Three key trends have emerged from the latest edition of the IHIF, which was finally held in Berlin on 1-3 September 2021, after having been postponed four times following March 2020, when the event was originally scheduled to take place.
The hospitality sector is embracing sustainability
There was one clear theme that dominated the headlines at IHIF – sustainability. While a few years ago, adhering to sustainable norms was considered a ‘nice to have’ for hospitality companies, now it has become a full-fledged necessity.
Indeed, the push towards sustainability is coming from above and below, both from customers and from investors in the hospitality sector. For example, according to Giorgio Manenti, managing director at Eastdil Secured, a real estate investment banking firm, many German and European institutional funds will not invest in companies unless they have sustainability plans in place.
Brian Kaufman, managing director at Blackstone, a leading private equity group, also noted that sustainability initiatives can also have long-term financial benefits. He said: “One thing to keep in mind is environment, social and governance (ESG) initiatives aren’t just necessarily costs, there’s real ROI opportunity that comes from investing in them, whether it’s water reduction initiatives, energy efficiency implementation, we as a firm have an emissions reduction target that we’re very focused on across all sectors across all assets.”
Mintel’s research shows that whilst sustainability is not top of mind for most consumers when choosing a company to book a holiday with, young consumers are far more likely to favour companies that prioritise sustainability. Nearly 1 in 5 Brits aged 16-24 consider a brand’s environmental policy to be one of their three most important factors when selecting a travel company, compared to around 1 in 10 adults.
IHIF 2021 investor panel discussion
(From left to right: Benjamin Habbel, Founder & CEO Limestone Capital; Brian Kaufman, Managing Director Blackstone; Dominic Seyrling, Investment Director Archer Hotel Capital , and Will Duffey, Managing Director; JLL)
Source: Questex
The ‘workation’
A second key trend evoked by several of the presenters at the conference can be summarised as ‘stay anywhere, work anywhere’ or as the rise of the ‘workation’. The pandemic has demonstrated that productive work can be carried out remotely and there is less necessity to come to an office daily. As a result, people can conduct their business from anywhere they choose to live or even as part of a working holiday. Mintel’s research shows that 42% of UK employees would be interested in combining holidaying with work if their company allowed it, rising to 61% of 16-24s.
Given this new paradigm, traditional holiday resorts need to start introducing proper areas where guests can work effectively in order to meet the changing needs of their client base. LRO Hospitality chief investment officer Henri Wilmes, remarked that: “We’ve spent the last 18 months combining the work life and private life in a different way and there will be some changes in how we work and where we work. I definitely see resorts creating spaces where people can come and work but have a break as well.”
Henri Wilmes, chief investment officer, LRO Hospitality, speaking at IHIF 2021
Source: Mark Green
Meanwhile Chris Norton, CEO of Equinox Hotel Group (also pictured above), identified that resort properties should prioritise amenities to best serve working guests, including: fast internet, multiple plugs in the rooms, ability to connect portable devices to TVs and fast food and beverage services. Mintel’s research confirms the importance of these facilities, with most potential hotel guests saying the level of comfort/amenities in a hotel room would be more important to them than other hotel facilities (eg bar, restaurant – see Mintel’s Report Hotels – UK, 2020).
The human resources challenge
Besides attracting more customers, the most pressing issue impacting the hospitality industry globally is the lack of sufficient manpower. Just as demand is ramping up, the pool of available workers has diminished, with some having chosen to leave the sector or remain on furlough. Marriott’s CEO Tony Capuano, who spoke at the conference’s opening session, noted that the chain, which is the world’s largest by branded rooms, has 10,000 unfilled jobs at the present time.
Attracting the right staff is crucial for hotel operators with Mintel’s research showing that customer service has the strongest influence on guest satisfaction levels, putting it above price, room facilities and the quality of food and drink offered (see Mintel’s Report Hotels – UK, 2019).
