ITB-Panel on the future of the "Hotel Mama": Some scepticism remains
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Discussing the challenges for mid-sized companies: (from left) moderator Steffen Weidemann, Marcus Smola, Susanne Weiss, Stephan Gerhard, and Guglielmo Brentel. |
Berlin (April 1, 2011). Within the European hotel landscape, smaller family businesses still dominate. However, their destiny is a hot topic in view of the advancement of the hotel chain industry in the budget and middle classes. Branch representatives send an urgent reminder within the middle class for changes and innovation as well as early action regarding succession arrangements. With the 6th "ITB Hospitality Day", the hotel conference at the Berlin ITB, experts on the scene discussed the future of the family businesses under the title "The End for Mom-and-Pops?"
Where does the hotel industry truly stand, asked moderator Steffen Weidemann, CEO at the Institute of Hospitality Management (IFH) from Frankfurt, at the beginning of the discussion group. Would be it strongly taken up by chains and uniform like the retail industry or rather as fragments as is with the scene of the hair salon business? And: Should one look at the hotel chain industry as a danger or rather as an opportunity for family businesses?
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Guglielmo Brentel. |
Guglielmo Brendel, an hotelier himself and President of the Swiss hotel association hotelleriesuisse, does not fear the chains. "The hotel chain industry brings momentum to the private hotel industry", he said self-confidently. In the city, chain hotels bring advantages through their good marketing as well as their training and continuing education possibilities. However, the Swiss hotel industry exists with merely 30 percent as city hotels. In resort hotels, there is more room for feelings, here the private hotel could, by contrast, exercise all manner of creativity, even with scents, to stand out positively in comparison to hotel chain companies.
Moreover, the "Mom & Pop" hotel name sounds disrespectful according to the Swiss. Finally, it is also better for a hotel if it succeeds without a brand connection. "An hotelier is a networker who bundles up services for their targeted guests", he explains. In the nineties, there has been a clearing within the branch in Switzerland because many hoteliers could no longer comply with the new credit granting criteria through the introduction of Basel II.
However, Brendel recommended changes. "It needs a structural clearing and I am against structural preservation because we then position ourselves against innovative concepts", he said. There are often personal fortunes behind the problems of single properties. Additionally, it is more difficult to direct a small company and the demands on the management are greater than with larger properties. "There is a deficiency in management abilities within Switzerland", underlines Brendel.
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Stephan Gerhard. |
No advancement without a profile
Treugast Solutions Group CEO, Stephan A. Gerhard, from Germany is also aware of these problems. "For a hotel to simply establish itself and wait for guests to come does not work", he said and that, regretfully, many hotels simply have no profile. Additionally, the conceptual question is quite an essential one. With marketing, hotel chains would stand to the side as a franchise granter or a cooperation of private hotels.
Additionally and so stated by Marcus Smola, Managing Director at Best Western Germany, an increased consultation from private hotels in connection with a brand. Susanne Weiss, Managing Director of Ringhotels, confirmed this: "The private city hotel often has quality problems, the area hotel familiarity problems. For this, they need our help. We are also increasingly accompanying our hoteliers in an advisory capacity." According to Weiss, there are approximately another 10,000 hotels in Germany that do not belong to a brand or cooperation. However, the hoteliers who have left a part of their duties to central structures would have an easier time adjusting themselves to developments.
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Susanne Weiss. |
Family liability with the change of generations
A very important subject for private hoteliers is the handing over to the next generation. "Not every hotelier has children and not all children really want to take over the hotel", according to Weiss. Also, the necessary changeover is often edged out. "Some of our hoteliers believe they are immortal", he describes an unfortunately frequent condition. However, those who have children who want to take over the company must prepare and establish this early.
According to Gerhard, the fact that so many hoteliers go over the succession arrangements quite late also partially lies with the over-extension of their business. "Many hotels in Germany have debt. And then with the handing over, the junior takes over the family liability to the bank," he knows.
In Italy this is similar; Austria has a better succession arrangement. "The banks are set up differently there. Tourism has a different value in the country and there is more support", says Gerhard. In Germany the so-called "steeple banks" - national banks and savings banks – are the quickest to be ready for the granting of credit to middle-class hoteliers.
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Marcus Smola. |
Another reason, which is why the succession arrangement is often tackled late, is that "Mom and Pop" do not have the free time to devote to this during their everyday life. Those today who have no successor and would like to sell the real estate only rarely find a suitable buyer. "The conversion possibilities for hotels in the country are limited very much, but also cities do not need so many seminar or retirement homes like hotels within the market there", said adviser Gerhard.
New forms of the cooperation
All discussion participants recommended an association with a consortium. Brendel introduces an absolutely new kind of cooperation in connection with this: Under the name "Matterhorn Valley Hotels", seven hoteliers have united their properties into one in Grächen. "Everybody does what they are the best at", explained Brendel. "One conducts restoration, another is a change companion by profession, another does especially well in marketing, et cetera …" Also cooperation forms like this can be duplicated.
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Steffen Weidemann. |
During this round, the private owners did not want to ring in on the final "exit". "The Internet offers private hotels the possibility to market themselves better than hotel chains", reckoned Brendel. Weiss was persuaded of the fact that her Ringhoteliers have the best conditions for the future. "The mega-trend is called individuation", she explained. It is important that the properties remain authentic and seek market niches themselves. A ring hotelier has, for example, great success as the "first child-free hotel in the Bavarian Forest".
Marcus Smola conveys the passion of the hoteliers and its catering trade as a USP of the private owners for the future. However, Gerhard remained sceptical: "Private hoteliers have lost their innovation strength", he criticised. The new "Mama Hotels" are called 25hours, Roomers, Pure or East - with these private newcomers of the last years in regard to the avant-garde concepts of the German hotel. / Susanne Stauss
Jan 15, 2010 An emotional moment: In company succession, it`s not always common sense that prevails
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