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A Breakfast Conversation with Horst Schulze, CEO Capella Hotels and Resorts,
at the Hotel Schloss Velden, Austria

Andreas Augustin meets Horst Schulze 

Retired as CEO from Ritz Carlton for one weekend, he found fishing boring and went back to work. This time he founded his own hotel group: Capella. We have researched the history and story of his first hotel: Schloss Velden in Austria. 

In 2007, former Ritz Carlton CEO Horst Schulze opened Hotel Schloss Velden in Austria as the flagship hotel of his new hotel group Capella. In 2008, the Breidenbacher Hof in Duesseldorf, Germany became the second Select Member of The Most Famous Hotels in the World to be operated under Cappela. 

Horst Schulze, CEO Capella Hotels and Resorts, is having breakfast with Andreas Augustin at his first Capella Hotel Schloss Velden, Austria
Today famoushotels proudly presents 400 years of history of Schloss Velden, the legendary castle and hotel at the idyllic Lake Woerth in Carinthia, Austria’s exemplary holiday destination. 

Andreas Augustin (A.A.): Horst, we are sitting at Seespitz (photo), the trendy lakeside restaurant, watching the sunrise as we are having breakfast. What’s your personal breakfast favourite?

Horst Schulz (H.S.): Weisswurst!!! 

A.A.: And your motto in life?

H.S.: Earthly happiness is to be connected to creating excellence. 

A.A.: Our book on Schloss Velden came out today. It is a splendid coffee table book featuring photography by US star photographer Robert Reck, but also a great collection of historic photographs – and of course a thoroughly researched history of the 400-years old castle. Did you have a chance to read it? 

H.S.: Oh yes, Andreas! I just concluded the wonderful nostalgic tour of the Hotel Schloss Velden as seen through your eyes – FANTASTIC. History is a key element. When I first came to America in the 1960s, I was working on a ship. We had some days off and we went to see New York. All my colleagues took cabs to the Empire State building or other famous sights, but I told the driver of my taxi "Take me to the Waldorf Astoria!" For me, historic hotels were always a magnet.

Originally, built between 1590 and 1603 by Barholomäus Khevenhüller, Schloss Velden has long been a preferred destination of the international jet set, royalty, dignitaries, movie stars and writers. 
A.A.: You have started Capella Hotels as an ultimate luxury hotel chain in 2007. Luxury is what, exactly, today?

H.S.: 35 years ago luxury was a large hotel lobby with a glass elevator. 25 years ago, that changed with Ritz Carlton and Four Seasons. And today it is changing again. Waterford chandeliers as a symbol of luxury don’t hurt but they are not luxury any more. Luxury today is privacy, security, safety, personal service, individual attention.

A.A.: How do you respond to this?

H.S.: We need to know what our new luxury travellers want. In general they all want individuality.

A.A.: What’s new?

H.S.: Our response! We will shift away from "this is what we offer you!“ to "what do you want, we create it for you!“

A.A.: This is what I have experienced at Capella Hotels. Following my reservation a personal assistant called me to find out what I want.

H.S.: That is exactly the point. We ask the guest, what he wants and how he wants it. And then we make it happen. That is the new luxury. We have commissioned a survey and we learnt from it, that 79% of hotel guests would prefer more individuality during their stay. A port for their own i-pod – people want to listen to their own music while they are in the hotel room – unlimited internet access at no extra charge, etc.

A.A.: You are currently managing two very important historic hotels, one is Schloss Velden, the other one is the Breidenbacher Hof in Duesseldorf, Germany, which goes back over 200 years. Do you consider history an USP?

H.S.: History is very important and a great tool. Here at Schloss Velden I can actually feel the past and I encounter this with great respect. Here history is presented with a heart, not with snobbish arrogance. This is what I like. History is a very important marketing tool. And you bring it alive in your books! 

A.A.: How may luxury chains can the global market take? 
H.S.: Since 2001, 15 new luxury hotel chains were formed in the United States. 11 of them are already bankrupted. 

A.A.: How will this luxury element develop?

H.S.: The well known five-star chains are the leading quality hotels, serving the top market segment. They have to expand their guest ‘down market’ because the economy has lowered their occupancy. They are all, at this moment, reaching down in market segments. Consequently they will loose their top market. Whenever you reach for an extra 10% from the down-market, you loose 2% of your top-market. That was always the case, since one hundred years.

A.A.: The result of that will be that new leaders will have to fill the top segment?

H.S.: Yes, while the leading hotel companies will become more conventional, others will take over the luxury part. 

A.A.: Luxury is what, exactly, today?

H.S.:  The luxury hotel of yesterday is too large to deliver this personal attention. And in fact, they want to give up this segment. So a new luxury is developing in the hotel business. This is the big change that is happening right now. Hotel companies like Capella are taking over the very top market luxury customer because they are smaller and can respond to the individual needs, be it a diet, or a check-in time, or an allergy – anything. They can respond to the individual while the traditional large luxury hotel can not do that any more. 

A.A.: Which markets are our future markets?

H.S.: Within the next ten years, one percent of the Chinese population will be travelling abroad. By that time that will be 15 million people. They will stay about 15 days outside of the country in average. This is over 200 million roomnights. Who will be that one percent of the Chinese travellers? The upper class, of course! So you will have an infusion of 200 million new roomnights in the luxury market. At the same time we have to look at the Indian markets, where we observe the same aspects.

A.A.: How should we prepare for this?

H.S.: We need to know what our new luxury travellers want. In general they all want individuality. We will shift away from "this is what we offer you!“ to "what do you want, we create it for you!“

A.A.: How did the travel industry in general develop?

H.S.: Look at the development of travel agencies, for example. Years ago when airlines stopped paying commissions, everybody was convinced this is the end of this industry. Today they have become personal travel adivisors rather than ticket writers. And they are more important to us than ever. When, 20 years ago, we lost a guest, OK, we lost ONE guest. With the involvement of the travel advisors, the situation changed. If you loose a guest, you also loose the travel advisor. So our full concentration is on keeping the guest, find out if he had any negative experience and turn it around. 

Service is not something you only talk about: you need to deliver it!

Schloss Velden - The Castle at Lake Woerth. The history of 400 years of this romatic castle, its conversion into a hotel in 1892, and the story of the Schlosshotel Velden, as it was called. The book can be ordered here (available in English, German and Italian). 

Thank you, Horst, for your time and breakfast. Hope to see you again soon in one of your historic hotels. 


Andreas Augustin

Also See: Schloss Velden in Austria Reopens Under Horst Schulze's Capella Hotel Brand / Andreas Augustin / May 2007

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