The Value of Hospitality Industry Trade Events 

With rising consumer expectations, advancements in technology, and the push for sustainability, staying ahead of the curve is crucial for anyone involved in the hospitality industry. One of the most effective ways to do this is by attending trade events and conferences.  

These industry gatherings provide professionals with an unparalleled platform to network, build their profile, expand their knowledge, and stay updated on the latest trends. From luxury hotels to independent restaurants, the insights gained at these events can shape the trajectory of businesses and professionals alike. 

With the Annual Hospitality Conference in Manchester having taken place earlier this week, many attendees and onlookers may be looking at the next opportunity attend such an event, whether it might be a little closer to home or a little more focussed on your specific area of interest.  

The next few months will see a plethora of Hospitality and Tourism conferences and events taking place across Europe and the Middle East, from UKHospitality’s Environmental Sustainability Seminar to the prestigious International Luxury Travel Market (ILTM) in Cannes. Each event brings unique value to attendees, helping them thrive in an increasingly competitive environment, and it is not too late to sign up and get those tickets booked. 

Why Trade Events Matter in the Hospitality Industry 

 Networking Opportunities
Trade events are invaluable for networking, enabling professionals to connect with peers, potential partners, and industry leaders. These interactions can lead to collaborations, partnerships, and business deals that can propel a company forward. For example, the World Travel Market (WTM) in London, taking place annually in November, is one of the most influential gatherings in the global travel and tourism industry.  

With representatives from travel companies, tourism boards, and hospitality providers worldwide, the WTM offers opportunities to forge lasting relationships and discuss future trends, making it an essential event for anyone looking to make their mark on the industry. 

For resort operators and residential leisure investors, the Resort & Residential Hospitality Forum (R&R) in Athens in November will provide a specialised platform to engage with stakeholders and experts in the resort and residential space. Establishing contacts in such niche markets can help businesses uncover investment opportunities or gain insights into emerging trends that can impact their future strategies. 

Building Knowledge and Gaining Insights
Attending trade shows is a prime opportunity to learn from industry experts and thought leaders. Events such as the Tourism Innovation Summit in Seville in October are designed to showcase how cutting-edge technology can revolutionise the travel experience. From sessions on smart destination management to talks about artificial intelligence in tourism, this event offers attendees the chance to stay ahead in an industry that is increasingly reliant on digital transformation.

At the Environmental Sustainability Seminar in the UK, climate change is becoming an ever-pressing issue for hoteliers and restaurateurs alike, who must adapt to greener practices. This seminar is a key opportunity to explore best practices and innovations designed to make the hospitality industry more sustainable. These insights can help businesses not only reduce their environmental impact but also appeal to eco-conscious consumers, a demographic that continues to grow in importance. 

Competitor Knowledge
Understanding what competitors are doing is crucial for maintaining a competitive edge. Trade events provide the perfect stage to observe and assess the latest products, services, and innovations that your competitors are offering. At the Hotel & Resort Innovation Expo at Excel London in October, hoteliers will get a first-hand look at cutting-edge technology designed to enhance customer experience. Whether it’s AI-driven guest services or the latest room automation technology, knowing what’s on the horizon can help businesses stay one step ahead. 

Similarly, at the The Restaurant Show, now part of the Food & Drink Expo taking place in April 2025 in Birmingham, restaurateurs will gain insights into the latest culinary trends, tech solutions, and operational strategies from leading industry experts. Understanding these trends early can empower businesses to implement changes that set them apart from competitors, giving them a significant advantage in the market. 

Industry Innovation
Innovation is the lifeblood of any industry, and trade events serve as a catalyst for new ideas and breakthrough technologies. The Independent Hotel Show, which takes place at Olympia London in October, focuses on boutique hoteliers and luxury establishments, offering a curated selection of the latest innovative products and services designed to elevate customer experience. For hoteliers seeking to distinguish themselves in a crowded market, this event is the perfect place to discover game-changing solutions. 

Another key event fostering innovation is the Italian Hospitality Investment Conference (Rome, October 2024), where the focus is on investment opportunities and trends in the hotel and real estate sectors. With a particular emphasis on innovation in hospitality investments, this is the first international conference exclusively dedicated to investments targeting hospitality in Italy. This is vital for anyone looking to stay informed on how new business models and investment strategies might apply to a region that promises significant opportunities.

Profile Building
For professionals looking to advance their careers, attending these events can be instrumental in building their personal profile. Speaking at panels, engaging in discussions, or even just attending sessions can raise your visibility within the industry.  

HOSPACE run by HOSPA (of which our brand, FM Recruitment are proud sponsors) takes place in November every year. As conference for senior professionals and host to an array of discussions and workshops from leading minds in the industry, offer the chance to establish yourself as a thought leader to address some of the key issues impacting the contemporary hospitality landscape, including sustainability, technology, wellness cyber security and career progression. 

Staying Ahead of Industry Trends
Trade events are where trends are born, making them essential for those looking to stay ahead in the fast-paced hospitality industry. The International Luxury Travel Market (ILTM) in Cannes taking place in December showcases the latest developments in luxury travel, from high-end destination offerings to personalized experiences. As luxury travel continues to be a key growth sector, keeping a finger on the pulse of new trends and consumer preferences is vital for anyone involved in high-end hospitality services.

The Current Hospitality Investment Landscape
The global hospitality investment landscape in 2024 is defined by recovery, growth, and innovation. After the challenges posed by the COVID-19 pandemic, the industry has seen a resurgence, with investment volumes outpacing pre-pandemic levels. According to JLL Research, global Revenue Per Available Room (RevPAR) in 2024 has exceeded 2019 figures by 12%, showcasing the robust recovery of the sector. 

Major investment deals in the first half of 2024, such as Blackstone’s acquisition of the Village Leisure portfolio for £850 million, highlight the renewed investor confidence in hospitality assets. Furthermore, there is a growing trend toward sustainable investments, with many investors prioritizing eco-friendly developments and wellness-focused properties, reflecting broader shifts in consumer preferences. 

Conclusion
The value of attending hospitality trade events cannot be overstated. These gatherings are more than just networking opportunities—they are platforms for learning, innovation, and growth. Whether it’s gaining insights into sustainable practices, learning about the latest technological innovations, or building your personal and business profile, attending these events can significantly impact your success in the hospitality industry. 

With the global hospitality industry continuing its upward trajectory, driven by strong investment activity and the adoption of innovative practices, staying engaged with industry events will be crucial for maintaining a competitive edge. Whether you’re attending to network, learn, or simply keep an eye on your competitors, these trade events in Q4 2024 offer valuable opportunities that no hospitality professional should miss. 

If you would like to discuss any of the above topics in more detail, please get in touch to arrange a chat. 

Dan Akhtar, Managing Director – HPG Advisory Services 
+44 208 600 1166 / +44 7808 157796 
dan@hpgsearch.com  

Image courtesy of hospace.org 

 

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

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. 

The Impact of Increased Salary Thresholds on the UK Hospitality Industry

The recent increase in the salary thresholds for skilled worker visas has marked a significant shift in the landscape of UK employment, particularly for the hospitality industry. As of April 4, 2024, the minimum salary threshold for a Skilled Worker visa application has risen to the higher rate of £38,700. While the previous threshold of £26,200 had already profoundly impacted the hospitality sector, this increase is now being felt across even more hospitality departments and indeed most business sectors. 

Hospitality Industry 
The hospitality industry has long relied on international workers to fill a variety of roles, from restaurant managers and chefs to housekeeping and front-of-house employees. While the thresholds do not apply to those who are already settled in the UK, they will present a considerable challenge, particularly for small businesses and those located outside of London and the south east, where salaries are typically lower. 

The trade body UKHospitality estimates that 95% of sponsored visas for chef and manager roles granted in 2022 would not meet the new salary requirements. The dramatic increase poses a substantial burden on employers, many of whom are already grappling with challenges in retention and recruitment alongside ongoing economic uncertainties. 

The increased thresholds are consequently deterring skilled workers from considering roles in the UK, pushing employers to compete for a smaller pool of domestic workers or to raise salaries, which simply may not be feasible for many establishments.  

Impact on Small Businesses
Small businesses, which form the backbone of the hospitality industry, are disproportionately affected. These businesses, without the support of a global hospitality brand, often operate on very thin margins and will struggle to meet the new salary requirements. For a local pub or a family-run restaurant, the prospect of raising a manager’s salary by 50% is daunting. With the increased minimum wage, costs of energy and business rates continuing to drive up costs, and leading to higher prices for consumers, we are more likely to see reductions in employees, or even closures, further straining the sector. 

Broader Economic Implications
The increase in salary thresholds is part of a broader strategy to reduce net migration following record numbers in the previous year. While this policy may achieve its goal of reducing overall immigration, there is a risk of creating immediate labour shortages in sectors that traditionally rely on skilled workers from abroad, such as hospitality, technology, and healthcare. However, we are also beginning to see the implications that this policy may have on the longer-term future of London as a global financial hub. KPMG recently announced that they had cancelled job offers for a new intake of foreign graduates as the starting salaries were lower than the new threshold. While the “Big Four” firm will have more flexibility to find solutions than small hospitality businesses, it will be interesting to see how this affects the long-term pipeline of attracting the best and brightest graduates. 

Potential Solutions and Adaptations
We would recommend that all employers in the hospitality industry review the new salary thresholds and identify the roles that meet the relevant minimum salary levels. This will help when planning their people strategy giving you more time to plan for the longer term. However, beyond this, the industry will need to continue finding innovative solutions to mitigate the impact of these changes. 

Upskilling and Training 
One potential solution is to invest in upskilling and training domestic workers to fill the roles traditionally occupied by international talent. This strategy requires significant investment in training programs, apprenticeship schemes and partnerships with educational institutions to ensure a steady pipeline of skilled workers. 

Workplace Culture and Employee Benefits
To attract and retain talent, employers will need to nurture their workplace culture. Primarily, this means understanding and communicating with your people, but may also require enhancing employee benefits and working conditions. This could include offering flexible working hours, career development opportunities, and other non-salary benefits that make roles more attractive to domestic workers. 

Technological Innovation
Technological innovation will play a role in mitigating employee shortages and has the potential to completely reimagine how we do business. Automation and digital tools can streamline operations and reduce the reliance on human labour for certain tasks, allowing them to concentrate on value-adding guest experiences. However, businesses need to ensure that these innovations work well for their customers or risk damaging the guest experience and brand image.  

Rethinking Business Models
Some businesses may need to rethink their business models and/or people strategy entirely. This could involve focusing on smaller, more manageable operations that require fewer staff or exploring alternative revenue streams. 

Summary
In conclusion, the decision to increase the salary thresholds for skilled worker visas represent a significant challenge, but not just for the hospitality industry. With little prospect of the decision being reversed (the shadow government have broadly supported the increase), this is something that all businesses will need to consider in their long-term people strategy. They will need to explore innovative solutions to attract and retain talent, invest in training and upskilling domestic workers, and potentially rethink their business models to adapt to a decreased workforce.  

If you would like to discuss about how this policy might affect your people strategy and explore some options that might help support your business through the change, then please get in touch.  

Dan Akhtar, Managing Director – HPG Advisory Services 
+44 208 600 1166 / +44 7808 157796
dan@hpgsearch.com 

Guy Lean, Managing Director – Madison Mayfair 
+44 20 8 600 1180 / +44 7813 009787
guylean@madisonmayfair.com  

Chris Denison Smith, Managing Director – FM Recruitment 
+44 20 8600 1160 / +44 7775 711923
chrisdenisonsmith@fmrecruitment.co.uk   

Andrea Shaw, Director – FM Recruitment 
+44 20 8 600 1160 / +44 7714 236469
andreashaw@fmrecruitment.co.uk 

 

Insights from International Hospitality Investment Forum (IHIF) 2024

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 

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
T
he 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 
dan@hpgsearch.com   

Guy Lean, Managing Director – Madison Mayfair
+44 20 8 600 1180 / +44 7813 009787 
guylean@madisonmayfair.com   

Andrea Shaw, Director – FM Recruitment 
+44 20 8 600 1160 / +44 7714 236469 
andreashaw@fmrecruitment.co.uk 

 

UK Hospitality Trends: What to Expect in 2024

Despite the challenges that the UK hospitality industry continues to face, owners, operators, and investors have many reasons to look forward with great optimism.  

While we specialise in people strategy and recruitment, Hospitality People Group is committed to continuously exploring the full hospitality landscape to identify trends and insights to support our clients in finding the best solutions for their businesses.  

Here are some of the key themes that we foresee will impact the hospitality sector in 2024. 

Hotel Investment
Investment trends in the hospitality sector are a valuable longer-term indicator of expected performance, and confidence in the UK market is booming. The rapidly increasing hotel supply in London, but also Edinburgh, Glasgow and Manchester, is being driven by both domestic and international demand. According to a recent report by Deloitte, London is expected to become the most attractive European city for hotel investment in 2024, with 11,000 new rooms planned to open.  

Outside of London, Edinburgh has the largest supply of five-star hotels in the UK with over 60 active hotel projects that are due to add around 5,000 rooms to the city’s hotel market. Some notable openings include  W Hotel, Tribute (expected to open in August 2024), and the Hyatt Regency Edinburgh Marina Hotel. 

The increase in supply will put ever-increasing pressure on the recruitment market, so like last year’s Battle for Retention, businesses that manage to retain their valuable employees may be better positioned than those that don’t. 

Travel Numbers
With the latest passenger travel figures from Heathrow, there’s a strong indication that 2024 will mark a significant milestone in the travel industry. For the first time since the pandemic, the total number of passengers passing through Heathrow is projected to surpass the figures recorded in 2019.  

A closer look at the international arrival data also reveals some intriguing trends. Travel from the Middle East and North America has not only recovered but has also exceeded the levels seen in 2019. The Asia/Pacific region is still lagging, with approximately 1.5 million fewer travellers in 2023 compared to 2019, but the majority of this shortfall occurred in the first half of 2023, suggesting that the gap is closing. While there is a disparity across different regions, the trend is positive and offers valuable insights for the hospitality industry as it welcomes more global travellers in 2024. 

Super Luxury Hotels 
The last year has seen a number of high-end luxury hotel openings in London, including The Peninsula and Raffles London at the Old War Office. Next year will see a new Mandarin Oriental and Maybourne’s new, all-suite, The Emory Room. Rates for these hotels all start at £1,000+, and this minimum rate expectation has already become a standard expectation for existing luxury hotels. According to a recent article from the Guardian, there is a new era of exclusivity, and with an expected 18% more visitors to London forecasted to spend 25% more than last year, there is an expectation that these higher rates will continue to attract those who can afford them. 

With these increasing rates and guest expectations, there will be skyrocketing costs and often unpredictable increases. At the highest luxury level, these costs can be far more easily passed onto guests, but guests at anything less than ultra-luxury hotels are likely to be a little more price-sensitive.  

Inflation and Rising Costs
The UK hospitality industry continues to face challenges due to inflation and rising costs. The 9.8% minimum wage increase to £11.44, which comes into effect in April 2024, will put pressure on the wage structure at all levels in hospitality. Many businesses may have to raise their prices again to cope with the increased costs. Some may consider reducing employee hours, but given the demand for talent, this could be a risky solution. Inflation, which is expected to remain above 3% by the end of 2024, has also increased the costs of raw materials and energy. Energy costs, in particular, have soared by more than 50% since 2021, making it difficult for hospitality businesses to operate profitably and sustainably.  

Just as strong financial leadership was so crucial during the pandemic, the direction now needed to ensure that the increasing revenues expected in 2024 translate into increased profit, will be essential. 

Hospitality Recruitment
The hospitality sector has been struggling to fill vacancies for some time, but the situation has been exacerbated by shifting demographics, the pandemic, and Brexit. With nearly half a million less 18 year olds than 10 years ago, the combination of the pandemic and Brexit has made it much more difficult to replace these potential employees, while skills shortages have made it harder to find qualified employees for specialised roles.  

Unfortunately, the recent announcement regarding the increased threshold for minimum salary needed to get a skilled worker visa is likely to increase pressure on this shortage. According to Kate Nicholls, UKHospitality’s Chief Executive, “There were 8,500 hospitality visas issued last year, which helped bring in talented chefs and managers of the future. Around 95% of those would no longer be eligible under these plans (an increase from £26,200 to £38,700), despite being offered competitive salaries.” 

Once again, the Battle for Retention is an increasingly important strategy for all hospitality businesses as they try to minimise employee turnover with a strong workplace culture.  

We hope this article will provide you with some insights and inspiration for 2024. 

If you are looking for a partner to support your people strategy in 2024, then please get in touch. 

Dan Akhtar, Managing Director – HPG Advisory Services
+44 208 600 1166 / +44 7808 157796
dan@hpgsearch.com 

Chris Denison Smith, Managing Director – FM Recruitment
+44 20 8600 1160 / +44 7775 711923
chrisdenisonsmith@fmrecruitment.co.uk  

Guy Lean, Managing Director – Madison Mayfair
+44 20 8 600 1180 / +44 7813 009787
guylean@madisonmayfair.com 

Andrea Shaw, Director – FM Recruitment
+44 20 8 600 1160 / +44 7714 236469
andreashaw@fmrecruitment.co.uk

Insights from The Resort & Residential Hospitality Forum 2023

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 / dan@hpgsearch.com

The Evolving Role and Importance of the Hotel Asset Manager

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 / dan@hpgsearch.com 

 

 

 

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