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Deals on table as hoteliers ponder Europe market health

Column: industry Tag: European Hotel Investment Conference,Hotel Investment,European Hotel Published: 2017-11-10 10:53 Source: Author:

Mai-Lan de Marcilly, of investment firm KKR, said the hotel industry needs to take into account technology changes when it comes to investment. Also on the panel was Credit Suisse’s Steffen R. Doyle. (Photo: Terence Baker)

LONDON—Conversation at the 29th edition of Deloitte’s European Hotel Investment Conference was divided as to whether Europe has reached a cycle peak.

Conference host Andreas Scriven, head of hospitality and leisure at Deloitte, said more than half of attendees who responded to a questionnaire said they believed that was the case in the United Kingdom.

But other healthy markets such as Germany, Ireland and Spain are believed to still be on an upturn, and there is plenty of capital aimed at both primary and secondary markets, he said.

Steffen R. Doyle, managing director at Credit Suisse, referred to funds looking for deals in Europe as an “absolute wall of capital.”

Scriven added that portfolio deals are still in the works, with the next litmus test for the continent being the upcoming Jurys Inn portfolio, bought by Lone Star?in January 2015 for ￡680 million (at January 2015 values, $1 billion). Scriven said two or three other European deals might also see new owners soon.

The conference was held on the same day that news in The Times suggested Starwood Capital Group was seeking a sale of its Principal Hotel Company and De Vere Hotel Group assets, the latter of which just relaunched in September.

No details on the deals were forthcoming from Cody Bradshaw, managing director and head of European hotels at Starwood Capital, or fellow panelist Anders Nissen, CEO of Pandox, which has been touted as one of the hotel companies looking at the Jurys portfolio.

But appetite for deals evidently remains.

That was the key spirit emerging from the conference analyzing the still-growing travel environment in Europe.

Robin Rossmann, managing director of STR, the parent company of Hotel News Now, said one key fact is that occupancy in 2017 year-to-date is 10% higher than it was at the pre-recession peak in 2008.

He added that European hotels currently are at all-time highs, and rising, buoyed by strong transient business growth.

Overall, times remain good.

Photo of the day

Deals on table as hoteliers ponder Europe market health

In his first year of hosting the Deloitte EHIC event, Andreas Scriven, new head of hospitality and leisure at Deloitte, immediately thanked two predecessors, both of whom were in the audience—Nick van Marken, former global head of hospitality, now retired; and Alex Kyriakidis, president and managing director for Middle East and Africa at Marriott International and former global managing director of travel, hospitality and leisure at Deloitte. (Photo: Terence Baker)

Quotes of the day

“The industry has seen design move from being better than what you had at home to being the same as what you have at home, so the onus is on public spaces. The physical plan of hotels in the future will change dramatically in terms of space-planning, and this comes from the ‘AirBnB-ization’ of the industry.”

—Olivier Chavy, CEO and president, M?venpick Hotels & Resorts.

“If you know my favorite wine is a Chardonnay, and every time I get a Chardonnay, I will get bored.”

— Hans Meyer, co-founder and managing director, Zoku, speaking about a potential pitfall of obsessing about guest travel behaviors and likes.

“The French handball team. They are the best. I do not like it.”

— Anders Nissen, CEO, Pandox, tongue in cheek as to what is worrying him most about the current state of the hotel industry. Nissen is on the board of the Swedish Handball Association.

Tweet of the day

When 1+1=3, there’s plenty of room in the sandbox for the #OTAs and #brands to court different consumers and leverage #richbigdata. Great energy on final #DeloitteEHIC panel of the day! pic.twitter.com/BgkRkJy9Dy

— guy langford (@guy_langford) 8 November 2017

Guy Langford, vice chairman and U.S. leader for travel, hospitality and leisure at Deloitte, reiterates a point from Carmen Hui, commercial director for owner partnerships at Booking.com and former SVP of acquisitions for Europe at real estate investment trust Host Hotels, that hoteliers evidently will still be playing catch-up for the foreseeable future.

Slide of the day

Deals on table as hoteliers ponder Europe market health