Exclusive AHGZ Interview with Andreas Erben – CEO of Aspire Hotel Group

Andreas Erben, you recently held the official opening for the Ramada Encore by Wyndham Munich Messe after a soft launch in the fall of 2023. How’s it going?

We’re doing well, aiming for an occupancy rate of around 80 percent, which we’re achieving. RevPAR (revenue per available room) is currently between 65 and 70 euros. For the current year, I expect revenue of around 10 million euros. We’re satisfied with that, and we’re filling the hotel well. Together with Wyndham Hotels & Resorts, we’ve created a quality hotel focused on guest experience, innovation, and sustainability – and this year’s high occupancy rate confirms that. Our room rates range from 69 to 399 euros, particularly around Oktoberfest.

How much did you invest in this project?

We’ve invested about 2 million euros in this rental property to bring it to the desired condition.

This hotel is one of many new brand hotels entering the Munich market. How do you plan to maintain long-term success?

The hotel is in eastern Munich, near the Messe and Riem Arcaden – so it’s not entirely central but also not too far out, a mixed location. For the guests we’re targeting, it’s ideal. We offer 170 parking spaces for those arriving by car who want secure parking. Guests have easy access to the city center and can reach the Messe on foot. A unique feature of the hotel – a structural characteristic, not part of Ramada Encore’s brand identity – is our triple and quadruple rooms, which are attractive to families. In many rooms, the toilet is separated from the bathroom. During trade fairs, these multi-bed rooms are frequently booked by international companies, especially from Asia, where this has become quite common.

Serviced apartments are highly popular, but you’re opting for a traditional hotel product. Why is that?

I think it’s worth examining what serviced apartments really are. Colleagues in this segment tell me that they see an average stay of about nine days. To me, that’s not truly a serviced-apartment business. In Germany’s serviced-apartment sector, it’s essentially a room with a kitchen. In actual hotel operations – I’ve crunched the numbers – I can’t make that work because it requires too much floor space.

The units are simply too large. Then there’s the fact that the kitchen is rarely used, yet I still have to install, maintain, and service it. The idea that a business traveler working on a project in Munich for two months is going to invite colleagues over and cook a four-person spaghetti dinner is unrealistic. No one does that. Most kitchens, according to several colleagues in the segment, have never been used.

“The idea that a business traveler invites colleagues over and cooks a four-person spaghetti dinner is unrealistic.”
Andreas Erben

But demand seems to be there. The offerings are growing, and the topic is widely discussed…

I assume that these segments are generating revenue. Initially, though, they probably end up in the red, hoping to eventually grow into the market. I can’t imagine serviced apartments achieving the returns a hotel does. They’re somewhere between a residential property, which has low returns, and a hotel, which can yield high returns. Serviced apartments fall somewhere in between. For me, that’s not attractive enough to invest in.

My definition of serviced apartments is different. We’ve been testing it at the new property for some time, and it’s been very successful. We have about 50 serviced-apartment guests in our hotel with 366 rooms. They don’t want to cook; they’re looking for a very different hotel experience. These guests want privacy, prefer not to be disturbed, and don’t want room service. They want to find their toothbrush, toothpaste, and suits exactly where they left them. With this setup, we’re able to reduce cleaning needs significantly in one hotel wing.

You’re saving on costs…

Yes, and with this offering, we can provide serviced apartments exactly as guests want them. The rest of the hotel operates normally, but with our long-stay model, we secure a stable base occupancy rate.

ASPIRE – NUMBER OF HOTELS AND REVENUE

•2023: 4 hotels / 10 million euros

•2024: 9 hotels / 20 million euros

•2025: 15 hotels / 40 million euros (planned)

Aspire Hospitality currently operates nine hotels across seven German cities, some under its own name and some under franchise brands. What are your future plans?

With the recognition and support of strong franchise brands, we aim to continue Aspire’s growth. I’m convinced that going solo will become increasingly challenging without a solid franchise partner. Germany remains important for us, and we’re looking at Switzerland. Austria, less so; perhaps we might consider the UK – these are just thoughts for now. I do have some concerns about the euro.

In what way?

I’m not entirely confident about its stability in the future, not in the immediate term, but there’s a certain instability from my perspective. That’s why we want to earn revenue in Swiss francs and other foreign currencies to diversify our income streams. Whether we succeed will be determined in time.

Text by Holger Wink

Link to the interview:

https://www.ahgz.de/hotellerie/news/aspire-hotels-die-meisten-kuechen-sind-nie-benutzt-worden-313552

Source: www.ahgz.de