The Ultra Luxury Hotel Guest is not Looking for Gimmicks.
By Joseph Fischer - Exclusive Interview, only at 4Hoteliers.com
Thursday, 4th July 2013
Exclusive Feature: An One-on-One with Horst Schultze – a living hotelier legend and the former CEO and Vice Chairman of the Ritz Carlton hotel chain, who is now the founder of the equally ultra luxury hotel group Capella and is based in Atlanta.

Mr. Schultze is best known in the hotel industry for his unwavering striving for service excellence.

Among his unforgettable quotes are: 
  • "You don't go to go work, you go to create excellence" 
  • "We are Ladies and Gentlemen serving Ladies and Gentlemen"
  • "Unless you have 100% customer satisfaction…you must improve"
4Hoteliers Image LibraryI asked Mr. Schultze what his views are on new features such as rain showers, special mattresses and pillow menus that hotels are now using in order to differentiate themselves from their competitors.

HS. These are all gimmicks that don't stand out in a true super luxury hotel. Our customers are not looking for gimmicks. They are looking for unique service experience and fulfilment of their holiday fantasies.

JF. What is your view on Designer branded hotels?

HS. Those Fashion brands may know a lot about merchandizing but would they last for long? Twenty years ago the ultimate luxury car was a Mercedes 500; nowadays it is still a great car but a true ultra-luxury car brand is a Bentley.

Design is important and the quality of the workmanship is imperative in the luxury market; however, calling a hotel "Armani", "Bvlgari" or "Versace" doesn't make the hotel stand out from its competition.
What truly makes the difference for the top end customers that Capella serves is the delivery of reliable, genuinely caring and timely service which is superior to our competitors'.

JF. How do you reach those top end customers in a global world and how do you compete with some of the other Luxury hotel brands?

HS. We are a small hotel group but we still get to our clients. We depend on specialized travel agencies and top-end tour operators. Over the many long years I have worked in this market, I found out that there is no substitute to a professional travel agent or travel manager who takes care of the customer's every wish and request.

Those customers want the best and are happy and willing to pay top dollars for outstanding, A-Z service. 

We also have our own offices in some of the major cities around the world. Currently Capella is looking to open a marketing office in Shanghai China, which is a market of huge importance to the brand.

JF. From where geographically are your customers coming?

HS. Different hotels have a different customer mix. In our Bali hotel, a pure resort hotel, we have Chinese, Russians, Americans and Australians. In Singapore – a multinational corporate destination - we have Americans, British, Europeans and Chinese. In Dusseldorf, we have Germans, Europeans, Japanese and Middle Eastern guests, so it is really difficult to pinpoint our general customer mix. It is highly individual .     

JF. Who are your competitors and what makes Capella different?

HS. Capella is a niche, top-end hotel operator. We define ourselves as "Ultra Luxury" so by nature, there aren't that many competitors out there. From the big brands we compete with Four Seasons,  Ritz Carlton and, to some degree, Kempinski and Mandarin Oriental.

What makes the difference is that we don't do large hotels. We limit ourselves to a maximum of 100 keys and we just work with FITs. We don't take group business. This gives us the opportunity of providing outstanding personalized service to our guests.

Our minimum standard for a hotel room is 55 square meters and the cost of development is around US $ 1 million per key which is higher than that of Ritz Carlton, Mandarin or Kempinski.

Since we service individual clientele we don't have huge public areas. No banqueting facilities, no business lounges, and no six or seven F&B outlets. In each and every Capella we do have outstanding restaurants and bars which are mainly for our hotel guests. In most cases the bar serves just our hotel guests.

Spa, wellness and health clubs are also part of our hotels. We have our own signature Spa.  

Just as an example, in Capella we do not have fixed Check Out times. Our guests check in and check-out of our hotels with no time limitations.

In our city hotels, we provide a private PA to our guests, if they wish to have one. 

What also makes the difference is that Capella is privately owned. We don't have to satisfy those young Wall Street analysts that are covering the lodging industry. We are all about product consistency and maximum guest satisfaction.

We are not looking just to "put our flag" and sign as many hotels to the system. We would never compromise on location and standards just to satisfy short term goals. 

JF. I know you are striving to achieve zero complaints from your guests. Still, what are the common complaints you receive?

HS. We are looking for maximum guest satisfaction. In our Bali property we had two-thirds of our guests from last Christmas re-book for their next Christmas. I am asking guest satisfaction to be in the high 90%s.

If a hotel drops below 90%, I travel there and stay a few weeks working together with the GM and his team to bring up the customer satisfaction ratio. That's also the advantage of being a small hotel group. I am a strong believer in leadership by example.

One of the complaints I am faced with is the quality and amount of in-room lighting. This is a reoccurring point that I am looking to solve. It will take some efforts and research but I am committed to resolve this problem.    

JF. Most big international hotel brands talk about bottom line results and less about their guests what is your view on this?

HS. In the small booklet that each and every team member of Capella carries in his or her pocket is clearly stated, "The Capella Group is in the business to create value and unparalleled results for our owners by creating products which fulfil individual customer expectations"

I am of the opinion that, in the Ultra Luxury market the fulfilment of our customer expectations has a hugely positive effect on the bottom line results.

JF. What is your development strategy?

HS. Since we are a rather small hotel chain we can't take huge capital risks. We would love to be in the great capitals of the world – London, New York, Paris, Rome, Moscow and Shanghai. Finding the right deal takes time, a long time. We will not do minimum guarantee agreements; however, we would be inclined to be flexible on our management fees. We are fully transparent with our partners/owners.  We don't take fees on purchasing services and there is zero commission on goods we provide to our hotels.

We have a long-term strategy but we are also opportunistic. We are currently developing a hotel in Sochi in the Russian Federation but still don't have a hotel in Moscow or St. Petersburg. Some of our potential future partners are some of our guests.

This is strictly an exclusive feature, reprints of this article in any shape or form without prior written approval from 4Hoteliers.com is not permitted.

Joseph - Yossi - Fischer  the CEO of Vision Hospitality & Travel -  international lodging & Travel Solutions
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