Exclusive insights from the recent 25th Deloitte Hotel Investment Conference.
Tuesday, 19th November 2013
Source : Joseph Fischer - Exclusive Insights only at 4H.
Exclusive Reporting: At the beginning of November, over 400 leaders of the European hotel sector, gathered up at the London Dorchester hotel to listen to some of the world's biggest lodging players;

In my view, this event is one of the two top yearly events for the European Lodging industry and I will name just a few panelists.

On the brand side:
  • Richard Solomons – Chief Executive – InterContinental Hotels.
  • Frits van Paasschen- President & CEO Starwood Hotels & Resorts. Michael Glennie-President & CEO, Fairmont Raffles Hotels.
  • John M. Scott III, President & CEO, Orient Express Hotels.
  • Puneet Chhatwal – CEO, Steigenberger Hotel Group 
On the Investors side:
  • Cody Bradshow – Senior Vice President , Starwood Capital.
  • Coley Brenan-Principal, KSL Capital Partners
  • Helder Pereira, Chairman, Redefine BDL Hotels
  • Struan Robertson-Executive Vice President & Chief Investment Officer, Host Hotels & Resorts.
The general feeling, almost across the board, was of cautious optimism.

Even the world class economist Sir Roger Bootle or as some of us nickname him "Sir Doom and Gloom", has made an unusual statement that "contrary to previous years he is optimistic of the near future"

The hotels CEO's shared their views and pointed out some of the currents changes in strategies. The big changes I noticed where:
  • The willingness of the big brands to start investing again in hotels. These investments will be limited, selective and strategic to the brands but it is a big change from the "Asset Light, Asset Right" that we saw for the last five years.
  • Significant investment in technology is a key to the future success of the big brands. All the panelists emphasized that they invest and that they will continue investing significant amounts of money in the direct distribution channels as well as into the social media. The direct contact between the guest and the brand is the key to the success of the brands.
  • Researching, understanding customer needs and adjusting the hotels to the needs and expectations of the new guests – Generation X and Generation Y.  Hangouts and lounges rather than the classical lobbies will be incorporated in the new hotels.
  • Diverting bookings from the intermediaries or best knows to us as OTA's into the brand's own web sites. This will be done mainly by investment in mobile technologies, pricing and last room availability via own brand own sites.
  • All global brands want to localize branded hotels in order to fit them to where they are located. Becoming a part of the local community and local scene.
Now, let us take a look at what I think was missing in the talks.

I felt that across the board, hoteliers are missing the point when referring to Gen x and Gen Y.

Some call them the Millennial Gen. I think that brands are focusing much effort on the "Baby Boomers" but we need to take a long term view especially in developing new hotels or refurbishing old hotels.

In five years time we will see more gen Y and X in our hotels and less 'baby boomers'.

The sharing economy is the new face of the economy.

Our new client base shops in H&M and Primark, Mango and Zara.  Rent bikes when visiting other cities, uses public transportation as a viable cost-effective alternative. 

That is the new generation that prefers not buying cars for economical and environmental reasons and instead joins Zipcar.

To those of you who don't know, Zipcar is a highly successful model. Membership –based car-sharing company.
Maybe the reason we don't pay too much attention to this shift in our customer base is because most of us if not all, are not part of this generation!

The sharing companies are the single largest challenge to hotels. Airbnb was founded back in 2008. Just five years ago. They now have over 500,000 listings in 33,000 cities and 192 countries.

Global Hotel Brands are doing surveys and researches.

We gather data but do we actually understand the change?

One of the panelists said in the panel he was o??: "It is an evolution rather than a revolution". It might be the case in Germany, Germans don't like revolutions. But overall, I think we do have a revolution and we need to address it and adopt.   

We need to go out of our offices, visit shops, go to see the new hostels coming up in every major city. Fly Ryanair, Wizz Air and other Low Cost Carriers and talk to the people.

We need to think "outside the hotel box". Yes. Most hotels are boxes with some modernistic touches of design led elements, but still boxes.

We should start looking at making hostels – branded hostels in gateway and tourism cities such as:  Amsterdam, Berlin, Barcelona, Budapest, Vienna, Rome, London, Paris, Istanbul and Prague.

Clearly, central locations are a 'must'. However strip-down most of the F&B outlets.

Vending machines, locker rooms, a great bar at the hangout area and few hosts that can give information on what's 'hot' is happening.

Keep it: 'Hip, Clean, Safe and simple' but most importantly affordable for those young people.

Another missing point during all the panels was our human recourses asset.

Our teams of individuals are the ones who make our hotels work and determine if we are successful or not.

he new wave of PE and Venture Capital companies buyers are looking for short to medium term flips.

Buying, refurbishing, and improving operational results.

Trimming down the numbers of permanent staff by moving to Outsourcing and looking for the cheapest workforce solution options in order to improve bottom line results.

At the end of the day, what makes the hotels work are our employees.

I think we should look at the Pan-European Economical recession not only as a challenge to our hotels in terms of occupancy and REVPAR.

This recession is also a huge opportunity to enrich our work teams with highly educated young people who find it very difficult to impossible to find jobs in the professions they studied in Colleges and Universities.

Spain, Greece, Italy, Ireland, Portugal and to some extent France have huge numbers of young well educated unemployed people.

Hotel brands should create a junior management training programs that will have an employment horizon.  

A move like that will enrich our hotels ethnic diversity base as well as draw young well educated people to our industry and boost the economies. 

On this note, let's all adopt and get our new year's resolutions ready.

2014 is literally around the corner. Let's make a change.

This is strictly exclusive material, reprints of this article in any shape or form requires prior written approval from 4Hoteliers.com.

Joseph Fischer is the CEO of Vision Hospitality & Travel - International Lodging and Travel Solutions.

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