ALWAYS IN THE RIGHT PLACE

Turkey 2017 | TOURISM | VIP INTERVIEW

TBY talks to Canan Özdemir, Managing Partner of The House Café & Hotel Group, on the growth of The House Café and The House Hotel brands, the potential in Turkey, and expansion abroad.

What major decisions and changes have taken place at The House Group over the past year?

First of all we opened The House Café Baku in 2014. Again, last year, we signed a franchise agreement with a company called Oryx Group for Food Services from Doha, which has different brands in its portfolio like Nandos, Juice Zone, and a few other local brands. According to our franchise agreement, Oryx should open two more The House Cafés in Doha in three years time. And we believe that this will open our doors to the Middle East with so many future growth opportunities. It is always very important that someone from the same sector takes the franchise, and this usually means it will be a success. In the meantime, almost two years ago we created a new concept/new brand in our portfolio called Nopa, which is a modern European brasserie with its mostly Mediterranean cuisine with its local blend menu. It was designed by the Autoban architectural company like all our other cafes and hotels. Recently, we have been more focused on franchising. Our franchising strategy is quite conservative because it is very important to choose a good venue with the right partner. We believe The House Café concept is not for the masses; it is a boutique concept. It should not be everywhere and cannot be a mass chain. We still want to keep fresh flowers on our tables and we still want to tailor our services to our guests. We are in all the best locations in Istanbul. As The House Café, we focus more on international franchising opportunities rather than local, as we believe our concept is very much appreciated at the international level. From the hotel side, we opened The Vault Karaköy by The House Hotel, which has 63 rooms. It is in an old, historic building originally built for Credit General Ottoman Bank in 1863 and was expertly renovated and turned into a The House Hotel in 2014. As The House Hotel Group, this was our first investor-based project, while our initial 3 Hotels—The House Hotel Nişantaşı, Ortaköy, and Galatasaray—were completely renovated and turned into hotels by ourselves, and we worked with an investor. Accordingly, in 2015 we signed the agreement—The House Residence project—with another investor. Project in Bomonti is a residential project and is our first time in this segment. That was a different step for The House Group. This is a project with 155 residents and we will manage the entire property as The House Residence Management. It will open in late 2016 or the beginning of 2017. There will also be The House Hotel with 51 rooms. This is a new concept for us. We have been in contact with many project owners and are negotiating with them; we plan to grow in the residence business as well. We are dealing with a few now, though nothing has been sorted yet. That said, we signed the The House Residence Bomonti about one year ago. In addition, there is an interesting project in Cappadocia. Our investor there is in love with Cappadocia and had started buying old Armenian houses and decided to establish a hotel. However, as his core business is not hospitality, he sought to work with a hotel brand here and we met in 2014 and The House Hotel Cappadocia opened in June 2015. Cappadocia is a unique place. We were already seeking to open a hotel in the area because it is economically, commercially, and spiritually amazing. After Istanbul, it is the second biggest opportunity for our hotels. It is such a special place with a unique history and unique features. The places he had bought were mostly cave houses. Now we have 29 rooms and the second phase is under construction at the moment but will be open very soon. With the new phase THH Cappadocia will have 45 rooms in total, and more than half of the rooms are original cave rooms. Some of these rooms were used to ferment wine, others used as kitchens. Recently, while the new phase of construction was under way, a beautiful chapel from an old church was discovered. This chapel is being carefully restored and will be used for events and organizations. As you can guess we are facing a really tough time at the moment, especially in the hospitality sector due to the fact that there is a reduced number of tourists in the country. At the same time, Turkey is a strong and dynamic country, and it will recover.

How has the significant and early investment by Kerten private equity influenced the growth of your business?

Kerten is a private equity firm; it is a personal fund and invested in us in 2010 when we were still at the very beginning of our hotel business. When we did this merging we had just built our first hotel, The House Hotel Galatasaray, but with this partnership we can take advantage of growth opportunity in the sector.

What new markets are you exploring?

We are open to either new partnerships or franchising opportunities abroad. Because of both regional proximity and cultural similarities, the Middle East is a priority for us at the moment. For example, Dubai could be a good place for The House Café. We have so many loyal customers from that region and they really love and appreciate our concept. Besides, we are also thinking of expanding to some European cities as well. London could be possible. I have British residency. I studied in London for a while and spend a lot time in London. It is an amazing city with a great food and beverage market as well. I have a very good network in the sector and we often discuss our thoughts that The House Café could be a success in London. As The House Hotel, we have not yet gone outside of Turkey; however, we are also open for a possible international partnership, franchising, or management contract opportunities. Our partner on the hotel side is actively seeking international growth. On the other hand we cannot ignore the fact that as a sector we are passing through a very difficult time. That's why our primary concentration right now is our existing hotels.