The opening day of the Hotel Investment Conference Europe in London focused much on the issues of sustainability, from an environmental footprint and financial standpoint.
LONDON—Hoteliers attending Day One of the Hotel Investment in Europe Conference, better known as Hot.E, time after time, panel after panel, mentioned the “S” word: sustainability.
The annual gathering of hoteliers in London did come just a few days after global protests, largely led by younger generations calling for governments to properly address climate change and related geopolitical problems.
Those gathered in the Hilton Bankside hotel were not so naïve to suggest that change would come to the hotel industry without a profit and savings angle to it, but the takeaway was that sustainability is what both guests and hoteliers desire, and is necessary throughout the footprint of hotel development and operations.
Speaking on a keynote panel titled “The European leaders’ outlook,” Cody Bradshaw, managing director and head of international hotels at Starwood Capital Group, said he saw change coming.
“As contracts and (hotel management agreements) come up, (sustainability) is where hotels will differentiate themselves, because up to now they did so only with their brands. It will be hugely exciting over the next 10 years, and this will be a challenge to the big hotel brands. … Budget luxury is leading the charge,” he said.
Sustainability also had several mentions during a panel titled “A focus on debt.”
Yes, bankers also have listened to global activists led by Greta Thunberg, the 16-year-old Swede who has captured the world’s attention.
The bankers were, of course, talking about the sustainability of capital structures, but an underlying message seemed to be that there is no point in hotels cutting down on waste if the debt is not sensibly stacked and hoteliers are sent into the world of competition with unfeasible boxes of hotel rooms.
At that panel, Michael Young, relationship director for hotels and leisure at bank Santander, said, “Yes, we are all working in a competitive environment, but we do not want to chase the next transaction only to be not sustainable.”
The goal is to make sustainability permanent in all aspects of a hotel’s cycle and exit, and with guests, employees and now the C Suite all pointing in the same direction, there is every reason a successful outcome is possible, especially as the hotel industry has such an obvious role to play.
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Sustainability is not always possible.
The first day of the conference started with the backdrop of the liquidation of the world’s oldest travel group, Thomas Cook, which was unable to continue trading despite the offer of £900 million ($1.1 billion) from its majority shareholder, China’s Fosun Group.
Creditors demanded Thomas Cook, founded in 1841, come up with £200 million ($250 million) of its own cash, and that was where the stumbling block lay.
The demise of the group will have devastating effects at least in the short term on many hotels in markets such as Turkey and Spain, although the company has shifted emphasis from Spain due to that country’s accommodation stock being more expensive lately.
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Quotes of the Day
“Sustainability is becoming a core driver, but I do not see that many people putting their hands up and saying, ‘yup, I am going to do that.”—Rohit Talwar, CEO, Fast Future, speaking about what the industry might see in the next five to 10 years and perhaps refuting the conference’s ebullience so far around issues of sustainability.
“There’s two things you need to know about the Benelux countries—Brussels wants tourists, and Amsterdam doesn’t.”—Robin Rossmann, managing director of STR, diligently summing up two European capitals.