Dear Insider,

Things are really heating up in the industry at the moment. Sircle Group and Revo Hospitality are finding themselves increasingly mired in negative headlines, and their misconduct is no longer an isolated incident. No, their behaviour is becoming the norm – and not just in Germany, but across Europe and internationally. Property owners and landlords are facing empty coffers. The only recourse left is the courts, which Deka Immobilien and Pandox are now also turning to. Everyone wants their rent arrears, in some cases amounting to millions.

As my colleague Sarah Douag has noted, the Sircle case – involving over €30 million in lost rent – is the largest to date, the longest-running and the most structurally complex. Revo's debts are not yet known.

Gradually, a picture is emerging of a chain that begins with a complex web of holding companies, through which subsidiaries apparently pass on fees and other revenue through so many layers that, by the time it reaches the owner at the end of the chain, no money remains. Insiders are familiar with such "intercompany structures", which are often set up for the purpose of money laundering. Landlords will therefore be under greater pressure than ever before to monitor the tenant and their behaviour. Furthermore, the so-called 'good old' sale-and-leaseback process needs to be redefined; at present, when misapplied, it is one of the root causes of the problem. Dive right into this fascinating article.

And now here’s the real kicker in a new context. At a hotel opening last night, there was just one topic fuelling the frustration behind the scenes: will the Indian group OYO secure Revo hotels? A few, or as many as 100? It is expected to be announced within two weeks at the latest which bidders will be awarded which properties.

OYO (short for "On Your Own”) is an Indian hotel and technology company, founded in 2013 by Ritesh Agarwal, a 19-year-old university dropout at the time. He revolutionised the budget hotel market by using a platform to standardise and digitise small, independent guesthouses and market them worldwide under a single brand. OYO has been attempting an IPO since 2021 – so far to no avail. There are plenty of reports on this. This makes it all the more curious that OYO is reportedly courting Berlin as an operator with lease agreements. How do the stock market and leases fit together?

Whatever the outcome of this story, it will show whether the insolvency lawyers and administrators handling the Revo Hospitality case in Berlin are truly competent and understand this industry. Relying on strict German insolvency law is convenient. Anyone who understands hospitality must bring the stakeholders (owners and operators) together; after all, they typically agree to a 20-year partnership. That is not convenient. One thing is certain: if an unknown - Indian - brand wants to enter the European market without knowing Europe, many owners will reject that operator.

The fact that everything now revolves solely around property was once again a sobering realisation at the Alpine Hospitality Summit in Kitzbühel. Hoteliers from Austria and Switzerland compared their figures, challenges and the competitive landscape, in which, for example, Italy is slowly pulling ahead of the DACH countries.

At Winnow, it’s all about food waste. Sensors, cameras and AI now identify the types of food in the bin and then provide the data: Why do guests send so many vegetables back? This is how shopping strategies are developed that are perfectly tailored to the vast amounts of waste generated. Marc Zornes, the founder and CEO of Winnow Vision, explained the model to our HITT participants. Incidentally, reducing waste is the quickest way to operate sustainably and profitably in the kitchen.

Back to property and money: Due to the crisis in the Middle East, lending conditions are deteriorating. The result is a decline in willingness to invest and a weak Europe. The project pipeline in the Middle East was not yet affected by the Iran conflict in the first quarter, but that is bound to change. A side note in this context: Dubai announced yesterday that it has moved the ATM (Arabian Travel Market) from August to September!

A recent study shows that Swiss businesses are still under pressure from OTAs. A new concern is their apprehension about third-party providers who sell hotel rooms on their platforms, sometimes under non-transparent terms. BWH Hotels has now brought the threat posed by phishing attempts under control; the cyber breach has been resolved.

From our staff news today: In a surprise move, Pat Pacious, CEO of Choice Hotels, announced his resignation yesterday. Not a week goes by without AI: But the software unicorn Mews aims to foster collaboration between machines and humans. It is based on a survey. Surprise: Over the next 50 (!) Years, IHG is set to manage hotels and accommodation for the US Air Force.

Beach holiday? First, please pick up the litter from the sand; then you’ll get an ice cream as a reward on the North Sea and Baltic Sea coasts. Want to spend the night next to a coral reef? An underwater room makes it possible. And last but not least, creative design can also be an experience in itself: Jung and Dornbracht have been creating something special. A whole new world of values.

Yours Maria Puetz-Willems
Editor in Chief