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In this episode of all about business, James Reed is joined by Sir Rocco Forte, titan of the luxury hospitality and hotel industry.
They explore his incredible journey as an entrepreneur within a family whose history in hospitality spans over a century. They also delve into how he has prioritised community impact in his work as well as maintaining a family-oriented approach to make something special that lasts.
02:23 building iconic hotels
09:43 the Forte family legacy
11:47 challenges and triumphs in business
21:46 expanding the hotel empire
38:54 family involvement in the business
43:53 leadership and decision-making
01:00:25 economic views and government policies
Follow James Reed on LinkedIn: https://www.linkedin.com/in/chairmanjames/
Find out more about Sir Rocco Forte and Forte Hotels here: https://www.roccofortehotels.com/
[00:00:00] James: Welcome to All About Business with me, James Reed, the podcast that covers everything about business management and leadership. Every episode I sit down with different guests of bootstrap companies, masterminded investment models, or built a business empire. They're leaders in their field and they're here to give you top insights and actionable advice so that you can apply their ideas to your own career or business venture.
Being successful in hospitality is incredibly tough, but how do you keep a focus on quality and authenticity whilst expanding into multiple new locations? Joining me today on all about business. It's Rocco Forte, Titan of the luxury, hospitality, and hotel industry. He's here to talk about his incredible journey as an entrepreneur within a family whose history and hospitality spans over a century.
He tells me how he has prioritized community impact in his work, as well as maintaining a family, family-oriented approach to make something special [00:01:00] that lasts
well today on all about business. I find myself in the eternal city of Rome and I couldn't be more delighted to be here talking to Rocco Forte, who is the chairman and chief executive of the Rocco Forte Hotels. Company and, um, we're in his amazing hotel Dusi, uh, which I think must be the best hotel in Rome.
Um, I've been fortunate enough to stay here for the night preceding the podcast and enjoyed it hugely and would recommend it to anyone who's coming to Rome. And I'm interested Rocco. Firstly, welcome to the podcast and thank you for having us. But, um, I'm interested to begin with, you have built sort of iconic hotels around the world, um, this one that we are in, but also the URA in, uh, Sicily, um, which is also particularly famous.
What is it that makes a hotel a Rocco Forte hotel? What is it that you seek to bring [00:02:00] to the business of hotels that is uniquely yours?
[00:02:03] Sir Rocco: Um, well, it, there's, um, there's certainly a culture to the, to the company that we've developed, which pervades all, all the hotels that, that we have. I mean, our hotels tend to be individual.
Um, um, so they each have their own personality. There's a strong sense of place, uh, in our hotels. That was one of the first things we tried to do when we, uh, when we set up, uh, the company in the first place. And my sister Olga, obviously has, um, a big impact on that, on that aspect of things. She looks at every hotel, looks at the situation it's in, and, um, and decides how we, they should, uh, you should, uh, she should make it feel local.
And even though you, and even when we use outside designers, uh, she obviously follows and works with them to, to create a, a same. [00:03:00] Similar feeling in, in the hotels. And I think there's, there's a sense of, uh, detail in the decor, which you don't get from the big, um, decor, uh, big chains that do decoration in hotels, they tend to do the same thing over and over again.
Um. As an individuality, uh, with, with the hotels. But most important I think is, is the service that we give in the hotels. 'cause people always talk about how beautiful, uh, you know, how much money's being spent on the rooms and so on. But the underlying thing in hotels is the service you give to the customer.
And, and in luxury hotels, uh, that's a thing that, that's the, the atmos importance. The customer's gotta be, feel like an individual service has got to be personalized as much, as much as possible. And yes, you can get a sort of cookie cutter approach to service, uh, but there has to be a genuine warmth, [00:04:00] um, and, uh, feeling towards the guest, which is what we try and instill, uh, in our hotels.
I mean, we have, um. Every member of the staff we take on is inducted. They learn about the family, the history of the family, history of the company, um, the, the, the hotel itself and, and the destination in which the hotel is in. So, so they, they have a fam f familiarity where everything, they feel much, uh, a very strong part of, of, um, uh, of the whole, the whole process.
And they generally believe, uh, in, in the project. Um, um, you know, at the end of the day, the people who are lowest paid in our organization, the ones directly in contact with the customer, um, and, uh, and so, you know, they have really got to believe what they're doing. They've gotta want to come to work, enjoy [00:05:00] coming to work, and, um, and they're the ones who actually are, are gonna make and make the, the stay correct and right for the customer.
[00:05:10] James: Well, that's so interesting. I mean, there's so much I want to unpack from what you've just said. Yes. Uh, um, I mean, you mentioned your sister, Olga, I should say. She's the deputy chairman as I understand it, the rocker. Yes. Yeah. So you worked together, um, and have done for many years. So this is a, a family enterprise through and through as far as I'm aware, but also our experience staying here.
I stayed with my wife, Nicola last night was exactly around the service, the people we met. Were very warm, helpful, and friendly, and we remarked on it actually. And it was interesting this morning, leaving the room, one of the, one of the people who cleans the rooms, open the windows in the corridor, let fresh air in, and then called the lift for us, which I'm, I, I think is unusual.
I've never had that happen before in a, in a hotel. So, so that sort of works. And, and I'm interested in the, the aspect of family and culture and service because [00:06:00] you say you induct people and you tell 'em about the family. Are you, are you sharing specific family values with, with your team or expectations that come your family?
Certain values that, you
[00:06:11] Sir Rocco: know, because I think we're naturally hospitable people. The, the, the, um, you know, if, if someone comes into your home and stays in your home, you want to look after them, make their stay. Uh, doesn't, you make a, you make a big effort. And so that should be what we do with every customer that comes into our hotels.
The, the, the, the thing about family, um, is important. Now, my children involved in the business, they did the same as me and in their school holidays and you, where they work part of their holidays, uh, in the various hotels and various departments, uh, and also in other, in other establishments outside of my, my company.
Uh, and they developed a passion for the business out of that. I didn't force them to come into the [00:07:00] business. Uh, they wanted to come into the business, um, because they like, they like it. They like what they do as a family, we're. We're in the hotels on a regular basis, so, so people know us, they see us, they know what we like, um, that we, they, they see the, the care we take and uh, and concern we have for the service we give to our customers.
And that and that. Pervades through the organization. Uh, also they know who they're working for. They're not working for a big organization. People change all the time. They're working for some people who they know are gonna be there, uh, for the longer, for the longer term. And I think that's very important.
Um, and I think in our sort of business, um, it's very important for someone like me to be visible. Um, and um, you know, I do. Uh, I appear quite a lot in the press. I've done television of various [00:08:00] for various different reasons, podcast necessarily. Sounds good. No, I agree. Not necessarily, not necessarily about the industry, but as a sort of in, in a way, an excuse you.
I did triathlons for a long time. First of all, I was a new kid on the block, then I did triathlon. You're an
[00:08:15] James: endurance athlete, aren't you? So, yeah. And, and that was Iron Man. That was a hook, you know, to
[00:08:20] Sir Rocco: start talking about hotels. Then now I do quite a lot on politics and that's, oh, I
[00:08:25] James: see. And then you can talk about hotels as well.
Yeah. That's another, another,
[00:08:28] Sir Rocco: another, another hook. And so actually, if staff, uh, read about you in the newspapers, you know, there's a certain sense of pride, obviously, right. They've gotta read the right. Yeah. Hopefully. I'm sure that's the case. Yeah. And you know, they feel they're part of something, you know, because we're quite a small organization really, but I think we make much bigger noise Yeah.
Than normal organization. They punch above your weight as they say. Yes. Yeah. That's interesting. So, so I think. You know, the family aspect is important.
[00:08:58] James: Can I ask about your, your sort of [00:09:00] origins? 'cause you grew up in a hotel family, I mean, and your grandfather was also called Rocco, wasn't he?
[00:09:06] Sir Rocco: Yes. Yeah. He
[00:09:06] James: started, I think in Scotland with ice cream shops.
Is that right?
[00:09:10] Sir Rocco: Yes. So you've
[00:09:11] James: been doing this for generations, you forte four. Yeah.
[00:09:13] Sir Rocco: Well, in, so can we,
[00:09:15] James: can you just tell us a little bit about that background and sort where you came from in a sense?
[00:09:19] Sir Rocco: I think, uh, I think there's a sort of, um, in my ancestors, if I can call them that, but, uh, you know, my grandfather, uh, was born in a little village where my father was also born, uh, in, um, the casino.
Between Rome and Naples, which at the height of its sort of, uh, power, if you call it that, uh, had four, a population of 400. Uh, so it was a very small place. Yeah. And at the age of 14, and my grandfather went to the United States on his own, came back when he was 21, uh, with enough money to build a house in the village and, and start a [00:10:00] family that he couldn't make ends meet.
And that's with how, uh, he went to Scotland in 1911 on my, on my mother's side. She was born in England. Mm. Uh, but of Italian parents who came after, after the first World War. And um, and, uh, her father actually walked from the north of Italy to England working on the way to get to, to England.
[00:10:24] James: That's real determination.
Her mother,
[00:10:26] Sir Rocco: her mother ran a delicatessen shop in Soho right. Until she was, uh. 80, 83 or 84. Then went to Venice where she originated from the Benito and started buying apartments and letting them, so
[00:10:40] James: she started a new business at 84? Yes. That's very good.
[00:10:43] Sir Rocco: And then my mother dragged her back to, to England at, uh, at, uh, the age of 90 90.
And, uh, and she lived with my parents till she died when she was 104, and my father. So there's
[00:10:56] James: no way you weren't gonna be an entrepreneur with, so assessment, sort [00:11:00] of resilience? I'd say in, in, in, in the genes. If, like me, you run a business or manage a team, you'll know how important it is to hire great people.
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[00:11:46] Sir Rocco: My father was, you know, extremely entrepreneurial, um, in many ways, not just in sort of the terms of the industry, but he sort of, he opened the first Midway service area he went into in-flight catering at airports.
Airport [00:12:00] catering.
[00:12:00] James: He was the first to do that too, wasn't he?
[00:12:02] Sir Rocco: Yeah. Well, when, yes. In the uk, very much so. And uh, and then. And he, you know, he was one of the sort of, um, he, he was one of the first people who the sort of fifties and early sixties recognized the value of companies where their assets were undervalued on the, on the balance sheet, right?
Always related to industry. Which he bought and then, and then used to, he used to say attach 'em to the donkey engine, which is the machine, the machinery, the donkey engine called it The donkey engine. Yes. Right. Machinery of the company. And they sort of, oh, right. So that was the sort of back office machinery they got, they got sorted, sorted out, and, you know, uh, so what
[00:12:46] James: sort of companies were, are you thinking of?
[00:12:48] Sir Rocco: Well, I mean things like, well they bought the Waldorf Hotel, the first hotel. Then he bought from the, the own, uh, EP Save Steel owned the Waldorf Hotel. Um, he did a deal on [00:13:00] that. He did a sale in leaseback on that, on that. It was first sale in leaseback at sort of 3% yield and then ended up owning it and then bought it.
And then we bought it back, um, at the Bri and Primer, which was a sort of, um, um. Catering come up. Market catering did a lot of a city, uh, city business. Um, uh,
[00:13:25] James: did he buy Little Chef?
[00:13:27] Sir Rocco: Uh, no. Little chef came, came with a merger with trust houses. Oh, okay. But it was, it was significantly developed. Uh, during, uh, from then, from from then on.
Um, uh, so he built
[00:13:40] James: up the Forte Group and then it was merged with, he merged, merged become Charles House Forte. Yes. And that,
[00:13:45] Sir Rocco: and that, uh, then it was a big row and he ended up, you know, becoming chairman. Right. Chief executive actually, because they didn't, he didn't make himself chairman. Right. He got Peter Thony Craft, who's a [00:14:00] friend, you know, who was a government who'd been chance of checker at one time.
Oh, okay. He became chairman. He became chairman.
[00:14:06] James: So what was the big row? What was that? Well,
[00:14:08] Sir Rocco: um, Crow though, who was the chairman of Trust Houses. Right. Um, had said in the agreement, uh, the merger agreement that he would retire after a year
[00:14:18] James: Right. As
[00:14:18] Sir Rocco: man called, um, Pickard, uh, who, who was the chief Executive Trust?
He was made chief executive. They had the company secretary and the finance director.
[00:14:27] James: Oh, I see.
[00:14:28] Sir Rocco: So, and the, and the deal was that my father would become chairman after a year. Crowder started reneging on that. Right. So my father then got busy and, uh, and managed,
[00:14:39] James: sorted it out one way or another.
[00:14:42] Sir Rocco: Got his own team in.
They, they engineered a take of a bit by breweries. Right. Uh, which failed and therefore they had to resign. And my father then Oh, took over. So it was quite complicated. Yeah. Because very different companies, you know, uh, trust us. Very bureaucratic and following. Yes. Um, [00:15:00] those sort of lines of approach in management, whereas my father's is much more entrepreneurial in his approach.
So,
[00:15:06] James: so you mentioned culture earlier. You have that problem, don't you, when you put two companies together with very different cultures Yes. Which one's gonna prevail? I suppose so. And yours did in in that instance, in the, yes.
[00:15:15] Sir Rocco: And I mean the end, you know, we had a hundred thousand employees in, in Trust 40.
It's a big, big group. But as a family, um, we gradually diluted and we had with right, with the merger particularly, um, 'cause my father. Had in the, in the 40 company, which went public in the sixties, had, um, had two, uh, two tier share systems. Right. So he controlled it, but that went away with, with the trust houses merger, and I think his shareholding dropped to below 20% then were rights issues.
And one thing another, over the years we had about 5% when Grenada made the takeover a bit.
[00:15:54] James: Yeah.
[00:15:54] Sir Rocco: So, so, and you,
[00:15:56] James: you were at the wheel when that happened? Yes. That must have been a bit of a, a [00:16:00] battle or a shock for you, was it? It was, but I mean, we, we, so what happened? What happened? So you had this business, 'cause you'd become CEO at this point.
Yes. Taken over was the chairman
[00:16:09] Sir Rocco: and CEO. You were both.
Well, I mean, this, this bid bid came outta the blue. Yeah. And, uh, so we started seeing how we could defend ourselves. The, the, um, thing, of course about a take of a bid. It's about, uh, it's about creating value for the shareholders. So yes, the end of the day, if you force a force, the bidder to raise his bid, generally speaking, you've created more value.
And the shareholders, certainly the institutional shareholders, we look at that and generally accept, accept the bid. So it was about forcing the price up. Um, and which we did, and we did, we pretty unconventional in our approach, right, in our approach. Uh, because, you know, you have the, the bidder makes an offer, then you make a reply, then he makes a, a subsequent, [00:17:00] uh, reply to your reply and then you make a final reply.
Um, and. We maneuvered in, in a number of different, we very unconventional ways. Actually. Some of the, some of our advisors were very, not very convinced. Anything you wanna
[00:17:15] James: share?
[00:17:17] Sir Rocco: Convinced and, and, and, uh, but, but really you got the price up. The price up. So, and, and funny thing was I stood in front of the screens and saw regard a share price.
Tumble as a result of the increased profit. 'cause people
[00:17:31] James: knew they were paying more and more for your business. Yes.
[00:17:34] Sir Rocco: And, and so the shareholders who owned shares in Grenada
[00:17:38] James: Right.
[00:17:38] Sir Rocco: Went into the market, bought Grenada, pushed the price up. Right. And it was part cash, part share bid. Yeah. So that made it valuable.
And all the institutional shareholders side to sell the individual shares about 15%, including our 5% hadn't agreed to, to sell. Right. But obviously you were out number majority. Yeah. So, [00:18:00] so, so that went, that went. And I, um, you know, which was sort of, I had a big ambitions for the group and I could see it and I wanted to rationalize it.
Yeah. Because it, in too many things, all demanding capital and we couldn't do them, do them all. Um, anyway, so it was a big, it was a big blow. And I remember coming back from the city, uh, to, to high Hoban where we had our offices. Um, and um. There was a whole crowd of, uh, it was very high profile. Yes. The whole thing.
Articles, I remember it in 19 article, article was in 1996
[00:18:35] James: or something like that. Nine five. Yeah. At the end of 95, 96. Yes.
[00:18:39] Sir Rocco: And, uh, and there were all these television cameras and sort of microphones were thrust in front of me and said, and said, and the, the, um. They said to me, what are you gonna do now?
Yeah. And uh, I remember for some reason I remember MacArthur, you know, in the Philippines. He said, I said, I will return. [00:19:00]
[00:19:00] James: And you did almost immediately. Didn't you start RF hotels as it was to begin with?
[00:19:06] Sir Rocco: Yes. 'cause I couldn't use the four. Well, that's what I remember. Yeah. Because they had the
[00:19:09] James: name. Yes. So how did that play?
'cause it, it must be strange, someone else owning your name.
[00:19:14] Sir Rocco: Yeah. Well it was, how did you get it back? What happened? And I was rf uh, hotel's, rock Forty's, new hotel camp.
[00:19:21] James: Right.
[00:19:22] Sir Rocco: Strap line.
[00:19:23] James: Right.
[00:19:23] Sir Rocco: And um, well, compass ended up with a name because it was a
[00:19:28] James: catering company. Yes. Right.
[00:19:30] Sir Rocco: And because the. Um, the, um, you know, they just broke up.
The company actually sold it for less than they paid for it, so it was completely ridiculous, uh, exercise altogether. Um, and compass in, in, in really in honor of my father. So they, they didn't, weren't using the name? Yes. And they gave it back to us.
[00:19:52] James: They gave it to you? Yes. Oh, that's jolly decent. Yeah. Yeah, so,
[00:19:55] Sir Rocco: oh, that's good.
A guy called Mackay was then chairman and, and [00:20:00] he decided to do that. So it was very
[00:20:02] James: So you then got going again with your sister? Yes. Was originally
[00:20:07] Sir Rocco: because during the take of a bid, Grenada had said, um, uh, the city didn't think they could run five star and four star hotels and they should sell them. So I thought, well, um, why don't I try and buy them, buy these hotels back, or some of them back?
Um, but it took me too long. I raised a billion in the city to, to do that. Yeah. Um, uh, and uh, by that time, gr changed his mind and Right. And so on. So I wasn't, I wasn't able to do that. And I said, well, what do I do now? You know, I was 52, um, 51. Yeah. Um, and, uh, you know, I'd worked all my life. I didn't. Yes.
And I always say that, you know, I had a bit of money out of there because I, my father had given me shares in the business and so on. Um, uh, but [00:21:00] I always say not enough to keep my wife happy, so, right. So I had to, I had to go into business again, but, but of course I wanted to, I wanted to go back into business and I decided to.
Um, to start a luxury hotel group and I spent a year basically trying to find, find a hotel and eventually, uh, the Balmoral Hotel came along, which, uh,
[00:21:26] James: in Edinburgh?
[00:21:27] Sir Rocco: In Edinburgh, yeah. Which Trust House 40 were running on a management contract. The Bank of Scotland had got it in a bankruptcy, uh, and we turned it around and they sort of coincided by looking for it.
They put it on the market. So, so I managed to buy it eventually after sort quite a long negotiation and um, uh, and I took it back. From, from Grenada, which was quite a satisfy. Satisfying, satisfying, satisfying. Starting there. Yeah.
[00:21:57] James: And,
[00:21:57] Sir Rocco: and, uh, and then, uh, [00:22:00] two months later, the chief executive rang of, of Bank of Scotland rings me up and says, um, and says, Mr.
Forte said, uh, you'll be wanting to expand. And I said, yes, yes. I said, and he said, well, you'll need some money to expand. And I said, yes, of course. He said, well, how does 50 million wow sound to you? 20 years money? No amortization of 1% of a base. And, and so I had to pretend not to be very excited about,
[00:22:32] James: kept calm at this point.
[00:22:33] Sir Rocco: And so I said, you know, do better than that. I said, lemme think about it. I said, so then I rang him back a day later and said, of course I accepted it. And sort of that effectively doubled my capital because I, I had, um, I. Great to get a 25 million, which I, I put in my sister Olga, put in five, I think, and my father, uh, put in another 25, no, [00:23:00] 20.
Uh, so I doubled my capital every night effectively. And, um, so which was, which was your next
[00:23:07] James: hotel? Which was the second one? Next two
[00:23:09] Sir Rocco: toe. Um. Next hotel. Well, I made, I made a mistake. I thought, I thought with devolution and so on. Right. Cardiff would become a Oh, I see. Okay. There was an opportunity to build, I built a hotel in Cardiff.
Right. And one in Manchester. Uh, at the, at the same,
[00:23:29] James: at the scene. But Wales was the only country in Europe without a five star hotel. You tried to break that Yes. Tradition. It
[00:23:36] Sir Rocco: didn't, uh, but it was in the Bay area of Cardiff. Right. And, uh, and actually building that hotel helped the Bay Area to, to develop, you know, the Parliament book there, uh, and so on.
And I couldn't make it work as a five star hotel. You couldn't get the rate Right to justify the service you, you have to give. So I sold it and Roger Morgan, who's then the first [00:24:00] minister mm-hmm. Or whatever they call them in Wales. Something about that I think. Yeah, yeah. The, the wrote me a handwritten letter.
Right. You know, and he was a socialist saying Thank you very much for what you've done for Cardiff.
[00:24:11] James: Okay. Which
[00:24:12] Sir Rocco: was rather, you know, I was quite taken aback actually receiving, receiving that, that letter. Yeah. Um, then really the, the we'd opened, um, in 2000 we opened Rome, this hotel right. And Florence, this hotel had been turned into offices before the war, uh, had been the headquarters of Rye, Italian television, uh, who'd left it eight years before and had been vacant.
And through a cousin of mine, uh, who knew the owners of the property, introduced me to it. And I couldn't believe it when I, I walked through from the vino and you see this courtyard in this garden, and it was a February, sunny February day, and I said, this is the most marvelous place I've ever Yes. Ever seen.
It took me a, a year and a [00:25:00] half to persuade the owners to let me convert it into a hotel. Yeah. Uh, which I did. And it cost the time it cost. FIF cost. They put did some of the infrastructure work. Yeah, they cost me 15 million. Right. Euros equivalent. 50 million Euros. Still the lier then. Right. Which I borrowed from the Bank of Ban, which existed.
Now it's part of Unic credit. And I repaid the money in three years. It's a huge 'cause the hotel did
[00:25:28] James: so well. I can see why. I mean, it's stunning.
[00:25:31] Sir Rocco: Uh, my God, especially, and you know, it's unique now all these other hotels in Rome have opened and are opening. Uh, and you know, some customers last year went to try some of the, they've all come back right?
'cause there's nothing really like this. Yes. In in Rome or anywhere. Actually, in many ways it's, yeah. So this was a unique, it's rather a unique hotel actually. And this put me on the map international's first major international city. Um, particularly with the American market. [00:26:00] Um, and I've, I've, I've been, the American market is of course the most important market for luxury hotels.
It, uh, in Italy it's 55% of our business. US company as a whole, it's 45, 40 5%. And so the travel agent community, uh, luxury travel agent community in the states is, is very important. And I'd always had a good relationship with a personal relationship with a lot of the top travel agents. Um, and I remember going to see Verity Wilson after I'd bought the, um.
The Balmoral Yes. With the plans of what I was going to do, you know, on hotel. And she saw me because, you know, the past, in the past relationship. And I had the plans on her desk showing her what I was going to do.
[00:26:47] James: That's good.
[00:26:48] Sir Rocco: So, so, and they've supported me, you know, and now, you know, they, they trust, uh, they always say to me, you know, we we're never worried about sending a client to your hotels [00:27:00] because we know they're, they're gonna be looked after.
We never have any complaints or difficulties and so on. And if, if they do, of course we deal with them very, very quickly. So, so I've got a big following and we opened a new hotel immediately. They immediately support it and they normally wait to see how it's going and so on.
[00:27:20] James: Got a captive audience in a sense.
Yeah,
[00:27:21] Sir Rocco: so it's, so, um, so there's, there's, and I go, now every year I go, um, I do a road show in the states, and I do usually do five cities in five days and a dinner at each city with all these, the travel agent community, right. I just lean to Brazil where I've done the same thing there in Aldo, uh, and, and Rio and people come in far and wide to attend the dinners.
[00:27:50] James: Right.
[00:27:50] Sir Rocco: Uh, and I sort of, I'm a sort of hero. So
[00:27:52] James: Do you give a speech at the Yes,
[00:27:54] Sir Rocco: yes. I give a speech and tell what we do. So
[00:27:57] James: what do you say to them? Just tell 'em about your next hotel [00:28:00] or?
[00:28:00] Sir Rocco: Well, I tell them a bit about our philosophy, what we've done,
[00:28:03] James: uh,
[00:28:03] Sir Rocco: um, how we look after our staff, you know, the, the importance of service and how we improving, trying to improve that all the time.
And, um, and you know, I was sort of. Like a film star with them. I, I can't really believe it because I mean, after all, so it's the culture 14, 15 hotels.
[00:28:20] James: Well, the culture that you are selling though, isn't it, in a sense, so the staff, you say how you look after the staff, I'm interested in that. What, what do you think you do differently to other?
Well,
[00:28:31] Sir Rocco: I mean, obviously we, we try and, and pay as, as much as, as much as we can. For example, um, in Italy, um, uh. Who's the Minister for Tourism introduced, uh, uh, a uh, a new law, which, uh, if you charge a service charge, uh, and you pay it directly to the staff, the staff are only taxed at 5%. Right. They don't pay any social security costs.
[00:29:00] So it's nearly net in their Yes, yes. In their hands. Um, and the employer doesn't pay any social security costs. And this is, so we've done this Yes. And we've done also done it in the uk, but there they're not the same tax advantages for the staff.
[00:29:14] James: No. They'll charge it. Yeah.
[00:29:15] Sir Rocco: Uh, um, but that puts 10, 11,000, um, euros of pounds net into that.
In, in, in Italy into their pockets, which was a big, big jump in Senate. I was the first person to do it in Italy. Right. Um, and the minister said, will you please, none of the other hotel companies are doing it. And I mentioned it, the minister was at a, an event where I, I described this in a speech and as a result, uh, other, other hotel companies too have been ringing me up and saying, yeah, uh, how do we do this?
And so on and so forth. She's grateful to me. Maybe I should have shut up because we had a competitive No, but it's good for
[00:29:57] James: customers to know in your hotels when the [00:30:00] service C charge goes to the staff directly. And, and
[00:30:02] Sir Rocco: so, so that's, that's been very important. But I mean, the benefits we give them, um, obviously, obviously the, the training, um, you know, we look after and we have, um, a death in service benefit, which is very not usual, certainly not in Italy, which I've introduced in as well, three times salary if someone dies in service because you have a situation where, where, you know, suddenly family is bereft in the wager.
Major wager. Yeah. So that. That creates, gives them, that's a good thing to do. I agree. Um, and, and many and many other things in, um, in, um, Sicily, for example, in ura, which you mentioned, uh, early on, uh, I created this, this hotel, the middle of, basically in the middle of nowhere, it's due South Palama on the coast.
[00:30:57] James: Mm-hmm.
[00:30:58] Sir Rocco: Uh, [00:31:00] 250 hec. Nearly 600 acres of land were built to 18 hole golf courses, two kilometers of coastline. Uh, there was no, uh, there was no economy really in that area. Uh, and we've created employment not only directly 500 people directly employed, but actually in a sort of wider. Area. The, uh, uh, the mayor of Shaq at sort of some years ago now, made me an honorary citizen, and in the, in the ceremony, mm, he, he, in his speech, he said, a thousand small businesses have created thanks to the dur people have come.
Sicilians from ura and Rivera, the next door town have come back to Sicily because there's a place to work. The staff there continually thank me when I go there. So, um, thank you very much. If I, if I hadn't been for this, I'd have had to go and work overseas [00:32:00] or on the continent. They call Italy the continent in Sicily.
Do they? It was as it is. So, so, you know, um, and, uh. So have you, because ho the hotel industry isn't considered by politic politicians because, uh, it's not like a factory. You open a factory in the 2000 jobs and it's small. It's made up of smaller, smaller groupings, but it has as much effect in the local community.
Well, it was ripple effect that you've described Yeah. Is incredible. As as anything else.
[00:32:36] James: Yeah, no, I think, I mean that's, that's the interest, that's why it's so important to encourage enterprise because once one person starts a business that has so many other businesses that potentially feed into and support it.
I would agree.
[00:32:50] Sir Rocco: Yeah. I that's, and that's unfortunately what the current government in the UK doesn't, doesn't understand. They think they keep talking about growth and everything they [00:33:00] do is the opposite to creating
[00:33:02] James: growth. Well, I did notice Roku that. You were opening more hotels in Italy than you were in the UK at the moment.
'cause I mean, obviously your new business began in Scotland as you described. Yes. But now you seem to be opening hotels in Milan and, and Naples, I mean, is, is that for a particular reason? I, obviously you love Italy, but all the business environments different.
[00:33:23] Sir Rocco: Um. They're slightly different. I mean, the, the, the, the, the, the thing about Italy is, you know, it's a prime tourist destination.
There's nothing like it in else in the world because you've got, you know, you've got amazing cultures. Over 60% of the world's artifacts are found in Italy. The, the, you have a good climate, uh, you have wonderful food, and you have a sense of hospitality, which exists in the, in the nature. So, yeah. Of people in this country, which is very different from, from any other.
Any other, [00:34:00] um, country and therefore, and the Americans love it. So a lot of Americans have origins in Italy as well. Um, and, and so the Americans come here in huge numbers. Americans prepared to pay high prices. And so if you open a hotel in the right destination, the right product, you'll get the American market and they will pay the prices, which justifies very good returns on investment.
Um,
[00:34:29] James: the Americans like coming to Scotland and England as well. Yeah, well, Scotland to some, yeah,
[00:34:33] Sir Rocco: to some degree, but not much. No. The same, same degree. Um, and, um, so, so Italy is very bureaucratic. Um, you know, the labor laws aren't very, very favorable to the employer as, as is the case in the, the whole of continental Europe.
Um. Uh, so all those things are different, but [00:35:00] Italy is a country, you know, if you know your way around, you can sort of Right sort things, things out. And, you know, even where you have unions, the unions are much more malleable and flexible. Yeah. If you, if you are a decent employer, they know you're doing the right thing, then they'll, you know, they work, they work with you.
Um, and so, so it's been a, you know, it's been a, a fantastic, um, success, my investment in, in Italy. Um, and we now have established, effectively we're probably the biggest luxury hotel company in Italy and continuing to grow.
[00:35:39] James: So how many hotels do you have in Italy now?
[00:35:42] Sir Rocco: Uh, I've gotta say they're opening so fast.
I think I've got, actually I've got I think six and I have two, uh, two pa uh, rocker. 40 houses. Right. And another five on the way in Italy. We're opening the land next month.
[00:35:56] James: I saw.
[00:35:57] Sir Rocco: Uh, we are doing, uh, uh, [00:36:00] Naples in 27, uh, Norto, which is a small center of baroque in Sicily, where with Palermo ura, we will have that be the third hotel.
Start creating a sort of tour of Sicily.
[00:36:12] James: My route. Yeah.
[00:36:13] Sir Rocco: Um. And, um, another one in Pulia and in Sardinia on the Esda, which was going to open this coming year, next year, but I'm not sure it'd be quite ready by then. So, and a lot of other things in the pipeline. We're starting now to try and spread our wings a bit further.
I did this deal with PIF, uh, where they brought in 49% of the company. Um, and so PIF what's P-I-F-P-I-F is the Saudi Arabian Sovereign Wealth Fund. Sovereign Wealth Fund. Uh, they injected some money into the company at the same time, so they're shareholders now. The shareholders and I had, I had five sisters, and the only one that worked in the business was Olga from the beginning.
The others were sort of rather. [00:37:00] Reluctant shareholders because he inherited shares from my father. Right. When he, he died, he,
[00:37:05] James: he left shares in this company to them?
[00:37:07] Sir Rocco: No, no, he, he left because I said at, I said at the beginning of our discussion that my father. Had invested money. Yes, you did at the beginning.
So we all inherited, six of us inherited Right. Okay. A share of the, of the shares he'd bought. And so they were rather sort of reluctant Right. Shareholders. And, uh, I saw an opportunity of of of, of getting them the liquidity Right. That they would've preferred to have had. So that's good. So that worked for everyone.
So that was one of the main reasons I did that. Yeah. That, um, that deal. And it's also, of course, given us a very strong financial partner. Yeah. Uh, you know, the development world is much, is more interested in us as a result. Yes. We got a lot of, uh, uh, high, uh, publicity as a result of that deal. [00:38:00] Um, and, uh, and so I, you know, I've got a solid partner with a long term view.
Um, yeah. Not an in and out. Sort of job
[00:38:10] James: and your family's preparing, the next generation is sort of involved in the business as well? Well, my
[00:38:16] Sir Rocco: children are, yes. Yeah. And, and they, um, you know,
[00:38:20] James: are you happy to tell me a bit about them and what they're doing? What, what are their jobs or what Yeah. My son
[00:38:23] Sir Rocco: is doing the development side now.
[00:38:25] James: Right.
[00:38:26] Sir Rocco: And since he's been in charge of that, things have really got moving, uh, my goal. So when you
[00:38:31] James: say development, you mean new hotels? Finding new hotels? Yes. Right. Certainly has
[00:38:36] Sir Rocco: you say, well, you've got quite a few in them by way. And, and my, uh, the eldest daughter, Lydia, um, is on, does restaurants and bars.
So she looks after those. We have a great, um. Here in Italy called Full Angelini, uh, who's a sort of executive chef over, over the whole of Right. All the Italian restaurants we do. Um, [00:39:00] he has a philosophy on food where, uh, simplicity is the point of arrival, not the point of departure. Right. He was a two star Michelin chef.
He would've been three star, but he always told the, told the, the inspectors to have off. They didn't like that Two star people. Oh, really? And, and, uh,
[00:39:20] James: and I took him this little restaurant. They get a bit pompous, don't they? Some of those Michelin star basics and, and
[00:39:26] Sir Rocco: uh, you know, it's completely opposite sort of cuisine I like.
So he is about, you know, we source locally as much as, do a lot of research on, uh, sourcing food, lo locally, wherever we, yeah. We open a hotel and his approach to cuisine is sort of, um, the food is much more natural, not messed about. I don't, you know, Michelin star, I best about food. Inventing things for the sake of inventing them.
And he brings out natural flavors of the food and the very, well, he's very inventive, but in a sort of,
[00:39:58] James: in a, what's his name again? Ful [00:40:00] Pierre. Angelini Ful. Pierre Angel. And so he works closely with my main to remember? Yeah. With my, with
[00:40:06] Sir Rocco: my, uh, with my daughter. Oh. Um, and then my, my second daughter, Rainey, uh, was responsible for the spas, the spas philosophy.
Yes. The treatments that we put into, into our spas and out of, she started developing, uh, some organic skin creams as a result of this. Uh, and found a scientist in, uh, in the north of Italy, started working with and developed her own skin cream business called Irey 40. Yeah. Um, El Catterton, which the investment bar will be in age bested 5 million.
When it was still losing money. Wow. For 25%. So she, so she's got another business. Great. So she's got another business and she consults on the spa
[00:40:55] James: and she supplies the hotel. I, some of the products as well as,
[00:40:59] Sir Rocco: as well as, [00:41:00] as well as, you know, being generally available in the marketplace, the states in, so this is another entrepreneur emerging
[00:41:07] James: from the, for family.
It's an entrepreneurial, yeah. No, I think that's very interesting. I think it's, I mean, it's interesting, I was talking to my wife Nicola about this, that you sort of, they, they have their own areas of focus.
[00:41:18] Sir Rocco: Yes. But they, but they chose
[00:41:19] James: that, you said earlier, they sort of, they, they were interested in what was happening in the company and
[00:41:23] Sir Rocco: Yes.
[00:41:24] James: Said, I want to get involved.
[00:41:25] Sir Rocco: Uh, and I mean, Lydia, for example, was worked, uh, worked with Hicks, uh, the chef in one of his restaurants, and then, you know, as a waitress and then sort of promoted to a supervisor. Then she was given a job as deputy manager, new hotel in Chelsea, new restaurant in Chelsea Green.
Um, the manager had resigned after three weeks, and so she became the manager. She ran it for two years and, um, was doing quite, was doing well, and she got fed up with closing the till at one o'clock in the morning, every, [00:42:00] every night. And so I said, well, why don't you come work for me? And she then. Yeah, it took, I chose the right moment.
[00:42:06] James: Yeah, no, the timing's important in business and so,
[00:42:09] Sir Rocco: but there's, there's this impression about family businesses that they're not, they're not professional and that, um, there's no reason why family business shouldn't be. Um, you know, have, employ the best people and, and, and be, um, and be, uh, you know, be, be current in, in what it does.
There is a certain tradition, which I think, I think tradition is important, which, you know, gradually is trying to be a politician. Some of the politicians are trying to dissipate at the idea of tradition today. But it is important that there's a sort of fiber and, and background, which is, uh, which is important, but it doesn't mean you don't innovate.
You don't keep, uh, keep in touch with what's going on in the world around you. And I have a great executive team, [00:43:00] um, and my, my, my children interface with them, you know? Yeah. As part of the executive team, it's not as if it's a family and no one else.
[00:43:09] James: No. Um, well, you have to innovate to survive and progress in this environment.
I think so you, you mentioned to me when we were talking earlier that you, you. Headhunted once in your career, which is unusual in a family business. I've never been headhunted. But you said when you were young, you were working in the basement. No, well, I was the Cafe Royal. Tell us that story.
[00:43:29] Sir Rocco: I was in, I was in the, uh, uh, in the cellars of the cafe Royal I was working, yeah, working the holiday job.
I think I was 15 at the time. Uh, and, uh, uh, and I was busying myself, you know, moving crates and, and doing the, and, uh, one of the suppliers came in, uh, and saw me. And so sort like the cut of my gym. Saw
[00:43:53] James: you were working hard and,
[00:43:54] Sir Rocco: and said, and offered me a job, and I think I was being paid. Uh, six pounds a week, [00:44:00] uh, there.
And then I think he offered me 10 pounds, 10 pounds a week. So, good offer. And, and, uh, so, so I went to my father. I said, look, you know, I've just been offered 10 pounds a week, and you're only paying me six. He said, well, if you wanna go and work for the other ggo and work for me, good negotiator.
[00:44:19] James: So you stayed put, I stayed put.
That's, but that's, that's, that's good to be asked. But I think it's, it is interesting. I think family businesses do bring a lot of entrepreneurial families. You learn a lot just being sort of part of the family about business. You're sitting at the table hearing the conversations than listening to the problems, the challenges.
It's a journey, isn't it? Yeah.
[00:44:41] Sir Rocco: With my father, you know. Uh. Any, any meetings he had at home, you know, would be about, sort of sit in and, and listen. Um, you know, he used to visit regularly, visit parts of the group, and I used to go with him, um, around with him, you know, [00:45:00] tagging along. Um, and then, you know, I saw him in action a lot.
And, um, so I absorbed, you know, I think I absorbed much more than I realized. Uh, yes. Uh, and I'm
[00:45:14] James: listening to you, I'm thinking the same, following my father around when he was sort of, uh, starting a business up. And I think I absorbed a lot.
[00:45:22] Sir Rocco: Um, and, you know, I think the, um, the, um, you know, my, I said I, as I said earlier, my, my father trusted, trusted people, you know, believed in someone.
He gave him a lot of strain to get on and, you know, and express him, express himself. Um, and of course, if you are gonna grow a business, you have to delegate and you have to understand, you've gotta delegate. If you want to control every detail yourself, the business can't, can't grow unless you're a complete genius.
Mm-hmm. Uh, [00:46:00] um, and so and so, so that's very important. And I think, um, you know, I have a very good relationship with all the top people in the group. Not necessarily the exec, all the hotel general managers. I know even people down the line in hotels, uh, uh, I'm familiar with and, and know who they are and their capabilities.
Um, so, so I think, you know, having a, a team around you at the end of the day is everything. And then you've gotta motivate them to. To, to drive the business forward in the way you want. You've got to be able to s you know, take the key decisions and the, um, and actually see the wood from the, through the trees.
Because very often businesses, there are problems, well, there are always problems in businesses, but, and people talk around them instead of going to the, to the point, which is really the problem and needs to be fixed.
[00:46:58] James: Why do you think that is? [00:47:00]
[00:47:00] Sir Rocco: Well, I think, I think a lot of people are afraid of taking decisions, you know?
Right. They don't feel comfortable taking decisions, um, because you can always make a mistake. And I made enough mistakes, plenty of mistakes in my life, but at the end of the day, most decisions who take the right ones and they've, and, and they help to drive the business forward. And I'm not someone, you know, shoot the messenger type at all.
If there's a problem, I want to fix it. I don't. Uh, let's, how can we learn from it? How can we stop the mistake being made again? And um, uh, and obviously. Um, if you, you have employees and not competent and not, uh, capable of the job they're doing, then you can't keep them in the no in the organization. And there's a reluctance always to fire people.
Mm-hmm. Um, and all this, this modern term, let go, you know, is just, is an example Yeah. Of, of that. Uh, and [00:48:00] particularly in, in countries like Italy where it's very expensive sort of top executives to senior executives to, to fire them, um, then there's a tendency to move them sideways and so avoid, avoid the decision, but they do a lot of damage.
Mm-hmm. And, uh, because they slow everything down, they stop things happening and they, they're actually anti the culture of the mm-hmm. Of the business. So I'm quite sort of, um, um, you know, I'm quite, um, forceful about that aspect. That aspect of things.
[00:48:36] James: So making decisions around people is a really important thing Yeah.
As well.
[00:48:40] Sir Rocco: Yeah. And our business is a business about people.
[00:48:43] James: Yes.
[00:48:44] Sir Rocco: Uh, you know,
[00:48:44] James: you said the team is everything. I mean, I, I was very struck by that. What do you look for in your sort of key colleagues? Are, are there certain qualities or characteristics or skills that you think must have in mind? Yeah.
[00:48:56] Sir Rocco: Also, you know, um, I'm not very good at [00:49:00] all.
The minister side, the government side of things, I sort of can't be bothered, you know?
[00:49:04] James: So, so you need people who do that
[00:49:05] Sir Rocco: for you. So I've got, you know, I have someone, uh, someone who makes up for that, those failings, uh, of mine and keeps the whole thing. So you're looking for people to
[00:49:15] James: compliment you in ways where you have a Yes.
Yeah. But I mean, you know, I, uh, I've got a very good,
[00:49:20] Sir Rocco: uh, marketing director now, she's a woman, um, came from Six Senses, right? Uh, well, she actually came from holding company after it had bought Six Senses. And that's one area where we are weak. Mm-hmm. Um, and we're, and we're starting to, to change, um, the, um, have a very good finance director, um, um, uh, well, they don't call them finance directors in what they call chief financial Chief Fi
[00:49:51] James: CFOs.
Oh, I knew what you meant. Yeah. Same thing. Yeah. Yeah.
[00:49:55] Sir Rocco: Who's grown up? That's an Americanism. She's, she's, she's, she's a, [00:50:00] a woman who's been with me now for, I think, um, 12, 13 years. She's grown up in the country. She's terrific. Um, uh, you know, and you, you have people you know, you can trust and you know, you can rely on, and you don't have to worry about every single detail.
Uh, of everything and you can do the things that you are good at and, and, and get on with.
[00:50:22] James: What, so what do you focus on yourself? I mean, you obviously, well, I,
[00:50:27] Sir Rocco: I focus on the operational side, right? And getting, and getting the right quality and standards and in, in the business and driving and driving. Um, driving that aspect of things because I think, you know, and how do we drive the top line?
How do we get better at getting more people into, into, into the business? 'cause the easy thing to do is say, costs, let's cut costs. Mm-hmm. But I mean, you, you cut gas costs. You spite your face. You can cut your nose, spite your face.
[00:50:59] James: [00:51:00] Interesting.
[00:51:00] Sir Rocco: It's, it, it's, it's, so, obviously you've gotta keep. Costs under control.
But, but, but if you don't have a top line, you don't have a bottom line. And, uh, and
[00:51:10] James: if you don't have, I want, say that again. If you don't have a top line,
[00:51:13] Sir Rocco: you don't have a bottom line.
[00:51:14] James: I, I, I like that very much. And it's very true and it's very, it is easy. It is an instinct in running companies when times are tough to try and cut costs.
And it's important to manage them carefully, isn't it? Yes. But you, you are saying people shouldn't just concentrate on that. 'cause now in lots of businesses it's pretty tough. You are saying look at the top.
[00:51:31] Sir Rocco: Yes.
[00:51:32] James: Yeah.
[00:51:32] Sir Rocco: But I mean, um. If you just focus on cost, particularly in the luxury hotel business, you've gotta be generous.
You be generous with the customer. If you count every penny, you know, soaps or this and that, then you don't have a luxury product anymore. So that, and also you need people to deliver service. You need people, you have to employ more people than you would in a, in a different scale of hotel. I mean, now you have hotels, an employee, you don't see any, you don't see any, [00:52:00] uh, staff
[00:52:00] James: in No, I've, I've been to some of those and you clock it on an iPad.
It's a different experience coming here, I can tell you. Uh, so,
[00:52:08] Sir Rocco: so luxury is about. Service about, you know, being generous. You know, a customer complains about something, you know, don't send them a small box of chocolate, only a bottle of champagne, you know, once it cost you, at the end of the day, someone's paying, you know, three or 4,000 a night for Sweet.
Yeah. Uh, it's, it's that sort of keeping perspective on approach and keeping that perspective. Um, and that's something I've, because I've had two operations directors in a row and I've sort of done away with that. Now
[00:52:40] James: you do that,
[00:52:41] Sir Rocco: I do that, and I've got three appointed, three, um, basically my best hotel GMs.
Mm-hmm. And give them, uh, Italy is divided in two, and I have someone doing the rest of the hotels mm-hmm. Uh, based in the uk. Um, and they're terrific. They, they understand the [00:53:00] philosophy, they understand, uh, uh, what I want. They know the nitty gritty, they don't fool around. You know, being political and so on, they just get on with they doing the jobs it needs to be done.
Um, and you know, this is, this sort of happened about a year and a half ago already. I can sort of, yeah. Ease off again because I see that. No, that's good. Yeah. Well, I have to say what needs to be done.
[00:53:26] James: The attention to detail is, is noteworthy rock. I mean, in our bathroom there were face towels with my wife's initials on one side and mine on the other.
I've never seen that before. Yeah. And uh, yeah, we were both impressed. I have to say. I mean, I was very special and it makes you feel special when you see that someone cares that you are there. And I think that's really interesting. I dunno who thought of that, but it's genius and, and I think that the sort of attention that we've had from the people in the business, your focus on the people is also evident because they have been very welcoming.
But that [00:54:00] takes, that's a real skill to teach people to be, well, maybe they're more naturally welcoming in Italy, you say, than some places. But I mean, you find that, you know, Russia, train in Russia where I, in Russia, what happened there? You've got a hotel there, what happens there? Hotel in
[00:54:13] Sir Rocco: St. Petersburg.
Yeah. You know, it was, it was a Soviet hotel. Well, how did you change that
[00:54:18] James: then?
[00:54:19] Sir Rocco: And just starting, I started by smiling at people,
[00:54:22] James: you know. Well, that's taken by surprise. Yes. So they smile at
[00:54:25] Sir Rocco: people, they smile back at you, you know? Yes. And, and gradually you put in our, you know, systems and standards and so on.
Um, and, you know, they achieve, they achieve a good, a very good product. Obviously. Current period is, is a difficult one. Um, and you know, some people say, why didn't you get rid of the hotel? Well, I mean, how do I get rid of it? Um, it's very difficult. You can't sell anything in Russian knife. I sold it. I wouldn't get any money.
Back because of the, the, the way the, the sanctions [00:55:00] Sure. Have being applied by, by the Russians, but those people in those hotels are my people. Yeah. They're just like any, any, any other staff I have in, I know a lot of them personally. Why should I abandon them? Yeah.
[00:55:11] James: Well it's not their fault. It's,
[00:55:14] Sir Rocco: and uh, and funny enough actually has had three record years.
The hotel has it all with Russian business. It used to be 50 50. Right. Interesting. A lot of Russians don't go to, 'cause they don't
[00:55:25] James: go over, they don't come to Italy so much. Maybe under, and,
[00:55:27] Sir Rocco: and, uh, well, you know, many of the Russians aren't in a position. Some are, some have moved overseas and they continue to use, uh, hotels.
Some of 'em have no non-US passports as well as Russian passports. So, so I've been back there three times since, since the war. It's always quite uncomfortable at the airport, right? 'cause they take you aside and, you know, they make you wait about an hour before letting you heading you through. Um, but I to, to be there, to be there to give them support, show that they are supported in, [00:56:00] in, in the hotel.
And the sanctions rules have changed lately, which means that we can't, we can't give, um, direct services to, to the hotel. So hotel people in the hotel in Sebo can't, can't, uh, talk to people in our head office. Wow. So I'm the only point of contact.
[00:56:22] James: Oh really?
[00:56:23] Sir Rocco: Um, and so, so this really
[00:56:25] James: is leadership from the front is, I mean, I mean, I was gonna ask you about leadership styles.
I mean, you are really sort of the face and persona of your business there, especially, but
[00:56:35] Sir Rocco: Yes. But I mean that you talk about
[00:56:36] James: smiling and people were picking that up. That came from you as well,
[00:56:40] Sir Rocco: I suppose. Um, um, there was, my father wrote an out autobiography, you know? Right. And, um, and I, one of the reviews, um, there, uh, uh, of the book, it said there's a pervading sense of decency
[00:56:58] James: Right.
[00:56:59] Sir Rocco: Comes outta [00:57:00] this book. And I think that's something my father taught me actually. And
[00:57:06] James: I think
[00:57:07] Sir Rocco: that exists in my company and they, people feel it and they understand it. Uh, and, um, when I have a, a. I have a sales, uh, vice senior vice president sales as they call themselves nowadays, a sales who, who came from Four Seasons.
He, see, he's never worked for a company like mm-hmm. This before. Best company's ever worked for. Um, so, you know, it's that, yeah. It's that aspect and also that people see me hear from me directly or in touch with me. They can ring me up, they can discuss things with me and so on. I think that's, that's a very important fact.
I'm not friger the distant white tower. Right. And there, and there are present people see me.
[00:57:54] James: Yes.
[00:57:54] Sir Rocco: And I think in this sort of business that's, that's really important. And you're, and
[00:57:57] James: you're on the road. I mean, going to America and Brazil [00:58:00] and Russia, you travel a lot obviously. Yeah. To leave.
[00:58:02] Sir Rocco: Um, so, um, you know, and I think, um.
You know, the other aspect is I'm in this for the long run. I don't, I don't have an exit plan. I don't have, I'm not, I'm not in the business just to make money. I'm in the business to, to, to actually create something special, to do it well, and out of that I make money. I've created value in that way, haven't done a deal, which is suddenly, mm-hmm.
Uh, you know, you are in and out and, uh, it's all about the money. It isn't about the money. It's about actually delivering something that's very special and that can last. Um, and so, so that's my sort of, you know, someone, I'm not a young man anymore, but I still have that same energy and Well, I was gonna
[00:58:53] James: say, but forgive me, but you might not be a young man.
You've definitely got a young man's energy because you sort of, you seem to cover a lot of ground, a [00:59:00] lot of miles.
[00:59:00] Sir Rocco: So luckily I've kept fit all my life. Well, you put
[00:59:04] James: it, you've made an effort to do that though. You used to run marathons.
[00:59:07] Sir Rocco: I remember I didn't, I did for 11 years I did triathlon. Seriously?
Yeah. From the age of 54 till I was 65. I did world championship age group stuff, you know, did nine Man when I was 60. I came second in my category. I won the were fifties chief executive. But you were
[00:59:25] James: elite athlete basically. So as well, a
[00:59:28] Sir Rocco: when most men hotel go, I actually got myself super fit.
[00:59:32] James: Yeah.
[00:59:33] Sir Rocco: And that stayed with me.
But that's
[00:59:35] James: important isn't it? If you are in a leadership role to have lots of energy. Clearly. Yeah. Especially in this business. So Rocco, we've got a budget coming up in the UK at the end of November. Um, you know, there's been a lot of. Ideas mooted around taxation and taxes rising. Is there anything in particular you'd like to see in the budget that you think would be helpful or [01:00:00] desirable for business or for the economy?
[01:00:01] Sir Rocco: Yes. So they reverse everything they've done so far, uh, and uh, and go back to, to, to seeing what can create growth in the economy. They talk about growth. Uh, if we look back at the seventies, because I think we are in a very similar. Period now, uh, where everybody thinks the UK is finished, um, there's no future managing decline, uh, and so on.
And this was a case in the seventies. Mrs. Thatcher came along and what she do, she created an entrepreneurial spirit in in the country. She reduced taxation significantly. You know, we were at, we were at 98% on so-called unearned income, and 83% on earned income was the top rate of tax. This was reduced to 40%.
Um, and, uh, she did away with all the labor legislation, [01:01:00] the, the power of the unions, uh, and so on, and sort of, uh, enabled an entrepreneurial culture to develop in, in, in the country. Um, this is, um, slowly being. Ruined over since, uh, the first three years of, um, the Blair government, uh, they didn't change anything on the economic front before Brown got going.
The socialist, uh, approach, uh, at that time in 2000, the private sector was 66% of the economy. Today it's around 50, so the state has taken over. Um, uh, and this is the problem in, in continental Europe as as well, um, labor legislation has got more anti, uh, employer and now it's gonna get even worse with this new workers' rights bill or labor bill, whatever they, uh, uh, they call it, it's gonna put more, uh, more [01:02:00] bureaucracy, uh, into businesses, more time wasted on things that are not important for the business.
Um, and it's not gonna, it's gonna help the skiver, it's not gonna help good staff. Um, you know, you value good staff. Uh, uh, it's a bad staff who take advantage of, of, of, of the law as it is at the moment. Um, uh, that it's not as if we're in a market where there's only one type of job available. There are plenty of jobs, rather if someone leaves, doesn't like one company doing work for, for another.
So it's completely unnecessary and will be very counter counterproductive. Um, the, there's no, you know, that we've got 500,000 civil servants more than, than before COVID. Um, the, the, um, um, you know, the economy has been stagnating basically for a long time. They pin their hope on, uh, on, um, on [01:03:00] infrastructure investment by government and housing.
There's no evidence that, that actually we'll get the economy moving. They've, they've, uh, snuffed out the entrepreneurial spirit because before the first budget, they started talking the economy down all the things and tax the speculation about the taxes. Um, they would, they would bring in and so on. So no one did anything until the budget.
The budget made things worse. Um, you know, the increase in national insurance contributions has affected the job market significantly. Um, and now they've done the same thing again. They've been floating tax, tax ideas and so on. Again, no one does anything. Yeah. Until they will see what, what has, what has happened.
So they've, they've effectively, uh, created a destructive approach to, to the economy, which won't recover until you have different policies brought into, into being.
[01:03:56] James: So undo everything you've done is the message. And start again. Yeah. And start looking. [01:04:00] Be more entrepreneurial. A
[01:04:00] Sir Rocco: car they can cut gun and expenditure.
Um, and, you know, every attempt they've made, uh, on welfare, for example, you know, we've got, you've got 7 million people working age, you're not working. Mm-hmm. Um, you know, this disability, uh, the whole disability benefit mental health. So it has doubled since, since, uh, since before. COVID. COVID was a disaster actually from that point of view because people got used to, um, doing nothing and being paid for it.
And that's. And know that will gradually change, but it won't change with the approach that this, this, this government is taking.
[01:04:41] James: So, so, so it needs a big change of direction. You are saying?
[01:04:46] Sir Rocco: Yes, and I, and you know, they're gonna make things a lot worse, uh, at the end of their term because they have a huge majority in parliament, even though they didn't have a huge majority in the county in 30th, [01:05:00] 3% of the vote,
[01:05:01] James: one third of the vote, and two thirds of the mps, I think is the statistic.
[01:05:05] Sir Rocco: And, and that's, it won't change. And I think things will be worse then. And maybe there's a chance of a revolution. I don't mean a la sense, I mean a well revolution together. I feel
[01:05:18] James: big change is coming sort of big disruptions. It feels are, are coming for all sorts of reasons. One of them potentially political.
So one other thing I'd like to ask you, which, um. You studied at Oxford University Languages, I believe. Yes. Um, but then after that, you went to become, to learn accounting. You, you qualified as a chartered accountant. So why did you do that? And, and has that helped you in your business journey? It was a sort of,
[01:05:45] Sir Rocco: uh, business, business training in a way rather than going to business school.
Um, it was most boring three years I've ever spent in my life. I think you're not encouraging other young people at this point, but it was useful. Was it? The, uh, [01:06:00] and in fact, I used to go to Par. I've had myself some velvet suits made, and I used to go to parties and say, guess what I do for a living? You see, no one would ever guess, of course, but, but, uh, the, the.
No, it's been extremely useful because I've become quite numerate. I understand balance sheets, um, and, um, and accountants can't tell me what to do.
[01:06:24] James: What, what advice would you give? I, I feel we're coming to the conclusion of our conversation. I like your last remark, but what advice would you give to someone, a young entrepreneur now maybe thinking of getting into this business or,
[01:06:37] Sir Rocco: well, I mean,
[01:06:37] James: starting a business from your experience and your family's experience.
[01:06:40] Sir Rocco: I mean, I used to know the business. I mean, I think that, you know, many people, certainly in our, in my industry, think that running, because they've stayed in hotels is easy to run a hotel. It's not, I mean, there's a sort professionalism to it. So if you're going to, you know, you've got a, come into it, work in it, and c that you like it and [01:07:00] you, and then you learn about it, understand it before sort of leaping off into, into the unknown.
So I think knowing your business is very important. Um, the other thing I think is, is, you know, uh, accepting that, that, you know, you have one, one unit one, or you expand and create more units, you expand and create more units, then you've gotta understand delegation. You've got to, you've gotta develop a team.
My father, my father, uh, always tells a story that he had this first milk bar in RET Street and decided to open another one in Cherry Cross. And he suddenly said, well, how am I gonna be in both places at the same time? Right. And, and uh, and so he decided he had a, one of his best waitresses at, uh, in Regent Street, it was called Rose Chicone, decided to appoint her as manager so he could then spend his time chaing Cross and the opening of that.
And he found that she ran it [01:08:00] better than he did. Oh, so that
[01:08:02] James: was the beginning of his, that was a learning
[01:08:03] Sir Rocco: business. Expansion delegation, yes.
[01:08:05] James: Yeah. Finding people who run things better than one does is a good idea. And that's fantastic. And I wish you continued success, which what with what feels to me like a multi-generational endeavor in a building these businesses and serving customers over many.
Many years, um, with your family?
[01:08:22] Sir Rocco: Yes. Well, I think it is, and I think it's sort of, it's some, somehow in the blood, you know, seems to be. Yeah. And, uh, and you know, you are lucky if you, you, what you do is something you enjoy and something that absorbs you. And of course, as you get older, you know, you've done, you've done most things in life or I've been luck.
I've been lucky enough to do most things. Thing that's most exciting, uh, and most enjoyable for me is the business. That's my main right. Focus. Yeah. Which annoys my wife sometimes. But
[01:08:55] James: you're still married, so that's
[01:08:57] Sir Rocco: good. Nearly getting up to 40 years.
[01:08:59] James: Well, [01:09:00] congratulations on that too. That's good.
So, Soroka, I asked two questions at the end of, uh, every conversation I have with my guests, which I'm gonna ask you. The first question is, uh, is what gets you up on a Monday morning?
[01:09:17] Sir Rocco: I mean, I don't think it's particularly Monday morning. I don't think about, uh, Monday as the first day of the week. I mean, it's sort of, you know, I live with my business all the time.
I'm thinking about it all the time. And, um, and so, you know, I'm anxious to do things. I've thought about things I want to put them into, into, into practices. So it's a sort of continuous process. I don't say it's Monday to Friday, you know, thank God it's Friday, I'm going home.
[01:09:43] James: No, well, hotels are open 24 7, aren't they?
You're always open. So I don't think it's, I can see that. Yeah. Irrelevance of Monday mornings might be particular to you, I suppose the anxious to get going again. And then the second question I ask, which is in my interview, but why [01:10:00] you 101 questions you'll never fear again is, is where do you see yourself in five years time?
[01:10:06] Sir Rocco: I have, you know, plans and ideas for business. You know, I'd like to see us in a position where we're twice the size that we are now, twice the size in, in terms of number of hotels, um, that, that we have either open or, you
[01:10:21] James: know, due to open. So you are so just stress, you are not saying down, you are accelerating into your eighties.
Yes. Because I think ambition, which is so exciting. Yeah. You know,
[01:10:30] Sir Rocco: to really compete, we need to have a slightly bigger scale than we have, we have now. I don't want to get so big that, you know, you lose, lose the, the ability to touch all, all the properties. Um, and then obviously I have to think about succession.
Uh, how that, how that will happen, uh, the, the, the people who will make it happen. I don't think I'll ever please God if I keep fit, leave the thing altogether. But, um, you know, [01:11:00] you can't carry on keeping the same pace forever, unfortunately. Uh, so even you, I still admit that. So, so I'd have to, I'd have to deal with that and I have my ideas and so on, and I think there's obviously gonna be a transitional period between myself and my children.
Um, uh, and they're still all developing and, um, uh, you know, in growing as, as business people. Um, so, so, so that really is sort of where I'm looking at, at, at, at the moment. Um, the, um, um. You know, my wife said to me the other day said, well watch how, how are you gonna be when you are 90? I said, I'm not gonna be any different to what I'm now.
That's
[01:11:52] James: my, I very much hope that's the case. Thank you very much for, uh, talking to me today and, and not least for inviting us. You're wonderful. Hotel [01:12:00] Ruth is been fabulous talking to you and very also staying here. Thank you very much, sir Rocco. Thank you, sir Rocco for joining me on all about business.
I'm your host, James Reed, chairman and CEO of Reed, a family run recruitment and philanthropy company. If you'd like to find out more about RE or Rocco Forte Hotels, also Rocco Forte, all links are in the show notes. See you next time.
This podcast was co-produced by Reed Global and Flamingo Media. If you’d like to create a chart-topping podcast to elevate your brand, visithttps://www.Flamingo-media.co.uk