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The Jarretts: carving out a market in boutique tourism
BUSINESS LEADER NOMINEE # 6
Wednesday, April 22, 2009
As he prepares to hand over control of the family business to a younger generation, 71- year-old Terence Jarrett finds himself in a comfort zone that must be the envy of his contemporaries: he is looking towards retirement with the bankable assurance that his hotels will remain in capable and responsible hands.
The Jarett family, owners of Altamont Court Hotel in Kingston and Altamont West in Montego Bay, stand in front of their Kingston hotel. From left: Terence, Donahue, Anthony, Ena, Chris and Richard. For the past 25 years, Jarrett and his wife Ena have built Altamont Court into one of Kingston's respectable mid-size hotels. Two years ago they expanded into Montego Bay with the opening of Altamont West.
Terence's sense of security rests in part on the investment that he and Ena have made in shaping the future leadership of the family business.
The successors-in-waiting are four of their children - Anthony, Chris, Donahue, and Richard, who collectively own 40 per cent of the enterprise. Terence and Ena control 50 per cent, while their daughter Nicola who resides in Atlanta, USA, has 10 per cent.
Chris Jarrett checks on the front desk at Altamont Court. In foreground is Sonia Virtue while in background is Roxanne Smith - both of them front desk supervisors. The hotel has 59 rooms and regularly has occupancy of over 80 per cent. The chairman makes no secret of his impending departure, or his desire to make way for the younger folks.
"At 71 years old I now need to stay home," he remarks. "My retirement is now a matter of months, not years."
Though on paper Terence remains executive chairman, and Ena the general manager, an heir apparent has already emerged from the ranks of the siblings, and from all accounts, he is wasting little time in stamping his authority on the company.
"He has gone through an apprenticeship and he now chairs our meetings and makes strategic decisions," notes Terence in commenting on the incremental transfer of power specifically to his son Chris, and more generally to his children. "He is the de facto CEO, and will officially take that position in a matter of months," he continues. " I want to set a date to be out of here."
An electromechanical engineer and MBA graduate, Chris emerged the favourite candidate to succeed Terence not only because of his sound academic credentials, but the way in which he has personally immersed himself into the business. From food and beverage management, to operations, to project and property management, he has run the full gamut of experience.
Ena Jarrett, the general manager of Altamont Court, examines a room that is being tidied by head housekeeper Carmen Brown. In background is housekeeper Marcia Ashman. Chris is not the type to shy away from challenges. He recalls how a few years ago he was thrown into the deep end as food and beverage manager "without experience", but was able to quickly move up the learning curve by attending seminars and taking courses at UTech. He eventually attained certification as a hospitality management trainee.
Initiatives like these, aimed at preparing himself for leadership of the family business, have not been lost on the patriarch.
"He is the most qualified one," says Terence. "He will make a good CEO."
Terence Jarrett (right) chats with Egbert Robinson, the head of security at Altamont Court and one of its first employees. Robinson joined the hotel staff at inception in 1982. But Terence explains that consensus building has been the key factor in the success of the hotel, and expresses hope that this feature will continue to be part of the corporate ethos once his children are fully in charge of the business.
"We have always operated by consensus," he stresses. "We do not make decisions unless all agree; if not we sleep on it and come back until there is agreement. This is the culture that I have inculcated and I am confident that it will continue."
The manner in which the decision was taken to develop Altamont West in Montego Bay in 2005, stands out as a good example of how this policy plays out in investment decisions.
The idea for the expansion away from Kingston's business district and into the heart of Jamaica's tourism mecca was first placed on the table by Donahue, the one who is regarded as the most bullish among the siblings.
For weeks he was able to get only very little traction as the idea was generally met with scepticism.
Chris explains the ambivalence towards the plan by pointing to concerns about pricing, financing, and critically, management issues.
"One of the first concerns that we had was who would run the hotel in Montego Bay," he recalls. "None of us wanted to be uprooted from Kingston and we did not want to consider somebody from the outside, because we were not sure if we could find someone who would think and operate like an owner."
After vigorously weighing all the risks against the opportunities of taking advantage of a property that could be snapped up on the cheap, a consensus was reached that pointed towards the investment.
As it turned out, Donahue - the project's conceptualiser -was selected, again by consensus, as the most well positioned family member to be dispatched to the north coast city as general manager of the new property.
The cautious and consensual approach to the investment had its merits. In the first place, it strengthened the hands of the Jarretts in negotiating the purchase price for the property. The owners were seeking US$2 million to part with the 27-room 15,000 square- foot building that once housed the Belvedere Hotel on Gloucester Avenue in Montego Bay, but which had been closed for years and had fallen into significant disrepair. In the end, they accepted US$675,000 from a hard-nosed, tough-talking family that had very little room for miscalculation.
The Jarretts spent another US$1 million on renovation and to add four rooms, conference facilities, and features like piped music throughout the building. The project time was significantly extended by the scale of the renovation that had to be undertaken.
Terence and Ena are convinced that the consummate ease with which their children have transitioned into management roles validates their long-standing practice of insisting that their offspring be exposed to all aspects the business - from as far back as their high school years.
"We brought the children into the business from very early," notes Ena. "Now their father wants to retire, I am sort of phasing out and they are taking over."
But as they prepare to take the Altamont brand to a new level, the Jarrett siblings are only too aware of the shifting and challenging environment in which the business has to operate. To begin with, they are at best, modest players in an industry that historically lacks a culture of indigenous ownership. To compound this disadvantage, the market is increasingly being dominated by mega-hotels and big international brands.
To date, the Jarretts have survived by embracing the only end of the business that is available to investors that lack the capital, branding and marketing power of the big players: the niche market, boutique-type service.
Additionally, they have worked to build a reputation as owners who welcome with equal enthusiasm locals and overseas Jamaicans holidaying here, as well as the more traditional guests from Europe and North America.
Donahue says that by wooing local holidaymakers and business clients, Altamont is able to minimise the impact of the seasonal cycles and vicissitudes that are a feature of the traditional travel market.
"Our strategy is to focus on locals and business clients," he says. "During the traditionally soft tourism periods we do not experience big dips in occupancy."
One cost-saving decision that this general manager has made at Altamont West is to outsource its restaurant services rather than struggling to maintain a time-consuming food and beverage department at such a small property. The decision has helped to trim staff to ten, and free up the manager to focus all his attention on customer care and marketing.
"The model is working," he beams. "It's a small hotel but the occupancy is good and we are able to pay the bills. Because the restaurant is operated by someone else we are able to keep our workforce to the minimum."
Altamont Court hotel in Kingston is the bigger of the two properties, with 59 rooms, a restaurant, swimming pool, and a small business centre. Like its sister hotel in Montego Bay it caters to all categories of guests, but has become a favourite for business travellers and vacationing overseas-based Jamaicans. Here, there are 58 members of staff.
Chris estimates that generally, between sixty and sixty-five per cent of the guests are foreigners, and points out that current occupancy of around 65 per cent represents a noticeable drop from the over 80 per cent that is normal for this time of year.
"About 65 per cent of our business is from overseas," he says. "We are trying to change this. We intend to focus on the local market, and have introduced VIP guest programmes to drive the business."
He attributes the below-par performance to a combination of two factors: the global downturn in tourism, and recent problems with the company's telephone service that made the hotel inaccessible to potential clients.
"The telephone problem is behind us now and we are working our way back up," he says.
Like other hoteliers in Jamaica, the Jarretts are concerned that the big buyers, exploiting the current softness in the travel market may be driving down room rates to the point where these prices may become uneconomical.
"There comes a point where one has to decide if it is worthwhile filling the rooms at those discounted prices," Chris argues. "It is a precarious position for the industry," he adds.
There is recognition across the industry that in this downturn, it is the small, independent hotels that are particularly vulnerable. The Jarretts too recognise this danger, and argue that they also want to avoid a situation where these external challenges are worsened by any internal deficiencies within their own organisation.
Chris, as the CEO-in-waiting has vowed to be vigilant against complacency, and is championing what he calls "professional approach to management" as a feature of his leadership of the family business going forward.
"We are trying to get away from the strict family management culture," he declares. "We want to bring in fairly high-level individuals who are as dedicated to the product as we are and as committed to performance of the company as we are, and to divest the Jarretts of some of their responsibilities."
The employment of a food and beverage manager to take over functions for which Chris himself was once responsible is an example of this principle in action.
In going forward, the family is also committing itself to strengthen the unwritten "code of conduct" that it claims has been helpful in engendering esprit de corps within its ranks.
"In this regard we try to operate as though we are not a family business," explains Chris. "We follow a code of conduct where we respect each other's line of authority. When issues arise there is a line of demarcation and we go through the person who is in charge of the particular area."
However, as Anthony points out, this unwritten rule does not prevent family members from doing what needs to be done even if it involves going outside their official remit.
He clarifies: "If I come to the front desk and there is a guest who needs help I will deal with it. Wherever needs help I will deal with it, and the same is true for all of us."
Anthony is the eldest of the siblings, and is in charge of all issues relating to the company's banking relationships. He rejoined Altamont Court in 2001 after a 10-year stint in the USA, and having run, in the 1980s a small car rental company that used to be part of the Jarrett family business.
He says his current position allows him "to see the company grow, to see both the incremental changes as well as the big changes".
One of the shifts that has become noticeable in the business model is the small steps that the Jarretts have been taking towards diversification of the revenue stream. This has come with a $100-million price tag, first with the acquisition of an office complex close to Altamont Court, and then the purchase of forty per cent of the office space on the Billy Craig Building that sits on the property that adjoins the land on which the hotel is located.
"We are moving into the commercial rental business," notes Terence.
To help fund the acquisitions the family recently signed an agreement for the sale of its short-term rental, nine-unit apartment building in Cherry Gardens, St Andrew.
This move falls within the vision that Chris and the others share about the future of the company.
"I would like to see us diversify into other types of businesses," he notes. "Any business, let's look at them and discuss them."
But Terence says that any such radical departure from current business lines as will have to be undertaken by his children with Chris at the helm.
"Chris will have to take the expansion to the next level," he notes. "I would like to continue having an input in the business until we have drastically cut the indebtedness."
But Donahue likes the hotel business, and apparently would like to see the family deepen its Altamont brand in this industry before venturing too far out.
"We now have the grasp of the hotel business," he says. "We believe that Port Antonio might be an option for expansion."
For now, however, this hotelier who once served in the US Air Force will continue to rely on excellence in service delivery to maintain Altamont West's competitive edge in the market.
He cites recent positive stories on his hotel in the Miami Herald and trade publications as evidence that the high-quality service has not gone unnoticed.
His brothers are also taking note, and have given him thumbs up for his management of the Montego Bay property.
"Donahue is the big reason for the MoBay's success," says Anthony. "He has the ability to reach across lines and generate business. He is very good at marketing."
Terence also says his son "has done a good job in Montego Bay" and that he is given significant latitude "without anybody having to second-guess his decisions".
But in mulling the future of the Jarrett family business, Terence reverts to the fundamental position that he has staked out from day one.
"This is a collective effort," he emphasises. "How well they do will depend on how well they continue to work together. In the end though, I believe they will, because this is what I have inculcated in them
BUSINESS LEADER NOMINEE # 6
Wednesday, April 22, 2009
As he prepares to hand over control of the family business to a younger generation, 71- year-old Terence Jarrett finds himself in a comfort zone that must be the envy of his contemporaries: he is looking towards retirement with the bankable assurance that his hotels will remain in capable and responsible hands.
The Jarett family, owners of Altamont Court Hotel in Kingston and Altamont West in Montego Bay, stand in front of their Kingston hotel. From left: Terence, Donahue, Anthony, Ena, Chris and Richard. For the past 25 years, Jarrett and his wife Ena have built Altamont Court into one of Kingston's respectable mid-size hotels. Two years ago they expanded into Montego Bay with the opening of Altamont West.Terence's sense of security rests in part on the investment that he and Ena have made in shaping the future leadership of the family business.
The successors-in-waiting are four of their children - Anthony, Chris, Donahue, and Richard, who collectively own 40 per cent of the enterprise. Terence and Ena control 50 per cent, while their daughter Nicola who resides in Atlanta, USA, has 10 per cent.
Chris Jarrett checks on the front desk at Altamont Court. In foreground is Sonia Virtue while in background is Roxanne Smith - both of them front desk supervisors. The hotel has 59 rooms and regularly has occupancy of over 80 per cent. The chairman makes no secret of his impending departure, or his desire to make way for the younger folks."At 71 years old I now need to stay home," he remarks. "My retirement is now a matter of months, not years."
Though on paper Terence remains executive chairman, and Ena the general manager, an heir apparent has already emerged from the ranks of the siblings, and from all accounts, he is wasting little time in stamping his authority on the company.
"He has gone through an apprenticeship and he now chairs our meetings and makes strategic decisions," notes Terence in commenting on the incremental transfer of power specifically to his son Chris, and more generally to his children. "He is the de facto CEO, and will officially take that position in a matter of months," he continues. " I want to set a date to be out of here."
An electromechanical engineer and MBA graduate, Chris emerged the favourite candidate to succeed Terence not only because of his sound academic credentials, but the way in which he has personally immersed himself into the business. From food and beverage management, to operations, to project and property management, he has run the full gamut of experience.
Ena Jarrett, the general manager of Altamont Court, examines a room that is being tidied by head housekeeper Carmen Brown. In background is housekeeper Marcia Ashman. Chris is not the type to shy away from challenges. He recalls how a few years ago he was thrown into the deep end as food and beverage manager "without experience", but was able to quickly move up the learning curve by attending seminars and taking courses at UTech. He eventually attained certification as a hospitality management trainee.Initiatives like these, aimed at preparing himself for leadership of the family business, have not been lost on the patriarch.
"He is the most qualified one," says Terence. "He will make a good CEO."
Terence Jarrett (right) chats with Egbert Robinson, the head of security at Altamont Court and one of its first employees. Robinson joined the hotel staff at inception in 1982. But Terence explains that consensus building has been the key factor in the success of the hotel, and expresses hope that this feature will continue to be part of the corporate ethos once his children are fully in charge of the business."We have always operated by consensus," he stresses. "We do not make decisions unless all agree; if not we sleep on it and come back until there is agreement. This is the culture that I have inculcated and I am confident that it will continue."
The manner in which the decision was taken to develop Altamont West in Montego Bay in 2005, stands out as a good example of how this policy plays out in investment decisions.
The idea for the expansion away from Kingston's business district and into the heart of Jamaica's tourism mecca was first placed on the table by Donahue, the one who is regarded as the most bullish among the siblings.
For weeks he was able to get only very little traction as the idea was generally met with scepticism.
Chris explains the ambivalence towards the plan by pointing to concerns about pricing, financing, and critically, management issues.
"One of the first concerns that we had was who would run the hotel in Montego Bay," he recalls. "None of us wanted to be uprooted from Kingston and we did not want to consider somebody from the outside, because we were not sure if we could find someone who would think and operate like an owner."
After vigorously weighing all the risks against the opportunities of taking advantage of a property that could be snapped up on the cheap, a consensus was reached that pointed towards the investment.
As it turned out, Donahue - the project's conceptualiser -was selected, again by consensus, as the most well positioned family member to be dispatched to the north coast city as general manager of the new property.
The cautious and consensual approach to the investment had its merits. In the first place, it strengthened the hands of the Jarretts in negotiating the purchase price for the property. The owners were seeking US$2 million to part with the 27-room 15,000 square- foot building that once housed the Belvedere Hotel on Gloucester Avenue in Montego Bay, but which had been closed for years and had fallen into significant disrepair. In the end, they accepted US$675,000 from a hard-nosed, tough-talking family that had very little room for miscalculation.
The Jarretts spent another US$1 million on renovation and to add four rooms, conference facilities, and features like piped music throughout the building. The project time was significantly extended by the scale of the renovation that had to be undertaken.
Terence and Ena are convinced that the consummate ease with which their children have transitioned into management roles validates their long-standing practice of insisting that their offspring be exposed to all aspects the business - from as far back as their high school years.
"We brought the children into the business from very early," notes Ena. "Now their father wants to retire, I am sort of phasing out and they are taking over."
But as they prepare to take the Altamont brand to a new level, the Jarrett siblings are only too aware of the shifting and challenging environment in which the business has to operate. To begin with, they are at best, modest players in an industry that historically lacks a culture of indigenous ownership. To compound this disadvantage, the market is increasingly being dominated by mega-hotels and big international brands.
To date, the Jarretts have survived by embracing the only end of the business that is available to investors that lack the capital, branding and marketing power of the big players: the niche market, boutique-type service.
Additionally, they have worked to build a reputation as owners who welcome with equal enthusiasm locals and overseas Jamaicans holidaying here, as well as the more traditional guests from Europe and North America.
Donahue says that by wooing local holidaymakers and business clients, Altamont is able to minimise the impact of the seasonal cycles and vicissitudes that are a feature of the traditional travel market.
"Our strategy is to focus on locals and business clients," he says. "During the traditionally soft tourism periods we do not experience big dips in occupancy."
One cost-saving decision that this general manager has made at Altamont West is to outsource its restaurant services rather than struggling to maintain a time-consuming food and beverage department at such a small property. The decision has helped to trim staff to ten, and free up the manager to focus all his attention on customer care and marketing.
"The model is working," he beams. "It's a small hotel but the occupancy is good and we are able to pay the bills. Because the restaurant is operated by someone else we are able to keep our workforce to the minimum."
Altamont Court hotel in Kingston is the bigger of the two properties, with 59 rooms, a restaurant, swimming pool, and a small business centre. Like its sister hotel in Montego Bay it caters to all categories of guests, but has become a favourite for business travellers and vacationing overseas-based Jamaicans. Here, there are 58 members of staff.
Chris estimates that generally, between sixty and sixty-five per cent of the guests are foreigners, and points out that current occupancy of around 65 per cent represents a noticeable drop from the over 80 per cent that is normal for this time of year.
"About 65 per cent of our business is from overseas," he says. "We are trying to change this. We intend to focus on the local market, and have introduced VIP guest programmes to drive the business."
He attributes the below-par performance to a combination of two factors: the global downturn in tourism, and recent problems with the company's telephone service that made the hotel inaccessible to potential clients.
"The telephone problem is behind us now and we are working our way back up," he says.
Like other hoteliers in Jamaica, the Jarretts are concerned that the big buyers, exploiting the current softness in the travel market may be driving down room rates to the point where these prices may become uneconomical.
"There comes a point where one has to decide if it is worthwhile filling the rooms at those discounted prices," Chris argues. "It is a precarious position for the industry," he adds.
There is recognition across the industry that in this downturn, it is the small, independent hotels that are particularly vulnerable. The Jarretts too recognise this danger, and argue that they also want to avoid a situation where these external challenges are worsened by any internal deficiencies within their own organisation.
Chris, as the CEO-in-waiting has vowed to be vigilant against complacency, and is championing what he calls "professional approach to management" as a feature of his leadership of the family business going forward.
"We are trying to get away from the strict family management culture," he declares. "We want to bring in fairly high-level individuals who are as dedicated to the product as we are and as committed to performance of the company as we are, and to divest the Jarretts of some of their responsibilities."
The employment of a food and beverage manager to take over functions for which Chris himself was once responsible is an example of this principle in action.
In going forward, the family is also committing itself to strengthen the unwritten "code of conduct" that it claims has been helpful in engendering esprit de corps within its ranks.
"In this regard we try to operate as though we are not a family business," explains Chris. "We follow a code of conduct where we respect each other's line of authority. When issues arise there is a line of demarcation and we go through the person who is in charge of the particular area."
However, as Anthony points out, this unwritten rule does not prevent family members from doing what needs to be done even if it involves going outside their official remit.
He clarifies: "If I come to the front desk and there is a guest who needs help I will deal with it. Wherever needs help I will deal with it, and the same is true for all of us."
Anthony is the eldest of the siblings, and is in charge of all issues relating to the company's banking relationships. He rejoined Altamont Court in 2001 after a 10-year stint in the USA, and having run, in the 1980s a small car rental company that used to be part of the Jarrett family business.
He says his current position allows him "to see the company grow, to see both the incremental changes as well as the big changes".
One of the shifts that has become noticeable in the business model is the small steps that the Jarretts have been taking towards diversification of the revenue stream. This has come with a $100-million price tag, first with the acquisition of an office complex close to Altamont Court, and then the purchase of forty per cent of the office space on the Billy Craig Building that sits on the property that adjoins the land on which the hotel is located.
"We are moving into the commercial rental business," notes Terence.
To help fund the acquisitions the family recently signed an agreement for the sale of its short-term rental, nine-unit apartment building in Cherry Gardens, St Andrew.
This move falls within the vision that Chris and the others share about the future of the company.
"I would like to see us diversify into other types of businesses," he notes. "Any business, let's look at them and discuss them."
But Terence says that any such radical departure from current business lines as will have to be undertaken by his children with Chris at the helm.
"Chris will have to take the expansion to the next level," he notes. "I would like to continue having an input in the business until we have drastically cut the indebtedness."
But Donahue likes the hotel business, and apparently would like to see the family deepen its Altamont brand in this industry before venturing too far out.
"We now have the grasp of the hotel business," he says. "We believe that Port Antonio might be an option for expansion."
For now, however, this hotelier who once served in the US Air Force will continue to rely on excellence in service delivery to maintain Altamont West's competitive edge in the market.
He cites recent positive stories on his hotel in the Miami Herald and trade publications as evidence that the high-quality service has not gone unnoticed.
His brothers are also taking note, and have given him thumbs up for his management of the Montego Bay property.
"Donahue is the big reason for the MoBay's success," says Anthony. "He has the ability to reach across lines and generate business. He is very good at marketing."
Terence also says his son "has done a good job in Montego Bay" and that he is given significant latitude "without anybody having to second-guess his decisions".
But in mulling the future of the Jarrett family business, Terence reverts to the fundamental position that he has staked out from day one.
"This is a collective effort," he emphasises. "How well they do will depend on how well they continue to work together. In the end though, I believe they will, because this is what I have inculcated in them
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