The Second Time Around

Ladies and gentlemen serving ladies and gentlemen.” Horst Schulze first heard this motto which would later become Ritz-Carlton’s slogan under his direction while still a teenager working as a busboy in Germany. The hotel’s maitre d’ coined the phrase, and Schulze so admired the maitre d’ for the way he treated all travelers, and was respected by the most affluent guests, that he did a school report on the hotel worker. German-born Schulze who would later become a major architect of The Ritz-Carlton Group and help catapult the company into a multi-billion-dollar brand may have started his hospitality career at the ground floor, but it afforded him a unique perspective on the business he revolutionized during his tenure at Ritz. Now, at this later stage in his career, 67-year-old Schulze aims to once again transform the hospitality industry.

At the Ritz
After rising through the ranks at Hyatt and Hilton, Schulze worked at The Ritz-Carlton Group for nearly two decades, eventually serving as president and COO of the brand. When he resigned from Ritz-Carlton in 2001, Schulze was responsible for Ritz-Carlton operations worldwide.

“Horst was there from the inception,” said John Drake, former head of the advertising agency at Ritz. “The Ritz-Carlton product was accomplished under his supervision.”

In addition to Ritz-Carlton receiving a slew of awards during his tenure (including the Malcolm Baldrige National Quality Award in 1992 and 1999), Schulze and his team were responsible for growing The Ritz-Carlton Hotels and Residences from three hotels in 1983 to 54 properties worldwide, building revenues from $69 million to $2 billion and spawning industry imitators.

Even with his success at Ritz, Schulze opted to leave the company after it was purchased by Marriott in the early ’90s to develop a new vision.

“As Horst would say, he had painted that canvas and was ready to take on something new,” said Drake, who, along with about a dozen key Ritz executives, followed Schulze’s lead.

Schulze’s plan was to target a new kind of luxury traveler, inspiring his award-winning team at Ritz to leave the company with the opportunity to do something different.

“I saw it happening 15 years ago our customers changed,” said Schulze. “This customer doesn’t want it better, they want it different.”

In 2002, Schulze and his Ritz recruits founded the West Paces Hotel Group to create and operate a brand of hotels to target travelers seeking service beyond the typical five-star experience.

After extensive research in the U.S. and international markets, Schulze saw that existing five-star brands had left a niche open at the upper reaches of luxury travel. These customers weren’t just interested in a posh room with exquisite surroundings, but for their dollar, they wanted to invest in top-notch services, like restaurants and spa services (typically offered by larger hotel chains), combined with a more customized stay and customer care often found in boutique hotels.

“We want to take very good care of the privileged travelers,” said Drake, “by aligning the experience to customers’ personal needs and expectations.”

Last year, as president and CEO of West Paces, Schulze announced the launch of two new hotel brands both aim to appeal to well-traveled guests with a commitment to customer service. First to debut in July 2005, Solis Hotels caters to a more business-focused market and will offer 200- to 400-room properties in key gateway cities.

The properties will also offer clients gourmet restaurants and state-of-the-art spas, along with off-the-beaten-path activities, including shopping excursions and arts and culinary experiences. But the Solis brand touts excellent customer service over luxe touches, like marble tile or oriental rugs, said Schulze.

“Solis is a 4½-star brand. It has pleasant surroundings, and has the reliable service of a five-star without the five-star finishes,” Schulze said. “It has to be the cleanest, friendliest and most reliable. That’s Solis.”

Solis initially plans to debut a Chicago property this fall, offering guestrooms and condos, and come 2008, two more Solis properties are slated to open, including one in Frankfurt, Germany, as well as a resort in Bal Harbour, Fla. (see sidebar).

While West Paces will run Solis, Schulze seems to have put his professional heart and soul into another brand of hotel.

“[Capella Hotels & Resorts],” he said, “that’s my top brand; my dream brand.”

Creating Capella
Capella Hotels & Resorts was designed to take selling service to the next level in the leisure travel market beyond the traditional five-star hotel and even Solis. Quite simply, Schulze and his team intend to make Capella the finest hotel brand in the world.

“Frankly, there’s a little bit of selfishness here,” said Schulze. “At this point in my career, I will not compromise this brand. This brand will be pure 100 percent customer-driven.”

Along with hand-picked destinations, Capella promises the benefits of the finest boutique hotels, including superb architecture and interior design, privacy, individualized service and attention to detail combined with the amenities of the larger luxury hotel and resort chains. This new customer, according to Capella officials, wants the privacy and care of a small, boutique hotel paired with the variety of options including dining and spa services offered by top hotels with larger infrastructures.

“Boutique hotels can be boring,” said Bob Warman, COO of the West Paces Hotel Group, adding that Capella guests have the choice to do more if and when they choose like they would at larger, five-star hotels.

And for Capella, choice is key.

“Luxury hotels today require their guests to choose in advance the type of experience they will enjoy,” Schulze said. “The hotel’s style and service determine that experience. It’s time for the customer to determine the experience. Capella will be focused on choice and we will offer choices that no other hotel in the world can match.”

As far as clients choose, Schulze cites anything from dietary needs to how many pillows a guest prefers on his bed. To target the new luxury-market niche, the emphasis will be on selling experience.

“If you want to go rollerblading in the park, that should be my business to help you,” he said. “If you want to have champagne at midnight with your girlfriend at the top of the Empire State Building, I don’t know if I can do that, but I’m sure as hell going to try....

“And that’s the type of service and attention you can rely on,” he added. “I’m excited about it because it puts & purity and honor in our profession. That’s what I want to do.”

To meet the needs of each customer, Capella properties are committed to offering 100 rooms or fewer, so that even at 90 percent occupancy, the staff will likely only have about 30 guests coming and going on any given day.

While pricing has yet to be determined, expect a Capella room rate to be comparable to the cost of a suite in a five-star hotel. So far, Capella has announced the launch of five resorts: two in Ireland, one in Austria, one in Germany and one in Mexico all are set to debut in the next two years. Other locations, including those in major U.S. destinations, will be announced in the future.

In addition to a customized experience, the destination of a Capella property is key. Each resort will be designed to showcase its hand-picked surroundings ranging from desert, mountain or oceanfront panoramas.

For example, clients reach Capella in Cabo San Lucas, Mexico, via the only privately owned tunnel in the country, which stretches some 1,000 feet through a mountainside to offer guests a sense of seclusion. The resort, which will open in 2008, will sit on 24 mountainside and oceanfront acres at the point where the Pacific Ocean meets the Sea of Cortez, near the legendary rock formations known as Land’s End.

Capella’s European additions include converted castles. Schloss Velden, a southern lakeside chateau in the town of Velden in southern Austria, was first built in 1590 and will reopen in the summer of 2007 with 109 suites and junior suites, 50 private residences, two world-class restaurants and an E’Spa-designed spa, as well as an adjacent beach club and marina on the shores of Lake Worther.

Dunboy Castle, in Ireland, will reopen later this year as an 82-suite resort featuring a wine bar, cigar terrace and a spa with eight treatment rooms. Other perks include helicopter service to Waterville Golf Links. Castlemartyr, also a restored Irish castle, later this year will boast 106 guestrooms, a Library Bar, Billiards Room, three meeting rooms, spa and an 18-hole, Ron Kirby-designed golf course. In 2007, Capella also plans to reopen the German luxury hotel Breidenbacher Hof as part of a mixed-use development, which will consist of a 100-room hotel, restaurants, high-end retailers, some offices and residential apartments.

Seeing Stars
While Capella’s name was drawn from a star in the constellation Auriga, the Charioteer, Schulze finds it difficult to give the brand a star rating.

“I hate it when people speak about stars. Who gave you six stars? What is that?” Schulze said. “I couldn’t rate Capella. It’s for the individual who is confident and wants something that’s special.”

Regardless of stars, Schulze and his team realize that Capella’s success depends on the travel agent as agents have the ability to reach the privileged traveler.

“Clearly, I know my best supplier is the travel agent,” said Schulze. “I think [travel agents] have done something really beautiful by reinventing themselves.”

Indeed, and even at this late stage in his career, Schulze knows all about reinvention.

As for the future of Capella, in the next three to five years, Schulze plans to open about 20 hotels baring the brand’s name about a third of the properties will be in the U.S. But he gives attention to detail priority over expansion.

“I’m very involved this time,” said Schulze. “To be honest, [Capella] is the last painting. It has to be a great painting.”