http://www.thestar.com/Business/article/467706Kicking off his SandalsBUTCH STEWART
Jamaica has produced some extremely wealthy expatriates with a Toronto connection, including AIC Ltd.'s Michael Lee-Chin and Ray Chang of C.I. Fund Management Inc., who both reside in the GTA.
Chang is the chancellor of Ryerson University and donated $5 million to the institution, and Lee Chin made a $30 million donation to the Royal Ontario Museum. But while both men made the bulk of their fortune in Canada, Gordon "Butch" Stewart is Jamaica's first homegrown would-be billionaire.
In 1992 he was hailed as a national hero after he pledged to pump $1 million (U.S.) into the Jamaican economy, helping to halt a run on the Jamaican dollar that had been devaluing rapidly.
Two years later he took over Air Jamaica, the island's disgraced government-owned national carrier that had been dubbed "Air Cocaine" by Britain's Daily Mail newspaper.
After investing millions of dollars in upgrades to the airline, Stewart returned it to the Jamaican government two years ago following a decade of losses.
TIMELINE
1941: Stewart was born in Kingston on July 6.
1960s: Works his way up to become sales manager of the Curacao Trading company.
1968: Sets up Appliance Traders Ltd., founded as an air conditioner service and distribution firm
1981: Buys the run-down Bay Roc hotel in Montego Bay and turns it into the first Sandals.
2006: Makes his son Adam, then aged 25, the chief executive of Sandals.
Today: 20 resorts, including 12 Sandals, four Beaches, two Grand Pineapple Beach resorts and a new luxury brand called Royal Plantation.
Butch Stewart, Jamaican king of the luxury-included vacation, turned an 'insane' hotel venture into 20-resort Caribbean empire
Jul 26, 2008 04:30 AM
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Tony Wong
Business Reporter
Gordon "Butch" Stewart is considered by some to be Jamaica's most powerful man.
The one-time air conditioner salesman – Jamaica's answer to Britain's Richard Branson – is on track to become the Caribbean's first homegrown billionaire.
Stewart, the country's largest employer outside of the Jamaican government, runs more than two dozen diverse companies, while wielding huge economic and political influence as the top foreign exchange earner on the island.
But with his lilting Jamaican accent and folksy, self-deprecating warmth, the 67-year-old entrepreneur, who grew up on a beach in Ocho Rios, comes across as more Jimmy Buffett than hard-nosed businessman.
"You know, half the time I didn't know what I was doing when I first started out, man, but it somehow works out," he says in an interview in a Toronto hotel suite.
Many Canadians are intimately familiar with Stewart's products, although they may not identify them with Jamaica.
When he bought a decrepit hotel near the airport in Montego Bay almost three decades ago, most people, including some of his own relatives, thought he was, to use his own words, "insane."
"I think if you live in the Caribbean, everybody harbours this secret dream to own their own little hotel," Stewart says. "Actually, it was a good thing we didn't know anything about hotels otherwise me might never have made the leap."
But after spending millions on renovations, he transformed the site into the first of what would become the world's most popular all-inclusive chain. He named it Sandals.
"I really had no clue," Stewart says. "We were basically just losing money every day. But we started to tinker around and eventually figured out what people wanted."
The hotel's first dinner service, for 27 guests, took 4 1/2 hours and the salad came at the end, but Stewart kept hammering away.
Sandals Resorts International (he was going to call it the less elegant Club Bay Roc, based on the name of the original hotel, but decided against it) ended up spawning an empire that now includes 20 resorts throughout the Caribbean.
Stewart owns numerous other companies, including the Jamaica Observer newspaper and Jamaica's largest appliance company. At one time he owned Air Jamaica, the island's national carrier.
Not bad for a confessed beach bum who skipped school to go fishing and whose dad, Gordon senior, nicknamed him Butch after a cartoon bulldog.
But Stewart's entirely relaxed persona is deceptive, obscuring the fact he's a master marketer, not unlike Branson, who's a friend, or Donald Trump – billionaire salesmen who have used the force of personality to become their brands' best ambassadors.
"He is one of the great global hoteliers, an operator ahead of his time, and he's still innovating," says Toronto hospitality consultant Joel Rosen, CEO of Horwath HTL. "He took the Club Med concept and outdid Club Med. And when the customer he had in the '80s changed and became more successful, he changed as well."
This week, Stewart was in Toronto flying the flag for his chain, which includes the Sandals, Beaches, Grand Pineapple Beach and Royal Plantation brands.
With the global economy in a tailspin, Canada's relatively sane economy has produced the company's fastest-growing market. Canadian travel agents presented Stewart with an award for favourite all-inclusive, his ninth in a row. His chain was also Canadians' top pick in the categories of favourite hotel chain and best environmentally friendly chain.
"Everywhere you go there seems to be this doom and gloom, but Canada seems to be doing well," Stewart says. "It shows you the effect of a strong economy. We are seeing a lot more well-heeled Canadians at our resorts."
Only five years ago, Canada accounted for 7 per cent of the company's revenues. Today, it's closer to 17.5 per cent, thanks to a Canadian dollar near par with the U.S. greenback.
Value-conscious Canadians love sun-drenched all-inclusives, where meals, drinks and entertainment are pre-paid. But they tend to travel to budget-priced resorts in markets such as Cuba and the Dominican Republic. Sandals, where top-end rooms can cost $2,000 per night, is not for the thrifty, unless your definition of parsimony is butler service and an infinity pool outside your room.
Stewart's latest property, being developed in the Bahamas, is the logical extension of relentlessly moving upscale: a private island with perhaps no more than 30 villas, similar to Richard Branson's famed Necker Island retreat.
"You know, after all these years, I haven't heard anyone say I don't want any more luxury in my rooms," says Stewart, whose company has spent more than $200 million (U.S.) over the past three years upgrading and expanding properties.
"I don't have any money left in the bank," he says. "I keep putting it back in the properties."
With villas including butlers and private chefs, this is not your father's "all-inclusive." That's a name Stewart hates, preferring instead "luxury included."
But there are storm clouds over this particular paradise.
Competitors, particularly in the low and middle end of the market, have studied Stewart's playbook and launched thousands of new rooms.
While last year was the best ever for the privately held company, Stewart's bold expansion comes as global stock markets are reeling from a massive credit crunch. Oil, though retreating from record highs, is cutting into Caribbean travel.
"I think it can be a concern, because you have less capacity for airlines to move people to the region," Stewart says.
He's been through tough times before, and triumphed. Right after the 2001 terrorist attacks on New York city, when hoteliers were reeling from vacancies, he claims Sandals' sales actually jumped, since customers flock to familiar brands and the Caribbean is not exactly a terrorist hotbed.Still, Stewart's reign has not been without controversy. He famously backed down from banning gays at his Sandals resorts several years ago in response to a public outcry, including a Toronto Star article that highlighted the discriminatory policy at his resorts. The controversial rule did nothing for the island's anti-homophobic reputation or for the Sandals' brand.
"We really didn't know better. We thought at the time it would ruin the concept. But there's a little thing called change," says Stewart. "It was the best thing we ever did when we reversed the policy."
The ability to adapt has been a Stewart hallmark. Key to his success has been the courage, or perhaps unabashed brazenness, to take a good idea from someone else and run with it.
He doesn't claim to have invented the all-inclusive, giving credit to Club Med. But he does figure he has just about perfected it.
"I loved the energy of Club Med. But they continued what they were doing and I decided to take the concept but add more luxury."
The first luxury all-inclusive in the world he credits to Garfield Weston, brother of Galen Weston of Loblaw fame. When Weston opened Frenchman's Cove to the public in the 1960s, the once-private beach on Jamaica's northeast coast was the most glamourous spot in the Caribbean, Stewart says.
"The champagne was free and they say you could literally take a champagne bath. I'd like to take a champagne bath."
That's not something Stewart has on his resort menus, at least not yet. But over the years, he has pretty much done everything else. Every business trip becomes an opportunity for research.
"When I was in Italy in 1983, I was in a hotel and they had a hair dryer in the room. I had never seen that before."
Within two months, all his rooms had a hair dryer. Over the years, Sandals would continue to innovate, becoming the first Caribbean hotel to feature Jacuzzis, then satellite television service and swim-up bars. Today, he's trying to ensure his company is the first Caribbean brand to meet the strict environmental standards of LEED certification.
"We're a private company. So we can act quickly without worrying about shareholders. We don't have a big bureaucracy to deal with."
Several of Stewart's children have joined the family firm. Adam, who was born the year the first Sandals opened, was made CEO two years ago. At 27, he's likely the youngest hotel chain CEO anywhere.
"I already started my business when I was 26, so I figure it's about time," Stewart says, when asked why he's handing over the reins so quickly.
"I'm really just an old fisherman," says Stewart, who sold his 138-foot Lady Sandals yacht two years ago for more than $7 million and is looking for a replacement.
And though he has the trappings of the good life he purveys – on this day he's wearing a gold Hublot watch you could trade in for a Honda Accord – he is not defined by it. At least that's what he tells you.
His absolute favourite thing, he says, and you almost believe him, is to sit on the verandah of his house "playing dominos and really just chatting about shit."
"I'm a simple guy."