
Marco Frik talks like a diplomat. He retains his cultural identity, keeps at arms length from popular issues and avoids criticising the country or taking stances on political issues. He sidesteps questions with a hearty smile, and he often manages to get away with it. But with so many issues affecting the tourism industry at the moment, he has opinions he can simply not avoid voicing.
“Since we diversified, Intercontinental Hotel Group has become the biggest hotel company in the world,” he started. “We are now subdivided into the five star deluxe Intercontinental hotels – of which we operate 160 units around the world; the Crowne Plaza four and five star hotels – of which we operate 350 units; the three and four star Holiday Inn hotels – of which there are as much as 1500 and then there are also about 2,000 Holiday Inn express hotels. This latter brand, operating in the two and three star category has become very successful. These hotels are usually positioned in motorways around the world and people travelling on business just love them. We also have a number of aparthotels around the US branded as Staybridge Suites – also very successful.”
Out of all these units, only 25 hotels are directly owned by Intercontinental. The brand would either run hotels on a management contract (as is the case with Malta), or lend out their name by means of a franchise agreement.
“We were into owning our own hotels before, but we have now moved away from that system,” he remarked. “We are now developing 1,000 new hotels planned over the next five years. It’s scary when you think about it – we’re opening a hotel every two days.”
While tourism faces the threat of a massive decline, Intercontinental keeps on investing.
“We have an enormous success story, and with such expansion going on we find our Malta hotel as one offering interesting opportunities to its staff,” he said. “One of the main advantages in Malta is that you all speak English. We need a lot of managers to run our new hotels around the world, so working here may present some very interesting career prospects.”
But what is it that gives Intercontinental its competitive edge? Why would people choose it over any other establishment of its category?
“Intercontinental has pioneered in many areas within the hotel industry. We have been the first hotel of our kind to open in China, we have been the first to enable reservation on the internet, among other things. Our guests also find it very easy to book rooms. We run a frequent-stayer programme applicable to all of the Intercontinental brands. We were also the first to come out with this. Basically, membership in this programme would enable you to join a priority club. This programme has become so popular that it now has 29 million subscribers,” he said.
In Malta, guests seem to prefer going for Intercontinental also because of the wide range of facilities it offers.
“Our main advantage here is that we can cater for everything,” he said. “With 451 rooms, we run the largest five star hotel on the island. But beyond that, we have the largest variety of facilities in Malta. Intercontinental has 22 meeting rooms, a ballroom, a 300-seater auditorium – previously the iMax cinema theatre, and its own private sandy beach. This is why we are very much geared on conference and leisure groups.”
Industry players saw that the first sector to be hit by the current global economic situation in Malta was tourism. Many also contend that the first to feel the crunch within the local tourism industry will be the Meetings, Incentives, Conference and Events (MICE) business. Malta-based destination management companies are already complaining about reduced bookings. Next year will be tough.
“We did very well on conference groups this year, at least up until October,” he said. “There was no real difference in spend per capita. Of course, low cost airlines help, as guests are given the opportunity to spend at the destination what they save on the flight. We’ve seen a change here this summer. The sleeper-diner ratio increased dramatically because we changed the whole concept at our restaurants.
“The first six months of this year was good for Malta in general. Throughout summer I suppose it was flat, or possibly even slightly down, and it is surely down now. It would have been a miracle if we were to witness growth in these circumstances.”
And where do conference and leisure groups stand? Will the hotel be facing some serious challenges in the MICE sector, especially after having invested so much in infrastructure to cater for this niche?
“Yes and no,” he replied. “We had a request from a large banking group but they have now postponed because this happens to be one of the badly affected institutions. Some other companies will surely look into staying in their own soil. That said, on our books, business looks better than last year – what we don’t know is how many of the groups booked will cancel.”
So in the context of such uncertainty, what is Intercontinental’s position on government’s announcement to go ahead with the removal of electricity usage capping? He laughs.
“I didn’t see this coming. I mean, it could have been communicated before. Of course it will affect us. From our end, we had already started eco-friendly programmes back in January. Obviously, the new tariffs will still present a setback – so a lot of things that were going to start this year are going to have to start next year. I know they’re going to renegotiate so I will wait for the outcome, hopefully a positive one for both parties. On a more positive note, I think this could gear people to introduce eco-friendly projects sooner. But there are more important things in the world than just the tariffs issue.”
He does not elaborate on the peculiarities he notices in Maltese culture. But having experienced his first Maltese election last March, the scene must have surely stuck in his head.
“You have a typical Mediterranean culture here. Generally speaking, the Maltese are very proud. Being here during elections showed me how loyal Maltese people are.”
Yes, that must have been a shock.
“Well, when I was in Nigeria I went through three military coups and hotels were occupied. So I’m no longer that impressionable. However, it was interesting to see how the PN and the MLP are polarised, perhaps similarly to the Republicans and the Democrats in the US. What amazed me most was that the electoral result here ended up being decided by a mere 1,500.”
How does he find Maltese staff? Is our reputation on poor standard of service justified?
“This is where the pride issue comes into play. Do we have a service culture in Malta? Yes and no. Certain people would just see this business as a demeaning job, while others do it passionately,” he said – signalling that both symptoms may be the products of personal pride. “It’s the same in the UK mind you,” he qualified.
But the service level difference in the two countries is evident and stark. London is where bus drivers say please and thank you.
“Yes but here the Maltese are very friendly people,” he said. It is not known whether he was making a comparison to the English here.
“We are also investing a lot in training. We consider this to be very important. The only difference you can make in a hotel, the only way you can truly be competitive is by offering good service. Forget the product. The Maltese are happy, and that’s a good start. What needs to be worked upon is some fine-tuning for attention to detail, which some times is lacking,” he added.
Industry players are often at a loss when it comes to ways of recruiting new and good staff. Added to that, many encounter the repercussions of typically high staff turnovers – heavily impinging on teamwork.
“It’s true you don’t have a huge job market,” he commented. “So what we do is take in ITS students. On the other hand, since everyone speaks English, there is automatically more to choose from.
“We also transfer people inside our company worldwide. For example, three of our Paranga staff are going to Italy for a month to get ideas. It sometimes works the other way.
“90 per cent of the students we received this year were the same people as last year. 100 people have been here for five years – and that is quite significant. We also have a good number of people who joined the company, left for competition after a while and have now come back to Intercontinental. Perhaps we have found a good winning formula since we are strong believers in the principles of teamwork.”
Why has Paranga been given a 1-star rating by one critic while another rated it so positively only a few weeks after?
“I can’t put my finger on it to be honest. I receive great comments from our patrons. I know that Maltese people love it, and this can be witnessed by its success. We have also invested substantially into it. We’ve covered it all up so we can also cater for patrons during the winter months, we’ve entirely changed the kitchen setup and redecorated the floor. But you can’t please everyone all the time,” he said. “It was only one newspaper article.”
Moving on to enlisting his future plans, Frik said: “We are starting with refurbishment in two weeks’ time, and this will take until next year. We’re taking it floor by floor so it shouldn’t be affecting any of our guests. We are planning to re-do 120 clubrooms, and all the corridors – starting with the first three floors first. After that we will carry on with the entire premises and once that is done we will continue investing a lot of money in eco-friendly projects.”
Back to the here and now. Many foresee that the coming Christmas will be the worst witnessed in years.
“We already have quite a few staff functions booked. However, Christmas seems to be always a last minute thing. I’m not worried about Christmas really – since this should be a time for us to have fun. It’s all about enjoying life, financial problems come and go. But yes, the current economic climate will affect the Christmas season, of course,” he admitted.
We’re getting mixed messages. Many will contend that the situation has never been worse, while others deny it being so dire. But if it weren’t so bad, wouldn’t government be unjustified in spending more on MTA funding?
“They had to invest more, there was no other choice. Tourism is Malta’s lifeline. This island is a jewel, but we must recognise that we require more investment in product. On a scale from 1 to 10, I would give Malta a rating of 6 on products. I mean, look at the roads. Look at how Paceville impacts this area. We all know what the situation is like because we can see it with our own eyes – I think we must make an effort in doing something about it.”


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12 November 2008

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