TBY talks to Canan Özdemir, Partner of The House Group on the rapid success of the company's hotels and cafés.

Canan Özdemir
Canan Özdemir graduated with a degree in Economics from Istanbul University in 1999. She then joined Ernst & Young as an Experienced Senior of Audit, Business, and Advisory Services. She became Managing Partner of The House Café in 2003 and Managing Partner of The House Hotel in 2007.

To what do you attribute The House Group's incredible success in such a short period of time?

We saw a distinct gap in the market when we established the business. There were no cafés comparable to The House Café. Although we cannot say that we were the very first, in terms of style we are pioneers. Our initial vision was not to be a chain, but instead create a stylish and relaxed environment with a friendly and comfortable atmosphere for people to socialize and feel at home. My partners and I were looking for a new challenge and felt the timing was right.

Was there a similar gap in the boutique hotel market?

The House Hotel is a similar case to the cafés—we realized that there was a niche in Istanbul for a fresh and design-driven boutique concept. In 2007, we launched the hotel business, which began with serviced apartments. Initially we bought a few buildings in Taksim, the downtown area of Istanbul, where we found a number of nice properties and saw vast potential for investment. The serviced apartment concept already existed in Turkey, but the competition was operating at a much lower standard than ours. Our initial plan was to restore older buildings and rent them out long term, but instead we decided to market serviced apartments on short-term rentals internationally. The design was simple; however, it reflected the café's design and style. We also ensured that the apartments had all the facilities one would expect at home. Istanbul was seeing massive year-on-year growth in the tourism market, so we felt confident to expand to 40 apartments in quick succession. During our expansion we saw that the business was growing very rapidly, therefore we bought a historic building in Galatasaray that would become the home of our first boutique hotel. Everything was preserved when we acquired this historic building, and the kitchen was over 100 years old. We worked with the award-wining Turkish architectural design company Autoban for all three of our hotels, which gives us a unique identity. There were only a few boutique hotels when we entered that market, but this segment has now become crowded in Istanbul. Our three present locations have been extremely successful. In 2010, we sold 50% of the accommodation side of our group to the private equity company Kerten.

The brand is extremely strong, but how important is it to connect the two segments?

For both the café and hospitality arms of The House Group we have worked with the same architect. The company has been working with Autoban since the beginning. Although it did not design our first café location, we decided to remodel it with Autoban recently. In April 2012, we celebrated our 10-year anniversary, and to commemorate the event we redesigned the first The House Café completely. The work has turned out beautifully. Autoban is a joy to work with—the company is able to upgrade and renovate very quickly. It is very important for us to be unique. When people visit Tünel, they feel a sort of ambience that is different from visiting our branch in Ortaköy. There are certain trends and design philosophy patterns that remind our customers of the brand. This environment is what we were aiming to create with Autoban. This is the unique atmosphere that connects every part of the group.

What are your plans to export the brand abroad?

The House Café Baku is set to open in summer 2012. Autoban has already started the project that will be operated as a franchise. We have given franchises to Ankara, Izmir, and Antalya, because we believe that having a local operator is very important. The partner should be someone who knows the local community and has experience in the restaurant sector as well as the financial capabilities to support the business. This system works well as long as you create clear franchise control points. We are planning to grow in other capital cities such as London and New York as part of joint ventures in the future. Once again, we believe that when we open a store in these places, a partnership with someone based in that location is very important. We are looking to grow around Europe in the next two years and also beyond. We are seriously considering the Middle East as well, in locations such as Beirut, Dubai, and Kuwait.

What is the occupancy rate?

Of our 100 rooms, usually 85% are occupied throughout the year. We have a good design, prime locations, and excellent service. Our guests are satisfied, and we have many repeat customers.

Do you cater mostly to business or leisure clients?

We have a client ratio of 60% leisure and 40% for business purposes. Istanbul has become a connected city. Previously, foreigners would come to engage in textile business transactions, and now they are coming for fashion, art, and festivals. Foreign visitors understand and appreciate quality and design.