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"Our target is to have 150 hotels in operation or in the pipeline by 2020" Interview with Thomas Willms CEO, Deutsche Hospitality

Interview with Thomas Willms on the objectives and strategy of the hotel group which recently changed its marketing policy.

What are Deutsche Hospitality’s DNA and values?

Our umbrella brand is a clear acknowledgment of the hotel group’s brand values. Deutsche Hospitality is an international and dynamic brand family that is characterised by attributes such as passion, perfection, caring, tradition, and vision. Deutsche Hospitality positions itself as an excellent host and as an attractive employer that fires the enthusiasm of its staff across the globe. The name combines our German roots and our international vision. Its international sound lays the perfect foundations for expanding into new locations. The things which people appreciate are our Germanness, our quality and our high service standards. We are hoteliers with passion – everywhere. German precision and global vision are obviously the right combination.

What are your development plans for Europe and worldwide? Do you have a target figure for 2020?

Our target is to have 150 hotels in operation or in the pipeline by 2020. We are expecting growth, especially via our fourth brand MAXX by Steigenberger, which launched recently. MAXX possesses more flexible hardware standards, and these provide us with the leeway we need to pursue qualitative and quantitative growth. We are looking for Triple A locations for Steigenberger Hotels and Resorts. Global cities such as Bangkok and Bangalore have been earmarked. We are also seeking to grow our Resort hotels in markets such as Italy, Greece or the Canary Islands. Jaz in the City is a lifestyle brand, and we are aiming to identify trend locations. Amsterdam and Stuttgart are open, and Vienna is at the planning stage. IntercityHotel has become extremely international over recent years. Hotels in Switzerland, Germany, Hungary, Saudi Arabia, Dubai and Oman are in the pipeline. Properties in Quingdao, China and Salalah, Oman are already in operation, and we have entered into a cooperation agreement with the Brazilian Intercity Hotel group, which has 40 hotels in Brazil and Uruguay.

Do you plan external growth?

Our current size of between 100 and 200 hotels means that we are in an interesting phase at the moment. Our growth rate is about 10% per year. We are obviously looking for small cooperation ventures, which could be a vehicle for growth. Our soft brand MAXX by Steigenberger gives us good opportunities to increase our portfolio.

Some of your competitors are developing a “horizontal” strategy (acquiring start-ups, F&B, flat rental…). What do you plan to do?

We already developed other assets some time ago which are still successful today. We were the first hotel company to establish a call centre, and we also have our own procurement company. We established the Steigenberger Hotel School (Steigenberger Akademie Bad Reichenhall), and we supply the catering services for the Bayreuth Festival Theatre, which is known as the most exciting musical theatre festival in the world. As you can see, innovation has always been in the DNA of the group.

Who are your clients? Any customer category(ies) you want to develop?

We believe that borders between target groups are blurring. The choice of a hotel is much more opportunity-driven  today than it was some years ago. Someone who would be presumed to be a Steigenberger Hotels and Resorts customer might indeed be attracted by this product if he or she is seeking outstanding luxury. However, the same customer might also opt for a Jaz hotel if a lifestyle experience is wanted or choose an IntercityHotel if travelling for business and if the main interests are flexibility and a good connection from the airport or the railway station.

All our brands have their USP. They complement one another rather than competing. MAXX by Steigenberger offers a further brand which fills the space between the existing brands. There is still space for a budget brand under the umbrella of Deutsche Hospitality, but we prefer to proceed step by step.

What steps have you implemented to ensure sustainable development and management of your hotels?

Deutsche Hospitality has a “Code of Conduct” that acts as a binding guide for all employees. It sets out the principles by which our everyday work activities are governed worldwide. The code also includes aspects such as the responsibility we bear towards the environment and sustainability. We believe CSR is a matter which must be directly addressed by the Management Board. For this reason, a new CSR Senior Manager was hired in January and reports directly to me. We are a member of the International Tourism Partnership (ITP), a consortium of twelve hotel companies which have joined forces to commit to sustainability. You will also be familiar with our Green Meeting concept, which ensures that every aspect of a business stay at one of our hotels is organised in a sustainable manner. We are striving to bring about a discernible reduction in water consumption in our hotels and to help provide clean water in regions where such a facility cannot be taken for granted. By the end of 2017, we were able to finance two water treatment plants in Egypt using money raised by the “Deutsche Hospitality 1x1” scheme, which donates €1 to charitable causes for every booking made via the Steigenberger and IntercityHotel websites.

Of course, when it comes to CSR, we are guided by the various binding stipulations that are in place. We introduced an ISO 14001 certified environmental management system at our European lease and management companies as long ago as 2012. This has enabled us to make responsible use of our resources ever since. In 2016, the launch of an energy management system in accordance with the ISO 50001 Standard allowed us to take a further step towards achieving an even better position, specifically with regard to energy consumption. A representative has been appointed for each of these ISO management systems.

How do you develop lifelong training within DH’s groups?

We focus on the development of our employees, which I consider a crucial factor for success. A company can only be as good as the employees working for it. We call this STEP@Deutsche Hospitality, which stands for Striving towards Excellence with Passion! There are programmes for new talents, leaders and experts that help prepare our employees for all the challenges of a career in the top-class hotel industry. For instance, we have a cooperation agreement in place with Cornell's School of Hotel Administration (SHA) for several programmes which are taught on a face-to-face basis at the Cornell University campus in Ithaca, New York. Employees also have the opportunity to undergo training at our own hotel school, the Steigenberger Akademie Bad Reichenhall. Our Young Potential Award prepares motivated employees for their future roles as managers.

How do you find young talent?

We enjoy a strong reputation, and this helps us find potential candidates. We received a “Germany’s Top Employer” award from the Top Employer Institute for the ninth time in succession. This is an annual accolade that recognises companies that offer exemplary working conditions. The areas in which Steigenberger Hotels AG was particularly singled out for praise were permanent investment in staff development, ongoing efforts to enhance the working environment and forward-looking approaches and practices.

How do you imagine that the hospitality business will evolve over the next few years? How will Deutsche Hospitality adapt?

Our priorities for the years to come are strong, clearly positioned brands. This also includes a refresh of our traditional brand Steigenberger Hotels and Resorts. We are also focusing on quality, which means that we will keep our brand promise. Growth will be another important topic for us. Our hotels are very well positioned in the German-speaking market, but we would like to strengthen our standing in the international context. We are concentrating on our customers by professionalising our Customer Relationship Management, and digitalisation is another key aspect of our strategy. We are working on several projects to meet the expectations of our customers. Digitalising standard processes also allows us to concentrate more on individual guest requests.

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