At its 2021 Global Meeting, Horwath HTL announced that John Fareed has been elected Global Chair, succeeding Robert Hecker, who will continue as a member of the Horwath HTL Global Committee and managing partner of the Pacific Asia offices. Fareed, who had been managing director/chairman North America, will continue to lead the North America region in addition to taking on the global role. Fareed shared with LODGING at the 2021 NYU International Hospitality Industry Investment Conference at the New York Marriott Marquis how he plans to enlarge the footprint of the world’s only hospitality-focused, independent advisory brand by continuing to grow organically through leveraging the 80 disciplines it brings to every project, but also by bringing in new members through mergers and acquisitions and active recruiting. He also described how their consultants approach different projects and educate clients, often while leading them through difficult situations.
What does your newly announced election to global chair of Horwath HTL mean to you and the company?
I’m extremely grateful for the opportunity to serve in the position Robert [Hecker] held for so long. In fact, he’s the one who nominated me, and he will continue to be a member of the Horwath HTL Global Committee and managing partner of the Pacific Asia offices.
Right now, we are the largest HTL—hotel, tourism, and leisure—firm in the world. We have 250 senior-level consultants working out of 52 offices in 40 countries, so we have the industry-specific expertise and very deep knowledge of local markets to help clients make their best strategic decisions. We also have the ability to handle very large assignments, such as the global assessment Six Senses chose us to do.
The push for me is to focus on building the brand further organically by bringing our 80 disciplines to bear on every client, but also by acquiring more members—we call them partners—through mergers and acquisitions as well as recruiting.
What will your priorities be in this position?
To some extent, I want to shake things up to build the brand. We’re very well known in Asia, Europe, and Latin America, but things are a little quiet in the United States—although there’s been nice growth here and in Mexico during the four years I’ve overseen those markets. So, we’re growing, but I really want to focus on building the brand globally and enlarging our footprint here in the United States. We’re going through a proper strategic market planning process next year to make sure all of our advisors are aligned with what our clients need over the next two to three years, during which I expect us to do very well.
What other types of initiatives are you hoping to implement as global chairman?
I’d like to increase our communication between offices, and, as part of that, promote more knowledge-based sharing of information on a more global basis, especially when dealing with regional issues.
The other thing that I’m initiating is to start trading junior-level consultants with their counterparts in the different regions to get them experienced and also keep them motivated and fresh. This could mean having U.S. consultants from China, Singapore, and France trade places. I believe that would give them a more rounded experience and a further understanding of what it means to be part of a global brand.
How does your consulting firm help hotels with challenges specific to the United States?
Some U.S. clients, such as those in the mountains or on beaches, have done very well; but others, such as those dependent on business travel, have had significant challenges that require making changes. We try to think about the individual needs of each property and apply the 80 disciplines we have within our skillset to turn them around. Often this means finding alternative uses for the properties to fill the gap—sometimes with the help of strategic partners. It can be anything from shared office space, to temporary entertainment opportunities, to figuring out what other than meetings can be done with ballroom space, such as one-off, high-revenue-generating specialty engagements that once again includes weddings.
How do you approach different situations—e.g., big vs. smaller assignments?
No matter what the size of the assignment, it’s all about the relationship and the trust and intimacy between us and the client. They all want that same attention, that same level of detail and communication. Whether the asset is a professional sports team or a beautiful resort, it’s their baby and want it to receive a lot of love and attention and care. As for the biggest projects—those worth billions of dollars, complete with a board, investors, and whatnot—they, too, want that same love and affection and detail.
What’s involved in providing that kind of attention and detail to clients of every size?
Whether you’re dealing with a single owner or a team of individuals from a company, every client and project is different. Our approach is to mirror the personalities of those seeking our services with the right people on our team. Fortunately, because we recruit employees based on personality as well as background and skillset—and train them to interact effectively with clients—we can match clients with the right consultant; this means there’s one who can provide a quick response with minimal communication to a client who wants that, and another for those who want hand-holding and to be wined and dined, or who need lots of time and information to gain a full understanding of our plans, recommendations, data, and research.
How do you decide how to reposition an asset?
Our first consideration is the client’s goals. With a long-term-hold asset, we are investing for the long term and want to think in terms of growing its status and profitability. But if they plan to flip it, we just need to get it to a good place for a short period of time.
We work with major tourism destinations, not just hotels, but find that the key to repositioning successfully with all our clients is turning underperforming assets into something that makes more sense. Whether it’s a hotel, 16,000-square-foot food hall, or a celebrity chef restaurant, we use the same asset management process.
What are examples of recommendations the client may have initially resisted?
One well-known high-end spa had high-end villas, large suites, and mini-suites, and a terrific restaurant, but it was struggling. We recommended converting the mini-suites, which were the last to sell, into large suites and restricting guests to age 16 and above, except at Christmas and Thanksgiving. Those subtle changes—including fewer rooms— took us from seven-figure losses to profitability in a very short period of time.
In another case, a minor change at a food hall led to a 30 percent savings in labor. It involved investing $30,000 to replace a complicated order system that created delays and a stressful work environment for staff. The change improved satisfaction for both guests and staff.
What does it take to get clients onboard with recommendations?
Clients generally contact us because they need help, but, from an advisory standpoint, we often need to explain why the changes we suggest are important. This is especially the case with technology. I think the hospitality industry is the most technology reluctant industry on the planet. To get clients onboard with the tech they need, we need to present it in terms of how it improves guest satisfaction and increases the value of their asset.
