Deutsche Hospitality CEO lays out reopening plan
 
Deutsche Hospitality CEO lays out reopening plan
02 JUNE 2020 7:50 AM

Following federal permission to reopen Germany’s economy, Deutsche Hospitality has set out an ambitious rollout of reopenings domestically, according to its CEO.

FRANKFURT—Germany has weathered the COVID-19 crisis better than some other European countries, and the largest economy in Europe is slowly returning to normal as lockdown restrictions were lifted on 6 May.

Deutsche Hospitality—the largest domestic hotel chain in Germany in terms of higher-segment rooms—is the first hotel company in the country to begin a phased reopening of its approximately 89 properties there.

Steigenberger Hotels & Resorts, Deutsche’s upscale brand ready to mark its 90th anniversary in the autumn, will reopen all its assets in the next four weeks. Deutsche’s other brands, Jaz in the City, IntercityHotel, MAXX by Steigenberger and its most recent acquisition Zleep will also reopen.

The Steigenberger Hotel Treudelberg Hamburg accepted reservations on 15 May, while Steigenberger hotels in Bad Homburg, Bad Neuenahr, Bad Pyrmont, Petersberg, Braunschweig, Bremen, Dresden, Düsseldorf, Heringsdorf, Jena, Cologne, Leipzig and Zingst resumed operations on 25 May. Elsewhere, the Steigenberger Inselhotel in Constance reopened on 29 May, and the Steigenberger Munich reopened on 30 May.

The last of the chain—Steigenberger Frankfurter Hof, Steigenberger Conti Hansa Kiel, Steigenberger Hotel Berlin, Steigenberger Hotel Metropolitan, Hotel Fürstenhof Bad Pyrmont and Steigenberger Hotel Hamburg—were slated to reopen on 1 July.

During lockdown, the Steigenberger Berlin Kanzleramt, Steigenberger Airport Hotel Frankfurt and Steigenberger Airport Hotel Amsterdam remained open to accommodate auxiliary staff, crisis-team members and guests undertaking urgent business travel, said Deutsche CEO Thomas Willms.

Deutsche Hospitality’s reopening process started a long time before the German government gave final approval, he said.

“We had set up a dedicated cross-disciplinary team of specialists well ahead of the lockdown measures in March,” Willms said. “A great asset in handling this situation has been that we have been effectively increasing the agility and flexibility of our teams and operations before the (COVID-19) epidemic appeared on the horizon.”

He said management tested various protection concepts, implemented comprehensive hygiene and disinfection measures and underwent staff training.

“The core areas are the significant increases in cleaning and disinfection intervals, but also the distance regulations in public areas,” he said.

Some of Deutsche Hospitality’s new health regulations include:

  • providing guests free-of-charge mouth-nose protection masks on request, and making masks mandatory for guests and staff in all public areas;
  • eliminating breakfast buffets, reducing the number of restaurant tables and widening the distance between tables to 1.5 meters (5 feet);
  • ensuring that only guests sharing a hotel room can share a restaurant table;
  • adapting restaurant opening hours based on the number of guests;
  • increasing contactless services such as roomservice;
  • disinfecting public spaces regularly, and only permitting two people to share an elevator, unless there are family groups;
  • installing disinfectant dispensers at all public contact points;
  • instigating contactless reception processes and adding protective screens;
  • removing from rooms magazines, writing utensils, tablets, decorative cushions and plaids and disinfecting room surfaces regularly and in consultation with guests; and
  • continuing to take leads issued by international health authorities and state and national governments.

Those processes are made more demanding by differences in German state laws, Willms said.

“It is a challenge to continuously adapt a changing set of regulations and restrictions,” he said. “In some cases, it makes the operation of hotels very difficult. For example, if a federal state demands that we keep rooms unoccupied for seven days in between guest stays. In general, however, we have been able to gain insights throughout the epidemic.”

He added Zleep’s hotels in Denmark and Sweden remained open throughout the crisis and offered extended-stay options.

Economic health
Alongside health issues are economic ones, Willms said.

“We did not waste any time and quickly assessed the various scenarios in order to hold open and very transparent discussions with our shareholders, property owners and partners,” he said. “Constructiveness and fairness were the key elements in finding solutions. … In this context, we were also granted deferments on rents.”

Willms said Deutsche has been very solid financially for many years, which has earned it the trust of banks and a good level of financial liquidity in difficult times.

“We are very grateful for the support and confidence of our shareholders who know that (we) will master this situation successfully,” he said. “We will not make any cost cuts that limit the guest experience, comfort and quality of service. While we may have to adapt the timeframe in view of the developments to come, our focus remains on the expansion of our brand family.”

Willms said he knows the next year or two will be difficult for all.

“The hospitality industry is one of the sectors most affected by the (COVID-19) epidemic,” he said. “The lockdown in recent weeks has caused a drop in sales of almost 95% in the industry, (and) we are currently experiencing a paradigm shift. Different regulations in the federal states and international travel restrictions have a strong impact.”

Germany will see recovery from domestic demand, Willms said.

“We have hotels in beautiful destinations (that) are less dependent on international travel and highly attractive for domestic travelers, be they leisure or business,” he said. “Hotels in such destinations will recover quicker than destinations with a large share of international guests.”

He added there are a number of German cities very dependent on international demand and meetings, incentives, conventions and expositions business.

“Hotels in cities like Frankfurt, Cologne, Düsseldorf or Leipzig are traditionally closely linked to international business travel, trade shows, conventions and events,” he said. “Demand in the MICE business is very low at the moment due to the volatile circumstances and restrictions. Therefore, cost management is one of the key strategies in dealing with this situation. While international travel will surely start to pick up soon, it could take a quite a while before it returns to previous levels.”

Willms added that some of his hotels outside Germany have stayed open throughout the crisis such as the Steigenberger Airport Amsterdam and IntercityHotel Riyadh Malaz.

“In Egypt, we also started very early to reopen selected hotels,” Willms added.

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