The One&Only Sol Kerzner
The legendary hotelier will pick up the HICAP (Hotel Investment Conference Asia Pacific) Innovator Award on 14 October. He discusses his philosophy with HOTEL Asia Pacific Publisher/Editor Steve Shellum... CHARACTERS don't come any larger-than-life than Sol Kerzner. Complex, committed, controversial and colourful, the "Sun King" never does things by half. The former college boxing and wrestling champ cuts an imposing figure - but his imagination is even more all-encompassing. Who else but Kerzner could dream up a Lost City, a Lost World or a Desert Paradise and turn them into fantastically over-the-top, hugely successful legends in their own right?
CHARACTERS don't come any larger-than-life than Sol Kerzner. Complex, committed, controversial and colourful, the "Sun King" never does things by half. The former college boxing and wrestling champ cuts an imposing figure - but his imagination is even more all-encompassing. Who else but Kerzner could dream up a Lost City, a Lost World or a Desert Paradise and turn them into fantastically over-the-top, hugely successful legends in their own right?
The chairman of Kerzner International, who wins this year's Hotel Investment Conference Asia Pacific (HICAP) Innovation Award, has never failed to confound his critics - and he has every intention of continuing to do so.
The imagination of the man - who, in 1979, built the controversial Sun City in South Africa's so-called "independent homeland" of Bophuthatswana and opened the magnificently opulent Palace of the Lost City on the same site in 1992 - is now firmly focused on the fabled Lost City of Atlantis.
In fact, he's built a whole brand around it.
In 1994, Kerzner made his first major acquisition outside Africa through the purchase of the 1,150-room Paradise Island Resort in The Bahamas, which had fallen into bankruptcy. He launched a major redevelopment and expansion programme which turned the renamed Atlantis, Paradise Island into a 2,300-room resort and casino, which included the world's largest man-made marine habitat.
The resort has proved phenomenally successful, and Kerzner is now sinking a further US$600 million into expanding it to almost 4,000 rooms, and bringing the company's total investment in the project to $1.7 billion.
And that's just the beginning.
The second Atlantis-branded resort - the $1.1 billion, 2,000-room Atlantis, The Palm - is scheduled to open in 2007 on the world's largest man-made, palm-shaped islands in Dubai. Kerzner recently increased the company's stake in that project from $60 million to $100 million.
"While a single resort can grow dramatically, it will eventually reach its optional size, whereas a brand has virtually no limitations," he says.
"While Atlantis started out as a single resort in The Bahamas, it has evolved into a brand that is extendable to other products and other parts of the world. Through aggressive marketing, it has become one of the most widely recognised brands in the resort industry - a brand enthused with the romance of a mythical city, blending land-based resort attractions with undersea experiences."
As if that weren't enough to keep him busy, Kerzner announced in December 2002 the launch of a luxury-resort brand, One&Only, which he says is "on its way to achieving its goal of becoming the pre-eminent worldwide ultra-luxury-resort operator". And, last year, the firm acquired a stake in one of the UK's leading casino companies, London Clubs International, to ensure his cut of the deregulated British gaming market.
Kerzner is now searching the world for sites to expand both the Atlantis and One&Only brands, and sees great potential in Asia Pacific.
As a man who has built a phenomenally successful career over the past 40 years via hotels and casinos, Macau must be a natural move. And, with Singapore looking at legalising gaming on Sentosa island, that must surely be another high priority? Kerzner keeps his cards close to his chest. "In Macau, we are continuing to talk to people, and will see what happens. With Sentosa, I'm not sure they've reached a decision yet on whether to legalise gaming but, again, we're talking to the right people there."
There are currently six One&Only resorts in operation, with another two under development (see panel, page 26). Kerzner aims to have 20 in the portfolio within five years which, he says, will give the critical mass and consumer awareness the brand needs.
The big problem is identifying and securing suitable destinations - and that is what takes up much of his time these days. "We intend to build One&Only into a global brand, but only with the right combination of destination, property and partners," he says.
How does Kerzner compare One&Only with Asian-born luxury-resort groups like Amanresorts, Six Senses and Banyan Tree, which have already made their marks in this increasingly competitive sector?
"We have a different product to Amanresorts, and the other groups in this sector," he says. "[Amanresorts founder] Adrian Zecha has built a great product and reputation, but we tend to look at things in a different way.
"When it comes to developing new hotels, we do not apply a standard formula. Each is different, with its own personality, although the core brand values of One&Only resonate through each hotel.
"One&Only is a guarantee that each of our hotels provides a distinctive and unique experience. At the same time, each hotel is underpinned by unbelievable locations, design and attention to detail, as well as our passion for quality, fun and luxury." Despite the sheer size of the projects Kerzner dreams up, he keeps a close eye on the small details. "Over the last few years, we have not cut back on the service we provide to our guests. When times get tough, there is always someone who suggests that we replace the fresh flowers less frequently. We think this would be shortsighted. "In fact, to the contrary, we continue to find new ways to add value for our customers and keep our product fresh and exciting. We simply believe in our number-one core value: Blow Away The Customer."
He adds: "We do luxury, but not in a stuffy way."
The company's two brands - the multi-thousand-room Atlantis properties and the 100- to 300-room One&Only resorts - might seem worlds apart but, he says, they both make great business sense.
"The Atlantis brand and product is powerful, and we have wanted to find a way to extend this business globally. Our second Atlantis, in Dubai, paves the way for that expansion.
"In terms of earnings contribution, One&Only is still small relative to the rest of our operations. But the benefit of coming off a low base is that the percentage increase in this business's earnings should be quite impressive over the next few years. "One&Only was designed exclusively for the luxury-resort market, and conceived as a hallmark of quality. The brand will consolidate the success of the company's finest properties worldwide and, combined with our experience as a luxury-resort operator, will provide a catalyst for future expansion into exciting new locations. "It's a brand built on our long experience, which we believe makes us better than anyone else at understanding the business."
Kerzner's straight-talking style, his business savvy and passion for the industry have attracted some of the industry's top talent - including former InterContinental president J.T. Kuhlman as CEO of One&Only.
"In many ways, finding the capital to build the company is the easier part of the equation," he says.
"Finding the right people is more important than anything else - and it is in this area that we are most proud and feel most fortunate.
"We have an amazing group of executives and would be willing to put them up against any other team in the hospitality, gaming or entertainment business.
"We are a tight-knit group that thrives in an entrepreneurial environment. We are all quite different from each other, and there are no big company politics. We all just get on with it.
"Over the next three years, we expect to more than double the assets that are under management of the company. This is an exciting challenge for us - a challenge that we approach with well-considered confidence because we are surrounded and supported by a talented and passionate team of executives and employees."
Married with five children and six grandchildren, Kerzner divides his time between his resort properties and his homes in South Africa, England and the South of France. At the age of 69 - and with the company in the capable hands of his son, Butch (see panel below) - isn't it time to slow down, play some golf maybe, or sail the yacht? "I'm having too much fun for that."
What will be his legacy?
"That's not for me to say ... but I hope people will say that whatever I did, I did it right.”
Like father, like son
SOL Kerzner’s son, Butch, 40, was appointed CEO of Kerzner International in January this year, after serving as president for eight years, during which time he directed the complex transaction to acquire Paradise Island in the Bahamas [the company’s first foray into the North American market] and negotiated a unique agreement with the Mohegan Indian Nation that led to the development of the Mohegan Sun, a $330 million casino.
More recently, he oversaw the roll-out of the One&Only brand, and formed a JV with Dubai’s Nakheel to build and operate the Atlantis, The Palm.
The younger Kerzner spent six years working in mergers and acquisitions on Wall Street before joining Kerzner International in 1992 as director of international corporate development.
Today, the son is responsible for daily operations of Kerzner International, while the father spends most of his time looking after development. “I am extremely fortunate to have Butch in the company,” says his proud dad. “He’s turned out to be a bit of a star.”
But he’s quick to point out: “This is not a family business – we’re a listed company in New York. I’ve got four other children, and none of those are involved in the company. Butch is in the CEO’s chair because, quite simply, he’s the right person for the job.”
Steve Shellum
(852) 2443 7352
HOTEL Asia Pacific
