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Some of the best quotes from Berlin investment conference

The 20th International Hotel Investment Forum in Berlin last week was met with optimism based on performance on the continent, and at the same time tempered with caution based on political risk and continued disruption. Here are some of the highlights from the presentations:

Roger Bootle, chairman, Capital Economics stated “the world economy was set reasonably OK.” However, looking to the U.S., he predicted that President Donald Trump’s promise of an increase in spending and a reduction in taxes would lead to a surge in borrowing and an increase in government debt. Further uncertainties for the U.S. include the rising dollar and whether Trump will stay the course of his term in office.

Looking to the Eurozone, Bootle noted major divergences between countries: Ireland and Spain showing particularly strong growth while Italy had very little. He referenced the various significant political events on the horizon and said, “I can’t remember a time so fraught with political risk,” noting that “if there is a fracturing in the Eurozone, it is likely to spread.”

Looking at the UK, Bootle noted three quarters of growth at a rate of 0.6% and reasons to be optimistic although inflation is increasing and earnings don’t look set to match this increase which will “result in a squeeze on people’s real incomes.”

Regarding London, Bootle said that it would “lose a bit of business and some jobs, but it will be marginal. Its position will remain strong.”

Looking at Europe, he said, “The last thing Europe needs now is stability because stability means stagnation” adding in his opinion that “interest rates were going to go up sooner, further and faster” than widely predicted.

Richard Solomons, CEO, IHG, on expanding the company’s brand offering: “It’s really important we continue to have brands that stand for something. We don’t want another ‘me too’ brand – it’s got to deliver something to the marketplace.”

Jamie Chappell, global business director, Horwath HTL, stated that 2016 was the third-strongest year on record in terms of hotel transactions in Europe. “Banks are still lending, private equity is dropping off but we’re seeing a significant increase in funds, particularly in Europe, who are chasing after assets.”

Andreas Scriven, international managing director and managing director consultancy, Christie & Co. on consolidation and M&A activity: “Hotel development will shift from mature to emerging markets” and he expects to see “significant capital coming from Asia and Middle East fuelling M&A deals.” He concluded by saying, “There is no end in sight for consolidation.”

Sanjay Singh, managing director, Fico Corp., said he was “reasonably confident in the UK as an investment target for the next 6 to 12 months.”

Marriott International president and CEO Arne Sorenson, when asked about the biggest threat to the hotel industry: “The global wave of populism.” He added that he has a “strong sense that immigration and refugees is not an area we have consensus.” And he is nervous that “too many countries in the world, including my own, are turning too far inward.”

Cody Bradshaw, senior vice president and head of European Hotels, Starwood Capital Group: “Brands need to go overhead light as well as asset light. Cost synergies are subsidising many of these deals, but there’s no trickle down in cost savings to owners. My prediction is that Google is going to be a real disruptor in this space. In the next 20 years something has got to give – the brand fees are not that different to the OTA fees.”

Sébastien Bazin, chairman and CEO, AccorHotels, on interactions with guests: “Whatever we do, we need to be customer-centric; stop looking at yourselves and look at your clients. Stop imposing your brand, your promise, your intent. Listen to what they want and react.”

Dara Khosrowshahi, CEO, The Expedia Group, on Trump’s executive order on travel: “The fact that the ban is not based on fact is what worries me the most… Travel is a force for good and brings people together.”

Raj Chandnani, vice president, strategy, WATG, Wimberly Interiors on what the hotel industry needs to do: “Reconnect hospitality with humanity.”

David Kong, President & CEO, Best Western Hotels & Resorts on loyalty programs: “Our best defence against the OTAs… In 20 years, hotel loyalty programs will be as relevant as they are today.”

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