The International Hotel Investment Forum in Berlin earlier this week reflected as many nuanced opinions as the diversity of delegates of the 20th anniversary of the conference: More than 2,000 from over 80 countries attended. And while uncertainty might have been one of the themes, from the long-term effects of the UK’s Brexit decision to ongoing policy shifts from the U.S. regarding travel and immigration, it wasn’t enough to stop forward momentum from the hotel companies in attendance, as other factors shape the hotel investment environment globally in 2017, including the continuing influence of Chinese outbound travel and other geopolitical issues.
Here’s a roundup of what’s happening with a few of the hotel companies at the conference:
Best Western Hotels & Resorts
Last year, the seven-brand company marked 70 years in business. CEO David Kong told a morning crowd that this year, given an environment that was mostly positively but held plenty of uncertainty in the form of Brexit and other geopolitical issues including terrorism threats, “it’s more important for us to focus on what we can control and influence.” For Phoenix, Arizona-based Best Western, that’s brand-building. The company is investing in technology and in an ongoing US$2 billion renovation plan. “Something exciting is happening,” he added.
His goal for Best Western this year and beyond was simple: to have the best RevPAR in the industry even if it isn’t the biggest company, to further build a loyalty program that has won accolades and which he said is the best defense against the encroachment of the OTAs, and to leverage the strength that includes scale and synergies among brands, options and locations.
Jumeirah Group Hotels
CEO Stefan Leser said that while last year saw some significant openings for the company, including the Terrace at the Burj Al Arab, this year, as the company turns 20 years old, it is focusing on investing in refurbishments, including the Jumeirah Beach Hotel, which opened in 1997. “It’s very important to keep our profile and our assets current,” said Leser, who became CEO a year ago. Another goal is to further penetrate China, including Nanjing, where a high-profile hotel designed by architect Zaha Hadid will open in mid-year.
The Dubai-based company is also considering how to develop its source market base and to encompass potential markets in places like Kazakhstan and Uzbekistan, to make it less dependent on Europe, which is 50% of the company’s total market. For that market, which plays in Jumeirah’s luxury space, recognition trumps points. The 320,000 members are “very well looked-after,” Leser said. For a company that is “all about creating destinations,” especially in Dubai, Jumeirah will continue to be selective in its growth and stay true to its strength, which he described as bespoke opportunities in key cities. “Scale is not a game that Jumeirah will ever play,” he said.
Deutsche Hospitality
For Deutsche Hospitality, last year was a big one. The company formerly known as Steigenberger Hotels is forging a new corporate identity on top of its familiar brands. Goals for 2017, CEO Puneet Chhatwal said, are to continue to increase profitability, which was buoyed by a stable German market, where the majority of its hotels are located, and which increased by 50% in the past four or five years; and to introduce the Steigenberger brand to Southeast Asia this year.
To support growth, three years ago the Frankfurt-based company started a training and talent-building initiative to evolve the culture. “We’ve made a significant investment in that because that is what will differentiate us” to owners and asset managers, Chhatwal said.
Longer term, he predicted that a proliferation of loyalty cards will mean that the strongest loyalty programs include multiple hotel companies, and that he would continue being true to the company’s DNA, which he said meant developing unique brands such as InterCity, which are always located next to train stations. Unimpeded growth, however, was not a goal: “As long as you make money, it doesn’t matter how big you are,” he said.
Corinthia Hotels
Last year, the Malta-based company signed its first third-party management agreement in Dubai and purchased a hotel in Brussels. This year, with issues such as Brexit and geopolitical uncertainty, the mantra is “growth mitigates risk,” CEO Simon Naudi said. He is focusing on a larger geographic spread for the company but is also targeting Russia, since two-thirds of its customers come from there.
Besides diversification, 2017 also will see a continued focus on quality and the addition of two to three new hotels through acquisition and management agreements. A director of innovation, a new position, will help spur the company toward faster change. The challenge: As simultaneous owners, investors and developers, it’s about finding and attracting talent that can think on all those levels, Naudi acknowledged.
Louvre Hotels Group
Recent terrorist attacks in Paris and elsewhere in France have sent Asian in-bound tourism down. That meant Pierre-Frederic Roulot, CEO of Louvre Hotels Group, CEO of Jin Jiang Europe, spent much of his time recently promoting France as a secure tourist destination to his Chinese partners.
Up for this year: “We are going to be very focused on the offline business,” which he defined as outside of “online” technology improvements. That means increasing customer loyalty. Loyalty programs, which he considers a key to competing with the OTAs, are important in Asia and particularly in China. Louvre, which acquired India-based Sarovar Group in January, “doesn’t want to impose” on the brand. Instead, Sarovar is choosing what it wants to adapt, such as technology. “That way you keep their DNA,” Roulot said.
Leonardo Hotels
CEO David Fattal said the company, which is active in 14 countries in Europe, is looking to expand there and increase its footprint in Germany, where it currently has a presence in 31 cities. Spain, the UK, the Netherlands and Poland are all in the mix for the Israel-based company. The company recently bought a hotel in Edinburgh near a convention center and will upgrade it to “4-deluxe”; it’s looking for two more locations there within three years and is aiming for a total of 1,000 rooms. It wants eight to 12 hotels in London eventually. “We believe that business and tourism in the U.K. will not be influenced by Brexit,” he said. Instead, secondary cities like Manchester, Liverpool and Birmingham will become stronger.
Its new brand, NYX, just debuted last week in Milan. One feature of the hotel is its Instagram feed, which is featured on screens on each floor. Guests are encouraged to snap photos and post them for all to view. The art-focused lifestyle brand is opening next month in Prague, before year-end in Madrid and Munich, and next year will open in Dusseldorf. “We believe that we can have 25 to 50 NYX in the next few years,” Fattal said.
Longer-term, Fattal said that the company wouldn’t consider entering a market like the U.S. before it hits 200 properties. South America is on its radar. “Being hoteliers and investors, we’d like to feel close to the product. So for the moment we believe it’s essential for us to put our hands on the projects.” The company intends to maintain its strategy of 100% management; currently it has ownership of about 70% of its properties.
Hyatt Hotels Corp.
Chicago-based Hyatt is the biggest little hotel company in Europe, but Felicity Black-Roberts, vice president of acquisitions and development, is part of the team hoping to change that. For all its brand recognition, the company has about three dozen hotels in Europe, but it sees “huge opportunities here,” Black-Roberts said. While the company doesn’t have a stated target number for the continent, it is taking a considered approach and being selective about projects, with about seven hotels opening this year. Black-Roberts, a Starwood alumna, is seeing activity in Spain and Portugal, which she said is directly linked to the fallout of the tourist industry in northern Africa. Branded residential is also making a comeback in that area.
Madrid just signed a Hyatt Centric, the first in Europe, which will open at the end of this year, and Hyatt is also looking elsewhere in Madrid. The Centric owners have a five-year management contract that can be converted to a franchise, a new approach on the continent for Hyatt with its non-luxury brands. Two franchises elsewhere have been signed, and a lot of the pipeline is franchises. “We’re really excited to have that extra tool in our box,” she said. Another tool: the company’s acquisition of Miraval, with its trove of spa expertise.
And while Brexit is causing some anxiety among regional investors, things are still moving ahead: The company has two hotels in central London and sees more opportunities there and in the regions, particularly with Hyatt Place, Hyatt House and Hyatt Centric.
Hard Rock International
Hard Rock Hotels is setting a brisk development pace worldwide, aiming for 50 hotels, a doubling of the portfolio globally, in the next five years. The longer-term aim of 100 hotels signed or opened by 2020, and the company is on track to make that happen, said Josh Littman, vice president of hotel development in EMEA. Europe has seen activity: Ibiza is in its fourth season, Tenerife opened in December, and ground will be broken later this year at Checkpoint Charlie in Berlin. The politically sensitive spot requires an equally sensitive approach, he said. New projects are moving forward at London’s Marble Arch and Malta.
How does the brand stay fresh with so many other brands popping up to drown out Hard Rock’s tune? “We’ve been doing lifestyle since before lifestyle was a buzzword,” Littman said, with its currency remaining its connection to music and philanthropy. Regional questions aren’t really having an impact, Littman said, although Brexit uncertainty did table a deal that was in the discussion phase. As African economies solidify and grow, Littman said he is working on a deal in Nigeria; Kenya and South Africa are also on the radar.
Wyndham Hotel Group
Wyndham Hotel Group announced at IHIF that it was expanding a franchise agreement with GS Star to expand the band in Germany and introduce it in Austria, Switzerland and the Netherlands. Super 8s have opened in Munich recently and will open in Freiburg soon; 2018 will see openings in Mainz, Oberhausen and Hamburg. In Europe, where the brand touts itself as a “spirited original,” development is designed to cost about US$50,000 per room. “The expectations of the budget guest have changed, and Super 8 is very well placed to satisfy this new development,” said Philippe Bijaoui, Wyndham’s chief development officer EMEA.
Long term plans: Wyndham is the number two hotel developer in Germany, after AccorHotels, and “we intend to catch up,” Bijaoui said. It also means being the brand of choice. “We need to achieve scale with our key brands in countries like Germany,” where the company currently has 94 hotels. Beyond Super 8, the company just opened a Wyndham Grand in Athens. Greece is experiencing a resurgence of tourism, he said, due to the perception of greater safety compared with the North African countries that were mainstays for European holiday-goers. The company also has 55 hotels in Turkey. Despite the political uncertainty there, “we continue working because we are still seeing some demand,” Bijaoui said.