Editorial
Dear Insiders,
Friday is "hospitalityInside Day", Monday is "Focus Day"! On Monday, both will coincide, as, for the first time, Germany's opinion-forming news magazine will contain the "Focus Hotel List" with 550 hotels from all over the world. In choosing the hotels, the editors of Focus have fallen back on hospitalityInside.com's know-how.
Today`s detailed articles can all be regarded under a single aspect described by Deloitte in its future statement: the aspect of the people. A married couple with a great deal of sensitivity for people earns money with its "Kuschl-Konzept" within a short time. Reading the expansion list of Moevenpick Hotels and the small Seetel group from Usedom, insiders ask themselves how these companies will manage to give these numerous new hotels a face with qualified people. And our book hints about public relations touch the people issue anyway. Many hotel groups do not realise the massive influence of the character and the abilities of the PR Manager building up the hotel image.
Six years ago, i.e. back in the boom year of 2000, I travelled with colleagues and Moevenpick's CEO Jean-Gabriel Pérès for one week through Israel, Jordan and Egypt. Pérès, who had been in office as CEO for only one year, had the ambitious plan to double the 40 businesses by 2005. As you will read today, Moevenpick is lagging behind this goal. The new focus on Asia follows the general trend and Pérès is able to evaluate the Asian market: Before joining Moevenpick, he worked for Le Méridien Asia Pacific for eleven years.
Today, Moevenpick still strongly believes in a future of this region, as it did back then. There is no other European hotel group that is deeply rooted in the Middle East. It still is one of the largest companies in the hotel industry that carries out professional training!
In 2000, our group of journalists admired its fabulous Middle East network: A strong blizzard at the end of February forced all tourists to stay in Jordan's rock city of Petra for one more night. The connecting flight to Egypt had left the flight home to Germany was endangered. The snow chaos in the desert caused the entire telephone network to break down. For hours, nothing worked. Despite all this, Moevenpick's employees managed to have their boss and the journalists fly on with only one day of delay: Moevenpick's managers in Cairo contacted the ministers of Egypt, Jordan and India by phone and chartered a private plane in Israel, which was allowed a flyover and stopover in Jordan. In Amman, the plane picked all of us up and brought us to Egypt. This was a masterpiece considering the complicated relationships between the countries in this region. Moevenpick manages to overcome borders... with people.
Yours, Maria Puetz-Willems
Editor-in-Chief
Questions? maria@hospitalityInside.com
Dear Insiders,
in this issue, we will trace trends from all over Europe decorated with news full of facts and figures. It's interesting how Americans see spa trends in Europe. The first British "hair spa" fits to these trends, but its rates will probably make Continentals' hair stand on end. Similar to this, the approach of GuestInvest in England simply amazes people, as they plan to introduce their expensive condo hotel concept on the continent.
This week's most important economic news come from Accor. The figures for the first-half 2006 practically include the "policy statement" of Accor's new CEO, Gilles Pelisson, who has been in office since January. He is drastically cutting the group down to its core business, as it is common practice in the industry. Entire brand chains are under the microscope.
But what is even more important: the hotel giant, who had experienced growth thanks to following a strict standardisation strategy suddenly wants to have nothing to do with standardisation anymore. The announcement of starting a new 2-star chain without any standards can be considered as a declaration of failure regarding the Formule 1, Etap and Ibis concepts. Accordingly, the half-yearly report says Formule 1 and Ibis were to be "revived". Or could the death sentence only hit the lease agreements which have put an end to the expansion in the past two years - at least in Germany? Shareholders understand simple franchise figures more easily than lease agreements with their jungle of clauses. And in addition, the fact that Pelisson wants to be appreciated by the investors is beyond doubt.
In Germany, a single question remains: where and how does Dorint fit in there after all? Accor will have to solve this problem at any rate in the second half of the year. And it doesn't look like Pelisson could score points among his shareholders with this issue. Provided that they notice this subsidiary from "abroad" at all.
I wish you an exciting week,
yours, Maria Puetz-Willems
Remarks? maria@hospitalityInside.com
Dear Insiders,
Two of the most important months of the second half of the business year are upon us. More and more appointments overload the calendar again and company activities are hotting up. ebay for instance has set itself a range of new targets: The more than successful online auction house has implemented further useful tools for placing hotel offers. And at the same time ebay vendors and hotel agents are polishing their profiles. Interesting developments are in the pipeline which should even appeal to the 5 star sector. Or did you already know that most of the offers made on ebay were placed by upscale hotels and that rates achieved were often at rack rate level?
What the future holds in store for us is on everyone's minds. Deloitte and the University of New York have condensed their vision of hospitality in 2010 into a report. Beginning with the topic "Brands" and following on to "Emerging Markets", Human Assets" and "Technology", we will take a look at what they have to say. The big trends in these areas are to ensure above all one thing: increased shareholder value.
Promising is the concept from Do&Co, Vienna's newest design hotel. A breath of fresh air to the Viennese town centre. Our new author Guy Dittrich will also focus more closely on architecture and design topics.
In September and October hospitalityInside.com will also take part in many conferences and not only as reporter: As already announced in the last edition, we are media partner for the International Hotel Conference in Rome, the Future Forum of Design Hotels in Vienna and - that's new - at the Bernd Heuer specialist "dialogue" about leisure real estate in Munich. The latter event is subject of a more in depth article from us today.
Our bank portrait this week is of Aareal. And don't forget to take a look at the fact-laden news.
Yours, Maria Puetz-Willems
Editor-in-Chief
Suggestions? maria@hospitalityInside.com
Dear Insiders,
The changing cadence of Dorint's Chairman Theim over the past few years has already conveyed the true development of the group. His words have become more and more sober, and that is why one should take it seriously when he says: "Dorint will not get a fourth chance."
Martina Fidlschuster of the Hotour consultancy knows what he is talking about: in case of high lease costs, as is the case with Dorint, a 5% drop in revenue is enough to enter rough waters, she says. Martina Fidlschuster cannot follow Theim's fear of a downfall of Germany's biggest, purely German hotel group could call into question the entire field of hotel financing. "The fatal signal of this situation would only be that too many hotels would be left without an operator at once."
Accor, however, has already received a public scolding. Dorint's majority shareholder has to deal with complaints insinuating a complete failure in terms of marketing and sales. This is damaging the image of Germany's market leader.
Alexander Fitz sometimes still has to deal with the effects of a negative image. Even in our talk, he twisted his face when asked about the past. However, he gives answers. For three years, the 37-year old has been Chair of the managing board of Hospitality Alliance AG with the Ramada brand. It emerged from Treff Hotels. For many years, the industry had heard nothing about this group. Not a single medium wanted to deal with this non-transparent network his partly choleric father Helmut Fitz had created mainly in the years after the reunification in Germany. Treff Hotels were his creation, and after a few years, their image was as bad as his was. Today, Alexander Fitz steers the company, and his father has no influence on the active hotel business, he says. Hospitality Alliance is planning to expand. This requires opening up and talking about strategies and figures, he emphasises. In addition, he was prepared to do so - after many years of consolidation. He takes a deep breath and explains...
However, there is some more news today: LSF Hotels do not want to expand further in Germany! The Swiss Grand Hotels Bad Ragaz does - on its own territory. In UK, the chain of Travelodge expands solely by using funds from Arabian sheiks. Dubai International Capital just bought them.
Of all staff issues, one particular one deals with a Swiss Gentleman Hotelier: Melchior Windlin, over 20 years GM of Bellevue Bern, died surprisingly. He hosted more than 20 state receptions at the Bellevue. After all, it is humans who shape the hospitality industry.
Yours, Maria Puetz-Willems
Editor-in-Chief
Questions? maria@hospitalityInside.com
Dear Insiders,
The thwarted terror attacks in London are not without consequence for the hotel industry: British newsletters and also our correspondent in New York report that occupancy and room rates are rising! No trace of a crisis for the hotels. "The bookings for the remainder of the year in New York stand at record levels. The city stands before annual average occupancy rates of over 90% - a first for city," Harold Weiss mentions in his report. Weiss's main focus of interest is, however, another: Some hotel chains receive their guest with exactly those cosmetic products which they've had to discard at the airport. On the one hand its good publicity, and on the other it's exactly the sort of campaign that creates loyal customers.
Whoever recognises current trends stands before better business. In Austria the Waldklause has demonstrated that an individual and consistently implemented concept can find its own niche. The hotel built from large wooden beams refuses to label itself with the words "eco" or "health".
Budapest, however, can make itself quite a different tag - that of an international metropolis. In the very heart of the Hungarian capital, not even the smallest remnants of their communist past can be found. Tourist strategists have fixed their gaze on the future and are in the process of providing both country and capital with a visionary health concept. The new 5-star hotels fit superbly into the plan.
And finally, the operator Success may well like to adorn itself with renowned hotel brands. All the same, many insiders remain unacquainted with the company, despite its lengthy history. Whether working time regulations known in more detail? Our labour lawyer doesn't think so. Questions on this area are amongst the most common asked of lawyers operating in this area of law. Reason enough to dedicate a spare moment to the topic.
Have a good week,
Yours, Maria Puetz-Willems
Editor-in-Chief
Questions? maria@hospitalityInside.com
Dear Insiders,
Holiday season - the cities are bustling with tourists. Backpackers included. They are part of the hotel business as well, but are often ignored by chain managers. Although, the Wombat's guests in Munich, Vienna and soon in Berlin seriously compete with every Etap! This clientele may possess only little money, but it spends its euros or dollars with great care.
By the way, wellness guests are doing the same, according to Wolfgang Kostenzer of Alpenrose Maurach at Lake Achen. His hotel is probably a European phenomenon: an occupancy rate of 99% is standard! I have known Alpenrose for almost 15 years, right from the beginning, when its wellness area was still small. But right from the start, it was a benchmark in terms of architecture, aesthetics and human nature.
In contrast to that, the report on the MICE surveys make quite dry reading. They reflect cold facts. While reading these "error lists" I asked myself: what is the hotel business actually? "The guest is the focus of attention!" This is what I have been hearing for years now from various hoteliers. A well-worn catchphrase - who else should it be??? As insiders, we know that investors are the true centre of interest, but as a matter of fact, both hoteliers and investors still need a few kind guests. And why on earth shouldn't it be clear or obvious to deal with guest demands in order to earn some money? The two MICE surveys quoted from today reveal lip service.
Our news section highlights some important details: Hilton now begins to stave off entire brand portfolios. Scandic is at their disposal. Over the past few weeks, Hilton has announced the separation step by step in various statements.
The verdict regarding hotel television shows up some typical German problems. It demonstrates once more how legislation causes an entire industry to fall behind in international terms. The most recent success achieved in the court of first instance is even more important.
Despite the summer holidays, there is a whole bunch of news. Nothing that affects the entire industry, but enough food for thought under the sunshade.
Yours, Maria Puetz-Willems
Editor-in-Chief
Questions? maria@hospitalityInside.com
Dear Insiders,
In the middle of the summer holidays, the quarterly and semi-annual figures of the major hotel chains are sending positive signals: the industry is looking up. We have compiled the key figures and linked them to the reports so that you are informed in detail.
This week sees tour operators in action. Looking at the 2006/2007 winter programmes, we noticed: the focus on high-quality hotels continues; each catalogue boasts more and better hotels. Moreover: more and more special catalogues are entering the market. All in all, this development leaves me sceptical: Who among the tour operators determines what hotels are of high quality? Officially, they deny what their staff members admit unofficially: they do not have any hotel inspectors. The buyers do the job. And that is exactly what some of the catalogues look like: their mix of hotels is a helter-skelter of quality. And what is the hotel industry doing about it? It is closing its eyes to the situation, fearing to drop out of the major operators' distribution system.
Officially, there are no problems on the Dubai labour market. The enormous expansion of Jumeirah Hotels led us to take a brief look at this point.
Ringhotels talk about its successful efforts to carry out efficient marketing with a small budget. Kempinski and Oberoi continue with their expansion on a grand scale, while Hilton further checks the market and its brands. Tour operator DER now offers booking trade fair hotels for the first time - exactly like in the bank, the "Reisebank". A signal for a new dimension of service: In future, money business and hotel bookings will be combined under one roof. Will consumers accept this?
Have an eventful week,
yours, Maria Puetz-Willems
Editor-in-Chief
Questions? maria@hospitalityInside.com
Dear Insiders,
Despite the exhausting heat, there is "moving news" for this week: Four Seasons President Wolf Hengst announced his retirement. After 30 years, another entrepreneuer in the world of hospitality, one of the modest, quiet figures of the sparkling 5 star community, will leave the stage. Has he ever made the headlines? In my 18 years as a hotel journalist, I can't recall one single time. All the same, Hengst's sensitive interpretation of luxury has made a decisive contribution to the luxury hotel industry worldwide.
Other "global players" are still flexing their muscles: Starwood has - just recently - appointed a new President for the hotel group: Matt Ouimet from Disney. It's to be hoped that he views Starwood's colourful marketing world not simply as a new Disney land. Even Barry Sternlicht, Starwood Capital's boss, has been working busily from his throne: He now stands at the top of the Societé du Louvre.
The Global Hotel Alliance, an association of privately led hotel groups, has begun a huge expansion and credibility action: Micros Fidelio is to make an efficient reservation tool from the paper alliance. CEO Chris Hartley is rightly looking for further chains as members.
When a consulting company all too strongly jumps into marketing, the result is useless. Two franchise groups tested the new HVS franchise calculator on its use in practice. A crushing outcome for the London consultants. Perhaps they should take a fresh look at their core competencies.
This edition is as colourful as summer itself - with further articles on Magic Life, an operator still seeking orientation, on the underestimated target group mountain bikers, on an unusual capital investment model in Switzerland and much more. Our second Cornell Report today - on the new trend of US employers towards arbitration clauses in employment contracts - is examined from a German perspective by our labour law expert.
Enjoy reading and a productive week!
Yours, Maria Puetz-Willems
Editor-in-Chief
Questions? maria@hospitalityInside.com
Dear Insiders,
The "Breaking News" this week brought it to attention on Monday already: Dorint, Germany's biggest hotel group, is falling ever more critically into the red. Not even Germany's market leader Accor, presently holding 30% of Dorint stock, has been able to ameliorate the situation - and that despite its promise two years ago to help Dorint out of the dilemma with its management skill and distribution and marketing clout. Admittedly Dorint's occupancy and average rates have risen, the increases are, however, still under market average. Treugast's chief consultant Stephan Gerhard said rightly: Even Accor, Europe's largest hotel chain, seems to be able to do little more than react to the whim's of the German market; not even they seem to have influence enough to actively determine their fate.
Of course the weak economy has been tough on both hotel companies. Nevertheless, the far greater strain has come from excessive lease payments inherited from former Dorint majority shareholder and fund initiator Dr. Herbert Ebertz. Although lessors and shareholders alike have twice already have had to swallow hard, it's still not enough. Never before has the Dorint business report been so cutting as this one.
All we know is: In the background the major shareholders are fighting out a solution - whatever its nature - to hold off insolvency. Does this mean that Dorint will meet with a premature end? One thing is sure: Insolvency would be not good to anyone concerned. The once booming hotel group in the healthy mid-sector will not survive the legacy of former majority shareholder Ebertz and his like-minded Dorint Chairman Alfred Weiss without massive structural changes.
Judging from his past profile, Prince Alwalid will presumably not wish to buy Dorint shares. The Arabian businessman is way too sober and cool for that, attributes which timeshare representatives would do well to assume, despite the chance of cashing in with the Condo Hotels. A very interesting market study full of facts and figures on investments and returns!
Right on time for the summer holidays in Germany, many will once again reach for their handy pocket travel guides. We took a look at these little books - and asked just exactly how the hotel tips make their way on to their pages.
The holiday period has also seen the coming into force of the new Equal Treatment Act. In response to last week's article on the new law, many readers asked for practical examples to illustrate the very abstract sounding law. It certainly won't be the last time that hospitalityInside.com will discuss the new legislation. Our practising labour law expert, Hans-Joachim Jungbluth, is sure that it won't be long till the first cases begin to appear before the tribunals.
Have fun surfing!
Yours, Maria Puetz-Willems
Editor-in-Chief
Questions? Ideas? maria@hospitalityInside.com
Dear Insiders,
The upshot is positive - even if some disappointment is making itself heard. The Football World Cup exceeded the expectations of the German National Tourist Board. According to Dehoga, about half the hoteliers and gastronomers are satisfied with the business revolving round the football events. Thomas Edelkamp of World Cup Accommodation Services and André Witschi of Accor, who orchestrated the room allocation, also appear to be satisfied without appearing disrespectful towards critical colleagues. Given this positive total impression, the griping of Berlin's tourism segment almost seems childish: 60% occupancy is not enough for Mr. Weiland and Nerger!
I can only say: overcapacities were posted in Berlin long before the World Cup. And whether the mega event is called football, Love Parade or film festival - the fact remains that Berlin's hotel policy is a huge mistake. In the name of the city. Another fact is that such big events separate the wheat from the chaff among hotels. What is the reasoning behind allocating more rooms for a World Cup than for a Love Parade or another festival? German hoteliers must cease making decisions according to their gut instincts!
The new sale of Swissôtel Hotels & Resorts demonstrates the insignificance of emotions. Within some years, they went from Swissair to Raffles to Colony and now to Prinz Alwaleed. Managing Director Meinhard Huck is happy that the group has remained intact as a separate brand. The clear statement of the property fund company CGI is emotionless as well: it likes hotel investments, but only wants to collaborate with renowned operators. The discussions about reservations in Austria appear to be culturally and emotionally oriented: Are the Turks enticing the summer tourists away from the Greeks with certain tricks?
Certainly, the ladies and gentlemen who made it into the "V.I.P" column were moved by emotions as well. They are leaving renowned hotel groups and/or being promoted.
In the 2nd week after the World Cup, we remain on the ball. Next week, Dehoga will be presenting some precise figures.
Yours, Maria Puetz-Willems
Editor-in-Chief
Questions? maria@hospitalityInside.com