CEO interview: Sonu Shivdasani

Sonu Shivdasani, the founder and CEO of Six Senses Resorts & Spas, tells Claire Ferris-Lay how he managed to create some of the world’s most luxurious hotels and still stay green.

Sonu Shivdasani orders a salad cooler and green banana juice, sits back and crosses his legs up onto the chair. With his collarless shirt and loose trousers one could be forgiven for mistaking Shivdasani as a tourist rather than the founder of the hugely successful Bangkok-based hotel management company, Six Senses Resorts & Spas.

That is, until a regular Six Senses holidaymaker wonders over to tell Shivdasani how much he is looking forward to catching up with him and his wife in February, when he’ll be holidaying at the couple’s Maldives resort.

The guest, Shivdasani later tells me, will spend between $20-30,000 on his holiday to the Maldives. Another Russian family he says spent $114,000 in one of the resort’s jewellery stores recently. Both examples are typical of Six Senses clientele who are usually high flying executives that enjoy luxurious boutique-style hotels in exotic locations.

This is exactly what Shivdasani and his Swedish-born wife Eva set up to do in 1995 when they opened their first resort, Soneva Fushi in Mauritius. Shivdasani, who attended one of Britain’s most elite schools, Eton, before studying at Oxford University, was a regular visitor to the Maldives while he was still at university. In fact it was his bad experience on one of the island’s resorts that inspired him to enter the world of hospitality, he tells CEO Middle East.

“Eva and I used to go on holiday to the Maldives [when] I was at university. It was a beautiful environment but in those days the standard of hotels was really bad as the incentive was to create the ugliest hotels possible,” he laughs.

“Italian and German operators who first went there would go to the island and lease from the government for $1,000 a year. They would say ‘you build us 100 rooms, we’ll take the rooms and we’ll give you a guarantee of 80 percent occupancy and here is an advance for the first year’. It was called a bed contract,” he explains. “There was no incentive to build anything of quality because your revenues were capped… and you didn’t want people to eat or drink too much because it was all inclusive… The only fresh thing you would have is fish, which was burnt.”

Today, Soneva Fushi, a 100-acre island, is the flagship development resort for the firm’s exclusive brand, Soneva (an amalgam of Sonu and Eva), which also includes a second resort in the Maldives, Soneva Gili and a third, Soneva Kiri in Thailand. The brand regularly sweeps the board at travel awards and has a host of fans including celebrities such as Madonna.

Other brands under the Six Senses umbrella include Evason Hideaways, Six Senses Latitude, Six Senses Private Residences and Six Senses Destination Spas covering twelve resorts from the Maldives to Vietnam. While Soneva caters to the “ultra rich” with a starting price of $5,000 upwards, a night’s stay at an Evason Hideaway resort will set visitors back around $150 per night, so the brand caters to a variety of guests.

But staying at a Six Senses resort isn’t just about lapping up the luxury. The company is also renowned for its approach towards sustainability and the environment. While Shivdasani remains the public face of the company, Eva — a former Vogue model — is its “conscience”, providing each resort with environment-friendly, recycled products from the toiletries to the building materials.

As well as sourcing the most sustainable materials for all of their resorts, the Shivdasanis also try to employ as many local staff as possible and also offer 0.5 percent of each hotel’s total revenue to support social and environmental projects on a local, national and global level. For example, at the hotel we meet, Zighy Bay in Oman, the tiny village that shares its beach with the resort enjoys a regular supply of water and basic food while its villagers are taught English and hired as drivers to work within the resort.

The brand is already carbon neutral and by 2011 Shivdasani hopes to turn off the diesel generators at its Soneva hotels to become carbon zero. “The environment definitely inspired us,” says Shivdasani as he sips his green concoction, a clear believer in his own philosophy. “Financial profitability doesn’t come by focusing on the numbers; it comes on inspiring your hosts [and] creating a concept that values and inspires them,” he continues. “Then they can create a fantastic experience for our guests, then the guests remain and they come back again and again and that’s what leads to financial profitability.”

His approach is clearly working. Over 30 percent of Soneva’s business is generated by repeat customers. The firm’s core philosophy is one of “intelligent luxury” — a saying the couple coined, which refers to their desire to offer luxuries of the highest standard in a sustainable environment.

Shivdasani admits there can often be a fine line between luxury and eco-consciousness. “You certainly have to be careful about what you market. If you market the ecology people say ‘why I’m spending so much for an ecological resort?’ and people sometimes perceive ecology as cheap so what we try [to do] is promote our intelligent luxury. It is indeed luxury but still sustainable.”

Six Senses has been better insulated from the global economic downturn than other hotel brands. Numbers were down around 20 percent across the board in the third quarter of 2009, says Shivdasani. While he notes that this year’s winter months have been weaker than previous winters he adds that he expects to see an increase in the number of bookings for the last quarter of 2009 as Europe’s bad weather continues.

“This winter has been softer than we’d hoped,” he says. “Rather than a recovery, this winter will actually be worse than last October, November and December, which could be because people had already booked their holidays in July and August and they didn’t cancel when Lehman Brothers went bankrupt.”

A firm believer of the “W” shaped rather than the “V” recovery, Shivdasani is under no illusion that the next two years are likely to be tough for the hospitality industry as a whole. His strategy is to look to emerging economies such as India, China and the GCC to make up for losses felt in Europe — Six Senses largest clientele. “It’s going to be tough for the next two years and all we can do is try and get more market, claw more market share from our competitors. Look at new markets in India and China to stimulate more business,” he says.

The hotelier also plans to increase its market share in the GGC. In addition to Zighy Bay in Oman, Six Senses also operates a Hideaway property in Ma’In, Jordan and a spa in Port Ghalib, Egypt. It also plans to open a spa at the Al Bustan Palace in Muscat this year as well as open an additional hotel in Petra, Jordan in the near future.

Shivdasani also hopes to increase its GCC clientele by five percent. “Overall it’s (the GCC market) is still relatively small but we would like to build it up to about five percent. If we can get five percent that would be a good share because it’s a small market but very affluent. If it’s five of our guests it will most probably be eight to nine percent of our revenue because the average spend is higher and they take the bigger villas.”

Despite the downturn Six Senses has managed to maintain its pipeline of new hotels. “The supply is a bit like a tanker, even when you turn the engine off you still continue to cruise along for another six miles and we have that at the moment when the engine has been turned off, new openings are happening because they were conceived a few years back,” he explains.

Although the Shivdasanis are keen to continue growing the brand, both are aware of losing their carefully crafted identity so plan to eventually operate over ten clusters across the world. “We will eventually have ten clusters with five to ten properties rather than having 50 properties in 50 different countries spread out,” he says.