‘Finding the right asset’ & ‘staying relevant’ themes of hotel investment- IHIF conference, Berlin 2017
Last week we were reminded that hospitality remains a vibrant and ever changing industry. Tourism and Travel is still growing internationally and driving demand for accommodation of all types. Ideas, Challenges & Opportunities in the industry include:
- Traditional hotel models are being shaken up by new concepts.
- Disruption caused by the sharing economy continues.
- The internet, ‘the great de-bundler’, has changed pricing models and prompted new strategic thinking.
- New and interesting accommodation concepts abound-they include Zoku, Steel Hotels, hostel and aparthotel concepts.
- Traditional operators such as Accor are also changing their approach with interesting acquisitions (John Paul, One Fine Stay) and services targeted at local communities.
- Capturing the customer is key-but their demands are changing. Many come not from a ‘society of stuff’ but ‘a society of experiences’ and their needs are different.
- Distribution and marketing remain critical.
- The power of on line travel agents, other intermediaries and/or a multiplicity of hotel brands remains key-how to get to the customer at least cost.
- Businesses can be operated directly through Management agreements, franchises or hybrid ‘manchises’ . Finally some flexibility is beginning to surface in the terms of these agreements.
- A multiplicity of hotel brands exist to help distribution and marketing- but at what cost and for what value?
Opportunities-Finding the Right Asset is key
- Investor opportunities exist. Germany is a core target market although pricing is beginning to become restrictive.
- Distressed assets in various European countries also show opportunity.
In a fast moving consumer, technological and economic environment, price, value and upside potential are the main challenges and key to determining transactional and commercial activity.