IHIF day two focuses on global economy, worldwide tourism

The second day of IHIF 2014 started with a message of thanks to Carlson Rezidor Hotel Group from Kerry Gumas, CEO, Questex Media Group for hosting the African Extravaganza themed opening night reception on Monday night at the Radisson Blu Berlin.

Andrew Sentance CBE, senior economic advisor to PwC, opened Tuesday’s formal sessions with an overview of the global economy. He highlighted that the $USD value of the global economy is currently three times as much as it was at the start of the century. Sentance pointed out that whilst economic growth has been positive, it has not been evenly spread. He said that the Euro Zone was ascendant in the global economy in the 19th century, whilst the 20th century saw the USA dominate the world economic stage. The 21st century sees the Asia Pacific region come to the forefront. One of his key points was the substantial growth that will be seen in the Asia Pacific region, which is home to 60 percent of the world’s population. Sentance stated that the end of 2007/8 marked the end of a long and sustained expansion in the UK and other Western Countries, and the conditions that supported this growth were not set to return. These growth drivers included cheap imports, easy money and confidence in policy regime. Sentance concluded that the global outlook for 2014 is improving and that there “is an innate human desire to travel.”

The next session saw Anita Mendiratta, Founder & Managing Director, CACHET Consulting, in conversation with Taleb Rifai, secretary-general of the World Tourism Organization (UNWTO) and David Scowsill, president & CEO of the World Travel & Tourism Council (WTTC). The session opened with the statistic that 1 billion people crossed international borders in 2012. That figure is projected to increase to 1.8 billion in 2030. Travel and tourism employs 266 million people globally, and contributes $USD 6.8 trillion, or 9 percent of the global economy. Scowsill said that it was important that both the WTTC and UNWTO were up to speed with the issues facing the international hotel investment community as both he and Rifai are able to address these routinely with the international heads of state.

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Scowsill said that he was conscious that better communication channels were required with the investment community and forums such as the IHIF significantly assist with this. According to Rifai, “travel and tourism is the industry of the future,” and he stated that one in seven people globally make an international visit each year. Asked by Mendiratta what they considered the key opportunities for the next five to 10 years, Rifai responded that “travel is becoming not only a human need, but a human right” and expects 3.3 – 3.5 percent growth between now and 2013. Scowsill noted that disappointingly, less than 20 percent of people who study and train in travel and tourism end up working in the industry. There needs to be a change in perception; the travel and tourism industry should be seen as a positive and long lasting career choice.

The next panel to take to the stage was ‘The World According to the Global CEOs,’ moderated by Michael Hirst OBE, consultant, CBRE Hotels. Hirst was joined by Jim Abrahamson, president & CEO, Interstate Hotels & Resorts; Sébastien Bazin, chairman & CEO, Accor; Henri Giscard d'Estaing, chairman & CEO, Club Méditerranée and Michael Glennie, president & COO, FRHI Hotels & Resorts. Hirst opened the session by asking each panellist for their snapshot of 2013. Abrahamson said that Interstate had seen an 8 percent increase in RevPAR in the US. They have 83 hotels in Europe, 13 in Russia and were seeing strong performance in the UK. Looking at the UK specifically, Abramson mentioned they were seeing good recovery amongst their UK provincial hotels.

Bazin stated that Accor had just reported a 6% increase in operating profit across the brand, but are still seeing weak operating in France. He also said that “one Ibis opens every three days around the world.” d'Estaing said that whilst he would have preferred a “more sexy growth”, they were still seeing positive growth in Asia, including China, as well as in North and Latin America. Glennie said that the US had seen a terrific rebound and that Asian performance was good. Abrahamson announced that Interstate manages over 40 brands and that those in newer markets were performing the best. Bazin stated that the leisure industry has a lot to learn when it comes to the innovations seen in the mobile phone technology market. He also questioned the need to form strategy alliances.

Abrahamson acknowledged that the “industry has been behind the times when it comes to technology,” and that revenue management and social media investment, research and development were priorities for Interstate. Glennie stated that it was important to note that “the customer today brings their own content with them” and FRHI must be able to facilitate this. The session concluded with Hirst asking what drives and motivates each panellist. Abrahamson said it was the “passion for developing the future CEOs,” and he was “constantly excited by the exciting changes taking place in the industry.” He feels we are moving away from a “bricks and mortar culture towards a service culture.” Bazin said he “is convinced that Accor has it all and can control its own destiny. We are the biggest hotel operator in the world by number of bedrooms and larger than the second, third and fourth operator put together.” d'Estaing is confident that Club Med “has the ability to grow the company on an international level,” whilst Glennie responded that the “untapped growth potential is what is moving us forward. They are still small enough to really shape our brands.”

The plenary sessions concluded with the presentation of the Lifetime Achievement Award to Ian Schrager, chairman & CEO, Ian Schrager Company. On receiving his award, Schrager shared “I consider myself so incredibly lucky to be able to spend my life doing something I love,” and that he is “truly honoured” to receive the award. Schrager said he sees himself as a social scientist and “likes to get a feeling for what is in the air, capture it and build it into a hotel.” Ömer Isvan, president, Servotel Corporation, presented the award to Schrager, and asked the recipient “where is the balance between asking the guest to tell you what they want and telling them what they want?” Schrager replied that “we are a service business and the customer is king. There is a collective unconsciousness and that is what you need to tap into.” On his relationship with Marriott, Schrager said he “considers the collaboration with Marriott to be the culmination of my career. We pursue excellence, are incredibly competitive and want the best.”

The IHIF, the International Hotel Investment Forum, takes place in Berlin from March 3-6 and is owned by Questex Media. The three-day conference is the leading annual meeting place for the hospitality industry, and unites global industry professionals to help expand business worldwide.

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