I've gone to The Eras Tour multiple times this past summer — and I have tickets to five more of Taylor Swift's shows in Europe next year.
25.08.2023 - 13:55 / skift.com / Sean Oneill / Richard Clarke / Long
All types of hotels have enjoyed stellar performance in the post-pandemic surge, but it’s properties offering something distinctive in a particular market that have the most promising financial returns. Investors see the most potential gain in hotels that address growing guest tastes for distinctive, experiential offerings.
That was the word from a few leaders in hotel investment and management at Skift’s Future of Lodging event on Wednesday in London.
Investors said they had barely done any deals in the past year, in response to a question from Pranavi Agarwal, the moderator and senior research analyst at Skift Research. But they added that change is in the air.
“The only way to go from here is up,” said Joe Pettigrew, chief commercial officer at Starwood Hotel Asset Management. “The tap is about to turn on.”
“Hotelconstruction runs at about a three-year lag to hotel performance,” said Richard Clarke, managing director at AB Bernstein.
Well, there has unquestionably been a solid post-pandemic rebound.
“In many markets where we have hotels, we’ve not only exceeded the 2019 levels [of financial performance] in nominal terms, but also in real terms,” Pettigrew said.
No wonder a construction boom is in the works, with some of the big hotel branded groups, such as Hyatt and Hilton, quoting record development pipelines in many markets.
A mismatch in supply-and-demand will become another lure for investors in new construction, conversions, and rebrandings.
Demand for overnight hotel stays has grown at about 4 percent year on average fairly steadily for a long stretch of time, Clarke said. This long-term growth is driven by fairly reliable and consistent factors, such as a rising middle class in emerging markets.
Yet for a stretch after the great financial crisis and then again during the pandemic hotel pipelines have been below a 4 percent-a-year-growth average.
“There’s not going to be enough supply of hotels to fulfill that demand in many markets,” Clarke forecasted.
Echoing observations made earlier at Skift’s event, the panelists said smart hotel investors are chasing differentiated products that will appeal to shifting consumer preferences.
“Even before Covid, there were lots of studies that showed, especially among Gen Z and millennials, that travelers prefer to spend more money into experiences and then things,” Pettigrew said. “They’re going to prefer an experience that is totally different from what they can get from a generic hotel.”
“We strongly believe that there is a complete change in people’s perception about what the ideal hotel experience is like,” Pettigrew said. “They want something that’s more experiential, different and unique. And that is the area that we’re going to be focusing
I've gone to The Eras Tour multiple times this past summer — and I have tickets to five more of Taylor Swift's shows in Europe next year.
Accor, the Paris-based hotel giant, said on Tuesday that Omer Acar will head its brands Raffles & Orient Express as of March 1. Acar will join Accor’s other brand CEOs in its luxury and lifestyle group (Fairmont, Sofitel & MGallery, and Ennismore) — all of whom report directly to group CEO Sébastian Bazin.
Not all hotels should pursue remote workers, a hotel group CEO has suggested, because they mostly served their purpose during the pandemic.
The formula for luxury hotels has typically had two key ingredients. First, choose locations in the districts where the elite live. Second, focus on high-touch services encouraging guests to linger, and spend, at the property.
Entrepreneur Richard Branson and Virgin Group announced a reorganization of their hotel brands on Thursday. Virgin Group, which owns a half-dozen luxury Virgin Hotels, will take control of Branson’s private collection of hotels, retreats, and islands (including Branson’s own much-hyped Necker Island), marketed as Virgin Limited Edition.
Good morning from Skift. It’s Wednesday, January 18. Here’s what you need to know about the business of travel today.
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