More than 2,000 delegates from 73 countries gathered in Berlin last week for the International Hotel Investment Forum at the Hotel InterContinental. Janet Harmer reports on the highlights
There is a very real chance the UK will leave the EU following the referendum on 23 June.
That was the very clear message from economist Roger Bootle, chairman of Capital Economics. However, he was not so decisive about whether the UK will be better off leaving or remaining in Europe.
"Some economists believe the UK could lose up to 12% of GDP if we leave; while others say we could gain 12% of GDP by staying," he told delegates. "The honest economists among us don't know what the consequences will be."
Bootle highlighted that some of the gains of Brexit included savings in EU contributions, less regulation, the ability to strike new trade deals, a new skills-based migration policy and a boost to confidence and investment. The losses could be tariffs on export to the EU, loss of access to the single market, damage to the City, lower population growth and a drop in foreign direct investment.
"I don't think it will be a disaster if we leave. Some say it will be a major blow to the City if we pull out, with a number of banks moving their headquarters to Paris or Frankfurt. This would have a major impact on hotels and employment in the capital, but the idea that this is going to happen is frankly bonkers.
"I believe a trade deal will be struck as there will be an incentive to reach an agreement on both sides. The real big issue of Britain leaving will be the consequences for the future of the EU. The EU could unravel," he warned.
- A survey published during IHIF by law firm Berwin Leighton Paisner showed that 54% of hotel industry professionals believed that Brexit is likely to adversely affect revpar and mergers and acquisitions activity in the UK
IHIF Lifetime Achievement Award Dieter MÁ¼ller (pictured), founder and chief executive, Motel One
IHIF Young Leader Award
Ben Justus, founder, EGBOK, a charity that helps underprivileged young adults in Cambodia through education, training and employment opportunities in the hospitality industry
HAMA Europe Asset Management Achievement Award
London & Regional for its work on the sale in October 2015 of the 197-bedroom InterContinental hotel, Dublin, which the company had bought just over four years earlier
The impact of Airbnb - global CEOs discuss
Airbnb is not a threat to hotels because it is a lodging business, not a hospitality business, according to the boss of Hilton Worldwide.
Chris Nassetta, president and chief executive of Hilton Worldwide, said he was not afraid of Airbnb. "The type of business run by Airbnb has been around for centuries - it is just that now a lot of efficiencies have been brought to it," he explained.
"I've used HomeAway [a USA-based rental site] for 30 years, but I'm still a solid hotel user. We are in the business of hospitality and not lodging - it is quite a different operation. Airbnb is focused on longer stays, leisure and a value experience. We offer a core business, wrapped up in unbelievable hospitality." However, Nasetta added that he recognised that Airbnb has created new travel opportunities.
Representing InterContinental Hotels Group, Richard Solomons said that there were some parallels between Airbnb and IHG. "We have an extended-stay brand, serviced apartments, Holiday Inn Club Vacations - all great products that compete with Airbnb."
However, Wolfgang Neumann, president and chief executive of the Rezidor Hotel Group, warned that 10 years ago the hotel industry didn't take online travel agents seriously. "We should stop discussing Airbnb as a fluffy sharing operator - it is not, it is a business and the same rules need to be applied to it in order to ensure fair competition."
The panel was completed by Geoff Ballotti, president and chief executive of Wyndham Hotel Group, and Frederico J Gonzalez Tejera, chief executive of NH Hotel Group.
A platform for new brands
Three new hotel brands were given the opportunity to showcase their credentials in front of a panel of industry experts: Jaz in the City, an upscale brand from German company Steigenberger Hotel Group; Canopy by Hilton, operating in the upper upscale sector for Hilton Worldwide; and luxury brand Evado from Dubai-based Meeras Holding.
The judging panel was made up of Alex Campbell, partner at law firm Fieldfisher, Tarna Schmidt, director of FREO group, and Kevin Underwood, principal, master planning and designing at HKS.
Jaz in the City Frida Hansen, director of business development, Steigenberger Hotel Group
With its tagline of urban, snazzy and jazzy, this brand is being developed with a strong focus on music, bars, art and its people, who are called "the band". Its first hotel has already opened in Amsterdam and there is the potential to open in London and other international cities - initially through management contracts and leased properties to ensure brand alignment.
Jaz in the City will offer an average of 150 bedrooms, each measuring 24 sq m with a development cost of around £120,000 per key.
Verdict The pre-opening costs of Jaz in the City were described as offering "value for money", while the design was deemed cool and quirky.
Canopy by Hilton Gary Steffen, global head, Canopy by Hilton
The new 'accessible lifestyle' brand fromHilton Worldwide will open its first hotel with 112 bedrooms in Reykjavik, Iceland, in June. A London hotel will launch in 2018. Growth will be via management and franchise agreements, with an average room size of around 27 sq m in London or 35 sq m in Dubai and a development cost of around £150,000 per room in the UK.
Verdict The opening costs were deemed to be high, but this is as a result of tapping into Hilton Worldwide's marketing and PR machine.
Evado Cherif Hosny, chief hospitality officer, Meraas Holding
Targeted at high net-worth individuals, Evado will be a luxury boutique brand offering an intimate curated experience. Three properties are currently under construction.
Meraas will be both the developer and operator in Dubai, but will work with third-party companies to take the brand internationally. The average number of rooms, each measuring 50 sq m, will be between 40 and 80 per hotel. The development costs will be around £460,000 per key.
Verdict There were concerns about whether the brand would be commercially viable with its high development costs beyond Dubai.
The distribution challenge
The fast-changing digital landscape is providing an ongoing distribution challenge for hotel owners and operators. How this affects hotel strategies was discussed in a session chaired by Ufi Ibrahim, chief executive of the British Hospitality Association.
Terri Scriven, industry head of hospitality at Google, said 37% of people now book their travel online, of which 25% go through online travel agents (OTAs) and 12% book direct.
"Users look at 28 different sites when they plan their travel arrangements," she told delegates. "People tend to look at their phone 150 times a day on average and 40% of travel searches happen on a mobile device."
Cyril Ranque, president, lodging partner service at the Expedia Group, said the demand for travel coming from so many different geographical regions makes it enormously complex to analyse consumer habits.
Peter Verhoeven, managing director EMEA at Booking.com, noted that consumers fall into two categories: those who book at least six months in advance and those who confirm their arrangements 48 hours before travelling.
As mobile is the fastest-growing bookings channel, "investing in mobile is critical" said Osama Hirzalla, vice-president of marketing and ecommerce at Marriott International.
Hotels need to engage with their guests, explained Carl Oldsberg, vice-president of international operations at Choice Hotels. "It's about engaging with customers on their level."
With regard to independent hotels, Scriven said they had been helped by OTAs, but that it was increasingly competitive for them to be found through online searches. "It is very important that these hotels ensure their organic search optimisation is up to scratch, using the right locations and targeting specific audiences."
Global threats: keeping your guests and hotels safe
A session headed 'Global threats: keeping your guests and hotels safe and secure in turbulent times' could not have been more timely. Just a few days earlier the German government has announced that the country was under high alert from a terrorism threat. In a sobering session, Helen Loughborough (pictured), vice-president of global safety at InterContinental Hotels Group and a former major who served for 20 years in the British Army as an intelligence officer, said it was a reality that "hotels the world over remain in the sights of those who wish to do us harm."
She said fighting the enemy in the British army had been relatively easy compared to working in hotel security, where the approach has to be more subtle.
"All of our guests expect a warm and hospitable welcome, but that has to be balanced against ensuring the right level of security," she said. "Terrorists are looking for civilian targets to instil fear and damage into our way of life. They look for an easy route to achieve maximum damage and regard hotels as easy targets."
Alongside terrorism attacks, Loughborough said hotels are under threat from serious and organised crime, cybercrime, activists and insider crime, as well as natural disasters.
In order to mitigate the operational, financial and reputational damage following a major incident, she said it was vital that all hotels had a sound emergency plan. "You have to prevent, prepare, respond and recover," she said.
Loughborough shared the example of the InterContinental New Orleans, where the general manager had drawn up an emergency plan.
"As Hurricane Katrina drew closer in 2005, the hotel staff boarded up the hotel to prevent damage and looting," she said. "The staff were then able to go home to be with their families. The result was increased loyalty from staff and a hotel that was able to quickly recover following the disaster."
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