Episode 1- Series - Conversations with hospitality entrepreneurs & leaders
With over 120 years of history, Kempinski Hotels is Europe’s oldest luxury hotel group. Since 1897, Kempinski has been building its brand in the luxury hotel space and is well-regarded for its heritage hotels, luxury holiday resorts, and business and spa hotels around the world. With its long-standing reputation, the Kempinski brand has successfully weathered its fair share of ups and downs and global crises as it continues to stand strong today, operating 76 five-star hotels in 31 countries. In a webinar with EHL, Michael Henssler, Chief Operating Officer Asia and Management Board Member at Kempinski Hotels, shared with us how Kempinski has strengthened its foray into Asia over the last decade, as well as how the company has been navigating the challenges of the current pandemic.
About 25 years ago, Kempinski came to China with the Lufthansa Centre in Beijing. 5 years after that, they decided to create a joint venture with BTG (Beijing Tourism Group), a state-owned enterprise, which is very dominant in travel and tourism all over China. The joint venture was called Key Company and was responsible for growing the Kempinski footprint in China, where BTG would bring hotels while Kempinski would run them.
When I came in, we had eight hotels in China, with a few more in the pipeline. The growth until then was done very opportunistically, and we really had to shift gears and go for more strategic, quality growth. Because at that time, the level of quality of our portfolio in China was substantially different from the quality of our portfolio in the rest of the world. We wanted to grow not in numbers but in quality, and we were developing additional growth platforms, for example with NUO Hotels. So when I came to China, my purpose was to help transform Key Company and as its success grew, the company started to have its own balance sheet and brands. Today, we manage 30 hotels across Asia from Key Company, and I think we were the first ones to manage hotels in Singapore, Bangkok, Kuala Lumpur etc. out of China.
They all do a great job and one attribute of Kempinski is that the hotels are all very different. I am very happy with every hotel in terms of offering experiences on a very high level of quality, service, and craftsmanship. However, when you look over the generations of hotels, you see the constant upgrading. Since I’ve been here [in Asia], nine hotels have left our portfolio, and several have been introduced – for example, in Singapore, Bali, or and Hangzhou in China. Over time, by adding new hotels and letting go of others, we have been able to slowly uplift the portfolio. We still have a long way to go, but the gap with, for example, the Hotel Adlon in Berlin or Çırağan Palace in Istanbul, is definitely getting smaller. If you look at the latest generation of hotels in Asia, they are at the level of the Adlon.
Also, one of the key aspects of Kempinski hotels in Europe especially, is that they are often hosted in heritage buildings, or buildings with a very strong history and heritage. But it cannot always be achieved anymore, with mostly new builds now. So to express that sense of heritage into a new build, we focus on the service methods – the European method, consulting [with stakeholders], the lobby [being framed] like a living room etc. We try to implement the DNA of craftsmanship and entrepreneurship, though not necessarily to pure fixed standards; it’s very tailor-made, very European, especially when it comes to quality management and implementing touch points – that’s probably one of our more dominant challenges.
I think it’s in the DNA and its relevance. We took a few years and worked with universities for social studies and history and we said, “What is Chinese service? How do you define Chinese values in a service sequence?” We said, “Art is an absolute expression of culture. How do you plan the art?” For example, for the tea at NUO, we have our own tea farms and tea masters to make sure that what we are doing is truly Chinese.
The project management, quality management, and engineering – the ‘German-ness’ were brought in by us [Kempinski]. But it was our Chinese colleagues, our Chairman, and a lot of professors – we took about 3 years – to really define the processes, design, procurement etc. The purpose was to make it relevant, whether for a Chinese or foreigner, to walk into the hotel and say, “Oh, that feels different.” And it’s not a design – it’s something that you smell and feel; the whole process has been adapted – it’s really a new experience.