Day 1 : Europe had seen 18 months of consecutive RevPAR growth, so « stay humble, stay curious and continue to learn».
Berlin, March 2. The 18th International Hotel Investment Forum (IHIF) has opened at the Hotel InterContinental Berlin, Germany. Over 2,000 delegates from across 70 countries have gathered for the largest and most senior event for the hospitality industry. The programme began with welcome remarks from Kerry Gumas, President & Chief Executive Officer, Questex and Jonathan Worsley Chairman, Bench Events, Board Member, STR Global. Gumas thanked the diverse delegation for their attendance as well as the sponsors and advisory board for their continued support. Worsley welcomed delegates who were new to the event and also those who were amongst the 300 who attended the inaugural event 18 years ago. The conference programme started with A Bird’s Eye View looking at the global and European investment landscape. Elizabeth Winkle, Managing Director, STR Global presented with notable points being that Europe had seen 18 months of consecutive RevPAR growth and demand in Europe was back to that seen in the early 2000s. The capital markets perspective was provided by Roy H. March, Chief Executive Officer, Eastdil Secured. Chris Day, Managing Director, Christie + Co concluded with a positive speech which noted that European yields are still very attractive and there are «no signs that hotel transactions will lessen across the whole of 2015». He expects to see a rise in secondary transaction markets and observed that lower oil prices will boost travel and tourism. The session concluded with Day saying «hotels continue to offer great value and very solid investment returns for innovative buyers».
Next on stage in the Potsdam Ballroom was “Riding the Investment Cycle” hosted by Simon M Johnson, Specialist Markets, CBRE, in discussion with Andreas Loecher, Union Investment Real Estate, Puneet Chhatwal, Chief Executive Officer, Steigenberger Hotel Group, Federico J. González Tejera, Chief Executive Officer, NH Hotel Group and Dr. Edward O. Wojakovski, Chief Executive Officer, Tonstate. Johnson began the session by asking each of the participants “how’s business”? Loecher responded by saying they were quite active with 12 hotels acquired over the last 2 years and he sees the current level of activity continuing as «8 out of 9 funds are interested in hotel real estate assets». Wojakovski response was slightly more guarded and he said «business is neither good nor bad, but challenging and unpredictable». Johnson asked the panel whether they were finding opportunities to buy to which Wojakovski responded that the current environment is both a good time to buy and also a good time to sell and this rarely happens in the hospitality industry. On the subject of branding the panel were largely in agreement that brands did add value to properties. Wojakovski stated that «a brand is a good instrument to fill a (bed)room particularly for what is a generic product». Johnson then asked the panel how they generated their business to which Chhatwal replied that «if used wisely, OTAs add considerable value to companies of our size», but that it remains «a challenge to get the cost of distribution under control». González said that the industry was «too obsessed with OTAs» and he preferred to view it as direct vs indirect business. From that perspective he was happy to announce that NH get more than 50% of business directly.
The first day concluded with the much anticipated panel “Colliding Megatrends: Innovation, Disruption and Sharing – The Challenge of Change” which was chaired by Michael Hirst, Consultant, CBRE Hotels. First to the stage was Leo Johnson, Partner, PwC; Author of “Turnaround Challenge: Business and the City of the Future”. Johnson focused on how we should use technology to create real connectedness and that this connection should be real and not virtual. He also highlighted the significant opportunity for the sector to provide local knowledge to guests. «Local knowledge is really prized» and «there is huge economic potential in exploring ways in which to deliver this». He encouraged us all to «make the real more fun than the virtual». Dr. Graeme R. Codrington, International Director, TomorrowTodayGlobal followed with a look into the future. He began with the startling statistic that there are over 400,000 people in the world who are currently over 100 years old and this figure is only going to increase. Increased longevity is a considerable factor when looking at future proofing business as it not only impacts guests but also employees. He also noted that if you were born in the 1990s there is an 80% chance that you will live through three centuries.
Codrington talked at length about the availability of being connected and that, with the development of cheap smart phones and free Wi-Fi as standard, connectivity was not reserved for the rich but available to everyone. He believes we are entering a golden age of technology and we need to consider how we respond. Firstly to change the way we think and unlearn the existing beliefs that shape our system. Secondly to «sort out our technology» by which he pointed to the fact that approximately 70% of senior executives don’t have personal social media accounts and this indicated a serious lack of engaging with technology. Thirdly he encouraged us all to experiment more and finally to deal with the limiting orthodoxies that we are surrounded by. Vivek Badrinath, Deputy Chief Executive Officer, Marketing, Digital, Distribution & IT for Accor talked to Michael Hirst about the digital changes the brand are embracing. Badrinath has a budget of $225m for investment in digital developments for Accor. Hirst asked whether Badrinath considered the sharing economy a friend or a foe? He replied «it is an inspiration and a flashlight on things that are changing». The final speaker in this session was Chip Conley, Head of Global Hospitality & Strategy, Airbnb. Conley owns 18 hotels but sees himself as a student rather than an hotelier or technologist. He says that Airbnb are focusing on localisation and experience and that he has tried to bring inconsistency to the company. Hirst asked whether Airbnb was a hospitality or technology company. Conley replied that he wanted to take the tech company that it originally was and turn it into a hospitality company. 20 million people used Airbnb during 2014 and Conley sees the company as facilitating travel, especially in the developing world where, for example, a hotel stay for a family of five would be unaffordable and impractical but staying together in an apartment makes travel and adventure accessible. He said that the empty nesters are their fastest growing segment as couples find themselves with two or three spare bedrooms and want to experience «kitchen table diplomacy». His philosophy is to «stay humble, stay curious and continue to learn». Hirst then brought the speakers back to the stage for a few concluding questions including the speakers key message to the hotel investment audience. Badrinath reassured them that Accor were embracing the coming digital changes and had $225m to invest in innovative technology. Conley asked the audience to consider whether they were transactional or legacy investors. On the future of the hotel industry, Johnson said «the small can become the massive small» and Codrington said that organisations needed both depth and breadth to be successful. He advised that a «mix and match of skills» was preferable and warned against boards of directors with 30 years’ experience all in the same industry. Hirst concluded by asking them where they would like to be. Codrington replied that his ideal was a «personalised world with as much access and connection and disconnection as I want». On whether investing in hotels was a sound business decision, Conley said that «there is always going to be a place in the world for hotels. I would continue to invest in hotels but only those who are smart about investing in technology».
A new report, launched today by Grant Thornton finds that the hotel industry lags behind others in adopting technology to meet customer demand. It means hotels are now playing catch up, and must put mobile technology at the centre of their customer experience to compete in the “sharing economy” where services such as Airbnb are challenging the traditional business model. However, Grant Thornton cautions against de-humanising the hotel experience, stressing the importance of balancing technology with the customer touch people still value.
InterContinental Hotels Group (IHG®) today announced the signing of three Holiday Inn® brand family hotels in Germany. IHG signed management agreements for Holiday Inn Express® Berlin – Alexanderplatz and Holiday Inn Express® Munich – City West with UBM, and a franchise agreement for Holiday Inn® Essen – City Rathaus with Tristar Management GmbH. IHG also opened Holiday Inn® Frankfurt – Alte Oper yesterday under a management agreement with UBM.
CBRE Hotels announce they have completed the sale of six hotels across Spain on behalf of Melia Hotels International to US based Starwood Capital Group for €176 million. The hotels, all branded under Melia’s Sol brand, are located in popular Spanish tourist destinations. A recent report by CBRE Hotels into the Italian hotel market found the total volume of hotel transactions in Italy exceeded €500 million during 2014. This positive trend is set to continue in 2015 as strong international investor interest for the Italian marketing continues to gain momentum. The group has recently appointed Francesco Calia to lead the hotels business in Italy.
Accor have today announced that the first Adagio will open in Frankfurt in 2016. This will be the fourth Adagio in Germany and its location, close to the Frankfurt Exhibition Center, will make it particularly attractive for business travellers.
Best Western announced, during IHIF 2015, the launch of two new hotel development offerings. The first, a boutique, technology-centric and stylish offering, Vīb, has been created to meet the needs of today’s traveller. Vīb will provide in room work spaces, gaming pods, a large relaxation area and 24/7 grab-n-go food and beverage stations. Also announced was the groups first soft brand, the BW Premier Collection, which will consist of carefully selected high-quality hotels in primary markets. The first hotel has already joined, the Hotel Mäster Johan, in Malmö, Sweden.
Oaktree Capital, a leader among global investment managers, has launched BEYONDER – the new Aparthotel concept. The group currently have ten properties, with over 945 apartments, in major cities such as London, Edinburgh, Aberdeen, and Dublin, right in the heart of the business and cultural district and are actively looking for further investments in the UK and Western European properties, either by way of forward commitment to brand new developments, conversion opportunities or currently trading buildings.
Carlson Rezidor announced its continued development across Africa by confirming the historic Radisson Blu Hotel du 2 Février will open in Lomé, the capital of Togo, in late 2015.
A new report from Christie + Co, suggests southern European countries may be able to reach a turning point as improving trading will make them a focus of investment activity in the next few years.
The hotel industry is going through a period of unprecedented, irreversible change. A new Grant Thornton report sheds light on some of the questions facing the sector – how will hotels attract the business and leisure guests of tomorrow? How can they compete in a digital world? And what will their future business models look like? Drawing on interviews with international hotel operators and futurists this report provides guidance on how to prepare for the customer-led economy of 2020.
Hilton Worldwide used IHIF to announce the European debut of Curio – A Collection by Hilton. The Reichshof Hamburg and Rumeli Han Istanbul are currently undergoing major renovation and restoration and due to open in 2015 and 2017 respectively. Hilton announced today that they have signed an agreement to open the largest Hampton by Hilton. The 344 bedroom hotel will be located in the central Alexanderplatz area of Berlin and will open in 2018. The group also announced the opening of the first Hilton hotel in the Democratic Republic of Congo. The Doubletree by Hilton, previously the French embassy building, is due to open in Kinshasa, the capital of the DRC.
InterContinental Hotels Group (IHG®) today unveiled at IHIF its ‘next generation’ guest experience for the Holiday Inn® brand in Europe. Based wholly on guest insight, Holiday Inn Express’s next generation is being developed with industry-leading experts to meet the changing needs of today’s European ‘Smart Traveller’. In order to stay ahead of this target guest’s expectations, the overall guest experience, the design of the hotel lobby, dining area and guest rooms are being revolutionised, the brand’s service delivery completely revamped, a new food and beverage concept tested and the latest technology piloted. The ‘next generation’ for Holiday Inn Express will be launched in Europe and adapted for new build hotels and properties undergoing renovation. IHG® also announced today at IHIF the signing of a multiple development agreement (MDA) with Interstar to develop 10 hotels by 2019. The first hotel under the agreement to be signed is Holiday Inn® Frankfurt – Airport. IHG’s growth strategy continues to gain momentum in Germany with over 85 hotels currently either open or planned under MDA agreements.
JLL Hotels & Hospitality Group announced at IHIF 2015 they have been appointed sole agent to sell London’s iconic JW Marriott Grosvenor House Hotel. The hotel is Mayfair’s largest with 494 bedrooms and spans 56,700 sq. m. in total. The group also announced they recently advised on the sale of Le Méridien Munich hotel which represents the largest single asset hotel deal in Germany for 15 years. The hotel was sold for €158 million to German open ended property fund DEKA I. A recent report by JLL Hotels and Hospitality Group found Europe to be the world’s most attractive hotel investment destination. Strong returns, fair value and availability of debt will all contribute to EMEA seeing close to $25billion in hotel transactions in 2015 as projected by the group.
Jumeirah Group, the global hotel company and a member of Dubai Holding, has signed a management agreement with Targets Investment Turizm Isletmeleri AS to operate a luxury hotel in Bodrum on Turkey’s Aegean coast. The group also announced it has signed an agreement with His Highness Sheikh Suroor bin Mohammed Al Nahyan to operate a luxury Jumeirah resort on Sa’adiyat Island, Abu Dhabi. The group also announced the first deal for its new contemporary lifestyle hotel brand, Venu™, following the signing of a management agreement with Meraas Holding. The Venu Bluewaters Island Hotel, off the coast of Dubai, together with adjoining serviced residences, will be operated under the Venu Living brand.
Marriott International announced today that it expects to triple in size across Europe by 2020 to reach 150,000 signed or opened rooms. The statement follows a record year of development in 2014 and will mark a substantial increase from the 40,000 it operated in 2010. The group has also pledged to create 20,000 career opportunities for young people aged 16-25 by 2020. Also announced during the conference were plans to open 2,700 Moxy hotel rooms in key cities throughout Europe by the end of 2016.
Pandox‘s new asset management company, Pandox Asset Management, has signed an agreement with the Norwegian property company Eiendomsspar AS, which also owns 50% of Pandox AB, to assume the management of the majority of Eiendomsspar’s hotel properties. The commission includes eight hotel properties with a total of 1,500 rooms, all of them in Oslo.
Starwood Hotels and Resorts have announced plans to grow their portfolio by more than 40 new hotels and resorts across Europe over the next five years. This represents an approximate growth of 30% of its portfolio in both fast growing and established markets.
Steigenberger Hotel Group announced they plan to restore the first ever hotel that group founder, Albert Steigenberger originally acquired in 1930. The Europäischer Hof Hotel in Baden-Baden is scheduled to undergo extensive renovation and modernisation and will open in 2017. The group also announced the launch of its third hotel brand, Jaz in the City. Each hotel will reflect the city’s culture, style and atmosphere and feature work from local artists and musicians.
Worldhotels announces the expansion of its portfolio with Worldhotel Wings, a brand-new business hotel located at Rotterdam The Hague Airport. This will be the first branded hotel for Worldhotels in Rotterdam and will open on 21.3.15.
Day 2 : the industry is in an exciting place, “a golden era”
Berlin, March 3. The “Economic Overview” presented by Andrew Kenningham from Capital Economics discussed the global and European markets. The key points from this session included the warning that one of the main risks to the Eurozone was deflation as this would make paying down debt harder, especially in an area which currently has a large amount of debt. He spoke of the growth in the BRIC emerging economies and how the rapid growth in China, which was mostly supported through huge lending, has stabilised slightly to a more sustainable level.
The presentation of the “Lifetime Achievement Award” was made by Ömer Isvan, President, Servotel to Barry Sternlicht, Chairman and Chief Executive Office of Starwood Capital Group. During the interview which followed the presentation, Sternlicht said: «I love the hotel industry because people are involved. There is creativity and it’s a team effort and you are always trying to surprise the guest. At the end of the day, it’s all about people». Sternlicht feels like the industry is in an exciting place, “a golden era” and enjoys staying in independent hotels. He believes there are still many opportunities available and to optimise these, you need to appeal to a demographic and there are many demographics that are not currently represented by the existing hotel brands.
This was followed by the presentation of the “Young Leader Award” to Greg Bows, Founder and Managing Director of African Impact. The award was presented to Bows by Chad Crandell, President of the International Society of Hospitality Consultants (ISHC) who said that this year’s «nominations were nothing short of spectacular». Bows was described by his sponsor at African Impact as «someone who provides truly unique and mind blowing experiences».
The ever popular CEOS’ panel concluded the general sessions for the morning. Chaired by Arthur de Haast, Global Chairman Hotels & Hospitality Group, JLL, in discussion with Sébastien Bazin Chairman and Chief Executive Officer, Accor; Stephen P. Joyce, President & Chief Executive Officer, Choice Hotels International; David Kong, President & Chief Executive Officer, Best Western International; Gerald Lawless, President & Group Chief Executive Officer, Jumeirah Group and Arne M. Sorenson, President & Chief Executive Officer, Marriott International, Inc. Notable points from this session included consensus amongst all participants that 2015 looked optimistic for the industry globally with lower oil prices and interest rates contributing to this. Lawless commented that Jumeirah are trading at between 82-85% occupancy on an annualised basis in Dubai and have average rate of upwards of $600. The company is looking at growing from 82,000 keys to 150,000 in 2020. When considering China and the 300,000 of the global 1.3 million rooms in the development pipeline coming from there, Bazin believes that the partnership recently agreed with Accor, Huazhu and China Lodging will be the key to their success in the region. «I don’t believe in competing with the Chinese operators. You need to be there, you need to be visible so the decision is to partner and then you must decide who to partner with«. Kong strongly believes that «people are looking for experience when they travel» and being able to provide this is a significant part of success. Looking at technology, Sorenson feels strongly that it is important that people get value from booking directly with them and referenced the recent move to provide free Wi-Fi to all Marriott members when they book directly. Lawless said if «technology is not helping to personalise the customer experience, it is not working». He said that converting the 10 million hits on the Jumeirah website last year into as many direct booking guests as possible was one of the company’s priorities. Finally when asked whether Airbnb was impacting the sector, Joyce said that they were big with millennials and «that is something the hotel business should be looking at as it is very relevant for our customer set».
News from the event included Choice Hotels announcing an agreement with SiteMinder, the leading cloud platform for hotel distribution, which will assist international hotels with managing their online distribution. The agreement will allow Choice’s international properties the unique ability to manage their entire room inventory from one central system.
Ecole hôtelière de Lausanne (EHL) announced that the EHL Foundation has set up a holding company to optimize its operations and hence meet the demands of the global hospitality markets. “EHL SA” is fully owned by the EHL Foundation and will manage EHL’s entire portfolio of activities, organized into several specialized business units.
Qbic Hotels announced plans for aggressive expansion in 2015/16. The group intends to spread its acquisition net into Europe, with hot-spots including the likes of Edinburgh, Paris, Rome, Milan, Barcelona, Dublin and a second hotel in Amsterdam. In addition, they will continue to seek new opportunities in London.
InterContinental Hotels Group (IHG®) today announced at IHIF the signing of a multiple development agreement (MDA) with Interstar to develop 10 hotels by 2019. The first hotel under the agreement to be signed is Holiday Inn® Frankfurt – Airport. IHG’s growth strategy continues to gain momentum in Germany with over 85 hotels currently either open or planned under MDA agreements.
Day 3 : 16 “In-The-Round” sessions
Berlin, March 4. The final day of the 18th International Hotel Investment Forum (IHIF), took a new format this year with the introduction of new “In-The-Round” sessions. These were introduced following suggestions from the IHIF Advisory Board to facilitate more intimate and informative discussion platforms on specialist subject areas. Each session was guided by an industry expert who prepared information in advance to share with delegates to enable a worthwhile and useful conversation. The sessions covered a wide range of topics including assessing the reliability of hotel valuations, crisis management, the sharing economy, technology and improving RevPAR among others. The In-The-Round sessions also provided an opportunity for an in-depth focus on specific geographical areas and the hospitality and investment status within those countries. These included Italy, The Maldives, Scotland, Switzerland, Austria, Morocco, Brazil, Ecuador and Macedonia.
News from the final day of the event includes InterContinental Hotels Group (IHG®) announcing at IHIF the signing of Holiday Inn Express® Cologne – City Centre under a multiple development agreement with Foremost Hospitality. Located in the heart of Cologne’s city centre, the 323-room hotel will join Holiday Inn Express Amsterdam Arena Tours in first place as the largest Holiday Inn Express hotel in Europe. The hotel will open during quarter one of 2017. Foremost currently have 16 IHG hotels open or under development in Germany.
HVS released two reports to coincide with IHIF. The first, their annual European Hotel Transactions report, saw European hotel transaction volumes rise to a total of €14.4 billion, an increase of 86% on 2013. This is a record figure since the onset of the financial crisis. The 2015 European Hotel Valuation Index saw Europe’s hotels witness their fifth consecutive year of value growth last year, with properties in the UK and Southern Europe seeing some of the biggest gains.
Foncière des Régions announced the acquisition of 22 B&B hotels in Germany totalling €128 million. The group also announced a €400 million investment target for 2015.
Source : IHIF