BERLIN, Germany--The second day of the International Hotel Investment Forum featured a big honor and recognition of one of the hotel industry's most iconic figures. Afterward, hotel CEOs made it clear why it's still a good time to be in the hotel business.
Barry Sternlicht, founder, chairman and CEO of Starwood Capital Group, was the recipient of the IHIF Lifetime Achievement Award. The former Starwood Hotel executive, who was behind the launch of the W brand among other trailblazing initiatives, was presented the award by Kerry Gumas, CEO of Questex, and Omer Isvan, president of Sevotel.
The presentation was followed by a Q&A with Sternlicht, who is never shy to say what is on his mind.
A total of four hotels developed by Starwood Capital will open this year, including the 1 hotel in Miami and the Baccarat Hotel in New York, a property that Starwood Capital has since sold to China's Sunshine Insurance, in a record-setting $230 million deal, or $2 million per room.
Sternlicht discussed his early years, wherein he spearheaded such deals as acquiring ITT Sheraton in a battle against Hilton for control of it. "We were using stock, they were paying cash," he said of the deal. "You don't think about the zeros."
While Starwood Capital has interests across many asset types, Sternlicht said hotels are his passion, in part due to the people involved, including employees and guests.
Sternlicht's success can be attributed to many things, his use of the left and right brain being one. "It can be a pretty dangerous combination," he said, adding that his mother was an artist. "I maybe would have been one, too, but my mom warned me I'd starve," he jokingly said.
CEOs CHECK IN
A CEO panel, composed of Sebastien Bazin, CEO of Accor; Steve Joyce, CEO of Choice Hotels Intl.; David Kong, CEO of Best Western Intl.; Gerald Lawless, CEO of Jumeirah Group; and Arne Sorenson, CEO of Marriott International, highlighted day 2's general session.
The mood was full of mirth. "2014 was spectacular and we wish we could repeat it forever. Let's savor it," Sorenson said. "I suspect 2015 will be even better. All in all we’ll see another strong year of RevPAR growth."
Best Western's Kong noted muted supply growth that is keeping the industry robust. "Supply hasn’t been a problem because money was tight, helping occupancies reach highs," he said.
Devoid of a black swan event, the CEOs were bullish on 2015. "When we look at the cycle, we are in great spot, middle of the game," Choice's Joyce said. "Supply is still low and demand is outpacing it, so it's a positive point in the cycle."
Joyce said that Choice is "hitting the sweet spot," and is seeing pickup in not only urban locations, but secondary and tertiary. Internationally, Joyce said Choice is concentrating on Europe.
Lawless' business remains predominantly in Dubai, where Juemirah will open its first Venu lifestyle hotel. He added that Dubai will look to double its room count by 2020 to some 150,000 rooms. "The biggest challenge," he said, "is geo-political."
Airbnb and the sharing economy proved to be discussion points, as they more and more tend to be at hospitality conferences. "Airbnb has become more significant," Bazin said. "But I'm not bitter. All new digital players are being evaluated not on bottom-line profits. We are at a disadvantage and have to adapt."
"The shared economies are going to be here," Joyce said. "Parts are attractive, but they need to do same things we do: safety, taxes, etc."
"It's hard to tell whether Airbnb is having any impact," Sorenson said. "We are regularly posting record occupancy numbers so there is enough demand to satisfy all of us. Airbnb is expanding the pie for all of us and introducing new travelers to the market. There will be pressure on Airbnb to get into the business travel space."
Questex Hospitality Group conducted a Ministers of Tourism panel at IHIF. The panel was represented by the Dominican Republic, Ecuador, Zambia, Macedonia, and Antigua and Barbuda.
Each nation is at IHIF to appeal to and attract foreign direct investment, specifically into their hospitality sectors. During the panel, all the nations presented cases for why their nations are ripe for investment, and what they are doing to incentivize investors. Video of the panel discussion will be hosted on hotelmanagement.net soon, so stay tuned.