EVENT EUROPEAN HOTEL INVESTMENT CONFERENCE EUROPEAN HOTEL INVESTMENT CONFERENCE EVENT
20TH EUROPEAN HOTEL INVESTMENT CONFERENCE
18 NOVEMBER 2008 – THE DORCHESTER, LONDON
‘2020 VISION’
WO DECADES OF UPS AND DOWNS cliff. This is just the start,” warned economist Roger – Sternlicht said this turning of the cycle would be
T
It is twenty years since Frank Croston, Kay Bootle of Capital Economics, describing the situation “longer and more brutal.” There would be similar
Dymock and Simon Turner first conceived as “much worse than other recessions...more like a opportunities to the last downturn but Sternlicht
the European Hotel Investment Conference. Speaking depression of three to five years of negative growth.” – described in Kyriakidis’ opening comments as
on the eve of the 2008 conference, Turner, returning He predicted that property prices would have to drop ‘synonymous with innovation and deal making’
to London in his new role as President of Global further to return to historical levels – by around 25% – admitted he wasn’t sure of the timing. “It’s early,”
Development for Starwood, told Sleeper Magazine in the UK, 10% in the US – and believed more bank he said. “The tide is going out but the world is only
their motivation had been “the lack of a pan-European bailouts would be needed in a programme of “rolling just adjusting, and banks are still in denial.”
forum,” in spite of the increases in cross-border recapitalisation”. “The penny has dropped that letting
transactions and political integration that were taking Lehman Brothers go to the wall was a mistake,” said LIFESTYLE STILL WORTH A LOOK?
place at that time. And what a rollercoaster ride those Bootle. The big question was whether banks would The lifestyle sector was one which several speakers
two decades have been. Of course, the rollercoaster is continue to lend in face of the inherent contradiction believed to be stronger than most. Nick van Marken,
on a downward trajectory at present, but if delegates between “an economic imperative to keep money Global Sector Leader, Corporate Finance, Deloitte,
needed reminding that it will eventually climb pouring out,” and “a financial imperative to keep purse pointed out that the lifestyle was still in vogue,
again, the evidence was there to see in the video strings tight.” referencing deals such as KOP Capital’s acquisition
presentation which opened the twentieth conference. The “worst downturn since the war” was the result of a 50% stake in Stein Group and Abu Dhabi-based
Rattling through headlines from both the mainstream of not one but two shocks: the credit crunch and a Mubadala Development Company’s purchase of
press and the hotel industry, the montage offered a bubble in commodity prices. Whilst the credit crunch a 50% stake in KOR Hotel Group. Peter Anscomb,
timely reminder that the hotel sector has survived had got worse, commodity inflation had got better. Corporate Director, Head of Hotels for The Royal Bank
great challenges in the past, to enjoy improved But the bigger danger on the horizon was deflation. of Scotland also believed there was growth in the
growth and returns when the cycle eventually turns. Although there were similarities with the situation lifestyle sector, as guests were “looking for something
In spite of the economic clouds gathering above, the in Japan in the 1990s, Bootle took a longer term more differentiated.”
2008 conference began jovially enough as Marvin historical view, pointing to the large amounts of Barry Sternlicht recounted how he had created W,
Rust, Global Managing Partner, Hospitality, Deloitte, national debt racked up after each of the World Wars arguably the most successful lifestyle hotel brand
took to the stage in a glam rock get-up, to the strains of the earlier 20th century. In each case there had to date: “I wanted a brand for me,” he explained.
of “Do You Wanna Be In My Gang.” In truth, such been “no explosion of interest rates or inflation.” On “Hotels had become commodities, the brands couldn’t
levity was always destined to be shortlived. Returning the contrary, said Bootle in conclusion: “inflation will differentiate or create loyalty. I fixed all the stuff
to the stage in more sombre attire, Rust opened the collapse, interest rates will go very low, banks will be that bothered me. With W we wanted to change the
conference saying that “Twelve months ago the view cautious and governments will pour money in to keep experience. We didn’t do any research. I sat around
was that the credit crunch would be over by Q1 08, the system going.” the kitchen table with my wife – who’s a copywriter
and that it would be limited to the banking sector. Barry Sternlicht, Chairman & Chief Executive of – and I needed a short word. I liked ‘W’ because it was
How wrong that was.” Starwood Capital, also believed this would be “a an upside-down M for Marriott.”
different kind of recession to 1990-91”. In an on stage Professing himself to be a great fan of Ian Schrager,
BURST BUBBLES AND BRUTAL CYCLES interview with Alex Kyriakidis – Global Managing Sternlicht said his opportunity had been to add
“Since September, the economy has fallen off a Partner, Tourism, Hospitality & Leisure, Deloitte comfort and service to the boutique proposition.
094 MARCH / APRIL 2009 EVENT VISIT WWW.SLEEPERMAGAZINE.COM FOR MORE COVERAGE OF HOTEL INDUSTRY EVENTS VISIT WWW.SLEEPERMAGAZINE.COM FOR MORE COVERAGE OF HOTEL INDUSTRY EVENTS EVENT MARCH / APRIL 2009 095
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