INTERVIEW: Breaking the rules with Horst Schulze
The founder of Capella Hotels, personalised service legend Horst Schulze, tells Louise Oakley why forgetting industry standards is the key to providing exactly what the guest wants
Horst Schulze is an industry legend when it comes to setting standards of service in hotels. Most famously, he spearheaded the development of Ritz-Carlton into a worldwide chain back in 1983, creating the operating standards which are still in place today and coining the firm’s well-known ideology: “We are Ladies and Gentleman Serving Ladies and Gentlemen”.
The dream then, and now, Schulze explains, was to provide exactly what the guest wanted.
“We were inspired by the guest; what does the guest want in a large hotel? The number one comment from guests was ‘friendly, caring people’ so we concentrated more around friendly caring people, which meant that we had to concentrate more on selecting people, we had to concentrate more on training. That was of course the secret, not to take it for granted that the staff know everything but to continue training. We really made an effort for continuous alignment to the company thinking, and the company thinking was aligned with the customer thinking.
“It was very clear that if you want to give the guests what the guest wanted, we had to pay more attention to our employees and to the hotel surroundings. That was the inspiration and that’s what we did,” sums up Schulze.
At the same time, he strived to create the type of working environment in which “the employee would enjoy working”.
His overriding aim was to provide the type of individualised service available in smaller, independent hotels; something he thinks is still “absolutely” achievable today.
“[There are some] major companies which are driven more by economic decisions rather than customer decisions. But if you put the guest first, you can accomplish easily what an independent hotel can. It’s only a decision regarding what a company’s prioritisation and concentration is. Do you give rewards to your organisation only for economic results or do you give rewards to your organisation also for customer satisfaction results?”
The philosophy worked: during Schulze’s tenure as president and CEO of Ritz-Carlton from 1988 and vice chairman from 2001-2002, the group became the only company ever to be awarded two Malcolm Baldridge Quality Awards, in 1992 and 1999, and was continuously voted “best hotel company in the world” by trade publications.
Financial success followed: when he left the company, Schulze was responsible for US $2 billion worth of Ritz-Carlton operations around the world.
So, why leave a “dream” that has been so successful? Here, Schulze’s constant striving for perfection shines through.
“Well quite simply the painting was painted. If you paint a correct painting, you step back, you enjoy it, and then you say ‘how can I create a better painting?’” he says.
Twenty years was “frankly, more than enough” with Ritz-Carlton, and although initially he had thought of retiring, Schulze soon realised he wanted to “go on to create a masterpiece”.
And so, with some other Ritz-Carlton executives, Schulze set up the West Paces Hotel Group, through which he has developed his masterpiece — the luxury brand Capella.
“I thought Ritz-Carlton was excellent, but I felt a dream piece could be created,” he explains. “I was dreaming about a hotel where every guest gets exactly the service that he or she wants, where every employee enjoys his part of the company. He doesn’t work for the company but is part of the dream and the objective and the purpose. People come to work to create excellence,” says Schulze.
The first step, he says, was to “forget the rules of hotels”.
“Every hotel has a check-in and a check-out time. Well, we don’t in Capella, because the guest doesn’t want it,” says Schulze.
“Why do we have hours of operation for restaurants? It’s for the convenience of the hotel, not the guest. So we have no hours of operation. If the guest wants to eat dinner in the restaurant at 3 o’clock in the night, it’s the guest’s decision, not ours.
“That’s why we call every reservation and say: what can we do for you, what do you want, how can we serve you, how can we help you experience the location, do you have a dietary need, an allergy need? We are here for you. So that’s a totally new dimension.
“I couldn’t do this — Ritz-Carlton is a great company, with great hotels — but I couldn’t do this in a 600-room hotel. Impossible. That’s why Capella is only 100 rooms in most cases,” asserts Schulze.
As with Ritz-Carlton, human resources is a key part of the Capella philosophy, with guest satisfaction monitored monthly by Talent Plus and feedback being given to the hotel team.
“I expect that over 90% of the guest in the hotels says I want to come back and I want to recommend you. Satisfaction I expect in the high 90s, but intent to return and intent to recommend, we measure on a scale of one to 10 — we only count nines and 10s and we expect that to be over 90% intent to return. Eight doesn’t count. Then we interfere, the corporate team will go back,” says Schulze.
Capella is still a very new brand, following the opening of Breidenbacher Hof, a Capella Hotel in Dusseldorf, Germany in 2008.
It has since signed and opened hotels in locations from Mexico to Singapore, and in November, will debut in New York with the Setai Fifth Avenue.
Location is vital to the success of the brand, and Schulze says “believe me, I am not exaggerating, for every Capella we have accepted we have at least 30 other opportunities”.
In order to fully serve the needs of guests — who Schulze says want to be connected to the culture — the Capella teams must be experts in their locations.
“Our connectivity to the local life is very important, that we understand and connect to the local people. That’s very different from how it was 25 years ago. We are there — we help to connect the guests to that life,” he explains.
The company also has a second brand, Solis, which is for hotels of 100-plus rooms. A project is already planned for Doha, marking West Paces entrance to the region.
As yet, no Capella hotels are agreed for the Middle East, although having opened the Ritz-Carlton Dubai, Schulze is keen for a flag here.
“Obviously I would like to be in that market, it’s a good market, it is totally understood when we go to this market that our whole intent is to be the leading luxury hotel. The key is service,” says Schulze.