Editorial
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
Dear Insiders,
As an exception, we are pleased to be on the leading edge: this issue marks our new partnership with the Center for Hospitality Research of the Cornell University School of Hotel Administration in Ithaca, USA - the renowned "Alma Mater" of the international hospitality industry.
This partnership is based on high demand with respect to quality, and it brings some synergies. One partner contributes articles that are prepared for the public, and the other partner completes them from a journalistic point of view with a regional background. This form of collaboration with Cornell allows you, dear Insiders, to get an idea of current views and thinking, trends and developments from the other side of the Atlantic Ocean. In this way, hospitalityInside.com creates a new information channel between America and Europe - thanks to its bilingualism. Our team and I are very happy about this approach, which is an absolute novelty in our hotel trade press that you should benefit from!
But read for yourself how it all came about. Moreover, read also what Cornell graduates say about it.
The gripping industrial topic of the week in Germany can only be: the Football World Cup! On Sunday a happy team will finally hold the golden trophy in its hands. Nevertheless, we are already informing you today about the hotel groups and if they were able to benefit from the super event of summer 2006! We asked your colleagues for a short and compact statement.
Our editor Baerbel Schwertfeger experienced a grave lack of professionalism on Gran Canaria. Wellness was on the agenda, but the result was more of a "wellness trap". A trip and a report full of emotions and the question of what EU funding is granted for and according to what criteria?
Some moving news from Italy: Italians no longer take pleasure in going on holiday in their own country. There is talk about profiteering, run-down accommodations and the trend of staying in one's own four walls. This should bring clever marketing minds in the neighbouring countries on to the scene: Let us entice the Italians away from Italy!
Of course, there is some prickling news as well.
At the end of this week I wish the hosts of the German World Cup that the world will say enthusiastically: "We were guests of friends!" And let us hope that many friends will come back again!
Yours, Maria Puetz-Willems
Editor-in-Chief
Your comments today? maria@hospitalityInside.com
Dear Insiders,
Hotel companies often forget that their own employees are classic business travellers when they are undertaking business trips. The employer's duty of care counts for them as well as for their "ex-pats" abroad. But are hotel groups themselves well prepared in case a staff member has an accident, gets ambushed or even kidnapped on one of his trips? "Express kidnapping" is the new trend! It sounds sarcastic, but it is the bitter truth. In today's "focus" about travel safety, we talk generally about travellers, but the hotel management should relate the general questions concretely to its own company.
The issue has another concrete connection to the industry: investigators regard hotels as a major source of danger for the safety of travellers! And what do the hotels do to increase safety? "Only what's necessary!" says the expert. Read some safe information about the safety issue.
The European travel insurance tries to bring about another form of safety to the hotel industry: the hotel cancellation insurance. It can be concluded for each individual guest as well as for the "collective". Our interviewed hoteliers have their own opinion. Obviously, there is still good payment morale in Germany, which we already found out one year ago in our research about "holidays on credit".
Can you still bear to read about "awards"? For my part, I don`t like these glamour and gloria awards that are thrown onto the market with great PR pomp, although everybody knows that most of them can be bought anyway. That is why we do not talk about external awards this time, but about internal ones. And what do we see? A similar outpouring of awards is heading our way! But are awards still up-to-date? During her research, Susanne Stauss found out: long-serving managers cannot be motivated with sculptures - they would much more prefer a monetary "incentive". The one or the other award will surely end up collecting dust!
From our news section: the selection among German luxury hotels includes the Adlon Kempinski Berlin, while Travel Charme sets foot at the beautiful Lake Tegern. An Israeli investment company secretly buys ten hotels in Germany. In France, a female star twinkles in the sky above Paris: a woman is at the helm of the renowned Grand Hotel Le Meurice and the Plaza Athénée.
Talk to you again next week!
Yours, Maria Puetz-Willems
Editor-in-Chief
Questions? maria@hospitalityinside.com
Dear Insiders,
A mid-sized hotel group is getting ready for the big jump: Falkensteiner Hotels & Resorts in Southern Tyrol. For the first time, it made a public appearance; for the first time, it engaged an external Managing Director. It is going through extensive restructuring measures, and the upcoming projects will be crucial for its expansion. In Croatia, a project is about to tip the scales - for 150 million euros. Austria's Hypo Alpe-Adria-Bank is becoming a dominant financial partner. hospitalityInside.com tried to create a portrait of this group, coming up without a final result. Read for yourself.
While some are squeezing out of their home countries, others are squeezing in. Two weeks ago, we reported about "Chinatown Bad Orb". When I was editing this article, I shook my head: would this model become a precedent? What if more investors from China, India or Arabia let their own workers be flown in to German construction sites? We kept our ears open and I think we managed to give a realistic picture about the practicability of this model.
There is always much fuss revolving around trade fairs. Accordingly, three hotel groups emerged just after the IMEX in Frankfurt came to a close and claimed to be prepared for online group reservations. We have taken a look at these websites.
My Swiss colleague Silvia Pfenniger also kept her ears open pointing out some questions. She coaxed some forceful statements about the state of the hotel industry out of the British future-guru Martin S. Raymond in London.
Reading such articles is pure fun, as they "poke". I hope you'll think the same?!
Until next Friday,
Yours, Maria Puetz-Willems
Editor-in-Chief
Ideas? maria@hospitalityInside.com
Dear Insiders,
The World Cup has us in its grip. In the late afternoon, there is hardly anyone left in the office. The appointment schedule is almost non-existent. Instead, the country gathers in the stadia or at the public-viewing areas. Public viewing is becoming a cult! People throng to the beer gardens and open-air areas. In view of this dream weather, the beer gardens should be able to recover quickly from the losses caused by the past few rainy weeks. Instead, some telephone calls revealed that city hoteliers are complaining about extreme volatility in accommodation such as F&B: business was humming on the match days, but in between it was desolate. "There is no additional business, but only an exchange of target groups," summarises Conrad Mayer, Vice President of Bayerischer Hotel- und Gaststaettenverband with respect to the World Cup's first week. He certainly expresses what many hoteliers are thinking. In our "Market Analysis" column you can read how foreign consultancy companies see the World Cup hotel scene for German hoteliers.
In his function as local chairman of Bayerischer Hotel- und Gaststaettenverband Muenchen, Conrad Mayer currently expresses his anger about a project of Munich's trade fair: on the trade fair premises, the fair’s management team is initiating accommodation with breakfast - treading on its own hotel partners' feet!
Apart from this, you can read the following news from the German hotel scene: renowned hotel chains are failing in terms of data protection, city tourism is definitely booming, a new hotel cooperative is being created, finally Robinson has a new secondary Managing Director, and TUI is restructuring itself cutting jobs in management.
We have tracked down the following trends and issues of the international hotel world: in the US, hotel owners pay more fees to their management partners; in England, the takeover of De Vere Hotels is in the offing; in Bad Ragaz, not only the grand hotels immensely benefit from a private art initiative; and finally, US chains like Starwood or Hyatt show themselves, once again, to be pioneers with respect to multi-sensor technology: in the near future, hotels will be recognisable by their smell or sound - the same way as Chanel will sound, Lego will taste and the i-pod will smell.
I hope we can score with you on one of these topics this week!
Yours, Maria Puetz-Willems
Editor-in-chief
Ideas? Comments? maria@hospitalityInside.com
Dear Insiders,
With its 850 hotels Starwood is still a small chain among the big global players, but the company presented itself in a very big fashion two weeks ago: about 100 journalists of the most renowned media were invited to New York. Chinese, Indians, Arabs, French, Italians, Spaniards, Germans, North and South Americans had arrived in a highly curious state to find out about Starwood's new "multi-sensory branding" - and after eight hours of marketing talks they were sent home with four pages of information. No interviews. Neither with CEO Steve Heyer nor with marketing guru Javier Benito. No notes of the speeches. And no press kits at all.
The idea of this media summit was fantastic and an excellent kick-off for communicating a revolutionary brand vision in an effective and global way. But concerning PR, the "small giant" made a leap that was too short. It missed an enormous as well as appropriate chance of positive publicity. As many questions remained unanswered, hospitalityInside.com did not report until today about the mega event. We were trying to find out how Starwood's marketing visions can be transformed into profitability and how its lifestyle ideas could become of interest to investors all over the world. Starwood seemingly did not want to or was not unable to verify this connection. The statements and answers from the US are partly meandering along the surface - probably, because there is no explanation for hope as such.
Nevertheless: Starwood's ideas open up a new direction for discussions about brands and operator profiles.
Today's other subjects are: Starwood founder and investor Barry Sternlicht sold Taittinger Champagne brushing up finances with millions of dollars. On the other hand, Urs E. Schwarzenbach, main shareholder of the Dolder Grand in Zurich, spent some additional 100 million Swiss francs for renovations. Also revolutionary news from the small health resort Bad Orb: is it going to become the German "Chinatown"? In any case, Vienna is promoted as design city, as it is obvious with the new Levante.
We hope you enjoy this new multicultural issue!
Yours, Maria Puetz-Willems
Editor-in-Chief
Comments? maria@hospitalityInside.com
Dear Insiders,
Today, our short news take a look behind the scenes, mainly in terms of staff issues: there is positive news - like those of Emanuel Berger's successor in the Victoria-Jungfrau Interlaken or the early appointment of the new GM in the Peninsula Tokyo. Both decisions were taken by companies that are known for their early staff planning and careful selection. This ensures continuity.
On the other hand, that news, which makes us pick up our ears: A highly respected veteran at ArabellaSheraton leaves - after 21 years. "Yes, I'm leaving," Peter Tschirky personally confirmed to us - and added "unfortunately" with a sigh. The hotel group from Munich is looking for a new identity. This is also expressed by such staff issues. Sol Meliá's appointment of the - next - new Managing Director also provides considerable insight: the Spanish company is obviously struggling on the German market. Perhaps Markus Steiner has a better chance now, as the first Meliá hotel was announced at the same time. At least this is finally a name bridge between the Spanish and German market. With their "Tryp" brand, the Spanish company has failed to achieve any success in Germany.
Names have always been news; therefore we enjoy continuing our series about "small chains". Today, Susanne Stauss took on two members of the top segment - the small Althoff Hotels and the growing group of self-confident Arkona AG.
Growing companies require new managers. Perhaps an opportunity for the hospitality study at ESSEC in Paris. Baerbel Schwertfeger describes this academic shortcut into management.
Hilton also chooses the direct way to its customers. The Americans would prefer to "undress" him completely, x-ray and "transparentise" him... They want to know his innermost desires - a RFID chip in the HHonors customer card. In future, they will trace him electronically, record his movements and whereabouts in the hotel and thus analyse his buying behaviour - they will observe his personal course. Critics decidedly warn about this and about the data security risks in connection with RFID.
In contrast, you may lean back and read what the next International Hotel Conference in Rome has to offer. I will be there for the third time and hospitalityInside.com will join in as a media partner for the second time. This hotel conference is still as easy to grasp as the Hotel Investment Forum in Berlin once was - and therefore still highly efficient with respect to the talks. Apart from the start-up forum, there will only be small rounds of talks and round tables. A compact event about the main issues of investment and operating concepts.
Have a successful week.
Yours, Maria Puetz-Willems
Your comments? maria@hospitalityInside.com
Dear Insiders,
The German International Hotel Association is justifiably upset about the rip-off in public - as was the case this week. The European comparison of radio and television fees clearly reveals the unfair competition German hoteliers have to face. Future will certainly not become easier as Professor Kreilkamp unmistakably demonstrated at the IHA conference. He sees a growing reluctance among Germans to travel, combined with thriftiness. The consequence: rate increases are no option. Now, even more so. Dumping hoteliers can close their doors as a result.
Even the best advertising and marketing campaigns will not help anymore. What am I saying? There are no smart ones anyway! External experts tell us so. In another talk, they even told off German tourism industries: their advertisement claims were as exchangeable as they were! That hurts. The externals hold a mirror up to the industry. Hopefully, it will risk a glance.
Do Germans do anything right? The next operators in our series about "small chains" give an answer: Motel One, Achat and Winter Hotels are blooming quietly in the background despite unfavourable circumstances and miserable predictions. If they - but please, not only them - make use of the results of the new eBay studies for their benefit, online distribution could flourish even more.
On the isle, there are different worries: in Great Britain, an intensification of the "manslaughter" law is in the offing. In future, companies have to take more care of the safety of their employees. Our London correspondent reports, our labour law expert comments. A clear case for the "knowledge" pigeonhole!
A note on our own behalf: Last week, a technical failure prevented the article on Cendant's expansion in Europe from appearing on page 1. Therefore, it will appear again today - as this "competitor observation" is part of the knowledge...
We wish you a good week and many new insights,
yours, Maria Puetz-Willems
Editor-in-Chief
Remarks? maria@hospitalityInside.com
Dear Insiders,
Cendant, the American franchise giant, is coming! Finally, after many years of mere announcements, CEO Steven A. Rudnitsky realises the expansion towards Europe. Splitting of the huge Cendant group into four separate companies obviously causes some pressure - by July, each division is left to excite its shareholders "by itself". Rudnitsky, however, refused to give too many details in our interview - arguing that a quoted company needed to be careful. As an experienced journalist I rather think that the Americans plan to build up their brands on the market in a stereotype manner. They believe that their brand power which is defined in countless marketing superlatives is enough reason to join Cendant. Many years ago, Choice Hotels had begun in a similar naïve mood...
Another expansion campaign is taking place in Vienna - several chains seek for new opportunities there. Be it Ritz-Carlton, Four Seasons or Kempinski - all of them moan under the high initial costs. Real estate and conversion costs find themselves in an unfavourable relation to attainable rates. One should be an Austrian - natives benefit from lots of advantages. Swarovski, the crystal producer, simply announces that he wants to build hundreds of beds and suddenly old laws are gone. Who would take a closer look to Biberwier at the bottom of the Zugspitz mountain in the Alpes?
Those hoteliers who accept reservations for the Football World Cup should take a closer look indeed. On the one hand, guests and consumers drown in the advertisement flood involving the World Cup and World Cup specials, and on the other hand some hoteliers struggle with shady tour operators on the market. The first complaints can already be heard. That particular ball probably only starts to move...
As foreign companies learn that it is becoming increasingly hard to find suitable operators in Germany, we will introduce some operators today and in future issues.
In addition, Accor introduces its new management team for Germany, TUI introduces its new hotels and the Kneipp institutes introduce their new hotel initiative... and a lot more. Just read it all.
Have a great week,
yours, Maria Puetz-Willems
Questions? Wishes? maria@hospitalityInside.com