Vienna’s refugee-run Magdas Hotel turns two

Vienna’s Magdas Hotel celebrated its two-year anniversary this month. Not, perhaps, a noteworthy feat for the average 2.5–star hotel, but this 88-room, independent property achieved an average occupancy of 65 percent this year as an experiment in social business. Part of the Magdas Social Business Group, a subsidiary of the Catholic NGO Caritas International, the Magdas Hotel provides work experience to accredited refugees, who comprise two-thirds of the hotel’s staff.

“Our secondary goal is to see Austria’s hotel business open up to more refugees because it’s an industry here that always lacks employees and we think integrating refugees into hotel staff is a sustainable solution for the hospitality business,” said Gabriela Sonnleitner, CEO of the Magdas Social Business Group.

Employees First

Magdas’ refugee staff is encouraged to continue their career path at Austrian hotels after two to three years in order to make room for newcomers. To that end, the hotel invests heavily in its human capital. In fact, staff costs are one of the hotel’s greatest operational expenses as new hires complete a yearlong, on-the-job training program that, Sonnleitner explained, results in more staff covering a single shift than would in a typical hotel of the same size. “We have about 1.5 people doing what another hotel would have one person doing, so our staff costs are higher than other hotels,” she said. She added that the business model is viable because the hotel is a non-profit required to make good on its debt and balance budgets. Although the hope is to eventually turn a profit once debt is repaid; yields would be invested back into the business.

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Specialty training is also incorporated into each individual’s yearlong program. So that could be a bartending seminar for a barkeep or German or English lessons for those whose language skills need remedial work. All hotel staff is trilingual, speaking a minimum of German, English and their mother tongue.

To source qualified candidates, the hotel works with various Austrian refugee agencies. “This doesn’t mean that they’re fully qualified for the job, but that they are confident to work with the general pubic, that they are open minded, they already have a certain level of German and they have the personality for a service-oriented job. Coordinating with these local agencies is a huge advantage for us,” Sonnleitner said. Exceptions to this rule have included a Syrian refugee who worked in a hotel in Damascus and an Iranian refugee who arrived to Austria a trained electrician. There are also opportunities for promotion at the Magdas, as was the case for one Afghan refugee who started on the nightshift at the front desk and is now an assistant manager.

Spreading the Word

If the unorthodox approach to offering high quality service seems unconvincing, know this: the hotel’s marketing efforts are largely dependent on online guest reviews. “We don’t have the budget for big advertising campaigns, so we have to trust our guests to recommend our hotel and that works quite well for us,” Sonnleitner said. “Take a look at TripAdvisor and you will see lots of positive feedback from our guests.”

Yet, guests rave about more than service; the hotel’s upcycle design is also generating buzz. A former retirement home built in the 1970s, the building’s reinvention was financed through crowdfunding and a $1.5-million loan from Caritas. Local architectural firm AllesWirdGut and Wisconsin-based interior designer Daniel Buechel created a “modern vintage” aesthetic. “We didn’t have much money to renovate and no one really trusted in our idea to run a hotel with refugees. So our designers decided to use the building’s old furnishings, which they disassembled to create new desks and night tables,” Sonnleitner said. At the designers’ request, locals also donated old furniture, which now sits in the lobby and some suites. The Federal Ministry of Science, Research and Economy took notice when it awarded the hotel the Austrian National Design Prize last year.

Coming and Going

The hotel's style, coupled with its service, have proven successful with a cross-section of travelers that Sonnleitner describes as everyone apart from people who are looking for pure luxury. Leisure travelers include the original target demographic, Millennials with the time, money and inclination to travel, as well as families and Boomers who are looking for a different hotel experience at an average nightly rate starting at €67. Business travelers working in creative fields or for companies with an emphasis on corporate social responsibility help fill rooms during the week and groups account for 10 percent of the hotel’s business. Corporate businesses also view the hotel as a creative space, so demand for more event space just resulted in the creation of a fourth meeting room.

In the long term, Magdas Social Business Group hopes to franchise the brand in other major European cities. “Europe needs the Magdas concept to integrate refugees, but first we want to further evolve our concept,” Sonnleitner said.

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