Frank Marrenbach
Germany-based luxury hotelier Oetker Collection last month said it would expand to Sao Paulo, Brazil, in 2017 with Palacio Tangara and would debut U.S. operations with a yet-to-be-named New York property inside the midtown Manhattan's Sony Tower the following year. Although the company was founded in 2009, its controlling family has been overseeing iconic luxury properties such as Germany's Brenners Park-Hotel & Spa, France's Hotel du Cap-Eden-Roc and London's Lanesborough since 1923. CEO Frank Marrenbach, 49, spoke to hotels editor Danny King by phone from the International Luxury Travel Market conference in Cannes, France.
Q: You've been in business for 90 years, yet haven't operated farther west than the Eden Rock in St. Barths in the Caribbean. What took so long?
A: In 2009, we had four hotels. Six years later, we have nine, with two more to come. For a big company, that looks slow, but for a boutique operation, that's quite good growth.
Q: Why Sao Paulo?
A: Sao Paulo is the economic powerhouse of South America. It was obvious that this was the best gateway for the U.S. The Sao Paulo market has 23 million people, and we believe we can complement the current inventory on the market. The hotel's position and location is unique. It's in a private park, and the outward appearance is similar to a big palace. That, for us, in many ways made for a unique opportunity, and one we couldn't resist.
Q: Why New York?
A: Forty percent of our clients are American citizens. It's our biggest market, so it was clear for us that engagement in the U.S. is crucial. And we wanted to be in that area of town. The great aspect is that it's a conversion. It's a great location, and we're very free [with room design] because the structure will allow us a great footprint for the rooms. The ceiling height is over 3 meters [almost 10 feet], which is unusual. The first floor of the hotel is the ninth floor -- the building has a very huge atrium -- and that allows us to create rooms with a wonderful view. Plus we have good investors in the [building developer] Chetrift Family.
Q: New York's hotel-room inventory is rising as fast as any in the country. Does that concern you?
A: We're not worried. There's only one New York. The question is, what kind of hotel is being opened? This isn't a "me-too" concept product.
Q: Where else is Oetker Collection looking to expand?
A: When you look at our portfolio, we have more resort hotels, so we look to balance that with [hotels in] gateway cities. A city like Los Angeles for us would be an opportunity, but cities like Rome, Tokyo and Singapore are also interesting.
Q: With larger hoteliers continuing to expand their luxury-hotel inventory, is there concern that Oetker Collection's properties could get lost in the mix?
A: No. There's an element you don't see on the balance sheet, which is culture. We are family owned, so we have an opportunity to grow slowly. We keep the hotel brand names. We never impose Oetker on top of the name. So we've been able to maintain singular properties. The large companies are very good at facilitating big things, but the niche requires a different approach, and the bigger you are, the more complicated it is to manage that. So that sets us apart.