The Max method.

Creative hotel manager on the one hand, passionate university lecturer on the other: Max Schlereth, Chairman of serviced apartments provider Derag Livinghotels, achieves this dual role of host and scholar. Despite the fact that he characterises himself as "the most chaotic person on God's Earth".

text: Michael Braun Alexander  //  photography: thorsten jochim

Let's start with the genes, the bio-software assigned by mother and father in the big lottery of life, which determines a lot already at birth and sets the course for our path through life. At this point, Max Schlereth, Chairman of Derag Livinghotels, the largest provider of serviced apartments in Germany, simply got a large dose of luck.

His mother, an actress who came from Egypt, was a film star in the 1950s and is still a minor celebrity today in her home country. "Here in Munich, we were always a totally normal family," Schlereth once said in a newspaper interview. "But when we were on holidays in Egypt, we noticed how much she is still revered there. Right up to today, a film with my mother in it is shown every week on TV." His father, in his turn, 86 years old and now living with his wife in Vienna, was a construction magnate of the old school, a "full-blooded entrepreneur", as his son says, who still works "from morning till night" today despite his advancing years. On his father's side management expertise, on his mother's side a touch of glamour: There are less fortunate combinations when parents are selected.

The youngest of three children from this international liaison, Max junior, is outrageously good-looking. The eyes a cool green, the sort that laugh; the look youthfully mischievous; the chin prominent, with a sharp six-day beard. Shortly before the interview, Schlereth, who carries an Austrian passport, had just returned from a two-week skiing holiday, tanned and in high humour, indeed: cheerful. He is dressed elegantly – dark suit, white shirt and winter coat, no tie – and his clothes hang damnably casually on him. This youthful and jovial 43-year-old, who has been newly married for two years, is one of the major hosts in Germany and Austria, with a total of 17 hotels, 3,055 rooms, and nigh on 6,000 beds.

"Everything that is no longer an apartment, but not entirely a hotel."

The roots of the guest house chain lie in the German economic miracle after the end of World War II, when Max Schlereth senior, an architect and engineer, founded Derag in 1951, originally as a construction and real-estate company. The rather unwieldy sounding company name is derived from its full title, Deutsche Realbesitz Aktiengesellschaft, which over the years built more than 85,000 residential and commercial units in Germany, Austria, Switzerland and Italy, whereby the Olympic City in Munich (1972) was probably the best-known project in the company's history.

In 1982, the company founder had the idea of opening a hotel in Munich that only had apartments for guests who wanted to stay longer than two or three nights. Today, this concept is known as "serviced apartments"; while other providers now sometimes also call it "boarding house", "long-stay" or "apartment hotel/aparthotel". Thus it is "everything that is no longer an apartment, but not entirely a hotel." An idea that caught on worldwide. According to sector association TAS Alliance in London, the global hospitality segment today comprises some 775,000 residential units, 15 percent more than 2 years ago.

With hotels in seven German cities as well as in Vienna, the Derag Group is expanding rapidly: At the end of 2014, a new boutique hotel with 43 apartments and 40 rooms opened at one of Munich's tourist attractions – the Viktualienmarkt market. In March 2015, the Derag Livinghotel De Medici (170 rooms) opened in a restored 17th century Jesuit monastery in the western German city of Düsseldorf. In early 2016 the Soulmade Hotel in Munich with 139 rooms, mainly made of wood, followed. The next hotel opening is due to take place shortly in Frankfurt am Main.

No generational gap

Four new hotels within two years is not just a matter of course for a medium-sized family-owned business. "Compared to other hotel groups, we are a bit of an exotic bird," Schlereth says, "insofar as we actually own and run all the hotels ourselves." Derag was and is a family-owned company, where Max, "the baby", may call the shots, but is by no means an autocratic ruler. His father is "a very, very active supervisory board chairman," says his son, who complements him well, and there "is touch wood, no generational gap." His brother, Thomas, who is ten years older than Max, is the guiding spirit of the two new hotels in Munich and Frankfurt, he says. As co-partner, he has "no classic management board function," but is "a really good friend" to his little brother, which is also important, he says.

However, it is Max who has really taken up the cause of the complete rebuilding and style reorientation of the company. At the end of the 20th century, Derag had had a fusty reputation. The company name sounded old and tired; the interior design of many of the hotels was primarily full of shiny brass. Renaming the company as Derag Livinghotels five years ago on Schlereth's initiative rejuvenated the tired brand, without giving up the origins – "after all, the name is part of our history" – of the company in doing so. Everything everywhere was and is being renovated and spruced up. Stylistically, the recently opened hotels have hit the mark as boutique hotels with charm, individual flair and bold use of snatches of colour gives the ambience a cheeky and unconventional feeling.

In the hotel business, Schlereth has a name for "being a very creative individual". He was "always courageous and simply tried things out that never existed before," says one colleague from his sector. An opinion that agrees with the Derag entrepreneur's self-image. "I have a bit of a propensity for thinking unconventionally," he says, "I sometimes like to come out of left field."

mother-in-law?

For example, there were the goldfish that he put into his guests' rooms a few years ago so that they would not feel lonely. With his cheeky "Don't want to deal with the mother-in-law?" concept, he encouraged people to send more mature women of intractable character to stay at the Derag hotels, where they would be suitably looked after, whatever their foibles might be. So he has a predilection for quirky campaigns. He is simply "the most chaotic person on God's Earth," Schlereth says. That might appear to be madness, but there is method in it; after all, chaos is just "a complex form of order." All new, all different, thinking out of the box – that is the motto at Derag nowadays. Definitely no service by the book, no customer care by check-list. His hotels are not just hotels where people stay over, he says, they are a home from home for long-term guests, where they dwell, work and live.

However, maximum hospitality is only one side of the Derag manager. The man is not just visually presentable (and quite wealthy), but in addition he is smart and eloquent, with the title of "Prof. Dr." on his business card. For ten years, he has been lecturing as an honorary professor in the Austrian town of St. Pölten, where he currently supervises about 45 students of business studies. The dual burden as manager and lecturer "is not easy", he admits. From time to time he has to "quickly take one or two days off from the company" and work through a large block of intensive seminars and lectures in St. Pölten.

Why does he take all this on? "Passion," he says. "There are two things that I love. Firstly, to build something up, and secondly, to tease a hidden quality out of a person. In the case of some students, it is sometimes as if a knot unravels, and that is a deeply satisfying feeling." And he alludes, without any appearance of affectation, to Goethe: "Because sounding out noble souls is the most desirable profession." A literary quotation which gives a hint about how he spends his free time. "I really love to read," he says, anything and everything, and he has been writing for more than 20 years. No research papers, but works of fiction, particularly short stories, "a liberating experience." Whether he will ever publish his works remains to be seen, he says. "It would be quite nice to publish a book at some stage."

Growth potential with management contracts too

However, before that time arrives, he still has an overflowing diary to work through in the chairman's office. "Firstly – and this is what our strategy will be – we will occupy the white spaces that we still have in Germany, and then we will certainly start thinking about other countries too." He could also imagine not owning individual hotels, but running them through management contracts. "Then, of course, the pace of growth will be completely different. That much is clear." It would be a revolution in the family-owned company.

However, he does not want to commit to this great vision, this super-clever master plan for the coming decades. "I am much too occupied with the here and now to do that." In Arabic, his mother tongue, he says, there is an apt figure of speech: "May your aims be fulfilled." That, he says laughing, is not meant as a good wish, but as a curse.

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