Editorial
Today, we try once more to get to the bottom of the effects of the crisis. Our correspondents in Austria and Switzerland interviewed leading hoteliers and experts; initial concrete forecasts in terms of figures are slowly coming in from the US. Here, it seems that it will become a "perfect" winter season for resort hotels, while city hotels are already suffering from the reduction in business travels. The negative news from the US should nonetheless be considered against the backdrop of rate and occupancy levels that were already substantially high.
All in all, the situation is quite confusing in all its detail, and nobody is able to look into the future through a crystal ball. From my point of view, all those extremely negative reports about the threatening economic disaster issued by the mass media every single day are psychologically devastating and partially irresponsible. If you listen closely, every forecast comes with critical dissenting voices - but the effects on consumers are depressing. We don't want to join in this type of reporting, but rather follow the developments in 2009, in an even more differentiated manner - and deliver background information exactly in the way our article about the problems of the open real estate funds mirrors it today.
In Munich, Alexandra Schoerghuber took over the management of Schoerghuber Unternehmensgruppe two weeks after the death of her husband. This early clarification of circumstances signals willingness to take decisions and continuity to both employees and partners - something the group urgently needs. Even if there are no details known about the future of the hotel division, it is positive to hear that the new head of the company is a friendly, active and analytical woman. And she learned her profession in a hotel.
Hilton is leaving everyone in the dark once again - you only learn about their new lifestyle brand via the media. Hotel Cipriani in Venice successfully defended its name in court, and the Alps see the beginning of a new collaboration.
Have a great final advent week.
Yours, Maria Puetz-Willems
Editor in Chief
Your opinion? maria@hospitalityInside.com
Dear Insiders,
The terror attacks on the Taj Mahal and the Oberoi-Trident Hotel in Mumbai are a superlative in the most negative sense of the word. It is one of the biggest disasters ever affecting hotels. The collapse of the Marriott World Trade Center New York in September 2001, the attacks on the Radisson SAS in Amman in November 2005, and the devastating explosion in the Marriott Islamabad in September 2008 are of course not to be played down. People died in all these cases, and there was a great deal of bloodshed. Of course, one cannot foresee such incidents, but in cases of crisis it is clear as to whether companies are prepared at all for such catastrophes. We took the incident as an opportunity to analyse the crisis communications measures of the two hotel groups. Dear hoteliers, "Crisis management has to be put to the test now at the latest!" says our editor Baerbel Schwertfeger - and she is right. We provide you with a concise checklist. Mumbai could take place everywhere today.
The financial crisis has grasped the entire globe, and therefore, the celebrations on the occasion of the 80th birthday of Leading Hotels of the World in Boston were accompanied by discussions and worries. The convention in the city of immigrants also revealed the different ways in which various mentalities cope with crises: the Europeans assumed a more confident and composed stance facing the threatening insecurity, while numerous Americans seemed rather helpless. Leading Hotels seemed prepared for the "run 2009".
At the Leading Hotels gala night, I was lucky to have Hans Bruland sitting right next to me. He has managed the legendary hotel The HayAdams in Washington - the "President's hotel" of the city with the absolutely unbeatable view of the White House - for almost ten years now. Bruland, a German native, talks a little about the "night of nights", the election night on November 4. And he explains why his hotel is normally "crisis-proof".
Such encounters are among the bright and happy moments for journalists, who are normally busy tracking crises nowadays. Our correspondent in Austria, Fred Fettner reports about the effects of the financial crisis on the alpine republic. Applications for loans are dropping, investments have been brought to a halt, and a lot more equity is required.
If you would like to treat yourself or friends and colleagues to an exciting read as a Christmas gift, you should take a glance at the review of Stefan Loipfinger's reckoning with the fund sector. This is crisis management à la journalistique. At Starwood Hotels, the crisis is already taking its toll - dismissals. Other chains will probably follow suit, I presume.
A thrilling issue awaits you. Read for yourself!
Yours, Maria Puetz-Willems
Editor in Chief
Your comments? maria@hospitalityInside.com
The hotel group ArabellaStarwood is probably the smallest problem in the business empire of Stefan Schoerghuber. His sudden death last Tuesday places his family and the staff of the Schoerghuber group before new and enormous challenges in times that are already turbulent anyway. The head of the company died far too early at the age of 47 right in the middle of the reorganisation of the holding. The German hotel industry has lost a great investor who put his heart and soul into his business. He purchased Schloss Pichlarn in Austria just last Friday.
The news of his death became known during the Dehoga Branchentag industry event in Berlin. There, the participants were struggling against burdensome fees and for a decrease of the VAT from 19 to 7%, but the day's star guest, the German Chancellor, did not submit to promises. She did, however, give the hoteliers the feeling that the industry's interests were being heard at the highest political level.
During the coffee breaks, the real economy was visible: The hotel managers and caterers talked about the banks' credit crunch, about decreasing prices and the year 2009, about which nobody knows what is in store. Our colleague Susanne Stauss intensely dedicated herself to the price issue and compared hotels via online booking systems.
The opening of the 15-million euro spa in the wellknown Wald & Schlosshotel Friedrichsruhe, so far only known as the gourmet temple, is counter-cyclical to these times. The hotel's aim is to attract the "stable" and well-off clientele between Hamburg and Dubai. In the course of its changes, the owner has dismissed the star chef Lothar Eiermann.
And there many more exciting bits of news this week.
Yours, Maria Puetz-Willems
Editor in Chief
Questions? maria@hospitalityInside.com
Dear Insiders,
I've known it since last week: the super-rich in this world have their own "misery". They need cash, but facing the current financial crisis, they remain sitting on their villas, yachts and paintings. Apart from two highly interesting talks on the decreasing luxury level in the US at the Leading Hotels Convention in Boston, today's article about the changed leisure time behaviour of Austrians also shows that the crisis has effects everywhere. Even the "broad masses" are showing a reaction - they are reducing their parties, shopping, wellness and breathing in fresh air instead. It is for free.
The Austrians, Europe's seismograph for tourism developments, live in the fear that a snow crisis might come in the next few years. Their winter sport is worth 11 billion euros after all! An enormous amount for such a small country. They are therefore taking immediate action looking for an alliance with winter sport partners.
At the Design Hotel Conference in London, Guy Dittrich learned that a huge gap lies between the desires of designers and those of the hotel operators. That is nothing new for realists, but in times of crisis, this is becoming critical. At the moment, there seems to be hardly any leeway for experiments.
Accordingly, the engagement of the famous Sacher Hotel in the mountains of Austria can be seen as a small experiment. As of December 1, the grand hotel dynasty will manage the domicile of a rich Russian. 19 rooms "all inclusive". But: the oligarch lost a lot of money. Despite this, the Sacher remains true to him. The famous cake is to be exported to Russia in the long term.
Today's top news: our staff reports - mainly on Wolfgang Neumann and Moreno Occhiolini. Two big managers have new plans. And Wyndham's Rudnitsky has turned up again as well...
Enjoy reading!
Yours, Maria Puetz-Willems
Editor in Chief
Questions? maria@hospitalityInside.com
Dear Insiders,
Singapore wants to push on. The Asian city state is improving its tourist offer. Ageing hotels are to be renovated and top integrated resorts are to be built in the city and the island of Sentosa. Singaporeans of course are a little concerned than billion-strong investors may renege at short notice, but for the moment everything is in order and the construction cranes are growing higher and higher on the skyline.
The picture is different in Europe. Here, banks and car manufacturers have discovered the State as saviour in respect of their economic failings and they withdraw unashamedly beneath its protective wing. SMEs, on the other hand, continue to struggle alone against the full force of the crisis and are even confronted by new restrictions, an injustice which led the European hotel and restaurant association Hotrec to make an appeal to European politicians at its annual congress in Prague recently, to finally change their course in such hard economic times: away from the glut of excessive regulation and towards real support for the industry in the form of reduced VAT rates and subsidy for training. But such appeals are likely to fall on deaf ears.
In such a situation, a modicum of solace might be found in predictions from Dr Volker Boettcher, Head of the tour operator TUI Germany. According to him, 2009 won't be too bad a year for tourism. Boettcher is convinced that the holiday is considered important in Germany and that in 2009 too, Germans won't be too willing to do without their "nicest weeks of the year". TUI's strategists have extended the number of four and five star hotels in their portfolio for their financially strong clientele.
Guests whose belts have had to be tightened in the wake of the financial crisis, however, can also expect a large selection of all inclusive trips. "2009 will be an all-inclusive" year, Boettcher said firmly at the presentation of TUI's summer programme for 2009 at Agadir in Morocco. Further focuses of the programme - in line with trends - are to be found on best agers and environment. Expensive air fares which may ruin the tour operator's business, have been pushed back by way of caution. And: TUI has not been afraid to announce price increases for the coming year.
Modified concepts in this edition of hospitalityInside.com are not only presented by TUI though. Fairmont, Raffles and Swissôtel - meanwhile all united in one single parent company - also announce their new strategies. Further articles bring us to Switzerland's top class hotels and to sensitive takeover negotiations: Starwood Capital plans the sale of numerous luxury hotels, among them the 33 Concorde Hotels and JJW Hotels. Have fun on our journey across the globe.
Susanne Stauss
Senior Editor
Questions? susanne@hospitalityInside.com
Kurt Ritter and Barack Obama have something in common: With the slogan "Yes, I can", the Rezidor CEO has been trying to motivate his team for years, and with "Yes, we can", the American President Elect has this week managed to mobilise an entire country. Both have to struggle against the economic downturn and Rezidor wasn't the first this week to announce falling figures. But more on this and on other ramifications of the global financial crisis next week.
Today's edition of hospitalityInside.com moves a little away from the topic of financial turmoil. Guy Dittrich once again summarises statements from the International Hotel Conference in Rome where positive approaches for boutique and budget hotels are found despite the financial crisis. And the tenor was similar at the hotel discussions during the ITB Asia. Here, it was reassuring for visitors from "good old Europe" to hear that the boom continent has now found itself subject to exactly the same market mechanisms as have long established themselves here at home. That is, competition between sectors, brands and prices.
In almost all discussions in which I have listened this autumn, an appeal can be made out to set oneself apart from the competition through "differentiation". The Fraunhofer Institute in Duisburg may be able to help here. It has recently completed the first two "experimental rooms of the future" and invites all those curious to know more to come and test them. How does it feel when a robot brings room service to your door? Or when the bidet disappears into the floor at the touch of a button?
The Swiss have once again proved their sense for hyper-progressive architecture: In Bern, the Westside - a mixed use project by star architect Daniel Libeskind including shopping, spa, entertainment, hotel and residences - has opened. The modern building hides a smart concept and the Holiday Inn is part of it. This hotel is once again living proof that the classic "stand alone hotel" isn't the ultima ratio. Here it's about concept synergies.
And last but not least, I'd like to present a row of current personality portraits and to point the Cornell alumni among them to a corresponding article. Here, you will find all dates for 2009 on which you can meet your international colleagues.
Because the year is slowly coming to a close, hospitalityInside.com would like to know from its readers how you view our magazine. For this reason, from this day on we will include testimonials. These are a huge motivation to us in giving you our best week for week.
Yours,
Maria Puetz-Willems
Editor in Chief
Questions? maria@hospitalityInside.com
Could it be that the rumour of the week about the imminent sale of Steigenberger to Marriott was a retaliation campaign of former employees? Even Dr. Ralf Corsten, Chairman of Steigenberger's supervisory board, who is rather considered a mastermind in the background, allegedly knew nothing about this rumour let alone activities of that kind.
Consequently, the floodgates have been opened to speculation. And in the middle we have the dynamic Chair André Witschi, who allows a short glimpse at the strategy he is following with Steigenberger for the first time after this week's events. And it says: tidying up! The investment crunch puts too much strain on the hotel group, and it is only able to divorce itself from old agreements very slowly. Anne-Marie Steigenberger and her daughters have lived on the "gold rush" for many years. Now they have to use all the more money in order to make their company attractive again.
Last week saw humming business in Singapore: the first ITB Asia was a complete success. Messe Berlin, the Berlin trade fair company, is pleased about 24% more visitors than expected as well as positive comments from both exhibitors and buyers. The trust in the ITB brand and the German organisational talent is amazingly big in Asia. As a German in Asia, you perceive this with respect. Being a media partner, hospitalityInside.com was on sight throughout the entire week: for starters, we will describe our impressions from the fair, and next week you will read more about the current hotel situation and up-to-date discussion topics in Singapore and Asia.
In Switzerland, the hotelleriesuisse industry association has drawn conclusions from a guest survey. By 2010, demands of guests will change criteria for awarding hotel stars. And based on the motto of "less industry sleaze, more objectivity", the association is filling its committees with external experts.
"Green meetings" remain wishful thinking, as our editor Simone Spohr found out. The hotel offers in this segment are far from being applicable.
Enjoy surfing and reading,
Yours, Maria Puetz-Willems
Editor in Chief
Your comments? maria@hospitalityInside.com
Dear Insiders,
The finance crisis this week too continues to keep the hospitality industry on its toes. Tour operators and representatives of the hotel industry all agree, tourism will be affected by the imminent recession. Across the globe, the ramifications of the events we've been witness over recent weeks will be felt in many forms. This week, hospitalityInside.com reports on the mood at various of the world's tourist hotspots.
Although the effects of the financial crisis are still not felt quite so strongly in the Middle East, it struggles against a different problem. There, rising construction costs, a lack of skilled labour and quality building materials are the talk of the day. The mood at the International Hotel Conference in Rome last week reflected the problems of the finance crisis, yet our correspondent Guy Dittrich, who attended the event, wasn't just confronted with tales of doom and gloom, but also noted a glimmer of hope. First and foremost, the large hotel chains see the crisis as an opportunity. In times of crisis, so the general idea goes, consumers look more than ever to what they know and trust and come to the strong brands in search of security.
Not least because of 9/11, the hospitality industry has learnt how to deal with crises. The results of a survey on "Sales & Marketing in Crises" are positive. No hotel chain spoke of lowering rates - and that, although it's certain that the crisis will reach their businesses. With the support of the "early warning systems", such as yield and revenue management, established over recent years, hoteliers have a good overview of reservations, are in a position to deal with cancellations and are able to fill rooms with other target groups. Drastic cuts to room rates were excluded by the hoteliers. In comparable situations, it has simply taken too long, they noted, before rates could be increased after all other markets had recovered. We hope that hoteliers will be able to stick to this approach.
Whilst I'm writing these lines, Maria Puetz Willems is researching moods and trends on the other side of the world at the ITB Asia. More next week. Have fun reading!
Yours, Susanne Stauss
Senior Editor
Questions? susanne@hospitalityInside.com
Dear Insiders,
The current financial crisis has also sent the share prices of the hotel chains plummeting - Wyndham, for instance, lost 75 percent! Nevertheless, our correspondent and economic expert Prof Macy Marvel from the EHL gives calming news: there's no reason to fear mergers and acquisitions in the industry.
For this first time this year, the Expo Real Munich made the "Green Thinker award", an award for responsible companies and project developers; our correspondent Guy Dittrich met many such characters in the Kruger National Park in Africa in an exchange of ideas in relation to the "Eco Resort" of the future. It soon became clear that the issues here weren't only related to solar energy and moderate water consumption, but also about the varying expectations of investors and the local population.
Not the environment, but the desire for wellness motivated gourmet chef Joerg Sackmann in the development of his "Indulgence Spa" in the Black Forest. In the end though, "eco" thoughts also characterised the project: The new spa also uses native woods and home grown herbs. Sackmann introduces his guests to the "roots" of aroma and scent. A perfect symbiosis between kitchen and spa.
Swiss Deluxe Hotels too plan to invest around one billion CHF in wellbeing. After rich patrons have meanwhile restored dilapidated grand hotels to their former glory, the noble middle class hotels follow suit. Their projects and plans are further proof that the Swiss hotel industry is finally about to return to its former prominence amidst the international competition. This, however, is not true of Switzerland's small and medium sized hotels: One quarter of them aren't in a position to survive, the study finds.
Our legal expert Joachim Jungbluth once again busies himself with the harsh reality for employers: Companies in Germany hardly have a chance to prevent a member of staff leaving to temporarily care for a family member.
In the coming week, my colleague Susanne Stauss will greet you here. I will be in Singapore where I will take part in the first "ITB Asia". Hopefully, I'll return with lots of news in my suitcase.
Have a pleasant week with few surprises,
Yours, Maria Puetz-Willems
Editor in Chief
Your opinion? maria@hospitalityInside.com
News from Schoerghuber: Stefan Schoerghuber himself will take over management of ArabellaStarwood. The leader of a true empire of enterprises will be discussing everyday operational issues with his hotel managers in future. It is one of the most unusual human resources "decisions" of the hotel industry. Who would want to contradict the chief of chiefs?
For many, last week's focus was on the Expo Real real estate trade fair in Munich. In the end, the trade fair recorded 42,000 participants - not a trace of any crisis mood. The hotel industry is gaining increasing importance there. The "Hospitality Industry Dialogue" hotel conference, the content of which I arranged for the first time this year by commission of Messe Muenchen, attracted about 1,200 visitors with six panel discussions. Today and in the following issues, you will find summaries of the respective topics; in addition, we will make the panels accessible for download on our website within a short time.
The mood was quite subdued, but it was not extremely negative. Read a first report and a summary on how the new situation will affect the private equity scene. On Monday, Treugast presented its annual investment ranking for Germany and Austria. The top news is that the budget sector is becoming presentable in financial circles thanks to Motel One.
Among the briefer contributions, you will find another interesting staffing issue: the new CEO of Accor Deutschland has introduced a new management level.
Read for yourself - and look forward to even more insider information next week!
Yours, Maria Puetz-Willems
Editor in Chief
Your comments? maria@hospitalityInside.com