Boutique Hotel News was a media partner for the 18th International Hotel Investment Forum (IHIF), held at the Hotel InterContinental Berlin.
More than 2,000 delegates from 70 countries attended the event which started with A Bird’s Eye View looking at the global and European investment landscape. Elizabeth Winkle, managing director of STR Global said that Europe had seen 18 months of consecutive RevPAR growth, with demand in Europe back to the level of the early 2000s.
Chris Day, managing director of Christie + Co said that European yields are still very attractive and there are “no signs that hotel transactions will lessen across the whole of 2015”. He expects to see a rise in secondary transaction markets and observed that lower oil prices will boost travel and tourism. The session concluded with Day saying “hotels continue to offer great value and very solid investment returns for innovative buyers”.
The 2015 Lifetime Achievement Award was presented to Barry Sternlicht, chairman and CEO of Starwood Capital Group. Sternlicht said: “I love the hotel industry because people are involved. There is creativity and it’s a team effort and you are always trying to surprise the guest. At the end of the day, it’s all about people”.
This was followed by the presentation of the Young Leader Award to Greg Bows, founder and managing director of African Impact. The award was presented to Bows by Chad Crandell, president of the International Society of Hospitality Consultants (ISHC) who said that “this year’s nominations were nothing short of spectacular”.
The CEO panel, always a highlight of the conference, was chaired by Arthur de Haast, global chairman hotels & hospitality group, JLL, in discussion with Sébastien Bazin, chairman and CEO of Accor; Stephen Joyce, president and CEO, Choice Hotels International; David Kong, president and CEO, Best Western International; Gerald Lawless, president and group CEO, Jumeirah Group and Arne M. Sorenson, president and CEO, Marriott International.
There was consensus among all participants that 2015 looked optimistic for the industry globally with lower oil prices and interest rates contributing to this. Lawless said that Jumeirah is trading at between 82 and 85 per cent occupancy on an annualised basis in Dubai and has average rate of upwards of $600. The company is looking at growing from 82,000 keys to 150,000 in 2020.
Qbic Hotels announced plans for aggressive expansion in 2015/16. The group intends to acquire property in Europe, with hot-spots including Edinburgh, Paris, Rome, Milan, Barcelona, Dublin and a second hotel in Amsterdam. In addition, it will continue to seek new opportunities in London.
A session on Asian hotel investment in Europe raised some interesting points. In 2014 $15 billion of Asian money was invested in European hotels. Delegates heard that there are four distinct Asian investor groups – insurance companies, developers/property companies, high net worth indiviusdals/tycoons, and soveriegn wealth funds. Strong Asian interest is set to continue as there is an attractive foreign exchange and interest rate environment.
Grace Leo, vice president of Reignwood Investments UK said domestic policies in China are encouraging investment in overseas real estate development. Large scale landmark mixed-use schemes, in the mould of the 10 Trinity Square development in London, is the model for future Reignwood projects, she added. “10 Trinity Square is an ambitious project for a first-time investor in the UK – it’s not for the faint of heart. We are surrounded by a battalion of experts to help us. I would recommend that apporach to investors in a new country,” said Leo.
John Connolly, head of development UK for Dorsett Hospitality International warned of the dangers of trying categorise investors, saying: “The universal language of investment is to make money, regardless of nationality. Investor behaviour doesn’t vary widely between nationalities.” He also said Dorsett may move in to the serviced apartment sector – “there will be lots of activity in that sector over the next few years”.
Alan Tang, COO of Frasers Hospitality noted the “tycoon effect” on his own company and the markets in general. “Frasers has done more new business in the last 18 months since the new chairman (who he described as a tycoon) came Tang also said: “Becasue it a seller’s market, vendors are becomign impationet, with the result that due diligience processes are fetting hsorter. It’s worth getting consultants on a retainer before any deals come up- you then appear serious to vendors and your team is ready to move fast.”