The 17th International Hotel Investment Forum 2014 (IHIF) opened to a delegation of close to 2,000 this afternoon. Kerry Gumas, President & Chief Executive Officer, Questex Media Group LLC and Jonathan Worsley, Chairman, Bench Events welcomed all delegates from across the complete range of the investment community. Worsley thanked the 52 members of the advisory board and the 200 participants scheduled to speak, present and moderate over the next three days.
David Fenton, Senior Economist, RBS set the scene with a presentation on The Economic Landscape. He reassured the audience that the developed economies of the UK, USA, Japan and the Euro Zone are in a better economic place now verses Q1 2013. He noted that the question dominating the economic landscape was whether it was necessary for monetary policies to be set at emergency levels? Relaxing the settings, however, means that we are speaking of an economy that is no longer in crisis. If the policies were to be relaxed, Fenton says, we are in for a bumpy ride to normalisation. Looking at the emerging markets, there exists a challenging environment for investors over the next few years. Fentonâs concluding point referenced recent research by Goldman Sachs â The Ladder of Spending. The research charts consumer spending through commodities, to durables, and then services from different markets across the world. The report forecasts significant demand for high-end durables in emerging markets. Both domestic and international tourism fall into the service category that appears in the later stage of the cycle. Fenton says the tourism sector will see significant growth in the next 20-30 years according to the results of the report. âThere will be a 268% growth in global tourism over the next 20 yearsâ.
Simon Johnson, Specialist Markets, CBRE Hotels moderated the following session with panellists Elizabeth Winkle, Managing Director, STR Global, Chris Day, Managing Director, Christie + Co and Michael A. Fishbin, Global & Americas Hospitality Leader, EY, who discussed The Industry Landscape. Winkle warned of that whilst the sector was seeing positive results in terms of occupancy, low rates are limiting RevPAR achievements. She referenced a recent survey by Quartz.com showing a significant amount of domestic travel in the Euro Zone region and that some of the hardest hit areas in Southern Europe are showing positive signs of recovery. Day spoke to hotel transactions and noted appetite for new developments across the UK, suggesting that the remainder of the Queens Moat House (QMH) portfolio would come to market soon. He warned that âpricing was criticalâ and referenced the early signs of competitive bidding for Rocco Forteâs The Lowry Hotel,Â Manchester in the UK. He said we had âmoved out of the dark days of 2009 when hotels outside the heart of London and Paris were incredibly difficult to sellâ and that âmore and more banks were expressing a willingness to lend to the hotel market at reasonable loan to value ratiosâ. Johnson asked each panelist for a specific prediction for the coming year in the industry. Winkle responded that the key was that âmore effective pricing is required, or we will miss the opportunityâ, Day said âprices will increase by 10-15% in the core markets, for both single assets and portfolios, in the next 12 months and Fishbin predicted a clear focus on growth with significant M&A activity to be seen in the USA.
Peter Shaindlin, COO of Halekulani Corporation, ended the dayâs discussions on a high note with his keynote address, Brand Blur: The Benefits and Perils of Brand Alliances. Shaindlin, who oversaw the partnership between famed fashion designer, Vera Wang and Honoluluâs Halekulani Hotel to create the enormously successful Vera Wang Suite, reiterated the importance of brands having a clear vision before forming any strategic relationship. Shaindlin noted that brands often end up in a ârace to the same place,â creating partnerships with leading brands as imitation, instead of focusing on innovation and differentiation. All brands on the search for brand alliances should refer to a select list of partnership criteria, taking into consideration the purpose, benefits, risks, alignment characteristics â from reputation and quality to company culture and values, duration and projected ROI value. Shaindlin stressed in his final takeaway, prior to any partnership criteria, it is imperative to understand your own brand first.
At the end of the day was a great reception in the SAS Radisson hotel.
The evening ended with african food and music
The second day of IHIF 2014 started with a message of thanks to Carlson Rezidor Hotel Group from Kerry Gumas, Chief Executive Officer, Questex Media Group LLC for hosting the African Extravaganza themed opening night reception on Monday night at the Radisson Blu Berlin.
Andrew Sentance CBE, Senior Economic Advisor to PwC opened Tuesdayâs formal sessions with an overview of the global economy. He highlighted that the $USD value of the global economy is currently three times as much as it was at the start of the century. Sentance pointed out that whilst economic growth has been positive, it has not been evenly spread. He said that the Euro Zone was ascendant in the global economy in the 19th century, whilst the 20th century saw the USA dominate the world economic stage. The 21st century sees the Asia Pacific region come to the forefront. One of his key points was the substantial growth that will be seen in the Asia Pacific region, which is home to 60% of the worldâs population. Sentance stated that the end of 2007/8 marked the end of a long and sustained expansion in the UK and other Western Countries, and the conditions that supported this growth were not set to return. These growth drivers included cheap imports, easy money and confidence in policy regime. Sentance concluded that the global outlook for 2014 is improving and that there âis an innate human desire to travelâ.
The next session saw Anita Mendiratta, Founder & Managing Director, CACHET Consulting, in conversation with Taleb Rifai, Secretary-General of the World Tourism Organization (UNWTO) and David Scowsill, President & CEO of the World Travel & Tourism Council (WTTC). The session opened with the statistic that 1 billion people crossed international borders in 2012. That figure is projected to increase to 1.8 billion in 2030. Travel and tourism employs 266 million people globally, and contributes $USD 6.8 trillion, or 9% of the global economy. Scowsill said that it was important that both the WTTC and UNWTO were up to speed with the issues facing the international hotel investment community as both he and Rifai are able to address these routinely with the international heads of state. Scowsill said that he was conscious that better communication channels were required with the investment community and forums such as the IHIF significantly assist with this. According to Rifai, âtravel and tourism is the industry of the future,â and he stated that 1 in 7 people globally make an international visit each year. Asked by Mendiratta what they considered the key opportunities for the next 5-10 years, Rifai responded that âtravel is becoming not only a human need, but a human rightâ and expects 3.3 â 3.5% growth between now and 2013. Scowsill noted that disappointingly, less than 20% of people who study and train in travel and tourism end up working in the industry. There needs to be a change in perception; the travel and tourism industry should be seen as a positive and long lasting career choice.
The next panel to take to the stage was âThe World According to the Global CEOsâ moderated by Michael Hirst OBE, Consultant, CBRE Hotels. Hirst was joined by Jim Abrahamson, President & Chief Executive Officer, Interstate Hotels & Resorts; SĂ©bastien Bazin, Chairman & Chief Executive Officer, Accor; Henri Giscard d'Estaing, Chairman & Chief Executive Officer, Club MĂ©diterranĂ©e and Michael Glennie, President & Chief Operating Officer, FRHI Hotels & Resorts. Hirst opened the session by asking each panellist for their snapshot of 2013. Abrahamson said that Interstate had seen an 8% increase in RevPAR in the US. They have 83 hotels in Europe, 13 in Russia and were seeing strong performance in the UK. Looking at the UK specifically, Abramson mentioned they were seeing good recovery amongst their UK provincial hotels. Bazin stated that Accor had just reported a 6% increase in operating profit across the brand, but are still seeing weak operating in France. He also said that âone Ibis opens every three days around the worldâ. d'Estaing said that whilst he would have preferred a âmore sexy growthâ, they were still seeing positive growth in Asia, including China, as well as in North and Latin America. Glennie said that the US had seen a terrific rebound and that Asian performance was good. Abrahamson announced that Interstate manages over 40 brands and that those in newer markets were performing the best. Bazin stated that the leisure industry has a lot to learn when it comes to the innovations seen in the mobile phone technology market. He also questioned the need to form strategy alliances. Abrahamson acknowledged that the âindustry has been behind the times when it comes to technologyâ, and that revenue management and social media investment, research and development were priorities for Interstate. Glennie stated that it was important to note that âthe customer today brings their own content with themâ and FRHI must be able to facilitate this. The session concluded with Hirst asking what drives and motivates each panellist. Abrahamson said it was the âpassion for developing the future CEOsâ and he was âconstantly excited by the exciting changes taking place in the industryâ. He strongly feels we are moving away from a âbricks and mortar culture towards a service cultureâ. Bazin said he âis convinced that Accor has it all and can control its own destiny. We are the biggest hotel operator in the world by number of bedrooms and larger than the 2nd, 3rd and 4th operator put togetherâ. d'Estaing is confident that Club Med âhas the ability to grow the company on an international levelâ, whilst Glennie responded that the âuntapped growth potential is what is moving us forward. They are still small enough to really shape our brandsâ.
The plenary sessions concluded with the presentation of the Lifetime Achievement Award to Ian Schrager, Chairman & Chief Executive Officer, Ian Schrager Company. On receiving his award, Schrager shared âI consider myself so incredibly lucky to be able to spend my life doing something I loveâ, and that he is âtruly honouredâ to receive the award. Schrager said he sees himself as a social scientist and âlikes to get a feeling for what is in the air, capture it and build it into a hotelâ. Ămer Isvan, President, Servotel Corporation, presented the award to Schrager, and asked the recipient âwhere is the balance between asking the guest to tell you what they want and telling them what they want?â Schrager replied that âwe are a service business and the customer is king. There is a collective unconsciousness and that is what you need to tap intoâ. On his relationship with Marriott, Schrager said he âconsiders the collaboration with Marriott to be the culmination of my career. We pursue excellence, are incredibly competitive and want the bestâ.
At the end of the second day was a networking reception in the Interconti hotel.
The final day of the 17th International Hotel Investment Forum (IHIF) opened with the results of the IHIF Student Challenge which was deservingly awarded to Cornell University School of Hotel Administration. Students took to the stage to summarise their project to the audience. Andrea Belfanti, Executive Director, International Society of Hospitality Consultants (ISHC), then presented the IHIF Young Leader Award to Patricia Gellardo, Global Director of Corporate Social Responsibility and Sustainability, Shangri-La Hotels and Resorts. On presenting the award Belfanti said of Gellardo that she was âtruly passionate and cares deeply about making the world a better placeâ. Gellardo accepted the award and urged everyone in the industry âto think about responsible businessâ. She stated that it was âtime to start doing things differentlyâ. The award is presented in partnership with the IHIF and recognises outstanding contribution to the industry by a young hospitality leader.
Kerry Gumas Chief Executive Officer, Questex Media Group LLC then presented a cheque to Ăcole hĂŽteliĂšre de Lausanne of USD$30,000 for the ongoing support of students in their learning and education at the pioneering centre for hospitality education.
The first panel session of the day was moderated by Anita Mendiratta, Founder & Managing Director, CACHET Consulting, in conversation with Hannah R. Messerli, Senior Private Sector Development Specialist/Tourism, Africa Region, The World Bank Group; Dr Sapta Nirwandar
Vice Minister of Tourism and Creative Economy of the Republic of Indonesia and Hon. Lazaro Nyalandu, Minister for Tourism, United Republic of Tanzania. Mendiratta asked Nirwandar and Nyalandu how they respectively position themselves as desirable tourism destinations? Nyalandu pointed to the pristine nature tourists can experience in Tanzania, the wealth of nature resources available and itâs position as a leading safari destination. He also noted the enormous transformation the country has seen in recent years legally, politically and socially, all of which create an attractive proposition for hospitality investors. He noted the wide range of tax incentives currently available, and indentified Tanzania as one of the leading countries in Africa for direct foreign investment. Nirwandar stated that there was currently a significant amount of human capital investment taking place in Indonesia. Both Tanzania and Indonesia recognise the benefit of working closely with neighbouring countries to create a region that is attractive to tourism investment and therefore tourism. Nyalandu announced during the session that The Africa Hotel Investment Forum (AHIF), organised by Bench Events, will be hosted in Tanzania in 2015. He added that this move will show the international hotel investment community âthat the doors are open for serious investment in Tanzaniaâ.
The formal sessions for the morning concluded with âOwners and Operators Talk Businessâ, which was lead by Christoph HĂ€rle, Chief Executive Officer Continental Europe - Hotels & Hospitality, Jones Lang LaSalle. Three pairs of Owners and Operators took to the stage to discuss their working partnerships and how best to structure communications with your owners and nurture relationships for sustainable growth. Amy McPherson, President & Managing Director, Europe, Marriott Hotels International and Petr Chitipakhovyan, President, CH-Group, stated that mutual respect and honesty were the key contributing elements to their success. Wolfgang M. Neumann, President & Chief Executive Officer, The Rezidor Hotel Group and Frederic de Brem, Managing Director, Algonquin France, discussed current projects and specifically the Radisson Blu Lyon, where both parties are working together on the current remodelling. Neumann said, âthis project puts pay to the rumour that owner and operator canât work together. It is on and time and under budgetâ. Finally Federico Gonzalez Tejera, Chief Executive Officer, NH Hotel Group and Riccardo Dallolio, Head of Alternatives and Special Situations, AXA Real Estate, summarised the general sentiment of the session saying that âtrust, honesty and transparency between partners is vitalâ
International companies continued to announce news at the IHIF including InterContinental Hotels Group (IHGÂź) signing two further hotels in London with Hotel IndigoÂź London - Barbican and Holiday InnÂź Watford Junction. As a result, during the last nine months, IHG signed all six of its current European brands into its Greater London pipeline, further reinforcing IHGâs presence in the UKâs capital. InterContinental Hotels Group (IHGÂź) also announced the signing of Holiday Inn ExpressÂź Manchester Airport. Located nearby the UKâs third busiest airport, the 201 room hotel will operate under a franchise agreement with Manchester Airport PLC and is due to open in the next coming months. Also revealed at the IHIF was the news that Azmont Investments, the owner and developer of Portonovi, a âŹ500 million luxury development in Montenegro with Europeâs first One&Only resort and ultra-luxury residences, announced a new partnership with world-renowned wellness brand, Chenot. Chenot and One&Only Portonovi have teamed up to offer a wellness and vitality centre. Upon its opening in 2016, it will be the first of its kind for the region, offering the Chenot Method range of treatments for complete revitalisation for health-conscious guests.
The IHIF 2015 will take place from the 2-4th March 2015.