Editors recap the opening day of the International Hotel Investment Forum with takeaways, quotables and more highlights from the event.
BERLIN—General overall optimism with a slight edginess about the future fueled the discussions during the opening day of the 20th annual International Hotel Investment Forum.
More than 2,000 attendees crowded the Hotel InterContinental Berlin to take in a program of all general sessions that looked back on the past two decades in the industry and pushed the 26 speakers on the docket to gaze into their crystal balls for the next 20 years.
As key metrics—revenue per available room, hotel transactions volumes and yield—all tighten slightly, at least in Western markets, hoteliers and investors were urged to understand the multifaceted nature of the industry and to provide new groups of consumers what they demand. Those new travelers might be Chinese, they might have disabilities, they could still be baby boomers with seemingly unlimited disposable incomes, but whoever they are, the hotel industry contains sufficient opportunities and products to cater to emerging revenue generators.
During a panel session titled “Hotel investment today,” Andreas Scriven, international managing director and managing director at business consultancy Christie & Company, underlined that a key trend in the industry is, “is the adaptability of the sector, how it reinvents itself, (and) its ability to repurpose is very impressive.”
At another panel, titled “The next 20 years: A collective look at the hospitality investment landscape,” Cody Bradshaw, SVP and head of European hotels at Starwood Capital Group, said that for the future “investment strategy requires knowing the consumer group that you most think will stay with you over the long term.”
Quotes of the Day
“In an industry that has elements that want to commoditize the brands, it’s important that we have brands that mean something.”
—Richard Solomons, CEO, InterContinental Hotels Group
“You have to continue to invest through the cycle. The worst outcome is to stop and wait a couple of years. What will happen then is everybody will race past you.”
—Alison Brittain, chief executive of Whitbread.
“(The Marriott buy of Starwood) is a starting point for something we have to build. … rather like President Obama receiving the Nobel Peace Prize in his first year in office, a promise of hope, rather than an active achievement.”
—Arne Sorenson, president and CEO of Marriott International, speaking about Marriott’s purchase of Starwood Hotels & Resorts Worldwide as he collected the IHIF Lifetime Achievement Award on the first day of the 2017 edition of the conference.
“The fad is millennial travel, but arguably that group is the least compelling. They are earning about 10% less than their parents and have far higher student debt. So if you are going into developing something for millennials, you have to go in knowing they will probably have less spending power.”
—Cody Bradshaw, SVP and head of European hotels, Starwood Capital Group.
Photo of the day
Tweet of the day
Data point of the day
IHG has seen annual revenues grow to $1.6 billion from zero five years ago, according to Solomons.
Slide of the Day
There was a mix of the usual topics and unique conversations that made the discussions broad, engaging and just a touch more optimistic than not. From U.S. President Donald Trump to technology to branding, the opening session crammed a lot of information into a short period.
Capital Economics’ Roger Bootle seemingly hit on a consensus early when he said the world economy was doing okay and that it would treat the hotel industry pretty well overall. Transactions—ultimately the reason most of the delegates trekked to Berlin to hear about—were also center stage, and Philip Ward, CEO of hotels and hospitality for JLL’s EMEA region, shocked no one when he said deal volume in 2017 should mirror 2016.
Trump’s name was invoked a number of times during the session, and Marriott International President and CEO Arne Sorenson made it clear there are some issues with some of Trump’s policies—as well as those of other countries. “Far too many countries, including my own, are turning far too inward,” he said after receiving the conference’s Lifetime Achievement Award. Sorenson added that the growing waves of nationalism and populism are coming at the wrong time for hotels because more people than ever are traveling, and by looking inward, many countries are turning away revenue.
But it was branding and technology that stole the show. The debate about the value of brands reverberated throughout the day, but Desmond Taljaard, managing director of hotels for investment firm London & Regional Properties, was the most provocative when he said the economics of branding will come under more scrutiny when the cycle of “old school franchise agreements” expire: “I’m beginning to wonder who is benefitting from all of this hard work.”
The icing on the cake was the constant chatter about technology. Ten years ago, that was a topic that you wouldn’t find anywhere near a hotel investment conference. Now, it’s front and center. From robotics to distribution channels, speakers addressed issues that clearly put the technology topic smack in the middle of the C-suite.
—Jeff Higley, editorial director
The overriding message of the first day of IHIF was the requirement for suppleness, but a second was to keep one eye on the political sways of Europe. Elections with a strong element of populism could sweep across the continent, as they might be accused of already having done so in the United Kingdom (not to mention events in the U.S.).
Bootle of Capital Economics and L&R’s Taljaard—both politely and firmly euro skeptics—in different ways sincerely laid out the case for the U.K. moving on very happily without being a member off the European Union.
One wonders how that sat with a crowd with a large number of French and German participants, the two main countries that sit most comfortably on the federalist camp of the 28 member nations.
—Terence Baker, senior reporter, Europe