John Spence
What is the USP of Karma Hotels?
Well, many things really. Firstly, I always point out that we view ourselves not as being in the hotel business but in the entertainment business. My whole life, I have been involved in entertainment, whether it be in the music business or now in hotels, and we don’t see ourselves as somewhere where someone just stays for the night or one or two nights or holiday.
It’s all about entertaining the client. So one of our USPs undoubtedly is all of the things that we have around the accommodation. It might be the great restaurants, it might be the great bars and the beach clubs, it might be the social life, the DJ’s, the activities, it could be the treatments that we offer in the spa, which are unique. It could be the wine list, the kids’ clubs and a plethora of other activities.
We always believe that entertainment can come to different people in different ways, and so we try to provide a full spectrum of entertainment for our clients. And the other thing I always say is that we are much, much closer to a private members’ club than we are to a normal boutique hotel. Our core business is creating members, people that belong to our various clubs, maybe on annual basis or multi-annual or lifetime basis, and then holiday with us every single year. We have over 50,000 members currently and growing very rapidly.
Our other USP is that we have, what we call, a five-star hippie culture. The time you had your best holiday in the world was, when you were young, you had no responsibilities, you may have slept in a hammock on the beach where you’ve camped out and you had an amazing time. As you get older, you ended up holidaying in five-star luxury. It was nice, but it missed that excitement. What we try to do is provide the liberation and the fun of when you first started holidaying, with all the five-star culture that go alongside it.
How many of your properties are currently open?
We have a total of 44 resorts, some of them are under renovation or under development, so we have 36 currently which are built. Are they all open? No. What we have seen over the last 18 months is a bit of a cyclical approach, there have been times that resorts could open, and they have been. Times, that they are shut. Most are open at the moment, some of them operating at a reduced capacity, of course, because of the Covid-19 restrictions and travel, but we are seeing them all open up very quickly.
I was thinking of a lot of activities, our resorts in India are all open. Our resorts in Europe are all open, our resorts in Bali are mostly open, Thailand is not open. But we hope very soon because they have recently announced the relaxation of the quarantine requirements in Thailand and similarly in Vietnam, so they are swiftly all beginning to open.
Karma Salford Hall in the Cotswolds, UK
How has the business been since travel resumed?
Well, what we have seen has been crazy, and I think it’s been mirrored by other operators. When a client can come and stay at one of our resorts, they will and they will stay for longer, they will spend more. They will enjoy better quality wine or facilities, they’ll upgrade to bigger units, and there is a huge desire to take holidays and enjoy themselves at the moment around the world. And I think it’s driven on several things. It’s driven on excess savings. During Covid-19, as an example in the United Kingdom, the Chancellor of the Exchequer Rishi Sunak estimated there was over GBP 280 billion of excess money in British people’s bank accounts.
The same is true in India, the same is true in America and Thailand or wherever. So, people have more money because they haven’t got to spend it. They’ve been at home and they haven’t been out eating or drinking or going out to vacation. They want to reward themselves because people have been locked down, they have been suffering. They haven’t been out yet, and so there’s a sense of rewarding themselves for that and also taking revenge almost on Covid-19 or on the governments or the forces that kept them inside.
So, all of these factors combine to make sure that all people can travel, whether it be internally on a domestic market or international. They will, and they will have a great time, and we have certainly seen that. As soon as our resorts are able to be occupied, people are rushing in occupancies – ADR – average daily rates are high, satisfaction levels are high, and it really has been tremendously exciting to see the rebound from Covid-19, which we anticipate will happen quite a lot over the next few years.
How has the footfall from India been?
Well, not good yet, to be honest. It is only very recently that it has become easier for Indians to travel to most of our destinations, and that has either been driven on the local quarantine requirements in the countries where we are! So for instance, Australia would be very difficult for India, Bali has had a five day quarantine period, as have Thailand and Singapore. Europe has been a bit more relaxed, but still being restricted. So, what we haven’t seen in the short term, a huge amount of footfall from our Indian consumers, but that is rapidly changing. We are already seeing a huge amount of bookings on our books. I am here currently at our resort in the Bavarian Alps. It is a ski resort and right up in the mountains of beautiful location near Munich, and we have many Indians now placing bookings.
What are the changes brought in after pandemic?
I don’t think there have been a huge number of changes, to be candid with you. We’ve always been very, very lucky, that we are boutique hotels, we’re not high density. We don’t have mass dining rooms or lifts servicing twenty floors or big conference centres.
Most of our properties are standalone buildings and villas, or here ski chalets up in the Bavarian Alps, so social distancing is no more of an issue than before. Many of our resorts are selfcontained which I think also sits well post Covid-19 days. Some people like to do their own catering and not necessarily go and hang out in the bars and restaurants.
Clearly, in all our resorts, we have very strict health and safety protocols now – whether it be staff wearing masks, whether it be all staff having to be vaccinated. We were very strong on vaccination, being the only way out of this, and all of our staff do have to be double vaccinated. We are also very strong on sanitation, we are very, very, very strong on making sure that our cleaning products are totally top of the range and that everything is cleaned immaculately when every room is turned.
How do you foresee 2022?
I think 2022 is going to be a huge year in hospitality. All of the facts that I mentioned above about the excess savings, about the reward, that revenge about the fear factor. People are going to be desperate to travel and there’s been a bucket list mentality as well.
I think people are going to be very adventurous and will take more holidays than before. I think people are going to enjoy themselves because of the reward factor, and so we see a very robust time. We’ve been very acquisitive in the last eighteen months. We went into it saying that we would come out with the same number of resorts as we entered into it. We then revised it and intend to come out of Covid-19 with 10 more resorts. We went into it with cash in the bank, with a flexibility, with a strong, strong vision that Covid-19 is going to be short-term. We have been acquiring resorts all over the world in places like Brazil and in Philippines, in Egypt, in Kenya, obviously in Europe and in India, where we bought three resorts during Covid-19. We predict a very, very bullish number of years coming out of here, and we’re very well positioned, we think, to take advantage of that!
