Ultraluxury owner-operator has its first property in the
U.S. and will likely add more. CEO Gruenert discusses the mission and the
growth strategy.
BADEN BADEN, Germany – Talk about being in the right place at the right time, ultraluxury
owner-operator Oetker Collection continues to post great results at its
12-hotel portfolio, especially since the inception of “revenge travel,”
generating 10% to 20% ADR growth in 2023 and with CEO Dr. Timo Gruenert suggesting
2024 shows no signs of regression.
Perhaps even as importantly, after looking for some 15
years, Baden Baden, Germany-based Oetker has landed in Palm Beach, Florida, its
first hotel in the U.S., where some 40% to 45% of Oetker guests originate. The former
Chesterfield Hotel is undergoing a complete transformation with key count being
reduced to 41 from 57, and the newly named Vineta hotel plans to reopen later
this year. The group also just completed its first successful season on the
island of Capri at the new 50-room Hotel La Palma.
Moving forward, Gruenert said they will continue methodical
growth via management and/or acquisition, looking further in the U.S., Europe
and the Caribbean. The owning Oetker family remains in no big rush to expand
and the entire group believes in maintaining quality at all costs.
Go where the loyalists go
One important lesson Oetker has learned is not to chase what
it thinks are locations where they should be, and instead go to the logical
destinations their loyal guests tend to travel. “At one point we realized we
just have to ask our loyal guests where they will go next,” Gruenert explained.
“That’s really what should define our plans for expansion, and that’s how we
arrived in Capri and Palm Beach.”
The Vineta Hotel Swimming Pool in Palm Beach, Florida
Oetker Collection leadership might also want to ask where
London’s famed Reuben brothers are going next since they own the hotels in
Capri and Palm Beach, and Gruenert said he expects the two groups to cooperate
again.
“We appreciate each other as partners,” he said. “The concept
of the Oetker Collection is to recreate masterpieces and we realized over the
past years that this is not for every developer… It takes a lot of time, money
and passion on both ends, and we don’t come across investors every day who say,
‘well, fantastic.’ So, the Reuben brothers are very good partners and I can well
imagine that there’s more to come.”
At the moment, Gruenert said Oetker Collection is working on
a deal in Tuscany, where it is the owning Oetker family who is putting skin in
the game. He called the deal “a work in progress,” but at the same time
suggested Tuscany could be the group’s next opening. Generally speaking, the
group is looking for smaller properties in the 50- to 80-room range.
Gruenert also said there are another three development deals
in more advanced stages of discussion. “I’m optimistic for 2025 and 2026 [for
further growth],” he said. “It is very thoughtful growth, which is much easier
to control and work through to find the one masterpiece that we can add to the
collection rather than trying to find 10.”
Gruenert expects more deals in the U.S. as the Palm Beach
deal opened the door to a new phase of development. He said a few conversations
are in motion, including one on the West Coast, and that they would like to go
to destinations like Aspen. “These are unique destinations where, again, our
guest go. That’s going to be the focus going forward.”
What he does not see in the near term is pursuing
opportunities in Asia or the Middle East.
Justifiably flying high
Back to performance, Gruenert said their strong rate
performance was justified by the investment the group continues to make in the
portfolio, which he added was not necessarily the case for among their
competitive set coming out of the pandemic.
The group’s biggest hotel, Le Bristol Paris, should do very
well this year with the Olympics coming to town, and he also cited continued
strength in the Caribbean, where they operate Jumby Bay on Antigua and Eden
Rock – St Barths. There has also been very strong performance coming from L’Apogée
Courchevel and Hotel du Cap-Eden-Roc in Antibes, both in France.
The Jumby Bay owner just made a big investment, adding 12
suites to just a 40-room property, while Eden Rock continues to crush it from a
demand perspective. “It’s sometimes hard to believe from a business point of
view how St. Barths has developed over the past years,”Gruenert said.
Summing it up, Gruenert added, “We are flying at the moment,
and hopefully for a longer time. I guess we’re in the right places at the right
time now.”
Adapting and maintaining
To keep the momentum going, Oetker Collection is adapting to
trends and courting next-gen travelers. “We have the heritage [of our
properties] – nobody takes this away from us. But adapting – this is work that
needs to be done.”
Gruenert cited a new pizzeria at Hotel du Cap-Eden-Roc, something
he would have never believed would have happened 10 years ago. “Now, it feels
absolutely natural. Yes, guests like to dine at the Michelin star
restaurant, but once they have done that three times they say, ‘can I have a
pizza.’ Let’s do what guests expect.”
Another example: the team at Le Bristol Paris created a
concept called “Bristol After Dark,” which has led to queues on Friday night at
1 a.m.
“Do a few things and do them really well,” Gruenert said. “Make
sure you do the right things to adapt. But the first thing is to make sure you
get the basics right.”
That led Gruenert to talk about his biggest challenge, maintaining
the Oetker Collection’s very particular culture as it continues to grow. “We’re
very clear today that a good collection is about four things: it’s about
masterpieces, family spirit, elegance, and genuine kindness. These four things
are non-negotiable and keeps this culture intact as we grow.”
We have the heritage [of our properties] – nobody takes this away from us. But adapting – this is work that needs to be done.
Timo Gruenert
To further maintain focus, Gruenert has also created an
internal mantra, which states, “we always need to be better than the last one.”
When asked what he is most proud of since taking the CEO
role in 2020 after 15 years with the company, Gruenert said it was a plan to better
clarify what the Oetker Collection stands for.
With some 3,500 team members, he said he wasn’t sure
everyone knew what the company should be about, which led to the creation of a
strategy paper. The result was massive buy-in. “We had people say, ‘we love
this. This is the company I want to work for. This is exactly the ethos in tune
with my personality.’ Everything we say about doing this right, not about speed
– many people can relate to that… We have our purpose.”
Gruenert further explained that many groups can manage
luxury hotel, but the Oetker Collection’s mission is to create masterpieces. “That’s
something very different. There’s a real purpose in that, and people buy into
it, and as a result, there’s a great team spirit.”