Pressure is mounting on Allen Smith to expand the Four Seasons Hotels and Resorts brand, just three months after the former real-estate investor became chief executive officer of the storied hotel operator.
One of Four Seasons’s largest investors, Saudi Prince Alwaleed bin Talal bin Abdulaziz Alsaud, is calling for the company to prepare to do a public offering. Mr. Alwaleed said he feels now is the right time, with some hotel stocks trading near record levels and Hilton Worldwide Holdings Inc. poised this week for the largest-ever hotel IPO.
The Four Seasons hit a rough patch during the recent downturn. Its property on East 57th Street in Manhattan.?Natalie Keyssar for The Wall Street Journal
The push from the prince could tighten the timetable for Mr. Smith to execute his ambitious expansion plans and recruit more hotel owners to hire Four Seasons to manage their properties.
“We see great market opportunity and have a sense of urgency to capitalize with our owner partners,” Mr. Smith says about prospects for taking the company public.
The Four Seasons, which for years has been viewed as one of the world’s top luxury brands but which hit a rough patch during the recent downturn, has identified 150 market opportunities world-wide and has more than 60 projects already in the pipeline, he says. The company currently manages 92 properties including Four Seasons Hotel George V Paris and the Beverly Wilshire in Beverly Hills, though it owns only the Vancouver hotel.
Mr. Smith says part of his strategy is to focus more on the developing world, and to find a way to attract a younger customer base through social media, design and other means. “We need to be relevant to millennials,” the 56-year-old chief executive said, referring to the generations born after 1980.
He is just the third CEO of the Four Seasons. Isadore Sharp, the son of Polish immigrants to Toronto, founded the company in 1960. Before Mr. Smith, the previous chief executive was Kathleen Taylor, a Four Seasons veteran, who left in February after only three years on the job amid shareholder dissatisfaction with the pace of expansion. She didn’t respond to a request for comment.
Saudi Prince Alwaleed, whose Kingdom Holding Co. owns 47.5% of the company, said in an interview that Hilton Worldwide’s plan to raise up to $2.7 billion through an IPO is a sign that Four Seasons should be preparing for its own public offering within two to three years.
“The industry is very buoyant now,” Mr. Alwaleed said. “I’d like to see what we can do.”
A spokesman for Cascade Investment LLC, a?Bill Gates?investment vehicle that also owns 47.5% of the Four Seasons, said: “Cascade sees Four Seasons as a great company to own, with tremendous potential. We are in for the long term.”
Mr. Sharp holds the remaining 5% of the company.
The Four Seasons has said it aims for high-level service without the stuffiness of traditional grand hotels.
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