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Reinvention is the industry's greatest asset

28 June 2007
Reinvention is the industry's greatest asset

Living through four decades of change gives David Michels, board member of Vector Hospitality and former Hilton chief executive, a special slant on trends in the hotel business

I started as a minnow for Grand Met in 1966 and often ask myself what's changed for the industry since then. Well, so far as our customers are concerned, very little. For the last 2,000 years "visitors to the inn" have wanted a warm welcome, a comfortable bed, good food and a wake-up call on time.

The industry still strives to supply all these things consistently and, regardless of all the trappings with which we surround our customers, their primary needs remain the same.

But this tip-of-the-iceberg stuff hides a vast amount of internal industry conversion over these last 40 years.

Brands are now dominant in the United States, the United Kingdom and gradually Europe and the rest of the world. It has, however, been gradual with, for example, 60% of Europe's hotels remaining private in all senses.

What has changed is the view of the value of hotel property in its own right. In the 1960s hotels were owned by private individuals, the odd sheik or billionaire and a few hotel operating companies.

Today, the long-term value has been recognised by institutions, venture capitalists and the market in general, helped of course by REIT (real estate investment trust) legislation to bring the hotel industry for the first time into the property sector. In my view, it's this fundamental change which will affect our future more than any other.

Despite the globalisation, the worldwide branding and our institutionalisation, it's still wonderful to see hoteliers worldwide inventing new styles of product and innovations that are fresh and original, particularly on the food and beverage side. Our ability to reinvent ourselves for our customers is ongoing and the best single thing about the hotel business.

Looking back to 1966 again, I can still hear the long sigh when I told my father I was going into the hotel business. But today we are now seen as a real profession, providing not only the chance for worldwide travel, but also now the opportunity to make a real buck.

No rush for REITs after Vector failure >>

Malmaison owner denies accusations of Vector mismanagement >>

Vector's problems not an end to hotel REITs, say experts >>

Read more on REITs here >>

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TagsFinance and Trends
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