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The global boutique hoteliers

ITB Hospitality Day: How 25hours and Unlisted conquer the metropolises

ITB 2013 CEO Panel Hoffmann Puetz Willems Loh Lik  
Creative, unconventional and cosmopolitan: the recipe for
success in Asia and Europa. Maria Puetz-Willems talks to the
CEOs of 25hours, Christoph Hoffmann (l.), and of  Unlisted
Collection, Loh Lik Peng.


 

Berlin (April 5, 2013). Boutique hotels are substantially more complicated to develop and operate than the standardised products of the big chains. In their niche and with a growing, if also narrow target group, smaller groups in this area have nevertheless found a permanent position in the meantime and they operate economically successfully as two Boutique CEOs pointed out convincingly at the 8th "ITB Hospitality Day" at the ITB Berlin. Christoph Hoffmann, CEO of the German theme and design hotel group The 25hours Hotel Company, and his Asian colleague, Loh Lik Peng from the Unlisted Collection in Singapore took the floor for 60 minutes and proved: They are following a global trend absolutely independently of each other - that of the cosmopolitan individualists.

At first sight, their hotels look different; upon a second, the companies exhibit numerous common characteristics: The 25hours Hotel Company (www.25-hours-hotels.com) and the Unlisted Collection (www.unlistedcollection.com). Co-founder Christoph Hoffman explained the concepts with the help of two examples: 25hours Hamburg Hafencity and 25hours Wien Museums-Quartier. "Both closely orientate themselves with the region and their people, the community." Retired containers from Hapag Lloyd give the public area of the property on the Hamburg harbour a special flair. Originally - instead of a library - the space was with vinyl records and old record players. Guests can rent Holland bicycles free of charge or use two Minis for touring.

Completely in the sense of a sailor's asylum in a foreign harbour, the guest berths at 25hours Hotel Hafencity are warm and comfortably designed. Elements and materials from ship construction are interpreted with a wink and are held together with a bit of sailor's rope; 25 sailors from all over the world tell their stories at the hotel.

In Vienna, the "Circus" motto governs the hotel. Since for the visitors of the cosmopolitan city, Vienna always stands for sensation and show, for seeing and being seen. The design of the property orientates itself around the heyday of the circus at the beginning of the 20th century and combines antiques from the time with memorabilia from the circus ring. Sawdust meets heavy velvet curtains, raw concrete meets thick carpets. With 220 rooms, this most recent property of the group is, at the same time, the largest one up to now. The 25hours Hotel Company headquarters is located in Hamburg and altogether, the company employs around 300 staff members.

  ITB 2013 CEO Panel Loh Lik Peng
  Loh Lik Peng is convinced of contrasts - of state of
the art design in old walls.


Unrestored properties and design interior

According to founder, Loh Lik Peng, the history of the Unlisted Collection began in 2000. At that time, the lawyer raised in Ireland opened a dwelling house and later, a restaurant in London. In the course of the Asian economic crisis, he bought his first – dilapidated real estate in Singapore in 2003 and from it, spontaneously created his first hotel, The 1929. In 2006, the New Majestic followed, likewise in Singapore. This hotel established in 1928 offers 30 different room types that were designed in each case by a different artist. The historic ceilings in the lobby were exposed, but were not restored.

This combination of unrestored historic components in the public areas and the exceedingly stylish rooms stretches throughout the better part of the hotel real estate of Loh Lik Peng. He not only operates his properties, but also holds ownership of them. Today, six hotels and six restaurants count among the Unlisted Collection in Singapore, London and Shanghai that are all led under their own name. They lie, for example, in old city halls, old schools, old department stores and as a result, exude quite a special charm. The smallest hotel of the group has 15 rooms, the largest, 98. Altogether, the Unlisted Collection employs around 450 staff members.

Different views toward size

There is one thing that Hoffmann and Loh Lik Peng agree on: Existing buildings are particularly suited to boutique hotels. However, experience has shown Hoffmann that a specific number of rooms should not be fell short of: "Our smallest property in Frankfurt had 49 rooms that we were able to double, however. The result has thereby significantly improved", he says. "In the beginning, we did not want to become too big, then, however, we had discovered that with larger properties, we can create more experiences and also offer more gastronomy. 49 rooms can make a family business happy, but no group with central administration."

His colleague from Singapore is not so demanding there: He will soon open a new hotel in London with 15 rooms, he will then also have fun with it, he explained. And while the F&B area is important to 25hours even though its success clearly lies in the accommodation area, the Unlisted Collection devotes itself to the subject of gastronomy quite enthusiastically: "I love food. The restaurants at our hotels often count among the best ones in the city and sometimes make more revenue than the hotel sector. Food & Beverage particularly pulls all of the local population into the hotels and with this, affords them a special atmosphere", says Loh Lik Peng. Likewise, Hoffmann prefers to offer a local experience in F&B and has confessed to detesting the word "Breakfast Room" because these dead rooms contribute little to the economic success of a property.

ITB 2013 CEO Panel Hoffmann Christoph  
Christoph Hoffmann would love to expand his
theme hotels to Asia.


 

The hoteliers of the design-oriented boutique hotels had their own opinion on the PR work. "The local community defines the national PR", said Hoffmann: The people would create a brand and distribute it. Loh Lik Peng also warned about excessive professional PR that can turn out as a double-edged sword. Both sides agreed that today, the Internet accelerates the development of a brand because the communication paths are altogether quicker. Nevertheless, Hoffmann emphasised: "We invest more in Revenue Management and in the staff than in marketing." One must have specific characters as staff members. So, the work clothes already differ from those at other hotels. For example, jeans and aprons are worn at 25hours. Loh Lik Peng in unison: "Our staff members should have fun. I always say: Do not take your job too seriously, also have fun with it", he explained.

Reservations on the Internet are very important to both groups. According to Hoffman, they already distribute 50 percent of the reservations through all channels. To reduce the OTA commissions, Unlisted Collection limits the reservations through online mediators to 25 percent of the online reservations. "30 to 40 percent of our reservations come through our own website", says Loh Lik Peng.

Both have cities of Europe in their sights

The discussants only briefly touched on the subject of financing broached by presenter Maria Pütz-Willems. "Banks love multifunctional systems - intelligent design concepts need little room," Hoffmann additionally said. Fundamentally, the expansion with a group like 25hours is more difficult, however, than with standardised products because the properties are to be strongly tuned to the location. Every development is very complicated; many different people from the developer and designer up to institutional finance partners have to be brought in under the same roof. Fortunately, Hoffman has discovered that the investor's train of thought is switching from the office building to the hotel. "Hotel operators offer longer lease contracts," he explained. Because, as a general rule, German real estate owners do not dispose of a great deal of hotel know-how, but they can continue to remain on leases.

  ITB 2013 CEO Panel Panel Gesamt mit Auditorium
  The CEO panel only attracted 450 attendees.

For Loh Lik Peng, all his operations up to now are also – as is common in Asia common – previous transactions in real estate. He develops, invests and operates himself; the real estate belongs to his concepts. As the CEO says, he has no objections against lease contracts and in principle, he would conclude one. "One must have an exact look at the markets and work with the local conditions", he explained. With the expansion in foreign countries, it is important to find local partners. At the moment, Unlisted Collection is looking around for real estate in key European cities. "The real estate prices are favourable in many places," explained Loh Lik Peng. "Europe is an opportunity." He has, for example, Amsterdam, Rome, Berlin or also Paris in his sights.

According to Hoffmann, 25hours has already negotiated in Italy, for example, interest exists in Milan, but the talks are nevertheless difficult there. Additionally, Barcelona or Amsterdam as well as the Scandinavian countries would fit well to the concepts and his message. "The Scandinavian countries are too expensive, unfortunately," he regretted.

No fear of big chains

At the moment, both niche occupants exclude the fact that their target group could shrink or the big chains could become a danger with their new "design concepts". "I have never looked at the big chains as a competitor", says Loh Lik Peng. The guest mix varies depending on each hotel. In London, 50 percent consists of business travellers, in Singapore only 30 percent and there, it particularly concerns freelancers such as designers or architects. Also, 25hours has different primary focuses according to operation and location. "In Frankfurt, business guests render about 90 percent, in Vienna and Hamburg, they dominate Monday through Friday, but on the weekend, there are vacationers and families," says Hoffmann. Two CEOs from two continents, similar concepts and the same target groups – the differences lie only in the details. A nice example, of how international the young hotel industry has become. / Susanne Stauss

Watch the YouTube video about this ITB Hospitality Day 2013 session in full length – Click here

 

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