HENRY E. SCHIELEIN, General Manager, Ritz-Carlton Laguna Niguel

Orange County has for years been one of the nation’s top vacation destinations. Then in 1991, the Persian Gulf War, recession and cool summer temperatures combined to zap occupancy at the county’s major hotels. The luxurious Ritz-Carlton in Dana Point has felt the chill too. General Manager Henry E. Schielein, who joined the Ritz in 1986, has shaved expenses, cut employee hours and taken other steps to try to cope with the downturn. He discussed his strategies with Times staff writer Chris Woodyard.

What is the state of the hotel industry?

It certainly isn’t at its best. There is no question about it. We have seen overdevelopment on a national scale. It always takes a while to catch up, and, naturally, when you have an economic slowdown like we have right now, it doesn’t help it any.

What has occurred here in Orange County? Has it been the same kind of thing?

Oh yeah. As a matter of fact, Newport Beach and Irvine are prime examples. There are several hotels in receivership down there. It’s not because those hotels are no good. It’s just that you have too many. Consequently, they all are suffering.

Is this a sign that Orange County has lost its luster as a travel destination?

Not at all. It’s just a matter that there is an oversupply of rooms.

Do hotel managers have to take an aggressive approach to beat this recession?

Even in good times, this is a business where you have to be a promoter. You just can’t sit back and wait.

Is it important to bring in local customers even if they do not plan to stay for the night?

Absolutely. The restaurants, the lounge, the bars are all packed with local customers. It’s all local people who bring their friends here, bring their kids here. It’s just wonderful. This hotel lends itself perfectly to it.

What are your other major markets?

What is becoming one of our major markets is the European traveler. In the past, they have heavily favored Florida.

But people are looking for new destinations, new places to go. So California is becoming very popular.

How do you reach the Asian market? Should you offer Asian-style meals or other incentives to entice Far East business?

If you want a Japanese-style breakfast, we have it, but we’re not promoting it. When in Rome, do as the Romans do. Why should they come here to have Japanese breakfast? They can get a much better Japanese breakfast back home. So, yes, it’s nice to have if somebody really wants it, but I think we should let the people be a little more adventuresome and try our foods.

If hotels are negotiating on room prices, are they bargaining on banquet rates or food and drink prices as well?

We are not negotiating on food and beverage prices. Our overhead is enormous. We have 80 culinary workers in our kitchen. We have five international chefs. When you have that overhead, you cannot negotiate. If you were to ask 10 hotel managers if they would like a room without food and beverage and just operate the rooms, they would have a big grin on their faces. All your challenges, all your problems are related to food and beverage. The expense is enormous. The quality control is difficult. It’s just a complicated aspect of the resort business.

How about cutting back? You’ve cut the hours of your staff to save expenses, but what else can hotels do?

Naturally, when things are slower than normal, you try to be more conservative. When things go well, you almost become a little wasteful. In slow times, you have to become more cost-conscious. It doesn’t mean you cut quality; you are just more careful about how you spend your money. You become a more competitive shopper.

We are spending millions of dollars in the local economy. We sit down with our dealers and say: ‘Hey, guys, things are a little slow. What can you do on the prices?’ There are many ways you can save money without really cutting quality.

What are the trends in hotels these days. Larger bedrooms or bathrooms?

Bigger rooms. People like big washrooms. I think you will find bathrooms, in particular, to be ultra-luxurious. There will still be a clear distinction between the luxury hotel and more economically oriented hotels.

Is it hard to find good employees?

It depends on what you are looking for. We have a process of targeted selection. If you come and apply for a job, we have three people interview you, and we have specific questions for that job. All three interviews have to be rated, and you have to pass each one. The key criteria are appearance, personality and how outgoing you are.

If I had to make a choice on an employee with a substantial background and an employee who has very little background but with a wonderful disposition--outgoing, neat, a happy person--wewould much rather employ the person with less experience.

Why?

People yearn for friendly people. There’s nothing worse in this business than not being outgoing and accommodating.

With the recession, have you been flooded with job applicants?

Yes. We have more selections than we ever had.

Is that good?

It’s good in two ways. No. 1, it makes your existing staff much more aware and appreciative of having a good job. No. 2, if we have to fill a position, we have a much better selection to choose from.

On room rates . . .

“There is not a hotel around right now that can honestly say, ‘We’re not negotiating.’ Everybody negotiates. I’m negotiating. That’s part of doing business.’

On thriving during the recession . . .

‘We’re firm believers that the more we do, the better we get. We’re not sitting back saying ‘Things are bad.’ We’re saying: ‘Things are bad. We’ve got to do something to make them better.’ ”

On coming up with promotion ideas. . .

“I sometimes lie awake at night, or I steal them from other hotels. I haven’t stolen much around here, but as you travel overseas, you pick up ideas.”

On marketing to specific countries. . .

“We don’t want to be identified as a Japanese hotel or a German hotel or as a convention hotel. We try to balance things so people who come here will be comfortable. We want the international atmosphere.”