The Netherlands-based hotel group Eden Hotels has created a parent company, Zien Group, to reorganize its 14 hotels and approximately 2,000 rooms and promote further growth, according to CEO Billy Skelli-Cohen.
Eden Hotels was formed by the Dijkstra family in 1947 when it opened a restaurant; its first hotel opened in 1955.
Today, the fourth generation of the family has decided to take a back seat, with former CEO Léon Dijkstra — born in the Hotel Dijkstra in Zwolle, The Netherlands — now having a seat on the board and retaining a 20% stake. Private equity firm KSL Capital Partners acquired a majority stake of Eden Hotels in December 2021.
“It has been an eclectic 75 years for the hotel firm and the Dijkstra family, which is a low-key Dutch family,” Skelli-Cohen said. “It grew organically and has gone up, down and sideways. There was just not the aspiration for the fourth generation to stay in the business.
“Taking the reins and leadership of a company like this is a privilege. How many companies can claim that milestone — 14 hotels, all quite different from one another, in cities you probably have never heard of. It is an opportunity to take a lead on some wonderful hotels that could be better with more energy and money, to optimize the current portfolio and to build the team,” he said.
The Hotel Dijkstra is no longer in the Eden portfolio.
Of its 14 current hotels, 10 are owned, four are leased and two — the 173-room Hard Rock and 207-room Holiday Inn Eindhoven Center — are franchised.
Skelli-Cohen said creating Zien is a strategic move that will add clarity for investors.
“Zien is an umbrella. If you develop a second brand, then you need an overreaching brand to wrap its arms around it. Zien is not meant to be in the consumer’s eye,” he said.
He said the Eden hotel brand will remain focused on value, while a new brand created out of a handful of the group's existing Amsterdam properties will comprise higher-rated properties, requiring more capital expenditure and driven by the potential of their locations and markets.
“Zien will prioritize a refinement of the Eden brand with refurbishments of some properties and create a brand of individual hotels, initially by reimagining some of its own assets,” he added.
In the past, when Skelli-Cohen was leading another company, he had been asked to set up a new office, and he said the Netherlands was his top choice.
“Most employees are trilingual, which is powerful. Amsterdam is highly creative and young, and Schiphol Airport is one of the best in Europe,” he said.
Single and portfolio acquisitions are possible for Zien thanks to capital from KSL, which has committed an investment of $50 million into existing properties. Technological aspects will be improved, and the company could expand beyond The Netherlands.
“We can break the border, but with discipline,” Skelli-Cohen said, referring to opening hotels outside of the Netherlands.
He said it is not appropriate to predict when, where and how many hotels the company might open outside of the Netherlands, but KSL’s aim is to grow across the continent.
“Eden is its first European acquisition on the continent, with exactly that aim in mind, but we have to have discipline and patience for the right opportunities,” Skelli-Cohen said.
But the company is ready to grow, he said.
“We have the capital and know-how, but obviously we do not control some of the big variables. We’re setting ourselves as an owner-operator for assets that deserve love,” he added.
Skelli-Cohen said he has been predicting notable distress in the market for years.
“At some point I will be right,” he joked, “although I have been wrong in the past few years."
Opportune pricing on distressed assets is coming, and all buyers need is patience.
"It’s a crazy world, with high interest rates and overall costs. It was expensive even with the [pandemic-era] government subsidies just to survive, so it is difficult to see how opportunities will not come in some form. In the [Great] Financial Crisis, a crisis much easier to explain; it took two to three years for those opportunities to come.”
Eden is poised to seize on opportunities as they arise, he said.
“We are well-capitalized and can execute quickly, so we will unlock opportunities in the next few years,” he said, adding that flexible capital must be melded with a hotelier’s empathetic idea of hospitality.
Dutch Designs
Skelli-Cohen said he divides responsibilities at Eden into three areas — acquisitions; operations to stabilize assets; and, in between, the reinvention of properties and their offerings.
“What I call the washing-machine process,” he said.
Adding to the portfolio is a question of relationships, discipline and patience. He said he believes the mergers-and-acquisitions ecosystem remains large, and relationships formed by KSL internationally and the Dijkstra family domestically and regionally will help tremendously.
“We’re working different channels. In the Netherlands, it is relationship-building and walking the pavements,” he said. “We’re focused on northern European, more beer-drinking locations, not so much wine-drinking ones. We’re proactive to what brokers are putting out there in the market, and we are also working hard to generate opportunities.”
He said 70% of demand in Amsterdam is from the U.S. and United Kingdom.
“It is hard to be dependent on only the Dutch. A robust hotel market is dependent on foreign intake, although Germany and Benelux can almost be deemed a local market,” he said.
The hotel industry has certainly changed during Skelli-Cohen's career.
“There are interesting things happening in the industry. I just wish it could breed more leaders than followers," he said. "The world is continually evolving and changing, and hotels, too. They are living systems. We do not dress the same way we did 20 years ago, we do not work out the same way and we do not stay in hotels the same way either.”
Sustainability is very much a talking point, he said.
“We have at asset and group level put into place big steps, helped by [capital expenditures], and moved the needle in terms of sustainability. These are exciting things and initiatives, but I do get a little annoyed when I see sustainability without much meaning,” he said.
Skelli-Cohen added some of Eden’s hotels are hundreds of years old, so they do come with limitations.
“Our upcoming journey will really set new standards for us as a business in terms of sustainability,” he said.
He added sustainability includes doing right by employees.
“Our business is all about people. It has been underpaying people for over a generation, and now we have hit a juncture in the world, with an unprecedented lack of staff and a once-in-a-generation inflationary environment. We are in uncharted waters. We need to pay our people more, build operational models to pay them more, as what they do is hard,” he said.
“The industry went through a very violent exercise during COVID. It was treating people like numbers, which is horrible, and now there is no one to staff our hotels. Frankly for us, if I have to compare bad with worst, it has not been so bad. The legacy of our group has been a net positive. We have to balance doing better for people with creating value for shareholders.”