APRIL 2011 |
www.opp.org.uk
HOTEL REPORT
be sure that it makes good business sense. “Clever design is all very well’” said Isvan, “but you will need to get the food and beverage points in the right place, as well as all of the other peripheral services. It is often best to have a brand operator in place to help with these things and be warned … you will lose some brands immediately if your design - internal or external - is too restrictive.”
Indeed, Marc Dardenne is familiar with brands that will allow no fl exibility at all on design. “Some operations want
“Why go to Marrakech if your hotel is so standardised it could be anywhere?”
it all their way, right down to the last detail … furniture, staff uniforms … even the sugar cubes.” Everyone agreed, however, that some brands are too homogenous, too bland. Property partners need to try and make sure that the development has a sense of place.
What is the point of going to
Marrakech if your hotel, and its rooms, are so standardised they could be anywhere? “Too many operators are losing
their sense of customer experience,” said Peter Norman. “Avoid working with people who are just commoditising the brand. And fi nally, on the boring but practical front, be sure to engage a proper project manager, advised the panel. Hotels are complex things to build and fi t out. Manage every element of the tender document process very carefully and do everything possible to get the best brand for the location. “Get the brand that has the right
strategic fi t, and everything else will fall into place,” said Isvan.
Chief execs and bankers under fi re These are uncertain times for anyone deciding to invest in hotel real estate agreed the industry’s leaders at one of the conference’s key plenary sessions. There are still too many dark
clouds on the horizon warned Ewout Hoogendoorn, of Horwarth HTL, saying “I’m worried about the
Eurozone collapsing and about the changes taking place in the Middle East ... It all adds up to instability, and people don’t like instability. And then there’s oil. “Oil prices have a big impact on travel,” he said, “and the unrest in the Middle East is pushing up oil prices strongly.”
“But the big issue for me is when will the banks really reopen for business? The terms on offer are still a considerable barrier to getting deals done in the west.”
Mark Lomanno, president of STR Global underlined the stagnant feel of the hospitality market in Europe and North America by revealing that in the past year or so the number of new hotel rooms being built in the Asia Pacifi c region is double that elsewhere. “Room supply increased in Europe by +1.1% last year, by +1.9% in North America, and by +2.8% in Asia Pacifi c,” Lomanno said. And, by common consent, it was the banks holding back the majority of new project ideas.
Arthur de Haast of Jones Lang LaSalle Hotels pointed out that even though there were US $26 billion-worth of hotel industry transactions in 2010 versus US $9 billion in 2009, “there is still lots of equity on the sidelines and money queuing up to be invested. The question is when?”
And for de Haast the answer is … “not that far away.”
“Many of the fundamentals for the hotel sector were up in 2010,” he told the conference. Transaction and investment volumes in the hospitality sector truly “bounced” in 2010 he said: Broad brush figures are all very
The Americas:
2008 US $ 10.0 BILLION 2009 US $ 2.2 BILLION 2010 US $ 11.9 BILLION
Europe, Middle east & Africa
2008 US $ 11.9 BILLION 2009 US $ 4.3 BILLION 2010 US $ 10.2 BILLION
IHIF CONFERENCE | 47
Flying the fl ag | More than 1,500 hotel industry experts were gathered in Berlin
well, but the market sentiment needs to be far more local argued Pandox AB CEO Anders Nissen. “For me, northern Europe is a good and healthy investment. Southern Europe is a poor investment. Occupancy rates in the north of Europe are up for us and with bookings at 60%-plus we can manage prices and yields very successfully.”
“Also, I would avoid the USA if I
were you. The hotel industry is far too franchised there now.” London & Regional Properties
CEO Ian Livingstone agreed that “when you are at 6% or 7% occupancy, it is hard to get prices up.” For IHG boss Andrew Cosslett
the Chinese could hold they key. “China is going to generate so many new travellers it will have a huge effect,” he said. “Today, there are 30 million outbound trips from China every year, with 10% coming to the European Union.” “That will rise to 140 million
outbound trips within the next 10 to 15 years, with at least 20% of them coming to the EU. We are all going to benefit from a huge uplift in business … just from China. Add in rising numbers of travellers from
India, Indonesia, and South America, and you will get the picture. And the good thing is that they will all bring their hotel choices with them.” The panel agreed and discussed the possibility of a new type of hotel emerging ... one which is much more Chinese in influence. “Not necessarily,” argued Anders
Nissen. “We have to get away from the idea that everything is global. It isn’t. And guests don’t like everything to be harmonised across the world.” “We look for underperforming
hotels in northern Europe and stick to what we know best.”
Ian Livingstone certainly agreed with an opportunistic acquisition strategy in the current climate.
“There are lots and lots of distressed hotel properties out there,” he said, “and we have come across some excellent opportunities.” True, said Andrew Cosslett. “This
is still a bricks and mortar business in so many ways … even when we don’t want it to be. If we need it, we will build it. Location is so important.” “You have to do everything you can to get the right brand in the right place.”
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