One year in, the Capella rethinks its strategy


Photos of Capella’s dining room. (Jeffrey MacMillan/Jeffrey MacMillan)

The Capella Washington, D.C., Georgetown hotel opened last spring with luxury quarters, a private rooftop lounge and the promise that guests’ every whim would be fulfilled.

A year later, executives say it hasn’t been an easy sell. Well-heeled travelers from Italy and China have frequented the hotel, but locally, it has failed to create buzz or attract much of a following.

The Capella is hoping to change that.

In recent months, the hotel has debuted a series of efforts to introduce area residents to the property without irritating its high-end guests.

“The challenge is that ultra-luxury [travelers] want activity, but at the same time, they want total privacy,” said Horst H. Schulze, chairman and chief executive of Capella Hotels and Resorts. “We have to find a balance.”

Among new offerings for locals: cocktail classes with the hotel’s head bartender (for $250 per couple), star-gazing sessions on the rooftop ($175 per person) and a number of pop-up boutiques and trunk shows featuring designers such as Elie Tahari.

The hotel has even loosened its strict private rooftop policy, occasionally inviting restaurant patrons and bar regulars up for a drink.

“We’ve begun to take a turn,” said Alex Obertop, the hotel’s general manager. “April has been a very strong month for us.”

In the first few months following the Capella’s opening, just 30 to 50 percent of rooms were occupied on a given night.

The hotel is faring better now — last month, all 49 rooms were sold out for five days in a row. Occupancy rates are now teetering closer to 80 percent.

“It’s doing well, but frankly, I thought we would there months ago,” said Schulze, who founded Capella in 2002. “We are about three months behind what I had anticipated.”

Hotel owner Bruce Bradley declined to disclose revenue or profit figures.

“We’ve had a number of successes,” Bradley said, adding that the hotel had been named one of the year’s hottest new hotels by CNN.com and a top-20 property by Forbes Life magazine. “We’ve made some refinements, and are looking to grow our relationship with locals.”

A number of factors have made it difficult for the Capella to capture Washington’s elite, Schulze said. For one, the property doesn’t have a ballroom or large events space.

If it did, “the magazines would say, here are pictures from the ball and Mrs. so-and-so was there,” said Schulze, formerly president of Ritz-Carlton. “That’s how you would get established, but frankly, we don’t have that opportunity here.”

The nightly rate for the hotel’s 27 rooms and 12 suites currently averages about $600, Schulze said. By the end of this year, he hopes the number will be closer to $700 as the hotel attracts more luxury travelers who are willing to splurge on expensive suites. (It is easier to begin filling a hotel with group and business bookings, he added, even if that means having to negotiate rates.)

“The first year is always unpredictable,” said Schulze, who has helped open more than 100 hotels around the world. “Building that reputation takes a little bit of time, it takes two to three years.”

But he said, there was one metric he is proud of: The Capella Washington is consistently ranked as one of the top hotels in the District on Trip Advisor, a Web site where guests can leave reviews.

“That rating to me is the indication for the future,” Schulze said. “Customers are enthusiastic about the hotel.”

Philip Conley, 34, has stayed at the Capella almost every week for the past eight months. Last year, he estimates he spent 50 nights there.

“I like it because it feels like you’re in a doorman [apartment] building instead of a hotel,” said Conley, an asset manager for a brokerage firm in Pennsylvania.

And, he added, the staff is happy to help — such as the time, right before a meeting, he realized he needed a shirt.

“Someone ran to Brooks Brothers,” he said. “That’s something a lot of hotels won’t do.”

Abha Bhattarai covers local banking, retail and hospitality for The Washington Post’s Capital Business section.
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