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IHIF 2017: The bubble is not going to burst yet

Logo 20 Jahre IHIF  
   

Berlin (March 10, 2017). No trace of bad tidings, except for the fact that the run on hotel properties is driving the rates further up and opportunities are getting scarce. At the 20th IHIF Berlin, the CEOs of small and large hotel brands were as confident as ever before, and investors that had already obtained an object, were spoilt for choice to find the right operator among many capable ones.

Three new hotel projects on Cyprus and already six hotels in Spain: the expansion of Leonardo Hotels in Europe is progressing just like that of Novum. In the meantime, both brands with a clear focus on Germany have more than 100 hotels each and are proud about their latest acquisitions – one lifestyle brand each. Leonardo's NYX is a concept based on street art. Novum is renaming its brand Novum Style into the brand NIU. With their new pet projects, both groups have successfully gained the attention of the investors' interest in Europe. Whether David Fattal for Leonardo or David Etmenan for Novum: both CEOs are in favour of more growth and deny any intentions of selling. However, the global players already have an eye on them. And not only on those: hospitalityInside.com has talked with the eighth largest Chinese hotel group Dossen about its plans concerning Europe (report follows). Last year, Wanda Hotels presented itself as first Chinese hotel group at the IHIF.

According to Andreas Scriven, International Managing Director at Christie & Co, there is no end in sight for the industry consolidation. The three largest global players Marriott (market capitalisation 349 billion USD), Hilton (193 billion USD), and Accor Hotels (117 billion USD) already account for 20 percent of the market share.

The chances for larger acquisitions and mergers are slowing down but they will focus on the merger of national players in future. And the investors' interest in hotels is not diminishing. And not only in the own country. Philip Ward, CEO Hotels and Hospitality Group EMEA, JLL, gave an insight in across-boarder investments, which already accounted for 30 percent of the investments in 2016. For 2017, he expects investments in foreign countries from China, which have a volume of 9.8 billion USD, from the rest of Asia of 4.4 billion USD, from the Middle East of 2.1 billion USD, from the US of 2 billion USD, and from Europe of 1.1 billion USD.

Robin Rossmann, Managing Director at STR, listed the winners and losers among the city locations in Europe for 2017: Dublin, Barcelona, Madrid, and Amsterdam are hot. Brussels, Moscow, Paris, and Milan are in a recovery phase. London, Edinburgh, Manchester, and Frankfurt have to expect worse business, but Prague, Athens, Rome, Warsaw, and Budapest, amongst others, provided solid results. In London, there are 478 projects in the pipeline at the moment.

Single-sided Brexit speaker

As first speaker at this year's IHIF in Berlin, economics expert Roger Bootle, Chairman at Capital Economics, also pointed out some dangers. The course of the US President Donald Trump remains uncertain, another uncertainty is the euro zone, and there, the economic development in Italy and France, especially. But Bootle regarded the Brexit, last year's spectre, as less threatening. Despite the increasing signals that the Brexit has an effect on the market in the UK. Ireland and Spain are currently exceptionally strong, according to Bootle.

With his hard and one-sided statements in favour of the Brexit and against the EU, Bootle aroused a lack of understanding among the audience, as several IHIF participants pointed out to hospitalityInside.com. They asked why the IHIF invited such an EU opponent, who did not understand that the tourism and hotel industry on both sides is very much interested in the further granting of free movement for the choice of jobs.

According to the organisers, more than 2,000 visitors from 80 countries visited the 20th IHIF in Berlin this year. At times, however, the halls came across as being quite sparsely visited.

Extensive reports will follow; from IHIF the hospitalityInside team directly went on to ITB, and the team members will be present in Berlin until the end of the week. / Susanne Stauss

 

NOTE: A 12-page white paper about the transaction year 2016 in the German-speaking market, written by Maria Puetz-Willems, is part of the media partnership between hospitalityInside.com, Augsburg, and Questex Hospitality + Travel, New York. For further information, a summary in German or English can be downloaded free of charge via this link.

 

 

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