Vanguélis Panayotis, Chairman, MKG Consulting : From 2001 up to February 2023. There are 2 cycles in demand. The crisis with Lehman Brothers cut the first cycle, the second one allowed us to increase the RevPAR. In the hospitality industry, we go through crisis and have very strong basis.
Welcome speech
Johanna Capoani, Head of Hospitality Portfolio Management, Swiss Life Asset Managers
At Swiss Life AM, hospitality was spotted as a complex but also important sector. Hospitality is still there stronger than ever. Hospitality is the subject of a dedicated centre for Swiss Life AM in Paris. Today we have invested through 5 thematic hotel funds and an increasing number.
As a growing hotel owner, we have witnessed an incredible change. News concepts, digital, and ESG are the elements of these changes.
Keynote address: Assessing the performance of the hospitality industry through the latest financial results
How much of a recovery and underlying resiliency have we seen? Is the industry back on track?
Patrick Mendes, CEO Europe & North Africa for Premium, Midscale & Economy brands, Accor
Business is back, despite what we are facing globally.
Accor is still 60% Europe driven. We are seeing China coming back very strongly. Euro/dollar parity helps us to attract American clients.
Financial results were much better than expected. We were expecting to reach 2018 performances and they were better than those of 2019. 2023 is in the same path.
Reassessing the way we operate and distribute hotels, shows in the EBITDA result.
We decided to do a reorganization because we thought it was the good thing and so does the market.
2022 was great and exceeded all expectation not only for Accor but for the whole industry. It is a different business.
In China, last week we were at 90% of our activity, whereas a month ago we were at 45%. The activity is restarting very fast. Right now, the level of occupancy is as strong as 2019 which is a good signal.
Camil Yazbeck, Chief Development Officer: When you build a hotel from the ground, the carbon impact is high. We do more and more conversions and it is environment friendly. In the end, it’s also about the relationship and about what the owner wants to do.
We have great deals with very good companies. It brings much higher value to an asset when the works are done.
Patrick: What’s happening now was expected for 2024. We are witnessing a lot of traction versus other type of assets, office for instance. Due to the crisis, we revised our operational work. We invested a lot in distribution, loyalty... We invested a lot on the toplines to ensure we have more guest. We open one hotel every day in the world. Having 44 brands in our portfolio, gives new solutions for development. We are expecting to grow about 2.8%.
Keynote address: Latest hotel investment trends
Li Zhang, Senior Vice President, Real Estate, Brookfield Asset Management
To what extend the impact of all the elements we are going through will be, that is to be determined?
Labour is still a challenge for the industry, we are still above the historic levels. Cost is also a very fixed cost for the hotels. Cost of borrowing is also increasing which also has an impact.
China is the second global spender for vacation. Major cities are going to be the primary beneficiaries. This is good for us but will take time regarding the air travel capacity.
Group tourism is still 25% below 2010 which will feed the rebound of the industry.
Panel discussion: Latest on ESG compliance for investors and operators
Philippe Bijaoui, SVP Development Europe and North Africa – Premium, Midscale & Economy division, Accor
First of all, we need to fix ambition and feasible targets. Property per property it’s not the same recipe. Recycling building is a very good way to limit carbon footprint.
Today it’s not an option, it’s a necessity and it’s adding value. Every day we learn new ways to be more efficient.
This topic is not about CAPEX, it’s about the will of doing the right thing. For the “S” part, we are in an industry of people. Employees will not come work for us if there are not treated equally. It’s a moral obligation today for us.
This is a place where there is no competition. We share ideas and practices. It is one area where we are all at the same level.
Karin Sheppard, SVP & Managing Director, Europe, InterContinental Hotels Group (IHG)
We both need in terms of what we do to get carbon neutral and we need to understand how we can decarbonize in existing assets.
We have had for over a decade a system to allow our hotel to measure our carbon emission.
Passing the advice, measuring, and sharing.
European countries are probably the most demanding. Six Senses have been leading in CSR. Across the world they are example of what can be done. The more we have those tangible examples, the better. We all need customers through the doors to make turnover. What does it take to drive customers through the doors? If there is no action taken, what are the consequences? It is about projecting assets even on short term.
The only way we can make progress is with transparency.
The more we find industry standards, the better we will be able to have a common roadmap, we will be in a better place to drive the action.
Most if not all the large brand have engaged themselves on those topics.
Anna Cohen, Fund Manager, Extendam.
It is extremely important for us at Extendam. We have a contract with Betterfly to monitor all the hotels we have. When we buy hotel, we do an acquisition audit.
It is very important for us when we build to have a label. It helps to reassure banks. Our funds are article 8.
It is very important when you are raising funds, it needs to be covered. It’s mandatory for us right now to comply ESG. We keep one room empty in case of life emergency for beaten women for instance.
We all learned that dropping rates didn’t help to keep the customers. I strongly believe that people will travel again.
Johanna Capoani, Head of Hospitality Portfolio Management, Swiss Life Asset Managers
ESG has entered all our process. We have always tried to be as good as possible but now, via our acquisition process, we are able to assess how the asset fits our strategy regarding carbon emissions.
The latitude of the owner is very linked to the type of contract you have with your owner.
A lot for actions towards sustainability are in the hands of the operators. What is changing is how we can align the interest between operator and investor.
Collecting data from our operators, has become a market practice. We don’t have operators who are not willing to share their strategy.
The outlook:
Karin Sheppard: I am hugely confident. We have demonstrated that’s a resilient business to be. There are trends towards leisure.
We have partnered with Iberostar as an illustration of our commitment to leisure.
We have seen a reset for luxury, and it is not going to change. How do I help my franchise owners an advantage of it? We want to make sure they want to use the system we created for them.
If you want long term strong ADR, it relies on people willing to spend the right price. Ongoing investment makes sure we deliver the value.
Philippe Bijaoui: I share the optimism for the industry. There is still potential with big events, Chinese customers, leisure customers. Leisure demand keeps growing and corporate hasn’t come back to what it should. We have enough brands to cover all sectors of market. Handwritten already has great success.
We learned from mistakes we did in the past. Today we are in a good place with demand increasing, supply in France has dropped since 2019: we have less rooms.
The hotel portfolio has increased in quality. CAPEX have been invested during the crisis. The increasing rates are also due to an increasing quality of the asset.
Johanna Capoani: We are in the process of launching a new alternative funds for camping. The real difference is that we are going much more management orientated. A stronger exposure to management which is a huge step from Swiss Life. The cost of funding is an issue. Funds, unfortunately, are still not really there. This year we may continue to develop without debt.
Our valuations are flat, the topline is so incredible that it’s compensating.
Anna Cohen: ADRs are higher than inflation and the coast of loan. The good results of hotels are a way to compensate. Right now, you pay the right price for the right product.
Workshop on key topics for the industry :
• Hospitality performance round-up
Table leader: Patrick Mendes, CEO Europe & North Africa for Premium, Midscale & Economy brands, Accor
• Hotel investment trends
Table leader: Li Zhang, Senior Vice President, Real Estate, Brookfield Asset Management
• ESG compliance for investors and operators
Table leader: Camil Yazbeck, Global Chief Development Officer for Economy, Midscale & Premium Accor brands
Table leader: Mariya Lazarova, Head of our TUI Asset Management Company “TAMAG” – Have set a deadline for tomorrow
• Operational challenges for operators and investors
Table leader: Dr. Peter Ebertz, MD | Head of Hotels, Art-Invest Real Estate
• Diversifying asset revenue streams though hybrid approaches
Table leader: Anna Cohen, Fund Manager, Extendam
• Latest on the leisure tourism market
Table leader: Mathieu Sauvestre, Vice President Development Europe & Club Med Property, Club Med
• Energy consumption & onsite production
Table leader: Alexandre Laidet, European Hotel Segment Leader, Schneider Electric
• White label solutions inside hotels
Table leader: Johanna Capoani, Head of Hospitality Portfolio Management, Swiss Life Asset Managers
• Branded residence
Table leader: Dan Wakeling, Vice President, Development, Luxury & Residential, Europe & Africa, Hilton
- Smart destinations Innovation in the road of sustainability
Table leader: Manuel Matutes, General Partner, KEI Cities
