Microsoft co-founder Bill Gates has dropped US$2.21 billion (AU$3 billion) to own Four Seasons Hotels & Resorts.
Gates, worth US$131.7 billion (AU$179.39 billion), bought a 23.75 per cent stake in the hotel company from Saudi Prince al-Waleed bin Talal in an all-cash deal earlier in September.
Prince al-Waleed will hold onto his remaining 23.75 per cent stake.
Once the deal is finalised, Gates’ holding and investment company Cascade Investment LLC will hold the 71.25 per cent controlling interest in Four Season Hotels & Resorts, valuing the company at US$10 billion (AU$13.5 billion).
Four Seasons currently has 121 hotels and resorts, along with another 46 residences and 50 more projects in the pipeline. This move marks Gates’ first major investment since his divorce from Melinda French-Gates earlier this year.
"Cascade's increased investment reflects its strong belief and excitement for Four Seasons’ iconic brand," the hotel chain said in a statement.
“Along with its long-standing investment partners, Cascade reaffirms its support for the vision and unique culture that will further distinguish Four Seasons as one of the world's leading luxury companies."
Four Seasons CEO John Davison added that the sale marks a “key moment” in the company’s 60-year history.
The sale is expected to close in January 2022.
Purchase comes months after dire travel warning
Cascade Investment has invested in Four Seasons since 1996. However, Gates has more recently warned that the tourism and travel sectors face major headwinds.
His latest purchase comes just months after he warned that the coronavirus pandemic will decimate business travel.
“My prediction would be that over 50 per cent of business travel and over 30 per cent of days in the office will go away,” Gates said in November last year.
He added that businesses will have to have a “very high threshold” for conducting business trips as workers and bosses embrace remote work.
But, Bain’s study remarked, the industry is down but not out. Tourists still have a hunger for luxury escape; they’re just more likely to travel in their home markets.
To VistaJet marketing and innovation executive vice president and luxury travel expert Matteo Atti, the luxury travel sector’s survival will depend on its ability to support customers through changing COVID-19 restrictions.
“A major part of overcoming this obstacle is to make sure clients are regularly updated and reassured so they know providers are standing by to help them navigate anything — from Covid-19 vaccine passports to pre-travel testing and entry-bans in certain countries — even if the rules change overnight,” .
“Clear communication is at the heart of managing the changes in customer expectations during the pandemic.”
The immediate task is to restore confidence so that travellers begin making bookings again, he added.
That could be tricky. Research conducted by hotel data tracking firm STR in July found that there remains negative sentiment towards travel, largely due to the Delta variant changing the pandemic landscape again.
STR research also found that guests are more interested in booking rooms at hotels with less than 50 rooms than they were prior to COVID-19.
“Indeed, the trend shows increasing interest in this form of accommodation which is likely due to improved confidence in hotels as many brands have implemented elevated cleaning and other COVID-safe protocols,” .
“Overall, travellers are still less interested in staying at hotels now than compared with before the pandemic.”
However, luxury and upscale hotels are bearing up better than budget stays over “perceptions of cleanliness and property size associations”.
“It will be interesting to monitor how the recovery unfolds for these hotel classes as demand grows.”