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Insights

We draw inspiration from the world around us and we want to share our knowledge with you. Tap into our latest thinking on the issues that matter most in hospitality today and find out what trends are going to shape our industry in the future.

5 Key Takeaways : HICAP 2016
24 October 2016, by Nikhil Virmani in Events & Industry Updates

Last week, I had the opportunity to attend the Hotel Investment Conference Asia Pacific in Hong Kong, together with Richard Croshere, our Chief Product Officer. Needless to say, Asia Pacific’s most established and premier conference was well represented by large global & regional hotel operators, global consultants/advisors, hotel owners & developers, OTA’s, asset managers & some of the most prominent architectural and design firms. With that kind of influence all in one room; it was a perfect cocktail mix for business as usual. Other than the networking opportunities, the conference addressed a variety of issues plaguing the hotel industry whilst nurturing new ideas and solutions for the future. Keynotes, presentations & breakout sessions at the Investment Conference were led by some of the hotel industry’s most seasoned experts. The conference was received with encouraging news about market optimism and stable supply growth in APAC.

Stable Market Outlook – STR

The short- and long-term outlook for travel and tourism demand, both within the APAC and around the globe, remains positive.

 The session also briefly highlighted the impact of three important macroeconomic events on the industry-

  • The uncertainty of Brexit looming on the European Union.
  • The implications of US federal interest rate hike
  • The fluctuation of oil prices in the Middle East.

The Asia Pacific region saw RevPar growth in markets like New Zealand and Vietnam supported by strong demand. India and Indonesia are expected to see a strong supply growth following a surge in Foreign direct investment and ease of bureaucracy in these markets.

The Rise of the Connected Consumer

A specially gathered panel of Millennials (including yours truly) created quite some traction amongst fellow attendees. The premise of the panel focused on the concept of “Millennial brands” being too limiting. The M- word has been overused and dropped in countless arguments subsequently deeming it obsolete. This generalization and stereotyping of cohort groups create a false sense of information that is not true for a broader audience. While connection, community and technology (as a facilitator) have surged to the forefront in terms of priorities, these changes are absolutely not confined to a single cohort of craft-beer drinking twenty-somethings. A unique cultural shift has been seen towards a more “connected consumer”: essentially a cross pollination of millennials, xers, boomers, & even Z’s. Let’s not develop our brands for an age group but  for a "mindset".

Digital Revolution- Diagnostics & Solutions : Sebastian Bazin, CEO, Accor Hotels

Mr. Bazin’s 10-minute keynote was nothing short of both exciting and inspiring. He sounded a strong wake up call as he summed up a critical diagnostic of how “unhurried” hoteliers have been in the process of embracing change. He spoke on the vertical and pyramidal nature of legacy businesses and called out for flatter corporate structure. At Accor, they have implemented a younger shadow executive committee for a more holistic decision making approach. He added that the younger lot have a better predictability of the future and a more progressive outlook towards strategy. Hoteliers need to have a more “outside thinking, inside producing” approach to brands/products essentially meaning a “client centric” focus. (video)

“Consolidation is here to stay” – David Berg, CEO, Carlson Hospitality

The Hotel Industry is highly fragmented with the top 5 global players accounting for 22% of market share. With Accor’s acquisition of Fairmont, Raffles, the Marriott-Starwood Merger, one can clearly see the benefits of scale and subsequent cost synergies. Travelers are looking to have “one big relationship” with a company reaping loyalty benefits and experiencing different brands. Mr. Berg highlighted the consolidation in the Airline, Cruise & retail industry in the US with examples in each of the sectors. (video)

Hotel Opening Delays- Gert Noordzy, Managing Director of Northside Consulting Company

Another hot topic this year at the conference. Huge losses are incurred during the Hotel  opening process on both the operator as well as on the owner’s side. The owners significantly suffer from the bulk of these delays. They lose 18 times more than operators. An industry average delay of 45 weeks and a 35% project pre-opening cost overrun can be attributed due to a multitude of reasons: namely project management and delivery times, hotel operator onboarding, staff induction and education. A strategic project management office (PMO) that can streamline project delivery and pre-opening operations planning (incl. training activities) will serve well to align both owners & operators, thus reducing the risk of opening delays.

 

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