BERLIN — The gray skies over Germany's capital weren't enough to hide the overall sunnier attitude during the second day of the International Hospitality Investment Forum EMEA, as attendees shifted focus from geopolitical headwinds to optimism about performance and deals.
Speaking during the "Capital Talks" session, Peter Werhahn, London-based managing director for Blackstone's real estate group, said if anything the global upheaval is making Europe — particularly around the Mediterranean — more of a "safe haven" for both travelers and investors.
"Europe is a pretty unique place, and that's why it's become a magnet," he said. "That's why as we try to follow these things, we really double down on leisure and investing in experiences," he said.
Photos of the day
Quote of the day
“It is a complementary brand to our system, technology-led, fiercely independent, as they say. Commercial platforms will drive better commercial terms for them and give our customers another reason to stay with us.”
— Christian Charnaux, executive vice president and chief development officer, Hilton, speaking of the U.S. hotel giant’s recent agreement with hotel firm Yotel.
Editors' takeaways
Hoteliers are always reluctant to get too specific about their forward-looking expectations, as there's really nothing but possible downsides for making bold, and ultimately incorrect, predictions. And the broad geopolitical uncertainty springing from the war in Iran is only heightening that impulse.
I heard multiple times today that broad expectations for travel this year were strong, but it could probably be considered a miracle if full-year results don't fall off somewhat because of that ongoing conflict.
And while travel directly to and from the Middle East is the most likely to suffer, the issue is somewhat more complex than that. In perhaps what was the most apt data point of the day, World Travel & Tourism Council CEO and President Gloria Guevara noted that while the Middle East is the destination for 5% of global air travel, it handles 14% of the connectivity.
"That's one-in-seven passengers globally impacted," she said.
— Sean McCracken, news editor
On the second day of the International Hospitality Investment Forum in Berlin, a lot of the noise heard on the first day as attendees first reached the InterContinental Hotel Berlin dissipated, and the talk returned to the nitty gritty of hotelkeeping, even amid continuing global crises.
Deals are still being completed, banks and other credit sources are still lending and, most certainly, guest demand does not appear to have ebbed, attendees heard. Due diligence and underwriting need to be perfect, and whereas there might have been two credit committees to satisfy in order to get a deal over the line, now, some said, there might be three.
At a morning keynote, David Kellett, head of hotels at business advisory Savills, agreed day-to-day operations in the world of hotels might be more complex than they were even perhaps one year ago.
Both complicated and less complicated scenarios can both lead to opportunities, if the homework is done diligently.
Germany is one example in case, he said.
Germany "has been Europe’s worst-performing market, [but] we think it is time for some serious investment to come in. Operational stress could be a catalyst for investment in Germany,” he said.
It is not just a question of a company, saying, well, we bought a hotel or a portfolio five years ago, so now is the time that we’ll sell it.
“Exits today require far more creativity. It is not a case of getting a load of term sheets and going with the highest offer. It is about operational efficiencies,” he added.
—Terence Baker, news editor, EMEA