Generally speaking residential yields are much lower than hotel yields, the happen to offer lower risk profile, there’s more customers, there’s higher occupancy, and generally speaking residential also tends to correlate with house price inflation, which is different than the hotel business so resi values tend to go with house price values, and so as [...]
Generally speaking residential yields are much lower than hotel yields, the happen to offer lower risk profile, there’s more customers, there’s higher occupancy, and generally speaking residential also tends to correlate with house price inflation, which is different than the hotel business so resi values tend to go with house price values, and so as [...]
Real estate funds can be a part of the development process for hospitality projects. In this TV show Andrew Pratt explains what Patrizia is all about.
Real estate funds and commercial investment businesses
Patrizia was set up in the mid 1980s, basically as a residential property company investing in residential property in Germany. Went through an IPO in 2005, now has over fourteen billion euros worth of assets, mainly in central Europe, fifty residential and commercial, we have thirty funds in Germany, we're the second biggest house builder in Germany as well now, the market in Germany's changing from being a, er, rental market to home ownership. Similar model to the UK. We act for a hundred pension funds across Europe - well across the world, actually. The strategy for Patrizia was to replicate that model, in the UK. Came into the UK, about - just under two years ago now we've been setting up both residential and conversion, commercial investment businesses.
Hospitality TV will continue to feature shows about real estate funds and development. Why not take a look at who else has been featured in the Hospitality250.
I think the main reason you'd invest in a hostel concept is there's a real shortage of this type of accommodation - it's a niche that hasn't been well catered for.
So, while maybe twenty per cent of world travellers are youth travellers, only five per cent of accommodation is designed for youth purposes, so there's a real shortage and the other reason you'd do it is actually the economics are very good, you'll see on a sort of revenue generation index spaces that we will clearly out perform a typical three or four star hotel and the reason for that is simple, we have quite high bed densities, typically there are four beds in each, room, so you've basically got, on a smallish size room with it's en-suite bathroom, four people, consuming, food and drink, er, paying for the bed, and that creates a very, a very powerful, revenue generation per square meter.
Hostel profitability and staffing compared to hotels
In terms of profitability, hostels rank very high, because already the revenue generation is very strong given the bed density, and because our costs are actually much lower - typically for instance we've just opened up our Paris hostel with nine hundred and sixteen beds, and that's staffed by forty five people, so the ratio of staff to guests is incredibly good and on that basis actually our profit per bed and per square meter will certainly be well up in the hotel space. It's not at five star levels, but it's very comparable to many three or four star hotels.
The staffing levels are, obviously, materially lower, because what we're doing is providing much more basic services - the focus is very much on the ground floor, the social spaces where we have our event coordinators, our bar staff, and all the, all the reception staff, this is a 24/7 operation. And then upstairs the housekeeping's much more limited, there are no televisions, there are, just beds, er, and therefore the cleaning is much more basic, but it's functional and very purpose driven.
Hotel owners will all have some common challenges. HOFTEL aims to help hotel owners work together as Simon Allison explains in this video.
Hotel owners unite
Well we are a hotel owner's alliance, so - why? Essentially because if you look at the structure of the industry, I mean most people know, a lot of the hotel real estate is managed by third parties, by other people, and if it isn't managed by third parties it's branded by third parties. And most of those are bigger and more global and certainly more experienced at negotiating contracts than the owners. So, ten years ago, I decided with a group of other owning companies to get together and form an alliance, almost like a hotel owner's trade union. And our objective is to leverage the combined power of owning companies around the world.
Hospitality TV will continue to feature shows about hotel owners and real estate. Why not take a look at who else has been featured in the Hospitality250.
OTAs have disrupted the industry in more ways than one. In this TV show Brian Reeves discusses how OTAs drive conversion rates.
OTA's approach to conversion
I guess the cornerstone, from a conversions perspective, the cornerstone of conversion matrix is abandonment analytics and understanding why it is visitors to our web site don’t end up booking with us. So we look at the performance of a typical hotel’s web site and compare it with the online travel agents; there’s a gulf between the two. So people like Booking.com spend a lot of time, probably a lot of money in multi variant testing which is the key too that drives the conversion improvement. Hotels are starting to pay attention to that a little bit at the moment but what happens as a result is that as the online travel agents improve their conversion rate, their advertising cost per room night sold decreases. So what they’re able to do is carry on with a lot more digital marketing work which tends to be disruptive and gain an awful lot of OTA market share in that space where even if you look at – I think it’s got some of the leading hotel brands. They haven’t caught up from any like, science perspective terms of understanding that key component which is I guess the central component from a travel investment perspective.
The Hospitality Channel will continue to follow discussions around OTAs and bring you videos from experts within online travel agents. Look out for the next 10 industry experts to be announced as part of Hospitality250
New hotel technology can seem daunting to implement. In this TV show Richard Valtr of Mews Systems discusses emulating technology that employees know.
Staff friendly hotel technology
I think most of the people that have actually – that we’ve implemented the system with, they're actually frankly quite shocked at how easy it is to implement, how easy it is to actually train the staff up on the system. Because – especially if you have a young staffing core, they understand some of the features. So for example, the way that we think about the guest profile is actually thinking about it from the point of view of how they would see profiles on a social network so that they can actually work with the guest in the same kind of logic. So we’ve learnt from the likes of Facebook and the likes of Google in trying to actually incorporate all of those things which people understand and know and actually trying to understand these kinds of complex systems from that point of view. So, the actual implementation process and the changeover process is very quick on our side then it usually takes only about one training day to actually get everyone up to speed in most of the hotels that we’ve implemented the system in, so.
The Hospitality Channel will continue to follow developments in hotel technology and will bring you more TV shows from the companies producing new systems.
Staffing in Saudi Arabian hotels: Investing in local talent
Staffing in new hotels can be dealt with by transferring people from elsewhere. However, as Khalid Anib explains in this TV shows, hotels in Saudi Arabia are giving the opportunity to local people.
Staffing new international hotels
Usually these international brands, they do bring people from either sister hotel that is already established in Saudi Arabia or through their other properties that are around the world. Now, Saudi Arabia have been a bit restrictive in term of lifestyle, so that creates a challenge to bring in certain profiles. Having said that, today Saudi Arabia is investing in Saudis basically. All the hotels are really into that . And we have seen recently this ratio growing. I remember it was something around 8/10%, now there are hotels with more than 40%. There is another element that we are noticing recently is that not only rank and file employees but also head of departments to GM’s level. In fact within our hotels we have four Saudi GMs that are very successful. And we have quite a number of number two that will soon be promoted to GM positions. So this combination today allows hotels to run successfully and to provide the quality that is required from a customer. And we can see that through guest reviews that has significantly been improved for the last five years where you could see really bad reviews with maximum of 7.5 on Booking.com or TripAdvisor, where today we have hotels that are highly ranked in term of quality. So today, yes, there is a possibility to provide the quality and to have the right people on board.
The Hospitality Channel will continue to share shows about staffing and recruitment. Look out for the next 10 industry experts to be announced as part of Hospitality250.
Hospitality careers can start anywhere but it is important to keep in mind were you want to get to. In this TV show Ziad El Chaar discusses why aspiring managers must understand return on investment
Hospitality careers and key competencies
Well, let me tell you from our side of the business, I cannot speak about the industry in total. But when you work for us in the hospitality sector, if you are in the top tier management then your main focus is to drive a return on investment for the people who bought that unit, they’ve put that unit in the rental pool and they are relying on us to give them an above average return. So if you’re coming in top tier management, even if you are in housekeeping, you need to think of how can I maximise the return to those people who bought those apartments – those hotel apartments from DAMAC. If you’re coming at a lower level and you’re aspiring to be in management, your main focus is to dazzle and please the customer, no matter what he asks for.
Keep browsing Hospitality TV for more videos discussing hospitality careers.
Hotel investment opportunities can come about locally or internationally but, as Chiheb Ben Mahmoud discusses in this TV show, it is currently more regional.
Hotel investment opportunities not badly affected by recession
The investment for hotels has not been drastically affected by the credit crunch, because it has always been, hotels have always been financed either on a more classical scheme, as opposed to residential and off plan sales. And so in that sense really it will not change much. It remains to a large extent a regional play, probably in the past it was more of a domestic play or pure local play, now it is more a regional. But apart from that, there has not been a significant change, there are no new entrants internationally to the investment scene, at least from the equity front. And perhaps there is less reliance on public funds, on government intervention.
Hospitality trends are more positive as regional markets recover from the recession. In this TV show Anne Walsh shares her insight into the Irish hospitality market.
Ireland, banks, and hospitality trends
What we are definitely seeing now is we’re seeing more transactions. So say in 2008, 2009, 2010 we saw very few asset sales. But in the last year alone we saw 200 million Euros worth of asset sales in Ireland. And we’re foreseeing a lot more of that going forward because seen now that we release assets into the market, we have banks, some foreign banks are exiting the market. And we’ve also a bank that’s currently being liquidated, IBRC. So we’re going to see hotels change hands. So I think the structure of ownership is going to be very different. You know, we’re seeing hoteliers maybe buying back hotels but we’re also seeing a lot of international money coming in. So definitely the profile on ownership, we’ll see new brands come into the market I think in terms of management contracts and franchising. And we’ll also start seeing more recovery in the regional markets whereas in Dublin we’ve been seeing double digit RevPAR growth for the last three years but that hasn’t been reflected in the other regions. But we’re starting to see a lift there as well. So hopefully in three to five years’ time all regions will have recovered and it will be a stronger market.
There will be more interesting discussion on regional hospitality trends on the Hospitality Channel. Keep an eye out for the next experts announced as part of Hospitality250.
Family office investors are looking for opportunities in hospitality and leisure according to James Innes of Chrystal Capital Partners LLP, who explains further in this TV show.
Family office investors in the MENA region
Family office investors are very similar to institutional investors in terms of what they look for. They are looking for strong management scenes, robust businesses, they’re looking for growth scalability. They’re looking for things within the MENA region specifically which are going to benefit from the overall macroeconomic situation, so those industries which are going to benefit from five percent GDP growth, the boom in population, the expansion of the middle classes, the deregulation of legal financial situations. So in terms of specific sectors I think retail, consumer, hospitality and leisure obviously are all key sectors which the families are looking for.
Hospitality TV will continue to follow discussions around family office investors and other funding sources for the hospitality industry.
Industry development has been halted by the global recession in many places. However, the market in Saudi Arabia has grown as Sameer Kazi of SEDCO Holding explains in this TV show.
Industry development through the global financial crisis
The last 10 years. The market has been on the uptake for sure. There was a blip during the global financial crisis which everybody witnessed. But focusing on Saudi Arabia, where we come from, that market on the real estate side did not see a downturn, it just kept moving up. That was for a combination of reasons, because one – there was, given the Sharia compliant nature of that country, people didn’t invest in real estate structured products rather than in assets directly. So that helped them weather the storm very well. Also not a lot of debt was taken on so people were not distressed from a cash flow or an operations perspective to exit. So people held on very well. And given that the public equities were not doing very well, that liquidity came out and went into real estate into Saudi Arabia in particular. So Saudi has done phenomenally well over the last 10 years. Within the region, although there have been certain countries where there have been political unrest or local scenarios, other than that the region has held up and grown very well. UAE is a fantastic example, so is Qatar in terms of infrastructure that they’ve created and the benefits that they’re going to reap and are reaping from that, is really going to help them well for the coming 10/20 years.
Keep browsing videos on the Hospitality Channel for more on industry development. Look out for the next 10 industry experts to be announced as part of Hospitality250.
A technology revolution is happening everywhere. Innovation could help the hospitality industry connect with guests, as Philippe Bijaoui discusses in this TV show.
Innovation & the technology revolution
I think the industry in general needs to put more efforts, put more resources into innovation. We are nearly working the same way that we used to work before. And I think there is a moment where we will need to just think, stop, look and try to innovate. And the other thing is in the operation of, because we are, I mean hotel development is linked to real estate, to business, to return, always think back to the guest. The guest is the bread and butter, is the essence of everything. And I don’t think we can progress in the hotel industry if we don’t place the guest at the centre of our decisions.
We have been one of the first company that you see apps for reservations on smartphones and the iPhones and all that. It opens a wide range of opportunities to communicate directly with the guest before even he checks in. And very soon the check-in will be also available on apps. I see it coming, I don’t know how long it will take to be implemented, we have to resolve security issues of course. But sooner or later we will have that as well. And I think that’s a sector which will keep opening new opportunities.
The Hospitality Channel is following discussions surrounding the technology revolution and how it is affecting the hospitality industry.
The African marketplace will attract different people for different reasons. In this TV show Bernard Forster discusses why he wanted to do business on the continent.
African marketplace opportunities
I mean I have to take a step back in the sense that I’m born in Africa, I’m born in Namibia, I grew up there. So for me there’s sort of a personal relationship. I spent a long time in Europe. I worked out of London a long time, focused on Europe. But I always had sort of the calling, I always wanted to go back home and do something in Africa. And you know, obviously in Namibia I’ve done some stuff there with, you know, with work as well. So it’s really the opportunity. It’s a high risk location still. It still has like I said earlier, high barriers to entry. And it has an opportunity, one has to stick it out, I mean you’ve got to be patient, you’ve got to have those relationships. But if you do and you are patient and you’re willing to take risks, I mean you have to take risks in Africa, then you’ll be rewarded.
The Hospitality Channel will continue to follow development in the African Marketplace and other hospitality markets.
Institutional investors have not taken as much interest in Dubai as they could. In this TV show Joe Sita discusses changes in Dubai over the last four years.
Institutional investors prefer developed markets
The UAE or in Dubai in particular has been always, you know, is essentially an emerging market. So you know, we to a large extent behave like a developed market but you know, essentially we’re still a developing market. You know, that said, so that tends to, because of that status, institutional investment is probably still not quite ready to come to this market to the extent that, you know, I think we would like it. But beyond that sort of pure institutional investor, we’re seeing lots of interest from, you know, real estate investment trusts that are looking to set up here through private equity investment. We’re seeing lots of debt now coming into the market which, you know, five years ago wasn’t there. So you know, generally speaking the whole investor sentiment for the UAE and Dubai in particular have improved dramatically over the last three to four years.
Keep browsing The Hospitality Channel for more discussion on institutional investors and Middle East regional markets. Look out for the next 10 experts added to the Hospitality 250.
If you invest in the hotel sector you have to take a long term view. The tourism industry is cyclical. I think overall, you’ll see that the tourism industry for those who know what they’re doing and investing wisely, can provide higher returns than any other asset class. But you have to take a long term view. Yes, you can be speculative and build for a boom, and get caught out by, you know, something that just goes bust all of a sudden. But it’s the long term investor I think ultimately that wins, and that’s our view. We are buyers, we’re not sellers, we’re buying assets to hold them, to reposition them if necessary, to keep investing in them and make sure they keep on performing well so they can withstand the test of times and the cyclicality of the market.
Hotel real estate ownership has transferred over the past 25 years from brands to banks. In this TV show James Chappell discusses straddling the world of real estate owners and hotel operators.
The hotel real estate overhaul
Our clients really are the people who are involved in the owning of the real estate, that community in the industry. And so we work with banks with individual owners, with real estate investment trusts, basically anybody who owns a hotel real estate asset. I mean 20-25 years ago the real estate asset itself was owned by the brands and they went under, they went though a process of selling off the family silver if you like. They decided are we in the hotel real estate business or are we in the hotel operation business? And there was a real separation and they decided very clearly that actually, we're not real estate guys we are hotel guys, and so 20 years or so ago you had a big inflow of hotel real estate into the market, which was then snapped up by, at the time it was banks, property companies, high net worth individual's trusts that were set up specifically to deal with hotel assets. And what that did is it created a need for a level of skills that was part hotel, part real estate, and it was a skill set that really wasn't there in the marketplace before, so a lot of what Horwath HTL does is we act if you like as a translation service and we straddle both worlds between hotel real estate between the investment community and the hotel operating community, because one of the interesting things about a hotel asset is that unlike other real estate asset classes like commercial or residential or retail, the value of the underlying asset is very closely linked to the performance of the property and so it is very difficult to separate the value of the underlying hotel business from the real estate itself, so you relay need expertise in terms of how the business works, how the contracts are structured and how they work etc.
Custom management agreements are a great way for deals to be made that both sides are happy with. In this TV show Petr Chitipakhovyan of CH Group explains how they can be used.
Custom management agreements for hospitality deals
I like to say that first of all never be so conservative and never stay on the same position, life is changing, and even agreements which has been done 20 years ago or 10 years ago or 20 years ahead, they can be changed as well. And we are doing that with our partners, this custom management agreement, after that we create a special enterprise lease agreement which is something in between. And now we agreed with Marriott to flip our managed hotel to franchising, because of that we create our own company. And because we have enough experience to work with Marriott we have now ability to manage our hotels and the franchising. I think that it’s necessary to have a certain period of time because it’s a question of proper calculation, brand as well invest money to get these hotels running. And 15/20 years, it’s okay. But it has to be good connection with brand that if you would like to discuss something later you have to have your partner who are willing to do that as well if circumstances really changed.
More expert videos are added to The Hospitality Channel every month. Keep an eye out for more great TV shows on custom management agreements, deal-making and related subjects.
In the hospitality industry, development and growth are strong once again. Russell Kett of HVS discusses how developers are confidently seek equity.
Positive industry development
All the pointers are up. Everybody’s excited. Investors are excited. The banks are here in droves. There are people here with developments to try and get people interested in and they’re even getting a good hearing. The operators are buoyant. In my business, we are really based around two types of deals. One is that we have a business which actively sells hotels. And the other side of our business is the advisory side, whether we’re doing some valuations of hotels, we’re dong feasibility studies for new hotels, strategic advice and so forth. So on our agency side we’ve been hugely busy selling peoples’ assets and that side of our business which is called HVS Hodges Ward Elliott. We’re obviously known as valuers and we value hundreds of hotels every year, even out of the London office alone. But what’s perhaps been more surprising in the past 12 months is how many people have come to us with feasibility studies that need to be done. So that’s encouraging in the sense that the new development market is picking up fast. And they are hiring us on the basis that they feel confident that they’re going to get funding, they’ve either got equity behind them or they’re confident of getting it. Some people are using our work to help them to find the debt and they’re confident of getting the debt before they’re even hiring us. So I think that’s an encouraging sign of the industry that that side of the business is on a more upward trend. We’re also getting more involved in helping companies determine their strategy for the future, how they should be growing and maybe how their brand should be developing and so forth. And again that’s encouraging, people are putting behind the sort of batten down the hatches, get our costs down, you know, keep surviving at all costs to saying, well now let’s look to the future, let’s look to how we can grow, how we can expand and so forth.
If you are interested in industry development and business growth, why not browse more TV show on The Hospitality Channel.
UK economy growth has creating a more optimistic atmosphere in the UK hospitality market, and other markets in Europe are beginning to see better times as well. Christopher Day explains further in this TV show.
UK economy growth and hotel investment
I think the vibe in the UK in particular is very positive. We’re seeing a lot of money coming across from the States in the form of private equity and debt funds. And that’s creating a real buzz around any disposals that come to market. Germany also is quite positive France has suffered from the political situation where the tax regime keeps changing. And Spain is starting to emerge from what has been a real period of the doldrums. I think the most exciting thing about Spain from a hotel perspective is that we are starting to see packages of debt come to the market. And that means that the control of that debt will change, hopefully into private equity or debt fund control. And I think that will start to trigger action in the transactional markets. There’s certainly more interest in people acquiring hotel investments. The note of caution is that pricing has to be sensible. If you’re too aggressive on pricing you can actually hurt the demand quite considerably and you probably won’t maximise proceeds.
The Hospitality Channel will continue to follow uk economy growth and the atmosphere in other global markets.
Deal-making is changing as owners are demanding more
Deal-making varies across countries as may be expected. In this TV show Saurabh Chawla of Louvre Hotels Group discusses the current trends that he sees.
You know, the market’s evolving all the time. I do development outside Europe. So I do deals in South America. I do deals in China, in India, in Africa. So it’s a wide spread of deals. The deal making is very different as one would expect. It’s a bit different for each region. The trend I’m seeing is that owners are getting fussier in terms of, you know, why is that I’m giving all my hotels to an operator without the skin in the game. So increasingly we’re seeing owners asking for some sort of financial benefit. And that trend started off in Asia and now I think it’s coming to Europe now and more and more owners are asking for some sort of financial instrument or skin in the game as they call it. Otherwise it’s really good in the making, lots of alcohol to be drunk in many parts of the countries. We have to build trust, especially in Asia and in South America before you can actually get into any sort of deal, Cyprus unlike in Europe where it’s very direct. So yeah, its different markets, different deals.
Keep browsing the Hospitality Channel for more videos on deal making trends and owner/operator relationships.
African Marketplace opportunities can be brought to fruition
The African Marketplace still has untapped potential. In this TV show Lourie Kruger of Kingdom Hotels discusses how to approach this opportunity.
Delivering the potential of the African Marketplace
Broadly, understand your market. And that’s a function of time spent in these markets. The opportunity, everybody’s going to tell you about how large the opportunity in Africa is. It’s to bring that opportunity to fruition and effective or deliver effective value to shareholders you’ve got to understand what your marketplace looks like. And that’s all about managing the risks. I think the African opportunity is all about an untapped market. Again, if you have the resources and the experience that you are going to be able to back yourself in terms of managing the risk, there is no other opportunity at this time as large and with as much potential as Africa.
Find out more about the African marketplace and other global markets by exploring more TV shows on the Hospitality Channel.
The development potential of Zambia is rising as infrastructure is being put in place. It now has so many more opportunities for investors, as Hon. Lawrence Evans, Zambia's Deputy Minister of Tourism & The Arts says in this TV show.
Development potential and investment opportunities
And I think we’ve carried on like that, you know, we’ve been a very, very friendly country, you know, to accommodate people. And I can tell the investors out there that, you know, come to Zambia, you’ll never miss anything and we are going to look after you.There are a lot of opportunities. Before every person looks into investing into a country, you need to look at the stability of that country. How stable is the political scenario there? What has that country got to offer, in terms of protection, you know, to the investor? How safe is that person’s money? What is there for them, you know, to bring the money into the country? What are the returns, you know, for them, you know, when they bring their money into the country? And I think for a county like Zambia I would say, you know, we’ve for a long period of time, you know, lagged behind in a way that, you know, we’ve never actually had roads, you know, like going to the northern circuit which is actually our point now where we should actually look into. If one comes into Zambia and says, “Well you know, you’ve got the nicest falls that we’ve ever seen, you know, the Victoria Falls.” And yet you know, we’ve actually never had a chance to get people, you know, to go to places like Kalene Hills where the source of the Zambezi River is. So those are some of the things that we should be looking into, you know. Where we should actually look into developing these areas so that when people come and visit the Victoria Falls the next thing they should go to now is to go to the source of the Zambezi River.
The Hospitality Channel is very interested in investor behaviour and the development potential for hospitality in local and international regions. We will continue to bring you TV shows on these subjects.
Industry development in London’s challenging marketplace
Industry development is slow in London even though it is a leading city, as Christine Hodder of The Stafford London discusses in this TV show.
Industry development: “London is a rollercoaster”
For London I think has always been that it’s slow to progress. I think the more boutique hotels that are coming online are suiting a certain client base. Something more intimate, not so, you know, not so, you know, not so impersonal. I think London has a hard time accommodating the tech, not so much the technology, but the design implementation that really people are looking for. I think they’re moving towards it. But I think there’s room for – well there’s room for all levels of hotels. And we can see I think over the last four or five years the bigger hotels, like the Park Plaza and Westminster, what I call really large hotels, 700, 800 bedroom hotels, are coming in. Maybe that’s because they feel that London as a leading city has that demand. But in fact it doesn’t. London is like a rollercoaster. You know, it’s busy because you’ve either got a show in town or something is happening. But in a general 12 month period it is a rollercoaster. So it’s, I think it’s difficult to know what really suits London. And London’s expensive. So I suppose one would say that the bigger hotels would accommodate a more affordable stay as London is so busy. So I think certainly room for the four star boutiques. I think the five stars are struggling because of what they need to return on an investment.
If you enjoyed this video about industry development, why not watch more TV shows on The Hospitality Channel?
Industry development in hospitality is limited in some areas of hospitality however loyalty programmes are a new area to explore, as Andrew Boshoff discusses in this TV show.
Industry development innovation
I think loyalty is probably the area that is advancing quickest in hotels because there’s nothing new about a hotel room. As you know, you can say the bathroom should have a transparent door or a wooden door, really it’s the same, it’s still a bathroom and it’s still a bed, and it’s still F&B. So loyalty is where everyone is focusing their efforts in the hospitality industry. I think the way we’re keeping up, I wouldn’t say we’re ahead, but the way we’re keeping up is by investing and adjust the technology required to do the loyalty piece. We leave the hotel operation to the hoteliers and our business is simply as the loyalty management business – a pure loyalty management business.
If you enjoyed this video about industry development, why not watch more TV shows on The Hospitality Channel?
In this business growth show Charlie Osmond discusses the fast growth of the content sharing website Triptease.
Business growth show - Social media for hospitality
We only just launched and we’ve been really blown away by, I guess the reception from the industry first and foremost. And so a lot of the growth really has been driven by people create content. They go and have a great experience, they create a photo review of the hotel and they share it with their friends. And we find that, that photo review often becomes the number one thing they’ve shared to Facebook for two/three months. It’s the most commented by friends and then you know five, ten, fifteen friends can come back as a result of it. So we’ve been growing very much through word of mouth.
If you enjoyed this business growth show, why not watch more TV shows on The Hospitality Channel?
A competitive market is growing in Africa with more domestic and international investment in the African hotel industry. Competition, as Daniel Silke says in this TV show, is the buzzword of the future in Africa.
More competitive market in Africa
You know when you look at the big long term trends in Africa, when you look at the population explosion that’s going to hit this continent over the course, it’s already done so, and it’ll continue to mushroom over the course of the next 50/60 years.
I mean if Nigeria is going to have a population by 2100 of just under a billion people, and that’s what the current United Nations projection shows, 960 million people in Nigeria.
It’s not just African domestic investment that will be looking at this continent. It clearly will be from outside and from overseas and western and other interests as well.
So I think we’re going to see a combination here of where the investment is going to come from on the continent. And I think there’s going to be competition.
I think the big buzzword of the future, frankly, is going to be in competition, African companies, local investment houses, local brands moving into Africa, domestic brands moving into Africa and of course being met by the competition from outside as the outsiders see the domestic environment on the continent becoming a lot more heated, a lot more exciting.
So it’s going to be a real mix. There’s going to be a bun fight in future. And frankly, from a business point of view, whether you’re talking about the hospitality industry or any industry, to me, competition and a competitive planet in every single respect is going to be the business buzzword of the future.
The Hospitality TV Channel will continue to follow the issues competitive markets. Why not watch more videos from Daniel Silke?
Infrastructure development for business and travel
Infrastructure development will making business and travel easier across the African continent as Daniel Silke discusses in this TV show.
Infrastructure development in Africa
The next five years offer more opportunities than they really offer challenges.
I think the well-known challenges are there in the African perspective without a doubt.
Issues surrounding infrastructure development, and the ease of doing business across the African continent broadly, be this through visa, negating visa bottlenecks, improvements in securities, security issues, intelligence issues across the continent important as we’ve seen over the course of the last week here in Kenya.
These are critical issues that we’re not going to get away from quickly. So there is a medium term challenge in Africa to making business easier.
And is also I think, a coming challenge in Africa to really cater for what I expect to be substantial demand, particularly in the leisure and tourism industry, not only from the business traveller, from overseas entering the African continent, but from a growing domestic African market.
That I think will be a central challenge to Africa, to make African travel affordable for a growing domestic African market. And I think that’s going to be the big challenge here.
The Hospitality TV Channel will continue to follow the infrastructure development issues in emerging markets including Africa, Asia and the Middle East
The property market for hotels in Africa offers amazing opportunities. It is an exciting time to invest and develop in Africa as Irwin J Barkan discusses in this TV show.
Property market with few competitors
I’ve been in business for 35 years.
I’ve watched the real estate business in the United States go from just another business to the business, then to the business that destroyed America in the last recession.
And I’ve done business all over the United States, in Canada, made investments all over America and Canada.
And in all that time, which included some of the great booms of American real estate, I have never been to a place where there is so much opportunity and so few competitors that I’m amazed at how many opportunities we have that are absolutely the top quality in each location in Africa.
In each market in Africa we seem to be able to identify one or two properties that fit all the characteristics of what we’re looking for.
That’s never happened to me in 35 years in the United States.
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Industry development in Africa offers return on investment
Industry development in Africa can be rewarding for hotel businesses. There is a high return on investment according to Mossadeck Bally. Further discussion in this TV show.
Industry development: Showcasing Africa’s successes
Talk about Africa. Say that Africa is not a risky continent.
Africa is not one country, so you have many countries, you have many regions, some regions are doing very well, Eastern Africa is doing very well, Kenya is doing very well, Ethiopia is doing very well.
We have some countries which are lacking behind like DRC, Somalia, central Africa, so talk about Africa.
As entrepreneurs we should showcase our successes.
I started my company with 20,000 euros, and today the shares – the capital share of my company is 40 million euros.
So I started very small, one hotel, 77 rooms, today we have eight hotels, 800 rooms and we are employing directly 800 people and indirectly 2,000 people.
So we should really showcase Africa as a success story because when you go to western countries, developed countries, all you see on CNN, BBC is civil wars, the attack on the mall here, the tourist attack on Kenya, what is going on in Somalia.
We should talk more about successes and there are plenty of successes on the continent.
So as entrepreneurs, that’s exactly what we should do.
You can invest in Africa. The return on investment in Africa is much higher than any other continent, including Asia.
So this is what we should showcase.
The Hospitality TV Channel will continue to follow issues around return on investment and the industry development of regional markets including Africa, Asia and Europe
Government investment is necessary for further industry development in Africa. There could be improvements in training, infrastructure, competition and promotion of the continent, as Mossadeck Bally discusses in this Hospitality TV show.
Government investment in Africa
For me the first area win which they should invest is skilled labour.
An example, in all West Africa we don’t have a hotel management school.
So we desperately need the government to really focus on training from the bottom to the upper management on training.
For me, that’s most important thing. You cannot say that tourism is important.
Tourism is a very important sector. We need to attract tourists but you need to train first people.
Second one is infrastructure, we need airports, we need roads, we need airline connections.
Airline fares especially in West Africa, airline fares are too high.
So tourists don’t come because it’s too expensive. So we need to take these prices down. And we need competition.
In most of our countries we don’t have competition, for example in my country Mali, Air France has the monopoly. So we need to attract more international big airlines to Mali, to Burkina Faso, to Ivory Coast so that we can bring down the cost of the tickets.
And the third thing is promotion, we really need to have a very good promotion for our country.
So these are for me the two key sectors in which government should invest and then I will add a fourth one which is integration – regional integration.
As a country we are too small, Mali is a very small country, Burkina is a small country. But as a region then we start becoming interesting for investors.
The Hospitality TV Channel will continue to follow government investment issues in regional markets including Africa, Asia and Europe.
Regulatory framework for business which would be created by government should encourage hotel investment, as Olaf Schmidt discusses in this TV show.
Regulatory frameworks in Tourism
We at IFC, we have an advisory services, which does investment climate work and one of the most important areas that they are involved in, it is called Doing Business.
So one could look up on the web page, doingbusiness.org. All the reports are posted there.
And what they do is to analyse how is the regulatory framework in a country fit for receiving hotel investments. And recommendations are made basically to say for attracting more business to a country you know, certain areas would be worthwhile addressing.
And in the context of tourism investment, I mean there are a few which always stick I mean that you, you know, you have easy visa kind of regulation, that you have easy business set up regulations so that you know, one-stop shop type of thing in an ideal world are available and many, many more kind of regulatory considerations to say this is what the government could contribute to provide the right platform to attract investors.
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The hospitality industry could contribute more to training, sustainable development and equity according to Olaf Schmidt of IFC, who gives his views in this TV show.
What the hospitality industry could do better
I think they could contribute quite a bit on the educational side. So kind of perhaps getting more involved in the vocational training which is something that we see as an area where probably more headway needs to be made, even so there are significant progresses.
And it depends again on the country we are talking about. So that certainly is something where they can bring a lot to the table.
I think it might also be interesting for them to help roll out even more on the energy efficiency side.
It's something we endorse obviously as a multilateral institution, it's a strategic priority for us.
We have developed our own tool which is called EDGE, which stands for Excellence in Design and Greater Efficiency, which basically allows for hotels to see how can they improve on energy efficiency.
We see huge opportunity there. And I think that also the operators have developed quite a bit of knowledge which probably could be further advanced.
And then the last piece is one of the biggest bottlenecks sometimes is the equity contribution, the capital contribution of local owners.
So then it might be interesting to start thinking a little bit outside of the box on the operators’ side. And see even so they want to pursue an asset light strategy, if there could be things how the, you know, perhaps could contribute in a significant way, to get these projects from the financial plan perspective well established.
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Institutional investors with large capital will come from outside Africa and will boost the local investment that is happening, as John Ngumi discusses in this TV show.
Institutional investors in Africa
Interestingly, again over the last 15 years we’ve tried to generate internal resources, and it’s amazing how much of that we have.
How much if you give people an expectation of return and security of investment, the local people will find a way to monetise their assets and if you sort out the banking system and financial system and create a money economy, we’ve been able to generate a tremendous amount of money internally.
But there’s no question that for quite some time, think of us as the US in the 19th century, you’re looking at some very, very large capital needs, that will not come from internal generation. But by the same token they would come from Asia.
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Government investment in Rwanda’s tourism industry
Government investment in Rwanda is providing attractive incentives and guaranteed security measures to business investors.
Government investment in incentives
My question would be why not? Why would you take it elsewhere?
The investment climates in Rwanda is one of the most favouring climates you can ever invest in.
Government has come out with a policy to give incentives to all investors.
And so the incentives have come up as a big attraction to investment, because attraction has so many incentives, lots of attraction activities can come in free, labour is not that expensive, government policies to support investments at all levels, at the central level, at district level, anywhere.
There’s a lot of, you know, energy, and there’s a lot of incentives to promote investment.
So clearly anybody with money I would say bring it down to Rwanda. You know that we boast over our security, Rwanda’s security is 100% guaranteed.
This is one destination that you are able to park your car anywhere and you come and find it tomorrow.
You’re able to do even in any direction you want and you’ll be guaranteed it.
So these are some of the things that honestly you want to comfort a tourist with. So yes, I would invite people to invest in Rwanda.
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The African marketplace is in a unique global position. It has not received the same focus that the BRIC countries have had in recent years, as Tara Ettl discusses in this TV show.
African marketplace has been left out of large scale investment
I think people want to reap the immediate benefit whenever they put in a dollar, they want to reap, you know, more than a dollar out of it.
So I think that there has been a lot of focus in the BRIC countries in the last few years, the last 10 years, Brazil, China, India, that was kind of like the name of the game.
It definitely still is. And without doubt there’s some good opportunities over there.
But I think if you look at it and if you look at the world as such and with globalisation moving on, there’s really a few places in the world left where you can really start from scratch.
Where there is an immense opportunity if you move early on, that instead of putting a dollar in, instead of just reaping two dollars, you may be able to make 20 dollars.
So it is basically still a wide plain that is there to discover. And any kind of discovery that anybody does is always quite exciting because you do, and I think it’s human nature that you start out with having certain reservations about places, unless you’ve actually been there and you’ve seen it and you’ve seen the passion of the people being there.
Nigeria I think is a very good example, being the largest country on the continent, with a huge potential, with people being extremely entrepreneurial in their approaches.
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Sustainable design is something that Wimberly Interiors offers every client as Margaret McMahon discusses here.
Sustainable design is base line
What we try to do is bring it to every client possible.
There are some clients that aren’t necessarily interested in it but what we try to do it very base line from lighting to controls.
We try to insert sustainability into it. I find that it seems to be our younger clients that are so passionate about it which is great because they’re really our future. So it’s extremely important to us.
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The owner/ operator relationship has changed as Alan O'Dea from Mövenpick discusses in this TV show.
Owner/ operator relationship in hospitality
We’ve moved away from owners that built a hotel because they wanted a hotel or it was an ego driven exercise, to owners who really want to see what the return on their investment is.
And they have brought on board on the owner side, asset managers, to keep us on our toes. Essentially where there was very little interaction between an owner and an operator in the past in terms of financial return on the investment.
Now that has completely changed and we need to report and be as transparent as possible and drive business on behalf of the owner and also be extremely aligned with their financial constraints. That is a major change. And that itself has changed the entire relationship between owners and hotel operators.
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Joseph McInerney: "We had just sort of a transitional year coming out of the end of the economic downturn that we had. Last year we had significant increase in occupancy, in average rate and RevPAR. This year is going to be a year where we’re going to be building revenue based on increasing our average rate in hotels. One of the interesting things about our industry over the last three years, we’ve had very little new product come into the marketplace. We had, in the 10 years prior to 2010 we were averaging about 2.2% of new product coming into the marketplace. At the height of the economic downturn unfortunately we had a perfect storm, we brought in 4.3% new supply in 8 and in 9 we brought in 4.9%. So we, you know, created another problem for ourselves. Well, in 2010 we only brought in .7% new product and less than 1% last year and will be less than 1% this year. So the good news is for the industry itself, we’re going to be back to where we were prior to 2007 in average rate and occupancy. And we’ll be doing more business so we’ll be providing more jobs because one of the important things about our industry is we are a job creator, we create jobs."
Joseph McInerney: "We’re finally getting up to a level close to where we were in 2000 because in 2001 after 9/11 we lost 17% of our international travellers, and it stayed that steady up until a couple of years ago. But for every international traveller that comes to the United States, for every 35 of them we have a travel and tourism job, not just in hotels, because travel and tourism really encompasses the whole industry, whether it be hotels, restaurants, convention centres, and the like, so there’s tremendous opportunities. And those people that come spend anywhere from 4 to 6,000 dollars when they hit the shores of the United States. And that money turns over about 10 times in every community. So again we’re a job creator and we’re starting to get into a very positive part of our industry, and it’s nice to see that again."
Joseph McInerney: "To help the industry I’d go out and do a commercial and have it played around the world about why you should come to the United States and take advantage of the different things that we have. I mean we’ve got, you know, it isn’t just New York City or Los Angeles or San Francisco or Chicago, you know, we’ve got the Grand Canyon, we’ve got lakes, we’ve got rivers. We’ve got all kinds of different things for people to see, natural programmes, monuments and different things. So the United States is a pretty vibrant area. But most people from foreign countries only know the gateway cities to go. So I would do that."
Renzo Iorio: "We try to stay connected, of course, as much as we can. We think that during the stay of the client, which I do think that is an important task that we have to comply with. And in this sense all the investment that we are doing in order to … how to ... the check-in, this function is devoted not to reduce the contact but to allow the contact with our people and with the guest in a constructive way and an emotional way rather than just in procedure and doing things. Then it’s important that a good measure of communication on emails, on the stimulation by the web is there, especially to be able to listen to our client through the guest perception etc is there. Probably something more should be done in social media, mainly in terms of listening in freedom what our client is telling about us, both in the way of increasing and upgrading our performance. But also in terms of understand how far the client understand what we are trying to do in the hotel, so really to better communicate. I am not sure that using social media in terms of commercial or a way to promoting is something which is efficient in this sense."
Reasons to continue making deals in difficult environment
Puneet Chhatwal: "The market for deal making has been very tough, however, it’s improving day by day. And I think it’s creating a lot of opportunities, especially on rebranding. I think new construction is tough, will continue to be that way. However, in emerging markets new construction is an opportunity too. The components of a good deal, it should be brand enhancing. It should be sustainable. It should last and not be short-term, it should be long-term. And it should provide a balanced return, both to the operator, to the owner and to the other stakeholders."
Global source funds for London are diverse and broad
Patrick Sanville: ”What we’re seeing is a very diversified, a broad base and diversified base of source of funds. We have the private money, private equity, family office, a lot of French funds. I’ll give you an example, three hotels, smaller hotels were sold last year in Paris for close to over one million a key, and all bought by private funds for families, so ranging from €40 to €65 million. So there’s that kind of money. Then we have of course the southern funds and the Middle Eastern funds to start with, the Qatari, the Abu Dhabi and others. And then we have the Chinese, are making their first entry on the Paris market, buying a property, which is managed by Marriott. And so the Chinese, there was a lot talk about it and nothing else happened but now they’re here for real. And many … you know, that’s continental China and you’ve got people from Singapore, from Hong Kong also looking at the, they would focus mainly to London to start with where they are very comfortable with and Paris and the Côte d'Azur.”
Patrick Sanville: “First of all, in business market is a deal finance now, you know. There’s sufficient cash flow to cover the debt. Is the equity that is required to make the deal finance available? Is there a story to deliver? Is there an upside? Even if there’s no upside, is the yield sufficient to cover the debt payments? These are the kind of things that we will be looking at. Of course, you know, we have to think first, the banks, the kind of deal that can be achieved, because they’re all looking for gateway cities, branded … the good buildings, branded hotels. Everyone is looking for the same type of advance and of a certain size that can, you know, support all the due diligent cost. The banks are lending, if the deal is good the banks are lending. The issue is that there aren’t so many good deals around. The picture is not so rosy. But there’s always a silver lining. I think that, you know, of course it’s going to take time to do the leverage. But there’s always niches and there’s a play, in downmarket, probably even more so. But there will be some … some decent asset to be picked up. And there is plenty of money around. So there will be deals to be done. We’re in that period of recovery and rebuilding the economies.”
Puneet Chhatwal: "Innovation has to be driven along margin expansion and return on investment. Now, whether you drive that innovation through customer experience, whether you drive that innovation by your ability to charge a premium for delivering that experience or whether you’re able to increase the margin by creating more efficiencies. So I think it’s about always consistently improving upon our competitive advantage. And as I said our competitive advantage lies in our ability to provide German management which is solid and fundamental to our business."
Majid Mangalji: "You want to buy at the right point in the cycle, the right kind of asset, from the right seller, and generally we have been buying assets when there is a fair amount of distress and then we try to operate and create value, operating right, doing financial engineering to get the right capital structure and create maximum value for our group and our investors. Every place is in a different point in the cycle, for example the United States is ahead of the curve, we are seeing more recovery there. And even Europe, it’s very difficult to paint Europe with one brush, Europe has got so many different markets. And what we are finding that in the northern European, in the developed markets like Germany and France, they are not suffering too badly. The UK has had a fair amount of turmoil and the many assets in administration and going through difficulties, so there is some good opportunities there. But the southern part of Europe, those markets are still quite challenged, so Portugal, Spain, Italy, Greece, I think are going through a very difficult time."
Majid Mangalji: "Usually you get a lifetime achievement at the end of your life, so I don't know whether this is to give me a message that I’ve come to the end my use, your sell by date has come, but I think that from what I understand is that generally speaking most of the lifetime achievement recipients have in the past been brands, or people that have expanded globally in mainly the branding. In our case we have taken the investment model and the management model globally and I think we have a different approach to our investing and operating of hotels and maybe that is the reason why that is being recognised today."
Majid Mangalji: "If I had to turn the clock back, you’re talking about almost 40 years, that’s when I started. I don't know what I would do differently, we have generally been in ownership, we manage generally speaking and so looking back, I don't know whether we would have done a lot of things differently, we have a global platform, we started with a single hotel 40 years or 38 years ago or so and have grown the platform in a number of countries. So I’ve been very fortunate that we have built up teams in different parts of the world and we have teams that specialise in their markets. So we have a Canadian team, a US team, a European team, so I would say I’ve been very fortunate that in this industry I’ve been able to you know, go to many parts of the world and count myself very fortunate."
Jalil Mekouar: "Brazil, Colombia and Argentina, are countries that would very much welcome capital coming from the northern part of the Americas and the rest of the world, for that matter. And it’s a matter of facilitating that capital flow and helping people understand the different markets. You know you don’t, obviously you don’t deal the same way if you deal with an Argentinean investor or developer as if you were dealing with a New York based developer. It’s very, very cultural. It’s very much understanding the business practices and at the same time bringing the transparency and professionalism that they are looking for but by mitigating the risks. So we are hoping that having a very strong global network that we’ll be able to bring that to the investment community.”
Jalil Mekouar: "Operators and owners have different interests, although operators might tend to say, “We have the same interest as the ... as the owners.” But ... but there can’t be, they have their own interest and so be it. And that’s good. That’s healthy. I think what’s happened ... if you look at what happened in the Middle East for example, I’ll just take it as an example, at one point it was an owners market and then it was an operators market and then an owners market again. It really depends on the dynamics of that particular market. So at one point the owners will be in a stronger position and they will be able to impose their rule basically, things like minimum guarantees and owners’ protections and things like that. And at some other times the operators will be in a driving seat and a strong position and they will be able to impose their own rules to the owners. And I think as far as I see, the stronger Africa will become as a safe destination for investment and the more it will be an owners market and i.e. owners will be able to impose their rules and say, “You operators will have to compete to go and manage my particular property.” And as the owners get more sophisticated and understand more of the needs of the operators and the investment community they will also ... and the lenders etc, they will also be able to impose their rules in a smarter way so to speak. And then the operators will feel, you know what, it’s fair enough."
Jalil Mekouar: "If you were to look at how much investment we’re seeing and you compare that to how much investment you see somewhere else you might be disappointed. What I like to say is, compare the potential of when you see Africa, it’s about what, 50 plus countries, 55 countries, a billion people, 1,000 languages, so much of cultural diversity and so much of opportunities there business wise as well, the growth of the population, the middle class growth etc, etc, etc. All those indicators are fantastic, are great. How that translates into investment opportunities is difficult to say because all that needs to be balanced with the right infrastructure, the right decisions from governments’ safety and security of the people and the capital and being able to repatriate money etc, etc. So in that respect, Africa still has some way to go and because of that increased interest into Africa. I think governments and people will understand and the business community will understand that they have no choice but to provide the right legal environment and transparency and the right framework to precisely capture that interest and convert that interest into investments. So do we see increased investment? Yes but from a fairly low base err, so percentage wise it might look great, dollar wise it might look pretty weak compared to other destinations and other emerging markets.”
Steve Pateman: “I think the most disruptive force at the moment is uncertainty, people like certainty in their lives. And I think people like certainty in economies and they like certainties in politics and they like certainties in outlook. And at the moment the world has none of the above. So I think uncertainty is the biggest hit, because if you’re uncertain about your future, you’re uncertain about your prospects of employment, you’re uncertain about your income prospects then you won’t spend money or you’ll save more money, you’ll be more cautious, you’ll defer spending and so on and so forth. And actually that is a massively depressive effect on the UK economy, indeed any economy for that matter, because if people aren’t spending then actually economic growth isn’t being generated. It’s a very simple model to get right and actually it’s a very simple model to get wrong. And I think lots of economies, particularly in the developed world have got it wrong, not through any fault of their own, but for, you know, function of circumstance over a number of years where the debt has built up and so on and so forth. And it’s very hard too, you can’t tell people to be confident about their future and look optimistic, they’ve got to want to feel it. And I’ve seen a lot of businesses that desire to invest, desire to grow, desire to do new things but a real cautiousness about whether the consumer will be there to justify that investment. And I think that’s the biggest drag factor on the economy in this country and the economy in Europe at this moment in time is confidence. And confidence is about certainty and there is very little certainty in whichever direction you look at.”
Hospitality a fundamental part of UK service industry
Steve Pateman: "We’ve been involved with the British Hospitality Association now for the last couple of years. Since we started building our corporate, commercial and business bank in the UK, which is only three or four years old in itself because we didn’t use to have that business at all. It’s very important that you kind of connect with the key industries in the UK. And the UK is a service economy. You just have to look at the, you know, when the service industry isn’t performing well the GDP isn’t performing well. And the hospitality is a fundamental part of the service industry in the UK. And we’ve got lots of hotels, we’ve got lots of restaurants, we’ve got lots of leisure facilities in the UK. And actually being in touch with that part of the UK currently is very important for any bank that wants to grow in the UK. And we want to grow in the UK. So we’ve grown our lending to small businesses by 20% per annum over the course of the last three or four years. We intend to kind of maintain that trajectory, and being in touch with these types of businesses is a good way of achieving that."
David Fenton: "The possibilities for big data are almost endless. If you look at the companies that are succeeding right now, I'm talking outside the hotel sector, they are companies that know what to do with data. They have access to a lot of it and they use it very well to understand their consumers better, to understand what their competitors are doing. Not just the competitors today but who their future competitors might be. And, yeah, no big data is absolutely what is going to drive the process of change in any industry going forward and we've only just begun."
Alex Kyriakidis: "What we are aiming to do here is really focus on the brands that resonate most with the consumer in the region that we are dealing with. And today I would say if you look at sub-Saharan and Southern Africa, it’s very much Marriott, it’s very much Marriott executive apartments. And our select service brands of Courtyard by Marriott and Residence Inn, these are the brands that we see leading the way across sub-Saharan and Southern Africa. In due course as those markets begin to mature and you have depth and breadth in talent in the industry you can see some of our luxury brands also beginning to come into play. But that is the evolution that the industry will go through over the next few years."
Josh Wyatt: "In any industry, there are always challenges, especially after a significant economic downturn. The hotel industry I believe, has suffered in the last four to five years with respect to a couple of key things, one is innovation. If you look at where technology has gone in other industries, whether it’s entertainment, media, advertising, fashion, there’s been a great sense of innovation because these companies have been forced to innovate because of economic pressure. The same has not happened necessarily in the hotel space. So we’re big believers in innovation and technology to drive forward the guest offering and hopefully to drive better profits down at the hotel level. I also think that design and how an interior is designed for the hotel guest needs to have a rethink. It’s not necessarily adding more expensive things, but it’s being more intelligent about what the guest wants. We’re looking in all of our products, whether again it’s up at the five star space or down at the youth hostel space to see what our guests truly want and what they value. And we’re trying to accommodate that by using better design spaces. So I think there’s two key things, better innovation, better design for the guest. I think is absolutely critical to ensure the healthy success of the hotel industry going forward."
Chief Edem Duke: "For hospitality today, currently we are undersupplied. We are undersupplied by the big chains and Nigeria currently a decent bed is about US $1,000. And it’s only … Nigeria is the only market in the hospitality industry worldwide where prices hardly go down because of insufficient supply in the market. And you never go round. The problem with the Nigerian market is that the moment you step in you will never ever want to get out. And you know the oil companies know that, the airlines know that, the telecoms know that, and so on and so forth. So I see a new frontier for growth in hospitality and leisure as well as entertainment. And we as government are willing and able to ensure that we create the atmosphere and conveniences necessary for the investor to actualise his full potential."
Chief Edem Duke: "There are perception issues. And that is because we as Nigeria are not telling our stories. We’re not promoting our market aggressively enough. And so people pick up on a few negative news. And the interesting thing on the flip-side of the coin is that those who go into Nigeria make huge profits, they never tell anybody about it, because they want to keep out the competition. That is why you have the hydrocarbon explorers who have been there for over 75 years. You have the airlines who have been there for almost 100 years. And you have the telecoms companies that, wherever they originated from and they were about to go out of business, the moment they step into the Nigerian market and they become global leaders. So there is need for us to manage the reputation of our country. There is need for us to engage with international media. It is also important for us to engage with the sector, the investors, so that together we can move the industry forward. The opportunities are enormous, the potentials are unbelievable, and I think the time is now."
Robert Cook: "I think the markets looking for something different. When we launched both the brands in ’94, it was to get away from the boxes that were being created and the blamange that was out there. And to get away from that sort of bland vanilla and give hotels a bit of rock and roll. And somewhere that you could go and eat, having...a great restaurant business within the business. We’ve always founded both the brands and buying interesting buildings and almost sleepy old buildings on street corners that no one went to and try and do something with them. So we’ve, we recently opened the Edinburgh Hotel du Vin, which was the old lunatic asylum in Edinburgh - the old sort of prison which was famous for the first ever Italian Job film. When we buy a building it’s not what you do to it, it’s what you don’t do to it. So if we’ve got fantastic stone or steel or steel girders or interesting staircases, we try and keep them and incorporate them in the bedrooms. I mean we are a hotel group that dares to be different. So, in our strap line we try and behave like that when we’re designing our hotels and as I say, expose as much of the goodness that you’ve bought rather than hide it with plasterboard and make them into boxes. It’s really important for us."
At the time of filming, Robert Cook was CEO at Hotel du Vin and Malmaison.
Jean-Philippe Chomette: "Both chains and ah I would say, entrepreneur hoteliers are right. It always depends on the product. We have created for instance, a ski resort brand which is called Temmos. Temmos is a chain, a micro-chain of 5 properties, 600 rooms, in very high altitude resorts in France like Val d'Isère, Chamonix, Les Arcs and there we have created a brand. We have renovated our hotels so that they look very much a look and feel that is similar across the properties. Why have we done that? Because we felt that nobody was proposing to the client a true modern mountain experience with a strong seminar and business corporate possibilities. All our mountain hotels have seminar centres, so we cater both to the ah individual clients but also to corporates, which is very important during the winter season. And there we have created a brand and I think that it’s been a good decision. But when you own a hotel in the periphery of a large city like Paris or a hotel we recently purchased in Edinburgh, what do I add to the business proposition by just creating my own little home brand? Nothing. So it all depends on the the asset. I think that in 95% of the cases, people with existing brands are going to provide us, whether it’s from the Accor Group, the Marriott Group, the Hilton Group, you name it, are going to pro provide us with a better brand, a better client proposition, a better reservation platform than what we would do on our own. And sometimes, in very small niches, like ski resort, we look around and say, there is nothing, let’s create something. So, it all depends on the asset."
Arthur de Haast: "From our perspective, one of the things that I think a lot of people in the industry, whether they are the operators or particularly the operators...to think carefully about, in order for the industry to continue to flourish and to grow, it needs inward investment. And in order to attract inward investment you’re competing with a wide range of other investment opportunities out there, not just in the real estate space which in itself is a direct competitor, but also much more widely and equities, bonds and so on. So the hotel industry has to think quite carefully about what it is, what is the investment proposition they’re offering in order to attract that capital. So, I think that’s one of the key things. And they need to think more, there are lots of stakeholders in the industry, obviously the client, the consumer that stays in the hotel, you know, the employees, the shareholders of the companies. But also those who are actually putting money into the bricks and mortar and so on, I think a little bit more focus and emphasis on that is important."
Algonquin takes an usual approach to asset management
Jean-Philippe Chomette: "It is fairly unusual but it’s a specificity that we really want to focus on, because they are good for our co-investors and they are also good for the large chains we work with. For our co-investors it’s really important that they know that each time we manage a property we are invested as equity partners with them. So our conflict of interest, if you will, as a business solution provider or as a manager of a property is really diminished by the fact that we are involved at the equity level, sometimes very significantly. For the chains, it’s actually very interesting for them to have direct interactions with a hotelier instead of having interaction with an asset manager or with a real estate type investor. We are first and foremost hoteliers, but as you mention, we we we own the very large majority of our hotels, we own the real estate of."
According to Laurence Geller, CEO of Geller Investment Company, the key to great hospitality careers is to display boldness and passion at all times. Too many people want brilliant hospitality careers but display little enthusiasm.
Laurence Geller on hospitality careers: "I would say that a very good example is Gerard Greene at Yotel. Gerard, I’ve known him since he was a kiddie. And what he did was he came … and this is so, this is what I would say, if you have a belief, and I always had my own beliefs, you stick to it, don’t let somebody tell you that’s not what happens. Yotel shouldn’t have existed, my hotel shouldn’t have existed. What I’ve done with the businesses shouldn’t have exited, if I’d have listened to everybody else they wouldn’t have. If you’re right, be bold, be passionate, be honest and don’t give in, be very persistent. I’m a Churchillian, he never gave in, I won’t and these kids shouldn’t and they won’t, because they’re going to change our world, and I just want to watch it and have a little piece of it."
Laurence Geller: "You have to communicate with them on this highly changing, highly volatile world. The social media is their method of communication. They hardly talk on the phone. They don’t read papers. So you have to communicate with them, not just to sell. But you have to communicate to learn what they want because their aspirations today or what they want today is influencing gen X, which is influencing our hotels. If you don’t communicate with gen Y, I might as well give up. So it’s really hard for an old man like me to do it. But it’s all crucial, so the money has to be spent on investing in social media companies, and investing in communication with these guys. We spend an awful lot of money on focus groups, trying to understand what they’re telling us."
Laurence Geller: "Almost too much exuberance, a little bit too much optimism, which is good. But on the one hand you have the curmudgeons say Europe is over and on the other hand let’s do some deals. And I don’t think Europe is over. I think everything is coming back but slowly. What three things could they be doing better, focusing on the under 28s, focusing on market share growth. And stop developing new brands for the sake of selling more franchises, and build the existing brands better."
Laurence Geller: "Lots of things satisfy investors, normally it’s return. But where you’re competing for money, as I’ve been all my life, in the investment market, what you need is not just the deal, but you need the components of the deal, the skills, the reputation, the history and the proven sponsorship. In the United States where I built my first business, I set up to be so attractive because our asset management of these multi 100 million dollar assets were so good that we were an investor’s choice. And in any case we went public on the stock market choice. In the UK, for example, I’ve gone on the Board of Michelle’s and Taylor, David and Michelle’s company which is modelled after my asset management company in the US, because without having that certainty of real deep expertise as an owner, for an investor it’s skinny. So I think what’s really needed is all of the dots coming together, not just a deal and not just, I have an idea. It’s here is a deal. Here is the idea. Here is how I execute. Here is my track record, this is the depth.
Richard Candey: "For a business of our size, with almost 50,000 employees, it is a constant challenge. But I’m not sure that any company of that magnitude ever gets really on top of. But certainly where it is important for those individuals to have the latest technology to be able to be at the table on certain opportunities as opposed to have missed them, critical. And in our business we focus on that and invest on that area very heavily."
Richard Candey: "Branding and the proliferation of brands will continue. It’s a double edge sword though in my view. As certain markets get saturated with branded product, then that creates an opportunity for a more independent focused operator to find a niche and operate very successfully. And you’re seeing that even in markets with, you know a lot of supply. So product differentiation I think will become even more important. Clearly your markets where demand is incredibly high will continue to be so, then proper brand, proper location and good management."
Richard Candey: "Location, first and foremost, the property fundamentals, the market fundamentals need to be solid and strong. Yes, it doesn’t need to be trading at the top of its class, top of its marketplace, but the opportunity to get there must exist. Buyers instinctively feel that they can do a better job than the current owners, and therefore demonstrating where that growth potential is in order to add value, crucial. The trend that I’m really seeing is around, on the deal making side, where the opportunities are stemming from. And my feeling is that over the next three years loan sales will continue to be a key factor in the market. And those will help to deliver more opportunities through loan services and that investor seeking to exit from his original purchase."
Philippe Baretaud: "Middle East is high in the ACCOR’s agenda. We have developed all our brands over there. We have a dedicated team based in Dubai and taking care of all the Middle East. I was fortunate enough to be based there for five years. And I would say that it’s a tremendous opportunity for hotel developers. We have basically the biggest hotel network with all our brands in UAE in Dubai, with still openings in Abu Dhabi, we opened recently in Abu Dhabi a Sofitel Corniche. And two more Sofitels are coming up in Dubai as well, one resort on Sheikh Zayed Road close to the tower. And we are also going to open properties, Pullman upscale property in Doha soon. So I would say that when you look at the figures, it’s like we say trees don’t get up to the sky but somewhere we can see tremendous performances. Of course with Dubai first being a hub with all segments coming there. But still every destination in the Middle East I would say managing to take its own place with its own specifics."
Philippe Baretaud: "So some countries and most of the time with natural resources, rich in natural resources are expanding. But you look at the hotel development map from big chains and it’s most of the time on the main capital city, big hubs, and not...the country, because once again the difficulty to attract tourism, except if you take Tanzania, Zanzibar, Kenya or somewhere. But otherwise it’s really somewhere where yes, Africa is speeding up its development. Africa has a great potential. But still coming from behind and having to catch up, and also some disappointments so far, with for instance, the growth in South Africa which hasn’t met its targets, and then constitute, I would say, a drawback and make all African growth lagging behind. And even if it’s taken over by Nigeria very fortunately, so you see some imbalances and also the fact that there is a great deal of long road to go, I will say. But we are strong about Africa. We are first hotel operator in Africa including North Africa. And we have at the present time 114 hotels, 17,000 rooms open and 5,000 rooms in the pipe with 30 hotels. Last year only in 2012 we opened 12 hotels and close to 3,000 rooms."
Philippe Baretaud: "The emerging markets in Europe, mainly Russia, Turkey and I would say new refreshed Eastern Europe, I’m thinking about Poland for instance. But taking Russia and Turkey, they are the main fields of development where hotel groups with the advantages of their brands of being able to channel through their distribution and their network in the sourced markets like Europe for instance, to channel a lot of western travellers. So they are fields of developments, so we have the ... I would say that for instance in Russia, we have the first pipeline with a lot of Novotel, Ibis coming up, Sofitel and Pullman soon to be signed as well in Moscow. And we are spreading out with our brands all over the Russian country, which is important, not only in Moscow, but also other cities, using both management and a franchise, when it makes sense."
Arora sees plenty of new opportunities in UK market
Surinder Arora: "In London, a lot of bed stock is coming on the market as we speak. I’m not seeing anybody feeling nervous about it. But I certainly would want to make sure, that I’m counting on my fingers before I do something there that. If you’re starting a new project now, it’ll take two or three years before one can open the property. But there are a lot of prospects. I’ve always tried to go for building in the right place, right location, most important having the right team, the best people there. From our point of view, we’ve already got I guess eight or nine new projects. Some of those we’re building for others. I mentioned the budget hotels and some of them we’re building for ourselves. So I guess for the next two to three years, that will keep us busy. We’ve started our first new build, a Premier Inn at Heathrow last month. We started our second Premier Inn at Gatwick last week, and we hope to start our third one at Stansted by Easter. So I guess over the next two years, we’re going to be having, starting eight or nine new projects. That’ll keep the development team full on, you know. So there’s plenty going on."
Mark Wynne Smith: "There is a vast area of 12 hours flying from one end to the other, if you include the whole of North Africa as well. There are pockets of great success. I think Dubai in itself has probably crossed over that Rubicon now of being too big to fail. It probably wasn’t quite there a couple of years ago. But again it’s what has occurred in that market is a segmentation, you know where the successful locations are, you know which successful segments to concentrate on. There are some guys who are still building the wrong hotels in the wrong location and they will struggle for sure. I think, again, if you look at Qatar, a lot of very bold and exciting development going on in the country there because of the way the country has benefitted from natural resources, it’ll all occur. Where things have calmed down and realistically so are some of the countries like Egypt, which has obviously seen the most unrest. I always come back to what these countries have to offer. Political unrest does end and yes the market’s been horribly impacted. But there is, over a five year period a path back to recovery and the natural assets they’ve got, the natural interest that they’ve got will increase your visit numbers. Across the piece I think there are a lot of developers who are very visionary, that are probably a little bit ahead of the market development. And there are some incredibly bold schemes which honestly will never get funded. What we forget is how the pace of world travel is growing now. Even around this conference I have talked to a good number of people who present this lovely project in front of you and you think well, how do I differentiate that from the previous four I’ve just seen? And they’re all in my later box. But I do generally...the market has held itself together very well after what we saw over the last 12 months. And surely political security comes back then normal patterns will start to reoccur."
Mark Wynne Smith: "The single biggest factor is to be a good executor. And by that I mean people who have done the right things at the right time. Again you look at our industry it was … we go back to 15 years ago, it was a cottage industry, I can’t remember how many people turned up there but it was a couple of hundred, and obviously what has happened is that as more assets have gone out into the public domain, as groups have adopted far more aggressive growth prospects, the whole market has expanded. New participants have come in and again on occasions they didn’t do anything wrong, it was just they did the right thing at the wrong time. And clearly over-leverage, all of these types of aspects has meant that the market has contracted quite a lot, in terms of the number of active participants. So if you are the type of company who has shown that you can perform in what the last couple of years, when you go to the table with the bank and you are negotiating over a loan, I think that sense of comfort that these guys do know what they’re talking about is what gets you ahead of the list. One of the interesting things, which is developing though is around the liking for banks to lend to their current customers because this is actually reaching the end of the line now because we have the point of single borrower concentration. So at some point they have to start lending to new guys because they can’t lend anything more to their current guys."
Mark Wynne Smith: "Clearly from Asia, I think has woken up after Chinese New Year and come back positive. We didn’t see that over the previous six months, there was a lot of concern about what was actually happening in Europe, possibly over-concern. But again Asian investors can be quite intuitive at times. So as the noise in the press has started to reduce around Greece defaulting etc, we’ve just seen Asian investors generally returning to the negotiating table. But again from a development perspective that hasn’t really stopped, but it’s more about people actually buying trading assets. But there’s more positive signs there that the market will return to what we normally expect."
Simon Vincent: "We obviously look for a good commercial deal and we obviously look to put, a brand into a hotel project that fits the customer requirement. We look to work with a very strong development partner. We look to get strong financing behind a project. And overall we look for a project that’s going to add value to the overall Hilton portfolio and be an important part of our expansion plan."
Kingsley Seevaratnam: "I think we would be best described as asset managers. In all of these turnarounds we also have equity positions. So we don’t ... we are not what we could call a typical manager who would take a long-term management contract. So what we do is we go in, take a piece of the action and we turn the whole thing around on that basis. So what happens is we share in the upside as well as we share in the downside. Now, in terms of the turnaround, what we generally do is we look at the brand that is currently operating and if we feel uncomfortable with the brand, that the brand is not delivering for one reason or another, we look to change the brand. And in the course of changing the brand invariably these hotels are tired so there is a question of repositioning as well which we go in and do when we have all the skill sets in-house. And then we take a good look at the managers running it. We look at them, the payroll cost. We look at all of the costs associated with it and the positioning of the asset. And so over a period, we give ourselves a period of about two to three years to achieve that as well. And the other thing we do before we set out is we do a very detailed underwriting, which is like what we call a business plan. So we do the business plan. We do the numeracy bit and make sure that they’re all in terms of return on investment, IRRs and all of that, they meet the criteria. And then once we’re happy with that we just monitor it and make sure it’s delivered."
Peter Norman: "The owner’s got to be the right owner. We’ve got to have an alignment in our aspirations for the opportunity. And then the location is so important, so both parties have to make money and by the nature of how a management contract’s structured the more successful the opportunity both parties win. So you’ve got to do your research right at the start. You’ve got to make sure that you looked at the market and therefore you understand where you want to go, which is the right brand for that particular product. And sometimes you decide that one of our Hyatt brands isn’t the right one. And the owner will go to somebody else because we don’t cover the whole spectrum of the hotel industry. So I think that for us it’s important that the research is done upfront to make sure that you’ve got the right brand in the right location regardless of whether it’s going to be our brand. And I think that those owners that have really put that investment upfront, then they’re going to be the ones that are successful. And if it means that they’re going to be successful with our brand, great. If they’re successful with another brand that’s also okay. At the end of the day that benefits the hotel industry and the image of the hotel industry in helping owners realise and become profitable."
Peter Norman: "If you take western Europe then there is more and more now the potential of an opportunity to, we see in buying assets. So getting into some of those cities where maybe a few years ago, because of the pricing and the competition, it was very hard to find those locations that maybe went 200 years ago in mature western European cities. So that is your … your Romes, your London, your Paris’s, your Madrid’s and your erm, Barcelona’s. Moving out of there and looking as going further east then it’s a slightly different opportunity, there you’re seeing still people struggling to find the financing. But at the end of the day in the right location with the right project then that’s going to find and attract the funding in order to develop it out. And that’s more Hyatt Place, Hyatt Regency which is our sort of five star, four star brands and that’s where we’ve been pushing out, to go into cities such as Sochi, more representation within Moscow, St Petersburg, in those key locations. And then as you go down into Africa you have sub, you have first of all North Africa where you’re focused more on potential tourism opportunities and then as you go sub Sahara then there’s an element of the strategy following the oil and gas or the resources. And so you’re looking at places like Rwanda, Lagos and then you have the tourism element which is more then towards the east coast, so err, Dar-es-Salaam, going down across or going across to Zanzibar, Arusha, the gateway to the Serengeti, Nairobi and then going further down to following the coastry to see where we believe there is a better future for resort development."
Peter Norman: "Africa’s always been a place for people to make money and they have made money. But the risk and the reward profile is very different. There’s also been many dawns in Africa. But this particular one, with the amount of inbound investment focused on resources, so whether it’s the Chinese, Indian, western European, Middle Eastern investment, looking at opportunities to really buy resources in preparation for future need, it’s more likely to happen this time round. So yes, it is quite exciting, I think not only for the hotel groups, they’re looking to really drive their business into Africa but for the people that live there, there is more job opportunity, there are more the future looks brighter, a lot brighter. And that, as economy builds and that money trickles in to the rest of the population then maybe this time it might happen. And it might happen in the right way."
Peter Norman: "Owners throughout the region have become more sophisticated. They understand the benefit of using professional advisors to guide them through the negotiation process. That’s one big change in how owners approach a negotiation. Then the other thing that we’ve noticed more recently is that there’s more of a focus on how can the operator help an owner in today’s current market, really help with the funding of their project. So today it’s really hard to really generate sufficient funding or financing for a project. And you can’t go out and spend $250,000 a key to build an all singing and dancing hotel without getting a little bit of leverage on there. There aren’t that many owners that have cash. And they don’t put all their cash into that project. So they need help with the debt and so there’s more and more people now or owners asking us for, “Can you help us secure the funding for this project?” And that’s where all operators are having to really consider, do we make a financial commitment to this project and in what form does that financial commitment take. And that’s a question of listening to what the owner wants and then trying to structure it within our parameters of negotiating to make the project work."
James Berresford: "I’m a huge supporter of research and intelligence. As a government-supported body we had our budget cut, quite significantly actually, at the last spending round and one thing I was determined to keep on hold of was our research and intelligence capability, because you’ve got to make decisions based on what the market wants, where the market’s going. You’ve got to make decisions based on the customer and what the customer feels. And we’ve kept that and we’ve got a good strong core at a national level. But I do see, as money becomes tight up and down the country, people are backing away from research and intelligence and actually consumer-research intelligence and that worries me greatly, it worries me greatly. In our individual components we do hold a lot of valuable information. Again, the tourism and hospitality industry needs to share that, it needs to be much more open about that in my view. I know there’s commercial sensitivity, of course there is, but we need to share that. Now, we as a national body are a great vehicle through which that information can be shared but, you know, I would feel incredibly depressed on behalf of the industry, on behalf of tourism, if we didn’t concentrate on research and intelligence."
Yann Caillère:"China of course is a big focus, not only with our actual brand but we have decided to launch a new brand last week... means Grand Mercure in Chinese. It will upscale the brand dedicated to the Chinese customer. We had the requests from all the survey we have conducted of Chinese guest expectations, to be much more Chinese than we used to be with Mercure or Pullman, meaning by that uniform will be Chinese, food will be Chinese. I mean it will be really a product meant for the Chinese customer. Sofitel is very present for the time being in China. We are actually operating 24 Sofitels in China. This is our first country in the world. And Pullman is expanding with rapid growth. So China as you can imagine with over one billion inhabitants is not only the market of tomorrow, it is the market of today."
Yann Caillère: "So I think we have different mode in fact, you know. We have some subsidiary, we did some with ibis for instance. We have some management agreement. We have some franchise agreement. And we have what we call a manchise agreement. It’s a mix between management and franchise. So we do provide the GM basically. But we don’t provide the management agreement, you know, then it’s just a franchise with a GM. So we are very much flexible on that market. And because this market is very domestic oriented you know. And except few cities but the majority of our competitors are national companies. So we adapt ourself accordingly."
Steven Rudnitsky: "With the millennium generation, really starting to enter into the workforce at a far greater level than years past obviously, they really do have expectations around bandwidth if you will, by way of example. They want their iPad, their iPods, their laptops to all work not just in their rooms but in their lobbies and in their meeting space. And people have multiple pieces of equipment, our properties allow for multiple devices to work wherever you are in our properties. It’s that type of connectivity that younger business people are really demanding and quite frankly it’s just kind of a way of the world that we need to respond to it. I think that’s one good example of what’s occurring out in the market."
Ian Goldin: "Technology is a double-edged sword. It can be both an enabler and a major, major problem for society. This is not new, Einstein saw this with his work, people have always seen that, even the things which are so brilliant at, for example, prolonging lives create other problems which is high levels of dependency ratios in society. So all these technologies need to be thought through, I think what’s most troubling is the technologies which could really be revolutionary in terms of cognitive ability. So if people could become say 10% more effective through taking a tablet, who would have it? That’s an interesting question. Will it widen inequality or lessen it? DNA sequencing is another good example, it will be fantastic in terms of improvements in healthcare, we will be able to tailor drugs much more effectively. At the same time the prospect of DNA sequencing raises questions about whether people will be able to create new bio pathogens, smallpox, Ebola or whatever, and dissipate these widely. So the potential of individuals is growing very strongly with technological change and also with it’s err, availability, ideas availability on the internet is a hugely liberating force. The internet is really the most powerful positive influence on education and development the world has ever known. At the same time a carrier of some very dangerous ideas. So a very good example about all these technologies have multiple uses, and I think the challenge for us is to harvest the upside, to try and regulate and control the downside to ensure globalisation is inclusive. The danger of course is if it’s not, people will start closing their doors. If they see openness and connectivity is bringing more bads than goods they’ll start slamming the doors shut, xenophobia, nationalism, protectionism, these are real threats for society that come from not effectively managing globalisation. And of course it will be dramatically negative for the hospitality sector."
Francois Baudin: "It’s a very isolated market where trouble has happened, it’s bouncing back now and I think it’s coming back to a certain stabilisation. Of course we were hit you know in Egypt but more in the existing hotels rather than in the development. And the potential is still there. So now when political stability will come then we should have all of the opportunities coming back. The markets are moving so we, I think during this crisis time we have found opportunities in other markets, which were not hit. And areas like Jordan, areas like Abu Dhabi of course and Dubai. They still exist and I see them full of opportunities. We have found good opportunities. We have signed a few Fairmonts, also in Saudi."
Francois Baudin: "Saudi is a huge market, one of our main partners is from Saudi and he’s helping us as to have momentum there. We had great footprints with the opening of our Macau operations, which is very visible, it’s a good showcase for us in the western world. And the pipeline is pretty large in this area. We’re developing in Fujairah. We’re developing in Ashman, we are opening another hotel in Dubai this year. So our presence is strong. We have a very unique opportunity for our brands, we just came in the market recently and it’s probably over the past 10 years. So we have a pipeline of hotels, which are probably the most modern in the market and very up-to-date in terms of standouts and what the guests are expecting. It give us a certain appeal compared to other brands, which had been there for 20 years or 30 years. So we’re like the new kids on the block. And we like this image."
Francois Baudin: "Eastern Europe is really the strength in terms of pipeline and in general I would say Russia, Ukraine. We’re looking in other areas like Bulgaria and I think the Swiss Hotel footprint is probably our best story. For Fairmont and Raffles, we have to make sure we find markets which can support the brand in terms of rates, which really are asking for luxury products. So if you look at Russia for instance, you’re talking about St Petersburg in Moscow, where else you would do a Raffles or a Fairmont? It’s a more strategic approach that we have to have . So in terms of Swiss Hotel, it’s different because it’s upscale, a little bit more flexible to go in secondary cities. And then another market which is very important where we are already very well established and where Swiss Hotel has really started having the momentum with Turkey. And Swiss Hotel in Turkey is very well respected, very well regarded and we have a good attraction, to do more projects there and to build really on scale as I was saying before. Then from Turkey, what you want to do is address other countries like Kazakhstan, which has a direct relationship with Turkey. We’re also building a Fairmont in Baku, which will open at the end of this year and Azerbaijan. And again it’s related to Turkey somehow. So this is the way we tried to consolidate our development and move towards developing those regions."
Kevin Underwood: "We were the master planners for the Olympic Games in London, in fact we helped London win the Olympic Games. And so on the back of that we’ve now won the Rio Olympic Games. And we’re providing all of the economic advice, the master planning advice and we’re designing all of the stadia as well, and indeed the landscape design as well, so it’s a great project for us. In Rio? The challenges in Rio are speed. We had six years to do it in London. They only have four years to do it. And they’re not as organised, bless them. But we’re getting there - we’re getting there. But time is a real issue. And they’ve chosen to go design and build and that brings another whole series of issues and problems."
Kevin Underwood: "A good project starts with a good client, a real driver of a project, a good team. But at the end of the day the clients are there to make a profit, to make money. We’re not concerned by that. But we also like to create a project that’s environmentally friendly, that’s important to us. And you can have both. You can have something that’s sustainable. Of course sustainability also means sustainable from an economic point of view. Sustainability is integral in everything we do, from the Olympic Games through to a hotel project. It’s no longer a choice, you have to do it."
Kevin Underwood: "Our sports architects are designing a number of stadia around the world. But one of our more recent commissions is we have the first stadia for the Qatar World Cup. That brings a whole series of challenges, particularly in terms of climate. And only in the press this week it was looking about whether they were going to shift the World Cup from the summer to the winter. But it’s not only designing for the human comfort of the spectator but it’s obviously also designing for the comfort of the player."
Bani Haddad: "Africa for us is very new territory. We do have two hotels in West Africa. But for a number of years our focus … we were expanding so much in Europe, in the Middle East and Asia Pacific, Africa was not really a focus for us. Up until last year where we sat down and we thought that the right time has come for us to expand and develop our brands in Africa. And the more we started studying the countries in Africa, the economies, the opportunities, the potential, we were getting more and more excited about this continent . So we sat down and we have identified a number of countries, East Africa, West Africa, South Africa, and we are putting significant efforts now to introduce our brands in that region."
Gerald Lawless: "I’m very excited first of all to see the recovery that we’ve had in our markets, where we have hotels, and particularly in Dubai which is our major home base. So it is good, it is exciting to see business coming back and coming back strongly. And then we look at our, we have one coming in Kuwait for example, which will be very nice. It will be a great hotel when we do open it. Hakuba will be interesting. And to get four hotels in China, will really give us a huge input into China, so that will give us five hotels in total in China. We’ve also signed a contract in India. So really the world is literally our oyster and we continue to be excited at all of our markets. I mean we are becoming a global luxury brand. And we are very true to the ethos and the vision of the brand to be recognised as one of the top luxury brands in the hotel business worldwide."
Robert Gaymer-Jones: "We have three pillars of our brand, we have design, gastronomy and cultural links. So under the design element we think that that is one of the most important elements to be able to bring the true French heritage of our brand around the world with wonderful French designers like the ones I just mentioned, or people like Andree Putman who is world famous in residential design, Didier Gomez, Jean Nouvelle for example who we used for the design of our hotel in Vienna. So it says and gives a very strong statement of who we are and how we are as a brand and then once you create this strong brand identity through design and then take the opportunity of including gastronomy which the French are very world known of their skill and knowledge of understanding food and wine, bring that also into the play and then lastly the cultural link point of the element of our brand, in the pillars of our brand, is really to take our French heritage, not in an arrogant way, but in a way that is relevant to the people where we are locating our hotels and culturally link the best of Paris with the best of Saigon, the best of Moscow, the best of Berlin and the best of London. And so really culturally link it together, so as you’ve got this refinement of French elegance and local culture."
Robert Gaymer-Jones: "We need to obviously you know, reinforce the message of tourism and how wonderful it is to have people to travel and create accessibility for travel, whether it be visas, whether it be security lines meeting at airports, we need to make the whole travel experience as seamless as possible for the client. So we need to do it from a hotel point of view, we need to do it from our airline partners, so everything that we are doing should be geared towards making it as seamless as possible, and we need to be pushing our governments I suppose around the world, to reinforce the message of tourism is a great industry, it’s great for culture, to bring cultures into the country, it’s a great employee base business and then we need to just try and make it feel as if we are getting support from the government and we as an industry are working towards enhancing tourism around the world."
María Zarraluqui: "Core components of a good deal is that of course we make a good return on investment of everything we do. But I think what is important for us, very important is to build a huge brand awareness. We are looking for locations and products that really bring some experience to our clients, that it brings security to them, so that when they go to our hotels they know what they are going to face, they know the services. They know the location is great. They know they will get the Spanish touches with international flavour. So I think what … we are just putting a lot of effort and putting a lot of pressures to get the best locations for brand awareness, to provide a service that our clients expect from us."