Day Two Rundown at IHIF
An eventful day 2 here at IHIF!
Day 1 generated a real buzz as we were all able to reconnect with old colleagues face-to-face and meet new ones. Maintaining that buzz, day 2 dove straight into the hot topics of the moment, 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, we launched a new networking roundtable, “Tech for Sustainability,” where Xenia Zu Hohenlohe, Managing Partner, Considerate Group, discussed matters with Kaspar Zimmerli, Co-CEO and Co-Founder, ARVE.swiss, and Michael Grove, COO, HotStats.
Afterwards, we headed back to the main stage for “Roads? Where We're Going, We Don’t Need Roads! - Identifying The Major Shifts in Leisure Hospitality Investment”. In this session, 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 Christopher.
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 so that should they need to press pause on their holiday time and drop back into work mode for a short while, they can do so properly.
In our “Talk of the Titans - Sharing Visions for Future Success” session, Chris Nassetta, President & 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 Chris. “In the US specifically… we have the highest RevPARs we’ve ever had – higher than the peaks in 2019.”
What does Chris see as being the key to further recovery? Vaccination rollout. While the US recovery might have been strong initially, Chris said that Europe is now starting to inch ahead thanks to the extensive rollout of EU vaccination programmes.
Pieter Elbers, CEO, KLM, shared some good news that he is also seeing a strong recovery. Even though the airline shut down all of its operations to 80 countries during 2020, KLM is currently operating its network to 95% of its pre-Covid-19 destinations.
Our global CEO panel jumped straight into the opportunities created by the pandemic, including using the time as an opportunity to hit the refresh button. That has certainly been the case for BWH Hotel Group, who took advantage of the lockdown to rebrand some of its hotels. David Kong, President & CEO, BWH Hotel Group, gave the example of a Best Western property in Austin, Texas, which was repositioned within the trendier boutique division, Aiden to capitalise on Aiden’s 30% to 40% increase in average rates.
Patrick Pacious, President & 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 he is trying to determine how to tap into this growing trend. Yes, we've all been there...
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 reemerge as customers resume travelling and once again demand greener options.
Adjacent Spaces has been new to IHIF this year. It’s our pop-up event for innovators and game-changers who actively operate or invest in alternative asset classes. These include commercial real estate, co-living, co-working, student living, senior living, and more.
A defining theme coming out of Adjacent Spaces was that while alternative investments have always offered great opportunity, the pandemic has shown just how lucrative these segments can be. Miriam Barnhart, Product Manager - Sustainability and Experiences, POHA House, explained that while adjacent concept investment may be a newer trend, it is also a stable one. Miriam said that these 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. Enter the hybrid model. In our lifestyle panel, Naomi Heaton, Co-owner and CEO, The Other House, explained that hybrid models allow “for the best of both worlds” from a profitability perspective, in that long-term income is sustained through residential guests staying longer, while additional ADR gains are made through short-term transient bookings.
In a discussion of senior-living, Jan Garde, Founder, The Embassies, explained that during “later-living”, as he called it, “loneliness is the biggest fear.” The ageing population is growing as life expectancy increases and, just like any other target demographic, these individuals expect and are deserving of premium experiences. “If you’ve ever dipped your toe in senior living,” said Jan, “you know how important it is to change the future.”
Another view on profitability – this time of smaller room sizes and larger communal spaces – came from both Lennert De Jong, CCO, CitizenM and Keith Evans, Chief Investment & Development Officer, Ennismore. Lennert explained CitizenM’s vision behind living rooms compared to lobbies by noting, “We want people to feel at home 24 hours a day.”
Keith highlighted what he believes are four key trends in alternative asset development: flexibility, hybrid models, localised experiences, and lifestyle. His fellow panellist, Caleb Parker, Founder, Bold, expressed his admiration for CitizenM as he discussed his journey towards creating Bold while co-working at a CitizenM property. Caleb said he felt that commercial real estate had become too focused on the investor, rather than the customer. “People are looking for places that they feel taken care of and where they belong,” said Caleb, arguing that commercial real estate assets need to be inspired by hospitality and put the customer at the very core of their businesses.
During our hybrid working panel, it was suggested that sustainability, culture and wellness should become the three pillars of success. These were listed by László Varga, Co-Founder & CEO, Heden / SpaceWorks, who said that, “If you get these right, you have created community.”
Emmanuel Guisset, CEO & Co-founder, Outsite, shared what he believes is the next growing trend in hybrid working – larger companies providing employees with memberships to work remotely. Outsite plans to continue to focus its business on attractive lifestyle cities with warm climates and a good cost of living, as well as exotic remote locations.
As you can see, day 2 was a busy day for everyone, although a rewarding and interesting one too. We’re all looking forward to our closing day tomorrow, and really hope you are enjoying your time with us at IHIF.