Editorial
Dear Insiders,
Looking back at the IHIF/ITB week in Berlin, the hotel industry is bristling with announcements: the flood of brands, acquisitions and capital seems never-ending. Even in 2007, it didn't feel as if developers were looking for locations and brand strategists were yawing for market shares as aggressively as today. The fear of being "eaten up" themselves in the latest hyperdynamic is driving several companies to expand or take over other companies even faster – whether or not this makes sense.
Accordingly, IHG's acquisition of Regent Hotels is not really a big hit in my eyes. 2,000 rooms of a forgotten brand as a basis for a global, ultra-luxury offensive? IHG aims at 40 Regents. The company also had great plans for InterContinental, but has been stuck for many years now, partly due to a lack of locations. Why should this work out better now? Especially since there are no premium locations anymore. I will keep an eye on these plans.
Another daring announcement was that by Federico J. González, CEO of Radisson, which aims at becoming the third-largest global hotel chain. Currently, Radisson is ranked 11th. The gap to IHG, the prevailing number 3, is thus 3,770 hotels wide. Radisson's brand finetuning is not really overwhelming, but it makes sense. I'm more impressed by the fact that, "at the back of the house", no stone is left unturned with a strategic, and not purely cosmetic, view in order to achieve the turnover and profit faster. The only hope is that HNA remains stable as main shareholder. The most recent news from China regarding HNA and Hainan Airlines again leaves lots of room for speculation.
The various global travel analyses presented at ITB document how volatile the markets are and how sensitively tourists change their travel destinations. As with every year, Fred Fettner patiently rummaged through the statistics, interpreting and putting into perspective the results of IPK, RA Reiseanalyse and ADAC Reisemonitor.
And as they are all swimming high on the waves of success, we've got a failure ready for you today as well: Why have hotels with a luxury label never truly taken off? Armani, Versace, Bulgari … They haven't come far. Obviously, LVMH is fed up with the experimental partnership of its Bulgari brand with Marriott, as the luxury goods group has started its solo career at IHIF Berlin with "LVHM Hotels"...
From the news section: Ruby Hotels has managed the leap into international expansion with agreements in London and Zurich. Now, France is drastically penalising Airbnb and its illegal hosts. And the spa wave goes on, at least in Germany – a country addicted to well-being.
Next week will see the end of our early-bird offers for the "World of Hospitality" joint stand at Expo Real 2018. So please hurry up, if you want to take advantage of them. You will find all the information and the reservation form on our first page.
Yours, Maria Puetz-Willems, Editor-in-Chief
Your opinion? maria@hospitalityInside.com
Follow us on LinkedIn / The Think Tank www.hitt.world
Dear Insiders,
The noise at the International Hotel Investment Forum and the ITB in Berlin this week was high. New stands, new brands, new acquisitions, lots of people, full halls and euphoria all around... Global tourism is booming, the bad news is thin on the ground, now money is being earned! The latter is especially true of the real estate sector. Yet the undertones are there all the same: Some investors are already being put off by inflated prices, whilst the first developers are beginning to ask that projects under construction are quickly sold off.
On the other hand, the brand creativity of the operators is unflagging. Those that don't have any ideas of their own, simply buy in the new brands. IHG has obviously already acquired an over-luxury group. An initial walk through the issues and reactions at the IHIF.
On the innocuous CEO panel at the IHIF, Sébastien Bazin was the only one who stood out with ideas and self-criticism. In an individual conversation, the Accor CEO explained the details of the recent AccorInvest deal and shared his thoughts on the future distribution of influence in the market: He believes Europe's biggest chain will be one of the 8 gorillas to determine the future direction of hospitality. Sébastien Bazin, with his quick-fire decision-making and quirky ideas, will make sure of this.
A few weeks ago, news made the rounds that Rezidor Group will now be renamed Radisson Group. CEO Federico González give a verbose press conference to this end, though provided few hard facts on the new brand architecture. I have now asked him specifically for these details so that I will be able to explain the differences to you next week.
My colleague Massimiliano Sarti looked on the new Horwath HTL analysis on chains in the Italian market. By 2020, experts expect around 250 active hotel chains with around 105 international brands. This brings us full circle, back to the brand push described above.
Our news this week include further news on transactions in Europe and the persistent run on Germany. Deutsche Hospitality will revitalise its old Maxx brand, jazzing it up as a chic soft brand. And once again we're back to the brands...
More from Berlin next week, today our team is still at the ITB for you.
Next week is also your last chance to secure your place in our syposium about space efficiency in Munich. The interest is high, we expect over 100 participants.
Yours, Maria Puetz-Willems, Editor-in-Chief
Your opinion? maria@hospitalityInside.com
Follow us on LinkedIn / The Think Tank www.hitt.world
Dear Insiders,
Accor's CEO Sébastien Bazin will probably have to answer many questions about the new shareholders of AccorInvest at the IHIF in Berlin next week. He, however, was ecstatic about the multi-billion deal at the online conference with analysts and media this week. Sarah Douag listened and took notes. For me, the next question simply is: What happens to AccorHotels, the group's operative arm, which is only "partner" and service provider for the Accor brands now?
Money changes the world. This was probably exactly Whitbread's thought when it purchased 19 Holiday Inn Express Hotels in Germany from IHG's master franchisee, Foremost Hospitality; the properties will be renamed Premier Inn by 2020. IHG acts as if this is business as usual; Foremost is changing its strategy.
However, the world of hotel properties and hotel operators remains fast-paced. All around the globe. Expedia and Booking.com are the leading OTAs, the Chinese government smells corruption concerning its voracious and formerly hotel-voracious insurance giant Anbang and is reining it back a bit… This makes Blackstone happy again as they will be able to buy back projects cheaply, which were sold to Anbang once upon a time.
Sports also changes the world. Our colleague Fred Fettner followed his son Manuel to the Olympic Winter Games to Pyeongchang. Manuel is a ski jumper in the Austrian team and Fred experienced a paradox world of controlled Olympic happiness, massive presence of sponsors, miserable camping accommodations, unexpected friendships, and great curiosity on the part of the Koreans.
From the current news section: The losses of Catalonia's hoteliers because of the independence efforts have become more concrete now and German travellers seem to be giving Turkey a new chance. Belmond, NH and Meliá announced their results for 2017.
And the 1,000-room Park Inn Berlin has become very popular through a very smart apprentice photo calendar. A small but nice detail concerning HR – in a hyper-dynamical world of hotel efficiency and hotel properties, which still does not care much about this pillar. At least not audibly. It is easier to announce pipelines. We will probably hear a lot about this topic during IHIF and ITB Berlin next week.
We will see each other in Berlin – and love to tell you more about our own activities concerning the HITT Think Tank in June, our commitment at Expo Real in October, and the next joint seminar with hotelbau about space efficiency on March 19. You find all the information about these topics on page 1.
Yours, Maria Puetz-Willems, Editor-in-Chief
Your opinion? maria@hospitalityInside.com
Follow us on LinkedIn / The Think Tank www.hitt.world
Dear Insiders,
AccorHotels, just like IHG, Hyatt, Rezidor and Wyndham, posted excellent results for 2017 over the past few days. Sarah Doug attended the press conference on Wednesday in expectation of concrete information from Sébastien Bazin as regards AccorInvest/booster project, though his lips remained sealed. Originally, he intended to announce the commitment of new capital providers before Christmas. Last night, finally, first rumours occured dropping names.
Nevertheless: The new figures reveal progress in strategy, and Bazin knows how to keep shareholders, analysts and media in good spirits with his inimitable mix of passion, charm, facts and brutal cunning.
Max Luscher is a positive person with sparkle in his eyes and an Excel sheet in his hands. For this reason, the Managing Director of B&B Hotels Germany is clear in stating that in his opinion there are only a handful of budget chains in this country: Motel One, Moxy, Ruby, prizeotel & Co. have long since become midscale brands! Their yielding even breaks up 4-star rates on some occasions. And so B&B is now venturing a new move: As of immediately, there will be XXL hotels of up to 250 rooms – and some of these will be in top locations in Germany's top 7 cities. B&Bs "real" budget room rates of under EUR 60 should be maintained though.
In Italy, there is another young CEO. He is wondering how he can make his lease heavy small group with just nine hotels into a major player. With French capital to back him up, CEO Luca Boccato of H.n.h. Hotels looks deeply into the issue and brings a clear understanding of contracts and terms with him for the establishment of his White Label Company. Massimiliano Sarti met him.
The small German operator and franchise partner GS Star has also found itself an investment partner for expansion, as other news tell this week. We also refer to a new survey which shows that hoteliers are rejecting robots.
Executives should not get stuck in such emotional dead-ends though. For this reason, Prof Lachmann from the Cognitive Science Centre at the University of Kaiserslautern, Germany will explain to our HITT guests how people think and how they should respond to robots. After all, the service sector will need both. We introduce our first "Impulse Generator" today – and our second sponsor: AccorHotels. Europe’s biggest chain supports our new approach at www.hitt.world, because it doesn't just preach innovation, but lives it too. Just as the boss lives it. See above. – More about HITT also on our front page today. Booking is open.
About 1,200 guests, 260 school students, 50 companies supporting them and high-calibre artists were an impressive frame for The Theatre Hotel at the Austria Trend Hotel Savoyen in Vienna last weekend. In its 11th year, the school charity event reached new records.
Yours, Maria Puetz-Willems, Editor-in-Chief
Your opinion? maria@hospitalityInside.com
Follow us on LinkedIn / The Think Tank www.hitt.world
Dear Insiders,
The yield pendulum is in full swing – from west to east. Above all Poland is benefiting from the falling profit margins in Central Europe, a trend which can no longer be denied. As we move closer to the hectic of the IHIF and the ITB in Berlin, Susanne Stauss has put out feelers and asked renowned consultants, operators and developers about current trends.
The three founders of Meininger Hostels and Hotels were among the first groups to be sold in the boom. Now, the trio comprised of Sascha Gechter, Nizar Rokbani and Oskar Kan has launched something else – a tribrid model combining hostel, budget and long-stay. The brand name – the common German surname "Schulz" – stands for what it is: a down-to-earth concept that knows its target groups: school pupils, students and clubs. "We're not looking so much for a party", Gechter says in view of the hip life-style models born in the lab.
And I’m happy for this: The current heat on the market is teaching experienced managers to take a new cool approach. Modesty, it seems, is "in" again, simplicity again does good.
Airbnb is exactly the opposite, takes an aggressive approach and is pulling out all the stops. Now the P2P platform is slowly causing the mega-OTAs concern: Through a technology partnership with SiteMinder, small hotels and charming boutique hotels are also to be brought on board. Yesterday, the platform also announced "Airbnb Select", a collection of super-hosts. We'll see how many hotels move over to the portal of their arch enemy.
There's also lots going on in our news section this week: Rezidor will officially announce its strategy change, which has already been made public, at the IHIF. In Germany, medium-sized groups are learning from the major players: And so the small Ghotel Group has bought up the smaller brand, nestor. Portugal threatens a hotel flood, Italy was happily inundated with investors in 2017 and Marriott, Hilton and Pandox have announced positive results for the past year. And again OTA issues: Hotrec has launched its next Europe survey on distribution, and the new Deutsche Hotelgenossenschaft is trying to get smaller hotels on board with lower commissions.
We're excited by our new think tank, www.hitt.com. Have you already taken a look at the programme and the participation fees? It's all online. And the first bookings have already been made! We await you too...
Have a nice week!
Yours, Maria Puetz-Willems, Editor-in-Chief
Your opinion? maria@hospitalityInside.com
Follow us on LinkedIn / The Think Tank www.hitt.world
Dear Insiders,
Our idea to launch a special-format Think Tank was met with great interest. Many thanks for that and for the many positive conversations which have provided us with yet further impulse. Today, we can reveal the programme contents and the prices. Bookings are possible as of immediately! Early birds will be happy, and our subscribers receive special terms.
Aside from this, we are pleased to present two important pillars of the HITT Think Tank. One is the moderator. We have secured Tim Davis from London. He was responsible for Commercial Development and Information Technology on the Hilton Management Board for nine years. The other one is our main sponsor. Here we are pleased to get Sabre Hospitality Solutions on board – a company which already 22 years ago established the first innovation lab and who shares our idea of HITT with special conviction.
Things are coming together, please find further information above the programme on www.hitt.world. More on the event can also be found on our Page 1.
The German Dorint Hotels are making a new attempt: After 15 hard years of restructuring, one of the oldest German hotel groups will get a new face: CEO Karl-Heinz Pawlizki has won Joerg Boeckeler as COO, now the two former IHG managers will rebuild the company – as a solid German full-service group, without gimmicks and lifestyle pomp. The investment backlog is to be resolved by the end of 2020, the expansion by franchise has already begun and there will perhaps be even more brands.
Dirk Iserlohe, the hard restructurer in the background, has therefore achieved an important target: to make the group competitive again. I know nobody who has teetered on the edge of his own grave for so long without falling in. That deserves respect, even if not everyone in the industry manages to get along with the sharp former Dorint shareholder and today Chairman of the parent company as well as they could.
At a Serviced Apartment congress in Amsterdam, Sarah Douag asked why investors in Europe are rather cautious, whilst in the US capital flows so freely in this segment. Interesting. At the same time, she was introduced to two completely different business models – Short Stay from the Netherlands and Becar Asset Management Group from Russia. The Dutch are placing their bets in this long-stay segment on short term, and the Russians are thinking about mega apartment complexes in thousands of units. If these extremes continue, the Serviced Apartment bloom will soon fade and disappear.
But why should we think about it so much? This question has been posed recently by me. Nobody wants to venture an answer as long as everything is positive. Luxury travel is booming again, even if in slightly modified form. Germany posts the best tourism results of its history, Ibiza now bans Airbnb & Co. And the banks are still granting more loans for more hotels, a current Europe study shows. So what?
The 230 school students from Vienna who organise the Theaterhotel next week do not know the different shades of the industry yet. They simply love and live hospitality and want to see something good. We support these young talents by a media partnership.
Yours, Maria Puetz-Willems, Editor-in-Chief
Your opinion? maria@hospitalityInside.com
Follow us on LinkedIn / The Think Tank www.hitt.world
Dear Insiders,
Motel One opening party at the new hotel at Berlin Alexanderplatz... It is the tenth hotel of the budget design group in the capital, and with 708 rooms, it is the largest of all. The hotels are getting bigger and more colourful – and they are highly profitable, as CEO Dieter Mueller revealed. The formula for success consists of a well-conceived mixture of location, size and design. Thus, 708 rooms are not the limit.
Yotel is another lifestyle design group with a limited service character. Now it is multiplying itself via YotelPads – buildings that include mini apartments for long-term guests. An app is the digital key for use of services and access to experiences in the on-site community. What can be adapted from the basic idea? Yotel wants to know. And we do, too.
Motel One and Yotel are doing well. Medium-sized Austrian businesses are not. With their highly involved OEHV industry association, they are currently analysing the conditions: who or what is to blame for continuously dropping profits? Erich Falkensteiner, member of the Falkensteiner supervisory board, considers the political nagging partly exaggerated. He worries more about employees than politics.
The news section covers a lot of movement on the market: Choice Hotels is moving its global reservation system into the cloud investing 50 million dollars – a novelty within the industry. HRS is making the check-in procedure a lot easier with a new idea. Amsterdam and seven other cities want to force Airbnb and other P2P platforms to hand over data to the authorities. It could work out with the help of the EU. Prince Alwaleed from Saudi Arabia is free again, but seemingly only in exchange for a lot of money ... Time will tell whether he will be allowed to continue work without restrictions.
Four weeks ahead of ITB, there is an initial extract about worldwide travel trends. And Amex is looking into the crystal ball regarding business travel as well. Optimsim anywhere. A shiny award was handed out for the "Hoteliers of the Year" in Germany.
When putting together today's issue, I had the feeling that everybody is just testing their limits and/or moving in extremes. Obviously, this is the only way to celebrate success - or defend oneself. It seems that there is not much going on with a "happy medium" anymore.
This is also why you need to learn from the big ones. Our joint seminar on "space efficiency" with our colleagues from hotelbau will take place in Munich on March 19. Motel One will also be among the speakers. Do you have it on your radar? Programme, fees and application link can be found on our first page.
Yours, Maria Puetz-Willems, Editor-in-Chief
Your opinion? maria@hospitalityInside.com
Follow us on LinkedIn / The Think Tank www.hitt.world
Dear Insiders,
The annual OEHV Congress was this year one of the most political for a long while as it sought to cement the demands of Austrian hoteliers. The new young Federal Chancellor, Sebastian Kurz, was also in attendance. He was cooperative, promised to repeal the VAT increase from 2016 and, amongst other things, installed the new department "Sustainability and Tourism". Whether this will solve hotel-sector specific problems faster remains to be seen. In a country like Austria with its large tourism sector, the question of staff recruitment remains a core issue.
All the same, operators and investors are not deterred: Bed giants such as Marriott and Motel One are now also storming the small city of Innsbruck. The local matadors are working out their best poker strategy here. Fred Fetter summarises the OEHV Congress and the background to the developments in Innsbruck for us.
After we last week described what over-tourism looks like, specifically in Mallorca and Latin America, our second article today focuses on cruise ships. They spew out thousands of passengers into ports and cities for just a few hours and have been identified as a major problem. The smaller the destination, the worse it is. They don’t benefit the locals at all. Studies are already putting prices on the damage and are recording the global suffering of the destinations. Yet a solution to the problem appears to be a challenge for everybody.
It can only end in a limit on the tourist numbers. Last Sunday, I experienced over-tourism first hand at the Grand Palace in Bangkok. Already at 9 o'clock in the morning, the large courtyards will packed full with loud tour groups, the limitless selfie-mania of the visitors slowed all progress through the grounds, which is why by 9:30, the first tourists began to sit themselves down on the steps in the shade of the temple. What a scene!
Whether Innsbruck or Bangkok: It’s booming everywhere. And wherever overcapacity has not yet arrived, it will soon be created – because it will continue to boom. The sector is focusing only on economies of scale, profit maximisation and displacement competition. In 2008, irrationality and greed were just as pronounced as today. And the current super performance figures from the global hospitality sector will only fan this behaviour further. All regions apart from the Middle East boomed in 2017.
Now that HNA intends to sell its stake in NH, Sarah Douag has taken a closer look at HNA's problems. Airbnb remains on track for growth, though in the background things are crumbling, currently in its home town San Francisco. And the Italians are meanwhile analysing what the new financing law has brought them.
Yesterday, Deutsche Hospitality officially confirmed Thomas Willms as CEO. The long-standing Starwood top manager started last June in Frankfurt as COO. hospitalityInside.com predicted this leap seven months ago.
This and more in a new colourful edition today, with a look at the broader picture.
Yours, Maria Puetz-Willems, Editor-in-Chief
Your opinion? maria@hospitalityInside.com
Follow us on LinkedIn / The Think Tank www.hitt.world
Dear Insiders,
Very rarely has the industry been as turbulent and energetic at the beginning of the year – our flood of news, especially the mix, reveals: Investments, corrections and experiments are being made as never before. Falkensteiner, for example, reports about its crowdfunding successes, destinations about their boom, chains about their numerous developments and their desire, to try out new things again and again. The high-tech lifestyle group Yotel, for example, is joining the longstay business now!
In 2017, more than 1.3 billion people travelled, according to the figures freshly published by UNWTO. Unbelievable. But the number is growing… And the boom is a double-edged, sharp sword, as our reports about "Overtourism" describe in detail: South America craves for masses of visitors, but already has to cope with some bottlenecks; and last September, about 3,000 Majorcans went on strike against the masses of tourists.
By now, the chains no longer have to compete against other chains only but to fight on numerous battle fronts. A current study shows: Chains do not have the most increases in bookings but rather alternative accommodations such as Airbnb and boutiques hotels – and OTAs still, despite all hostilities.
Our correspondent Sarah Douag took a deeper look at Belgium where the market is recovering after the terror attacks in Brussel at the beginning of 2016. For 2017, the Brussels Hotel Association expects an occupancy of 70 percent. However, the middle-class hotel industry is the big loser here: In the last five years, 570 properties have had to close. Instead, more hotels are under development with more than 100 rooms and chain labels.
By contrast, Massimiliano Sarti's Italian dialogue partner Giorgio Palmucci, Executive Vice President at TH Resorts, is very optimistic. This group with currently 17 hotels and holiday villages is on an expansion course, has changed its shareholding structure, and is signing lease agreements now. And at destinations, which have not been endangered by Overtourism yet.
Enjoy your reading today!
Yours, Susanne Stauss, Senior Editor
Your opinion? susanne@hospitalityinside.com
Follow us on LinkedIn / The Think Tank www.hitt.world
Dear Insiders,
The team of hospitalityInside wishes you a very Happy New Year – with fewer of the burdens and more of the happiness of 2017! 2018 will probably keep us all going in full motion: consolidations, cost pressure, frustration with OTAs, and technology trends in high-speed will give many top managers the feeling of being driven. Who is currently able to note down a strategy until 2020, a question I keep asking myself at the end-of-the-year review of 2017.
The first request merger – Barceló purchases NH – already burst in the first week of January. The nail-biter concerning the future of NH Hotels, which are controlled by Chinese HNA, continues. The Chinese people will not stop travelling in 2018, predicts our columnist Prof Wolfgang Arlt today: Instead of holiday makers, they will become holiday creators and go on discovery journeys.
What does it mean to manage "hordes" of holiday makers? My colleague Hans-Juergen Klesse investigated this topic in an unusual way – in the waste belly of a TUI cruise ship. And he also learned how to save tons of leftover food and money with only a few measures.
The real estate brokers experienced that there is more capital in the market than available hotel properties: For lack of assets, 2017 ended without new transaction records, in Germany and in Austria alike. However, the investors' desire for safe havens seems to be unabated, and this will increase the speed in the hotel real estate world even further in 2018. Also Amsterdam does not "benefit" from the hotel ban: The investors' demand remains undiminished.
One of the world's most famous and richest hotel investors, Prince Alwaleed, had to apparently exchange his "golden jail", the Ritz-Carlton in Riyadh, for a real prison this week; the drama surrounding the Saudi royal family and the Kingdom Holding seems to be far from over.
In the new year, the waves will continue to be high, socially as well as politically. Therefore, it is important to stay afloat in this wave pool, keep a calm head and to consider well, which wave to ride. Currently, all our vigour and lifeblood is flowing into the realisation of the HITT Think Tank, which we announced before Christmas and which will take place in June in Berlin. And together with colleagues from the trade magazine hotelbau, we will organise a one-day expert symposium about efficiency of space – How can creative hotel concepts be calculated? You will find more information about both events on page 1.
From now on, every Friday is hospitalityInside day again.
Yours, Maria Puetz-Willems, Editor-in-Chief
Your opinion? maria@hospitalityInside.com
Follow us on LinkedIn / The Think Tank www.hitt.world