The Journey from South Tyrol to an International Hotel Group

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"Holiday hotels have to be tailor-made and serve the entire life cycle of the guest, only then they work and bring success."</div>
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Erich Falkensteiner
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Erich Falkensteiner is an entrepreneur, hotelier, and investor. With around 30 properties in seven countries, Falkensteiner Hotels & Residences is one of the most successful family-run holiday hotel groups in the Alps-Adriatic region. As founder, chairman and co-owner of FMTG Falkensteiner Michaeler Tourism Group, he is a leading expert in the consulting, development and management of tourism products and services. Through Falkensteiner Ventures, Erich Falkensteiner also invests in start-up companies in the hotel, travel and leisure industry. In an interview with ADDITIVE, Erich Falkensteiner tells his story and gives hoteliers courage for entrepreneurship and change.

<h3 class="interview-question">How do you go from a family-run guesthouse in the Puster Valley in South Tyrol to one of the most successful family-run holiday hotel groups in Central Europe?</h3> The basis for a group of companies and for continuous corporate growth is a solid foundation of values. In the case of the Falkensteiner Group, these are Down-to-earthness, courage, hunger for success and, most importantly, communication with each other and with our employees. If you have the right foundation, you need the right people to accompany you on this path of growth. The premise is always that these people share the same values that were previously developed together. That is the core of all growth and development. I have been in business for 40 years now. Every seven years or so, there are periods when the business is mega and there is a great danger of shooting at everything that moves like a hunter. You see potential deals everywhere.

Apart from the Falkensteiner Hotels, I still have a lot of businesses in venture and tourism, and by no means did everything always go smoothly. But I believed in the people I could take with me. That's what I'm good at, flying the flag and taking the right people with me. Why do people follow me? Because I never lie to them and always say what I think.

<h3 class="interview-question">So the individual business areas developed slowly?</h3>
Exactly - at the beginning, that was a jump in at the deep end for me. When I was 19 years old, my father, who had supported me in everything until then, died unexpectedly. From one day to the next, I was the boss at the family-owned Hotel Ehrenburgerhof (Pustertal/South Tyrol). Only four months later, I built another hotel with a converted loan of 10 million euros.Shortly thereafter, I had to contend with an interest rate of 27%, and the Italian lira lost 30% at the same time. It was immediately clear to my brother Andreas and me in those first 80's, we needed German Marks. We grabbed the car and drove all over Germany while our mother held down the fort at home and everyone got upset that the Falkensteiner sons left their mother to toil alone while they enjoyed themselves abroad.

<h3 class="interview-question">Let me guess, this was no mere pleasure trip?</h3>
Well, we visited about 800 bus companies, with bacon and red wine as provisions. Then, thanks to this experience, we founded an incoming agency ourselves. In 1983/84 we supplied FalkTours to about 100 South Tyrolean hotels, we took German Marks from the guests and paid the hoteliers on site in Lire. To be honest, there was no strategy behind it, but the idea arose during a disco visit at home in Ehrenburg, where a German explained the word "incoming" to me.

<div class="article_quote"><div class="article_quote_contain"><div class="article_quote_quote">"As a group of companies, we have been pursuing a strategy for 20 years now: we want to offer 360-degree support for tourism products. The FMTG brochure shows this very well: develop a hotel concept, build the hotel, resell the hotel, operate the hotel, advise the hotel and supply the hotel."</div><div class="article_quote_name u-text-style-main">Erich Falkensteiner</div></div></div>

<h3 class="interview-question">So the home hotel Ehrenburgerhof and FalkTours were the starting point for further development?</h3>
Later we pushed the service, the purchasing company GES was founded and then the cooperation with Otmar Michaeler began: The consulting branch was born. This was followed by the hotel management sector, including expansion into Austria and Croatia. Since then, one can speak of a strategic approach. We were carried by a high phase, as explained at the beginning of the interview.Falkensteiner Ventures came about through my children: they founded a startup, I naturally followed with interest and eventually invested. As a group of companies, we have been pursuing a strategy for 20 years now: we want to offer 360-degree support for tourism products. The FMTG brochure shows this very well: develop a hotel concept, build the hotel, resell the hotel, operate the hotel, advise the hotel and supply the hotel.

The photo gallery offers first impressions of the new Falkensteiner Family Resort Lido in South Tyrol, IT (opening in autumn 2021).

<div class="article_quote"><div class="article_quote_contain"><div class="article_quote_quote">"The important thing for hotel marketing is to communicate these characteristics as pointedly as possible. "</div><div class="article_quote_name u-text-style-main">Erich Falkensteiner</div></div></div>

Future and Vision of the Falkensteiner Group

<h3 class="interview-question">What makes the Falkensteiner Hotels & Residences a strong brand?</h3>
Two years ago, we made the decision to specialize in certain hotels and thus to leave the city hotel business. We believe that to work well, hotels must be:
a) be tailor-made. Hence the specialization in four areas: Entertainment, Pleasure, Deceleration and Active.
b) Serve the entire life cycle of the guest. As a child he visits the family hotel, in his mid-twenties he checks into the adults-only hotel, then he becomes a family vacationer again, and finally in his senior years he enjoys other benefits.
Based on these two considerations, all Falkensteiner hotels are now either classified as family hotels, adults-only hotels or have such outstanding unique selling points, such as the Schlosshotel Velden, which is simply so strikingly connected to Lake Wörthersee, that such a classification is not possible.
The important thing for hotel marketing is to communicate these characteristics as pointedly as possible. This is what we are currently doing for the opening of the former Ehrenburgerhof Hotel, the new Falkensteiner Family Resort Lido (opening 2021). The Lido is a family hotel! Young adults or bus travelers are just as at home here as senior citizens in their 70s in the adults-only area. Guests must feel at home in the hotel community before they will take a vacation. In short: our unique selling proposition is the tailor-made.

<h3 class="interview-question"What do I get as a guest at Falkensteiner that I don't get elsewhere? Or to put it another way: What is the promise of the brand?</h3>
The Falkensteiner "Welcome Home" promise. That's a big word, of course, but it describes very well the family atmosphere that surrounds the guest in our hotels. Now, you might ask, how can you create a family atmosphere if you, as the owner, are not there? The answer lies in corporate culture.
In large chains with 1,000 hotels, this is usually not feasible, but even here there are positive examples such as Marriott or Hyatt.

<div class="article_quote"><div class="article_quote_contain"><div class="article_quote_quote">" The brand promise "Welcome Home" is a big slogan, but that's exactly what we want to live. Our goal is clearly the 4-star-plus and 5-star segment, and that only works with first: quality, second: quality and third: quality."</div><div class="article_quote_name u-text-style-main">Erich Falkensteiner</div></div></div>

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<h3 class="interview-question">When we speak about new trends and outstanding hotel concepts worldwide, which projects do you think of first?</h3>
In my opinion, it is above all the variety of accommodations that will change, and this is exactly where we as the Falkensteiner Hotel Group are already starting. The classic Falkensteiner hotel will continue to exist, as will the many family-run top hotels here in South Tyrol. However, the company is thinking about new forms of vacation such as camping or glamping (i.e. 5* camping formats such as Premium Camping Zadar in Croatia with luxury in terms of space and cuisine).Nature and outdoor themes are also on the rise. However, I believe that the response to this trend with the construction of chalets, as can currently be seen in the Alps, is more of an aberration. Kudos to the outriders who have embraced the concept, such as the San Luis in Hafling/South Tyrol. However, many are now trying to simply adopt it and have construction costs of 700,000 euros per unit, which in my eyes will never pay off.

<div class="article_quote"><div class="article_quote_contain"><div class="article_quote_quote">"Falkensteiner is not aiming for exclusive luxury, but for real luxury that is affordable. With Croatia/Alpe Adria, we want to be among the top 3 holiday hotel groups in the DACH region."</div><div class="article_quote_name u-text-style-main">Erich Falkensteiner</div></div></div>

<h3 class="interview-question">Where will Falkensteiner Hotels & Residences be in 2030?</h3>
We would like to continue to grow organically, but we don't need to grow any further; a realistic target is probably around 50 hotels. But we will certainly no longer grow based on opportunities, but rather steadily and only with businesses that we are 100% convinced of. I would like to make it clear that the number of hotels is not the key to success. What is decisive are truly top hotels with top infrastructure that can earn money. For example, the new family hotel in Montafon: top investor, top destination, no family-oriented hotel on the market.We are currently in the 4-star to 4-star superior segment, with a few 5-star properties. We would like to move up another half step in terms of quality, i.e. consolidate in the 4-star S to 5-star segment. Falkensteiner is not aiming for exclusive luxury, but for real luxury that is affordable. With Croatia/Alpe Adria, we want to be among the top 3 holiday hotel groups in the DACH region.

<h3 class="interview-question">Is there someone in tourism (or any other field) that you have always wanted to meet? Why and what would be your main question to this person?</h3>
I would love to spend two hours with the Pope and ask him the question "How do you stand up to all the pressure you are under? Billions of people look up to him, and everything he does or says can make a difference. There is a certain amount of pressure on every entrepreneur, but the Pope has an entire globe on his shoulders, and it looks so easy to handle. Maybe he would answer, "By praying," but I'd like to find out.

Now online: Part two of the four-part interview series with Erich Falkensteiner on the challenges of dealing with the pandemic, and part three on digitalization in the hotel industry and online marketing.