Redefining the Luxury Travel Experience in the New Normal, with Jerry Inzerillo

Episode Transcript

Jerry: We may not share the same ideologies or even the same theologies, but we all share the same biology. And in a polarized world where people have a hard time talking to each other, and we have conflict that breaks out in war-torn areas, the equalizer to all of that has always been tourism. And it’s always been us in the hospitality business that live our lives every day with the mantra of only two of the most powerful words in the English language, you’re welcomed.

Woman: [inaudible 00:00:34].

Robin: Welcome to the “Innovative Hotelier” podcast by “HOTELS” magazine, with weekly thought-provoking discussions with the world’s leading hotel and hospitality innovators. Welcome to the “Innovative Hotelier” podcast brought to you by “HOTELS” magazine. I’m your host Robin Trimingham. And my guest today is world-renowned Hospitality and Tourism visionary Jerry Inzerillo, the Group CEO of the Diriyah Gate Development Authority, Saudi Arabia, and the vice-chairman of the Forbes Travel Guide. Today we’re chatting about redefining the luxury travel experience in the new normal.

This “Green Technology” podcast is sponsored by Blink Charging. About 50% of vehicle sales will be electric by 2030. And EV charging is the hotel amenity drivers need. Blink is the leader in EV charging and offers the most flexible solutions and business models. For more, visit blinkcharging.com. Welcome, Jerry.

Jerry: Thank you so much, Robin. I’m absolutely both thrilled and honored to be with you, especially a fellow innkeeper as you are. And my beloved friend of decades Jeff Weinstein, and to have a chance to have a lovely chat with you with all our fellow innkeepers around the world. So, thank you so much.

Robin: Well, thank you. It’s an honor for me as well. As a hospitality industry thought leader who cares so deeply, both about those employed in the hospitality service sector and in bringing joy to those who travel, what’s it been like for you to witness the events of the last two years?

Jerry: It’s a myriad of emotions, isn’t it? It’s breathtakingly sad to see the devastating effects that the COVID and the pandemic had on us as a tourism community. So, prior to COVID, we were doing great. We got up to 10.6%, 10.7% of global GDP. We were one of the principal employers in the world. And then just to get wiped out when people couldn’t travel. And it was painful because it affects a lot of people who couldn’t afford to really lose their jobs, and it affected a lot of communities that were solely dependent upon tourism and didn’t have diversified economies. So there was many ways that it was just breathtakingly sad. And it required the leadership to say, “We’ll get through this and everything will fine.” And we did get through. And now in looking even though it’s gonna take a little time…

I sit on the executive committee. I have the privilege of the WTTC. And you know, when we look at our forecasts now for 2023, 2024, and see the restoration of travel, it’s very encouraging. And we’re gonna have bigger numbers than we ever had. But the big thing is that what it did teach us is that we’re very close as a community, but we really have to respect those who devote themselves to service and to hospitality in all aspects of tourism. And I think all owners, and all major corporations, and even small entrepreneurs really now will respect their staffs more. And it may even mean that we have to take a look at global compensation and work environment, so we retain a lot of the people that during COVID took alternate employment, so we can get them back because the Human Resources has always been a big thing. But COVID really wiped out a lot of our ranks. And now we have to attract people back with a better quality of life, and a better compensation scheme, if we’re gonna retain them for the future, even though it’s my view now that the future is very bright.

Robin: I concur with much of what you have just said. I’m in the jurisdiction of Bermuda. It’s a rock in the middle of the Atlantic Ocean, and we were very, very isolated and heavily impacted by a lot of what’s going on as well. In your mind, what are some of the biggest lessons that have been learned or need to be learned by the hospitality industry as a result of all of this?

Jerry: I think there were quite sizable lessons and they break down into different streams. There’s the business aspect internally of what it takes to run tourism entities, cruise ship, travel agents, wholesalers, hotels, restaurants. And then there’s the bigger macro changes that came as a result of travel behavior and travel patterns. One thing that everybody realized now is just how meaningful travel meant to them. And even those who took it for granted, they don’t take it for granted anymore.

But I think one of the big macro trends is that people now have a greater appreciation for probably one of the most valuable commodities ever, and that’s time. So, time now means something because I wanna spend time with people I love, or I wanna spend time with people I don’t know. And I wanna learn things, I wanna feel things, I wanna go, I wanna see because I may not be able to go anywhere. “Oh, don’t worry, I can go next year or don’t worry, that city will be there.” Well, maybe not. I mean, you know, you got the beautiful city, the coastal city of Odessa. Well, you can’t go to Odessa now. The Ukraine is a beautiful country. You can’t go right now. Things change. So everybody understands that time is precious. I wanna go, but I wanna go to what’s authentic, things that are gonna meaningfully move me, and I wanna go with the people I love. So if I have to travel with the children or grandchildren, my significant other, whatever, we’re gonna go because time is precious, and you can’t get it back. Now, that’s macro trends.

Sociologically macro, everybody sees now that the COVID showed them that there’s a global dependency on one another. And we really have to take better care of the planet. And that brings up there’s a buzzword now… I really don’t like buzzwords. There’s the whole thing about sustainability. Well, of course. Well, what’s the opposite of sustainability? You’re gonna let things be not sustainable? Well, maybe that’s the case. So there’s gonna be a bigger protection, especially with the younger generation, that we enjoy something, but we preserve it at the same time. And I think that’s a giant macro trend where everybody’s saying, “Are we really doing this responsibly now? And maybe we have to do things differently.”

In terms of the industry, we have to get on a program of sustainability, and we have to look at alternate measures of energy, and transportation, and how we take care of our people, and how we operate. Because we’re losing a lot of our management to different industries, especially tech. But now we’re losing our line staff because people don’t wanna work graveyard anymore. They don’t wanna work weekends. They don’t wanna work holidays. So why would they do it? Well, we have to attract ourselves to people who enjoy serving and enjoy human interaction and get them to come in. And not to be verbose, but one has to throw a major credit to the organization of Les Clefs d’Or, the wonderful global association of concierges, because now Les Clefs d’Or is attracting people who really love people, and really love serving, and really love their cities.

And if you look at the talent that Les Clefs d’Or is attracting, and these are professionals that have to take a test and work hard and earn their keys. Well, I think they’re a shining example to everybody in the industry because that’s what we have to do. We have to attract people now whom don’t just need a job. That’s true. But really, really love to serve. And that will really reflect in a great positive way, a very bright future for tourism over the next 5 to 10 years.

Robin: You’ve just touched on a great number of variables all at one time. Help us take this from being alphabet soup into a way forward. How would you say all of this is changing the luxury travel experience, what it takes to get a luxury traveler to decide to get on an airplane and go somewhere particularly long haul?

Jerry: Yeah, now luxury is the operative word there because it’s a segment of a broader tourism travel. Because a trend that was happening since the millennium was that luxury was been redefined. But then it got super redefined because of COVID, because what happened is that, if you took a look at luxury 40 years ago, 50 years ago, I’ve worked hard, I’ve made money. So let me show you my wealth, and therefore, I’m gonna have beautiful jewelry, and beautiful cars. I’m gonna show you the success of my wealth. Well, that’s still omnipresent now. But there’s different definitions. Now luxury is measured in time. Time has come to the top of the list. Forty years ago, time wasn’t even in the top five. If you said, what is luxury? No one said time. You know, if I can fly first class, if I can have this cabin, if I can have that suite, if I can order a nice bottle of wine or a bottle of champagne, no one said time. I have time.

Now you have camaraderie. Who am I with? Am I with people I love? Am I with people I enjoy? So now there’s another thing that you didn’t hear 40 years ago, super important, value. Hey, you know what? If you wanna charge me €200 more than you did, I’m okay with that now, but I better get my money’s worth because if you think you’re gonna charge me these luxury prices, and not deliver your end of the deal, I’m not all for that. Now, when you go into Gucci product, Cartier, Hermès, you never see a sale in those stores. They don’t have to because, in the definition of luxury, you get what you pay for. You never say when you walk, is this fake? Or am I getting a real bag, a real wallet? No, because there’s integrity.

So now, in the luxury segment, and all segments of tourism and hospitality, all the operators gotta behave like the luxury retailers in that you gotta keep your promise. And you have to provide service. Now, in the context of not the Diriyah Gate Development Authority, which is a privilege for me. But in the context of Forbes Travel Guide, the reason why it’s so important, especially in the five-star and four-star categories, is because it establishes that partnership and that trust in that you have to pass 90% of 800 standards to win the five-star. There’s still less than 300 five-stars in the world. But if you go into that, and you see that five-star, you know they had to earn it. It’s the same thing as walking into Gucci. And then the other thing is that, especially when it relates to hospitality, I’ve said for decades, and my beloved friend, Paul Chelsea [SP] has said for decades, “The most beautiful hotel in the world is not necessarily the best.”

That’s why on the Forbes Travel Guide criteria, 80% of the weight is in service. It’s in human interaction. Now technology is becoming a big buzzword as well but if technology serves the guest, and you can go to a room, and you can command the operation of the room in any language, I’m cold, run the bath, call room service, that’s good. But if you replace people where you don’t see anybody, how are you gonna be emotionally fulfilled of where you are?

Robin: Yeah. It’s not a luxury experience?

Jerry: Right. Right.

Robin: I agree.

Jerry: So I think luxury now is time. I’ll go. I think it’s less cost-sensitive. I actually do. I think in the evolution of RevPAR in the next five years, I think there’s gonna be less [inaudible 00:13:0], or you’re gonna have a different guest because then there’s gonna be a much higher accountability that, okay, I better get what I’m paying for. And they’re gonna look for a deeper human interaction in terms of service. Do you see me? Do you hear me? I’m paying you. But if I go into Gucci, I don’t want a robot serving. And that’s the same thing I think on all aspects of luxury tourism, and luxury hospitality.

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Robin: You mentioned Forbes Travel Guide and the ratings therein. How is this huge shift in luxury travel expectation impacting how the Forbes Travel Guide is assessing and rating the properties?

Jerry: It’s a great question. You see the genius Forbes Travel Guide and a big shout out to a Filip Boyen who led Forbes Travel Guide and now to the wonderful Hermann Elger, who’s the CEO, both great innkeepers like you, never before has the necessity of the Forbes Travel Guide been more meaningful, especially post-COVID. Because who do I trust? You can’t trust TripAdvisor. It can be bought. You can’t trust a lot of the websites because they could be biased or bought. So, the same way you can trust an Olympic gold medal, you go into a bar and sit down next to somebody in the bar, they’re wearing an Olympic gold medal and you don’t know them, you’re gonna say, “Excuse me, is that an Olympic gold medal?” “Yes.” Well, just the recognition of it means it has authenticity, and credibility, and value. “Well, how did you get that? Can I buy you a drink?”

Okay, so now, what the guest is gonna say, “Who do I trust?” That’s why this nonsense around the world of this is a six-star, seven-star, eight-star hotel, there’s no such thing because there’s no value. How do you trust it? In other words, have you ever heard of a platinum medal at the Olympics? All right, but Michael Phelps is one of the greatest athletes of all time. The last I checked he didn’t have a platinum medal. So what’s this nonsense?

Robin: Great analogy.

Jerry: So now the reason why it’s no longer funny, I’m the first eight-star, I’m the first nine-star, the reason why it’s no longer funny is because the guest is confused. Who do I trust? You go into Gucci, you trust it. You go into, you know, the Plaza Athénée, you trust it. So I think people are gonna look to that. And that’s why it’s important. However, where the genius of Forbes Travel Guidance, thanks to the wonderful staff there, is that they have something called the Standard Advisory Committee, SAC. And the SAC are two-year terms that represent innkeepers from every aspect of hospitality, to review the 800 standards, to make sure that the standards are relevant, and that they represent the interests. So what happens is, if I’m gonna be judged like an Olympic athlete, the criteria may be different now than it was 10, 20, 30, 40 years ago.

So, maybe now you always had the friction cloths because when guys shave, they nick themselves, you don’t need them in a room anymore. In other words, if you don’t have 20 amenities on the bed vanity, but they’re available in housekeeping, should you call to have it, maybe you don’t have to have the 20. So, maybe the criteria has to be upgraded. There’s several small luxury hotels that when you go now, they don’t give you a valet check for your car. Well, instead of dinging them, well, they didn’t give me a valet check for the car, maybe you should reward them. We know our guests, and we know that when they came that Robin had a Tesla. So, the SAC is an important vehicle to contemporize and make sure that the standards globally that guests expect require it. Now, for instance, if you don’t have now a day a port or a plug at your bedside to charge your iPhone…

Robin: Oh, that’s a big problem.

Jerry: Big time. Now you got people checking in, I’ve got more than one device. So now, what happens is there’s a capital requirement today. So, maybe you have to revise your standards that you better be able to have your guests plug in their device. And if you call housekeeping and no one answers the phone, and it’s ringing and ringing because you’re allergic to a pillow, why are you gonna pay $1,000 a night for that? So I think the Forbes Travel Guide, the global meritocracy, 70% compliance, 80% compliance, 90% compliance, recommended four-star, five-star. Evolution of standard advisory committee where the peer group decides what’s relevant and what’s fair, so you’re not dictating the standard that nobody wants, and I think this lends credibility to the luxury travel experience because, at the end of the day, that’s who you trust. That’s why you went to the better travel agent. That’s why you went to Matthew Upchurch. Matthew built a great business, fabulous guy Virtuoso, because of credibility and reliability. You know, you take Frank Fisher and Valerie Wilson, and the wonderful Elizabeth Bradley, in the gallery. They built great businesses. How did they build a great business? Just because they booked him? No, because they were reliable. They were thoughtful. And I think that’s gonna be even more important as a trend going forward.

Robin: I agree with you. Let’s change things up here and talk about Diriyah a little bit. And I have to tell you, I am very excited to hear that it’s a UNESCO World Heritage site because believe it or not, my grandfather was a founding member of UNESCO back [crosstalk 00:19:48].

Jerry: Oh, how wonderful.

Robin: Yeah, but funnily enough, it’s a very small world. So, talk to me about how you’re incorporating all of these principles that you’ve mentioned into the development of Diriyah as a cultural tourism destination for Saudi Arabia.

Jerry: Yeah, thank you very much for that because that’s not only a good question, it’s an extremely thoughtful question. We just touched before on authenticity and on emotional experiences. And UNESCO is a wonderful organization because could you imagine having an organization that’s dedicated to the preservation of what’s considered global treasures, both in hardware and physical buildings and in programming, and in cultural identity and preservation? I’m all for that. I know you are too. So kudos to UNESCO. So thanks to our wonderful king, King Salman, when he was governor of Riyadh, he took the ancestral home of Al Saud, the birthplace, the physical birthplace of the kingdom, which was a mud city, built in an oasis in Riyadh named Diriyah, which was the founding of the first Saudi state, second Saudi state, and third Saudi state. So thanks to the efforts of the king, King Salman, he and his wonderful team got UNESCO World Heritage a certification in 2010.

But because the Saudis were very ambitious to build a prosperous nation, a lot of emphasis, even well-intended, wasn’t on the historical side of the kingdom because we have to be forward-looking. But this king, who’s a historian, said, “We have to preserve our national identity. We have to make sure that our birthplace is the source of great pride to the Saudi people, and to all people that come to visit.” So we’re gonna open up the kingdom to tourism, which was the idea of the dynamic Crown Prince Mohammed bin Salman. And together you have two visionaries, a father-son combination that sounds a bit informal, but His Majesty the King and the Crown Prince, and said, “We’re gonna use tourism now to welcome, to preserve our national identity, to promote a 300-year-old, it’s older than that, but a 300-year-old rich society of culture and heritage, and to open up the kingdom now to welcome everybody to come in, and to see how Saudis… and by the way, ambassadorially, as a tourism entity, that will do a lot to reverse some very stubborn kind of dated stigmatisms that the kingdom is only deserts and camels.

Come and see beautiful river ranges and lush green mountain ranges and snow. And snow in Saudi Arabia? Yes, it snows in Saudi Arabia. And then come and interact with a very warm, generous, and hospitable people. So everybody doesn’t think, “Oh, these Saudis are intimidating and…” No, they’re not. You have to come. So, Diriyah, the birthplace, the Arabian Peninsula, the birthplace of the king of the Saudi Arabia, the ancestral home of Al Saud, one family who’s ruled for 130 years benevolently, and the center of culture and heritage, is now being master-planned with a $50 billion master plan in central Riyadh, in 14 kilometers of beautiful real estate in the center of what is gonna be one of the great G20 cities, which is Riyadh.

Robin: This is an absolutely fascinating and long-term mammoth project. How can your work on this project be viewed as sort of a template for others who are trying to transform and create a luxury travel experience in another jurisdiction?

Jerry: Believe it or not, and I’ve devoted 50-plus years of my life to welcoming people, but one of the things that I take great pride in at night when my day is over or early in the morning, but with this crown prince he works overnight, so he works an 80 hour a week. He’s such a hard worker. But one of the things that I’m very pleased is I think that Saudi Arabia is actually gonna be a role model for a new type of tourism, one that really richly celebrates culture and heritage, but does it in a very responsible environmental way. The kingdom controls over 45% of the Red Sea. My colleague John Pagano is doing an amazing job in opening up the Red Sea. We have six UNESCO World Heritage Sites. We’re gonna be doing some amazing things here. And I think the kingdom, not only will open up to tourism, attract 100 million tourists by 2030, of which 30 million. It’s very special because 30 million will be pilgrimages where part of the 1.9 billion Muslims in the world can fulfill one of their life goals to have a pilgrimage to the two holy cities of Mecca and Medina.

So, on top of that, because the Crown Prince is such a strict environmentalist and very strict on issues of quality of life and sustainability, I think the kingdom has a real chance to be a role model, and be a beacon to remind all governments to put the time into the preservation and the promotion of their national identity through culture and heritage. And I think that is very, very important because we may not share the same ideologies or even the same theologies, but we all share the same biology. And in a polarized world where people have a hard time talking to each other, and we have conflict that breaks out in war-torn areas, the equalizer to all of that has always been tourism, and it’s always been us in the hospitality business that live our lives every day with the mantra of only two words, but two of the most powerful words in the English language, you’re welcomed.

Robin: Yeah. Wonderful way to put that because I think this is such an amazing opportunity, what you’re building, because sometimes what it takes to show people that we’re not different is just to be welcoming and to give people the opportunity to see how it is to walk in another culture. We have a couple of minutes left here, Jerry. What’s your key message for all the hoteliers who listen to this podcast?

Jerry: Well, first of all, I wanna send not only my regards and my thanks to everybody for hanging in there and doing an extraordinary job during COVID, but I wanna break ranks a little bit and act like an elder, and I wanna say how much I love everybody. I love you all. We’re one community. We’ve never broken ranks. We’ve never given up. This shocking time where no one keeps a secret, and the world of TMZ, and negative social media, we are people that serve and service is nobility. And all of you are noble. And you’re great. And to all the young people listening, there is a bright future with the least discriminatory industry in the world. Anybody can progress, and very quickly now, on the basis of your passion, and your commitment, and your ability to serve. So, as we navigate out of this COVID, and there’ll be other challenges to us in the future that we’ll have to face, but we came out stronger, more optimistic, positive. And I would say to everybody, please keep your dreams very ambitious. Please think big. Know that tourism, know that the human spirit is behind you. Serve with all your heart and soul. Don’t worry about promotion and money and everything. It will come. And I’m just super proud to be one of you. And we look forward in the kingdom of Saudi Arabia to welcoming everybody. We have one of the most dynamic master plans. Eighty-three percent of our staff are Saudi, 36% are women, 16% of those women are in management, 14% of our staff are from the community we serve as Diriyah, 38 new hotels, 100 restaurants, 9 museums, university suites, 20,000 residents. Come and see a welcoming, beautiful country, and as a united tourism community. God bless you, keep the faith, and it’s always an honor and a privilege for me to be amongst you, and to thank you for your service to the industry.

Robin: Jerry, it’s been a complete honor to chat with you today. Thank you so much for your time.

Jerry: Thank you.

Robin: You’ve been listening to the “Innovative Hotelier” podcast brought to you by “HOTELS” magazine. Join us again soon for more up-to-the-minute insights and information specifically for the hotel and hospitality industry.

Jerry: And as we say here in Riyadh, “Only one Diriyah.” Come visit us. Robin, thank you so much. Always wonderful to be with you. I look forward to seeing you in person and give my big love to my big pal, Jeff.

Robin: I absolutely will. Thank you so much for your time, sir. You’ve been listening to the “Innovative Hotelier” podcast by “HOTELS” magazine. Join us again soon for more conversations with hospitality industry thought leaders.