How Waldhaus Sils manages family business succession

A family affair since 1908

The Waldhaus Sils motto is “A family affair since 1908”, and the reason is apparent to guests as soon as they walk into the hotel. Despite its grandeur - the 140-room white palace hotel overlooks Lake Sils and the Upper Engadine valley near St. Moritz - guests are likely to be greeted within the first few minutes of their stay by Patrick Dietrich, one of the current generation owners, or his father, Felix Dietrich-Kienberger. Patrick’s brother, Claudio Dietrich, will also be present, although much of his work tends to be done behind the scenes. 

The Waldhaus has a significant cultural legacy, with past guests including Albert Einstein, the writer Thomas Mann, the artist Marc Chagall and musicians such as Maurizio Pollini and David Bowie. Patrick and Claudio have been immersed in the hotel since they were children: one of their first jobs as teenagers was to clean the minigolf course in the forest behind the hotel at the start of each day.

The transfer of executive responsibility from their father to the brothers in 2010 was smooth. Their father had given plenty of notice and they had agreed on a plan under which he would continue to oversee cultural programming, which plays a significant role at the hotel. He would also continue to maintain relations with long-term and multigenerational guests, as well as their families, a role he still performs today.

However, the brothers soon faced a major issue that none of them had anticipated. “When we took over, the Waldhaus had enjoyed 10 very successful years,” says Claudio. “What we didn’t realise at the time was that that period was coming to an end.”

Overcoming economic challenges after a successful decade

A few months after they took over, the Swiss franc appreciated against the euro by around 25%. At the time, around 80% of the hotel’s guests came from either Switzerland or eurozone countries. The sudden currency shift posed a significant challenge for the new owners. As the brothers explain, “overnight we became 25% more expensive for all the European guests. And for our Swiss guests, all the European countries became 25% cheaper.“ As a result, many Swiss guests opted to travel abroad, while the hotel became too costly for many German, French and Italian visitors.

The situation went on for five years, a period the brothers describe as “very challenging”. Doing nothing was not an option, so they needed to persuade their father and their uncle, Urs Kienberger, who both still had to approve major commercial decisions, that investment was essential to enhance the hotel’s appeal and attract more affluent guests.

Claudio reflects that, in this respect, the commercial downturn helped them to win over the older generation: “If the hotel had been fully booked throughout the year and we had told them we needed to change and invest, they would have challenged us. But we all knew changes were necessary.”

Investing in new amenities to boost business

The major investment was a new spa, which opened in 2016. The brothers say that business has improved steadily ever since. 

While their father’s operational role has remained unchanged since he stepped back from day-to-day management in 2010, the brothers' roles have evolved organically. “When we started, we split the roles in quite a traditional way,” says Claudio. He took responsibility for two departments at the hotel: food and beverage and administration. Meanwhile, Patrick was in charge of the rooms division and sales. 

To start with, their uncle, who had run the hotel with their father, also wanted to stay involved operationally, which led to some challenging situations. “We had some difficult decision-making with three general managers, so my uncle stepped back in 2014,” Patrick explains.  

Four years later, the brothers reshuffled their own operational responsibilities and tailored their roles to their individual strengths. Since then, Claudio has been responsible for all guest-facing duties, from bookings and guest relations to managing feedback, while Patrick has overseen the operational side of the hotel. Strategic decision-making continues to involve their father, uncle and other family members on the board, as well as a number of professional appointees. 

Claudio says having two people with an equal say in decision-making is easier. “Looking back at the past 15 years, we have had some disagreements, but less about what to do and more about how to do it.”

The brothers say that there are numerous advantages to having a family-run hotel. They include loyalty, the ability to plan long term and the capacity to make decisions quickly. So, what about the disadvantages? “You do not choose your family; you work with the characters you have,” says Patrick, adding that the positives far outweigh the negatives. 

Their approach has clearly paid off. 2024 was the hotel’s most successful year commercially since it was founded in 1908.

What advice would they give to other multigenerational families? Patrick observes that it may take the next generation longer than anticipated to truly grasp how to run the business.

Claudio adds that, after taking over, there is a danger of becoming so immersed in the day-to-day running of a business and feeling so much pressure to get it right that not enough time is given to strategic planning.

“At first, with all the things we needed to learn, we felt overwhelmed. Even though we were well prepared, there were many things that we wanted to do or change that we never did. We were so busy that we never got around to them. For example, it would have been useful to establish clear decision-making processes for us, the fourth generation and our management staff earlier on. We did not start doing this until much later.”