On Monday 18 May, “In Sync”, the virtual event from Questex Hospitality launched and welcomed delegates keen to connect with colleagues and peers from across the international hospitality.
Hospitality is a human powered industry, driven by connections, emotions and interactions. Never has there be a more vital moment to join together and share leadership in thought and creativity, hope for the future and celebration of the collective sense of community that this crisis has created.
The event was hosted by Alexi Khajavi, Managing Director EMEA & Chair of Hospitality + Travel Group, Questex Hospitality and Katherine Doggrell, Editor in Chief EMEA, Questex Hospitality who opened the event by inviting the audience to show support for all those in the hospitality sector with a round of applause.
The opening keynote saw Sébastien Bazin, Chairman and CEO, Accor interviewed by Katherine Doggrell. Asked to describe the current experience for Accor, Bazin replied that it was somewhere between “very painful and very rich”. He added; “I’ve had time to reflect, time to reset, time to learn and time to look at the world in a different manner.” Following several articles on Hospitality Insight on the strained relationships between brands and owners, Bazin was keen to state that “Relationships with owners are stronger than ever. As a global company there are lots of different cultures among our owners, but with all of them we are sharing information, offering them advice and someone to talk to. It’s vital that we are transparent and authentic with them – sharing the good news, but also sharing the bad news. It’s a healthy relationship – we have learnt from them, they have learnt from us.”
Bazin confirmed that in many cases, owners are getting the financial support they need from local authorities and added, on the day the business secured a €560 million credit line, that: “Accor is not a bank.” Bazin is spokesperson for the hospitality industry in France and liaising with the government on various elements including sanatory protocol, a calendar for reopening and defining the rebound plan. He believes the “more orchestrated Europe is, the most efficient it is.”
He commented that it was important to be transparent with investors, sharing the good news and the bad news. “March was apocalyptic. As announced this morning, we might have reached the bottom of the pool. There is light at the end of the tunnel when it comes to China and Asia Pac.”
When asked how to make hotels fun again, Bazin replied: “By being thoughtful about what your clients want from you. If they travel, it means they have been reassured in terms of the health and safety issues. They have been on video for the last 60 days and are sick of it! They want to experience new cultures, new gastronomy, new people and new places.”
Listing his current priorities, Bazin said they were to: “Be prudent, stand still, get comfort levels high for owners, re-hire everyone who has been furloughed or made redundant. Anything M&A related is not high on my priority list.”
He concluded with an optimistic statement: “The hospitality sector has been blessed for the last 20 years and will be blessed for the next 20 years. Just be patient for the next 18 months.”
The first panel session of the event was Beacon of Hope: Insights into the Recovery in Asian Markets, moderated by Jileen Loo, Senior Director at CBRE Hotels who was joined by Girish Jhunjhnuwala, Founder and CEO, Ovolo Hotels, Alan Tang, Group Chief Executive Officer, Far East Orchard and Piyaporn Phanachet, CEO, U City PCL.
Jhunjhnuwala was optimistic about the growth being seen in domestic travel and looked forward to the imminent opening of the border between HK and China. The group will focus on the South East Asia and Asian markets as the restrictions lift but he was clear that: “The human element is essential. People want experiential things. They want to meet people. We still believe that the touch of human element is very important” and described the creation of novelties such as a bartender coming to your door or a restaurant in your room concept for those keen to maintain social distances when staying at Ovolo properties.
Alan Tang, Group Chief Executive Officer, Far East Orchard said that: “Singapore will be looking onward towards the domestic market and staycations. Sentosa, the island resort off Singapore’s southern coast, is well positioned to receive guests and we have properties there. The government is working hard and is in talks with Canada, South Korea, Australia and New Zealand to discuss travel arrangements. We’ll need to hunker down for the next couple of months and go after the domestic market for June and July.”
Piyaporn Phanachet, CEO, U City PCL said: “Nothing can replace the experience that you get from travelling but demand will change and so it’s about how we adapt and change our behaviour. No one has a clear answer at the moment. In Thailand, the government and medical professionals are working hard to control the spread of the virus and people are desperate to go out. Many hotels are offering voucher promotion to collect cash. A second tier of travel will come from those countries with a good control of COVID-19 and marketing has begun to those countries.”
Considering the future of the physical meeting, Phanachet said: “In person meeting can’t be replaced with virtual meetings but the frequency of face to face meetings may change.”
Jhunjhnuwala talked of a system of bubble migration that will take place over the next few months, particularly between territories accessible by ferry and encouraged everyone to “keep communicating with international partners”.
In summary, there was cautious optimism for recovery, balanced with reality. Domestic staycation is the sector that everyone is focusing on and lots of work is being done on protocols as well as forming bilateral relationship with countries that are ahead of the recovery curve.
Simon French, Chief Economist at Panmure Gordon & Company delivered the economic overview and opened by saying that the economic contraction will be seven times the contraction experienced during the financial crisis. The acute impact will be felt during Q2 with output in the developed world likely to be down by 20-40%.
He said: “Governments and central banks are stepping in as the insurer of last resort with unprecedented level of borrowing whilst experiencing a collapse in tax revenues and high levels of unemployment.” French believes that the how quickly the economy recovers depends on when labour markets resume.
Discussing settling the bill for this unprecedented level of debt, also discussed in this interview earlier in the month, French feels lesson have been learnt from the 2008 crisis and there was less concern about immediate austerity and an understanding to act now and support people and jobs.
He noted that not every household will be affected the same. “Households who have continued to earn are now desperate to spend (known as forced savers) and will have a latent capacity to go out and spend when it is safe.”
There have been several changes in behaviour, such as an increase in online shopping, which is unlikely to be completely reversed.
Continuing this session, Adam Sacks, Founder and President of Tourism Economics presented an analysis of the travel sector. In his opening statement he said: “Non-essential travel has stopped in its tracks. This situation only has precedent in the Great Depression and WWII but travel spending in the last two weeks has started to pick up.”
Looking to recovery Sacks said: “Everything is contingent upon easing restrictions” and Tourism Economics were modelling several forecasts based on restrictions being lifted over the coming weeks.
On the recovery, Sacks said: “The bounce is going to be dramatic. Travel is going to drive an uptick in global.” Echoing a theme from other speakers, he also predicted a shift from international to domestic trips and countries which historically saw a large number of outbound trips needing to work on converting those to inbound travel.
Sacks believes that the return to “normal” levels of travel will be a multi-year effort and could take until at least 2023.
Jointly taking questions from the audience, first on the concern of countries taking a country-first view, Sacks and French responded that “politicians who take that view are answerable to their electorate and will get voted out as people clearly want to travel.”
Another question from the audience was around globalisation and whether this will be affected by the pandemic. French believes: “the economic forces behind globalisation will prevail. There are strong and compelling reasons why businesses seek globalisation. These won’t be dramatically different on the other side of this. It is in countries economic interest to have open borders. To have a permit closing would be against self-interest.”
The investors panel – Resetting the Risk vs Opportunity Balance – was moderated by Philip Ward, CEO Hotels & Hospitality Group EMEA at JLL in conversation with Cody Bradshaw, MD, Head of International Hotels at Starwood Capital Group, Amal Del Monaco, Head of Sector Specialists at AXA IM – Real Assets, Olivier Harnish, Head of Hospitality at Public Investment Fund, Ramsey Mankarious, CEO at Cedar Capital and Anders Nissen, CEO at Pandox.
Katherine Doggrell shares her analysis of this session on Hospitality Insights.
Anders Nissen, CEO at Pandox said the group had created a: “respond, restart and reinvent” programme at Pandox which involved firstly monitoring liquidity, harnessing the cash available and understanding the required leadership style. The group were starting to see glimmers of hope, mainly in the leisure segment.
Amal Del Monaco, Head of Sector Specialists at AXA IM – Real Assets confirmed they were not considering changing strategy, commenting: “We knew the risks at the beginning.”
Olivier Harnish, Head of Hospitality at Public Investment Fund said: “PIF is a long term and patient investor. We are driven by the 2030 vision for the Kingdom. Tourism has always rebounded. People will start travelling again and that makes us very confident.”
Ramsey Mankarious, CEO at Cedar Capital was optimistic and said: “If you believe as we do, that the hotel markets will recover, now is a great time to buy”
Cody Bradshaw, MD, Head of International Hotels at Starwood Capital Group said: “Europe is going to have the benefit of watching other regions reopen. Our hotels in the US are all preparing to open up in the next 30 to 60 days. Our hotels are already back open in China. How do I operate a viable operation on a seriously reduced occupancy? Some of these changes will be sustainable in terms of profitable, the environment and labour relations.
Del Monaco said: “This crisis is completely different from others we have experienced so far, the origin is different, but the effect on leisure and hotels is the same. Consumers will focus on the most economic segment.”
Considering what will prove most attractive, Nissen said: “Domestic profile, properties easy to reach by train or car. This is where you’ll see the first occupancy and revenue. But I never follow the crowd. If people go to the right, I normally go to the left.”
Harnish said “what will be really interesting will be to observe the behavioural changes that will stick after COVID-19. The essence of our business model is the bring people together, to share an experience, in a rented space. Investment will be driven by behavioural changes. We all agree that virtual meetings aren’t the same but if physically meetings don’t return in the same way then we need to consider how we build hotels.”
On the future, Bradshaw said: “Hotels will come out of this stronger with a much better understanding of which brand standards are essential and which can be removed or improved. We will emerge from this as stronger operators and better investors.”
Mankarious said: “If you’re in this business, you know the ups and downs of it. A hotel is risky but if you don’t have a tenant in an office building then you’re not receiving rent. If you like hotels, you’re drooling today. If you believe as we do, that the hotel markets will recover, now is a great time to buy”.
Concluding and looking at alternative models, Bradshaw said: “Alternative models are rapidly developing and we have already invested in some of these great products. These groups are charging very high rates for who just want to go and stay in the woods, decompress and read a book by the fire. Selina is an example of an exciting product developing in Europe.
However, if it’s too exotic, you may struggle to exit the real estate part of the investment. I would still watch that space of alternative accommodation. One of the biggest things to come out of this will be the re-positioning of assets that have been hindered with legacy brands and operations that are no longer relevant to today’s consumers.”
Turning to hotel performance, Robin Rossmann, Managing Director at STR opened his presentation by confirming: “we are at rock bottom” but was heartened to note that China is now showing occupancy close to 100% over the May holiday weekend with business demand also coming back and showing mid-week occupancy back to 40/50% levels.
STR data showing forward business on the books however, shows only around 30% sold in July and August which is far behind the data trends from previous years and further forwards shows negative pick up for September, October and November. Rossmann defined the longed for recovery demand as the ‘Ketchup effect’ – namely a big blob of demand ready to come out of the bottle. Recovery is likely to be healthiest in markets with more reliance on domestic and less reliance on international travel with full recovery unlikely until 2022.
Michael Grove, Managing Director, EMEA at HotStats continued the analysis and said: “The priority for hotels is to get back to profit”. He delivered a detailed analysis covering a variety of countries and sectors as well as providing guidance on which point hotels break even.
Concluding with a joint Q&A session, questions from the audience included whether the German economic recovery was likely to be as healthy as the country saw in 2008 – unlikely due to the high levels of supply, whether rate was being dropped – there is no active evidence of this at the moment and a final point that the break analysis will continue to evolve over the recovery period.
The final panel discussion of the day – Redefining Owner-Operator-Brand Alignment – was moderated by Andreas Ewald, Founder and Managing Partner, Engel & Völkers Hotel Consulting in conversation with Thomas Willms, CEO, Deutsche Hospitality, Christof Winkelmann, Member of the Management Board, Aareal Bank and Dr Peter Ebertz, Managing Director and Head of Hotels, Art-Invest.
Willms opened by saying there was empathy for all stakeholders: “Real characters are shown in a crisis. Short term, it’s all about liquidity, long term it’s all about stakeholder returns.”
The panel were in agreement that resorts will be amongst the first to reopen and, as all had hotels in Germany, noted that all states in German are being restricted in terms of capacity.
Ebertz said: “they were showing solidarity with the sector and to the operators, but it was still too early to amend terms to a lease contract.” Adding: “I don’t want to make a new one in July and then a new one in August.” He said that they: “Take an individual approach to each property. I’m optimistic that we’ll find solutions for everybody. They might be hard solutions, but we’ll find solutions.”
Willms noted that all the events, conferences, sports fixtures, etc that provided peaks of demand have gone whilst the costs are still high.
On distressed assets, Winkelmann said: “I don’t think there is the need for owners to sell or lose assets at this point, if they have several years of good trading behind them, that will show a strong track record.” This sentiment was echoed by Simon French in an interview earlier this month when he said: “If you can signal this through a long track record, strong parent organisation and/or commitment to events in the future, then this can be a key distinguishing feature.”
Willms believes it will take the industry until 2023/2024 to get back to 2019 levels, adding: “I think it’s important to have a mixed portfolio to strengthen the offering. It’ll be hard for people who have largely business hotels.”
The panel believed that COVID-19 will put a stop to the burgeoning development pipeline in Germany and predicted lots of brand consolidation in the future.
Ebertz encouraged positive messages from authorities around travel to help invigorate the re-starting of the industry.
Winkelmann concluded by saying: “We will go through a very tough time but humankind are very resilient. People will travel again. Will it change? Absolutely.”
Day 1 of In Sync closed with a lesson on how to make the perfect martini , courtesy of Bar Manager, Alessandro Palazzi from DUKES BAR at DUKES LONDON.
In Sync Day 2
On Tuesday 19 May, In Sync welcomed back over 5,000 registered delegates to the virtual event from Questex Hospitality. Following an informative, interactive and entertaining day yesterday Alexi Khajavi, Managing Director EMEA & Chair of Hospitality + Travel Group, Questex Hospitality and Katherine Doggrell, Editor in Chief EMEA, Questex Hospitality launched the second day of the event. In summarising Day 1, they recalled salient points from sessions including confirmation that hotels were still seen as a mainstream asset class by investors who were positively drooling over investment opportunities and returning to the now well-trodden discussion around brands supporting owners during the crisis noting that Sébastien Bazin, Chairman and CEO, Accor had firmed stated, on the day the business secured a €560 million credit line, that: “Accor is not a bank.” Day 1 also heard a lot of discussion around travel bubbles being created to allow travel between countries deemed to be safe but excluding those with high levels of infection. Khajavi felt the reoccurring themes from Day 1 were: “Confidence, optimism and resilience. With the realisation that we are in a bad shape now, but the industry will be back.”
Leading us into the second day was Paul Dallaghan, CEO & Co-Founder of Samahita International Co., Ltd who guided the audience in a 10-minute practice of breath exercises as both a physiological process and a meditative practice.
The first panel session of the day – From Managing Operations in Crisis to Planning for Reopening – was moderated by Russell Kett, Chairman, HVS who was joined by John Brennan, CEO, Amaris Hospitality, Nicholas Northam, EVP International, Interstate Hotels & Resorts and Kike Sarasola, President and Founder, Room Mate Group.
Asked about the immediate concerns, Nicholas Northam cited the pace of recovery and what shape the curve is going to take. Kike Sarasola said his immediate concern was: “That we are not united enough to get our industry going. We are all hitting the ball from side to side when we need to unite.”
Northam said they have half their UK portfolio currently closed with their focus on accommodating essential workers.
Room Mate Group have offered all their closed properties to medical staff and essential workers. Sarasola said: “My company has dedicated itself to helping anybody that needed it in this pandemic.”
All agree they were maintaining a sense of activity although not focusing on normal guests.
Kett asked the speakers where they need to focus their re-opening processes to which Sarasola said: “We have to focus on sanitary. We have to ensure the hotels are COVID free. Hotels that are hosting medical staff are already prepared with screens, PPE, etc.
John Brennan said they were focussing on employee training, safety protocols and practises so staff have confidence in the re-opening process. He said that high touch areas were moving to low touch whilst trying to maintaining the experience of hospitality and they were moving to physical distancing as opposed to social distancing.
Northam said the challenge was managing the hotels with the number of staff we currently have as well as managing the balance between the employees and making the returns for the owners.
In response to being asked how they are keeping a positive cash flow Brennan answered: “by trying to be as flexible as possible and exploring the options around going on and off furlough in the UK.”
Sarasola said that they: “Need more help from the governments as I think we’re all lost” and asked: “Is there anyone out there flying the flag on an industry wide level?”
Asked about physical changes, Northam confirmed they had installed screens, social distancing markers, were keeping guests as far away from employees as possible, for example by utilising remote check in. They were offering breakfast as a bagged and ready to go service and dinner as room service. He said: “The biggest challenge across the board will be that the customer is currently accepting of this level of service. How are we going to manage going back to a more normal level of service with “normal” customers rather than essential workers?”
Sarasola believed that the changes will be largely logistically rather than monetary or physical.
Northam said: “We will try and be as profitable as we can. We are in lots of discussions with the brands and asking what the brands are prepared to do to help support the operators and the owners. Our revenues will be determined, as always, by supply and demand, quality and location. As operators we need to rip up the play book and start again.”
He added that they are firmly following government advice and adhering to guidelines and were being regularly visited by the police who were checking who is staying in the hotels. Employees were also being stopped on the way to and from hotel by the police asking them where they were going.
The CEO Panel – Leaders Redefining Hospitality after COVID – was moderated by Katherine Doggrell, Editor in Chief EMEA, Questex Hospitality who was joined by Keith Barr, CEO, IHG, Federico J González, President & CEO, Radisson Hotel Group and David Kong, CEO, BWH Hotel Group.
Asked about their relationships with owners, David Kong said that with 70% of staff having been furloughed, the owners were in dire straits. Best Western have offered fee reductions and, in some instances, fee waivers and were offering operational support in preparation for reopening. He confirmed the fee waivers would be in place throughout May and the group would be monitoring the situation going forward.
Federico González said Radisson were sharing as much information as possible so every owner could get ready to open as soon as the geography allows.
Asked specifically where owners are asking for assistance, Barr replied financial support, assistance in lobbying governments and a clear understanding of hygiene standards. He added: “it’s great to have collaboration with owners.”
All panellists agreed there was security in brands as they are already known for safety and security. With González pointing out that: “We need to give the consumer a common message.”
Kong suggested there was “a war on cleanliness” between the brands, “which is a good thing” and added that: “Cleanliness is going to be extremely important. Guests will see visual cues – screens, distance markers – to reassure them.”
Kong suggested that between 50-100% more time would be spent cleaning rooms which was “a necessary investment but it’s required to provide comfort and reassurance.” When asked whether Best Western will be helping with the cost for this additional cleaning, he said: “We have provided some flexibility.”
González believes the consumer is going to be ready to pay a premium to prioritize safety and Barr agreed saying: “The number one thing on consumers’ minds is safety. As an industry in travel and tourism, we need to work together to make the customer journey safe. It will be a collective effort.”
Asked what is driving the re-opening Barr said that other than government mandated re-openings, it was up to the owners. González said the issue facing Europe is the lack of clarity when travel will restart and when borders will reopen.
Kong agreed saying: “there are a lot of considerations that owners have to make but we are not dictating when they have to open.”
Asked whether there will be a difference in the response of the sector to the OTAs this time in comparison to after the financial crash Kong replied: “I would hope so but everyone is trying to survive.” González believes that the quantity of the inventory the OTAs carry means it’s hard to engage in the safety protocols. “We need to work together as an industry to spread the safety standards across the industry. Trust in the hotel will be even more in demand in the future. There will be more direct calls from the consumer to the hotel to understand the safety and so more opportunities for the consumers to reach the hotel directly.”
González believes profitable depends on a cure or a vaccine and said: “We’re unlikely to be a situation like 2019 until at least 2022.”
Acknowledging that domestic business is the focus because of the challenges around international long-haul, Barr said: “People want to travel and when markets open, people will travel. In the meantime, we’re staying well connected with our loyalty members and trying to have some fun with them.”
Commenting on his recent meeting with President Trump, Kong said: “I was very reassured by my recent meeting with President Trump, he was extremely understanding and supportive.”
Turning to sustainability, Barr said: “I think we will continue to innovate from a sustainability point of view. To say that sustainability isn’t important just isn’t true. It’s going to be much more comprehensive than just a carbon footprint.”
González said: “Radisson always considered planet, people and communities. We need to make sure all the safety protocols are sustainable with the environment. Hotels across the world have gained a huge amount of credibility. Sustainability efforts need to focus not only across the planet but also across people and communities.”
Simon Vincent OBE, President Europe, Middle East & Africa, Hilton joined Nick Van Marken, Managing Director, Van Marken Ltd to discuss “Supporting Change: When Hospitality Works with Governments to Prepare for the Future”. In his opening comment Vincent said: “We have come through the fire fighting stage. The real challenge is getting working capital back into the hotels and generating demand.”
He said that: “By and large the governments have responded reasonably favourably, we have leveraged existing relationships with associations like WTTC and various government relations department. This is a defining time for hospitality.”
He added: “It is extremely hard to co-ordinate across territories. As we come out of the crisis, this is where we are looking for co-ordination. We have been working with governments to make sure we are at the forefront. A lot of governments have taken our guidance and built it into policies.”
As also mentioned earlier in the programme, Vincent said: “There is the age old problem that the travel and tourism is sector is so fragmented and governments often criticise that it doesn’t talk with a unified voice.” Vincent and his peers have been working with the World Tourism Council, UKHospitality, the CBI and WTTC as well as other industry bodies to co-ordinating the industry and respond to government.
He acknowledged that: “Our business is going to be principally domestic in the short term and that is where we are gearing up.”
He said the group were focussed on installing confidence in customers and had launched a number of initiatives in relation to cleanliness. As has been noted often, he is well aware that people will remember how they were treated during the crisis and as such is engaged with regular and open dialogue with owners.
He added: “We have got to be realistic with how we approach the recovery. We’re looking at every single cost that is going into the business and we know we have to be flexible with owners.”
Concluding, Vincent believed demand was still there, although: “I think a V shape recovery is off the agenda but we have witnessed incredible levels of pent up demand.”
Exploring how the OTAs were adapting and responding to the crisis, Cyril Ranque, President, Travel Partners Group, Expedia Group was interviewed by Carine Bonnejean, Managing Director – Hotels, Christie & Co.
Ranque opened by saying they were “starting to see some bright lights. It’s like coming out of a long tunnel. We’re starting to re-connect with partners to discuss how we can re-start our industry.”
On innovation and lessons learnt he said: “This crisis has helped us see through the clouds and simplify. We have automated a lot of our processes that were manual before.”
On relationships with partners, namely brands and owners, he said these were stronger than ever. “When we all face a steep wall, you come together to scale it. As an industry, we need to collectively rebuild trust in travel, and remove fear.”
Ranque believes the major trends to transform travel and hospitality will be cleanliness and hygiene measures and said: “There is a big initiative to build transparency with consumers around this initiative. Contactless check in and check out will make the experience lower touch for consumers.” He also believes we will see a destination shift: “A chance for regional diversification where there is lower density. Now is the time to build online marketing around these destinations.”
He believes mid-market hotels will have to re-invent themselves but is reassured that the appetite for travel is not going away.
The final session of Day 2 and the closing panel of In Sync was ‘Diversification of Hospitality and Hotelisation of Real Estate: A Safer Way to Recover from the Crisis?’ moderated by Yousef Wahbah, Managing Partner, Global Hospitality Leader – MENA Real Estate, Hospitality and Construction Sector Leader,EY in conversation with Laura Brinkmann, Vice President at Brookfield, Peter Heule, CEO at Short Stay Group & Yays, Puneet Kanuga, Head of Hospitality Investments at Queensgate Investments LLP, Huburt Viriot, CEO at Yotel and David Kellett, Senior Director, Hotel Transactions, at Invesco Real Estate.
Laura Brinkmann opened by stating that: “Those that will be winners will be hospitality operators who manage to navigate the difficult landscape to allow for social distancing rules and protect those in their properties.” She believes the effects of the crisis won’t be long-term as the last few decades have seen people come together and enjoy travel. She said: “I would expect to see the hostel sector bounce back sooner rather than later. There will be a short term and difficult environment to navigate but long term there will be some winners in this space, namely those catering to young and keen travellers, who have been least affected by COVID-19.”
David Kellett felt that whilst social distancing measures go against what a good hospitality experience is, if you’re an optimist, there are plenty of opportunities for investment available.
Huburt Viriot said: “COVID-19 is accelerating trends we are already seeing – less contact with guests, more IT, grab and go replacing room service, new house keeping protocol and going cashless.” He believes travel will rebound but travel budgets will change.
Peter Heule said: “Hospitality is about real people – it’s about experiencing a city. The real estate is a way to showcase the hospitality.” He referenced data showing Europeans will be quicker to return to a “normal” state with the average length of stay in serviced apartments will further increasing. He said: “I see a bright future for serviced apartments”.
Puneet Kanuga said the medium age of their Generator hostel guests is 24 and this demographic was not impacted by crisis and keen to travel.”
Asked about whether investment in hospitality has been damaged, he said: “Fundamentally, nothing has changed from our perspective. This is a short term issue. The sector will come back”. He believes there will be a “flight to familiarity” with this environment not being conducive to fly off to more exotic sectors as that could be riskier.
Kellett said: “We have gone right back to the start of the cycle. This is a great opportunity to continue building a portfolio. We are investing for the long term.”
On lending Brinkmann said that: “lenders are very cautious at the moment and will need time to get comfortable again with hotel lending again.”
Rounding up the event, Khajavi and Doggrell observed the resilience of sector and the willingness of owners to adapt their business to whatever is required. Doggrell commented that prior to In Sync she had assumed hostels would be amongst the last of the alternative asset classes to come back after the crisis due to the shared nature of most of the facilities but as Brinkmann had pointed out in the last panel discussion, those serving young travellers, less affected by the pandemic and with a willingness to travel actually stand to be well positioned when the shutters come off.
Khajavi noted that with an acknowledgement of shared pain also comes shared opportunities in the long term and once again pointed to the acceleration of trends, including digitalisation, sure to be an outcome of the pandemic.
In conclusion both were sure that the positive response of the hotel sector through the crisis, through their support of key workers, provision of meals to essential employees and general reassertion of their role in the community would result in an improved perception of the industry by the general public.
Source : Questex Hospitality