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By Neharika Padala | November 7 2014
Sometimes a hotel is more than a hotel. The Baur au Lac in Zurich is one of those instances. Set in its own park on the lake with a mere 120 rooms on what is one of the city’s most desirable plots of land, it is now under its sixth generation of private ownership by the founding family.
In virtually any other world capital, a hotel like this would have been redeveloped into a bank headquarters or multi-purpose shopping, office and luxury apartment complex. With Andrea Kracht being the only current generation family member in the business and his daughter working in London for the wines and spirits division of LVMH, it was worth considering over lunch at Nomad in New York that there may not be another 170 years in the future of the Baur au Lac. My host was having none of it, and didn’t seem particularly worried about his scion’s seeming lack of interest in the family business.
While he was trained in hotel school and worked in his early years at top hotels in New York, Kracht said it wasn’t until he returned home at age 35 that he realized what an important legacy he was watching over. Michel Rey’s retirement from Management Director of the Baur au Lac in 2013 ended a 60-year run by a father and son team directing day-to-day operations. It’s highly unusual in this day and age to have a father and son who don’t own a company (or in this case a hotel) run the company for such a long period. Kracht, who keeps his office in the hotel, notes that while there are many long serving employees, in Switzerland it is increasingly difficult to find young Swiss who want to get in the business at the bottom, though he sees the diversity of his team today as being in sync with the country’s large community of foreigners and flow of international travelers.
While today it is not uncommon for hotels to host celebrities and bloggers to tweet and Instagram their visits, a book on the Baur au Lac takes up 11 pages to review some its most notable occupants, dividing them into several categories: Royalty and Rulers; Composers and Conductors, Soloists and Dancers; Scientists and Explorers; Writers; Artists; Limelight; and Very Special Guests.
This who’s-who of guests includes General Ulysses Grant, David Ben-Gurion, Willi Brandt, Indira Gandhi, George H.W. Bush, Bill Clinton, Margaret Thatcher, Placido Domingo, Sergei Rachmaninov, Christian Barnard, Alfred Nobel, Alfred Hitchcock, Marc Chagall, Joan Miro, Fernando Botero, Audrey Hepburn, Sophia Loren, Goldie Hawn, Oliver Stone and more. The “Very Special Guests” references the Donald Duck cartoon where the great tycoon Dagobert Duck takes his nephew to dinner at Baur au Lac.
Despite the hotel’s enviable guest book, none of the 25 suites are of the over-the-top $50,000 per night variety. Kracht says clients come for a low-key experience with the best service, amenities and unbeatable location.
During lunch Daniel Humm dropped by our table to say hello to Kracht. The top chef started his career in the hotel’s kitchen. I ask Kracht if he remembers the superstar from his days as an apprentice. It turns out several years ago after Humm scaled the pinnacle of fine dining (Elite Traveler ranked his Eleven Madison Park third in the world) when he reached out to the owner wanting to return, this time to stay as a guest instead of dicing potatoes.
While Kracht says he is frequently asked why over nearly two centuries the family didn’t expand, he answers a question I didn’t ask by saying he would never recommend anyone to invest in hotels. It is a capital-intensive business, he says, and at the very top end of the market keeping up with investments in technology is very expensive. Over $40 million was spent over the past three years to renovate its two restaurants, some rooms and all its suites, and right now he is pouring more francs into a renovation of the lobby that will provide a casual dining area and a spot to congregate in the afternoon and evening. This year its Pavillon restaurant, led by Chef Laurent Eperon, won its first Michelin star.
The other family business is a wine importing company, with about half its volume sold to other hotels and the other half to private customers. There are four retail locations in Zurich.
Kracht spends a considerable part of his working time as Chairman of the Executive Committee of The Leading Hotels of the World (LHW). We discussed hotel loyalty programs. Four Seasons Hotels & Resorts and Mandarin Oriental have famously stood on the sidelines, while The Ritz-Carlton Hotel Company and Starwood’s St. Regis and Luxury Collection brands make heavy focus of such programs. I am surprised to hear that Kracht is a forceful advocate. He says of LHW’s Leaders Club that it brings a steady flow of new customers who don’t regularly travel to Zurich but are loyal to LHW. He notes that while recognition is important, free nights are very much appreciated even by elite travelers. He says the simplicity of the Leaders Club, where one earns a free night for each five paid stays, is important, as high end travelers don’t want to spend time figuring out complicated earnings and awards structures. Kracht does admit when the scheme first launched, his attitude was, “We are the Baur au Lac.” Now he says, he appreciates that his loyal guests get extra attention when they go to the other 420 LHW properties, and he likes to reciprocate.
Today hotels are often referred to as assets as part of complicated real estate investment funds. Condos are sold to finance development. Shopping malls and offices are included in developments to smooth the peaks and valleys of the travel industry. The name of a hotel in industry lingo is referred to as a flag, as in easily changeable. One can only hope there are another five or six generations of family stewardship in the Baur au Lac’s future, and that the hotel’s flag continues to fly over Lake Zurich 170 years from now.