News for the Hospitality Executive
Wrap up: Eighth Annual International Hotel
Cautiously Optimistic Global Outlook for Hotel Industry
|VENICE, Italy, December 2, 2010-The general tenor
of the eighth annual International Hotel Conference held here recently
suggests a brightening outlook for the hotel industry. Attendees
expressed a cautiously optimistic outlook for the global hotel
industry, realizing that while the worst may be behind the industry,
obstacles still lie ahead.
In addition, conference organizers announced that the 2011 Conference will return to Rome, October 26-28, at the Hilton Cavalieri Hotel. "We had solid attendance from a much broader cross-section within the hotel community this year, ranging from the leading brands, ownership groups and managing companies to OTAs, law firms and consultants," said Morris Lasky, conference co-chairperson. "We already are planning next year's event and predict record attendance if the economic rebound continues at the current pace."
Some of the more newsworthy soundbites from the conference follow:
"I found the conference to have a genuine buzz of optimism for the immediate future," said Guy Lean, director, Madison Mayfair, who moderated the closing general session, "A View From the Top." "It is still challenging to get firm decisions and commitments. However, the volume of real and qualified leads has increased. True opportunity lies with the brave. My impression was that cost cutting is largely over, and the focus now is on revenue generation whilst remaining very lean."
European Hotel Development Upbeat
The Hotel Developments in Europe panel displayed an upbeat consensus that the industry is rebounding. Finance remains a major issue particularly for new-build developments. Attendees thought hotel conversions in this market generally were less costly and more readily financeable, according to panel moderator Monica Palmas, project manager, Hotel Management International/Global Trade Media. Participants indicated that the United Kingdom, especially London as the host of the 2012 Olympics, was the prime market, followed by Germany, Italy, France and some Eastern European countries. Turkey with a number of opportunities for mixed-use segments also was of substantial interest. International hotel brands and management companies will play an increasingly important role in future development.
Global Developments Offers Significant Opportunities
Globally, China and Africa offer significant opportunities, according to Bridget Baker, managing director, Bridget Baker Consulting Ltd., who moderated the "Global Emerging Markets" panel. However, both locations present significant challenges in terms of getting a hotel built. "Panelists emphasized the importance of understanding and taking on local cultures, not only in the hotel design, but in employing local people and providing training. Recognizing local demand markets is another key to success. In China, the emerging middle class presents a base of hotel demand," she said. "South America, particularly Brazil, offers significant opportunities for international brands. Local partners in emerging markets are important to help a project come to fruition."
Unprecedented Lender Financial Difficulties a Main Focus
From a legal perspective, much of the conversation in the "Successfully Resolving Complex Legal Issues" panel revolved around current economic realities and the respective legal issues and challenges facing owners, operators and lenders during these difficult times, said moderator Cliff Risman, partner, Gardere Wynne Sewell LLP. "Of particular interest were comments about how these three groups were addressing the economic challenges being encountered by the various counterparties to their agreements. How owners and operators are dealing with unprecedented lender financial difficulties was a main focus."
Loans Need to Be Rebalanced
Participants attending the "Loan Modification and Recapitalization" panel agreed that there is both the need to refinance and modify existing loan facilities, according to Rod Taylor, Taylor Global Advisors, and panel moderator. "Such actions often require new, additional capital to redress the current imbalance between the EBITDA to Loan equation," he said. Taylor said attendees indicated that this rebalancing effort would likely persist for several more years.
Labor and Skills Issues
Industry and education need to better manage the growing problem of the expectations of young people graduating from hotel schools. "Young people now are less inclined to look for a career pathway with one company, but they also need to understand that a certain amount of experience is essential to successfully fulfill the role of a manager," said Philippe Rossiter, chief executive, Institution of Hospitality. The participants concurred that the process of professional development needed to go much further down the line in order to encourage a culture of ambition and self-improvement amongst all staff members, especially at the operational level.
Technology versus Personalization
The future of hotel design will be the balance between technology and personalization, was a theme that emerged from the "Next Generation Design & Technology." "One school of thought was that in the future everything in the hotel room could be controlled by an iPhone, allowing the space to be tailored to the guest's requirements," said Jane Lawrence, director, Conran & Partners and panel moderator. "On the flip side, a number of delegates considered the importance of a more personalized face-to-face approach as the way forward, requiring better concierge services and higher levels of customer service."
The changing role of the lobby and a world of growing "global nomads," is evolving into all-day cafes and the proliferation of WiFi people who now use lobbies for multi-functional purposes. Other trends include the idea of a hotel becoming a destination rather than just somewhere to sleep, the expression of "the local" within the design as hotels form relationships with the local community and sustainability. "It was interesting that provenance of wanting to know more about the origins of the hotel's food wine and culture seemed to hold greater guest interest that sustainability," she said. "Sustainability will inevitably play an increasingly important role in the development of future hotels, however."
The Billion Dollar Spa Industry
The well-attended "The Billion Dollar Wellness and Spa Industry" covered a wide variety of topics including the profitability of resort spas and city-centre day spas, the trend towards social spa going, should spas be specialist or generalist, out-sourcing and its strengths and weaknesses, staffing and long term career planning. Panel moderator Guy Dittrich, hotel marketing consultant and journalist, noted that there was continued global interest in spas, according to comments from attendees from around the world, including "valuable contributions from Pietro Luigi Valle, Board Member of Portugal's largest hotel group, Grupo Pestana, and Ami Federmann, Vice Chairman, Dan Hotels Corporation of Israel."
The Feasibility of Growing a Hotel Portfolio Today
Participants attending the "Feasibility: Growing Your Hotel Portfolio" focused on the major development risks in the present market, how to determine which brand best suits a development, and whether to go for opportunistic or strategic growth in today's economic environment, according to moderator, Karen Callahan, director, Colliers International Hotels.
Sponsors of the event included: Activeion, Choice Hotels International, ESSEC Business School, Expedia, Inc., Field Fisher Waterhouse LLP, Gardere Wynne Sewell LLP, Hilton Worldwide, Magnuson Hotels, REAG-Real Estate Advisory Group, Stenden University, and three Architecture.
International Hotel Conference
up: Fifth Annual International Hotel Conference / October 2007