Kerten’s concepts target novel markets, the adventurous
 
Kerten’s concepts target novel markets, the adventurous
08 JANUARY 2019 8:45 AM

Kerten Hospitality is on the rise with innovative brands aimed at the adventurous and young at heart, including two hotel chains, Cloud7 and The House Hotel, with the aim of targeting savvy investors and developing mixed-use hospitality spaces in unique neighborhoods.

DUBLIN—Kerten Hospitality and its parent Kerten have a goal of launching a new business every 12 to 18 months, including hotels brands, of which it currently has two, according to sources.

It also seeks to develop the kind of hospitality brands current and forthcoming generations want and will gravitate to, often likely to be in mixed-use developments.

In regard to its hotel initiatives—Cloud7 and The House Hotel—the focus is on its existing brands, according to CEO Marloes Knippenberg.

Describing itself as a capital investment company, Kerten specializes in the operations of hotels, serviced apartments, branded residences, F&B brands and serviced offices and co-working space, with its capital focused on the creation of brands, infrastructure, investment in people and legal and financial frameworks, she said.

Paramount is finding the right space for one of those brands, or vice-versa, Knippenberg said.

“We are looking for projects and developments where we can operate either new-build or conversion venues, where we can take on the entire space or plug and play. The latter is a nod to our different brands, which can be easily slotted in existing spaces where, for example, a certain floor or unit is not working for the owner,” she said.

She added developers are increasingly starting to see the world differently.

“It’s not just about being the biggest,” she added. “What’s essential now is that (developers) have projects that can be tailored to every location and community. We offer that, and want to work with developers who want to future-proof their projects.

“Our hotels cater to multiple yet targeted markets across mid-market through to five-star brands. Every single brand and style is tailored to their location and customer profile. We know our markets with extreme precision.”

One collaboration Kerten has signed is with Egyptian developer Tatweer Misr for seven hotels in Egypt.

Cloud7 is about technology and the young at heart, Knippenberg said. The House Hotel brand is about five-star service and exquisite designs with touches of local flavor. Both also focus on connecting with their communities.

Cloud7 has one property in Istanbul, with two in the pipeline, including Prague, while House Hotels has current assets in the Istanbul suburbs of Bomonti and Karaköy and four in its pipeline.

Kerten contains distinct hospitality and technology divisions, Knippenberg said.

“We are set to expand in key Middle Eastern cities such as Dubai, Jeddah, Kuwait and Cairo, (and) with projects in Bucharest, Tbilisi, Portugal and Italy also in the making. Our portfolio is growing quickly with a pipeline of 3,000 keys spread across hotels, branded residences and serviced apartments,” she said.

Some of those hotels might feature Kerten’s F&B brand Frikadell Burger, 100 of which are planned.

Knippenberg said the entrepreneurial structure of Kerten, headed up by entrepreneur Michael O’Shea, offers more choice for high net-worth individuals wishing to diversify real-estate portfolios.

“We work with many (investors) who think the way we do, and we understand what people are looking for and thinking. There isn’t any conflict, and we connect with them more easily,” she added.

Doubling its holdings
Knippenberg said she is looking for partners willing to sign on long-term and “join us on a journey of taking the hospitality industry to the next level.”

“The days of just pushing cash flow on to a project are over,” she said. “Just working on development doesn’t cut it anymore. It’s not about owning a piece of real estate in the current climate, it’s about a profitable and meaningful journey that we can create in close co-operation with all the stakeholders involved.”

“Those developers who can see the value in that differentiation factor are the ones we work with,” she added.

The first Cloud7—so far the only one—opened in February 2016.

Turkey often has been an unsettled market since then, but Knippenberg said a lot has been discovered in the subsequent months.

“We didn’t leave Turkey when it got difficult. (We do) not shy away from entering emerging markets, or volatile markets. We believe there are great opportunities in this area of the world,” she said.

“For example, in Egypt where we have 2,500 keys coming online, 70% of the population is under 30. That’s huge. The other thing we strongly believe in is having a flat structure, which was to our advantage then and now. We are focused on being asset-light and being flexible to external occurrences in the world,” she added.

Knippenberg said such thinking extends to expansion.

“Everything is happening East nowadays, and Kerten Hospitality has never had a West-centric growth strategy. We grow where the world is growing, and right now, that’s in the East,” she said.

Brands
Kerten Hospitality is focused on growing its existing brands, not creating more, Knippenberg said.

“I don’t think we need new brands in our lives, for now,” she said. “We don’t think it’s important to create more brands, but rather that we further develop our existing ones. In that vein, we are continuously self-critical to ensure that we adapt … fitting brands within projects, rather than projects into our brands.

“Flexibility is another keyword we want to exude with our brands, we think, ‘Let’s add and take away elements based on the project,’ rather than insisting every letter of a manual is followed to the end. It’s about consistently developing, rather than creating.”

The push in technology, Knippenberg said, allows niche brand operators to better serve guests, most pertinently in regards to using artificial intelligence, streamlining processes, gaining guest insights and optimizing experiences.

“Technology, if used correctly, can drive the new wave of responsive, guest-centric hospitality, more so than ever before, while still remaining mindful of operating costs. Early adoption is essential,” she said.

“Fast-paced changes in the tech world will continue to drive new business, but it really is up to us as an industry to keep an open mind. … It’s not necessarily that technology by itself is the foundation of what’s going to drive guests into our businesses, but it’s the technology that we use to deliver the hospitality that will bring them into our doors,” she said.

“In a way, we are almost creating a virtual company culture, where someone in Turkey can connect with the team in Dubai who are liaising with a colleague in Ireland, and so on. … From just one hotel, we are now positioned as a global operator of mix-use projects (that) we believe differentiates us from others in the playing field,” she added.

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