Max Thorne, managing director of Jones Lang LaSalle's Hotels & Hospitality Group, leads a team focused on European serviced apartments as investment opportunities. He has more than 30 years’ experience in property, playing a key role in the serviced apartment sector as it has developed and grown.
Thorne will participate in a panel discussion "Perpetual Motion" at the upcoming Annual Hotel Conference at the Hilton Hotel in Deansgate, Manchester on Thursday, Oct.13. Are we in the most changeable period of hotel operation ever? Or has it always been like this and we have short memories?
Ahead of the conference, we asked Thorne five questions about the changing nature of hotel operations, home-sharing services and the future of Europe's hospitality industry.
1) You are on a panel that has the tagline of “Perpetual Motion,” and the idea that hotel operations are changing. How does that strike you? Is it a fair statement that we are in the most changeable period of hotel operation ever?
Thorne: Everything evolves and moves on: Changing consumer habits and new technology impacts everything from our jobs, the way we shop and how we live. The hotel and hospitality sector is far from immune to this.
It’s safe to say that the combination of a better traveled consumer able to compare other traveler's experiences with one click and the rise of Airbnb is leading us into uncharted territory across the sector. However, it is something to embrace. It means new opportunities for hotel owners who are ready and willing to embrace these new trends and habits.
2) Beyond that, what are the biggest/larger trends you are seeing take shape in the hotel space?
Thorne: The rise of travelers mixing business with leisure and the resulting ‘Bleisure’ market means that travelers are looking for home comforts. A bed in a small space is no longer enough. This certainly helps to explain why in the UK alone there are more than 3,500 serviced apartments in the pipeline over the next three years.
The homesharing trend is of course the biggest new phenomenon for the industry to grapple with. However, short-term rental sites are facing increasing legal opposition across the world, as cities grapple with the impact of the Airbnb boom on local housing and hospitality operators. This is leading to a patchwork of legislation, such as in Berlin where it is now illegal for people to rent out more than 50 percent of their property.
Technology and the desire for a more experiential and bespoke service is also having an impact across the sector. Lifestyle assistants, on-call butlers, child-minding and pet services are all additional extras that people are looking for.
3) In your opinion, what is the long-term impact of home-sharing and serviced apartments on the traditional hospitality industry?
Thorne: There is a change in attitude happening towards what people want and expect from where they stay. The industry has to look at what is driving people to opt for home-sharing and apartments and apart-hotels and replicate that in their offering.
The chance to ‘live like a local’ or find an affordable room in a city center location has tempted many a visitor away from hotels and into the arms of peer-to-peer apartment rental sites. There has been an extraordinary global growth in consumers looking to discover new experiences, including choosing to rent apartments as their travel accommodation.
Brands and operators need to respond to next-generation travellers’ desire for the unique and individual over the familiar and expected; for a personalized home-away-from-home over a room that is identical and generic no matter what city you are in.
This is not something to shy away or be scared by. There is a clear opportunity for operators to step up and create product to fulfill the continuing demand for short-term apartment rentals
4) How do you compare Europe versus the U.S. when it comes to the importance of brands and their value
Thorne: We are seeing the first triple branded hotels opening in the US, such as Marriott’s new opening in Nashville. This is building on the popularity of dual branded hotels, which has gained traction over the last five years.
Branding is probably more commoditized in America, as demonstrated by their very successful franchising market. However, as the world evolves and each city becomes more cosmopolitan, regional branding successes will be more about brands recognising the current consumer demand for individual adapted lifestyle brand variations. It will be about consumer interests aligning, rather than historical paced success which is likely to be the more prosperous.
5) Characterize the overall health of the UK hospitality industry, particularly in light of the Brexit.
Thorne: While we have still yet to see what a Brexit will actually look like, it is clear that currently investors are still seeing the hotel market as an attractive prospect. JLL has recently advised on the acquisition of a three hotel regional UK portfolio to an Asian based joint venture. The fall in sterling will also surely boost the UK’s attractiveness as a tourist destination to overseas visitors, which can only be a good thing for the hospitality industry in general.
The Annual Hotel Conference is Oct. 12-13, at the Hilton Hotel in Deansgate, Manchester. To learn more about the conference and to register, click HERE.