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Gewandhaus boss explains: What's going wrong with hotels in the East

The Gewandhaus in Dresden is one of the best hotels in Germany. Manager Gregor Gerlach is proud of the award. But he warns.

Reading time: 4 Minutes

Das Bild zeigt das Hotelgebäude.
Gregor Gerlach bought the Dresden Gewandhaus in 2005 and reopened the baroque clothmaker's house ten years later as a five-star boutique hotel. © Seaside Collection Hotels

By Michael Rothe

Mr. Gerlach, congratulations on the 5th place of your Dresden Gewandhaus among the "101 best hotels in Germany 2023"! What does the placement mean to you?

It is a wonderful confirmation of our work, especially for the team on site.

Aren't you disappointed not to be at the top? Especially as the winner is called "Vier Jahreszeiten" - like your family's first hotel in St. Peter-Ording.

No, we are very happy. Dresden is not the classic luxury hotel city. The prices are different than in Hamburg or Munich, the hotel budget is smaller. And it's a wonderful story when you still come so far ahead.

With the Bülow Palace and the Suitess there are still two Dresden addresses in the top ranking, as well as the luxury resort Schumanns in Kirschau. Is the cake big enough in Saxony?

It could be bigger. Except in December, the occupancy rate in Dresden's hotels is not at a super level. But everyone has a slightly different target group and therefore does things differently. We take a sporting view.

Das Bild zeigt einen Mann.
Gregor Gerlach (54) and his sister Anouchka not only run ten hotels, they are also active in river cruises with Riverside Luxury Cruises. © Seaside Hotel Collection

What does a hotel need to be ahead in this "sport"?

Of course, the hardware has to be right first and the hotel has to be in good shape: from the building fabric to the building services. But the real difference is made by the people on site, their friendliness, their proactive and forward-thinking approach. There is a lot of truth in the saying "Read the guest's wishes from their lips". Making them feel welcome - that's what counts. And the people of Dresden seem to be particularly good at this when three of them are at the forefront.

Berlin is represented 13 times in the ranking, but there is not much going on in the wider area. Does the East have a quality problem?

No, he has a guest problem. The market in Berlin is much bigger than in the rest of the East, especially in the 5-star segment. There is also a larger clientele there - including large companies, politicians and embassies - who are prepared to pay more. Except during the Advent season, when Dresden is also full, hotels in Berlin, Hamburg or Munich earn twice or even three times as much as in Saxony's metropolis. This income can also be used to invest more.

Seaside Hotels advertise on their website with the slogan "Simply making guests happy". How simple is this "simple" - especially in times of multiple crises?

It's not that simple. The saying means that you don't need golden spoons or caviar to please guests - or chichi here and chichi there. The most important things are simple: friendliness and the occasional surprise.

You travel to different regions: Canary Islands, Maldives, Germany. Do the guests' requirements differ?

Yes and no. Of course, each hotel is individual, which is why we don't have a chain name, but each hotel has a different name to reflect its local identity. But there is a common denominator that is important to us everywhere: friendliness, good food, design.

What about the framework conditions, for example at the Side in Hamburg and the Gewandhaus?

I think both Saxony and Hamburg are doing a good job. Dresden initially had deficits in business development, but that has been made up for. In Leipzig, economic demand is already much stronger than in Dresden, and in Hamburg anyway, as a business location that has grown over centuries. Dresden could have more international companies and visitors. But that cannot be forced. For not being a city of millions, it is a good location.

Do you have any wishes for the city?

Decision-makers should be careful not to build even more hotels. Because the greater the competition, the more everyone has to save and the worse the product will ultimately be.

During and after the pandemic, the hour of the lobbyists struck: everyone is demanding.

The situation is anything but rosy.

According to the Federal Statistical Office, per capita expenditure on restaurants and overnight stays is 13% above the pre-corona level at an average of EUR 177 per month.

However, the cost of electricity, food and salaries has risen far more in this time: by an average of 30 percent. This gap is very painful. We also have extremely low prices - in the hotel and restaurant industry. In London, Paris or Lyon, you pay 300 or 400 euros per night, in Germany 150 or 170 euros. A McDonald's burger costs almost twice as much in France as it does here. That makes it difficult to earn money in Germany, although the occupancy rate is okay.

Why is that?

Maybe it's too easy to build hotels. Whenever things improve, five new ones spring up. Then the price war rages and prices fall. The catering trade cries out first because of the VAT on food, which is back to 19 percent instead of the temporary seven percent.

Are you shouting along?

If the partial compensation of costs is eliminated, that is dramatic. And some people will have problems.

... if he doesn't raise prices?

Yes, but this is an experiment with an open outcome. Germans are very price-sensitive. Nobody knows whether many or just a few fewer guests will come.

Schnider Reisen, Attika Reisen and Arcona Hotels have canceled their operations. Is a wave of bankruptcies looming?

Quite possibly. The prices are not such that everyone earns well. Some can fall over at the slightest breeze.

In Saxony, you have driven in three stakes at once: in Leipzig and Dresden you have built on historical substance and in Chemnitz you have even renovated a slab.

In Chemnitz, it was the very first hotel in Germany that my father took on right after reunification. Then the others were added bit by bit.

Where do you see your group in five or ten years' time?

Anything that goes beyond five years in terms of planning quickly becomes clairvoyant. We have just started with the exciting riverboat theme, in which we are investing a lot of time. We don't have to grow, we're not on the stock market, we're not driven by anyone, we're a family business. But when good opportunities arise, we get involved. That's how we came to Saxony, when everyone still disregarded the East.

The interview was conducted by Michael Rothe.

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