FRANKFURT—It’s been nearly two years since Steigenberger Hotels AG left the friendly confines of family ownership and six months since Arco Buijs assumed the CEO’s mantle. Now, the Frankfurt-based company that has 78 hotels in its portfolio is looking to expand.
“I see a lot of possibilities for our type of hotels,” Buijs said during a recent phone interview. “We do not want to take crazy risks. It’s a question of finding the right opportunities.”
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Arco Buijs |
The 80-year-old company has two brands in its portfolio: Steigenberger Hotels and Resorts and InterCity Hotels. During 2009, it was acquired by The Egyptian Travco Group International Holding S.A.E. The Cairo-based company is the majority shareholder and is run by Hamed El Chiaty, his wife Dora and his children, Tania and Karim.
The majority of the growth for Steigenberger, which was founded in 1930 by Albert Steigenberger, will come in the form of management contracts, according to Buijs. The plan is to add approximately 15 hotels each year.
“We like management contracts, but we do (have) lease contracts in certain destinations if needed,” Buijs said. “We are not a building owner, but we would consider looking at possibilities to buy. We’re working with partners to identify opportunities. … The strategy is to make this German brand exported abroad.”
Investment plans
The company will invest about €100 million (US$131.6 million) during the next four years as part of the expansion program, Buijs said. The expenditures include major renovations at Steigenberger Hotels in Düsseldorf and Stuttgart.
The company has 12 hotels in the pipeline to open between now and the end of 2013, including two Steigenberger Hotels in Bremen and at the new capital city airport, Berlin Brandenburg International, as well as two Steigenberger Grandhotels, in Leipzig and on the Baltic Sea island of Usedom.
“The 15 (each year) might be located in markets we’re already in, but certainly the focus is on foreign markets,” Buijs said.
Other transportation sources are just as important for expansion—particularly for the midscale InterCity brand, according to Buijs. The properties are located near railway stations and airports, and they offer guests free public transportation in the city where they are staying.
“It’s a lean concept, attractively priced and easy to reach by train or plane,” Buijs said. “Generally, InterCity has a lot of chances to grow because midscale hotels are showing more growth than luxury.”
Steigenberger-branded hotels are characterized as grand hotels located in resort areas and business centers, he added.
“Steigenberger is always located in a good location in the city or a resort location,” Buijs said.
Steigenberger’s growth will be fueled by a reorganization of its sales-and-marketing department when Dirk Führer takes over as chief commercial officer at the beginning of January. The new sales structure will feature four new global sales agencies, and regional sales offices will be expanded in Hamburg, Berlin, Frankfurt, Düsseldorf, Stuttgart and Munich, according to Buijs.