IHIF ends on high note with low-down on brands and growing business


BERLIN, Germany--All good things come to an end. The International Hotel Investment Forum here at the InterContinental Berlin has culminated, but not before one last day of valuable sessions and networking.

Discussing traditional versus next-generation business models was the theme of an afternoon panel composed of four young hotel executives: Guido Fredrich, VP of special property finance-hotel properties at Aareal Bank AG; Fred Hines, director and head of acquisitions at Queensgate Investments; Theresa Jaeger, director of of real estate and asset management for Hilton Worldwide; and Jacob Rasin, analyst-business intelligence at Pandox AB.

The panel hit on a variety of topics, though sticking close to discussion on new brands, new structures and new concepts in the hospitality sector.

As the lone brand on the panel, Jaeger made the case that a brand's segmentation and performance has a direct impact on its ability to grow in the marketplace and satisfy owners.

"When it comes to the consumer, brands have to have their own positioning, their own consumer mindset to generate demand, otherwise, no one would sign up these deals to drive returns. Each has its own customer segment and the customer understands the differences of brands," she said.

Queensgate's Hines started the company's own brand, Generator, a collection of eight hostels in Europe. He discussed the benefits of building a brand over bringing in a brand. "We took the view that it was worth the effort to develop something for young people," Hines said. "If you are starting a development in London, you don’t need to start your own brand and can take advantage of what [an established] brand has already been done. You just need to know who your customer is.

Meanwhile, as the money man on the panel, Fredrich said the likelihood of a deal getting done is higher if a brand is involved. "As a lender, brands are a crucial component we look at, as is sponsorship, the operator and location," he said.

In a poignant exchange, Hines expressed the opinion that having some stake of ownership in a property by a brand or operator is desirable to the overall success of the business. It was an opinion that Jaeger countered. 

"We don’t need ownership to have operational control. We know how to translate the key pillars and brand standards. We can leverage that when we launch a new brand. Owners are comfortable with our brands; they have trust. So we can start new brands with third-party capital; we don’t need to own," she said.

Hines, on the other hand, said, "Having control over the property is extremely important. If we are bringing in a manager that is going to be aligned with us, we want them to come in on the equity side. Then they are incentivized and can squeeze out additional revenue. We want people running our property to feel like owners, which comes with an equity stake. We want more than just a flag and be aligned with people running it. The are incentivized to have the best operation every day."

"We don’t need to own; it's a testament to the strength of our brands. We want to grow capital light and rely on third-party capital," Jaeger responded.

When it comes to brands, one thing is sure, Fredrich said. "People change, tastes changes, so brands need to change."

New this year to IHIF was the "In-The-Round-Sessions," a series of intimate and informative discussions focused on an array of specialized topics. The discussions were arranged in a matter that allowed delegates to learn about opportunities and hear from experts about ways to grow business. 

While there were 16 sessions in all, some of the standout included discussions on the sharing economy, crisis management, investing in Italy and hotel valuation matters.