Editorial

Dear Insider,

Since the recent headlines about Revo and the break-up of the company this week, we have been contacted by owners who do not trust the insolvency proceedings. If any other owners or (potential) operators have anything to share on this matter – in confidence, of course – then you know where to find me. Everyone is now waiting to find out the names of the five groups that wish to operate the 120 hotels in future. In the meantime, we are continuing our research.

To change things up a little, today we're bringing you entertainment from Mews, home of the mavericks. At its annual "Unfold" event in Amsterdam, the software company first brought a quirky solo guitarist onto the stage, followed by a cartoonist who coaxed "the child" out of the 700-strong audience and sketched their emotions and dreams. This paved the way for the great 'magic' of the hotel industry, which still embodies the unconventional, but no longer lives it. The receptionist is the one who shapes that first impression; it's just that they've been trained out of being creative. It's just wonderful to see how man and machine come together here. Mews is redefining "AI" (Artificial Intelligence) – as "Authentic Interaction" (AI). Sarah Douag was delighted.

Dear Insider,

Airbnb is on the rise again. Indian tourists, for example, booked 50% more overnight stays in the first quarter of this year than in the same period last year. Given such sharp fluctuations in the markets, another piece of news would almost have gone unnoticed: The key performance indicators for hotels on Airbnb are growing at twice the rate of the overall business. That means: Hotel bookings are making up for the decline in short-term rentals. It is not yet clear exactly what the hotel strategy will look like. But this: Airbnb has a technical infrastructure that helps to integrate hotels on a large scale at low cost and keep booking fees down. Sarah Douag on the quiet overhaul of the Airbnb platform and the power of its data. 

The Raiffeisen Association of Salzburg (RVS) is also quietly making its way through the region. It provides funding for almost 70 percent of tourism businesses and tourism infrastructure, such as cable cars. Tourism makes a significant contribution to the gross regional product and is responsible for 40,000 full-time jobs. Great: at last, a main bank for SMEs! Yes and no: The bank acts as a hotelier itself and can compare its own figures with those of the independent hotels applying for credit. No wonder the RVS continues to encourage hoteliers to invest in its own "forum". And two success stories are presented: that of the Brandlhof in Austria and that of Europapark in Rust.

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.

Dear Insider,

The EU was at HITT – represented by two experts seeking to forge links with the tourism, hospitality and AI sectors. They didn’t make political PR speeches; instead, they spoke plainly. Nevertheless, some participants levelled very sharp criticism at Dr Misa Labarile and Mihaela Lafont. Conversely, the representatives of the European Commission acknowledged the EU's mistakes and gave a sober assessment of what is actually feasible within this system. Both urged the sector once again to speak out – only then would it be heard.

Misa spoke about the EU tourism strategy, which has been in the pipeline for 25 years and is finally due to be published by the end of July as a frame work. The bitter realisation: Tourism and hospitality have so far NOT featured at all on the Commission's agenda as strategically important sectors! Excuse me? How is that possible after 25 years of lobbying by European hotel associations?

A new door is currently swinging wide open for the industry: the topic of AI. To begin with though, the IT and AI specialists among the HITT participants engaged in a heated debate with Mihaela about the EU’s lack of competitiveness. However, Mihaela from the EU AI Office also highlighted new avenues for greater cooperation: Among other things, a Tourism Data Space is currently in the pipeline, and the AI Office is inviting the industry to help shape the next steps.

Dear Insider,

Today, I’m making a case for conservatism. At a time when statistics for the German hotel industry show that it has the highest number of insolvencies in the economy, it was refreshing to speak to Yoram Biton of Leonardo Hotels. "Making a profit these days isn't easy at all," he notes soberly. "It's hard work." That’s why Leonardo is growing only gradually; franchising costs too much money and only the rent cover counts. This operator’s business model is ‘stay grounded and disciplined’. Yoram reviews the P&L with each area manager every month.

Some investors lack one of these qualities. This week, Deka Immobilien announced the new operator for the W Amsterdam: Corendon. The company is based in Turkey, has a background in tourism, and is now running its first luxury lifestyle hotel. But without the restaurants. Liran Wizmann will be allowed to continue running these. It’s all set out in the contract, but of course it’s confidential. So the former operator, who owes Deka Immobilien €23 million in rent, will remain a business partner? In any case, a lack of transparency in communication raises even more questions. My eight questions (inter alia, how Deka Immobilien will guarantee its investors that it will regularly receive rent) was dismissed with four sentences. Don't investors have any questions at all?

Dear Insider,

Dubai has come to a standstill. The hum of business, the underlying sound of this glittering city, has faded away.  The Dubai Mall, the motorways, hotels and swimming pools – there are vast stretches that are completely deserted. Sarah Douag has brought lots of photos with her: She was there last week. She met with Henk Meyknecht, CEO of the private equity firm SAH, Duncan O'Rourke, Accor’s CEO for MEA & APAC, Joachim Hafner, General Manager of the Mandarin Oriental Downtown, and consultant Hans Peter Betz, and reports on the industry’s severe downturn, the cash flow of hotels, the decline in property values and how staff are being managed.

Dear Insider,

It is certainly unusual to read in the quarterly results of tourism companies how much kerosene TUI, for example, has secured for its summer season. Or, to put it another way – in a positive sense – Scandic emphasises that it is not suffering directly from the geopolitical situation. The chains are also remaining cautious, as Accor, Scandic, TUI and GHA all indicate in their Q1 results. The Iran conflict has everyone on edge, all over the world. In Germany, the first tour operators and travel agencies are announcing short-time working.

The World Cup drama has begun in the USA. In Philadelphia, FIFA cancelled 2,000 of the 10,000 rooms it had booked. Thousands of hotel rooms have been cancelled across all 16 World Cup host cities. Bookings are falling short of forecasts; ordinary fans can no longer afford the prices, but there aren't yet large numbers of high-spending fans either. The golden summer has been cancelled. MAGA.

Back to Germany, where the business travel market is changing. It is the small changes that show that cost control is currently the top priority. That means, for example, flying less and taking the train more. Or travel, yes, but no longer within their own country; they'd rather visit the (cheaper) neighbouring countries. In Austria, business travellers could give the hospitality industry a boost: The pressure on this sector is also intense, as the figures show.

Dear Insider,

The Revo insolvency proceedings are currently in Phase 2, which, with the 'newly opened' insolvency hotels, also provides somewhat more transparency. At the same time, creditors are beginning to lodge their claims. Potential buyers move in the background. It is still unclear whether some are readying to acquire Revo Hospitality or whether the whole thing will end in a break-up. The two leading hotel insolvency lawyers spoke to the media, and we also spoke to other insiders.

What's the evidence? The topic of longevity is just as controversial, but it's a hype created by marketing. In TV adverts, toothpaste is already promising a longer life… My equally sceptical colleague Bärbel Schwertfeger interviewed an even more sceptical scientist from the Max Planck Institute for Biology of Ageing in Cologne, Germany. He points out that the striking results seen in mice that have received the 'longevity vaccine' but warns that the same results in people keen to live longer might still be a little way off yet. Let the facts speak for themselves! My grandmother already knew some of that too. A must-read for wellness hotels.

New brands and people are shaping the Italian hospitality industry. Are you already familiar with Raro Resorts plans, the new operator LVRH, Le Graal as a luxury hotel partner, or UNA as a proponent of management contracts? Massimiliano Sarti knows all about them.

Dear Insider,

Airlines are changing their routes; these changes are affecting destination markets; in the Middle East, hotel occupancy rates are falling sharply, in Greece, bookings are reportedly stalling; and the governments of Dubai, Cyprus and Egypt are beginning to provide financial support to hotels and tourism companies. The chaos and tension surrounding the Iran conflict continue.

This makes the brief item in today's News Mix all the more baffling, to put it politely: The city of Cluj-Napoca in Romania is preparing the first stage of planning permission for a Trump Tower comprising 250 apartments and a 150-room luxury hotel.

Despite the crisis, business carries on as usual, as Susanne Stauss and I gathered from our many conversations in Berlin. International chains continue to adapt their strategies, sometimes in a rather dull way, sometimes in a lively one. We listened to Hyatt, Minor, Leonardo, the Vienna Tourist Board, Accor, Marriott and UBM. Everyone wants to fill every niche. The craze for brands continues, as does the appeal of franchising.

The chains are now desperate for independent hotels and want to make their soft brands even more flexible. Villa Viva might well have fitted into this category – hotels as "social guesthouses", a perfect, alternative product for investors and operators keen on niche markets, such as Stephan Gerhard. But franchise is not his cup of tea.

Dear Insider,

The mood at the IHIF in Berlin this week was subdued, with hotel investors and operators expressing serious concerns. The unpredictable US-Iran conflict is once again taking a heavy toll on the industry. What do the global and regional CEOs of major chains have to say? There are no longer any safe markets; new travel trends are winding their way through new landscapes; holidays in the Middle East are shifting to the Far East… The industry is re-adjusting but is responding with a level head. It has learnt from the Covid pandemic.

During the day, the IHIF venue felt rather empty; those who hadn’t bought tickets gathered outside the InterContinental to have a chat, and in the evening, the "family" ended up meeting up at a number of events around town. Unfortunately, Revo Hospitality’s long-running and popular party did not take place… Incidentally, interested investors are today submitting their bids for the insolvent Revo hotels.

Radisson CEO Federico González, for his part, does not wish to demonise any operator. With 75 contracts, Germany is the largest lease market, he has nothing against that. It's all a question of details and honest dealing.  And a good mix! Radisson manages 50% of its properties itself, refines its 10 brands without needing to create new ones, and only operates in locations where the owner has paid a realistic price for the property. In an interview with me, he also explains why Jin Jiang’s two subsidiaries, Radisson and Louvre, will not be merging.