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A not-so-carefree hotel manager

Andrea Scherz has been at the head of one of the world's most famous hotels for the past twelve years. Gstaad Palace spoils discerning clientele with a variety of facilities and services. They have a great number of regular guests. There are no less than five five-star hotels in Gstaad and nearby Schönried providing high-quality rest and relaxation in Saanenland region. A proud 100-year history is no reason to sit back and relax, as General Manager Andrea Scherz explains.

Mr. Scherz, what makes a good hotelier?

On one hand, a down-to-earth approach, and on the other, responsibility towards the employees. In other words, everything has to work in order to survive long term.

To what extent do you involve your managers in your work?

I consult thoroughly with my closest employees before making a decision. I delegate a high degree of responsibility to my management team and trust my employees, which has a considerable motivating effect. Of course, a good hotelier also makes sure employees receive regular, goal-oriented training. Running a luxury hotel is a tremendous team effort.

How do you define your role as a host?

I consciously keep myself somewhat in the background. I would like to spend more time with the guests, but unfortunately the amount of administrative work required in our country is increasing. There is no one key role in hotels like the Gstaad Palace anyway. All our employees are essential for our success.

What makes Gstaad Palace so unique?

The building itself is very special. Our hotel can be seen from far away and it's reminiscent of Neuschwanstein Castle, but it is not lifeless or overly grandiose. The Gstaad Palace exudes a relaxing atmosphere and has real character. This spirit is influenced both by guests from around the world and by our employees, many of whom have been with us for a great number of years.

Aren't luxury hotels the same all over the world these days?

Not at all!  We try to be different. We consciously resist the trends in order to preserve the character of our hotel. So we don't immediately chase every new trend. We actively adapt to our surroundings in this beautiful holiday region.

Can you give us an example?

In 2009 we launched the Walig Alpine Hut, which is available in summer and is located high above Gsteig at an altitude of 1,700 meters. The hut was built in 1786, it's a real trip back in time. It has been modified for our purposes, but it is still very rustic compared to our main hotel. It can accommodate a family of four and only has solar electricity, cold water and an outhouse. The hut is booked by guests looking for a change of scenery and has become a huge success. It is occupied four to five nights a week. The international travel magazine Conde Nast recently awarded our latest addition the prestigious title of "Nature Hotel of the Year".

Here's another example: we pick up guests arriving by plane at Saanen airport with our 1952 Rolls Royce – it's a very popular service.

Nostalgia alone is not enough to make you stand out from the competition.

Of course not! We need to distinguish ourselves with as many services as possible. We're always open to new ideas. With help from Swisscom, about ten years ago we became the first five-star hotel in Switzerland with Wi-Fi. In the beginning, we charged a user fee but then we realised that the internet is not only used for communication, but has great entertainment value. So, for years now our guests have been enjoying free internet access throughout the whole hotel.

We can also differentiate ourselves with our unique spa, which is also open to the public.

What advantages does a single, privately owned hotel have over global hotel chains?

Global hotel chains are no threat to us. Most have turned away from tradition. As a family business, we have the advantage of being able to implement changes within a few days. A single, privately run hotel like the Gstaad Palace is far more flexible and adaptable than a hotel that is part of a global chain.

What kind of guests do you attract?

In first place, thanks to conferences and other occasions, are the Swiss, followed by Europeans – with the British, French and Italians at the top. Then there are guests from the U.S., Russia and the Middle East. Recently, we also been seeing more guests from India and China.

In winter we attract a slightly younger crowd. In summer we host more families, as well as older guests who want to escape the heat at an altitude of around 1,000 meters above sea level.

How you respond to the needs and wishes of new guest segments?

We have hired an Indian chef for the Indian guests who prefer familiar cuisine. For the Chinese, we offer some special dishes, but most of them like to try Swiss cooking.

Speaking of gastronomy: how important is the culinary aspect of Gstaad Palace?

We usually offer our rooms with half board. So, gastronomy accounts for about half of the total hotel revenue. Our "Le Grill" restaurant has been awarded 16 Gault Millau points, but stars and points are not a priority for us. We deliver authentic, high-quality, traditional cuisine with a corresponding level of service, which also attracts many diners who are not staying at the hotel.

How do you appeal to new, younger guests?

On the one hand, young guests who stayed with us with their parents grow up and perhaps still have fond memories of our 50-metre heated outdoor pool. We have also hosted the "Roy Emerson Tennis Weeks" every summer for the past 40 years. This tennis camp is directed by one of the most successful tennis players in the world and is hugely popular.

For the first time this summer we ran two "boot camps". Mike Horn, an adventurer now living in Château d'Oex, and his brother Martin put together a varied program of outdoor activities such as river rafting, rock climbing and mountain biking.

What is your biggest concern?

Although Gstaad Palace is only open for three months in the summer and winter respectively, we make every effort to employ as many of our highly-valued staff as we can throughout the entire year. Thirty of them are on our year-round payroll and twenty of them receive eight months of wages.

My biggest concern is that the situation in Switzerland has made it almost impossible for luxury hotels to operate profitably. The competitiveness of Swiss hoteliers is being put to the test. Compared to neighbouring countries, thirty percent higher food costs, constantly rising minimum wages and the excessive laws and regulations for our industry make it hard to compete. Our profit margin has been halved in recent years.

How heavily has the Gstaad Palace been affected by the currency situation?

The strong Swiss franc affects us greatly. Although our guests are usually quite wealthy, it hurts when they have to pay 20 to 25 percent more for the same service, just because of the currency situation.

Do you see a light at the end of the tunnel?

Fortunately the franc has weakened somewhat, but a Euro exchange rate of CHF 1.50 would make everything much easier for us. Although bookings for summer 2013 were ten percent higher than last year, we're still coping with a decrease of about thirty percent compared to how it used to be.

Has anyone made an offer to buy?

A concrete offer to purchase appears on my desk about once a year. About once every six months there is a rumour in the industry that we will sell. But it's out of the question. I'm looking after the legacy of my grandparents and my parents. It is my firm goal to continue running Gstaad Palace the way it has been done in the past. But I can say one thing for sure: a five-star hotel in Switzerland is no longer a gold mine!