SCHROEDER LEADS KEMPINSKI WITH MORE HUMILITY

Now, heading into his second year in the role, Schroeder plans to lead humbly, and perhaps, in true Asian style, under-promise and over-deliver.

The German-born sports enthusiast likens his management role to sports: “The coach must agree with the owners on a long-term plan, but thereafter think from game to game,” he said. “And obviously the team results must be better than in the previous season. Likewise, I see our general managers as coaches of their teams, and they have my full trust to run the season without interference as long as the team moves forward.”

The good news is that Schroeder said the group has weathered COVID fairly well and, again, has all the ingredients to excel as it tries to overcome internal and development missteps, as well as bad press generated by two of the three Kempinski leaders over the past seven years. Schroeder, who previously served as the company’s COO for Europe, is determined to drive results.

“I try to tell people every single day, you must think from an owner’s perspective. It is my Asian education and experience that is very helpful,” said Schroeder, who prior to joining Kempinski held senior management positions in key growth markets with Pan Pacific Hotels (Singapore), Jin Jiang International (Shanghai) and Banyan Tree Hotels & Resorts. “So that’s what we focus on.”

Kempinski had 79 hotels and residences with some 25,000 rooms under operation in early November of 2021, and has a pipeline that will increase the property count to 99 in the not-too-distant future. The pipeline includes a hotel on the corniche in Tel Aviv set for a March opening, which Schroeder believes will deliver the highest rate in the city. Deals are also being struck in the world’s hottest market, The Kingdom of Saudi Arabia.

Schroeder eschews growth for growth’s sake and wants to stick to projects that will maintain profitability. The five-year plan revised this year calls for reaching roughly 120 hotels – perhaps three new hotel deals a year, and mostly, if not all, managed. He definitely wants to move into the U.S. after a failed New York City deal from the previous regime, and knows he needs boots on the ground there to explore his preferred markets on the East Coast.

“I think we need a strategic partner with the same vision,” Schroeder said about U.S. expansion. “It doesn’t have to be big. You can enter a city with 150 rooms, but we have to be very careful not to go to the wrong destination. So, if we can get to New York, or Washington, or Boston or Miami, I think we clearly can deliver.”

Schroeder is also bullish on residential development and even serviced apartments for the luxury market. “Today, when you look at serviced apartments, it’s all family business, and so much medical business, too… This has been traditionally more in the midscale and upscale sectors, but I think there is an opportunity in the luxury space.”

Since well-positioned resorts tend to be more profitable due to their higher average rates, Schroeder also wants to increase the Kempinski footprint outside urban destinations, and points to a recent deal to develop three lodges in Tanzania. “We’re also looking for a beach resort there. So, guests can do the entire circuit, staring with the three lodges and then go to the beach.”

He also sees deals that don’t quite fit the luxury Kempinski ideal, so rather than seeing these deals going to someone else, Schroeder would like to consider a brand extension in the upscale segment. “I think we have our own solution. So that’s something we are playing with, but I don’t want to announce it just yet.”

Lastly and naturally, Schroeder pointed to organic growth with daily optimization of the current profile.

Straight talk

Schroeder considers himself a very relationship-driven leader, believing in honest conversations with all stakeholders to address challenges and opportunities. “We are small and can spend more time with our owners,” he said. “With Kempinski, you are really somebody special… I compared it to a private bank – we must make very customized solutions… This company is lean and owners know they can pick up the phone and call us… In some parts of the world, these very traditional business relationships are getting more and more important, and I think a few years ago in the hotel industry, they disappeared.”

His broader message is that Kempinski is in very good shape. “There is stability and we will deliver… With Kempinski everything is a handshake deal – whatever we do with any stakeholder, we will deliver.”

Some proof of that comes from more recent performance, as Schroeder said business has come back strong and that internal research reveals there is a lot of trust between Kempinski leadership and property level teams.

While the first quarter of 2021 led to many sleepless nights for Schroeder, the second quarter provided a rapid turnaround. While many markets still have a long way to go, he said, business in cities like Munich and Istanbul was very robust, especially on weekends – higher then pre-pandemic results.

“Leisure, leisure, leisure – people are going to the cities like Vienna, Berlin, Bangkok for domestic staycations from Thursday to Sunday,” Schroeder said. “Oman and Qatar are just reopening and Dubai is having a super year. I would have never thought that the World Expo would come in so strong.”

On the business travel side, Schroeder thinks results will be much stronger by the second half of next year.

That said, Schroeder is not resting, believing there must be continual reexamination of standards, as there are so many new groups shaking up the status quo that must be taken seriously. “Luxury is today very often differently defined, and as brand you must have a certain flexibility…  Guests make different decisions about their stays and I ask our team to rethink a lot, which is taking us more toward wellness and health.”

Lastly, Schroeder said Kempinski is over communicating with all constituents, asking owners what they need and employees about how they are managing. “This year, we had the highest employee engagement and employee satisfaction in company history,” he said. “We were also named number one, ahead of Marriott and Hyatt, and won the Forbes best Employer Award in the hospitality industry… And that is, for me, super important because we have a tremendous war for talent in Europe.”

In the end, it comes back to humility for Schroeder. “I hope for some time now there is more peace and normal headaches… I love what I do. I’m positive and I’m always grateful.”

By Jeff Weinstein