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The world’s premier international hotel industry conference, which draws about 2,000 participants from some 80 countries, has now drawn to a close. The mood at this year’s IHIF (International Hotel Investment Conference), held in Berlin on 5-7 March 2018 can be described as one of ‘cautious optimism’. Although the economy seems to be firing on all cylinders virtually worldwide and most hotel markets are performing at all-time highs, there’s somehow the feeling that things cannot get much better and that a downturn may be lurking around the corner. Nevertheless, Megan Greene, Managing Director and Chief Economist at Manulife Asset Management, who kicked off the proceedings on Monday morning, was quick to point out that there are no compelling reasons to believe that a recession is on the horizon. Instead we are living in a world of oversupply of practically everything, including labour and productive capacity, but also of debt and regulation. She concluded that long-term inflationary pressures should remain muted and that there is little risk of soaring interest rates.

A cyclical highpoint?

Robin Rossman, Managing Director at STR noted that occupancies now are almost 10% higher than they were at the previous peak during 2008. He expects that RevPAR (revenue per available room) will increase by a further 5% in Europe during 2018. He sees a rebound in demand growth in Asia, but cautions on growing oversupply in key Middle Eastern markets. Nevertheless, Dubai has maintained its position as the fourth most visited city in the world. The positive effect of a weakening Pound on the UK hotel sector has about run its course. Now it seems that a downturn has set in as occupancies and rates have begun to decline. Rossman warned that “2018 will be challenging for London with 0-2% RevPAR growth.” In contrast, the outlook for the European Mediterranean region remains strong with city locations having achieved 40-50% RevPAR gains during the last 4 years and resorts doing even better with 50-60% growth over the period.

Brand proliferation set to continue

While it can be wondered what will support the creation of yet more hotel brands, the trend towards proliferation seems unlikely to die anytime soon. Indeed, when the CEO’s of five of the world’s top hotel companies (Hilton, IHG, AccorHotels & Choice) took the stage on Tuesday morning it was noted that between them these groups operate over 90 brands in all –with more on the way. The CEO’s generally went to some lengths to justify such dispersion in their branding as a way to target every possible customer niche. Meanwhile, an executive of another chain (not present on the podium) admitted privately that one of the main reasons for creating more hotel brands was for a chain to be able to add more properties in a given destination without the risk of infringing on existing franchisees. IHG’s CEO Keith Barr announced that the chain was looking to purchase an existing luxury brand that would trade at a premium to the group’s InterContinental-branded properties and Hilton boss, Chris Nassetta, tipped the chain’s new millennial-focussed midscale Tru flag to be company’s fastest expanding brand, with over 20 due to open this year and 50 in 2019; the goal is to have over 100 by 2020. Meanwhile Choice’s CEO noted the company’s mid-February deal to acquire the brand and franchise business of WoodSpring Suites, which has added some 240 extended-stay hotels in the US to the chain’s portfolio.

Otherwise, Deutsche Hospitality (not part of the abovementioned roundtable) announced a new brand at the conference, Maxx by Steigenberger, which is in fact the revival of a former flag that was introduced 30 years ago and subsequently discontinued. Maxx will be a soft brand positioned between the group’s 3-star brand, Intercity Hotels, and Steigenberger Hotels & Resorts.

Serviced apartments join the mainstream

For the first time at IHIF, there was a session dedicated to serviced apartments which are now recognised as a viable alternative to hotels. Guus Bakker CEO EMEA at Frasers Hospitality noted there has been a major shift towards leisure clientele who now account for 70% of the total at the group’s properties. Otherwise, Christabelle Morgan Desoushes, International Hotel Development Director at Accor’s aparthotel flag, Adagio, said that their client breakdown is 50/50 between business and leisure.  She also noted that over 50% of Adagio’s pipeline is now in ‘combos’, i.e. dual or triple-branded properties with, say a Novotel sitting alongside Adagio serviced apartments.






Macy Marvel Journalist focused on the area of hospitality and tourism

Macy Marvel has extensive professional experience in the financial sector. Macy was professor of finance and economics at the Ecole hôtelière de Lausanne for 20 years and is a Geneva-based journalist focused on the area of hospitality and tourism. Prior to that, he spent eight years as an investment strategist and financial analyst for two Geneva private banks. He has also held the positions of financial analyst at Digital Equipment Corporation, auditor at the Geneva offices of PriceWaterhouseCoopers and securities analyst at The Value Line Survey in New York. He has also carried out numerous hotel property valuations and feasibility studies and is a frequent presenter and moderator at international hospitality and tourism conferences.  He holds an MBA from the University of Toronto, an MA from the London School of Economics and a BA from the University of Pennsylvania.