BERLIN — War in Iran was one of the top topics of discussion during the International Hospitality Investment Forum, but IHG Hotels & Resorts CEO Elie Maalouf said conflict is sadly not a new phenomenon for a global hotel brand company like his.
Speaking during one of the fireside chat sessions with top industry executives, Maalouf said disruption is par for the course when your company spans the globe.
"The top priority is the safety and security of our guests, our colleagues, properties and supporting our owners in the region," he said. "Unfortunately, we have a lot of experience with this around the world. We are always somewhere in a place of conflict or natural disasters. When you're in 100 countries, things happen. We're still operating in Ukraine and Kyiv. We've been operating in the Middle East for 65 years."
He noted hoteliers have had to be nimble in recent years.
"It seems like uncertainty is the only certainty we have every year," he said. "I'm not sure what the uncertainty will be, but there is [always] something that comes up. Last year, it was tariffs and the impact on world trade and business. That seems to have been managed, and well this year, we have this conflict in the Middle East."
One key for the hotel business is to understand situations are always changing, but that doesn't mean that things won't recover, Maalouf said.
"This is an interruption of a very strong trajectory but not a change in that trajectory," Maalouf said. "It's hard to see that when things are happening. Usually people always assume the worst during the situation. In the pandemic, the presumption was nobody will travel again. No groups or meetings. No conferences. What are we doing here, right? People are traveling again, and when war happens in the Middle East, we think it's going to be the end of times. It's sad. It's awful, the loss of life, the pain, the destruction. I'm from the region myself. I'm a Lebanese citizen, and a U.S. citizen, too. So I've seen my share of wars, but I've also seen the recovery every time."
Path to growth
Beyond the headwinds brought on by war, there are a strong confluence of factors supporting global travel, including the burgeoning middle class in China and India and an increasing appetite for experiences and events, Maalouf said.
He added hotels are the long-term linchpin for those seeking life-changing travel experiences.
Travel "is the ultimate live experience," he said. "It brings it all together, our culture, music, restaurants, bar life, everything important in life happens in a hotel at some point. Business, personal, professional, ceremonies — everything important in life happens in hotels."
The decoupling of GDP growth and travel spend, which has been viewed as largely a negative trend in the U.S., actually bodes well in some regions like Europe, which have seen softer economic growth but increasing international inbound travel.
"I think for quite some time, Europe can grow travel as a destination while GDP growth remains lower," he said. "We're prepared for that."
Another thing IHG Hotels & Resorts is prepared for is a shift to spending on luxury and lifestyle travel and experiences, which Maalouf said now accounts for 22% of IHG's pipeline.
He pointed to increasing longevity as a driver of high-end travel, as more older consumers look to enjoy their retirement in comfort and share travel with their families.
"Instead of buying something for the kids or the grandkids, what they do is buy a holiday. They buy a vacation," he said.