Sir Rocco Forte is determined that his children will not experience the same difficulties that he endured on taking over the family business. Together with his daughters, Lydia and Irene, he tells Janet Harmer how the business is enjoying a new era of growth
Handing over the reins of a family company can be a tricky business. Sir Rocco Forte knows this only too well, having gone through the angst of replacing his father as chairman of Forte, a worldwide conglomerate operating restaurants and hotels in every sector of the industry. The year was 1992 and Lord Forte, then aged 83, stepped down somewhat reluctantly from the business he had founded in 1934.
“I had the most wonderful relationship with my father; he was the most fantastic man,” explains Sir Rocco. “The only time we really came to blows was when I took over. I was already chief executive, but it was only a titular role; it was impossible being chief executive with my father as chairman. The reality was that until I was able to fully take over, I had no real authority and that was an issue, as effectively suddenly the mistakes you make – if you haven’t made small ones before – are likely to be big ones.”
Sir Rocco is also concerned that his father found his departure from the company to be a difficult transition. “My one regret is that I didn’t find a way of keeping him involved. This was a business he founded and worked in all his life and being out of it was a great blow to him.”
To this end, Sir Rocco intends the succession, when he eventually stands down as chief executive of the 11-strong group of luxury Rocco Forte Hotels will be less traumatic. Hence, he has welcomed with open arms the arrival into the business over the past three to four years of his two daughters, Lydia, 29, and Irene, 28. He has encouraged them to become fully embroiled in the decision-making process across different departments, be independent, and as a result learn from the occasional mistakes they may make along the way.
Sir Rocco is full of pride and enthusiasm for what his daughters have brought to the business. “They bring a freshness and are hugely innovative,” he says. “They’ve added another dimension.”
In recent weeks, the youngest member of the Forte clan, Charles, 25, has also joined the company full-time, and is now expanding his knowledge base of the business. However, it was never a given that the three children would automatically take up roles within Rocco Forte Hotels, in the way Lord Forte had ambitions for the young Rocco to join him. Looking back, Sir Rocco explains that it wasn’t a problem that such expectations were laid upon him. “I always had a huge interest in the company and all I really wanted to do during my time at university and then during three years doing my articles in chartered accountancy was to go and work in the business.”
While Sir Rocco has never forced his children to join his company, he has been more than happy to welcome them on board on a full -time basis as and when they were ready. “It was nice that they undertook work experience during gap years and university holidays so that they gained an insight into the business early on,” he says.
Today Lydia is bar and restaurant development manager, Irene is brand manager and Charles is just beginning his career working on future developments. The arrival on board of the younger generation has come at a good time for Rocco Forte Hotels, with the company entering a new expansionist era. Funding, secured in 2014, gave the Italian sovereign wealth fund Fondo Strategico, owned by CDP, a 23% stake in the company in return for £60m.
“It has enabled us to move on to the front foot again, with a view to doubling in size over the next five years,” says Sir Rocco, who welcomes the move, having endured several tough years which saw sales dropping by 40% during the first three months following the financial crash at the end of 2009. The period saw the sale of Le Richemond hotel in Geneva for a sum believed to be around £110m, which helped to pay down a significant amount of the company’s debt, which today stands at around £150m.
In looking for a new investor, it was important for Sir Rocco to find a long-term partner. “I talked to a number of people, most who were looking for a short-term exit after only four or five years and that was not the sort of partner I wanted.” Fondo Strategico’s Italian heritage also suits Sir Rocco as he views Italy as a key location for future growth.
“There is so much opportunity in Italy; it is probably the premier tourist destination in the world from a cultural point of view. When it comes to the luxury hotel sector, there is really not a lot in Italy, so there is an opportunity to create a chain across the country,” he explains.
Beyond the two properties it already has in Italy – the Hotel de Russie in Rome and Hotel Savoy in Florence – Rocco Forte Hotels is currently looking at nine potential sites. “Not all of them will come off, but we should be represented in cities like Milan and Venice,” says Sir Rocco. “The hotels don’t necessarily all have to be huge. There are a lot of good seasonal locations around, such as on the Amalfi coast, where we would probably look at 60-bedroom properties. Seasonal hotels in Italy can achieve very high rates and occupancies and show good returns.”
Also on the target list are New York, Paris, Madrid and Barcelona. “Around 30% of our business comes out of the US, so having a calling card there – initially in New York, and then maybe Miami and Los Angeles – will make a difference,” says Sir Rocco.
What about future expansion in the UK? Having sold St David’s hotel & spa in Cardiff in 2007 and the Lowry hotel in Manchester in 2014, the company today has just Brown’s in London and the Balmoral in Edinburgh. “I would look at a second hotel in London if the right thing came along,” says Sir Rocco, adding that he also would not be averse to entering the country house hotel sector. However, within the UK, outside London and Edinburgh, he believes it is not easy to achieve the rates required for a luxury hotel.
Meanwhile, the company has just launched its 11th hotel. The 147-bedroom Assila hotel, which opened in Jeddah, Saudi Arabia, in November, marks Rocco Forte Hotels’ first move into the Middle East, after an earlier false start. An agreement is still in place to manage the Shepherd hotel in Cairo, but the ongoing political turbulence in Egypt has delayed any progress on this front indefinitely.
Sir Rocco explains that the owners of the hotel, the Al Issa family – powerful and well respected in Saudi Arabia – had used his hotels in Europe and asked him to manage the Jeddah hotel on their behalf. “It is a beautiful hotel with three restaurants and a rooftop pool, which my sister [Olga Polizzi] designed with Martin Brudnizki. There are obviously Arab touches, but it is not a typical over the top hotel that you get in that part of the world.”
The Assila hotel is run under a management agreement and is expected to be the way forward for much of Rocco Forte Hotels’ future growth. Italy is the one exception, where expansion is expected to be via leased properties. All 10 existing hotels in the group, before the addition of the Assila, are either owned or leased properties.
Work is well under way on the group’s first Asia property, a 280-bedroom hotel located on the top 15 floors of the tallest building within what is effectively a new area of Shanghai in China – the West Bund. The property is being developed in partnership with Longhua International. “We were chosen because the owners wanted a non-American to create the best hotel in the city,” explains Sir Rocco, who is delighted that Stuart Johnson, the 2012 Hotelier of the Year and until recently general manager of the group’s Brown’s hotel in London, has agreed to oversee the completion and opening of the Shanghai property in 2018.
Also opening next year will be Rocco Forte Hotels’ second property in Rome. What was previously a 192-bedroom InterContinental property is being transformed – with the real estate division of the Reale Group – into the 105-bedroom Hotel De La Ville. “This is a fantastic opportunity for us,” says Sir Rocco. “It is very difficult to get into the centre of Rome and this is situated at the top of the Spanish Steps, with 360° views across the whole of the city. The building is not the easiest to work with – there are a lot of terraces and an internal courtyard – but it has a lot of charm and we think we can get a spa with a swimming pool into it, which will be rather unusual for Rome.”
As the company undergoes expansion, the central management team is expanding too. Maurizio Saccani was appointed last year as director of operations, joining the company from Belmond; Roy Paul, who has 20 years’ experience with Four Seasons, has been taken on as director of developmental; and Phillip Haller has joined as vice-president of brand marketing.
And, of course, the arrival of Lydia and Irene has had a significant impact on operations too. Both women remember being immersed around the Forte hotels from a very young age, whether it was in the Hyde Park hotel (now the Mandarin Oriental) London, or the likes of Forte Village in Sardinia or Sandy Lane in Barbados, on holiday.
The essence of Rocco Forte Hotels today as a family business, with hands-on management from all family members, is what both father and daughters believe is the key identifying factor that makes the group stand out from its competitors,
For Lydia coming into the company, restaurants have always been what she has wanted to focus on. Having undertaken a three-month professional cookery course at Leith’s School of Food & Wine at the age of 18, she worked as an assistant maître d’ at the Wolesley restaurant, London, one summer while studying history at Oxford. “I loved it – the adrenalin, being on the floor, the interaction with guests and seeing how the whole mechanics of the restaurant came together,” she says. “From that moment on, I decided I was going to work in restaurants.” On graduating, jobs followed at Hix in Soho and then as an assistant manager of a new restaurant in Chelsea. “Within three weeks of opening, the manager left and I became the manager. I did that for about a year, loved it and learned a lot,” she says.
It was at this point that Sir Rocco suggested she joined the family business, initially working on relaunching, alongside the chef Mark Hix, what had previously been Hix at the Albermarle as Hix at Brown’s.
After a brief period away studying for a master’s degree, Lydia returned to the company to work on further restaurant projects, including launching La Banca, an Italian sharing concept restaurant and bar in the Hotel de Rome, Berlin; the creation of Irene (named after Lord Forte’s wife), an elegant Tuscan bistro in the Hotel Savoy, Florence; and the opening of Sophia’s, a more informal bar and restaurant in the Charles hotel, Munich. In each case, she worked closely with the group’s creative director of food, Folvo Pierangelini, one-time owner of the two-Michelin-starred Gambero Rosso restaurant in Tuscany.
More recently there has been the creation of four restaurants – an Italian café, an international buffet restaurant, an Argentinian grill and a rooftop Arabic-Mediterranean outlet – at the Assila hotel, Jeddah. Lydia is also involved in the planning process for the restaurants within the two new hotels in Shanghai and Rome, while continuing with the day-to-day aspect of her role, overseeing the existing restaurants, and working on relevant marketing and PR campaigns. “We are constantly looking at how to push the bars and restaurants to a local audience,” she says.
Meanwhile, Irene’s path within Rocco Forte Hotels has not been so clear cut. Also an Oxford graduate, with a degree in French and Italian, she spent seven months during her year abroad as communications manager at the Verdura Resort in Sicily, before later completing a six-month development programme, working through all departments, at Brown’s hotel in London.
Irene’s first full-time position within the company came in 2013 when she was appointed as quality standards executive, which involved writing the group’s brand standards and working on the service philosophy. “It was a big responsibility – my dad needed someone who was meticulous and detailed and focused – some of my favourite things,” she says.
She has since gone on to establish a portfolio of Rocco Forte training, including a management development programme called Forte Future Leaders; launch the Families R Forte programme; and establish Rocco Forte Spas as a uniform concept across all the hotels. The latter initiative involved the launch of an in-house product line, Forte Organics, created in conjunction with Dr Francesca Ferri using products grown at the Verdura Resort in Sicily. The success of the items – one year’s supply was sold out within two months – has resulted in them now being introduced as the in-room amenities in all the hotels, as well as the possibility of being snapped up by independent retailers.
“Margins are much better on products you are producing yourself,” explains Irene. “Forte Organics also represents our philosophy as we have total control on the ingredients, so we know the quality is good.”
The impact Lydia and Irene are already having on Rocco Forte Hotels was highlighted with their success in winning the 2016 Catey Health and Nutrition Award – presented for their implementation of the Rocco Forte Nourish programme, created in response to the growing demand for healthy options from health-conscious travellers.
“It is an all-encompassing concept, with healthy options available across everything from the mini-bar and in-room dining to the breakfast buffet and dinner menu,” explains Irene. Each hotel has partnered with nutritionists and specialists in fitness to create local menus – Brown’s had teamed up with the nutritionist Madeleine Shaw, while the Balmoral is working with cyclist Mark Beaumont.
Meanwhile, Irene has also been recognised in her own right as a Rising Star in the Shine Awards run by People 1st in partnership with The Caterer. She received the accolade following the success she has had in securing £250,000 funding for the development of the Map My Future app, as part of a competition set up by the UK Commission for Employment and Skills.
Initially launched at Brown’s in August last year, and a month later at the Balmoral, the app aims to tackle the industry-wide issues of high turnover rates and skills gaps by providing a clear and easy to understand bespoke career path and training programme for employees. Map My Future has been built as white label product, which, as well as eventually being rolled out across all Rocco Forte properties, will also be available to other hospitality companies to tailor for their own needs.
While Irene loves being involved in so many projects, she recognises that the time will soon arrive where she will have to decide on one particular direction. “Otherwise, I’m going to spread myself a little thin,” she says.
It is clear that the enthusiasm and exemplary work ethic of Lydia and Irene is something they have gleaned from Sir Rocco. “Dad is a workaholic – he has dedicated himself to work – and has therefore always given us that ambition to work hard,” says Irene.
They both also feel entirely supported by their father in developing their experience through a variety of different areas. “He has been amazing as he has let us get on with different projects and make mistakes,” explains Lydia. “He will then ask us why we have made those mistakes and give us advice on how we can improve in the future.”
It is clear from the closeness displayed between father and daughters at The Caterer’s photoshoot that this is a family that enjoys a happy and supportive working relationship. There is no indication yet as to who may one day fill Sir Rocco’s shoes, although he admits that he will withdraw from some of the management decisions in future, with Saccani and his children now in place. “My focus in the next few years will be to secure the pipeline to take us to the level where we become a much more solid and secure company,” he says.
Having been a competitive triathlete for many years, Sir Rocco continues to exercise regularly, but not to such an extreme degree – although Irene appears to share her father’s love of running. Retirement is likely to feature some golf (he is a member of three golf clubs), but he also hopes there will be some ongoing role for him in the company, which doesn’t interfere with the way his children will eventually choose to run the business.
Rocco Forte Hotels
Hotels 11 open (Brown’s hotel, London; the Balmoral, Edinburgh; Hotel de Russie, Rome; Hotel Savoy, Florence; Verdura Resort, Sicily; the Charles hotel, Munich; Villa Kennedy, Frankfurt; Hotel de Rome, Berlin; Hotel Amigo, Brussels; Hotel Astoria, St Petersburg; Assila hotel, Jeddah)
Two under development Rome and Shanghai, both due to open in 2018
Turnover (to 30 April 2016) £172.8m, up 7% on a like-for-like basis
Pre-tax profit (to 30 April 2016) £8m
Revpar Like-for-like increase of 8% on 2015
History Rocco Forte Hotels was founded in 1996 under the name RF Hotels by Sir Rocco Forte and his sister, Olga Polizzi, who is responsible for the design of each property. Sir Rocco had previously joined his father’s company Forte in 1969, working his way up to become chief executive and chairman. During his time with the company, Sir Rocco had responsibility for more than 800 hotels, 1,000 restaurants and nearly 100,000 employees in 50 countries worldwide.
In 1996 Forte was subject to a £3.87b hostile takeover bid by Granada, which ultimately led to the break-up of the disparate empire. RF Hotels was renamed Rocco Forte Hotels in 2007 after Compass Group returned the rights to the Forte business name that it had inherited from its merger with Granada in 2000.
Running a smaller business than Forte, with a focus on just the luxury sector of the market, has enabled Sir Rocco to become a hotelier rather than an executive. “I get more involved in the details of the hotels than I ever did at Forte,” he says.
Sir Rocco on Brexit
A strong supporter of the Out campaign prior to the EU referendum, Sir Rocco is an even stronger supporter of Brexit, seven months on from the vote, and is frustrated by the widespread negativity that continues to be voiced about the result. “I’m very irritated because effectively the Remainers are trying to reverse the decision,” he says. “Sir John Major has spoken about “the tyranny of the majority” – what kind of remark is that?”
Having spent many years working across Europe, Sir Rocco says he believes “the European project has effectively failed”, resulting in huge levels of unemployment across the southern part of the continent, where countries have not recovered from the financial crash.
Referring to the economy and the fact the UK has remained outside the eurozone, Sir Rocco says: “We were able to adapt much better after the financial crisis and our economy has moved forward while others have stagnated over the past eight years. We are the only people who are creating jobs, therefore there has been huge immigration into the country as a result – and, of course, we have particularly become a magnet for east European countries.
“We’ve got to take back control. We need to adopt a much more open trade policy with the rest of the world. We can certainly do a deal with the US, which is almost as big a market as Europe.
“All the doom and gloom that was predicted – that we were going have an immediate recession and huge levels of unemployment – has not happened. The economy has continued to go forward strongly and foreign companies have continued to invest here.”
Sir Rocco believes overseas staff will continue to be employed in the UK, just as they were before the UK joined the EU. “What is going to change is that there is going to be more bureaucracy, people will have to get visas to come here and work. Foreigners who come here with job offers will be very welcome if they have the skills,” he says.
“Brexit is a fantastic opportunity for this country and a real shot in the arm to be able to move things forward in a way that we weren’t able to before.”