Day One Rundown at IHIF
And, we are back!
The first day at The International Hospitality Investment Forum (IHIF) set the backdrop for a buzzing hybrid meeting – bringing over 1,200 senior leaders in global hospitality investment and development together for the first time in 18 months. This year is a huge achievement, uniting our industry not just confidently and safely, but as one that other industries follow. Thank you for joining us.
As referenced by Paul Miller, CEO, Questex (the producing company behind IHIF) “hospitality is the core of the experience economy,” and opportunity has come from the pandemic, with many speakers highlighting this. We kicked off with an earnest conversation between Kenneth Hatton, Head of CBRE Hotels, EMEA, CBRE Hotels and Tony Capuano, CEO, Marriott International, “Dawn of a New Era – Where do we go from here?” The importance of people was a common theme today and Tony 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 past 18 months, the answer according to Tony was simple: it’s 31st brand aka its Bonvoy loyalty programme.
Shifting gears to an economic overview, Linda Yueh, Professor, 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. Linda talks about the uniqueness of this pandemic, that it's a crisis that has uprooted both supply and demand. She finished promisingly that the key to recovery, again, lies in people. If we can maintain employment, we can avoid hysteresis.
Henri Giscard D’Estaing, President, Club Med then joined Roger Allen, Group CEO, RLA Global for a discussion on the resort market. With leisure leading the return, Club Med has seen double-digit growth in its average daily rate (ADR) following the pandemic, due to three reasons; safety, customer service, and an environmental focus.
In further positive news, Robin Rossmann, Managing Director, 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 – Hotels, Christie & Co., transactional volume in Europe will end the year above 2020 levels. There is also a clear rise in cross-border investment, with 70% coming from Europe and an increase in activity from the US, mainly in the distressed asset area.
In a discussion of M&A and improved alignment, Stefan Lenze, Co-CEO, Motel One Group, shared his sentiment on navigating the pandemic through the importance and impact of 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 plans to grow this proportion as the world starts to travel again.
He added: “What we saw after the financial crisis is the leisure customer is the first to get out, as they want to go out.”
Michael Grove, COO, Hot Stats, shared that while we know the blow felt by extended stay and limited-service was cushioned, luxury hotels are coming out of the dust quite rapidly; something that is crucial to the industry as leisure travellers continue to pay up for the experiences they have missed out on over the past year.
A shared sentiment of ESG strategies took centre stage as Will Duffey, Managing Director, JLL, Cody Bradshaw, MD, Head of International Hotels, Starwood Capital Group, Dominic Seyrling, Director, Investments, Archer Hotel Capital, Brian Kaufman, Managing Director, Blackstone, Dominic and Benjamin Habbel, CEO & Founding Partner, Limestone shared in a discussion of what’s keeping them busy at the moment.
Brian Kaufman says, “one thing to keep in mind is ESG initiatives aren’t just necessarily costs, there’s real ROI opportunity that comes from investing in ESG initiatives, whether it’s water reduction initiatives, energy efficiency implementation, we as a firm have an emissions reduction target that we’re very focused on across all sectors across all assets.”
Debates 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, there is a difference; they answered to 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 our conversation between Sébastien Bazin, Chairman and CEO, Accor, and Jonathan Langston, Chair, IHIF Advisory Board about “rethinking hospitality.” Sébastien shares, “what I have learned over the last 18 months? Humbleness. Being at the helm I did not control much.” He elaborates that amongst the chaos, he found himself enjoying seeing new leaders emerge from within Accor, and learned to give control to those on the ground.
A key mission for Accor was setting up a relief fund, as Sébastien knew the majority of his staff would not benefit from government support schemes simply due to their location. They launched a $200 million hardship fund which was made accessible to 290,000 employees, many of whom took advantage of the scheme with the average grant costing $400.
He closed with some sage advice on leading through a pandemic: make decisions from the gut, then the heart, then the brain.
Key themes from day 1:
· People are our greatest asset
· ESG is an ROI opportunity
· Leisure travel is at the forefront of recovery
· A shared excitement to meet in person at IHIF this year!
Here’s to an exhilarating day 2 ahead as we continue to 'Reframe Hospitality'!
Continue to follow the conversation with us on our social channels with hashtag #ihif2021.