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Tourism Development in K端hlungsborn, Germany A Private Sector Perspective

By Albrecht Kurbjuhn, Hotel Polar-Stern for the VisitDenmark Study Mission to K端hlungsborn, October 1, 2007


Tourism Development in Kühlungsborn A Private Sector Perspective 1. Hotelinvestment at the German Baltic Sea  Why Kühlungsborn? 2. Business Development 1993 – 2007 (town/hotel)  Amazing progress in relatively short time 3. Remaining Challenges  Bankruptcies and unemployment persist 4. Strategies for a Bright Future  Ideas for meeting major challenges


Hotelinvestment at the German Baltic Sea Why Kühlungsborn? · Dagmar and Albrecht Kurbjuhn discovered Kühlungsborn in July 1992 on a holiday trip  Sand, sea, forest, 30° temperature, cicadas in GERMANY?!  This fact is still unknown to millions of Germans who traditionally travel to Mediterranean! · Derelict but beautiful historical architecture!  Vacant villas demanding to be restored · Financial support from gov‘t for entrepreneurs in Eastern Germany after Reunification  Chance of a lifetime for establishing own business! Business set up on Sept. 1, 1993


Hotelinvestment at the German Baltic Sea - Why K端hlungsborn? Grand tourism tradition since 1800s - past successes proof of potential!


Hotelinvestment at the German Baltic Sea - Why Kßhlungsborn? Clear and varied city structure – choice between serenity and high life!


Hotelinvestment at the German Baltic Sea Why KĂźhlungsborn?

Centrally located between Hamburg, Berlin, Copenhagen and MalmĂś

Very important for stays of short duration (2-5 days)!


Hotelinvestment at the German Baltic Sea - Why Kßhlungsborn? Intact, comprehensive collection of historic buildings – atmosphere!


Hotelinvestment at the German Baltic Sea - Why Kßhlungsborn? Intact and varied environment – the right place for any weather!


Business Development 1993 - 2007: Amazing progress in a short time! Town of Kühlungsborn with steady infrastructure development... with an emphasis on quality rather than speed! · Sanitary facilities along the promenade every few 100 metres · Pier for fishing and leisure boating (first after Reunification) · Modern telecommunication systems / road improvement (A20!!) · Waste water canals / water treatment systems (in cooperation with neighboring towns) · Promenade upgrade over 3.7 kilometers (longest in Germany) · Restoration of historic buildings - attention to detail (mainly private sector; public support through building permits for additional capacity) · Marina for 400 boats with successive F&B/shopping infrastructure · 5-star Kempinski Hotel in Heiligendamm (6 km) · Golf course in Wittenbeck (3 km) Aside: Founding of „TSK“!


Business Development 1993 - 2007: Amazing progress in a short time! Town of K眉hlungsborn with steady increase in guests! 1995

2006

Capacity (beds)

3.695

14.000

+279%

Arrivals

98.071

341.345

+248%

Room nights

432.843

1.822.249

+321%

Average stay, days

4.4

5.3

+20,5 %

路 About 50:50 from Eastern/Western Germany 路 < 3% from abroad!


Business Development 1993 - 2007: Amazing progress in a short time! Hotel Polar-Stern with infrastructure improvement in phases! 1993 – Purchase of property 1994 – Renovation of hotel 1995 – Build of „Grillarium“ 1996 – Build of conference rooms 1998 – Build of penthouse 2000 – Build of 3 hotel-apartments 2006 – Major renovations Capacity from 40 to 50 beds F&B from 70 to 140 seats Additional outside F&B capacity Infrastructure for groups, conferences/trainings, family and company festivities, cultural events (concerts, exhibitions)  No more room for wellness!


Business Development 1993 - 2007: Amazing progress in a short time! Hotel Polar-Stern with significant revenue growth! · Revenues: 98% increase 1994  2006 (50% hotel; 50% F&B) · Occupancy based on 365 days in 2006: 57,1% (rooms); 56,7% (beds) · Employees: 8 full time year-round (very low fluctuation!) 4 apprentices year-round 2 full-time summer season Drivers:

· Improved accessibility from affluent cities of Hamburg, Bremen and Hannover (Autobahn A20) · Improved infrastructure of hotel/city · Improved knowledge of region in Southern Germany (marketing and by word of mouth)


Remaining Challenges - Bankruptcies and unemployment persist Most prominent problems 1. Significant seasonality persists – three „seasons“: High season: Medium season: Low season:

Mid-June – Mid-September (80-100%) Easter – Mid-June and Mid-Sept. – End of Oct. (40-70 %) November – March, except Christmas/New Year (20-30 %)

2. Relatively low avg. spending/guest (≈ € 60,-/day incl. accomodation) 3. Low tourism marketing expenditures in Mecklenburg-Vorpommern (much less per room night than in most other Länder) 4. Low cost air carriers to major European cities/Mediterranean (could be a benefit, too – they fly in both directions!) 5. Lack of creativity, innovation and quality in public/private sectors!


Strategies for a Bright Future - Ideas for meeting major challenges Improving occupancy November – March (Polar-Stern examples) 1. Offer of unusual/creative packages at attractive prices  Mini-holidays (3 nights) with Malt Whisky tastings (Excellent start with „Happy Days“ in Denmark!)

 Over 600 rooms nights booked Mid Oct. – Mid-December!


Strategies for a Bright Future - Ideas for meeting major challenges Improving occupancy November – March (Polar-Stern examples) 2. Long-term effect: Artist invitation program „Art at the Baltic Sea“ · Foreign artists invited to free room and board in winter months (6 – 8 weeks or even longer)...rooms aren‘t occupied, anyway! · Artist absorbs impressions of new surroundings and integrates them into the work he does in the hotel · Art exhibition at end of stay in the hotel  Involvement of embassies and cultural institutions in artist selection process (program as catalyst for new target groups), e. g. Chinese Embassy, Ukraine Consulate, Kyoto Art Centre  Guests meet interesting people, participate in work shops!  Exhibitions enhance event calendar in winter! Media coverage!  Artists and their work highlight our region in their countries!


Strategies for a Bright Future - Ideas for meeting major challenges Improving occupancy November – March (Polar-Stern examples) 2. Long-term effect: Artist invitation program „Art at the Baltic Sea“


Strategies for a Bright Future - Ideas for meeting major challenges Improving occupancy November – March (Polar-Stern examples) 3. Initiation of special events in cooperation with Clubs and Societies Verein der Freunde des schottischen Malt in Mecklenburg e. V. Clan MacLeod Gesellschaft Deutschland e. V. Evangelische Akademie Rostock („Dialogische Begegnungsseminare“)


Strategies for a Bright Future - Ideas for meeting major challenges Improving occupancy November – March (SeaWell Center Kühlungsborn) 4. Providing access to the Baltic Sea even in winter time (vision) Architecture: gmp Architekten/Hamburg

 Direct access to sea from wellness-hotel (e. g. after sauna)  Spectacular architecture to capture imagination of guests/media  240 metres out to sea; no impact on historic fabric of the old town


Strategies for a Bright Future - Ideas for meeting major challenges Raising avg. spending per guest – Increase percentage of foreign guests! Basic consideration: Price levels for room and board abroad are higher; willingness to pay a good price for good quality more pronounced (good example were foreign journalists visiting during G8 Summit!)

F&B expenditure per person increased by over 50%!


Strategies for a Bright Future - Ideas for meeting major challenges Raising avg. spending per guest – Increase percentage of foreign guests! Founding of the „Initiative Internationaler Tourismus e. V. “ in 2007 to specifically address foreign target groups:  Purely private initiative of business people who have extensive experience and contacts abroad and language skills  Partner for public bodies (like Tourismusverband) for product development and co-funding of marketing activities (PPP); partner for similar initiatives in other Baltic Sea countries  Activities include publishing of foreign language brochures („Germany‘s Grand Baltic Sea Coastline“), own website (www.german-baltic-sea.com), artist program, road shows, public relations initiatives, trade fair visits, etc.  Special competence in spoiling foreign guests (hopefully!)


Strategies for a Bright Future - Ideas for meeting major challenges Raising avg. spending per guest – Increase percentage of foreign guests! Improved cross-border cooperation in promoting the Baltic Sea as a holiday alternative to the Mediterranen!  Climate change trends („comfort zone“ moving northwards)  Health awareness (e. g. dangers of excessive sun)  Demographics (older people apprehensive about flying; circulatory problems associated with very high temperatures)


Thank you very much for your attention! Any questions?


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