The good old business model: Keep your feet on the ground

Dear Insider,

Today, I’m making a case for conservatism. At a time when statistics for the German hotel industry show that it has the highest number of insolvencies in the economy, it was refreshing to speak to Yoram Biton of Leonardo Hotels. "Making a profit these days isn't easy at all," he notes soberly. "It's hard work." That’s why Leonardo is growing only gradually; franchising costs too much money and only the rent cover counts. This operator’s business model is ‘stay grounded and disciplined’. Yoram reviews the P&L with each area manager every month.

Some investors lack one of these qualities. This week, Deka Immobilien announced the new operator for the W Amsterdam: Corendon. The company is based in Turkey, has a background in tourism, and is now running its first luxury lifestyle hotel. But without the restaurants. Liran Wizmann will be allowed to continue running these. It’s all set out in the contract, but of course it’s confidential. So the former operator, who owes Deka Immobilien €23 million in rent, will remain a business partner? In any case, a lack of transparency in communication raises even more questions. My eight questions (inter alia, how Deka Immobilien will guarantee its investors that it will regularly receive rent) was dismissed with four sentences. Don't investors have any questions at all?

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Dear Insider,

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