Editorial
Dear Insiders,
The Hotel Adlon at the Brandenburg Gate in Berlin has written hotel history for over 100 years, and it will continue to do so. Last Monday saw the 100th anniversary celebrations in Berlin - and rightly so. There has to be times in which the efforts of the formative years and day to day problems are forgotten. Kempinski and Fundus plc presented themselves as glamorous hosts; and the champagne flowed. It was the hotel society event of the year.
For me, the celebrations in the Adlon were preceded by three extremely interesting days in Provence, in which I met many General Managers and part of Four Seasons top management. They had invited guests to the first "Four Seasons University", a meeting in which socialising was desired and concrete business left aside - at least as between managers and media. The event was intended to uncover nuances, the fine differences among markets and opinions.... And it was successful.
I also used the opportunity for a casual meeting with Oliver Hopp, joint owner of the Four Seasons at Terre Blanche in Provence. The family, among the ten richest in Germany, generally avoids the media; more interesting then, if only for their rareness, are their comments on the hotel industry and their own hotels. Oliver Hopp asked, for security reasons, not to be photographed. We respected his wishes.
HOTREC also surprised us with its position report on hotel rating portals. The European Business Association formulated ten principles for portal providers. Their goal: to protect hoteliers from manipulation and unfair ratings. A sensible step, I think. The first providers see things similarly. Read for yourself!
Apart from that we have news on: a new hotel for Berlin, new men for Hilton and Season, legal threats against Relax, Austria, and new motivation for non-smoker hotels....
Please, start reading - and also have a look at our related website hospitalitySolutions.info to learn more about Micros Fidelio's new "Suite 8 Kundenbeirat at work". Similar to the Four Seasons meeting, this initiative should enhance the information flow between partners!
We wish you an eventful week,
Yours, Maria Puetz-Willems
Editor in Chief
Questions? maria@hospitalityInside.com
Even if some still don't want to believe it: there are numerous opportunities on the European hotel market. In the Italian metropolis of Rome, Maria Puetz-Willems talked with international experts from all over the world about market trends at the International Hotel Conference. Fred Fettner from Austria visited a congress about architecture in tourism in Bregenz, where he learned many new facts about the future of resort hotels in the alpine region. For many decades the local hotel owners clung to hotels that resembled "blown up" farm houses and to everyone's dismay were later "enhanced" with little turrets and bays. Today, new buildings appear in a clear, modern style taking ecological issues into account - and they are still profitable.
On the other side of the world, in Asia and in the Arabian countries, people deal less with ecological issues, but rather with new expansion plans that change on an hourly basis. The investors on site outmatch one another speaking derisively of the aged and old-fashioned Europe - where, as a rule, they acquired all their knowledge. Unperturbed by this, business in "good old Europe" is still running well.
This is also the result of the recently issued Global Business Travel Forecast by American Express. For 2008, the forecast expects European hotel rates of the medium and upper class categories to grow by 12 to 14 percent. As a comparison: Asian-Pacific and Latin American growth is estimated between 18 and 22 percent. In the upper-class segment, Germany can expect increases in rates of between 10 and 12 percent, while rates will increase between seven and nine percent in the medium-class segment. According to the survey, the losers will be hotels in North America, whose room rates climb only moderately. But they still climb and don't fall!
Expansion in Europe is thus still on the agenda of foreign investors, regardless whether they come from Russia or the US.
In the meantime, Sir Rocco Forte has started operating all his desired locations in Germany and does not let all the prophecies of doom faze him. After Frankfurt and Berlin, an opening celebration took place in Munich with the in-crowd. We can already provide our readers with some detailed reports and initial figures concerning the days after the "unofficial" opening. And on the sidelines, we are publishing the future strategy of Europe's hotel giant of Accor. Have fun in "good old Europe".
Yours, Susanne Stauss
Senior Editor
Questions? susanne@hospitalityInside.com
There is a growing certainty that the recent irregularities on the financial markets - triggered by the crisis on the American mortgage market - will hardly influence the world economy. The report of the International Monetary Fund published just recently, expects a general growth of 4.8 percent in the worldwide gross domestic product in 2008, while 5.2 percent are expected for this year.
According to the experts, the 2008 growth markets will be mainly the emerging countries of China and India. This estimation proves again that the weal and woe of the world economy will no longer solely depend on the US.
Last week, the real estate experts at Expo Real Munich were relatively unimpressed by the turbulence. Their opinion is now backed by the assessment of Lodging Econometrics. The company has counted 814 hotel construction projects in Europe for the next few years and expects that most of them will be realised.
Even in Morocco in northern Africa, investments in tourism are in full swing. In Marrakech alone, 196 building proposals for tourism projects were approved last year. The prices of resort real estate have already reached the level of Spain.
However, hoteliers in Morocco cannot keep up with the investment of Ty Warner, the owner of Four Seasons in New York. He invested 50 million US dollars in a single suite.
This is something European investors like the Blodinger family from Frankfurt can only shake their heads about. The successful concept of their hotels branded Fleming's, Steigenberger and InterCity that are operated by their own operating company of HMG, includes: buying portfolio properties in key cities in German-speaking countries and up to now, this was primarily a strategy for the 3 to 4-star segment, but next year, the first Fleming's Deluxe, a 5-star product, will open up in Frankfurt.
NH Hoteles will also give a separate name to the luxury resort hotels in the company's portfolio. The initial eight hotels will be named edenNH.
An interesting study by a student at Heilbronn University deals with the question of how beds can be filled in future analysing structures and trends of online distribution. In her study, she has observed contradictions and interesting facts. But read for yourself.
Susanne Stauss
Senior Editor
Your Questions? susanne@hospitalityInside.com
Expo Real is clearly the leading trade fair for commercial real estate in Europe: 23,800 professional visitors from 77 countries - 13% more than the previous year - came to Munich this week. There were more companies from Russia than ever among the exhibitors - which was also reflected in several discussions.
The first day of the trade fair has been a traditional meeting point for hotel operators, hotel real estate owners and financiers for years: the room was filled to bursting point at all discussions rounds of the "Hospitality Industry Dialogue". Susanne Stauss and I have heard all speeches and summarised them in four major articles for you today. There is no real news, but it's fascinating to observe the market as it is partly swinging back: accordingly, after the most recent capital market crisis, the moderate interest rates on the rather conservative European market are considered to be absolutely reasonable, and even less risky lease agreements are back in the minds of investors. In their search for a successful yield-heavy concept, investors increasingly realise that only clear visions about target groups and knowledge of the micro market can help.
The boom in Eastern Europe and mainly in Russia was debated not only at Expo Real, but also at the following "hotelforum" industry conference in great detail. The brief conclusion: the euphoria has given way to absolute disillusionment, the first markets have been saturated and many problems remain as they were. Even for Eastern Europe there is no one single secret to success.
Today, you can read the most important news of the manifold issues gathered by the editing team of hospitalityInside this week - so that there is some space left for other industry news. Like the one about the sale of the German Innside Premium hotel group.
Our impression after many days of talks in the world of hotel real estate and financing: the market will stay in motion, as there is too much capital that could be lost. And Germany will remain attractive, as real estate is cheap and there is high trust in the economic power. Therefore, Expo Real is a sensitive sensor for the psychological powers; it either boosts the mood of investors or it has a downside effect.
Yours, Maria Puetz-Willems
Editor in Chief
Your comments? maria@hospitalityInside.com
Dear Insiders,
The resort hotel business is experiencing a rapid change - just like the city hotel industry. There are lots of investments and experiments as new paths are being pursued. However, the secrets of success for resort hotels are more different than ever. Friendly service is a must, but that alone is far from being enough. Fred Fettner, our correspondent in Austria sheds light on the most recent strategies and investments of the hoteliers in the skiing destinations Kitzbuehel and Seefeld. They are refitting their hotels with conference rooms. The goal is to have them benefit from the MICE market apart from their main purpose as resort hotels. In the Burgenland region, a new thermal bath hotel where construction has just begun also counts on conference guests as a means to fill its beds.
The new, stylish Hotel Cerês on the resort island of Ruegen, which was visited by editor in chief, Maria Puetz-Willems, this week takes a different path. The "lifestyle-hotel" has created a very promising niche of its own with its extraordinary architecture.
The most recent resort hotel strategy of the Steigenberger Hotel Group starting in November aims at the traditional target groups of resort hotels, such as families, wellness guests and activity vacationers. We can already reveal some details about the contents - like improved equipment, extended F&B offerings and a resort concierge. Improvements are absolutely welcome, according to Maria Pütz-Willems who stayed at the Steigenberger Resort in Ruegen this week: There, the investment delay is more than obvious, rooms are sold by the cheapest distribution channels. The result: a Steigenberger resort on budget level.
Another topic leads us to Spain this week. There, the former Hotusa consortium has transformed into a diverse company with more than 2,000 hotels in 40 countries. Hotusa has long since been operating hotels owned by itself or via lease or management agreement. In the meantime, this segment is growing faster than the actual cooperative. Further short news and talks with insiders show international trends and tendencies in the industry. Next week, the editing team of hospitalityInside.com will visit Expo Real in Munich for you looking out for further interesting news.
Yours,
Susanne Stauss
Senior Editor
Questions? susanne@hospitalityInside.com
Dear Insiders,
Meeting cards, yes please, but without disagio! The hotel industry doesn't want to be left holding the bill for others yet again. Who profits when companies pay their seminar bills by credit card? Our conference specialist Ralph Langrock has tested the waters on the market. The mood seems to be changing - in favour of the Meeting Card!
Possible mood-killer, on the other hand, may well be the report from Susanne Stauss: Even travel agencies now plan to rate hotels! Should we be expecting the German Pensioner Association, the Butcher's Guild and the Union of Chiropodists to follow suit?
The hotel industry is also playground for architects, as can be seen at the Development Fair in London. Should you be visiting the English capital before the end of October, remember to make time to visit this extraordinary event. Entrance is free of charge!
Peninsula hotels is also looking steadfastly into the future. The small, fine collection, easily among the most luxurious in the world, paid 20 employees a whole year's salary in a unique initiative to ensure the best training prior to the opening of the Peninsula Tokyo. At the same time, Peninsula's own specialists in Hong Kong/Aberdeen were working on new ideas to improve the guest's stay even more.
We've described some of these innovations for you. Peninsula's commitment once again shows that quality only comes from knowledge of the market and of guest needs and that quality is not a commodity which can be obtained at will.
Our employment law specialist Hans Joachim Jungbluth also shows how politicians should be taking care of Germany's future potential: young workers in the hotel industry. Yet once again the law courts are having problems.
Of today's news: Hilton expands in Russia costing it its contract with Trident in India; Golden Tulip says goodbye to its master franchise partner in Great Britain and Crowne Plaza can no longer extend its contract in Cologne.
We wish you a successful week,
Yours, Maria Puetz-Willems
Editor in Chief
Ideas? Questions? maria@hospitalityInside.com
The turbulence on the financial markets could affect the field of hotel real estate as well. But nobody can foretell the degree of price reduction of the properties. Investors and consultants are still convinced that investing in hotel properties is a secure type of investment in the long term.
In the run-up to the Expo Real real estate trade fair that will take place in Munich in early October and will deal with the issue of hotel properties with increasing intensity, two German hotel real estate funds have introduced themselves to the public. Their initiators see a great chance for their products particularly regarding the growing problems of private equity financings. One of the funds concentrates on downtown Hamburg and a resort hotel on Sylt, while another one turns to institutional investors promoting investments in hotels at German B locations. Both probably make sense. With the right concept, A locations are sure-fire successes offering reasonable investment prices that are hard to supersede. At the moment, B locations take the industry's heart by storm, as the markets of mid-sized cities have proved stable and relatively unaffected by crises in the past.
However, the German funds still cannot expect rapid increases in room rates. After a calm year due to the World Cup, the discussion about rates has flared up again. Despite the fact that the country is becoming increasingly popular as a travel destination among foreign guests, room rates are lagging behind compared to the rest of Europe. Nonetheless: more and more Arabian guests have been turning their backs on the expensive British hotels and let the German retail business, medical sector and our "cheap" luxury hotels benefit from their strong buying power.
Additonal exciting topics of this hospitalityInside.com issue are the personal search for employees of Kempinski CEO Reto Wittwer, who decided to give top priority to the topic of "people", planned mergers and the report about the first Yotel in Great Britain by our correspondent Guy Dittrich, accompanied by a background interview about the Yotel concept.
Check it out with us.
Susanne Stauss
Senior Editor
Questions? susanne@hospitalityInside.com
Dear Insiders,
Now the budget flood is coming! Two similar concepts are announced in the Netherlands on the same day, while a Malayan airline boss boasts about a hotel concept on a 3-dollar level. Only those who have their own towel with them should dare visit a Tune Hotel. This little bit of fun only costs 3 dollars though.
The Dutch at least provide a bed in a box: the rooms of Qbic are to be put together like Ikea furniture - this would be the best solution for underutilised or old real estate that cannot be changed in terms of its floor plan. With Qbic and the second budget novum called CitizenM, guests are allowed to join the game and determine and programme the degree of light and colours of their room. Two articles about design and future technology pointing the way.
The description of the Lánchid19 comes from reality. Guy Dittrich shows that European cities like Budapest smoothly connect to the "western world". His detailed description makes us think that this project will probably be among the valuable and durable design objects.
By the way, Asians and Dutch want to expand with their budget concepts - on a large scale. Will these become tourist brands? The first "Marken-Tag" of the Travel Industry Club in Frankfurt last Monday showed the difficulties in changing from a product into a brand. However, the contributions also revealed that it is hard to find speakers who do not bore a demanding audience with their superficial contributions.
In contrast, the world of banking is quite demanding. So you should take some time to read the article written by our financial and real estate journalist Karin Krentz. She explains the positioning of the German banks on an international level - an important background even for the hotel industry!
One of this week's "minor" pieces of news should be specially mentioned: the hotel chain of Jumeirah from Dubai with a single European presence in London will soon be present on Mallorca as well. And maybe even in Germany.
Yours, Maria Puetz-Willems
Editor in Chief
Questions? maria@hospitalityInside.com
Limitless thinking creates connections - and brings up new ways of access to "good old Europe". The Kuwaiti company of Refad already set a foot into Germany several years ago. Now, it is about to fetch a German COO to Kuwait. The Arab, regionally designed brand of Shaza Hotels has gained a foothold in Europe through its connection with Kempinski.
Germany has been benefiting from a particularly positive image boost since the Football World Cup last year. The German National Tourist Board confirmed that again in a recent survey. Travellers also rated German hotels absolutely positively, however, Petra Hedorfer, Head of the GNTB, wants a lot more interested hotel groups to join the association.
The supra-organisation of the EU always thinks as a whole. It indirectly forced HOTREC, the European umbrella association for the hotel industry, to pave the way for an all-European certificate of existing quality management systems in the industry. A rather dull but future-oriented issue for those who want to market their quality!
HTNG - Hotel Technology Next Generation - thinks across all boundaries. The association located in Chicago and hospitalityInside.com will start a collaboration beginning as from today that is to give you - dear Insiders - new ideas on the topic of technology. This association includes experts from the fields of hospitality and industry thinking about trends and whether they can be realised technologically hospitalityInside.com will be at that round table in future in order to find out next generation issues for you. So you know what investments make sense in future. We are very glad about this new transcontinental collaboration and express a very warm welcome to HTNG among hospitalityInsiders!
After Cornell University/The Hotel School, HTNG is our second partner in the US we collaborate with to keep up to the minute with the hospitality industry. Furthermore, hospitalityInside.com will continue to be active behind the scene for you: we will be participating in ExpoReal in Munich, International Hotel Conference in Rome and at the same time, we are about to start organising the third "Hospitality Day" hotel conference at ITB 2008!
Yours, Maria Puetz-Willems
Editor in Chief
Ideas? Remarks? maria@hospitalityInside.com
The true dimensions of an announcement or an action are often revealed only then when one probes a bit. This is why several initially small bits of news turned into major stories this week. And they are all about brands - how to make them more attractive and how to place them more quickly on the market.
First, there is Accor: Europe's bed giant announces good semi-annual figures and in passing, the much hotter news that Sofitel will be upgraded and the old Accor brand Pullman will be revived. hospitalityInside.com whisperings revealed this already two weeks ago. But Accor's CEO Gilles Pélisson will not disclose before the end of October how the brands will distinguish themselves from one another. Should the financial media have correctly quoted the CEO after the press conference this week, he plans to position Sofitel on the same level as absolute top luxury brands like Ritz-Carlton and Peninsula. High-brow ambitions. Ambitions that could cost shareholders lots of money. As there is a small difference between luxury and luxury.
There is Hyatt - up to now a fairly closed shop of brands directed by the Pritzker Clan from Chicago. For the first time, Pritzker now allows foreign investors to step in - as an alternative to an IPO. The brand expansion requires higher investments.
Then there is Best Western: the hotel group reacts a bit hesitantly when hospitalityInside.com digs deeper asking whether the first lease businesses could become a new pillar of business. But Markus Keller, Head of the mother company Dehag, gladly explains to hospitalityInsiders the details of the new model, which differs from franchising in order to protect the Best Western brand.
And then there is Barceló Hotels from Spain: they are buying a UK chain so they can survive at home. A fantastic example for the cross-border amalgamation of continental/global problems and chances. And finally, there is the small village of Alpbach near Innsbruck in Austria, whose success originates from "thinking without borders" as well. It owes the increasing rates in the congress business to international companies mainly from Germany.
Today, hospitalityInside.com will hopefully grant to you again some new "insights" about markets and people .....
Have a great week,
yours, Maria Puetz-Willems
Editor in Chief
Ideas? Comments? maria@hospitalityInside.com