IHIF 2021

Covid-19 pandemic set to accelerate hotel M&A

The global Covid-19 pandemic may accelerate companies’ merger and acquisitions strategy but is unlikely to alter radically their original plans.

Speaking in a panel debate at the International Hospitality Investment Forum (IHIF) in Berlin, Deutsche Hospitality CEO Marcus Bernhardt said while the pandemic may have been a “game changer” the main disruption caused was to the balance sheet, not strategy.

However, he added it did speed up the introduction of plans made for the future as the company seeks to ensure it is fit for purpose in the new world that has been created by the global pandemic.

Bernhardt 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.
He added: “It has helped us as what we saw after the financial crisis is the leisure customer is the first to get out as they want to get out [and travel].”

And in doing so, he said the group was continuing to follow an ambitious strategy of growth that was already well in place before the world’s travel industry was effectively closed down.

He said: “We are never happy, we would like to grow and it’s not just to double the size, it’s to quadruple the size, it’s our focus and our objective and that is what we are going to do.”

Motel One co- CEO Stefan Lenze agreed, adding: “We did not consider selling the company short, things are going great and we’re expanding more than in our peak years of 2018-19.

“You need the best product and you need a great portfolio which we have and we have been working on it for 10 years to get it this way.”

HR Hotels managing director Ruslan Husry agreed the pandemic had not shifted the hotel company’s strategic goal of driving further growth, although the impact of the pandemic may yet accelerate the strategy.

He said: “There will be much bigger opportunities, we are a fast-moving company and can make decisions quickly.”