Author: Dan Akhtar

Hospitality Investment and Travel Trends for 2025

Posted on by Dan Akhtar

The UK hospitality industry has started 2025 with optimism, buoyed by record-breaking investment and robust travel demand, despite continuing to face significant challenges. 

For many businesses, these mostly financial challenges have created a perfect storm, leading to difficult decisions about investment, workforce management, and day-to-day operations. The sector’s labour-intensive nature means absorbing rising costs is particularly difficult without cutting into profitability or increasing prices, which risks further dampening consumer demand.

However, the sector continues to see large pockets of resilience and opportunity, such as record-breaking investment activity and growing demand for travel. For businesses willing to adapt and innovate, there remain pathways to navigate these conditions successfully.

A Snapshot of the Current Landscape
The challenges of 2024 have left a significant impact on the hospitality industry. Rising inflation, higher business rates, and increased wage costs, compounded by National Insurance changes introduced in the 2024 Budget, have squeezed margins across the sector. Labour shortages, ongoing supply chain disruptions, and elevated energy costs have only added to the pressures on operations.

These factors contributed to a rise in insolvencies, with hospitality accounting for 10% of all UK administrations in 2024, according to Shakespeare Martineau. Of the 1,718 businesses filing for administration, 172 were from the hospitality sector—a 5% increase from the previous year. Andy Taylor, partner at Shakespeare Martineau, highlighted the importance of early financial planning and proactive management, stressing that addressing challenges head-on can significantly improve resilience.

On the brighter side, UK hotel investment reached a record £6.3 billion in 2024, as reported by Knight Frank. This represents a 198% increase compared to the previous year, driven largely by portfolio transactions, which accounted for 57% of total investments. Key deals included Starwood Capital’s £800 million acquisition of Radisson Edwardian Hotels and Blackstone’s £700 million purchase of Village Leisure Hotels. While London attracted 50% of all investment, regional markets and adaptive reuse projects, such as converting office or retail spaces into hotels, also gained momentum. Criterion Capital’s £50 million acquisition of Edinburgh’s former Debenhams store underscores the growing interest in such projects. Henry Jackson, head of Hotel Agency at Knight Frank, anticipates continued interest in single-asset transactions alongside robust portfolio activity in 2025.

Amid these challenges and opportunities, Hospitality People Group has worked closely with European hotel investors throughout 2024 to build new investment, asset management, and operational leadership teams. Leveraging an extensive network of industry professionals at senior levels across hospitality, we have stayed ahead of industry trends by actively participating in networking events and high profile hospitality conferences. Crucially, we take the time to deeply understand our partners’ businesses, ensuring tailored support that aligns with their specific goals and operations.

The contrast between rising insolvencies and record investment illustrates the dual challenges and opportunities in the industry. Businesses that are proactive, adaptable, and supported by the right leadership teams can navigate this complexity to drive growth and innovation.

Evolving Travel Patterns and Consumer Preference
Travel demand remains strong in 2025, with changing consumer behaviour shaping the industry. According to a survey by RSM UK, 41% of Brits plan overseas holidays longer than five days this year, up from 35% in 2024. Weekend breaks and domestic staycations are also on the rise, with around a third of respondents planning UK weekend getaways, reflecting an appetite for accessible and cost-effective travel.

Hilton’s 2025 Trends Report introduced the rise of “travel maximisers”—guests who seek to combine wellness, adventure, and cultural immersion for meaningful experiences. These travellers are not just looking for relaxation; they want to prioritise their health, connect with local traditions, and engage in outdoor activities. For instance, wellness tourism continues to grow, with over a quarter of global travellers planning to book wellness-focused stays in 2025. Outdoor adventures such as hiking, cycling, and water sports are also in demand.

Cultural immersion is increasingly important, with slow travel—a focus on spending more time in one destination to experience its culture—gaining popularity. Activities like cooking classes, historical tours, and local festivals are particularly appealing to travellers seeking authenticity.

Sustainability is also shaping travel decisions. Eco-conscious consumers favour hotels with strong environmental practices, such as waste reduction, energy efficiency, and community support. Accommodations that highlight their sustainability credentials—through locally sourced food, green building certifications, or social impact initiatives—are better positioned to attract this growing audience. 

While digital integration remains essential, many guests are also embracing “soft travel,” prioritising simplicity and disconnection from technology. Balancing digital conveniences like mobile check-ins with opportunities for mindfulness and relaxation can appeal to this segment. 

For businesses, aligning with these trends—through tailored wellness packages, immersive cultural offerings, and eco-friendly initiatives—presents an opportunity to attract a wider audience.

Strategic Considerations for 2025
Navigating 2025 will require a strategic balance of addressing challenges and leveraging opportunities. Businesses may find it helpful to focus on:

  • Proactive Financial Management: Rising costs and refinancing pressures mean keeping a close eye on finances is critical. Regular reviews of cash flow and early engagement with advisors can help identify risks and opportunities. FM Recruitment, part of the HPG group, specialises in financial recruitment for the hospitality sector and can provide valuable expertise in strengthening financial teams.
  • Targeted CapEx Investments: High borrowing costs make a phased approach to capital expenditure more practical. Investments in energy efficiency and sustainability can deliver long-term cost savings while meeting the growing demand for eco-conscious operations.
  • Responding to Traveller Preferences: Enhancing wellness offerings, creating value-driven packages, and tailoring cultural experiences can help attract guests. Flexible pricing options and personalised services are also likely to resonate with travellers seeking unique and meaningful stays.

Amid these changes, people strategy remains vital. A well-supported team is essential for delivering exceptional guest experiences and maintaining operational efficiency. HPG, which specialises in people management, offers tailored support to ensure businesses have the right talent in place. From workforce planning to leadership development, investing in people can enhance performance and build resilience.

Looking Ahead: A Positive Outlook
Despite challenges, 2025 offers significant opportunities for growth and innovation in the UK hospitality sector. Record investment levels, strong travel demand, and evolving consumer preferences create a dynamic environment for businesses willing to adapt. By focusing on sustainability, guest experience, and financial health, hospitality businesses can put themselves in a strong  position for success.

HPG focus on assembling leadership teams that are capable of making strategic decisions to reduce risk, improve resilience, and address the challenges organisations face in today’s complex environment by fostering workplace cultures that promote continuous improvement and innovation. This approach helps ensures our clients not only navigate the current landscape, but also position themselves for long-term success. With the right strategies and a proactive mindset, 2025 has the potential to be a year of resilience, progress, and growth for the UK hospitality industry.

If you would like to discuss your people strategy further and explore how we can help you achieve your goals in 2025, then please get in touch.   

Dan Akhtar, Managing Director – HPG Advisory Services 
+44 208 600 1166 / +44 7808 157796  / [email protected]   

 Guy Lean, Managing Director – Madison Mayfair 
+44 20 8 600 1180 / +44 7813 009787  / [email protected]   

Chris Denison Smith, Managing Director – FM Recruitment
+44 20 8 600 1160 / +44 7775 711923  / [email protected]   

Andrea Shaw, Director – FM Recruitment
+44 20 8 600 1160 / +44 7714 236469  / [email protected]  

Insights from the Resort & Residential Hospitality Forum in Athens

Posted on by Dan Akhtar

The Resort & Residential Hospitality Forum (R&R) was held in Athens last week and brought together leading investors, developers, and hospitality professionals to discuss the current resort and residential real estate industry. While taking place in Athens for the first time, the forum continued to offer valuable insights into how the sector is evolving and how it sits in the current hospitality investment landscape. We have distilled some of the reports, including from Hospitality Investor and Savills, into key themes that are influencing hospitality investment and development across the globe. 

Greece 
For years, Spain has held a dominant position as the preferred destination for Mediterranean hospitality investment. Perhaps unsurprisingly, given the location of the event, Greece was put forward as a formidable competitor. According to Hospitality Investor, Greece is now a market of higher potential returns compared to its Western Mediterranean counterpart, with strong growth in its luxury and eco-conscious offerings.  

This shift can be attributed to several factors, including increased government incentives, robust tourism growth, and a pivot towards year-round destinations. High-profile developments in Athens, the Cyclades, and the Peloponnese are attracting global attention, with a focus on luxury resorts and branded residential projects. These developments highlight Greece’s ability to offer not just natural beauty but also long-term investment returns, with a strategic focus on sustainable and premium tourism experiences.

Branded Residences
The branded residences market continues to expand, driven by demand for premium living experiences that combine private ownership with the quality and service of luxury hotel brands. According to the Branded Residences Annual Report 2024-2025 by Savills, this market is expected to grow by 12% globally over the next two years. The report notes that branded residences have historically been associated with ultra-luxury brands, but mid-market operators are entering the space, appealing to a wider audience. 

Branded residences offer clear benefits for all stakeholders. Developers gain diversified revenue streams and enhanced brand loyalty, while buyers enjoy an exclusive ownership experience supported by five-star hotel services. For investors, branded residences represent an opportunity to tap into growing demand for high-quality, flexible living options. In Greece, these projects are increasingly integrated into mixed-use developments, combining residential units, hospitality offerings, and retail spaces. This approach aligns with the broader “placemaking” trend, where creating vibrant, interconnected communities is as important as the individual buildings themselves. 

The Modern Traveller
One of the most striking discussions at the forum was around the evolving expectations of today’s travellers. Modern consumers are prioritising authenticity, personalisation, and immersive experiences over traditional notions of luxury. This shift is driving developers to innovate and rethink how properties are designed and operated. 

Hospitality Investor observed that guests increasingly favour properties that integrate local culture, wellness-focused designs, and sustainable practices. For Greece, this has translated into a focus on eco-conscious resorts and developments that blend seamlessly with their natural surroundings. For example, developers are prioritising green building practices, such as the use of renewable materials and energy-efficient technologies. There is also a growing emphasis on experiential travel, with properties offering cultural immersion, farm-to-table dining, and bespoke wellness retreats. Meeting these expectations is essential for operators aiming to remain competitive in an increasingly discerning market. 

Increased Liquidity in Leisure Investments
Another significant trend discussed at the forum was the anticipated increase in liquidity within the leisure sector. Institutional investors are expected to unlock substantial capital in the coming year, particularly for leisure-focused assets. According to this article, mixed-use developments are proving particularly attractive for their ability to cater to multiple market segments while delivering stable returns. 

For developers, this means aligning projects with institutional investment flows. Mixed-use developments, which combine hospitality, branded residences, and retail components, are particularly appealing due to their diversified revenue streams and ability to address multiple consumer needs. This offers exciting opportunities for projects that balance scalability with innovation and sustainability. 

Sustainability
As with most recent European conferences, Sustainability emerged as a central theme throughout the forum. It is no longer a “nice-to-have” but a fundamental expectation from both investors and consumers. Savills emphasise the importance of incorporating environmental, social, and governance (ESG) principles into development strategies, noting that guests are increasingly drawn to properties that demonstrate tangible commitments to sustainability. 

Developers are responding with innovative approaches, from carbon-neutral building designs to waste reduction programmes. In Greece, the integration of sustainability into new developments is particularly significant, as it ensures the preservation of the natural beauty that is such a key draw for the country’s tourism. For example, many luxury resorts in Greece are adopting renewable energy solutions, such as solar power and water recycling systems. These initiatives not only reduce environmental impact but also appeal to the growing segment of eco-conscious travellers. 

 Takeaways
The discussions at the R&R Forum offered a clear message: the hospitality and residential sectors are at a pivotal moment of transformation. For developers, operators, and investors, adapting to these changes is essential for future success.  

  • Target Emerging Markets: Greece and other underexplored regions offer untapped potential for savvy investors. Identifying the right opportunities in these markets can lead to significant returns. 
  • Innovate with Branded Residences: As this market continues to grow, incorporating branded residential components into developments can offer long-term financial and operational benefits. 
  • Prioritise Sustainability: ESG goals must be integrated into every stage of development. This is not just a trend but a consumer and regulatory expectation. 
  • Understand the Modern Traveller: Developers must align their projects with the demand for authenticity, wellness, and cultural immersion. 
  • Leverage Liquidity Trends: Mixed-use developments that cater to multiple income streams and market segments are key to capturing institutional investment. 

 From Greece’s emergence as an investment hotspot to the rise of branded residences, the R&R Forum highlighted the resilience and adaptability of the hospitality and residential sectors which are now poised for a positive 2025. By staying ahead of market trends and aligning strategies with consumer and investor expectations, we help ensure that our clients are well-positioned to capitalise on new opportunities and proactively manage challenges. If you would like to have a chat about how we can support your people strategy then please get touch. 

Dan Akhtar, Managing Director – HPG Advisory Services  
+44 208 600 1166 / +44 7808 157796  
[email protected] 

UK Hotel Investment Reaches New Peaks: A Mid-Year 2024 Analysis

Posted on by Dan Akhtar

The UK hotel investment market has seen a significant resurgence in the first half of 2024, with Knight Frank reporting that investment volumes reached an impressive £3 billion between January and the end of June. This marks a substantial increase from the £990 million recorded in the same period in 2023 and exceeds the total investment for the whole of last year, which stood at £2 billion. This remarkable growth can be attributed to several key portfolio transactions and the continued interest of international investors, particularly from the United States. 

Major Transactions Driving Growth
The first half of 2024 witnessed some landmark deals that have driven the overall investment volume. Notable transactions include Blackstone’s acquisition of the Village Leisure portfolio for £850 million, Starwood Capital Group’s purchase of 10 Radisson Edwardian Hotels in London for £800 million, and Landsec’s sale of its hotel portfolio to Ares Management for £400 million. These significant portfolio transactions highlight the increasing attractiveness of the UK hotel market to major investors. 

In total, portfolio transactions accounted for 76% of the total transaction volume, a significant rise from 53% in H1 2019. This shift can be partly attributed to the scarcity of high-quality single asset hotels available for sale, which has led to a 19% year-on-year decline in the number of single asset transactions and a 34% decline in transaction volume. 

Focus on London
London continues to be the epicentre of hotel investment activity, attracting around 70% of the total investment in the first half of the year. This focus on the capital is largely driven by overseas investors, who accounted for acquisitions totalling £1.3 billion, with US investors alone representing 77% of the overall investment activity. The city’s enduring appeal as a global financial, political, and cultural centre ensures steady demand and makes it a resilient market through challenging economic conditions. 

However, with Edinburgh once again being given the top spot in Colliers’ UK Hotels Market Index, London has some very strong competition. Edinburgh’s strong performance in Average Rate, Occupancy and RevPAR has helped it secure this position and will serve to further highlight its appeal to further hotel investment. With high land prices and relatively limited RevPAR growth London has slipped down Colliers’ list, while cities like Belfast, Manchester, Liverpool and Glasgow have risen, giving investors further options in the competitive UK market. 

Market Outlook for H2 2024
The outlook for the second half of 2024 remains optimistic. According to Knight Frank, the momentum for investment in the UK hotel sector is expected to continue building, supported by a diverse pool of well-capitalised investors. The anticipated reduction in interest rates is also likely to enhance investor confidence and drive further activity in the market. Stakeholders are increasingly pressuring owners to bring assets to the market at realistic and deliverable levels, which should facilitate successful and timely sales. 

Henry Jackson, partner and head of hotel agency at Knight Frank, stated, “The direction of travel for the sector is positive, and the volume of portfolio transactions is evidence that the sector remains attractive. An increase in the quality and the number of hotels seeking to transact is expected, as hotel owners who have extended their investment cycles now seek to realise their exit strategies”. This sentiment is echoed across the industry, with a strong pipeline of hotels currently in legal stages, suggesting sustained investment momentum. 

Development Pipeline
The UK is also leading Europe in terms of new hotel developments, with the highest number of new projects in the pipeline by the end of the first quarter of 2024. According to Lodging Econometrics, there are 321 projects (45,257 rooms) under development, with London having the highest pipeline by project count in Europe, featuring 80 projects (14,987 rooms). This robust development pipeline indicates a healthy future supply of new hotels, further boosting the attractiveness of the UK market to investors. 

Challenges and Opportunities
While the overall investment landscape is positive, the market is not without its challenges. The lack of quality single asset hotels for sale has been a notable issue, impacting transaction volumes and leading to a greater reliance on portfolio transactions. Additionally, the increased cost of debt and uncertainty around interest rate stability have put many deals on hold, as seen in 2023 when investment volumes hit their lowest in a decade. 

However, the prospect of interest rate cuts is expected to support deal volumes as the year progresses, narrowing the bid-ask gap and aligning buyer and seller expectations more closely. This is crucial for facilitating transactions and driving market activity. 

Conclusion
The first half of 2024 has marked a significant recovery and growth period for the UK hotel investment market, driven by major portfolio transactions and strong international investor interest, particularly from the United States. With London continuing to attract the majority of investment and a robust development pipeline in place, the outlook for the second half of the year is promising. Despite some challenges, such as the scarcity of quality single asset hotels and the high cost of debt, the overall direction for the sector remains positive. As interest rates are expected to decline, further enhancing investor confidence, the UK hotel market is well-positioned for sustained growth and activity in the coming months. 

Insights from International Hospitality Investment Forum (IHIF) 2024

Posted on by Dan Akhtar

The International Hospitality Investment Forum (IHIF) 2024 took place in Berlin in mid April 2024. Like many recent articles, insights and data we have seen recently, the increasingly positive results in terms of sector growth continue to be treated with caution as investors seek to secure long-term value. 

Here we look at the current UK investment landscape and highlight some of the key themes from IHIF such as expansion strategies, the future of hotel operations and what they mean to the global investment infrastructure. 

UK Investment and Market Dynamics
The UK hotel market has seen a robust recovery, with investments soaring to £1.7 billion in the first quarter of 2024—marking the highest level since 2019 and a 138% increase from the first quarter of 2023. 

In this article from Hotels, David Eisen cites recent data from Cushman and Wakefield to say “London accounted for 60% of major deals by volume and included the sale of Atlas House to Integrity International Group and the BT Tower to U.S.-based hotel owner and operator MCR Hotels” These deals highlight a growing trend of converting non-hotel assets into hotels, a strategy expected to continue shaping the market. 

The transaction volume in this quarter spanned 93 properties across the UK, encompassing around 7,600 rooms. Major portfolio deals like the Edwardian UK Radisson Hotel Portfolio and the LXi REIT Travelodge Portfolio made up 60% of the transaction volume. Private buyers dominated the market, responsible for 69% of the transactions, followed by public investors and institutional-backed capital. 

Ed Fitch, head of hospitality UK & Ireland at Cushman & Wakefield, commented on the sustained high performance of the UK hotel sector, which is stabilising as the new norm. Despite a strong capital interest, the market faces constraints due to a limited number of available properties and cautious buyer sentiment ahead of expected base rate cuts and the upcoming UK election. 

Strategic Expansion 
Speaking at IHIF in Berlin, Sir Rocco Forte outlined his group’s strategy to leverage its strong U.S. customer base, where 40% of its business originates, and explore high-demand locations like New York, Los Angeles, Beverly Hills, and Miami, despite high entry costs. The investment from PIF, which acquired a 49% stake in the hotel group, is poised to double the size of Rocco Forte’s portfolio within five years, including launching The Carlton Hotel in Milan and a new venture with fashion company Capri Group in Naples by 2027. 

Sir Rocco highlighted the group’s commitment to maintaining high service standards in the face of rising costs and continuing to manage food and beverage operations in-house to ensure quality. He also emphasised the importance of enhancing employee remuneration and working conditions, reflecting on COVID-19 as a catalyst for improving employee welfare and aligning hotel operations closely with local cultures. 

Regional Opportunities
On Day 2 of IHIF, hotel executives highlighted increasing investments and travel interest in Mediterranean destinations, contrasting with the economic challenges in northern Europe such as Germany.  

Hotel News Now reported that that Tim Abram of Starwood Capital acknowledges the difficulties in Germany due to a sluggish economy and high interest rates but reiterated the country’s strong investment potential. 

On the other side of the coin, Italy is being seen as an emerging hotspot for hotel investments, similar to Spain a decade ago. Marcello Cicalò of Bluserena Hotels & Resorts noted Italy’s fragmented market and rising asset values are attracting significant private equity interest. Andreea Bodea of Pygmalion Capital noted that while Italy can boast the highest room count in Italy, many owners are still struggling to attract the investment their properties need in order to meet and exceed the expectations of the modern traveller. 

Operational Insights and Future Prospects
The forum highlighted the critical need for operational efficiency and adapting to evolving consumer expectations. The changing landscape of hotel food and beverage services was a focal point, emphasising innovation and operational optimisation to boost profitability. Sébastien Bazin of Accor shared insights from the company’s decade-long transformation, emphasising the importance of digital integration and stable leadership amidst a volatile geopolitical landscape. “Navigating new challenges requires a robust blend of innovation and tradition,” Bazin remarked during his session. 

Customer Loyalty and Guest Experience
Hospitality Investor reported on a fascinating panel discussion that once again highlighted the evolving concept of loyalty in the hospitality sector. The discussion, featuring insights from Antonio Gonzalez, CEO of Sunset Hospitality Group, and Gregory Lanter, a senior executive at Club Med, emphasised the shift from traditional transactional loyalty to a more emotionally driven model.  

Gonzalez elaborated on the importance of experiential hospitality that withstands changes in pricing strategies or market trends. By launching Sunset Hotels & Resorts, his group aims to expand its portfolio significantly by 2026 while focusing on crafting unique experiences that resonate on a personal level with guests. 

Lanter shared similar sentiments, pointing out that the real value lies in providing life-enriching human experiences beyond the standard offerings of rooms and amenities. He stressed that the key to achieving this is through employees who possess strong interpersonal skills rather than just technical capabilities, enabling them to engage with guests meaningfully. 

Both leaders highlighted the role of technology in enhancing guest experiences. Gonzalez discussed how technology could leverage data to better predict customer preferences and streamline experiences, making them more seamless and personalised.  

Meanwhile, Lanter viewed AI as a disruptive tool that can revolutionise how guest services are delivered, particularly in tailoring the marketing and distribution of these personalised experiences. 

Market Optimism Amidst Challenges
Despite macroeconomic uncertainties, the forum radiated a general optimism about the hospitality market’s future. The European M&A outlook appears promising, reflecting improvements in deal structures and an increase in strategic investments. However, the forum also acknowledged challenges such as rising costs, interest rates, the current geo-political instability and the necessity for flexible business models to adapt to rapidly changing market conditions. 

In conclusion, IHIF 2024 offered invaluable perspectives on the continued resilience and adaptability of the hospitality industry, highlighting the sector’s commitment to growth and innovation. The discussions reflect the industry’s concerted efforts to navigate a complex global landscape while pursuing expansion and refinement. 

 

 

Global Hospitality Investment Insights – Spring 2024 

Posted on by Dan Akhtar

With IHIF (Berlin), Caribbean Hotel and Resort Investment Summit (Florida) and Future Hospitality Investment Summit (Saudi Arabia) all taking place in April, it presents an opportune time to delve into the current state of hospitality investment, spotlighting the investment landscape across the UK, Europe, and the Middle East, while referencing global patterns that offer insights into the future of hospitality. 

Recovery and Reorientation: A Global Snapshot
The hotel industry has continued to show remarkable resilience in the face of adversity. According to the Global Hotel Investment Outlook 2024 by JLL, by the end of 2023, global Revenue Per Available Room (RevPAR) not only recovered but in some regions exceeded 2019’s figures, showcasing an industry on the rebound.  

This resurgence is underpinned by a burgeoning interest in urban markets such as London, New York, and Tokyo, which are now prime targets for hotel investors. However, the narrative varies by region, with the Middle East and Europe leading the charge, with Asia Pacific trailing slightly, as it grapples with slower recovery rates. 

The JLL article also reveals that while RevPAR recovered, global hotel investment volume was significantly low in 2023, marking the lowest total since 2012 (excluding the COVID-19 impacted 2020). This decline was attributed to capital market dislocation caused by high-interest rates and geopolitical instability.  

Despite these challenges, the year witnessed a large number of global trades, indicating a continued interest in the hotel sector. However, there was a notable shift towards smaller, single-asset trades and a decline in high-dollar portfolio transactions. 

Chinese Market: The Awaited Return
A critical element in the global travel and hospitality puzzle is the return of Chinese international travellers. Pre-pandemic, this demographic was a powerhouse of spending and mobility.  

However, as Hospitality Investor reports, despite the lifting of travel bans, Chinese international seat capacity in early 2024 remained 30% lower than 2019 levels. The expected revival of Chinese outbound travel could catalyse significant shifts, particularly in markets heavily reliant on this segment but there remain significant challenges. The UK, with a strong influx of students and their families returning, has done well but, the overall picture for Europe is less impressive. War in mainland Europe and the diversion of direct flights over Russia alongside and reprioritisation of the economic landscape at home has led to a slower recovery in the long-haul sector with gateway cities in the US and Asia the primary benefactors in the recovery so far. 

Luxury and Beyond
While the luxury market has performed better than any other segment post-pandemic, this is now facing a potential slowdown. Hospitality Investor writes that significant brands like Burberry are signalling a downturn due to decreased spending by aspirational shoppers. While this trend, coupled with a general market correction following years of growth, poses challenges for luxury goods, the impact on the luxury travel and accommodation sector remains nuanced. The travel industry may still find resilience through a shift in consumer preferences towards meaningful luxury experiences over goods.  

The luxury travel market is expected to continue growing, driven by unique, personalised experiences that cater to high-net-worth individuals. The evolving luxury landscape suggests polarised spending towards high-value and luxury experiences, with an ongoing demand for unique and immersive travel experiences despite broader market challenges. 

Furthermore, the narrative extends beyond mere accommodation to embrace sustainability, wellness, and authenticity, elements now integral to brand differentiation and investment appeal. The evolving expectations of travellers are reshaping the essence of hotel branding, with a marked shift towards experiences aligned with personal values. 

Market Movements: Europe and the Middle East in Focus
Europe presents a mixed bag; the allure remains strong for domestic and international travellers alike, buoyed by events such as the Summer Olympics and Taylor Swift’s Mega Tour. However, the shadow of geopolitical tensions and economic uncertainties looms large, affecting travel dynamics, particularly from key markets like the aforementioned China. 

The Middle East, particularly Saudi Arabia, has emerged as a beacon of growth and investment, catalysed by major initiatives to boost tourism and hospitality as part of broader economic diversification efforts. This region’s upward trajectory offers a compelling narrative for investors, but the ongoing conflict in Gaza has started to impact revenues and the longer-term impact is hard to predict. Bloomberg recently reported that Dubai based Emaar Properties PJSC posted a 33% drop in fourth-quarter revenue despite a record annual profit in 2023. The conflict has also led to wider regional effects, including consumer boycotts of major foreign brands and a decline in tourism in nearby countries.  

Looking Ahead
The global hotel industry, particularly in strategic markets like the UK, Europe, and the Middle East, is at a pivotal juncture, shaped by the slow yet steady return of Chinese travellers, the polarisation between luxury and value and the increasing emphasis on sustainability and experiential luxury. Together with the unpredictable global geopolitical landscape, there are significant opportunities for hospitality investors. 

While the landscape is fraught with uncertainties, the undercurrents of recovery, innovation, and a renewed focus on quality and sustainability signal a new era for hotel investment. The industry’s ability to adapt, innovate, and cater to the evolving preferences of global travellers will define the success of investments in the coming years. 

This month, we will be attending the Caribbean Hotel and Resort Investment Summit in Florida and the Future Hospitality Investment Summit in Saudi Arabia. These conferences serve as critical platforms for industry stakeholders to converge, share insights, and forge the path ahead. We remain committed to providing our clients with nuanced, forward-looking advice, grounded in a deep understanding of global trends. 

If you are attending the Caribbean Hotel and Resort Investment Summit in Florida and would like to set up a chat, please contact Dan Akhtar or Andrea Shaw. 

If you are heading to Saudi Arabia for the Future Hospitality Investment Summit, Guy Lean will be our representative. Please contact him to set up a chat. 

Dan Akhtar, Managing Director – HPG Advisory Services 
+44 208 600 1166 / +44 7808 157796 
[email protected]   

Guy Lean, Managing Director – Madison Mayfair 
+44 20 8 600 1180 / +44 7813 009787 
[email protected]   

Andrea Shaw, Director – FM Recruitment 
+44 20 8 600 1160 / +44 7714 236469 
[email protected] 

 

Insights from The Resort & Residential Hospitality Forum 2023

Posted on by Dan Akhtar

With the Resort & Residential (R & R) Hospitality Forum recently taking place in Lisbon, we delve into some of the key insights to uncover opportunities in leisure hospitality investment in the Mediterranean and Southern Europe.

This event is run by Questex, the same team behind the International Hotel Investment Forum (IHIF), which Dan and Mara attended in May, and the Annual Hotel Conference (AHC), which was attended by our colleague, Guy Lean, in September.  

Here is a brief summary and some ke takeaways from The Resort & Residential Hospitality Forum 

Attendance and Demographics
The forum saw a total of 390 delegates, with an impressive 58% being first-timers. Significantly, 98 of them, which is over 25% of the total count, were investors, proving that leisure hospitality continues to draw attention from varied capital sources. 

Theme: Leisure to the Core
This conference has now evolved from its traditional emphasis on beach resorts. It includes a wide variety of leisure offerings like wellness retreats, Alpine resorts and hotels which used to be more corporate-centric but are now welcoming leisure guests. This shift also indicates a new wave of investors who perceive these assets not as fleeting opportunities, but as long-term investments. 

The Market’s Perception of Leisure Hospitality
One of the most discussed topics was the resilience of the leisure hospitality sector. Despite the numerous challenges thrown at the travel industry in recent times, including wildfires, air traffic control strikes, and even the aftermath of COVID-19, the demand for leisure hospitality remains strong.  

This is evidenced by statistics presented by STR, Hotstats, and tourism economic analyses. This steadfast demand, combined with an observed savings glut during the pandemic, suggests there’s ample room for optimistic growth projections. 

Investment Trends
Patrick Whyte, from Hospitality Investor, shed light on emerging investment patterns. He highlighted the contrast between struggling transaction volumes in Northern Europe and flourishing ones in Southern Europe, particularly in countries like Portugal, Spain, and Greece. This is likely because of owner-operators and family businesses seeking exits or joint ventures after facing post-COVID challenges. 

Supply Evolution and Professionalisation
The forum also touched upon the professionalisation of assets. Opportunistic funds, for instance, are keen to understand how to better position an asset to appeal to long-term buyers. A significant part of this involves understanding modern demand, where travellers seek unique and local experiences, rather than traditional resort offerings. 

Climate Change and Extending Seasons
Climate change, which has its set of challenges, is inadvertently offering opportunities by reshaping travel seasons. Investors and hoteliers are capitalising on this by expanding resort seasons, finding profitability in previously off-peak months. 

Branded Residential Growth
The conference highlighted a growing interest in branded residences, with large hotel brands like Marriott and Wyndham leading the way. However, they face competition from luxury non-hospitality brands seeing potential in this market. 

Destinations in Focus
Southern European destinations are garnering the most investor attention. Greece, particularly, stands out due to supportive government policies and market conditions. Additionally, emerging markets like Montenegro, Bosnia, Slovenia, and Albania were discussed as potential growth areas. 

Experiential Elements
Lastly, the forum emphasised the importance of offering a holistic experience to its delegates. From rooftop receptions to hotel tours, participants had the opportunity to truly experience the best of Lisbon’s hospitality. This reflects the increasing trend for more experiential localised experiences that customers are demanding. 

Summary
In conclusion, the R&R 2023 was a comprehensive showcase of trends, challenges, and opportunities in the leisure hospitality sector for the Mediterranean and Southern Europe regions.  

With a broad range of speakers on various topics, it clearly has its finger on the pulse of the industry and the digital debrief offered through multiple videos on the R & R Digital page is an extremely valuable asset.  

Next year’s event is moving to its new home in Athens, tipping its hat to Greece’s growing influence in the hospitality industry. 

If you would like to read more about our personal experiences at International Hotel Investment Forum, Annual Hotel Conference or Future Hospitality Summit this year, then please click on the links.  

If you would like to discuss any of the topics shared in this article or would like to speak to us about your people strategy and our advisory services, then please get in touch. 

Dan Akhtar, Managing Director of HPG Advisory Services +44 20 8600 1166 / +44 7808 157796 / [email protected]

The Evolving Role and Importance of the Hotel Asset Manager

Posted on by Dan Akhtar

In the dynamic and ever-changing hospitality industry, the role of the Hotel Asset Manager has become increasingly more visible and vital to the investor, owner and operator relationship.   

For some time, HPG Advisory Services has been familiar with the position, as hotel owners and investors build an independent connection to the day-to-day operations of their properties, while savvy operators prove their commercial acumen by adding this additional skill to their property management arsenal.  

Historically, owners would have liaised directly with hotel General Managers and Finance Directors to measure performance. Over the last 20 years, we have seen the emergence of dedicated Hotel Asset Managers who play a crucial role in maximising profitability, ensuring operational efficiency, enhancing the overall guest experience and ultimately, maximising the return on investment. In an interview with Hotelier Middle East last year, Hospitality Asset Managers Association’s Vice President Amit Nayak said that owners have realised that “you need a certain category of individuals to run your asset, those who understand operations; those who understand corporate finance and lending; and those who understand relationships.” 

Here, we explore the ever-evolving responsibilities and significance of hotel asset managers in the hotel industry. 

Financial Performance and Revenue Optimisation 

One of the primary responsibilities of a hotel asset manager is to drive financial performance and revenue optimisation. With a highly competitive market, rising costs, and fluctuating demand, it has become crucial to engage experts who can analyse data, identify new revenue opportunities, and implement strategies to protect profits. Hotel asset managers work closely with hotel owners, management teams, and other stakeholders to develop comprehensive financial plans, set performance benchmarks, and monitor key performance indicators (KPIs). They provide valuable insights on pricing, revenue management, cost control, and expense reduction to achieve sustainable financial growth. 

Risk Management and Investment Strategy 

As the hospitality industry faces various risks and uncertainties, effective risk management and investment strategy have become paramount. Hotel asset managers are responsible for evaluating potential risks, assessing market conditions, and implementing risk mitigation measures. They play a pivotal role in determining the investment strategy, analysing market trends, conducting feasibility studies, and assessing the viability of expansion projects or acquisitions. By carefully managing risks and making informed investment decisions, hotel asset managers protect the interests of owners and investors while maximising returns. 

Operational Efficiency and Quality Assurance 

 In an era where guest expectations are continuously evolving, operational efficiency, quality assurance and a clear focus on the customer experience are essential for maintaining a competitive edge. Hotel asset managers collaborate with operational teams to streamline processes, enhance productivity, and improve service quality. They implement industry best practices, conduct regular operational audits, and identify areas for improvement. By analysing guest feedback, monitoring online reviews, and benchmarking performance against competitors, hotel asset managers ensure that the hotel maintains high standards of service delivery and guest satisfaction. 

Asset Enhancement and Capital Expenditure 

Hotels require ongoing capital investments and asset enhancements to stay relevant and attractive to guests. Hotel asset managers develop long-term asset enhancement plans, aligning them with the overall business strategy. They identify areas where renovations, technology upgrades, or repositioning efforts can add value and increase profitability. By closely monitoring industry trends and guest preferences, hotel asset managers play a crucial role in guiding capital expenditure decisions that optimise returns and enhance the guest experience. 

Relationship Management and Brand Alignment 

Building and nurturing strong relationships with stakeholders, including hotel owners, operators, brands, and third-party vendors, is a critical aspect of the hotel asset manager’s role. They act as a liaison between owners and operators, ensuring alignment of goals, contractual compliance, and effective communication. Furthermore, they work closely with brand representatives to ensure brand standards are met and brand values are upheld. By fostering collaborative relationships, hotel asset managers create an environment of trust and transparency that leads to successful long-term partnerships. 

Conclusion 

The hotel Asset Manager role has become a multifaceted and indispensable position for many hotel operators, owners and investors. Their expertise in financial management, risk assessment, operational efficiency, and relationship management contributes significantly to the success and sustainability of hotels in a competitive market. The ability to adapt to evolving industry trends, leverage data-driven insights, and make strategic decisions is essential for maximising profitability, enhancing guest experiences, and ensuring long-term success in an uncertain landscape. 

HPG Advisory Services are specialists in the hospitality Investor, Owner and Operator landscape.  If you would like to have a deeper conversation about asset management, or any of the other services we can offer, then please reach out to set up a call. 

Dan Akhtar, Managing Director of HPG Advisory Services +44 20 8600 1166 / +44 7808 157796 / [email protected] 

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