CONFERENCE REPORT
International Hotel Investment Forum 8-10 March 2012 – InterContinental Hotel, Berlin
Report by Guy Dittrich T
he International Hotel Investment Forum (IHIF) in Berlin in
early March had a cautiously optimistic atmosphere. As always there were ample opportunities to meet and ‘press the flesh’ as suppliers of professional services to the hotel industry sought out owners, developers and investors to convince them of the benefits of their particular offer. Celebrating its 15th
anniversary
in 2012, IHIF began in 1998 with 250 delegates. This year’s 1,700 delegates were slightly more than last year but not back to the peak of 2,000 delegates in 2008. “Like the industry, we are showing gradual improvement with the number of attendees,” commented Jonathan Worsley, Chairman of Bench Events, one of the founders of the event. A total of 57 countries were represented with 70% of delegates coming from the UK, Germany, USA, France and Switzerland. “Recent growth markets include Turkey, the UAE and Russia with increasing interest from Africa. Delegates from emerging economies are wanting to meet the global players and IHIF is the perfect venue,” explained Worsley. In line with previous years, operators represented the largest segment at 24% with builders and lawyers at 10% each. Investors and bankers made up a further 9% and 4% respectively. The event included well-
attended plenary sessions interspersed with a large number of smaller ‘break out’ sessions covering a wide variety of topics. Contextualising the industry’s place in the world economy David Scowsill, President and CEO of World Travel and Tourism Council, noted that it represents 9% of world GDP and is worth an expected US$6 trillion in 2012. Scowsill predicted that 2012 would end up similar to pre-crisis levels. Whilst the recessionary clouds
may have been clearing for some, economist Daniel Thornily stated that the industry’s “biggest challenge was to increase prices to fragile consumers” in what was generally a more pessimistic assessment. The ability to raise prices was less the case in Asia but Thornily warned that if the predicted slowdown in Chinese economy were too sharp or deep this would be “catastrophic”. Meanwhile Ian Goldin, Professor of Globalisation and Development at Oxford University cautioned the difficulties of prediction, nevertheless going on to introduce our times of “turbo- charged innovation” leading to more rapid change. The major risk foreseen is that of growing inequality because it has become systematic in that individual countries may be performing well but as a group, such as the Eurozone, are a disaster. At the hotel investment level this translates to the need for a global
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strategy to deal with such risk. Goldin also predicted that the fundamentals of future hotel investment were good, a sentiment supported by comments from a panel of CEOs from operators Accor (Denis Hennequin), Carlson Rezidor (Hubert Joly), Choice Hotels (Steve Joyce), IHG (Richard Solomons) and Starwood (Frits van Paasschen) all talking optimistically about the future. The impression was that as soon as van Paasschen spoke of “business being surprisingly good (albeit) with challenges in Europe” the other CEOs followed suit. Low growth in supply was helping demand; strong demand from emerging economies; the on-going importance of face- to-face business; conversion opportunities in Europe – were all cited as factors leading van Paasschen to conclude that we are “on the cusp of a golden age as an industry”. The topic of ‘Smart Design’
was covered in a breakout session, and defined succinctly by Koen Van Malder, Projects Director – Design, Construction and Engineering EAME, Starwood Hotels & Resorts as the ability to “design to an ambition and negotiate to a budget”. Acknowledging that measurability was an issue speakers Chris Boulton, Chief Executive of design and marketing studio, Yoo, and Rob Steul, Principal of architects
Woods Bagot Europe, agreed that design must deliver ROI and that all aspects need to work together to bring value to a project. A final day plenary panel
entitled ‘Redefining the Art of Hotel Keeping’ was interesting in that it featured only one hotelier, André Balazs, who was nevertheless great value with penetrating insights into the business based on his practical experience as an owner and operator of eight hotels including The Mercer and Standard Hotels. “The nature of hotel investment with separate ownership from operations makes it difficult to be innovative... and is not good for the guest,” Balazs explained adding that it results in a “banal box” derived from the least expensive build cost per square foot.
Residential developer, John
Hiscox, Chairman, Yoo, talked of enhancing the value of a project through design warning however that it is “difficult to apply the creative process at mass scale.” His lesson from the residential property world was to build “better quality to last longer.” At a more humane level Tyler
Brûlé, Editor in Chief, Monocle and Founder and Chairman of Winkreative, saw that “there are not enough GMs to go around. There is no new Cornell.” Furthermore GMs need to be in the lobby and not responding to all the chatter on the increasingly untrustworthy social media sites.
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