Global: With the International Hotel Investment Forum postponed until 2021, organiser Questex launched In Sync, its virtual equivalent, today.
The virtual content began with an interview with Accor CEO Sebastien Bazin, in which he said one of the effects of the pandemic was that it had possibly made him a better person. “I’ve had time to reflect, time to reset and time to learn,” he said.
When asked how Accor’s dealings with its hotel owners have been affected, Bazin said: “We have a stronger relationship with our owners than ever. As a global company there are lots of different cultures among our owners, but with all of them we are sharing information, offering them advice and someone to talk to. It’s vital that we are transparent and authentic with them – sharing the good news, but also sharing the bad news – let’s face it, the last few months have been apocalyptic.”
On the day that Accor secured a new €560 million credit line, Bazin insisted: “Accor is not a bank. We can’t act as a lending institution, but we can help owners by deferring fees.”
And asked if he intended to spend the money on acquisitions, he replied: “This is a time to be cautious and to be prudent. It’s time to salvage our own business first. My priority is to rehire the 220,000 staff we had to let go as soon as possible.”
Bazin also revealed he is the spokesman for the entire hospitality industry in France, in talks with the French government on getting the industry back up and running.
The Accor boss was sceptical of the view that the pandemic will result in technology taking over the role of humans in the hospitality process. “If you travel it’s because you want to spend some time with somebody – if not, stay at home,” he said.
He ended the interview on a cautiously optimistic note, saying: “We may have hit the bottom – May and June might be slightly better than March and April.”
Adam Sacks, founder and president of Tourism Economics, gave some insights in to the possible shape of a travel sector recovery.
“There is likely to be a big initial bounce in travel as lockdown and movement restrictions are lifted,” he said, but warned: “After previous recessions, it has taken seven quarters for demand to recover and 12 quarters for ADR to recover.”
“In the US there is considerable pent up demand for travel. There will be an increase in drive-to rather than fly-to destinations, and more domestic than international. Countries with the biggest percentage of outbound tourists, such as Germany, Italy, the UK and Spain, have the biggest potential to develop their domestic tourism markets,” said Sacks.
Other observations included:
• Regional travel is positioned to recover more quickly but the timing will initially be defined more by social distancing policies than the economy
• Business and group travel will age due to low cash/profits as well as corporate and government policy
• A return to “normal” levels of travel could take until at least 2023
In an investment session, Cody Bradshaw, managing director and head of international hotels at Starwood Capital Group, said: “The question the industry is asking itself is ‘how do I take a full service hotel and make a profit with 40 to 50 per cent occupancy?’ It will make us do things better in the long run, and will make us rethink the way we do things. For the first time in our careers, for a lot of us, this has been an opportunity to pause and re-evaluate.”
Ramsey Mankarious, CEO of Cedar Capital, spoke of the necessity to look beyond short-term trends: “While train-to and drive-to hotels are attractive in the short-term we are looking very much at the long-term, luxury, lifestyle and full-service hotels. If you don’t think there is a solution to Covid then you shouldn’t be buying anything!”
He concluded by emphasising the favourable climate for investment: “If people liked hotel investments before, they will be drooling now, it’s a great time to be buying.”
Part two of In Sync takes place tomorrow (May 19) at 13:30 BST. Click here to register.