24 - 26 MAY 2022

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How Deutsche Hospitality will open more than 100 hotels a year

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Image Courtesy: Hotelier Middle East

VP of Middle East Siegfried Nierhaus details how the group will expand so quickly

Germany’s largest hotel group, Deutsche Hospitality, laid out ambitious plans earlier this month to boost its entire portfolio from 120 hotels to 700 by 2025. Averaging almost 150 hotel openings each year, we heard from VP of Middle East Siegfried Nierhaus on how it’s going to be done.

“It’s a very bold and strong statement from us. We’re assigning management deals with hotels and conversion deals to quickly move in one of our five brands. We’re also looking at various mergers and acquisitions too.

“Companies which were once very well established and doing well have since been struggling during the pandemic. We can come in and support them. We’re planning 25 hotels per year as organic growth, and the rest through mergers or acquisitions,” he said.

For the Middle Eastern region, the group is eyeing 20 new hotels by 2023, looking at Dubai, Abu Dhabi, Ras Al Khaimah, Fujairah, Muscat, Qatar, Salalah, Jeddah and Riyadh in particular.

Thankfully Nierhaus is no stranger to the region, having worked across MEA helping groups enter the market. His previous posts include director of future openings MEA for Carlson Rezidor Hotel Group, managing director of Atlas Group, and general manager of the Radisson Blu Hotel in Dubai Media City.

Looking back on his past experiences, he said: “In the Middle East, you still need local knowledge to expand the business. You need local, experienced people who know how to deal with different situations, owners, customers and employees. Together with my team, we have a wealth of experience in the Middle East, so we know how to become successful here.

“You need to adapt your business to different parts of the world. Our team has that experience to gain trust and confidence with the owners. The key in the Middle East is to find the right partner to assist and grow with you. Too many people have gone with a partner they’re not aligned with and this is always slow and painful. You must work closely together.“

According to Nierhaus, the group is planning to steer away from the luxury segment, which he says is oversupplied, and instead tap into the mid-market and lifestyle sets.

“The majority of our deals will be in the mid-market set and the application of these brands is much easier than five-star hotels. Our flagship hotels are fabulous, but we don’t want more than one per area.

“In the past, some companies have made the mistake of doing business the exact same way in the Middle East as they would in Europe. This is totally the wrong approach, I believe this is absolutely wrong. You almost have to start from scratch again, we set new targets and we open new communications.

“We have a plan for how we want to be perceived in the Middle East, and it’s different from how we’re seen in Europe. The F&B segment for example will have to be different.”

Opting to accelerate growth mainly through mergers, brand-buyouts and acquisitions, the VP revealed he has considered potential brand dilution.

“It is a concern, and our CEO is making sure all our brand identities are clearly defined. We may find some instances of bringing in hotels which are not fitting into our brands but we can recreate them and convert them as required. Our brand Max by Steigenberger is very flexible to allow a range of hotels to join us.

“We have extensive training whereby we instil the culture into our team, so service wise we think we’re ready for this growth.”

Another secret to the group’s rapid growth will be its connection to Huazhu, an Asian multi-group hotel company.

He explained: “All of a sudden we went from 250 hotels operated plus pipeline, to more than 7,000 hotels. All of a sudden, our company has a totally different face and different powers in order to gain attraction.

“We have a combination of traditional German hospitality plus Asian technology. We will be rolling out new programmes and new systems to deal with customers, to manage bookings, and to streamline the room experience.”

He told Hotelier that interest has been growing for the group thanks to its ambitious plans: “A lot of staff from larger brands have been keen to join us as they hear our ambitions. People believe in visions and in missions and if I tell them our story, it’s something people believe in.”

Source: Hotelier Middle East