How Luxury Hotel Brands Pursue Opportunities for Expansion, with Kempinski’s Aref Sayegh.

Episode Transcript

Aref Sayegh: We operate and embrace the unique customs of the environment. When I say that we call this an Kempinski cultural empathy and we try to blend our European etiquette with the cultural empathy, the hospitality that we have around us, the flavor of the location out. 

Robin Trimingham: Welcome to the Innovative Hotelier podcast by Hotels magazine with weekly thought provoking discussions with the world’s leading hotel and hospitality innovators. Welcome to the innovative hotelier brought to you by Hotels magazine. I’m your host, Robin Trimingham. When we think about iconic luxury hotels in the Middle East and Asia, one of the brands that immediately comes to mind is Kempinski Hotels, which is well known for offering exceptional service, elegant and sophisticated accommodations and unique experiences in some of the world’s most desirable destinations. Interestingly, they recently announced that they’ll be expanding into North America for the first time with the opening of a resort property in Mexico. And my guest today, RCA general manager of the Kempinski Hotel Cancun, is here today to share some insights regarding the challenges and opportunities of expanding a luxury boutique brand into North America. Join me now for my conversation with RF. F.o. is a global food service and hospitality company that manufactures smart commercial grade solutions. Headquartered in Miami, the company designs and manufactures all their restaurant and hotel products. They have showrooms and distribution centers located throughout the globe, and their products are always in stock and ready to ship from any of their distribution centers worldwide. Welcome, RF. Thanks so much for joining me today. 

Aref Sayegh: Well, thank you, Robin. It’s a pleasure to be with you. 

Robin Trimingham: I think this is going to be a fascinating conversation because as our listeners won’t know, I’ve actually been in your hotel once, many, many years ago. And I do remember it was quite an impressive place, but it’s now a kempinski property and where our European listeners are going to be quite familiar with your brand, it might be brand new to some of our North American listeners. So starting us off today and explain to us what distinguishes a Kempinski property from other luxury hotel brands. 

Aref Sayegh: Well, thank you. First of all, to let me introduce Kempinski in your program. Well, Berthold Kempinski is a wine merchant. Back in 1897, the Kopinski brand has started this way and came a long way as a European luxury. All this luxury group. We are proud to go through the years to show our iconic places, like in the Adlon in Berlin or the Titan in Munich, even the palace in Saint Moritz or another one, Ciragan Palace. Maybe some people would would be familiar with these names because not all our hotels have the name Kempinski on it. We have also gorgeous but totally other way architecturally masterpiece of hotels like the Sunrise in Beijing or like the Horn Inn in Thailand and the one that maybe some people are so on on the news is our hotel in Bali, the Apoorva that just received the G20. So all these hotels have been bringing this oldest luxury hotel company to new heights. And the things about Kempinski is we are the individual lies, the the hotels throughout the world. And and that’s what makes it unique. 

Robin Trimingham: I love that each and every one of your properties has its own special flair. I think that makes such a difference. I was doing a little background reading because your brand was new to me as well. When I heard that we were going to get the opportunity to chat and I came across a quote from Kempinski Group CEO Bernard Schroeder, and he said that North American territory is a crucial market. Why would he say that? 

Aref Sayegh: Yes, obviously, North American travelers love to to go all over the world. And we welcome travelers from all over the world. And finally now we are opening Kempinski in North America so we can share our kempinski brand experience. And this is an exciting new territory for us. Whether the guests are traveling from the US or further afield for business for leisure, it’s really no doubt that guests will enjoy our hotel, and North American travelers will be our ambassador in North America when they’re coming to see our beautiful Kempinski Hotel Cancun, because it is a breathtaking from from the views of the rooms you walk on a beautiful white sand beaches. So. If the North American are coming to see us, they will go back to their friends a little bit more north and give us a great praises. And you can look on the TripAdvisor and other media platform where the reviews are. And I think that we’re doing justice to the kempinski and it’s 125 years of existence. 

Robin Trimingham: I love how you say that your guests are going to be your ambassadors for the brand. That is the ideal concept. But let’s be real. Here in North America, there’s several really established luxury hotel brands. And I think that some might argue that you’re going to be facing a bit of an uphill climb here. How does Kopinski view this opportunity? 

Aref Sayegh: As you said, it’s a great opportunity to show that there is another luxury player in North America. Kempinski is a European brand with 125 years, like I said, of history. And North America is, I think, a great place to be in guest love to adventure new brands. That’s kind of a new discovery. And they do though look prior of coming where they should stay. And like I just said, I think that the reviews will just bring them attract them to our hotel. I ensure I do every day, walk two, three times throughout the hotel, through the beach, through the food and beverage outlets around the pool, and make sure that I talk to every guest and try to figure out why did they choose our hotel and how is obviously their experience with us. And they really love the way they read those those reviews and see how amazing our colleagues are, the warmth, the genuine hospitality that we’re giving to each and every guest in our hotel. And I think that this is going to be our edge, making sure that we elevate the service delivery and take care of each one of our guests. 

Robin Trimingham: You’re making me think of another question that I would like to ask you. You’ve been talking a little bit about the guest reviews and how important they are. What’s your strategy for motivating guests to write reviews? Because I know that this is something that a lot of luxury brands face because on the one hand, your guests like their privacy, but on the other hand, we want them to say very proudly that they’ve stayed with you. How do you walk that line? 

Aref Sayegh: This is a good question because there is two approach. I have the approach of the personal approach. Others will say, well, please, you know, scan this and give us a review. I’m more into the personal approach, making sure that the guest is happy that we enhance their stay. Actually, we have last month twice as much reviews as the hotel had the year prior. And we have just made sure that the guest is so happy that they have to tell all their friends. And the fun part of it is a lot of guests came to our hotel many years ago with a group and one guest said, Well, you know what, I’m going to go to Kempinski and how proud they were that they made that move and sharing pictures and sharing a great experience. And I think this is why if the guest leave the hotel super happy, super content and really enjoy their experience and they cannot wait to come back, some make their reservation just before leaving. This is why they want to show and express to others that they had a great time. 

Robin Trimingham: I love your comment that some of your guests will reserve their next stay as they’re leaving. That’s really the old way of traveling. I remember when I was young, that’s what my father always used to do. It’s so refreshing to hear that there’s a brand out there where that’s still the case on a regular basis. I know that you have a big following in places like Asia and the Middle East. How are you going to entice those well established travelers in crossing the ocean to experience kempinski in North America? 

Aref Sayegh: Great question. Kempinski has 82 hotels in 36 countries and throughout the world. Currently, most of these properties are in Europe, Middle East, China, Asia and Africa. We have three hotels within the Americas. Our first one here in Cancun. We are already enjoying many European and Middle Eastern, actually flying all the way to Cancun. And it’s fantastic. And they are obviously, as you said, loyal guests of ours. Abroad. Some guests making trip excursion coming in the resort as home base and going around visiting or some just using this as a landing pad from overseas, staying couple of days going through the Yucatan and Quintana Roo, which is our state, and coming back to our property for 3 or 4 days of rest, resourceful time. And then after there, going back to their home country. 

Robin Trimingham: Established in 2002. Fo is a woman owned global food service and hospitality company that manufactures smart, savvy commercial grade products, including plateware, drinkware, flatware. Hotel amenities and more. Driven by innovation F.o.h. Is dedicated to delivering that wow experience that restaurants and hotels crave all while maintaining a competitive price. All products are fully customizable, and many are also created using sustainable eco friendly materials such as straws and plates made from biodegradable paper and wood and PVC free drinkware. F.O.H Has two established brands. Front of the house focused on tabletop and Buffet Solutions and Room 360, which offers hotel products. Check out their collections today at FOHWorldwide.com. Let’s change the conversation a little bit here and talk about capital investment. What’s your experience been like in Mexico in terms of investment in things like real estate and renovations and staffing? How does that compare to your start up costs in other jurisdictions in which you operate? 

Aref Sayegh: Great. Great question. Well, our Kempinski Hotel Cancun owner has established themselves in Cancun for over 30 years from when Cancun started. The idea was to to bring a lot of of tourists and make this a wonderful destination for the tourists. So Cancun has grown. I saw pictures within 30 years, has grown such a great speed. And I think the owner’s vision was right there. And over the time I did a research for us and there is, I believe, 110,000 luxury rooms in Cancun and some something around 5000 luxury rooms in the pipeline for 23, 24 and 25. So it’s going to be busy. Our owner understands that to be relevant, you must ensure that your our property right stays updated. And we are going through a I would say, a soft refurbishment of our rooms, like taking the furniture and refurbishing them totally so they look like brand new painting, all these items within the rooms. So to make sure that it’s refreshed and now currently we are actually resurfacing the two tennis courts and one tennis courts will stay a tennis courts and the other one will become pickleball courts. Oh, that’s very because we will also yeah, we really want to be updated and with it the pools have been taken care of. So there is a lot of outside items have been taken care of and the obviously the internal infrastructures are being looked at like the Wi-Fi and things like that to bring more. Also, new plan for the future of our task force. I have actually I’m an alumnus of the École Hoteliere de Lausanne, which is in Switzerland, and we’ve been talking about doing internship in coordination with them to ensure that we are sustainable. We have an organic growth because the luxury market is in need of great colleagues to make sure that the Cancun is is recognized as a luxury luxury destination and not all the time a party destination. 

Robin Trimingham: You know, that was was going to be one of my other questions to you, because one of the problems since COVID has been staffing for any level of hotel anywhere in the world. I love your idea of an internship partnership, if you call it that. Yes. Talk to me what it’s like to come into a property that’s been operating for years and years under a really good brand, but a brand that had its own style, its own way of doing things, its own way of thinking about things. And now we are. Kempinski How do you successfully build trust with colleagues, employees and get everybody we say rowing in the same direction? 

Aref Sayegh: Yeah, that was definitely a thought that the team at Kempinski was envisioning. But I would say again, we have a long history and we have used our curious nature to develop an understanding of the location we operate and embrace the unique customs of the environment. When I say that we call this an kempinski cultural empathy and we try to blend our European etiquette with the cultural empathy, the hospitality that we have around us, the the flavor of the location. And when we do this is we really are getting integrated into the local community. We are very, very proficient in adapting ourselves and we don’t come up and we say we are kempinski and we have to do this this way. We make sure that we blend and we respect the the environment, the local partners, the local culture to ensure that we do not disturb. Serve, I would say the hospitality environment. 

Robin Trimingham: Fair enough. I know in Mexico generally, immigration can be a tricky long winded paper heavy process. What’s all of that been like? 

Aref Sayegh: Well, first of all, we have been very fortunate to acquire an established hotel. Like you said prior, we enjoyed an incredible workforce. The colleagues that stayed with us, which is a lot, have been employed in the hotel for 20 years. And their experience and their knowledge and their passion and their their warmth was just overwhelming to take on a Kempinski a brand and embrace it and move forward. So it has been very inspiring and exciting journey so far. And usually when we are going into, as I said, into a country or into a location, we don’t try to disturb the environment and we rather work with local employees, local colleagues, how we call them in Kempinski, and make sure that we do this organic growth that I spoke about a bit earlier. 

Robin Trimingham: Well, that makes sense. It’s always better to have as many local employees as you possibly can. Question that I ask everybody that I chat with, What do you feel is the biggest mistake that other boutique operators are making and why do you say this? 

Aref Sayegh: Let me say that I cannot judge mistakes of others because obviously that’s not me to judge. But what I would say is what can you do to make sure you’re successful? And I think first, training training is the key to success together with learning from any mistakes you did prior. When you open or when you take over a new hotel, the training must encompass the vision of the company, the mission of the company, the standards and the skills, obviously, of the luxury and understanding your environment, the physical environment and the moral environment. I think that they are extremely crucial to the success of the opening or the takeover. This is why we were lucky to bring our Vice President of Training and Quality for a month when we start taking over this. Anthony is a gentleman that really helped us not only to understand how to blend our standards, our vision, our mission to the local culture. Also, we had various Kempinski sister hotels that brought us their specialists in it front desk, commercial food and beverage finance. I mean, you name it. We had one of each colleague coming from all over, which gave really an international display of ideas and things like that, which I think it was a very, very interesting. 

Aref Sayegh: And then also we had our public relations, corporate public relations director who came to help our colleagues to know how to speak about Kempinski, because really, at the end of the day, speaking about a brand that you you’re not aware of, is is is is a task on itself. So we definitely had this working. Another thing that I should have maybe said it in first or second it’s a very important is the factor of our owner’s relationship between us and the owner, which is, I think, crucial to any work that you take over hand in hand to ensure that we protect their assets and we work in our property. And I think that it is really essential that the communication between the owner and the management company is amiable at all times. And I think that they trust us to take care of their assets. And that’s also the reason why it was a successful opening. 

Robin Trimingham: Yeah, I completely agree that the relationship between the owner and the management company is key. Several of the other hoteliers that I’ve spoken with have talked about the way in which that relationship was transformed by the events of the last two years, if you will. Did you experience that with Kempinski? 

Aref Sayegh: Well, the relationship was, like I said, crucial because, you know, we have 82 hotels in 36 different countries. So depending on where you where you were more affected or less affected. So every single time that you had to have that relationship, I think the strongest relationship made it happen. And there is every single hotel that I know of. We’re successful in going through the COVID time. So it’s very important. And to your point, I think it’s very important to have that very tight relationship with your owner. 

Robin Trimingham: If you could give one piece of advice to other boutique luxury operators who are listening and they’re thinking of expanding into new markets, what would you say? 

Aref Sayegh: I think that any destination you choose, for whatever reason should be embraced and understood prior of establishing yourself. Guest Tourists are coming to a country, a city, a location, a destination to experience the environment, the local culture. And it is obviously my belief that you need to blend with this atmosphere, this culture, the ambience and what we’re doing with Kempinski. We have a loyalty program. It’s called Kempinski Discovery, and we allow our guests when they accumulate a certain points discovery dollar, we call them or there are certain level to use that as to do a local experience. And for example, here in Cancun, we have an experience for the Cenote, very beautiful water, clear water where you can enjoy wildlife. We have actually during the turtle season, we have this experience with releasing the turtle at night or just guacamole making. So this is what we’re doing. And I think embracing the culture and enjoying the surrounding is what you need to believe in opening your your your new hotels. 

Robin Trimingham: Well, I think that’s a great way to tie things up today. I want to thank you so much for taking time to chat with me. You’ve been watching the Innovative Hotelier join us again soon for up to the minute information and insights specifically for the hotel and hospitality industry. You’ve been listening to the Innovative Hotelier podcast by Hotels magazine. Join us again soon for more conversations with hospitality industry thought leaders.