John Spence: 25 Years Later
February 24, 2010 by Perspective Magazine | Timeshare & Fractional Reviews
John Spence, the entrepreneurial chairman and owner of Karma Royal Group, celebrates 25 years in the industry this year. Spence’s career spans a humble beginning to a 17-resort group with no debt today, and Paul Mattimoe reviews those 25 years.
Paul Mattimoe:
25 years, 17 resorts and no debt –how does it feel?
John Spence:
I feel a sense of achievement. However, I also believe in the philosophy of “keeping it simple.” For me the simple fact is that we are a sales driven company. It is our ability to sell day in and day out which has enabled us to be where we are today.
Is this a mission statement?
Most definitely. Our mission statement is “We Create”:
• We create products which people enjoy.
• We create sales and profit.
• We create customer satisfaction.
Where is Karma Royal Group today?
We are expanding. My favorite quote is the Warren Buffet saying “when people are greedy be fearful and when people are fearful be greedy.”
I see the current climate being good for the group. We can acquire assets at realistic prices. We are presently reviewing land and resort and sales and marketing opportunities in Bahamas, Canada, Philippines, Croatia and Sri Lanka.
I am in a mood for expansion. Greedy.
Where did all start?
As a sales rep in Tenerife for Global Group. I started in 1985 at Sunset Bay in Tenerife. I worked my way up within Global.
What did you learn in those early years?
Probably the need for ethics above all else. Ethics and integrity have been the cornerstone of my timeshare career. I was very disappointed at the direction the industry took in those days. Particularly the “big sale” scam. While I was in charge of Global I never allowed the sales department to take us down that route.
You became something of a leading figure in European timeshare. You were vice president of Global – the largest and most successful timeshare company in Europe. And yet in 1993 you gave it all up. Why?
Two reasons really.
First – although I was instrumental in building Global and its value I had no equity, no shares, options, etc. and I was discouraged by that. A lesson I have learned in business is that the strongest motivating factor of all is personal enrichment. Hence in KRG I have not made the same mistake.
Secondly – as a “history of timeshare” student so to speak, it seemed clear to me our industry goes through various cycles. And it was the first cycle, i.e., when the industry is new in an area and booms that interested me most. I wanted to repeat the experience of the early developers on Europe and USA.
So you packed your bags and went to India.
When I first planned things it was my intention to go to the Caribbean and Latin America. However at the 11th hour we changed course and went to India. I always say we did what Christopher Columbus did but in reverse. Columbus sailed west thinking he was going east. We thought we were going west but went east.
So how did KRG start?
OPC’ing on a beach in Goa.
Tell us the full story. Why did you choose India? Who went? How was it capitalized?
When I visited Goa in 1993 I knew I had found the place to be our home. Goa was just beginning as an international tourist destination. It has tourists from Europe and India. Land prices were cheap. (I have always been driven by a belief that we need to keep product cost under 20%.)
India had a huge population. It was an emerging market and it has a middle class of quarter of a million families, creating a huge domestic market.The team consisted of a handful of loyal colleagues from my Global days – in particular Mark Attwood the group sales and marketing director, as well as Esperansa Patricio and Ann Gilchrist (all of whom are still with me today).
And the start-up funding?
My life savings. It was all a huge gamble for me. I sold my flat in London, cashed in my assets and threw it into the pot (and looking back it wasn’t that much). But we were all driven by this vision to create something huge. Failure was just not an option we considered.
Why did you become a developer? At the time it was more normal for people to operate marketing companies?
I believe a timeshare business needs roots and continuity. By developing resorts you have that. Your product is your rock. If you just run a marketing company there is no substance behind you. You can be here today and gone tomorrow (which indeed is what happened to most of our competitors in Asia as they were nearly all marketers).
Did you have any other strongly held values?
Yes – the importance of controlling every aspect of the business. Very early in the company life I realized we had to become a vertically integrated company. Today we have divisions for design and construction, sales and marketing, resort management, customer services, spa, etc.
This means that we are the masters of our own destiny.
Was it all plain sailing?
I wish it had been. Where shall I start? The problems of getting people to adjust to life in India, the dodgy practices of Goan developers. I could write a book. No, it wasn’t easy.
What was your sales and marketing strategy?
To sell quickly. I bought the land. We placed it in trust. Then we had to sell like crazy to fund the development. That is how we became a debt-free company. We sell to live and live to sell. (It’s a principle I have adhered to ever since.)
So we opened offsites all over Asia. I think the end figure is 76 venues 18 countries. But not for us Paris, Morocco, San Francisco – instead Mumbai, Calcutta, Dhaka, Jakarta, Manila.
In those days the creation of the member base was our dominant goal. I agreed with Mark that we would stop when we reached 30,000. But somehow we never did. It’s well over 50,000 all in acquired bases, associates, etc.
How did Karma Resorts come about?
I became conscious of the fact that the perception of timeshare limited our options of what we could do with the company. I believed that if we laterally diversified and added another operation it would give the company enhanced value.
Karma Resorts has done exactly that. With our three luxury boutique resorts, association with Leading Hotels of the World and celebrity guest list we have given the group an exciting public face and opened doors.
For example we are strong bidders to develop Rottnest Island in Perth. Rottnest is an icon for Perthites. KRG is hopeful of launching the contract. We could never have done that as a pure timeshare company.
So looking back over those 25 years what would you advise new players about to start to consider?
• Profit, profit, profit.
• Keep your product price as keen as possible.
• Never believe your product sells itself.
• Invest most in sales and marketing.
• Start small grow organically.
• Be vertically integrated.
Does your mother wonder what to give as a present to “the man who has everything”?
I don’t have everything. One thing she could give me is new people. To grow and expand as our plan we need good people – at all levels. That would be a nice present. We are most definitely recruiting at present.
John, that was very illuminating. Thank you for your time.
And you, Paul. Thanks.
John Spence is happy to receive any inquiries from within the industry regarding the matters mentioned in this article or cooperative ventures. His email is johnspence88@hotmail.com.
Karma Royal Group Factsheet
Resorts
RGBC at Luisa by the Sea – Goa, India
RGBC at Royal Palms – Goa, India
RGBC at Benaulim – Goa, India
RGBC at Monte Rio – Goa, India
K2 at Ratan Haveli – Rajasthan, India
Royal Kovalam Beach Club – Kerala, India
RBBC at Candi Dasa – Bali, Indonesia
RBBC at Jimbaran – Bali, Indonesia
Royal Terranora Resort and Country Club – Gold Coast, Australia
Royal Lighthouse Villas – Phuket, Thailand
Royal Bella Vista Country Club – Chiang Mai, Thailand
Royal Reef – Lombok, Indonesia
Karma Samui – Koh Samui, Thailand
Karma Kandara – Bali, Indonesia
Karma Jimbaran – Bali, Indonesia
Karma Mykonos – Mykonos, Greece
Karma Bahamas – Little Harbour Island, Bahamas
Awards
John Spence – RCI Hall of Fame, 1998
John Spence – Most Philanthropic Developer, ARDA 2004
Karma Spa: How to Operate a Profitable Spa
From time-honored healing rituals to indigenous experiences, yoga and detox, the demand for luxury spas, say experts, is no longer the province of the 5-star boutique resort. Spas are a thriving business that can dramatically increase revenue for virtually every style of resort and hotel.
Enter the world of Karma Spa situated within the grounds of Haathi Mahal Royal Resort in Goa, India – a world of pure harmony where white stone floors, arched walls, domed ceilings and flowing drapes creates a sanctuary experience. Renew your being amid the seductive white marble stone steam room with a star-like sky. Experience spa rituals and massage curatives designed to soothe, heal and nurture the whole body.
Karma Spa is the newest creation by John Spence, the owner and chairman of the Karma Royal Group. With the assistance of Judy Chapman, an internationally known figure in the global spa industry, and other experts, by the first quarter of 2010 every Royal Resort will be home to a Karma spa & wellness facility.
“We recognized that the wellness industry is one of the fastest growth industries in the world today,” says John Spence. “I wanted Karma Royal Group to share in that growth.”
There was a time when spas in hotels, like the gym or sauna, were a service facility. How things have changed – these days, spas can generate as much revenue as an F&B department. In the near future, there will be no 3-, 4- or 5-star hotel or resort without a spa facility.
Says Spence: “While we have had spas at our Royal Resorts for years, our services were not much more than a simple massage for members. But with the baby boomer generation driving the fast-growth spa trend, we realized the financial potential of spas. Housing a commercial spa facility can dramatically augment a resort’s revenue, not to mention attract more interest to one’s brand.”
He adds that Karma Spa has revolutionized their thinking. “The bottom line of a successful spa can be phenomenal. Each month we are seeing our spa revenues and, indeed, spa retail sales, grow from strength to strength. People from all walks of life are being turned on to the health benefits of spa.”
With that learning curve behind him, John Spence is offering to share that experience with the resort development industry worldwide by offering Karma Spa licenses. Any Resort Developer with the desire to operate a spa can take a license, and Karma Spas will set up and operate the spa for the developer.
When asked why choose Karma Spa?, Judy Chapman’s reply was this: “The best spas around the world offer spa experiences that are unique and memorable, and this is where Karma Spa delivers,” she says. “The Karma Spa DNA is that we offer all that one would expect to find at a 5-star spa but with Asian service and hospitality. We are also fortunate to have a network of incredible trainers and experts in their craft who can train any team of therapists to a top notch standard.” She says that part of the unique training program with Karma Spas is their ability to select the right managers and train them to run their department as a standalone and profitable business.
She adds that it is also the design and feel of a spa that attracts guests time after time, and yet this aspect need not cost a fortune. “I know spas that have been created in the most humblest of environments, but with the right managers and a team of well-trained therapists delivering services not available elsewhere – well this is a win-win situation.”
Just some of the treatments to be found at the various Karma Spas, for example, include Himalayan crystal salt scrubs to Indian rosewater facials, Balinese tarot reading and healing reiki. From ayurvedic curatives where warm herbal compresses are pressed and pounded along the body to soothe the muscles to a signature ‘Tibetan singing bowl’ massage, the offerings bountiful. By providing experiences second to none, the potential is boundless.
Karma Spa Licenses
Create a successful and profitable spa at your resort. A Karma Spa license offers the developer:
• The shared “know how” of a successful spa operator
• Design expertise
• An Asian theme
• Exotic spa menus
• A business plan
• PROFIT
For information on Karma Spa licenses write to karmaspa@karmaresorts.com.
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