When the hotel and resort investment community met at the Mediterranean Resort and Hotel Real Estate Forum (MR&H) in December, it was the end of an eventful year for the sector. Geopolitical events, from Brexit and the incoming Donald Trump presidency in the U.S., to the Italian referendum, political volatility across Europe, M&A activity, new consumer travel trends and local governments’ policies, provided plenty of opportunity for discussion.
Here are some of the top takeaways.
It was clear that the Iberian markets, in particular Spain, remain the stars of Mediterranean hospitality and tourism. In addition to their strong economic recovery, they benefit from being seen as safe markets by tourists and investors. New growth markets are also clearly emerging in the southeastern part of the Mediterranean, such as Croatia. Despite political instability and security risks, the Turkish and North African markets can still generate interest among investors, although recovery may take a few years. For most emerging destinations, airlift and seasonality remain a challenge that hospitality companies are working to overcome.
At MR&H, investors shared their views on the various markets in the region, their exit strategies, consolidation in the sector, bringing value to distressed assets and more. One of the points to take away from the investors’ debate was that there is $1 trillion of non-performing hotel loans on European banks balance sheets, with more than 50 percent of that in the Mediterranean.
Mixed-use resorts represent a key investment and development opportunity in the Mediterranean: speakers debated finding the right component mix, creating a destination and getting projects of the ground. The residential component is clearly a priority for the success of a mixed-use resort in the region, to target the second-home buyer market. That’s where the impact of Brexit on tourism and residential sales could be a concern, but no immediate negative impact has been witnessed on the sector other than the fall in exchange rate, which slowed down spend from British holiday-makers and buyers.
Delivering the right experience to meet customers’ changing needs is a constant concern for hoteliers, particularly in light of the competition from sharing-economy sites. The role of hotel brands in meeting those needs was debated. One particular customer segment to take into account is travellers from Asia: as investment and tourism from China in particular are increasing, hospitality and tourism stakeholders in the Mediterranean should be ready to adapt to their requirements.
MR&H speaker series: Alsotel's Horacio Alcalá; The Carlton Group’s Javier Beltrán; London & Regional's Henri Wilmes; ER Yatirim's Ferzan Çelikkanat.
Over 80 speakers from the whole sector shared their views on the state of the market: leading investors (Starwood Capital, HI Partners, Cerberus Capital, London & Regional), hotel and resort companies (Marriott International, Club Med, Wyndham, Meliá and more), developers (André Jordan Group, Tatweer Misr, Propriétés & Co, ATUM Developments), architects, consultants, law firms, construction companies and more.
Government agencies and local authorities were also represented, most notably Agustí Colom Cabau, Barcelona’s Councillor for Tourism and Business, who explained the city’s moratorium on new hotel development.
Outside the conference room, MR&H was all about the networking: evening receptions at the Fairmont Juan Carlos I and the Meliá Barcelona Sky, swapping cards in the Networking Xpress session at the start of the conference, and networking lunch and refreshments in the exhibition, where delegates saw some of the latest innovations in Mediterranean hospitality.
“The Mediterranean Hotel and Resort Real Estate Forum (MR&H) is unquestionably one of the industry’s best conferences. I know that I may be justifiably accused of being biased but the truth is that there is no other region in the world more aligned and yet dependent on tourism than the Med and MR&H taps into that momentum while being honest and informative of the issues the Med faces," said Alexi Khajavi, EVP of Questex Hospitality Group, the organization that puts on and operates MR&H.
With just over 280 delegates, MR&H creates an intimate environment for networking while still serving up a diverse makeup of regions and hospitality professionals. - Dates and locations for the 2017 event will be announced shortly. As we enter 2017, Mediterranean markets have the potential to offer great opportunities for a wide range of investors. The MR&H team looks forward to continuing the debate leading to its next event in the autumn.
For more information on MR&H, visit www.mrandh.com.