In March, Deutsche Hospitality launched a refresh of its flagship, 90-year-old Steigenberger Hotels & Resorts brand with plans to invest €120 million (US$134 million) through this year to its existing portfolio.
Deutsche CEO Thomas Willms unveiled ”Evolution Steigenberger,” which includes major renovations to properties in Frankfurt, Hamburg, Petersberg, Baden-Baden, Brussels, Vienna, Dresden and many other cities, and service delivery updates with welcome managers and services to connect guests to the local culture and music scene. At the same time, the company will continue to grow the Steigenberger brand internationally in Bangkok, Cairo and Sønderborg, Denmark.
“We think Steigenberger needed a little push,” Willms told HOTELS, “keeping the traditional values and keeping some of what was in place so many years.”
Willms said the refresh will focus on updating the terra cotta brand color, training, uniforms and restaurant concepts, as well as bringing in more art and partnering with local cultural institutions. It will also bring back lobby welcome managers to act as ambassadors and roaming concierges with tips about where to go for local color.
Some hotels in the system, such as Hamburg (€50 million/US$55.8 million investment into 270 rooms), are getting complete renovations, while eight properties are being kicked out of the brand and converted to Deutsche’s soft brand Maxx by Steigenberger. “We want to really have a clean and reliable, good brand,” Willms added.
The bulk of the work across the portfolio is expected to be completed by Q1 2020, and Willms is hoping for about a 15% lift in ADR as a measurement. “My measurements are always quality scores, guest satisfactions and market share,” he added.
Companywide, Frankfurt-based Deutsche Hospitality wants to grow by 15% annually. Currently, more than 30 hotel openings are in process until 2021. The strategic focus of Steigenberger Hotels & Resorts’ expansion is on the Middle East and Europe, for example in the Mediterranean region, and on Eastern Europe. It has approximately 106 hotels open today and wants to reach 225 to 250 by 2023.
Franchising will start to play a greater role in Deutsche’s growth trajectory, especially for its Intercity brand. “We created a new department with a full support department to really be better with that business model,” Willms said. “Even in the Middle East, there’s a trend into franchise. Owners are grown-up now, and the big management contracts from the old days are not that easy anymore to sign.”