Leading an up-and-coming luxury brand

Montage Hotels & Resorts has only been around for a decade, and it is already a trendsetter in contemporary North American luxury. I was fortunate recently to interview the brand’s founder and CEO Alan Fuerstman, who in late June was named Entrepreneur of the Year by Ernst & Young.

Larry Mogelonsky: In a luxury segment dominated by such heralded names as Four Seasons, Ritz-Carlton and St. Regis, what differentiates the Montage experience?

Alan Fuerstman: While we have a great appreciation for legacy hospitality brands, Montage Hotels & Resorts was founded to be the next iteration of luxury hospitality, with a greater emphasis on comfortable luxury, a highly engaged service culture and truly local experiences.

Each hotel has an immensely strong sense of place, celebrating its location and drawing inspiration from local culture. Laguna’s rich history as an artist colony, for example, inspires the craftsman-style architecture and airy interiors of Montage Laguna Beach. Similarly, the grand mansions of 1920s Beverly Hills and the dome atop the Beverly Hills City Hall influence the classic Spanish Revival architecture and residential interiors of Montage Beverly Hills.

LM: How much leeway do you give local GMs in managing their business?

AF: You could say that our foundation — our service culture, our focus on gracious hospitality and our continuing associate education process — is centralized. However, we rely greatly on our general managers and our property-level leadership teams to understand the specific needs of their communities and deliver the brand promise within a local context.

A great example is our general manager at Montage Beverly Hills, Hermann Elger, recognizing a niche that was not being served in the Beverly Hills market — an intimate scotch bar — and creating a craftsman cocktail and experiential scotch bar very consistent with our Montage style. The bar, £10, is now one of the most celebrated bars in L.A. and was the winner of Virtuoso’s Best Bar award last year.

LM: What about new expansion?

AF: We take a very disciplined approach to each new hotel opportunity, and while we have had many chances to expand the Montage brand, we will not compromise quality for quantity or grow for the sake of growth. While this approach means that we pass on numerous opportunities, you can be sure that the opportunities we do pursue will be very special. I’m delighted to say that we will be announcing some very exciting news soon that will include a Montage presence on the East Coast, Hawaii and Mexico.

LM: Do you foresee Montage extending the sensibility of “casual Californian quality” beyond accommodations and adjoining residences into product lines?

AF: The underlying sense of comfortable luxury will tie all of our hotels together, such that whether a guest is staying at Montage New York or Montage Laguna Beach, they are made to feel at home and the experience feels like Montage. This quality truly resonates with our guests, so much so that we see tremendous business in guests buying the physical things — bedding, bathroom amenities, even furniture — that help convey the sense of comfortable luxury in a Montage hotel. It’s the ultimate compliment — our guests feel so comfortable in our hotels that they wish to make their own homes more like Montage.

LM: Where do you stand with the OTAs?

AF: For Montage, the key is to have a highly differentiated product offering whereby price is not the driving factor in the booking decision-making process. Whether guests book via an OTA or through our direct channel, we have the opportunity to, as Steve Martin puts it, “be so good they can’t ignore you.” When we create emotional attachments and really connect with our guests, our guests recognize our brand values and stay loyal to our hotels.

LM: How do you utilize OTAs as part of your brand’s distribution strategy?

AF: OTA production is relatively minimal at Montage. Our brand positioning and pricing requires a more relationship-driven approach apparent in the bonds we create with our guests and the travel agent community.

LM: How will Montage target younger travelers?

AF: Our Paintbox children’s program (our youngest guests’ first real experience with Montage) is summer camp-like, with myriad activities ranging from tee-shirt tie-dye to mini beach boot camps to Hollywood movie nights to gardening in our herb gardens. We are just as passionate about connecting with our youngest guests as we are with our adult guests, and the youngest are often the most influential on choice of stay. When a young guest asks their parents to stay at “Paintbox Laguna Beach,” referring to Montage Laguna Beach, we know we’ve been successful.

LM: Has the strong growth of outbound Chinese tourism affected your business?

AF: We’ve experienced this at our Beverly Hills property in particular, as inbound bookings from China have grown significantly in each year since we’ve opened. At a property level, we make great strides to create a comfortable luxury environment for these customers — everything from providing a tailored arrival amenity and traditional tea program to ensuring that we have associates in house that speak Mandarin.

From a company standpoint, we are investing heavily in digital marketing in China over the next few years and are evaluating strategic relationships to continue to build brand recognition abroad. We also see markets like Beijing, Shanghai and Hong Kong as natural fits for the Montage brand.

LM: Montage is a leader in giving back to the communities in which it operates. How has this philanthropic approach affected your business?

AF: As a company, we want to embrace the communities we are in, and our philanthropic outreach program “Hearts of Montage” allows us to do that. It’s a powerful example of our values in practice and a great reflection of the caring nature of our associates who champion the program. Hearts of Montage also ensures our local communities and neighbors are our biggest brand fans, and with so much of our hotels’ revenues driven locally, it really helps to ensure a sustainable business. This is a great business outcome, but it was never the reason Hearts of Montage was started.

LM: Any plans for a public share offering?

AF: None as of yet.

Larry MogelonskyLeading an up-and-coming luxury brand