BBJ: How do you look back on the past three years?

Selim Ölmez: Initially, we were moving slowly and trying to understand where to head. Now, after three years, we feel more confident. I think this is the number one achievement. I believe our guests also feel more confident in us because we started three years ago during the pandemic. The Luxury Collection is a powerful brand, a collection of iconic hotels, but the name of Matild Palace was very new. When you first put your name into the market, it’s not very easy to say that you are the best. It’s much better if the guests tell us that. Today, they say we are a very important player in the market. This gives us a lot of hope for the future. The Budapest market is growing every year. I think the outlook is positive, not only for us but also for the Budapest market. You know, there are many different layers to this property; Spago, our partnership with Wolfgang Puck, is one of them. To operate a restaurant successfully in a competitive environment and in a hotel is not easy, but we are delighted with how Spago has established itself. The same is true of our Duchess bar.

Right now, we are looking to the future because we opened this property with a very long-term vision. And I think we are successfully implementing our vision. How will we mark the event? We will celebrate with our guests, but especially with our staff. I think now is the time for them to celebrate some success stories. This year, the focus will be on employee engagement. I think we all deserve it. It was a very interesting opening: a new hotel in a pandemic, we did not have the chance to do a grand opening. So, I think our fifth anniversary will be our grand opening celebration. We want to do something special for that, but let’s wait and see.

The Duchess VIP Terrace.

BBJ: Are you happy with where you are today?

SO: We are happy with what we have achieved. But that doesn’t mean we don’t have anything else to achieve. We are very ambitious. There is always something you can do better. When you look at the past, there are a lot of learnings from these three years. This year, for example, we have just finished our training with Forbes Travel Guide. We want independent evaluators to look at this property so that we can identify areas for improvement.

I am pleased about some of the changes that we made during the pandemic. You know, we were running toward a goal with total energy and full enthusiasm. But when the pandemic came, and the whole world stopped, it gave us time to think a little. It gave us space to say, “Okay, we are doing this, but maybe the world will look different after the pandemic. Maybe we should go in a different direction.” Where we are sitting today, Spago, it’s a result of this. Originally, we were aiming for something else. The location would have been the same, but the look, the feel, the concept, the name of Wolfgang, these are all results of the pandemic; it gave us the courage to stop and think and look at all the plans and make changes. It gives me great pleasure to see that what was implemented during the pandemic paid off. Spago is a very successful concept; we have more traffic, more energy, more guests, which gives me a lot of opportunities to also improve the hotel. Most of the people we host in the restaurant live in Budapest. So, it helped us connect with the market. Despite the challenges, I think the pandemic enabled us to be who we are today.

Spago Budapest by Wolfgang Puck.

BBJ: Did you ever consider delaying the opening because of the pandemic?

SO: To be honest, no, because our plan was to open this property as soon as possible. In fact, we were planning to open a little bit earlier, in April, but due to the change in the restaurant concept, we had to wait for Spago to be ready at the same time. Normally, when you open a new hotel, you start from zero and start climbing. When we opened, everybody was at the bottom because of the pandemic. Some hotels are still closed today. We were perhaps one of the only luxury hotels opening in all of Europe, so we got a lot of attention from the whole world, which was happy to see something was going on.

Let me give you another perspective because it is part of the history of this building, from the Belvárosi Kávéház, which is today the Matild Café house. We have this marble plaque still hanging in a corner of the cafe, which says this was the first business to reopen in Budapest after World War Two. It offered hope for the Hungarian people that life was coming back. We took the same mentality: Let’s open this hotel so that the people can see that things are returning to normal. I think it worked. We always got very positive comments. Since the day we opened, Spago has been on fire; it has a good name on the market, is always among the top 10 restaurants, has a Michelin recommended plaque on the door, and the same guests are returning and dining here with us. It builds an emotional connection with all those people. We have tried to change this perception that this building is all about the hotel; it’s not. It’s much more than that.

Wolfgang Puck

BBJ: You mentioned that most of the guests for Spago are Hungarian. What is the breakdown for the hotel, and is that changing?

SO: Our biggest market right now is the United States. The river cruise business has a big impact on that. As it is getting stronger, so are we, since the river cruise guests are looking for a pre- or post-stay in the city. Others combine Budapest with a visit to Vienna or other cities on a European tour. We see a similar trend from the U.K. at the moment. We are very good in the German-speaking market; we have a lot of guests from Vienna and Germany, maybe because of the influence of Wolfgang and the restaurant. For the rest, it depends on events. We were very strong in the Israeli market, but you can guess the situation now. Likewise, we used to be very strong in the Russian market.

I think the next big thing will be the Chinese market. Last year, we saw a huge increase, almost 600%. That was from a very low base, but it’s still impressive. This year, we are seeing the same trend. We have guests from everywhere else, like Australia, Japan, and Turkey, of course. Looking at how the industry is developing, I think in the next two to three years, the Indian market will become very important. Listening to the experts and reports on the Indian economy, they are getting richer and are ready to travel the world. Their high net wealth percentage will increase from 1% to 6-7% in the upcoming five years. But what I am really hoping for is that all these conflicts will be resolved peacefully, and then, perhaps, more travelers can return.

BBJ: I’ve often thought launching and running a hotel must be like painting the Golden Gate Bridge. You build it, and then you start painting it, and when you get to the end, it’s time to start at the beginning again. What are the plans for the hotel? Are there extra elements you hope to implement that are not yet in place?

SO: It’s exactly like that! You need to revisit topics each and every year, sometimes even sooner. Of course, it’s not only about keeping the physical condition in good shape. It’s also to keep the team spirit up, the service level up, making improvements. There are a couple of ideas that we want to implement. For example, one of the things that we are always looking at is the cafe. We operated it for two years, but have decided to shut it to the public for now. We are using it as a ballroom for the hotel because we didn’t have one. We still do the cabaret shows once in a while, on special occasions like Valentine’s Day or New Year’s Eve, because I think it’s something that is missing from this city. We are in touch with many world-class concepts, where we might partner with them, as we did with Spago. We are not in a hurry because we want to do things right.

And, of course, we will continue to invest. As a group, we are very happy about where Budapest is heading. In the hospitality industry, we see the potential for double-digit growth every year, so maybe we will invest elsewhere in the city.

BBJ: The investors have a Turkish background. Like the Hungarians, the Turks have a reputation for hospitality. Do you think that gives you a special connection or unique insight into the market?

SO: The group’s previous hotel investments were resorts with all-inclusive service, which they do exceptionally, by the way. This was their first city hotel and their first international hotel brand partnership. Working with Marriott International is a big commitment. And it’s a huge responsibility to renovate a historical monument. They could have received so much criticism if they got it wrong. They used all their know-how regarding construction techniques and refused to cut corners in terms of cost and quality. They bought the marble in Italy because it is the best quality, but they shipped it to Turkey, where the craftsmanship is better, and from there, they brought it to Hungary. And it cost a lot of money; it’s not a short-term return investment, but it is paying off today. The marble still looks brand new. The hotel has become a great business card for the group in the global hospitality market. When we say today that we are the owner of Matild Palace, everybody has some respect for the investment and the vision.

This is the group’s flagship property; when they go out to the international market, it opens a lot of new doors for them. As I said, maybe we will open another hotel in Budapest in the future, and I’m sure it will be even better than this one if we do. But the Matild gives us the opportunity to spread our name into other markets, whether it’s Paris, the Maldives, or wherever. The group will expand in the upcoming 10-12 years. Currently, it has 18 hotels; by 2035, they are targeting 50. I wouldn’t mind having another group hotel in this city, but perhaps it might be in one of the neighboring countries. I think they started at the right time and in the right place for their international hotel presence.

BBJ: Any last thoughts to share?

SO: I would like to thank everyone, the community, our partners for believing in us and supporting us on this three-year journey, and I hope that we will continue the same tradition for many years to come; without the community, it would not have been possible. Believing in a project is not always easy because not every project becomes a success story. There are always risks, but we are delighted that here we are, still sitting together after three years, talking about the future, not the past.

BBJ: And talking of the future, is there anything you can share about new developments in this building?

SO: Could be. We are working on elevating the Duchess right now, so there might be a couple of exciting events over the summer on the rooftop of this palace. Stay tuned. I’ll not give details at this stage, but yes, I think there will be a lot of fun upstairs!

This article was first published in the Budapest Business Journal print issue of June 28, 2024.