Issue Iss2 2009
Kempinski Hotels is currently undergoing huge investment and plans to expand the chain by 110 hotels
Having acquired its first property in 1897 in Berlin, Kempinski Hotels comprises the oldest collection of luxury hotels in Europe. Ever since its foundation, the company has been synonymous with a distinctive form of luxury. The company is an independent German delisted AG, which is involved in a number of hotel and hospitality related businesses, including conference, catering and hotel supplies. The chain now owns and operates an international portfolio of 59 hotels that reflect the finest traditions of the culture of European hospitality. A further 57 hotels are either under final development or construction in Europe, the Middle East, Africa and Asia.
James Phillips, regional director of global sales for Europe, describes the way each hotel celebrates the unique culture of the city or region in which it is located: “We have a very individual branding perspective – each one of our hotels is a distinctive property, which reflects the local cultural traditions, countering that global attitude of a traditional chain. For example, the Kempinski Hotel Ishtar, located on the Dead Sea, in Jordan, is softly styled on the hanging gardens of Babylon. It’s not overly themed, but we like to have these cultural references woven into the tapestry of the hotel. This gives each one a beautiful cultural dynamic, giving guests an experience that reflects the location of the hotel. We see this as a huge strength.
“This individuality means that although the brand is still Kempinski, it is not standardised. The mood and theme of each hotel reflects its location, so guests have a unique experience, depending on where they stay. This is a very different perspective to most other hoteliers that look towards standardisation and uniformity across their chains, on the basis that they feel their customers are looking for a familiar experience each time, wherever they go. We try to deliver a reliability that comes with the renowned quality of our brand while still incorporating a unique design and a local flavour into each of our hotels. In this way we ensure that our customers do not feel they are dealing with a faceless corporation, but rather enjoying an individual hotel that is integrated with its surroundings, while being supported by a world-famous luxury brand.”
An example of this combination of opulence and local flavours is evident in the Bilila Lodge Kempinski, which has recently opened in the Serengeti, in Tanzania. James elaborates: “The launch ceremony for the Bilila Lodge was attended by the Tanzanian President, and marked the opening of an incredible property – a 74-unit hotel, which while it is still a lodge, offers full hotel service facilities. Located close to the great annual migration, the Bilila Lodge offers spectacular views of wildlife roaming over miles of bush, an active water hole and the beautiful sunsets of the African savannah.”
The chain is expanding rapidly, with ever increasing business around the world, but particularly in the Middle East, Germany and Switzerland. Part of this expansion is the imminent opening of the Kempinski Hotel Adriatic on the Istrian Coast, a seaside property looking out towards Venice. James comments: “Whilst the western side of the Adriatic is well and truly explored, the Croatian side in the east, is still virgin territory in tourist terms and so the opportunity here is huge. We are literally the first luxury hotel chain to arrive in that part of the country.”
He goes on to outline the company’s expansion around the world: “We are now moving into Bangkok with a world class development, and we have also just opened the Udaipur in India overlooking the lake. There are further plans to build in Johannesburg, Hong Kong and Shanghai. We have restructured our development team with a private equity specialist, whose role is to partner with individuals or companies that are looking to get into the real estate business. Forming partnerships, we will use that as a platform to grow our brand. In this way we do not operate in terms of ownership, but rather we work really closely with developers to bring their strategies to reality, which in turn allows us to grow our footprint rapidly.”
He goes on to explain how this expansion is part of the company’s plan to combat the impact of the global recession: “The key for us at the moment is our continued growth, and with that comes the issue of finding talented people to run our hotels. This is challenging at the present time, as we are in a troubled economy, where many hotels are cutting back and chains are shrinking. Whilst we are being very sensible in terms of managing on a cost basis, we are also conscious that we need to find the best hands in the industry to fulfil our plans.
“The hotel sector as a whole has been badly hit and the luxury sector is struggling. We are seeing a particular downturn in our commercial sector. However we feel we are well placed to regain the losses that we have experienced on the corporate side, as we are favoured among senior management level customers, who are very loyal to our brand. It is merely a question of waiting for their budgets to increases once more, and then we know that these customers will return to Kempinski. We’re not quite at the green shoots stage yet but empirically, we know that demand is picking up and our challenge now is to adapt the business to the changing market.”
Looking to the future, James outlines the chain’s development strategy: “We are going through a great re-branding experiment at the moment, asking ourselves fundamental questions about the way we operate to truly understand what our brand represents to customers and if we are delivering what they require. The combination of our distribution, development and people strategy, provides us with a troika of components that will drive us forward for the next couple of years. We see this turbulence as being temporary and we are now looking forward to, and preparing ourselves for, a time when growth returns to the industry.”