Development Opinion Articles

March 5, 2021

European Hotel Investment Market 2020: Surprisingly Optimistic Results

Nearly a year into our days of forced telecommuting and videoconferencing, the words 'impact of COVID-19' continue to ring in our ears. The hospitality industry has undoubtedly borne the brunt of this crisis, as many hotels across Europe continue to record single-digit occupancies, with average revenues per room down by nearly 70% in 2020. However, it would be hasty to presume that the long-term prospects of hospitality are all doom and gloom.

By Kimberly Yoong, Assistant Vice President, Hotel Financing, Aareal Bank AG

Opinion Article

March 5, 2021

Stress Test Before You Invest: Hotel Supply

For better or worse, the decimation of the hospitality industry as a result of the COVID-19 pandemic has piqued the interest of investors. Private equity firms are raising new rounds of funding; SPACs are being created for the purpose of buying up distressed restaurants; and all sorts of new, opportunistic capital is sniffing around.

By Susan Barry, President and Queen Bee of Hive Marketing and consultant with Cayuga Hospitality Consultants, Hive Marketing

Opinion Article

February 24, 2021

The five keys to successfully negotiating an off-plan hotel lease, for hotel owners

More than ever, off-plan hotel leases[1] are making headlines in the leisure real estate industry. Stemming from real estate law professional practices, off-plan hotel leases reconcile the legal and financial interests of three distinct actors: the developer (seller), the investor (owner) and the operator (tenant).

By Christopher Boinet, Anne Epinat, and Julien Guittet

France

Opinion Article

January 22, 2021

Hotel Sales Teams: 2020 is Behind Us but Not the Pandemic. Now What?

In Spring 2020, many hotels were forced to furlough most on-property Sales Managers because so much demand for hotels disappeared with the pandemic, requiring any remaining team members to be responsible for market segments which previously were not their responsibility. These remaining Sales Managers were forced to adapt to many other changes in a short time, including rescheduling/canceling events, in addition to learning how to research and sell to new/additional market segments while maintaining relationships with past and current clients. What does this mean for the future sales teams?

By JoAnn M. Mulnix-Morris, Senior Vice President Sales & Marketing, Newport, RI, HVS

Opinion Article

January 22, 2021

Global Warming Vs. The Great Gold Rush To Ski Resorts

Time after time over the past 20 years, we have been told that snow is going to become a very scarce commodity. And we witnessed it several years ago in various parts of the world, when it failed to show up during part or most of the snow season.

By Benoit Gateau-Cumin, Chief Recruiting Officer, The Boutique Search Firm

Opinion Article

January 20, 2021

How Hotels are Faring in Transformative Times

We live in extraordinary times. There are only a limited number of periods in America's 245-year history which have been as transformative as 2020 (i.e., 1776, 1865, 1929, 1945, 1968, 2001). The confluence of a global pandemic, mass civil disobedience, and the transfer of power will undoubtedly affect how we live and work in 2021 and beyond.

By Daniel Lesser, President & CEO, LW Hospitality Advisors LLC (LWHA)

United States

Opinion Article

January 12, 2021

An Examination of Central and Eastern Europe’s Hotel Sector in 2021

Even though European hospitality sector has been hit hard by COVID-19 in 2020, there is a lot of positivity and movement in regard to new hotel openings in the region. According to research from TOPHOTELPROJECTS, it is expected that 277 hotels with 63,680 rooms are planned to open this year across Central and Eastern Europe. Thus, it seems that 2021 will be a busy period for new openings of hotels in the region and with even more to come in the market for the subsequent years. This indicates that investors and developers are optimistic about the rebound of hotels in the next few years.

By Korosh Farazad, Founder & Chairman of Farazad Group of Companies and Member of Board for Trinity Hospitality Group, Farazad Group Ltd.

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Radical Innovation Hospitality TECHNOLOGY

Radical Innovation is an initiative that challenges creative thinkers and visionaries in hospitality TECH to pioneer compelling innovations that fuel the future of the hospitality and travel industries.

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Opinion Article

December 25, 2020

Hotel Receivership Case Study: 48-Hour Deployment Due to Bankruptcy

During crisis times, the hospitality industry becomes fragile as demand is driven by guests. Conditions that affect guests also affect the business. As its nature, hospitality investments usually have longer return on investments, and sometimes detached investor profile as owning a hotel and operating it are two different practices.

By Ken Edwards, Ken Edwards is owner of Tristar Hotel Group, HMBookstore and Hotel Management Online, LLC, along with being a consultant, Cayuga Hospitality Consultants

Opinion Article

November 24, 2020

Lawyers involved in M&A transactions – Never buy a hotel in France without a good representations and warranties agreement

With an asset and liability guarantee agreement (Garantie d'actif et de passif, or GAP, under French law), the buyer obtains a contractual warranty for ensuring that the price it is paying matches the value of the company being sold. A post-sale tax adjustment or industrial tribunal proceedings in favour of an employee? A GAP agreement covers disputes prior to the sale, if these disputes were undeclared or if insufficient provisions were made for them.

By Christopher Boinet, Anne Epinat, and François Gérard Mondi

France

Opinion Article

November 23, 2020

HVS Monday Musings: Hotel Feasibility Study will Become Critical in the COVID era

COVID-19 has dramatically changed every aspect of life as we knew it, including the way we conduct our business. Though demand will be subdued for the near to medium term, we expect the industry to regain its 2019 glory in the next 2-3 years, making this an opportune time to invest in hotels. However, with the rapidly evolving consumer behaviour and demand fundamentals, it is imperative for investors to be more cautious and meticulous while evaluating their investment decisions, which makes a professionally prepared feasibility study more critical than ever before.So, what is a feasibility study? As the name suggests, a feasibility study is a top-down approach that helps potential owners and investors to determine the economic viability of a hotel project based on the location, the underlying market conditions, demand-supply dynamics, and the planned investment. It also recommends the optimal development and brand strategy for the proposed hotel, making it an essential first step of any hotel business & development plan.

By Mandeep Lamba, MRICS, President (South Asia), New Delhi, HVS

Opinion Article

November 17, 2020

Voluntary chains vs. Corporate soft brand chains: Which branding strategy offers hotel owners more value?

In the modern hotel industry, the hotel owners can choose from different branding options: Independence (non-affiliation), traditional franchise, and soft brand that includes voluntary chains and corporate soft brand chains.

By Oleksii Kapichin, Revenue Management Expert, Hotel Revenue Insights

Opinion Article

November 13, 2020

How Has The Hotel Development Scene Evolved?

Hotel development, in a nutshell, involves the process of sourcing and negotiating hotel management or franchise contracts as well as investment opportunities, in order to drive the organic growth of a hotel business. As the tourism industry boomed, the term had earned itself somewhat 'vogue' status, especially amongst aspiring hoteliers. In an EHL webinar, EHL alumni Chris Anklin, Regional Vice President of Development at Hyatt Hotels Corporation and Ananth Ramchandran, Vice President of Global Corporate Finance & Strategy, Capital Investments & Transactions and Head of Branded Residential at InterContinental Hotels Group (IHG), built out the conversation on how the hotel development scene has evolved, as well as how they have navigated the challenges of this sector.

By Kimberly Yoong, Assistant Vice President, Hotel Financing, Aareal Bank AG

Opinion Article

November 12, 2020

The COVID Impact on Hotel Values

As we enter month nine of the pandemic, the hotel sector remains challenged, transactions are scarce, and from the perspective of someone who doesn't live hotels day in and day out, values seem to be a guessing game. And in this period of extreme volatility and uncertainty, there is a tendency to make hasty and potentially costly decisions. But it is precisely during these times when taking a rational and long-term view is paramount. Reliance on data and sensible intelligence to form value opinions has never been more important. While this article does not provide absolute clarity, it is intended to be informative and perhaps assist in the quest for price discovery.

By Tommy Crozier, Head of Hotels Valuation & Advisory - U.S, CBRE Hotels

United States

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Opinion Article

November 11, 2020

Confronting the Global ‘New Normal’: A Conversation with Daniel Xiang, Hong Kong-based Junson Captial

"Culture can be understood as 'how we do things around here'. Right now, the how is changing daily - and in some cases, forever." The above sentiments reflect what most business leaders and operators are currently thinking. COVID-19 has drastically altered worldwide market conditions, with many countries on the brink of recession.

By James Houran, Managing Director, AETHOS Consulting Group

Opinion Article

November 6, 2020

Insights on the Private Equity Market

Over the past years, the hotel sector had remained a hot market for investors, as hotel investment volume reached US$66 billion in 2019, with initially cautiously optimistic projections for 2020. Although the short-to-medium-term prospects of the market now remain uncertain due to COVID-19, there may be opportunities amidst these times, both for companies to innovate their models and investors with a keen eye and open mind. In an EHL webinar, EHL alumnus Min Su Sung, Head of Product Strategy, Asia-Pacific and Middle East at BlackRock Private Equity Partners, shared some insights on the private equity market.

By Kimberly Yoong, Assistant Vice President, Hotel Financing, Aareal Bank AG

Opinion Article

October 30, 2020

How Hotel Sales Performed in Q3

Today's global travel sector, which many characterize as being "on the brink of collapse," is simply unprecedented. Seven months into a 100-year worldwide pandemic which caused a swift, wide, and deep economic recession has decimated key travel and leisure related industries including airlines, car rentals, cruise lines, ridesharing, and tour operators. While stock markets have rebounded to near record levels, the US lodging industry continues to experience crippling stress as travel demand, which has experienced a sharp and sustained decline, continues to significantly lag pre-pandemic levels.

By Daniel Lesser, President & CEO, LW Hospitality Advisors LLC (LWHA)

United States

Opinion Article

October 27, 2020

Current Pandemic an Opportunity for African Hotel Management Company Selection & Negotiation

HTI Consulting recently launched a new report on hotel operator selection and management contract negotiation in Africa, providing various invaluable insights into the selection process as well as important analysis on contract contents, trends, benchmarks and negotiation techniques for owners in Africa."

By Wayne Troughton, CEO, Hospitality & Real Estate Consulting, HTI Consulting

South Africa

Opinion Article

October 16, 2020

Adjusting Asset Management Staffing Strategies

The hotel industry faces an extraordinary challenge today: how to operate a hotel in the "new normal." With the near future so cloudy, it is close to impossible to effectively set accurate property and company forecasts; at this time occupancies and revenue per available room numbers are at painfully inadequate levels.

By David Mansbach, Managing Director, AETHOS Consulting Group

Opinion Article

October 15, 2020

Can Hotels Create Convergence Economies?

The COVID-19 pandemic has forced us to question the way our economy and society have operated for centuries. Since the onset of the first Industrial Revolution more than 200 years ago, the Western economic model of hyper competition and continuous growth has achieved global dominance - this holds true even in the hotel industry.

By Ambika Gandhi, MRICS and Laurette Dubé

Opinion Article

October 14, 2020

HVS Musings: Mixed-Use Development - The Most Sustainable Model For Hotels Going Forward

Mixed-use development, usually a planned combination of hotels, retail, office or residential space, is a fairly widespread concept globally with several such iconic projects around the world. In the last decade or so, the concept has been gaining ground in India as well, though the combination (two or more elements) of retail, office, and residential spaces have been more popular. However, as investors look to maximize returns through efficient land usage and optimal utilization of FSI, hotels have also been added to the mix.

By Mandeep Lamba, Dipti Mohan, and Akash Datta