The Yak goes one on one with…
John Spence of Karma Group.
The Yak has known John Spence (the very affable and charming mastermind, Chairman and Founder behind The Karma Group) for over a decade, and we thought it was time to have a proper catch up to see where he is now, and what he and the Karma Group has been up to over the last few years…
John, so good to catch up and hear from someone who has turned this global hiatus into a positive! What resorts have you recently added to your global experiences empire?
Sophie, good to talk to you again. Well, quite a few, I mean, when we went into the pandemic, I said that we would not leave it with fewer resorts than we started with, and I said that we would be quite keen to look at acquisition opportunities, because I thought there would be good opportunities. We went into it in a reasonably robust state, as you know, we have no debt. I own 100% of the company. We had a fairly good war chest, and so we anticipated that there would be some very good deals to be had during the period. And that’s really borne itself out. We’ve already acquired several resorts in India. We have a resort in Udaipur up in Rajasthan that we acquired a few months ago, which is a palace resort, obviously in the lake palace city. We already had resorts in Jaipur, so it complements that quite well. We recently acquired another resort in Jaisalmer, which is the desert city in Rajasthan. It’s actually a tented camel Safari resort, which sits out in the desert about 20 minutes from Jaisalmer itself. It’s not actually open yet, of course, because of various lock downs, but guests can sit in the tent and see the stars, go out on camel safaris and go “dune bashing” and surf down the dunes, go out on jeeps and really experience the desert. Jaisalmer itself has got fantastic palaces and forts and is huge on heritage. Linking our three resorts together Jaipur, Jaisalmer and Udaipur, there will be a fleet of Ambassador cars that we’re buying.
Elsewhere in India, we purchased a resort just outside Bangalore, in the Nandi hills. And again, that’s primarily attractive for the domestic market in the short term. And so we’ve geared a lot of our new acquisition to somewhere in the short term. And in the long term, it’ll be attractive to international clients.
Moving elsewhere, we acquired in England a property called Karma Salford Hall. It sits in the Cotswolds. It’s a magnificent old English mansion at one point in time it belonged to Henry VIII and it has an incredible history. Its 38 rooms sit on a nice ‘grounds’ in between Evesham and Stratford, which obviously is Shakespeare’s birthplace. We are applying for permits through an extension to build a swimming pool, a spa and a gym, and some extra rooms. But at the moment we have some beautiful common areas. We have libraries, we have restaurants, we have bars, we have some nice manicured lawns with a croquet area and boules and what have you. So that’s a beautiful property. Very pleased with that. That’s open now and operating.
And down in Indonesia. We purchased Karma Salak, which is one hour from Jakarta, up in the hills, and is extremely popular for our Indonesian guests, and we believe that it will also be very popular internationally when people can again holiday and travel to Indonesia.
We’ve got quite a few more in the pipeline. We’re looking at one up in the Philippines, which is in a beautiful scuba diving area. And we have another one in Indonesia. And our plan is to develop a network of Indonesian resorts. This one is down in Yogyakarta that we hope to launch in the next few weeks. Plus we also have a property over in Egypt of all places, which is magnificent. I can’t tell you too much about it but I think you’ll enjoy hearing details when it is launched. So acquisitive, very bullish about the future and we have being buying quite a lot of properties.
Just so that people can get to know you better:
When did you land in Bali?
Twenty-six years ago, I started off on the beaches of Goa with my first resort in 1993. It was a vastly underfunded venture, we fell in love with India and we started developing there. Then I met a man at a conference who had some property in Bali, and he told me about this island. So a year after starting with Goa, I went to Bali and fell in love with the place. My first property is over in Candi Dasa, which we still have. And over the years, we’ve developed and operated non-stop since then, it beautifully got under my skin and our skin as a company. And I always say, when I speak at international conferences, what are the two most important locations in the history of our group? The two names that always leap off the page are Goa and Bali. Our network during this COVID time has vastly grown and we now have 36 resorts built around the world, and eight under development. So we now have 44 properties, I have to pinch myself sometimes when I see that number, I certainly wouldn’t have believed that when I started in first Goa and Bali all those years ago.
What “Karma experiences” does the brand cover? From Estates and Resorts to…Did we hear Boutique Gin? Can you give us a quick rundown by industry/niche?
We are primarily in the business of finding land and developing or finding existing resorts, renovating them and turning them into luxury accommodation that our consumers will enjoy. We have a wide spectrum of accommodation experiences. It may be a camel safari in Jaisalmer or a resort in Karma Reef in the Gili Islands in Indonesia or a ski resort in Germany. We do use various different brand names to segregate them to a certain extent, but it’s all bracketed around Karma. We also step outside that box as we have spas and various bars around the world. We have great beach clubs with great DJs and bars and restaurants. We also provide products – we make our own olive oil and various organic items and our own wine. Wine is something that’s very important to me, I like to make it and drink it, and enjoy it. In addition to the above we get involved in education and teaching, consulting and all sorts of things. So I always say it’s lateral diversification. We never forget our core expertise, which is providing entertainment to clients. But having said that, we go much more than just providing a hotel room. It ties in, I guess, to our information about our recent dive into fine wines and spirits.
Is there a “why”?
Because it’s fun, I enjoy it. Our owners like it. I think it’s a touch point of ours that we like to provide extras for members and most of the wine and gin we make is given free to all our clients. We’re not trying to be a commercial wine or gin manufacturer, but I think you know that from a wine point of view, we make a very, very good Bordeaux, which I go down and blend myself each year down at Lynch-Bages in Pauillac where very good Beaujolais comes from. We also blend a very good white burgundy and we have a very high quality Rosé, all cellared on property.
We also recently got involved in Gin. We were approached by a gin company that had an idea of crafting a boutique gin, of extremely high quality, distilled many, many times more than a gin is normally distilled, and we then included the botanicals, which come from the many areas that we operate in. And so we have a unique, bespoke, botanical blend, which include lemons from Tuscany and special herbs that come from Cornwall. So the answer ‘why’, it’s a bit of fun for our owners, we stock it and sell it in our resorts and we give it away – it’s just a little extra entertainment value.
Which, in your eyes, are the most romantic Karma properties and why?
Very hard question to answer. I mean, Karma Kandara in Bali is a beautiful property and it’s extremely hard to beat with its amazing location on top of the cliff with a great Beach Club and a travelator car and I love it. I would say probably Le Preverger Chateau has to win on the romantic side. Le Preverger is our 18-bedroom chateau, in the south of France and very near to St. Tropez. It sits in 200 acres of magnificent grounds. It used to belong Jeanne Moreau, the French film actress and then Laura Ashley acquired it. We were lucky enough to acquire some ten years ago. We had Nicky Haslam, the go-to interior designer work on it and make it even more beautiful. So the interiors are fantastic. The location is superb. It has a storied history. And I personally love spending time there.
The Yak’s favourite, Karma Kandara, has recently had a lot happening. What are the upgrades and do you have any more planned?
Yeah, lots has happened there at the beach club as we expanded quite a lot. As you may know, we pushed it out to the other side of our little Bay, we added a bridge, so when the waters are up during King Tides, it’s still accessible. On the other side, we put in a Tiki Bar, some private cabanas, and we’re planning on doing quite a few more things over there. To the rear of Karma Kandara, we own quite a large chunk of land that we’re about to start developing. You’ll probably have seen the apartment block at the back, which is about 50% developed now, it will have magnificent views from the top over the whole region. And behind that, we have planning approval and suitable land to build about another 80 villas and apartments. We’re putting in at least one, if not two, more restaurants. We’re putting in some meeting spaces, a larger gym, an add-on spa and all sorts of amenities. You know Karma Kandara is very dear to my heart. I bought the land many, many years ago when I was actually thinking of retiring and I wanted to find the best land in Bali. I acquired this land because I’d employed a Fung Shui expert, who said it had the most powerful energy on the whole island so I swiftly changed my mind from retiring. I think it keeps getting better and better, and one of the things I like about it is that it is designed organically. It was never master-planned. we never “custom-filled” the land. We kept it natural, which is why we have amazing flora and fauna there, whether it be monkeys or butterflies, and great trees. And, over the years, it’s grown much like a village grows. It has windy pathways and you know funky trees and strange corners and a certain illogicality to it, but I think that adds to its charm, totally.
Charity is very high up on the Karma Group CSR (Corporate Social Responsibility). Can you tell us a bit about what the group is doing and in which countries?
Yes, that’s huge for us. I mean, I’m a huge believer in charity, I think very much ‘there but by the grace of God go I’. We support an orphanage in Bali, we support a school In India, we have various charities in Vietnam. We’re working with a refugee concern over in Europe. And I think it’s something that I sometimes get frustrated with, that other companies don’t do more. And so we are heavily involved in charity. One thing we actually love in India is we actually do a “Karma Week”, where we take a lot of the kids from the school that we have in Bangalore, and we populate a resort with them. It’s like 200 kids,in a 120 room hotel or 140-room hotel. And we allow members, clients of ours to volunteer to come and work, so the staff can get the week off. We actually have a waiting list of people wanting to come and help.
Your Karma Member’s Club: How and why do they become members? And what are the benefits?
This is a new product, which we launched over the last few months. And it’s really in response to requests from our clients and members. As you probably know our core business is creating long-term members. And we have 48,000 people that have been members for many, many years. Normally, they buy a long-term membership plan and then keep topping it up, and that entitles them every year to two usage-rights for our resorts. But, particularly for the younger generation, there is a demand for a more short-term plan. So Karma Club, our new product, essentially entitles someone to join us for a year. It costs plus or minus about 12 x $100 depending on exchange rates and jurisdictions, and it gives them a range of benefits for one year. The primary benfit is free usage of our resorts and seven nights free accommodation at any of our resorts, it could be in Bali, it could be in Australia, it could be in England, it could be in Vietnam, or wherever. And these nights can be used in one single block or they can be separated out and used in various different tranches. It also gives the client 20% discount on extra accommodation, and so someone could elect to take a long weekend and cash in one of their free nights and a couple of discounted 20% it gives them 15% on food and beverage, it gives them free access to rugby for example, whether it be the Bledisloe Cup in Perth this weekend, whether it be the autumn internationals coming up in England.
Or for the production of Dante’s works in Florence this week which we are sponsoring, which will partly be to celebrate his 700th anniversary of him passing With actors, such as Ralph Fiennes, Rupert Everett, and other famous actors and actresses, partly with a live stream going out around the world and with screens in London. So our Karma Club members can come free of charge, whether they wish to come down to Florence or see it in London. As we mentioned, we produce our own wines and our own spirits, which we send free to members too. We have social events, drinks, parties, cocktail events, a whole assortment. So Karma Club is a bit of a lifestyle club, really. We launched it a couple of months ago, we have over 1000 members, and we obviously anticipate rolling it out on a bigger scale quite soon. So we’re very positive about that. I think it’s going to be a great success and one of those programs that I think will be with us for a long time afterwards.
How would you describe a typical Karma member?
Well, that’s quite hard to answer. I don’t think there was a strict demographic, I think a lot of our members become members with us because they like the idea of having different experiences. Most of them want to go to the different destinations around the world. They like Karma because we have interesting environments, we always say we’re not in the lodging business, we’re in the entertainment business. Our job is to entertain. Now, that may happen in different ways. It may be that they like the bars, the restaurants, it may be they like the kids clubs, or the wine list and maybe the beach clubs and the DJs. It may be the different resorts and destinations and the fact we’re so geographically spread, but there certainly is an element of “enjoying experiences”.
I take great pleasure (when I travel around my resorts) in sitting at a bar or coffe shop coffee shop (with usually a bar) talking to members and finding out what they like about us. It’s amazing how many members travel with us to so many different destinations year after year, they come from all countries. Different countries, different backgrounds, different people but united by a bit of a travel bug and wanting to enjoy good experiences and live life well.
What has Karma Group got going on into this extended global ‘hiatus’? And what is planned for 2022?
What are we done in this hiatus? Well, I think I’ve explained some things above. We’ve launched new products, we’ve developed new resorts. We’re developing a very nice app for our clients to have on their phones, which enables them to interact with very easily.
I think we’re gonna see a boom, I think there’s going to be a global boom in tourism when people can travel. And they will travel. And they’ll travel with a relentless vigor. And so we’re ready for that, we’ve got new resorts, we’ve got new products, the company is quite lean, we’re quite fit. We looked at what we were doing, at what works and what didn’t work, we’re going to come out of this with plus or minus 50 resorts and with cash in the bank, with a very highly-trained and structured management team.
You have been a well-recognized business powerhouse for a few years now. How has your drive been recognized by the global hospitality and business communities?
I’ve been recognized business powerhouse? Very kind kind words, I wouldn’t say it’s necessarily true, but I have been recognized. I won an award called Entrepreneur of the Year a number of years ago, which I was very humbled by and after that I have served on the judging panel obviously. And I’ve judged many, many amazing fellow entrepreneurs. That was a very good exercise. I’ve also been honored with a fellowship at Yale University, to teach. And what’s interesting about this is that I’m a university dropout, I dropped out after two terms! So I’ve got no academic, real knowledge, and to actually go to Yale, which is obviously one of the top universities in the world, and to teach students who have more brains in their little finger than I do in my whole body, is amazing.
And to work alongside real professors and lecturers who are unbelievably intelligent and dynamic and inspirational is a real joy.
Lastly, if The Yak could plan you a perfect ‘John Spence’ day what would that look like?
Dive into work. I love my work. So work isn’t the challenge. And so my perfect day would be to get up at about six o’clock in the morning, then go downstairs, do some emails, make some savagely strong coffee, get organized and work through until 9 or 10 o’clock again. Go to the gym. I like to try and work out every day. I throw weights around, I’m very into weight training. So I’ll do that for an hour. And more work if I’m in this part of the world in Asia, obviously different time-zones. Lunch for me is the most important meal of the day – a savage lunch. Whether I’m in London, the south of France or in Greece. A long lunch with either interesting business people that I like to talk to and discuss business deals or good friends or family. I enjoy lunch with good seafood. Maybe some grilled calamari or Dover soul or a big slab of oysters washed down with some Chablis. My afternoon? I’d probably go to the beach or swim. Maybe a couple more glasses of wine and a chilled out evening. Relatively early to bed and repeat. So that I guess is my perfect day. Nothing too amazing. Nothing too dramatic. But the one thing in life I always say that I would find it hardest to give up is the long, savage lunch. Good fish. Good wine. Good company. That’s my birthday.
John, we know you are a very busy man so we really appreciate your time.
Thank you and hopefully see you in the Karma Kandara’s Director’s Nest when you get back to Bali…
FB: Karma Kandara