NH Hotel Group, a leading urban hotel group in Europe and Latin America, has been part of Minor Hotels since 2018 and together, the two groups operate a portfolio of over 500 hotels across eight brands.
Ramón Aragonés, CEO of NH Hotels and Dillip Rajakarier, CEO of Minor Hotels, share their views on the opportunities in leisure as the hospitality sector heads towards post-pandemic recovery, ahead of their participation to the Resort & Residential Hospitality Forum in Portugal in October.
Seizing opportunities in leisure hospitality
Ramón Aragonés: Growing in leisure hospitality was a natural next step as part of our integration with Minor Hotels. Their years of outstanding experience coupled with our leadership in and knowledge of the European market, are the perfect combination to grow in the resorts segment in this region. We have been taking steps to build a solid, attractive, and differentiated resorts proposition for investors for some time, and now is the ideal moment to share it with the market.
Despite the recent challenging times, we have full confidence in the early recovery of leisure travel and in our capability to seize the opportunity and leverage our strengths to increase our footprint in the segment. Experiential tourism is here to stay and we want to capitalize on the long-term trend.
The increasing interest of institutional investors in resorts is also a strong point for us. We have long-standing and solid relations with many, and we look forward to growing alongside them to develop a strong, innovative, and professionalised resorts offer.
Focusing on conversions for growth
Ramón Aragonés: Our strategy in this sense has been the same for quite some time. Even though we are open and ready to analyse every opportunity, our preferred growth option is through takeovers, an area in which we have an indisputable track-record.
The brands that we operate together with Minor - NH Hotels, NH Collection, nhow, Tivoli, Anantara, and Avani - comprise hotel propositions that range from mid-scale to luxury, with some of them having the highest levels of brand awareness in the main feeder markets of Southern Europe. Our value propositions are solid and proven, and we can adapt them in record time to the property that is entrusted to us. All of this, together with our strong loyalty programme with access to 26 million customers, allows us to start generating value for our partners almost immediately. So… why wait?
The impact of the pandemic on relations between stakeholders
Ramón Aragonés: Relations have been impacted but in a positive way. Every crisis is an opportunity to learn and to improve and I believe this is a clear example.
The pandemic has served to align the interests of all parties involved in development transactions. This is a partnership and it provides benefits for all involved, and this is now more evident than ever.
Formulas like hybrid or variable leases and management contracts with owners’ property returns have gained importance as an alternative to traditional fixed leases, where weak points were exposed during the COVID-19 crisis. This type of contract has proven to be less secure than originally believed, which has made hospitality stakeholders open up to constructive dialogue, foster the search for innovative solutions, build bridges and align interests for the benefit of all.
Technology and guest experience to drive growth
Dillip Rajakarier: Moving forwards, the main challenge facing hoteliers is to find the perfect balance between safety, comfort, agility, memorable experiences, and personalised attention with a human touch.
In this sense, technology and digitalization are critical in driving recovery. Firstly, digital evolution is absolutely necessary for the sustainable growth of our business. It will help us gain efficiency, automate processes, simplify commercial tasks, and streamline costs.
Secondly, new digital solutions will be decisive in regaining the trust and enthusiasm of travellers as it will be essential to improve the tangible part of the customer experience, ensuring that our guests feel safe and pampered at the same time. I am referring to services like the ones that our company has already implemented like NH’s FASTPASS, which offers the possibility to check-in, choose the room you want and check-out from the customer's mobile device, or Mobile Guest Service platform, with which the customer can manage hotel services such as room service, request extra amenities or book a table in the restaurant through any mobile device. Other projects of this nature have already rolled out with different brands, such as Anantara, or are under development and will provide a differentiating factor to drive our recovery.
Other areas of focus to drive recovery are those in line with new guest needs and trends such as being able to offer them security in terms, not only of hygiene, but also regarding flexibility and destination.
We also expect a surge in the demand of unique experiences. We sense that there is a lot of pent-up demand where guests want to experience new places, cultures, cuisine etc. They will be more selective and eager to immerse themselves in their chosen destination. In many cases, mass travel will likely give way to ‘à la carte experiences’, something that we already have experience in, and on which we will continue to focus on moving forward.
Middle East and Mediterranean regions to lead recovery
Dillip Rajakarier: Concerning our European portfolio, we expect the warm Mediterranean regions with better vaccination programmes and a more controlled pandemic situation to be the ones to start recovering first. However, market recovery is highly dependent on the travel recommendations and restrictions issued by governments of the key feeder markets.
Although corporate and MICE travel will most likely take a little longer to recover, we expect that the pent-up demand and a better overall pandemic situation will serve to drive the recovery of other, not so seasonal, regions during the last months of 2021.
Beyond Europe, we have already witnessed strong recovery in the Middle East, primarily driven by local demand, and also the Maldives and other Indian Ocean destinations such as the Seychelles. Strong vaccination programmes, early opening of borders and easing of travel restrictions have fuelled growth in these markets.
Leading ESG initiatives
Ramón Aragonés: The importance of ESG requirements has clearly gained relevance in the past year. Where it was a “plus” before, it is a “must” now. Corporate clients demand ESG information for their RFPs and OTAs, for example, are also requesting more and more information about hotel’s sustainable commitment and results. There has also been a shift in this regard in what investors, financial institutions and even private clients expect and demand.
Luckily for us, both Minor and NH have a clear commitment to sustainability for some years now. So we can proudly say that, not only are we ready to meet these new demands, but also to lead responsible efforts within the sector.
Our ESG objectives are aligned with the 2030 agenda and the United Nations SDGs and their results are tangible. In the 2020 ranking published by SAM – part of S&P Global - NH ranked third among the most sustainable hotel chains in the world, receiving a “Best in Class” distinction in 9 of the 23 criteria evaluated and the highest possible score in six categories, including climate strategy. Minor Hotels has similarly been listed in the FTSE4Good Index Series (fifth consecutive year) and also included in the Dow Jones Sustainability Emerging Markets Index (DJSI) 2020, Hotels, Resorts, and Cruise Lines Industry (seventh consecutive year).
Looking forward to participating to R&R
Dillip Rajakarier: We have been successfully collaborating with R&R for some time. However, this year, more than ever, we are excited to participate in this conference and we very much look forward to it. We believe it is the perfect moment and the ideal platform to showcase everything that we can offer investors seeking to grow in the resort segment.
In fact, not only are we sponsors, but hosts too. We are truly excited about having participants experience another one of our brands, Tivoli, first-hand. We want attendees to be able to experience what we have to offer in order to reinforce their trust in our products and management skills. We want to be able to share our strengths will all guests and prove why we are the perfect choice for resort investors, developers and owners. And all of this while we enjoy a unique location, an incredible line-up of experts, and great company, in a time in which standing side-by-side, forging partnerships, and looking for ways to relaunch hospitality together is more vital than ever.
Dillip Rajakarier and Ramón Aragonés will be speaking at the Resort & Residential Hospitality Forum, taking place in the Algarve on 25-27 October 2021. For more information you can view the programme here.