HOTELS Interview: Oetker Collection on the move

When it comes to ultra-luxury hotelkeeping, The Oetker Collection, based at its Brenners Park-Hotel & Spa in Baden-Baden, Germany, is among the elite operating such icons as the Hotel Le Bristol in Paris and the Hotel du Cap-Eden-Roc, Cap d’Antibes, on the French Riviera’s Côte d’Azur. Next, it will add the 41-villa Palais Namaskar in Marrakech in mid-2012 and a 250-room Le Bristol in Abu Dhabi, which the United Arab Emirate’s National Corporation for Tourism and Hotels plans to open in 2014.

While the Oetker family has mostly owned its hotels for over 70 years, it is now taking a new tact as it plans to add 10 to 15 ultra-luxury hotels over the next 10 years — mostly through management contracts and, perhaps, just slivers of equity.

For CEO Frank Marrenbach, the brief is simple during what he sees as a golden window of opportunity: further establish The Oetker Collection as one of the most relevant players in the ultra-luxury hotel industry. “When people in 10 years ask to whom you need to talk to know more about this specific segment, it will be The Oetker Collection,” Marrenbach said. “To be relevant to 2%, and to come to their mind when they consider where to spend their vacations, that is what I want to do.”

Marrenbach talked to HOTELS recently to discuss recent renovation at the Hotel Le Bristol, Hotel du Cap-Eden-Roc and the company’s plans going forward. You can read more in the December issue of HOTELS’ Investment Outlook.

HOTELS: The Oetker Collection has been such a small, exclusive group of hotels. Why do you want to expand now?

Frank Marrenbach: When you look at the market today and realize that if you remain so individual that you are lonely it puts you at risk. Big chains will dominate but they leave nice niches. … This is where we come in. We believe that we are specialists in creating masterpieces (the subtitle of the collection).

HOTELS: Beside the announced projects, where else are you looking?

Marrenbach: As a small company, we need focus. Our geographic focus is Europe and the Middle East in cities like London, Milan, Istanbul and countries like Oman and Qatar. We have a second opportunity on Saadiyat Island in Abu Dhabi – a new development where we might build a full-fledged resort hotel.

The one exception to our focus is New York City. The Americas and the U.S. represents 20% of our current market. As a feeder market, it is of the greatest relevance and as a destination a very important place to be. We are in talks and have engaged someone who is looking for us.

HOTELS: Will you take ownership?

Marrenbach: Growing by 10 to 15 hotels is big for us. We have 1,200 employees now. With this growth, it would move 3,500 colleagues into our environment and that is a big exercise. So we prefer management deals because the development of the company is a costly affair, and owning of real estate would make it even heavier. We would differentiate in key cities and be prepared to contribute financially.

HOTELS: You just completed a renovation at Hotel Le Bristol. What are you most proud of?

Marrenbach: The quality of the product and its individuality. It is the last Parisian palace in European hands and we are proud of how we have kept it up. Since 2009, we have spent 100 million euros. Why? Left and right, we have very prestigious brands coming into Paris and want to be prepared. I am very proud of our new wing with 26-rooms and suites, and the new brasserie on the ground floor.

HOTELS: How is the Paris market performing?

Marrenbach: Paris is doing quite well. For us, we were very interest what kind of impact the new competitors will have on us. We can see we are not affected and see the market getting bigger. Competitors are very strong, have their own identity, are not redundant and will help the Parisian market grow. The market is able to absorb the new capacity.

For 2012, we believe it will remain at the healthy level we are at in 2011. The Ritz is going to close for renovation and that is a 2-year program that will create some windfall profits for the rest of the players.

HOTELS: Tell us about the Hotel du Cap renovation.

Marrenbach: We redid the hotel entirely. All 70 rooms were re-done. We created two new suites, five new luxury rooms with hamman showers, and a new 200 square meter terrace with Eden Roc suite by the sea.

HOTELS: What was the impetus to take this step to grow?

Marrenbach: A few years ago, we had a strategy conference and looked at pluses and minuses. One of the painful experiences was that we train people and then they leave us because we are too small. We wanted to grow the company and offer opportunities for the owners to benefit from the huge investments they have made over time translated into a new business model, and create value for owners, employees and partners. … When a door opens and you see a market environment that allows you to fill a gap you should do it.

Frank Marrenbach, CEO, Oetker Collection
Frank Marrenbach, CEO, Oetker Collection
The newly designed Epicure restaurant now entirely faces Hotel Le Bristol's interior garden.
The newly designed Epicure restaurant now entirely faces Hotel Le Bristol’s interior garden.
The redesigned Junior Suite at Hotel du Cap-Eden-Roc.
The redesigned Junior Suite at Hotel du Cap-Eden-Roc.