Taking shop, taking stock

The IHIF began with an earnest conversation between Kenneth Hatton, head of CBRE Hotels EMEA, and Tony Capuano, CEO, Marriott International about the future of hospitality. Capuano emphasised, "the most admirable thing about the pandemic is the way brands, owners and franchisees have come together to navigate the crisis." When asked how Marriott stayed afloat over the course of the pandemic, the answer for Capuano was simple: the Bonvoy loyalty programme.

Next, Linda Yueh, professor of Economics, Oxford University, announced some positive data from the World Economic Outlook, illustrating a 6% growth rate, albeit starting from a lower base. Recovery to pre-pandemic levels will likely be in 2023, depending on vaccine distribution. In further positive news, Robin Rossmann, managing director for STR shared that thus far in 2021 more new hotel rooms have reopened in Europe than all of 2020. And while we are seeing recovery, occupancy rates are 8% lower than in 2019. Yet, there is still growing confidence in the market, and according to Carine Bonnejean, managing director of Hotels, Christie & Co., transactional volume in Europe will end the year above 2020 levels. In a discussion of M&A and improved alignment, Stefan Lenze, co-CEO, Motel One Group, shared his sentiment on navigating the pandemic through good labour; "the one thing that really gets you through this is your people."

Marcus Bernhardt, CEO, Deutsche Hospitality said currently around 20% of the hotel group's properties are leisure focused and there are now plans to grow this proportion as the world starts to travel again.

Michael Grove, COO, Hot Stats, shared that while we know the blow felt by extended stay and limited-service was cushioned, luxury hotels, which were much harder hit, are coming out of the dust quite rapidly. Debates also highlighted the discrepancy between customer wants and investor wants, especially during a time when the traveller is seeking out unique experiences more than ever. According to Benjamin Habbel, citing Aethos Hotels as a prime example, they answered the market without thinking about valuations when it came to their F&B investment. While it keeps travellers excited, investors may see it as too high a risk.

Closing the day, was a conversation between Sebastien Bazin, chairman and CEO, Accor, and Jonathan Langston, chair, IHIF Advisory Board about "rethinking hospitality". Bazin argued that amongst the chaos, he saw new leaders emerge from within Accor during the pandemic, and learned to give control to those on the ground. A key mission for Accor was setting up a $200 million relief fund which was made accessible to 290,000 employees, many of whom took advantage of the scheme with the average grant costing $400.

Day 2 began with a networking breakfast that offered options for breakout discussions across a wide range of investment topics, including key destinations such as Cyprus, Greece, Italy, and Portugal.

In keeping with this year’s deeper commitment to the issues surrounding sustainability, there was a networking roundtable, “Tech for Sustainability”. Afterwards, we headed back to the main stage for a session on investing in lifestyle-centred hospitality ventures. Christopher Norton, CEO, Equinox Hotels, said hotels will need to steal ideas from each other if they are to prosper. “The challenge for the traditional luxury brand is they’ve got to be more innovative and the lifestyle brands have to have better service,” said Norton.

Work from holiday

Henri Wilmes, CIO, LRO Hospitality, shared his view on the increasingly blurred lines between personal life and work life, saying that traditional holiday resorts should start to provide proper workspaces for guests.

Next Chris Nassetta, president and CEO, Hilton, made a great point that while leisure is leading in terms of Covid-19 recovery, it’s actually domestic travel that’s kept Hilton afloat. “Business that was 95% domestic is now 99%, or nearly 100%,” said Norton.

Patrick Pacious, president and CEO, Choice Hotels International, commented on another trending topic at IHIF – serviced apartments – by sharing his belief that this trend has become a permanent shift due to increasing lengths of stay. One of the biggest changes seen by Dillip Rajakarier, CEO, Minor Hotels, has been in the families market, with many families trying to combine their children’s educations with a holiday. This has led to tutors travelling with families and so forth.

Federico González, CEO, Radisson Hotel Group, was one of many to return to the topic of sustainability during the day. His point was that while the pandemic may have temporarily put ESG initiatives on hold, they will soon re-emerge as customers resume travelling and demand greener options.

Miriam Barnhart, product manager of sustainability and experiences, POHA House, then explained that while adjacent concept investment may be a newer trend, it is also a stable one. Barnhart said that creative spaces offer a sense of community and belonging, while also making the guest feel safe. Another pandemic-related subject covered was the ongoing migration of people from city-centre to suburban locations. The shared need here is a continued desire to work remotely but in a more social environment. Naomi Heaton, co-owner and CEO, The Other House, explained that hybrid models allow “for the best of both worlds” from a profitability perspective, while additional ADR gains are made through short-term transient bookings. In a discussion of senior-living, Jan Garde, founder, The Embassies, explained that “loneliness is the biggest fear” among the ageing population as life expectancy increases and, just like any other target demographic, these individuals expect and are deserving of premium experiences. Next during a hybrid working panel it was suggested that sustainability, culture and wellness should become the three pillars of success. Emmanuel Guisset, CEO and co-founder, Outsite, shared what he believes is the next growing trend in hybrid working – larger companies providing employees with memberships to work remotely.

Panels and the pandemic

Day three started in earnest with John Pagano, group CEO, The Red Sea Development, sharing his passion project in Saudi Arabia. “Sustainability is really not enough,” he said. By partnering first with scientists, rather than architects, Pagano has set the goal not just to ‘sustain’ but also to improve the destination by increasing the net conservation value by 30%.

In an ‘Operational Models’ session, panellists revealed that they each reacted to those first few punishing months of the pandemic by throwing out the rule book. Dimitris Manikis, president and managing director EMEA, Wyndham Hotels & Resorts, Michael Deitemeyer, president and CEO, Aimbridge Hospitality, and Hubert Viriot, CEO, Yotel, agreed that working across the owner, operator, landlord and lender relationship structure requires high degrees of collaboration and flexibility.

As Aimbridge set out to navigate the US state-to- state regulations set forth by the pandemic, Deitemeyer shared that the company formed a government affairs team to help staff on the ground to understand the ever-changing regulations and evolving customer concerns. Aimbridge also launched a charitable fund for employees to offer further support.

Next Mahmoud Abdulhadi, deputy minister, Investment Attraction, Ministry of Tourism for Saudi Arabia articulated the kingdom’s Vision 2030 plan, with the country setting ambitious hospitality targets of reaching 100 million visits, creating one million new jobs, and bringing 400,000 room keys into the market. Abdulhadi explained that, alongside its environmental focus, the ministry is also deeply focused on the socioeconomic, cultural and financial sustainability of the country. General sessions closed with a final discussion of the industry’s ESG goals. According to David Kellett, senior director, Hotel Transactions, Invesco Real Estate, while some brands still cling to the argument that certain ESG initiatives conflict with their brand standards, it’s time to reframe such thinking. It was a fitting finale to a conference that has been all about thinking anew.