Arco Buijs
Frankfurt-based Steigenberger Hotels might not be a household name in the United States--or in any country in which German is not the predominant language, for that matter--but CEO Arco Buijs, now in his seventh month on the job, would like to see that change this year. In an interview with The Transnational, Buijs discussed German business travel recovery and outlined the company's 2011 plan for international expansion, including new hotels in markets outside the German-speaking world and an increased sales presence across the globe. Excerpts follow.
Could you give us an overview of Steigenberger's brands and structure?
The Steigenberger Hotel Group has two brands. The luxury brand is the Steigenberger brand, in which we have Grandhotels, which are five-star-plus, and the five- or four-star Steigenberger Hotels. There are at this moment 48 hotels under that brand operating in Central Europe. The other brand is InterCity Hotels. This is a budget brand located in mainly Germany, near train stations and airports. It's a concept where the guests get free public transportation included in the room rate. The Steigenberger brand is a little bit more traditional. Albert Steigenberger started the company 80 years ago, and the inheritors sold the whole company to Hamed El Chiaty, the Egyptian entrepreneur, [in 2009]. I'm here in this position since July. We are setting a growth target right now for signing 15 contracts [for new properties] a year, and the idea is to grow in metropolitan cities in Europe. When we say metropolitan cities, it is those places that are well frequented by [travelers from] German-speaking markets. Our brands are very known in Germany, Austria and Switzerland, and we think growing in those destinations would generate the necessary traffic. In the same context, we would like to grow hotels in leisure destinations, in resorts in the Mediterranean, Northern Africa, the Middle East and other popular destinations that are frequented by the German speaker. Right now, we have some hotels in Egypt, but most of our portfolio is in Germany, and a little bit in Austria and Switzerland.
Will these hotels be new builds or conversions?
Right now, we have 12 hotels in the pipeline of new builds, and those are to be opened between now and 2013. We're also looking at takeovers, to have hotels converted into our brands. If you want to go to these popular cities and resort destinations, it might be easier to get the best location if you're an existing hotel, because many of these cities don't give us the space anymore. There are still in Europe a lot of non-chain-affiliated hotels that could be of interest--to see if a management contract, a lease contract or whatever form of cooperation could be done.
How is Steigenberger's corporate sales structure changing this year?
Before, we had just very small representations of our own people in foreign countries. As of the first week of January, we are kicking off a general sales agent approach. We have a point in all different markets in all parts of the world, partners and agents who will represent our brand there with salespeople who will work for us. This is quite a big operation. In addition to that, in Germany we are going through regionalized sales, which means we bring sales out of [the back offices of] hotels and will be working much closer to the customers.
Have you set any corporate sales goals from these efforts?
My hope is to generate much more business, because first of all, we will be operating in markets where we never were active. In the U.S., for example, up to today, we had barely two people there who were covering the whole continent. Now we'll be represented by a larger company and will be working with quite a few salespeople to represent us, and I have high hopes that there will be more traffic generated like that. It's not only in the U.S. It's in the Middle East, where we've had no sales effort at all, or Eastern Europe, which is a growing, important market and where we had no sales team either. We had no presence in Scandinavia, and in Southern Europe--Italy, France and Spain--we've added a lot of countries to the list. We should be really increasing our sales growth out of many places, but we did not quantify it. In the existing markets, the target was to grow at least 10 percent.
How is the German business travel market faring in comparison to the rest of the world?
Germany is growing faster than Europe right now. It's not comparable to India or China, but for Old Europe, we are really well out of the recession. The industries are performing quite well, and travel therefore has picked up quite well. We are very happy with our results [in 2010]. We are going to do something like 14 percent more revenue per available room than the year before, which is, in Germany, really good. We see that people are planning business trips again or conferences, although the conference and incentive market is a little bit slower to come back. We came out of the recession very fast and unexpectedly.