How the Dorint supervisory board chairman Dirk Iserlohe fights for compensation

At the same time, 50 million euros in NRW guarantee loans had to be taken out, since the state had only provided aid of 70 million euros. “In the case of the corona aid, the federal government referred to alleged EU aid limits, so that the grants were capped,” says the Dorint supervisory board chairman. “Smaller competitors still got between 90 and 100 percent of their failures replaced.”

However, the way through the courts is extremely difficult for Dorint. With the argument that the lockdowns, which were detrimental to his business, were a purely preventive measure and therefore liable for damages, Iserlohe initially failed before the Federal Court of Justice and the Federal Constitutional Court. In their multi-page verdict, however, the top judges pointed out in a side note that individual companies must not be disadvantaged by state aid.

With this new legal argument, Iserlohe has now sued against the previously imposed non-admission of his complaint. “As soon as the BGH dismisses our non-admission complaint, as expected, we will be back at the Federal Constitutional Court,” says the 58-year-old business graduate, hoping that the Federal Constitutional Court will stick to its opinion. But even with a positive verdict for him, it should take a while. Instead of an immediate compensation payment, a new regulation would first have to be created.

Still in the red

The fact that Dorint survived the corona crisis at all despite the horrendous losses is due to the hotel group almost by chance. Only seven months before the outbreak of the pandemic, the umbrella company Honestis AG, which manages the hotel business as well as the real estate assets, provided the hostel business with additional equity. “In this way we were able to prevent over-indebtedness, which might have thrown us out of the race in negotiations with banks and landlords during the corona crisis,” says Iserlohe in retrospect.

However, there will probably not be a profit in the company this year either. Iserlohe is aiming for a loss of between ten and eleven million euros for 2023, after a loss of 24 million euros in the previous year. From 2024 he expects a profit of five million euros again – with an upward trend through “controlled expansion”.

The expansion in particular should bring the business back into the black. Up to ten more houses are planned by the end of 2024, mostly through the acquisition of family hotels with 120 to 130 rooms. Iserlohe hopes that the expansion of business will reduce administration and marketing costs proportionately.

The chain, founded in 1959 by the furniture entrepreneur Werner Dornieden in Mönchengladbach, has long been expanding its locations. In 2022, the former Interconti on Düsseldorf’s Königsallee was taken over, at the beginning of the year the former Hilton Hotel on Bonn’s Kennedy Bridge was added, and in Garching near Munich another hotel with 207 rooms opened in February. In addition, the Lerbach Castle in Bergisch Gladbach, which has been empty for years, is scheduled to open its doors in 2026 following a renovation. A total of ten houses were added during the corona pandemic.

In order to provide the many new houses with the right hotel concepts, the group divided the operation into three segments. Since then, the previous name Dorint has only stood for the mostly larger houses in the four-star range, which usually offer extensive conference operations. The “Essential by Dorint” brand, which has been awarded twelve times, promises boutique hotels that offer full service. The group’s six five-star hostels, including the former Interconti on the “Kö”, operate under the new label “Hommage”.

Debate on VAT rate

There should also be an increase in yield through “moderate price increases”, as the Dorint supervisory board chairman announced. So far, however, this has only been achieved to a modest extent, he says.

Energy purchasing, on the other hand, developed more successfully for Dorint. Instead of being tied to utility companies through long-term electricity and gas contracts, the chain now procures the energy it needs on the spot market. The size of the company – in 2022 the turnover was 253 million euros with 4500 employees – makes this possible. “We currently only pay a quarter of what Vattenfall and Co. charge private households,” reports Iserlohe. For him, this is an absurd consequence of government price interventions in the market economy.

But the savings should suit him just fine, because most other costs are currently climbing steeply. The company has had to spend ten percent on staff since the minimum wage was raised last year, and general costs have gone up by eight percent.

The hotel industry has by no means fully recovered from Corona, as the Federal Statistical Office recently calculated. Compared to the last year before the pandemic, overnight sales in Germany fell by 9.1 percent after adjustment for inflation. “The mood moves between hope and skepticism,” complains Dehoga association leader Guido Zöllick, the cost pressure is enormous.

And already there are more price increases in the house. The chain’s restaurants, which Iserlohe’s wife Heike opened in several hotels under the name “Le Bistrot 99”, are threatened with a significant tax surcharge from 2024. As in all of Germany, the VAT rates there are to rise from seven to 19 percent after the federal government reduced the tax rate in mid-2020 due to the pandemic.

Iserlohe FDP Finance Minister Christian Lindner suggested that a uniform tax rate of ten percent should be created for hotel accommodation and gastronomy. But he immediately waved it off. A fourth VAT rate, the ministry in Berlin decided, is not permitted for reasons of European law.

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