"Price increases in the hotel industry of up to 20 percent"

Caroline von Kretschmann is the fourth generation to manage the five-star hotel "Europäischer Hof Heidelberg".

"Price increases in the hotel industry of up to 20 percent"

Caroline von Kretschmann is the fourth generation to manage the five-star hotel "Europäischer Hof Heidelberg". In 2010, the 54-year-old joined the family business, whose origins date back to 1865. Together with her parents, Caroline von Kretschmann pursues the vision of becoming the "warmest five-star city hotel in Germany". A few weeks ago she was named "Hotelier of the Year 2022".

WORLD: Have you already taken precautions in case gas runs out in winter?

Caroline von Kretschmann: In the "Europäisches Hof Heidelberg" we have a very small proportion of gas in our energy mix. The main energy requirement is covered by district heating. However, I know that there are great fears in the industry that there could be a partial gas or energy lockdown in the autumn and winter.

WORLD: With what consequences for the hotel industry?

von Kretschmann: With dramatic consequences. Many hotels will probably not survive renewed restrictions or even forced closures after the last two exhausting years of the pandemic. The hotel industry therefore expects politicians to take precautions to ensure a secure and affordable energy supply.

WORLD: And the Corona crisis? Is that being pushed into the background because of the energy crisis?

von Kretschmann: Unfortunately no. All scenarios predict further waves of infection by autumn and winter at the latest. Therefore, as an industry, we appeal to the government to implement what we hope we have learned during the pandemic years and to finally fix weak points. But what we're hearing about it so far is worrying; For example, the digitization of the health authorities does not seem to have progressed, nor does one get the impression that the government is taking forward-looking measures to prevent a pandemic.

WORLD: What gives you the strength to continue in these never-ending times of crisis?

von Kretschmann: The "Europäische Hof Heidelberg" has had to survive many crises in its more than 155-year history. I think that has developed a certain resilience. Our family is characterized by a fundamentally positive attitude towards life. But also fighting spirit. We have the ability to accept things that cannot be changed. And we do not focus on possible causes and culprits, but try to mobilize our resources. By the way, humor is also part of it.

WORLD: Are you perhaps more relaxed because luxury hotels like yours get through economic crises more easily than budget hotels?

von Kretschmann: I don't think so. It's no coincidence that there are only a few privately run five-star hotels and many of these are owned by large, industrial investors who, in the event of a crisis, can cross-subsidize with money from other entrepreneurial sources.

WORLD: But your loss of sales during the pandemic was compensated for by state aid?

von Kretschmann: From March 2020 to March 2022, the hotel and catering industry lost a nominal 75 billion euros in sales. On the other hand, there are 21 billion euros in state aid, for which the industry was very grateful. As far as the "Europäischer Hof Heidelberg" is concerned: We were compensated for almost two thirds of our lost sales. We had to compensate for the rest through savings, borrowing or using up reserves.

WORLD: Why don't you increase the room rates?

von Kretschmann: The price sensitivity of the guests and their demands on the price-performance ratio are generally high in a luxury hotel. Price increases can therefore only take place if a corresponding promise of performance is fulfilled.

WORLD: But won't you have to make price adjustments because of inflation?

von Kretschmann: Yes, that cannot be avoided. I suspect that there will be price increases of 15 to 20 percent in the hotel and catering industry due to the exploding prices, especially for food, energy, investments and also due to the rightly significant increase in wage rates.

WORLD: A problem that also affects all hotels is the lack of workers. How many employees left your hotel during the pandemic?

von Kretschmann: During the two years of the pandemic, we only lost one colleague at the "Europäisches Hof Heidelberg". All other 149 colleagues, whom we deliberately do not call employees, stayed with us. We have a close relationship with our teammates, they are part of the extended family. You are our number one priority, ahead of the guest and far ahead of the company.

WORLD: But in the end it is the economic that counts.

von Kretschmann: Not with us. We are driven by a higher purpose that goes far beyond the economic. With our value-oriented and empathetic corporate and management culture, we want to bring a deeply philanthropic and caring attitude into the world.

We also do not make any decisions that would improve our economic result out of pure profit orientation, but which were at the expense of our colleagues. And we don't give notice in times of a pandemic, we prefer to take out a loan or cancel events in times of high capacity utilization if the workload in the kitchen or in housekeeping is too high.

WORLD: You joined the company in 2010, is this special corporate management culture your work?

von Kretschmann: We have always had a strongly value-oriented corporate culture. I just had to develop them further. The framework conditions in which I move, unlike my parents, are shaped by megatrends such as digitization, sustainability and health. But also of high complexity, uncertainty and, specifically, of a frequently new idea of ​​what characterizes an attractive workplace.

WORLD: What has changed in terms of an attractive job?

von Kretschmann: Earlier generations could often be lured with careers and with company cars, high salaries and promotions. Nowadays, many young people want a balance between work and private life, a job that makes sense to them, sustainable company action and a certain focus on the common good. Managers have a special responsibility here.

WORLD: Are you setting a good example yourself?

von Kretschmann: I'm trying because I'm convinced that management will become even more cooperative, empathetic and value-oriented in the future. The ego of the leader will no longer be in the foreground, but the interests and needs of the followers. We take care of the team members in every respect, including private matters.

WORLD: Can you give an example?

von Kretschmann: A colleague from housekeeping, for example, was recently desperately looking for a doctor for her daughter with heart disease; In this case, my mother personally went from professor to professor with the documents to get an appointment. Our colleagues appreciate this approachable, caring approach and reward it with loyalty. Many of them have been with us for 20, 30, 40 or even 45 years.

WORLD: In order to counter the shortage of skilled workers in the catering trade, Federal Interior Minister Faeser proposes making it easier for foreign workers to move in. A good idea?

Interior Minister Nancy Faeser has presented her plan for a "modern immigration law". The building blocks are, among other things, a right of residence, a facilitation for the immigration of skilled workers, but also "faster return journey prospects for criminals," according to the SPD politician.

Source: WORLD

von Kretschmann: Absolutely. By 2030, there will be a shortage of around five million skilled workers in Germany. The head of the employment agency recently said that we need 400,000 foreign skilled workers a year to close these gaps.

According to many experts, the only medium to long-term solution to our skills and labor shortages is accelerated digitization and automation. This means that we will probably be forced to replace the recurring and standardizable processes with artificial intelligence across all market segments and to deploy the rare colleagues where human contact, empathy, flexibility and creativity are necessary.

WORLD: Do you think it is unthinkable that a robot would greet the guests at the reception of the hotel “Europäischer Hof Heidelberg”?

von Kretschmann: At a time when technical developments and the use of artificial intelligence are rapidly becoming market-ready, I think anything is possible. In my opinion, we have to remain open and curious and see transformation as an opportunity.

WORLD: You are one of the few women at the head of a luxury hotel, how do you define luxury?

von Kretschmann: Time and attention for the guests. Of course, we also have to offer a very high-quality infrastructure, excellently equipped rooms and very good gastronomy. But we have never understood luxury as golden faucets or the Bentley in front of the door, but always as a particularly warm, very dedicated and empathetic service.

WORLD: You were certified with a sustainability seal during the pandemic. How does that fit with luxury?

von Kretschmann: I think it's very good. Luxury has long ceased to mean wasteful consumption. The new definition of luxury revolves around values ​​and responsibility. The traditional luxury of ownership has been increasingly replaced by the luxury of experience in recent years.

And now the sense of luxury is more relevant than ever. And this is where sustainability in its holistic form plays a major role. Understood in this way, luxury also means driving positive change. People no longer want to consume only beautiful things, but at the same time good things that do not harm the common good, but promote it. And i like that.

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