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Mr. Jürgen Bartels
Former CEO – Starwood Hotels & Resorts Group
at his holiday residence at La Zagaleta, Spain
Edition 5



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With the wisdom he has gained through years of experience, Mr. Bartels gives us his opinion for getting the Spanish tourist industry improved. He, who has been the CEO of Westin Hotels worldwide, CEO of Starwood hotels and resorts and CEO of Méridien hotels, considers it vital that the sector be given a boost with public funds, that the growing Asian tourism be attracted to visit Spain and that Spanish companies get involved in mergers and acquisitions of foreign hotel companies.

Let us start the interview by telling our readers about your career in a shortened version.

I spent my entire working life of almost 50 years in the hotel business. 15 years ago I became chairman and CEO of Westin Hotels in the US. We sold this up-market hotel chain to Starwood Hotels and Resorts, a public company in the US. With the sale I became the CEO of the Starwood Hotel Group. The hotel group has 285.000 hotel rooms in over 950 hotels in 80 countries and 170.000 employees. Its worldwide brands include Sheraton, Westin, Méridien, St. Regis and W. The best known and owned Starwood Hotel in Spain is the Palace Hotel in Madrid, which is a Westin hotel and the Hotel Alfonso XIII in Seville which is part of the luxury collection of Starwood Hotels. I also was CEO of Méridien Hotels. This worldwide hotel group was also sold to the Starwood Hotel group. The Ritz Hotel in Madrid was owned by Méridien until 2003. I am now 68 years of age and am retired.

In your mind is there a founder of the modern and branded hotel business?

Yes, there is. Until the early 1950´s the hotels in the world were owned and managed mostly by families and sometimes small companies in their countries. In the early 1950´s Conrad Hilton started to manage Hilton Hotels outside the US for fees. These hotels were owned by others. Later he started to franchise the Hilton name for fees in the US. A franchise is owned and managed by others. The hotel business grew very fast on the principal of minimising risk for the hotel companies. Today all very large hotel companies own very few hotels and employ the method of managing or franchising for fees for other owners. One of the largest multibranded hotel groups with more than 4.100 hotels only owns 14 hotels itself. This has become an industry with more than 20 million employees worldwide. Within 10 years I expect the first hotel company to manage and/or franchise over 1 million guest rooms.

Is this the model of the hotel business used by Spanish hotel groups?

Yes, it is to a very small extent. The major Spanish hotel companies have not raised many Spanish flags in foreign countries. Management and franchise contracts, to reduce risks of growth, are a possibility especially in Spanish speaking countries to start. Thereafter accelerated growth on a worldwide basis is certainly possible. Of course, now is also a unique time to merge with or buy an international, large hotel company under a Spanish flag. Imagine, right now, US or other international public hotel company shares are sold at discount of 60% to 90% to the past 52 weeks high (the interview was given in early March 2009). It does help tourism to Spain to raise a lot of Spanish hotel flags outside the country.

How long will the current worldwide hotel business be in decline?

I expect an ongoing decline for 12 more months. This period will be followed by 24 months of very slow and slow growth. Accelerating growth I only expect to start in 2012.

What comes to mind when you think of modern Spain?

He is your beacon of strength, authority and outstanding contribution over many years to a modern Spain: The king of Spain. I also think of SANTANDER. Yes, SANTANDER, the banking system. Imagine, the US banking system has taken the world to a brink. I do know about Madoff. SANTANDER has handled this situation honourably. SANTANDER has weathered the storm, aided by better government regulations. SANTANDER is buying cost effectively international banks and raising the Spanish flags and respect outside the country. ZARA also comes to my mind. ZARA invented a business model that proves positive when most its retail business competitors are failing in the world right now. ZARA grows Spanish flags outside the country and raises respect.

I also think of Rafael Nadal. He is talented, inspired, with outstanding work ethic, he is the successful modern Spaniard seen on TV by hundreds of millions of Tennis fans worldwide. He is becoming a one man Spanish brand. Real Madrid and F.C. Barcelona have millions of fans in the world and I am one of them. There is a lot to be proud of in the modern Spain.

You worked for almost 50 years in the hospitality industry worldwide. Do you have an observation about what Spain has done for this industry that impresses you?

I am impressed with the well-planned and implemented progress of a necessary modern infrastructure for tourism. I will mention the new autoroute system, the improved airports and in particular, the growing and excellent high-speed AVE train system of Spain. I also like the Spanish initiative to build the hotels Paradores. These are inspired, representing the spirit of Spain very well and are part of cultural tourism in Spain.

Do you think there will be a long-term negative impact from the worldwide economic difficulties on tourism in Spain?

Tourism is a Spanish national treasure and has an excellent future. It will be very difficult for Western Europe, including Spain, to defend manufacturing industries. The systemic decline of manufacturing will continue and result in increasing unemployment in Europe. Spain needs to look for new and additional customers in tourism. As Asia’s living standard improves, Asian travel accelerates. 100 million Chinese are expected to travel annually outside China by 2020. This number represents research by the WTO and I believe it. Asian tourism to Europe will mainly be cultural and include other countries on the same trip. It is excellent for the future that Spain is increasingly promoting cultural and up-market tourism.

How would you go about attracting Asian tourists to Spain and would you already spend limited promotion funds immediately?

Yes, I would. These will be new and additional customers. I would not yet advertise but promote through annual press conferences in major Asian cities like Peking, Shanghai, Hong Kong, Djacarta, Singapore, New Dehli, Mumbai and others. Japanese customers have found their way to Spain already. I would rotate mayors to lead these press conferences aided by a cultural movie on Spain. I would hope this movie to be shown on TV stations in Asia after the press conferences. I would also give an outstanding dinner party after the press conference with the best of Spanish cooks, waiters, musicians, artists and accompanying art works. The follow-up would be monthly press releases on Spanish cultural news and news on progress of interest to tourists. I do believe that the European Country that is seen to want the Asian business first will be most successful over time. I also would invite the Chinese and other Asian Tourism Ministries to produce a similar presentation for Madrid and Barcelona. I would also welcome the private hotel, train and airline sector and El Corte Ingles to participate.

Do you have any recommendation on how to combat this current decline in tourism in Spain?

Over the short term there will be a decline. We are in a decline right now. The vast majority of hotels in the world, including Spanish hotels, cut costs in employee training and in renovation right now. In my mind this is a time for Spain to take the initiative to help the private hotel sector to do things that it finds difficult to do without help:

1. To participate and incentivise with federal funds in major renovations of 4 and 5 star hotels.
2. To participate and incentivise with federal funds in the construction of 5 stars hotels in Spain
3. Right now it is also necessary to make a portion of the loan federally guaranteed but made available through a Spanish bank for hotels to be built. SANTANDER, in my mind, has the infrastructure for very good staff work.
These programs could have a run of a minimum of 5 years to gain impact and worldwide recognition. I would inform Spanish hotel owners of these opportunities first and would tell the world through press releases second.

How could the Spanish government help, assuming there is a shortfall of funds being spent in hotels aon training its employees?

The European hotels train correct but formal and technical. They have not modernized. The European hotels neglect to train the smile, warmth, energy, enthusiasm, attitude, immediacy, the unexpected and inspired “yes, I can” service. It is interesting to observe that in America the technical training is second to motivational training and I agree with this. In America, as a consequence, service personnel get higher tips. Spanish employees need to channel their pride into a collective and inspired “Viva España” permanent campaign and become ambassadors of Spain. The service employees of Spain are empowered to please their customers. This can be done because it exists already in Spain from the goodness of the heart of a minority. It can be built upon, expanded and institutionalised for the minority to lead the way to become the majority. Nobody can hide in service without hurting co-workers, their company and ultimately Spain. Motivated service employees, growing in numbers daily and reducing the numbers of service employees that diminish by their persistent negative actions the national treasure of Spain: tourism.

Envision all 4 and 5 star hotel employees select each 5 “Viva España” motivated employees per year and are confirmed by their general managers. The mayor’s office of their city selects 10 – 15 winners to participate at an annual event attended by 1.000 service employees. The annual event consists of an outstanding dinner party with life music and the “Viva España” medal presentation. Each participant receives the medal from the Tourism Minister and Mayor of their city. If the Royal family were to agree, a member of the Royal family to participate in the medal presentation would be unique and remarkable. Still photos are taken and sent to the respective hotels to be presented to its selected employees in a ceremony at their hotels. Employees will wear their medals daily at the hotel. The entire medal presentation will be filmed and projected onto a large screen in the banquet hall. After the medal presentation I also recommend to show a film of a variety of  modern service employees in action at various hotels in Spain. The film needs to demonstrate smile, enthusiasm and “yes, I can” attitude and service beyond. Not formal and technical. This film should be copied and used at all hotels as part of training, and at press conferences. After dinner and the medal presentation a tombola will decide the winners of 100 prices of 1.000€ each among the participants followed by life band dancing. The presentations should rotate annually to different cities. This program needs to be communicated and offered to all general managers of 4 and 5 star hotels in Spain and followed up through presentations at regional meetings.

Do you consider these activities as marketing?

Yes, I do. All of it. In terms of priorities I regard inspired service to keep customers who come back and tell others equal in importance to renovation and advertising of a hotel. All elements need to work together. Most service employees in tourism are not likely to realise the harm their negative action can cause their co-workers, company and country. This, of course, also includes airports, transportation, restaurants, bars and retail. You will be able to measure annually your steady growth of customers and your steady move to the more demanding up-market. The sun will be shining on the investors, employees and customers. The needs of these three groups of people have to be balanced to become the triangle of success for the future. Viva España.

And finally, Mr. Bartels, how did you find out about La Zagaleta, what were your thoughts before you bought your house here and are you pleased with your decision?

My wife and I were living in the US and the UK and were planning my retirement. I started to look for a house in the best possible climate in Europe with a good cultural offering not too far available in an international community with outstanding security. We have a house in Greenwich, Connecticut in a community not dissimilar to La Zagaleta with 1.400 acres, a Polo Club, less than 100 houses and excellent security. That was our model. With an architect I visited Southern France to look at a secure community. He told me about La Zagaleta. I visited, saw 3 houses at La Zagaleta and came back with my wife. We looked at 3 more houses, all at La Zagaleta and decided within 30 minutes on the one we bought after seeing it. We spend about 100 days a year here and we love every one of them.

Property of Jürge Bartels



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