On 7-9 March, business leaders from across the hospitality sector gathered in Berlin for the 19th International Hotel Investment Forum (IHIF).

Proceedings kicked off with an extremely lively opening bash at the Steigenberger Hotel Am Kanzleramt, with delegates reconvening the following morning at the InterContinental in order to get down to more serious business. ‘Bewitched, Bothered and Bewildered: Threats, Challenges and Disruption Facing our Industry’ saw David Rowan, editor of Wired, tell the conference hall that the speed of tech change is only going to get faster.

"A new technology will always come along, and it’s about how you react and adapt that is important," he said, going on to refute that new forms of remote connectivity would diminish the value of "being up close, feeling the pulse of the conversation and looking into people’s eyes". Asked about the impact of automation on the sector, Rowan felt "there would always be demand for highly trained humans who can make guests feel super special".

While confidence was high throughout the three days, there’s no disputing that this has been a challenging year in terms of international safety and security. Helen Loughborough, IHG’s VP global safety, discussed global threats, and how to keep guests and hotels safe and secure in turbulent times. Loughborough observed hotels have to manage the balance between providing hospitality and security and that, after cost, security was commonly known to be the most important aspect to guests. She warned that hotels could be viewed as convenient targets for terrorists and it was vital to have a comprehensive crisis management plan be put in place, covering "prevention, preparation, response and recovery".

Emerging security threats are just one area driving operator behaviour. ‘The Distribution Challenge: Impact on Hotels Strategy’, chaired by Ufi Ibrahim, CEO, British Hospitality Association; alongside Marriot International’s Osama Hirzalla; Choice Hotels’ Carl Oldsberg; Terri Scriven, industry head of hospitality at Google; and Peter Verhoeven of Booking.com, opened with the observation that 37% of people now book their travel online. Scriven claimed users access 28 different sites on average through their travel research. Added to that complexity, they often use multiple devices throughout their search process so multichannel, multidevice and multigeography useage all combine to make analysing and understanding consumer habits challenging.

Verhoeven noted that consumers broadly fell into two categories: those that planned and booked a long time before travel and those that did so within 48 hours. Hirzalla stated that, as it’s the fastest-growing direct channel, "investing in mobile is critical". Oldsberg added, "The days of standing on a mountain top screaming the benefits of your brand are long gone; it’s now about engaging with customers on their level."

When asked about future trends, Scriven felt various departments within hotels needed to become more interlinked. Hirzalla’s advice was to "understand the channel mix and profitability by channel and to remember that the customer experience is paramount". Oldsberg reminded owners and operators that they own the product and to "focus on the after-arrival and before-departure section of the experience". Ranque encouraged operators and owners to "invest in guest satisfaction and to pick your strongest battles and outsource the rest".

Awards and more

This session was followed by the presentation of IHIF’s Lifetime Achievement Award to Dieter Müller, founder and CEO of Motel One, and the Young Leader Award to Ben Justus, founder of EGBOK, a non-profit that enables underprivileged young adults in Cambodia to be self-supporting by providing education, training and employment opportunities in the hospitality industry.

The final session of the first day was also its headline event, the CEO panel: Deloitte’s Nick van Marken sitting down with Geoff Ballotti of Wyndham Hotel Group, Hilton Worldwide’s Chris Nassetta, Wolfgang M Neumann of The Rezidor Hotel Group, IHG’s Richard Solomons and NH Hotel Group’s Federico J Gonzalez Tejeravan.

What followed was a whistle-stop global tour. On China, Solomons said the economy was slowing, not declining, and growth drivers remained intact. On Africa, Neumann observed "a continent of opportunities", where 50% of the population is under 30 years old. Europe? Nassetta felt the region was extraordinary strong and, with his company opening a European property a week in 2016, would run a close second to Asia-Pacific over the year ahead.

Ballotti saw growth being more on the rate side than occupancy for Wyndham, the company having opened 65,000 new rooms in 2015. On Brexit (Britain’s potential exit from the EU), a recurring subject throughout the three days, Solomons was relatively sanguine, citing IHG’s presence in over 100 countries.

Following a year of major M&A activity, van Marken pressed the issue of further consolidation. Nassetta countered that Hilton Worldwide "still has lots of running space", while acknowledging that the latter stages of the investment cycle tend to see more M&A activity. Solomons said that, while scale matters, being "big for the sake of being big" was unnecessary.

The IHG head honcho also observed that, when thinking about differentiating factors with the new players in the market, hotels should consider their legacy. IHG turns 70 this year and, Solomons revealed, would be building an engaging story around this history to take to the market.

But even the most established players are casting sideways glances at the new kids on the block, despite Ballotti’s claim that companies like Airbnb had "been around since Mary and Joseph checked into the Inn". Nassetta encouraged hotels to remember their core strength: "the business of hospitality", casting Airbnb more in the realm of lodging. Neumann remained cautious, feeling the industry should learn from the effect Uber has had on the taxi industry. When discussing technology on a more general level, the panel seemed to share the view that they were not software specialists and that outsourcing this to expert partnering companies was a sensible path to take.

Breaking news on day two

The second day opened with the news that Rezidor Hotel Group had purchased 41% of Prizehotel for £14.7 million, one of a number of deals signed during the three days.

Roger Bootle, chairman, Capital Economics, then took to the stage to provide his global economic outlook. The often outspoken economist cautioned against excessive Chinese doom-mongering. "The evidence is that the Chinese economy has stabilised and the markets have got themselves worked up unnecessarily," he said.

Bootle then looked at oil prizes, foreseeing "no immediate reason at the moment why oil prices have to rise" and claiming that, generally, "lower oil prices are a good thing for the world economy". When talking about the US market, Bootle said that "at various points in the past few months, various markets have worried that the US market is in trouble. I think this is wrong and the US market is very resilient."

Turning to the eurozone, Bootle was less optimistic. While Irish recovery looked firmly established and stable, the outlook
for Italy, Portugal, Spain and Greece was anything but. Turning to the Brexit, Bootle acknowledged "a serious, serious chance" the UK would leave and the matter should be taken gravely; economists don’t know the consequences of either outcome, he admitted. "The single biggest uncertainty is what the consequences will be for the EU?"

The final plenary session of the day was on the rise of Asian investors, moderated by Jileen Loo of CBRE EMEA Hotels. Loo was joined by Roc Huang of HK CTS Hotels, Louvre Hotels Group’s Pierre-Frédéric Roulot, Sanjay Singh of FICO Corporation, and Teddy Zhang of The Thayer Group and Phoenix Global Investment.

Singh started the session by emphasising how important it is to know your client when doing business across Asia. Roulot highlighted the growth in Chinese tourists into European Louvre hotels since the operators deal with Jin Jiang. When asked about Brexit, Zhang said that he felt the European market had peaked but there was an importance to "build a global platform where you can provide value to customers".

One of the concluding points was the rise of the Chinese middle class and the impact this could potentially have on the global hospitality industry. This section of the market potentially accounts for 300-400 million people. The panel agreed that whether the UK was in or out of the EU had relatively little influence on their decision to invest in Europe or not.

One thing is certain, however; June’s referendum will be followed closely by all attendees and should remain a point of conversation at next year’s event, whatever the result.