Queens' guide
Hotel manager Tanja Schilthuizen is bubbling over with enthusiasm. Sitting in the guests' lounge in the four-star Bilderberg Hotel Jan Luyken, Amsterdam, she is eagerly describing her ambitious plans to transform the 62-bed residence from a 1980s haven into a modern boutique hotel.
Renovation of the hotel - whose lease was taken over by the Bilderberg group from its family owners last October - is due to start this year and will cost G3.5m (£1.01m). When work is completed in 18 months' time, the hotel will join the 23 other four- and five-star hotels in the group.
With the change, it is hoped the hotel's customer profile - which boasts an 82% occupancy, an average rack-rate of G270 (£78), and an annual turnover of G5m (£1.45m) - will move from predominantly leisure to corporate. "Businessmen will pay higher rates," says Schilthuizen, "but they also have higher expectations and want to stay in comfortable, homely surroundings."
The 32-year-old Bilderberg group has a good base for attracting business. It is something of a jewel in the Dutch hotel crown, where the company has 37% brand recognition. All properties are based in Holland, including four castles. Most were originally family-owned, which means the group is known for its trademark family character and desire to give personal attention. Last year Bilderberg had an average occupancy across all properties of 68% and a turnover of G230m (£66.8m). There are plans for expansion in Holland over the next five years, with a view to going international.
It may come as a surprise then that, since 1986, the group has been part of Queens Moat Houses (QMH), which in recent years has been synonymous with debt, scandal, legal wranglings and the large-scale disposal of its hotel interests.
The QMH story is well documented. Trouble started in 1993 after an £85m profit forecast turned into losses exceeding £1b. As a result, the group, which had 189 hotels in six countries, scaled down its operation to just 90 in three countries - the UK, Germany and Holland - while interests in France, Belgium and Switzerland were sold.
But even during the selloff, QMH - founded in 1968 - recognised the importance of holding on to at least some of its European connections. As Michael Finkleman, managing director of QMH, puts it: "QMH wanted to remain a pan-European company because if there was a problem in one country it would be offset by other countries."
The strategy proved to be a sensible one. As Finkleman explains, Bilderberg, kept in the group because of its strong position within Holland, helped to save QMH. "It was one of the factors, along with consolidation of interests and growth in profit of those hotels that we didn't sell, that helped to keep QMH going," he says.
During QMH's darkest days Bilderberg kept its head down and cultivated a huge domestic market, which now accounts for up to 90% of its business, except the properties in Rotterdam, Amsterdam and The Hague (18 of the group's 24 properties are outside these cities), while profits have grown by 14% over the last five years.
According to John Serbrock, Bilderberg's group sales and marketing director, the link with QMH didn't affect business because most people in the UK and Holland were unaware of the connection, and because only a small part of Bilderberg's business was foreign. As Serbrock points out: "The brands have developed independently from each other and have gone down their own routes. The domestic market was the most important to develop."
In Bilderberg's case this means looking after its substantial leisure and corporate markets, as well as building on its reputation for serving top class cuisine. At present, the leisure side accounts for 50% of overall business and is becoming more important to the group. It is no longer considered, as Serbrock puts it, a "filler" business.
Corporate and conference, which make up the other 50% of business, remain equally important - a fact made obvious by the remarketing of Hotel Jan Luyken (left). In recent years customers have become fussier, especially with their food. "We cater for the high end of the corporate market and they expect a quality cuisine product," says Serbrock.
Top class restaurants, including one at Michelin-star standard, have helped to keep Bilderberg's restaurant and catering side at 45% of turnover. Even Finkleman praises Bilderberg's catering expertise: "We do take influences from Bilderberg which are put to work throughout QMH. We can all benefit from each other's expertise."
With plans to expand the brand in Holland, Serbrock also believes the group is strong enough to go international. But while expansion in Britain has not been ruled out, there are no plans as yet.
But expansion will happen on the European Continent with the launch of Bilderberg's new scheme to form "alliances", the first of which is the 85-bedroom Hotel de Wilmersberg in the North-east of Holland. By offering alliances, explains Serbrock, Bilderberg can be represented in areas of the country and abroad in which it was previously not seen.
The scheme is aimed at hotels similar in appearance, character and management style to those currently in the group. Alliance hotels will keep their names, but are identified as Bilderberg hotels in signage and promotional material. They will also benefit from using the company's extensive marketing system, which is shared with QMH. Finkleman estimates that over the next 10 years the number of hotels could increase by 50% from the alliance scheme and other hotels coming into the group. "The important thing is that it has to be the right product," says Serbrock. "We are very strict on standards."
These strict standards are being installed at Hotel Jan Luyken. Back in the hotel's lounge, Schilthuizen continues to detail her plans for the building work on the hotel. Along with the general renovation of the building, the front office will be changed and IT systems updated. Next year, as the work is in progress, Schilthuizen says she expects the average occupancy to drop 4% to 79%, although average rack-rates will increase to G290 (£84) on the refurbished rooms.
As Schilthuizen points out, the issue of room rates highlights the type of universal market Bilderberg and QMH are competing in. "You can't protect your room rates any more because of the international market, which as a result of technology is getting more and more transparent."
And it also highlights the importance of being able to survive in the market; something the expansion of the Bilderberg group should help to ensure.
FACTS:
A total of 90 hotels are owned by Queens Moat Houses
23 are in Germany and are run as part of the Queens Germany chain
The UK has 43 under the Queens Moat Houses brand
24 are part of the Bilderberg company in the Netherlands
Bilderberg Park Hotel is the largest hotel within the Bilderberg group, with 189 rooms, while the smallest, Bilderberg Kasteel ‘t Kerckebosch, has 30. Hotels rarely have more than 100 bedrooms
Of the 24 in the Dutch group, 18 are outside the major Dutch cities
Room occupancy across the group is 68%
Turnover for 1999 was G230m (£66.8m)
Restaurant and catering account for 45% of turnover
QUEENS MOAT HOUSES HISTORY
It was the story that shook the hotel world to its foundations. Queens Moat Houses, ranked in 1989 as Britain's second-largest independent hotel group and valued at around £1b, was on the brink of collapse in 1993. A forecast £85m profits for 1992 turned into losses exceeding £1b, leaving the City reeling.
Shares were suspended and the departure of the management team - headed by chairman John Bairstow - led to a wrongful dismissal case. Government investigations into the collapse began.
For the next two years Caterer‘s news pages were awash with stories of plunging profits and the rapid selloff of the company's hotels. In a bid to pay off the massive debt, the new management team, headed by QMH's chief executive Andrew Coppel, shrank the Europe-wide group from 189 hotels in six European countries to a core of 90 covering the UK, Germany and Holland.
Phrases like "disposal programme" and "debt-ridden" became intrinsically linked with the company.
More recently, however, as a result of Bilderberg's sound standing, the consolidation of interests and retained profit growth in the hotels, "slump" and "tumble" are being replaced by "growing" and "soaring". QMH's share prices have started to rise again.
During the first six months of 1999, trading profit was up by 15.3% to £56.3m, excluding the effects of exchange rate fluctuation and hotels that have been sold off or closed for refurbishment. Underlying turnover was up by 4.8% to £174.4m.
"The selling is finished," says Michael Finkleman, managing director of QMH. What of the future? All will be revealed in March, when the company announces its latest figures.
Source: Caterer & Hotelkeeper magazine, 25-31 January 2001
