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Kempinski plans push to double portfolio size
January 14 2013

The company has nine properties under development in places including China, India, Europe and Africa.

  • Kempinski currently has 75 5-star hotels in 32 countries.
  • “With other hotel companies expanding as well, talent will become the most important challenge in the business,” Kempinski’s COO Duncan O’Rourke said.
  • Kempinski is expecting “steady” performance in China during 2013.
By Shawn A. Turner
HNN contributor

GENEVA—Luxury hotel company Kempinski Hotels S.A. is on a mission to double the size of its portfolio by 2015.

The Switzerland-based company currently has a portfolio of 75 5-star hotels in 32 countries, with an additional nine hotels under development, Duncan O’Rourke, Kempinski’s COO, wrote in an email. Kempinski’s development focus is on Europe, with the Palais Hansen Kempinski Vienna scheduled to open in March 2013. Other properties under development in Europe include the 250-room Grand Hotel Kempinski Batumi Black Sea in Georgia and 200-room Emerald Palace Kempinski Hotel Kiev in Ukraine.

“As a global company, we consider business opportunities according to whether our client base will naturally go on business or leisure,” O’Rourke said.

As part of the effort, he said Kempinski is looking to hire 22,500 new recruits globally to satisfy the company’s growth plan. To fill that need, the company held its first regional Career Day on 6 December at Emirates Palace in Abu Dhabi, United Arab Emirates. O’Rourke said candidates came from as far away as Germany and South Africa to interview. A Worldwide Career Day will be held in Munich on 2 March 2013 while a China Regional Career Day will take place 23 March with positions available in and out of China.

“With other hotel companies expanding as well, talent will become the most important challenge in the business,” he said.

Business composition
In 2011, nearly 40% of the company’s business was comprised of leisure, 36% was corporate, and the rest was group/meetings, incentives, conventions and exhibitions, he said. The company’s primary feeder markets are Germany, the United States, the United Kingdom, Switzerland and Russia.

“In 2012 and beyond, we aim to get a more evenly split market share and increase group business to about 30% of total occupancy,” O’Rourke said.

He said Europe’s hotel sector “has performed well” of late, with Germany as the main driver.

“Germany has had a strong performance over the last year at both the top and bottom line,” he said. “This has been an excellent year for Germany, arguably the most resilient economy in Europe, and flagship hotels such as the Hotel Adlon Kempinski Berlin and the Hotel Vier Jahreszeiten Kempinski Munich had record-breaking years.”

He added: “Overall, the European region is performing well and in line with its targets. Kempinski remains optimistic for 2013, and the operating hotels will have the very welcome addition of a key hotel in Vienna, which is expected to yield healthy revenues and enhance the brand value in line with the portfolio’s development strategy.”

European soft spots are in Frankfurt, where rates have dwindled, and Switzerland which is not attracting many tourists because of the strength of the Swiss franc. But Western Europe overall is also performing well, he said.

Outside Europe
The company also has properties under development in China, India, and Kenya. Africa, particularly Ghana, Nigeria and Angola, is a continent that is seeing strong economic growth, he added.

“At the same time, Africa is also home to a varied landscape that is inviting to tourism, especially the very high-end luxury safaris, for example,” O’Rourke said. “We have been operating destinations for almost 10 years now and we see that there is a lot of potential for continued growth in frontier markets such as Kenya, Ghana, Nigeria, Botswana, Namibia and South Africa.”

In China, where the 431-room Kempinski Hotel Chongqing opened last month, Kempinski is expecting “steady” performance in 2013.

“With more players coming to the market attracted by the steady growth of previous years, a clear oversupply is starting to emerge in key cities and will put further pressure on (revenue per available room),” he said.


1/16/2013 1:27:00 PM
For luxury this is a large chain, with zero North American presence. Very interesting, given Kempinski's distribution throughout Europe, Asia, the Middle East, Africa and Oceania.
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