One of the most recognized family businesses from Düsseldorf has filed for insolvency. Lindner Hotels AG, founded in 1973 by architect Otto Lindner, has submitted its application for the opening of insolvency proceedings under self-administration to the Düsseldorf District Court. This was announced by the Düsseldorf restructuring expert Frank Kebekus on Tuesday evening. Kebekus, from the law firm KebekusPartner, is assisting the executives Frank Lindner and Christoph Scherk as general representatives during the company's restructuring process.
The traditional Düsseldorf company faces the threat of insolvency and must now aim for self-administration to manage its restructuring. It seems Lindner is encountering problems similar to those of the Galeria department store chain, with the primary issue being high rental costs.
On December 17, 2024, the Düsseldorf District Court approved the application to initiate the self-administration insolvency proceeding for Lindner Hotels AG and appointed Prof. Dirk Andres from AndresPartner as preliminary administrator. The company intends to continue its operations amid these challenging circumstances.
The workforce has been informed about the financial struggles leading to this situation, stating Lindner Hotels AG has not earned enough revenue to meet obligations stemming from the pandemic and the Ukraine conflict sustainably. Currently, the company employs nearly 650 individuals, along with 96 apprentices and up to 100 temporary workers. Management has emphasized the importance of maintaining high standards of customer service during this transitional phase, encouraging staff to continue welcoming guests with exceptional service.
Importantly, not all divisions of the hotel group are immediately impacted by the insolvency proceedings. The impact on each location remains unclear. Lindner Hotels AG operates as Lindner Hotel Group (LHG), encompassing 39 hotels across ten European countries and the United States. An additional six hotels are reportedly being developed. The LHG employs about 2,500 personnel and had projected revenue of around €330 million for 2024.
The Lindner Hotel Group operates under four different brands and has been part of the Joie de Vivre (JdV by Hyatt) project since 2023, aiming to drive international growth and integrate with Hyatt's loyalty program. Just recently, on June 28, 2024, one of Hyatt's subsidiaries acquired the "Me and all Hotels" brand from Lindner to facilitate expansion across Europe and beyond.
Before the pandemic hit, the Düsseldorf hotel chain already faced financial losses, with significant downturns worsened during the pandemic years. Sales plummeted, declining by over half to approximately €80 million gross, and the struggles continued with meager figures the following year. These financial pressures prompted the then-CEO to seek refuge under the umbrella of US hotel giant Hyatt Corp. as they pursued strategic partnerships for future stability.
“We have just entered a strategic partnership with the Hyatt hotel group,” announced former CEO Arno Schwalie during the Expo Real real estate fair held in Munich back in October 2022. This partnership was intended to provide the family-managed business with financial assistance and access to broader clientele, along with technological improvements.
Significantly, after almost four decades of leadership, Otto Lindner stepped back from daily management duties in May 2022, transferring responsibilities to his five sons. He continued to serve on the supervisory board until his passing in 2020. Celebrated for his influence on the architecture, one of Lindner's well-known projects was the former headquarters of Landesbank WestLB located in Düsseldorf.
Lindner operates several prominent hotels, including locations at Cologne City Plaza, which features 180 rooms, and another just off the iconic Cologne Cathedral, boasting 108 rooms. Notably, one of its hotels located within BayArena Stadium serves fans of Bayer Leverkusen, having 103 rooms available for visitors.
Many Lindner Hotels & Resorts became part of the Joie de Vivre project since 2022, with recent shifts indicating managerial changes, including the departure of CEO Arno Schwalie and COO Stefanie Brandes just two and a half years after their appointment. Amid these changes, the decision was made to close the Lindner Congress Hotel located in Cottbus by year-end.
The broader regional hospitality sector is dealing with challenges, having witnessed several businesses facing income woes or insolvency. Lindner's current predicament is part of this trend as notable names like Arcona Hotels and Achat Hotels are also seeking various forms of restructuring. Meanwhile, companies such as Novum Hospitality have shifted strategies and are now functioning only as franchisers under the IHG hotel group format.
The onset of insolvency proceedings on December 17 adds Lindner to the list of major players grappling with hard economic realities. It's clear pressing concerns, like high rents, increasing energy prices, and continuous hesitance among companies and customers alike to engage with hospitality services, are driving forces behind the challenges presented to Lindner and others. Hedging against this, Frank Kebekus highlighted the company's efforts to negotiate lower rents and engage strategies to pull through this financial burden.
Despite its challenges, Lindner's management aims for sustainable restructuring through self-administration, telling their workforce to continue delivering top-tier service to customers. This strategy reflects not just hope, but also resilience among employees, who’ve been urged to uphold Lindner's standards during such tumultuous times.