Lessons of Luxury (Kempinski) (GB)

Kempinski- Best Brand 2011

Reto Wittwer, CEO of the world's oldest hotel group, has always done things his own way. The Kempinski boss is perhaps the ultimate hotelier. , Wittwer's vision has taken Kempinski to distant horizons such as Africa and to other markets that his peer group have been reluctant to enter.
Despite his École Hôtelière de Lausanne training, his nose for the business has been gained in all his years of experience and the fact that he comes from a hospitality family. Wittwer attributes his success to a passion for the business.

   I’m a rebel and I’ll die a rebel. My mother tried, my father tried, the army tried, my bosses tried to tell me what to do. I always pretend I’m listening and then do it my own way. 
  • The business of luxury:

"Luxury is peculiar to each person," explains Wittwer of the philosophy that he instills in the service. "It has to be exclusive."

"Too many people claim to be in the luxury business," he says of the big chains. "The top end has to be individualistic; it cannot be controlled by a chain with a homogenous portfolio. If you are growing as fast as our competitors and you keep cloning your product, you end up with 200 hotels that look the same. That is not real luxury."

For Wittwer, the essence of a luxury hotel is its individuality, not a brand identity concocted in an anonymous boardroom. "The big companies, such as Starwood, are simply brand supermarkets, you can't tell them apart," he says.
  • Quality not quantity:

Kempinski has deliberately limited the number of hotels it operates. Although this exclusivity frustrates hotels that want to get onto its books – and perhaps the company's shareholders – Wittwer says it is essential in order to keep standards high, the group manageable and the brand prestigious, particularly considering that Kempinski's reputation is centred around its collection of landmark, iconic hotels.

The policy is like a rigorously adhered to vow of celibacy and it all comes down to the Holy Grail of luxury. "Anything related to luxury must be numerically capped," Wittwer says.
"The more similar the hotels, the more boring they become as the numbers increase."
Wittwer's strategy of sustainability pays back over time: "When a market first gets rich, the favourite brands are those that scream out," he says, comparing hospitality to the fashion industry."If people don't know the difference between a Château Pétrus and a Beaujolais, they might as well drink Beaujolais," he explains.

In coming years, Wittwer sees luxury as becoming even more individual. "Cloning is not what people think of as luxury," says Wittwer. "The only way to ensure you have the sole version of that dress is to buy one from Valentino. For some people, that has meaning."

Despite the emergence of ever more luxurious hotels from Shanghai to Dubai, Wittwer maintains that Europe will lead the way in creating new forms of luxury. "The European lifestyle has always defined luxury, be it in cars or in fashion. It's not the case in Australia, China or America, despite these being shrewd markets."

"Many more customers than before come from the East, fewer from the West." Wittwer says that the demand for luxury is such that the top tier of the hospitality industry will ride out the current financial turbulence.

For Wittwer luxury will always be in demand. "My father used to say that when the rich are impoverished, the poor are already dead," he says.

"If you are not a luxury brand, you will be thrown into the bloodbath of the mid-market." But the top-end is a ruthless market requiring an iron will.

"Luxury does not compromise," he says, following with another lesson. "If you are at the top of the line, you don't discount. If the market is going down, whoever is in the discount game is not a luxury hotel."

The properties in the Middle East, Europe, Asia and Africa provide four facets to the company's business model, and each contributes to the success of the whole. The standards originate from Europe, the capital comes from the Middle East, new and exciting opportunities come from Africa, and Asia, particularly China, is where future investment will originate from.

"We are adventurous enough to anticipate the movers and shakers," he says, explaining that Kempinski helps to put destinations on the map. The company already operates five hotels in Africa, including one in Chad, the Kempinski Hotel N'Djamena, and it is looking at new destinations including Cape Verde and Rwanda.

"The eco-lodges in Africa command great rates for a basic standard," he says. "Where else in the world are people prepared to pay €2,000-€3,000 a night?"

"We have found three specific partners in Africa who share the same vision of Africa as us," explains Wittwer. "We were introduced to the president of Madagascar by one of our African partners and he's happy. So we're looking at Madagascar."

Wittwer is a big believer in Africa's potential as a hotel market. "The US trade won't go there because they think it's poor, but Africans meet," says Wittwer.
However operating in less developed parts of the world has its risks. "In Chad, we've had to evacuate our people twice in as many years when rebels moved in," he says.

It all comes with the territory for Wittwer. "We never involve ourselves in politics," he states.
"We love everybody and everybody loves us. We don't interfere in the country's regime. Whether it is socialist, communist or something else doesn't matter, they all need hotels."

Despite the war between Russia and Georgia, plans are still in place in Georgian capital Tbilisi to turn the former foreign ministry into a 200-room luxury hotel, managed by Kempinski.
High profile events such as these can be a headache, even for Wittwer. "It was sort of a challenge because of the security, no one can go in or out," explains Wittwer.

  • People power