“Hotel operations radically changed”

In his opening remarks at this year’s ITB, David Scowsill, President and CEO of the World Travel & Tourism Council, said that one of the key challenges to the industry is to eliminate outdated infrastructure. “How can this work?” and “What does real estate have to do with this?” are two questions that come to mind in response to this statement.

For example, this could work by converting old downtown offices into ultra-modern hotels – even if this means getting by with 2,500 to 3,500 sqm of space. This is typically the size of smaller, downtown office buildings spread throughout Central and Western Europe, which are being converted for the first time to be used as hotels. This is precisely the concept pursued by Ruby Hotels & Resorts GmbH, which will open its first hotel in Vienna this May, the Wiener Sophiensälen.

Our author, Elke Tonscheidt, spoke with Michael Struck, the managing director of the Munich-based company, and asked him how he intends to sell hotel rooms at the level of 5-star hotels for the price of 2 to 3-star hotels.

Michael Struck, Managing Director of Ruby / Photo: private

Michael Struck, Managing Director of Ruby / Photo: private

ELKE TONSCHEIDT Mr. Struck, you intend to offer less, but exactly the right thing at a high level of quality. As the new brand on the hotel horizon, what does Ruby stand for?
MICHAEL STRUCK Ruby stands for lean luxury: A location in the heart of the city, good design and high-quality room furnishings at an exceptionally affordable price-performance ratio, i.e. 79 euros per room. We manage this by omitting other things that our guests can do without. We have also radically changed the hotel operations.

TONSCHEIDT Which operational procedures have you changed?
STRUCK For us, one of the main levers was to automate processes. This starts with the back office, continues in the reservation and even carries over into the front office: We give our guests the option of an online check-in.

TONSCHEIDT Only online or offline as well?
STRUCK A classic reception is still available for the guests that consider it important. Most of our guests, however, prefer a fast and lean process like they experience with their airline. The guest also has the option of getting the room key from a machine in just a few seconds. We have completely eliminated the check-out for our guests; everything is taken care of during the check-in.

TONSCHEIDT The success observed in hotel chains already active in the market is promising: The Dutch Citizen M Group is expanding internationally with three hotels per year; the same is true for the French Mama Shelter Group. What sets Ruby apart from a Motel One?
STRUCK What primarily sets us apart is that Ruby puts more emphasis on the features and design of its rooms. And this is important to us: Every hotel has its own individuality and its own character, which is expressed in the service, the communication and the interior design. Hotels should have stories to tell if they want to be unique.

TONSCHEIDT Isn’t that what everyone wants? What sets Ruby apart from other new generation hotels?
STRUCK We are convinced that luxury is possible even in small spaces. Our guest room is very space-efficient, thus we are reducing one of the main cost drivers. The subsequent advantage in leasing costs is passed on as a price advantage to our customers.

TONSCHEIDT How quickly do you intend for Ruby to grow, in what segments and/or locations?
STRUCK Ruby will be focusing on major European cities. This is where our guests are at home or where they are headed to when they travel. And an efficient use of space brings the greatest advantage where space is expensive. We want to grow with a sense of proportion and not merely for all it’s worth. This is particularly true for our locations. We choose them very carefully. That is why we are setting our sights on one to a maximum of three new hotels per year.

TONSCHEIDT Where do you see Ruby in ten years?
STRUCK As a true and established alternative in the hotel market.

TONSCHEIDT What role do the right partners play in your concept?
STRUCK A large one – primarily in the factor of digital technology. For example, we have found hetras as our significant system partner, whose cloud-based architecture fits well with our lean structures. Through its intuitive, tablet-based user interface, we are able to work with non-technical personnel at the reception. We have developed many of our automated processes together with this partner. We could not have developed our own automated system at the reception so economically without the open system interfaces.

TONSHEIDT Mr. Struck, thank you for your answers!

Das Interview ist auch in Deutsch unter retimes.de/2014/03/04/ablaeufe-im-hotel-radikal-veraendert nachlesbar.