Novum Group CEO: 'The hotel brand world is in chaos'

(IHIF 2018)

When the 21st International Hotel Investment Forum (IHIF) kicks off in Berlin in early March, leaders and influencers from the global hospitality industry will meet to talk trends, strike deals and determine the course 2018 will take for the sector. 

David Etmenan, CEO and owner of the Hamburg-based Novum Group, will be part of the "Spotlight on the Hottest Markets: CEOs Talk Development" panel, joining several other leaders to discuss investment opportunities in different regions of the world, and where these influencers are focusing their development strategies for the years to come. 

Ahead of the conference, IHIF caught up with Etmenan to talk about the major trends facing the industry, strategies to grow profits and why the growth of new brands is causing "chaos."

1. What hospitality trends and storylines will dominate discussion at IHIF and why?

Digitalization is still a major driver for innovation and the hotel industry has a lot of catching up to do with regards to this topic. Moreover, we currently see a comprehensive solution for digital check-in and check-out as a technical challenge, whilst this service is steadily gaining in relevance. In this context, the hospitality industry will need to digitize hotel rooms, as is the case with the smart-home concept. Intuitive control of TVs, lighting, room service and others—be it via app or voice assistant—will conquer the future hotel rooms. Of course the increased digitalization also influences the storylines in the sense of "form follows function." Thus, the "living room character" will establish itself permanently,detached from any temporary trend, but evolving due to the progressing digitalization–in accordance to the guest’s expectations. Those hotel brands that remain authentic in storytelling and dare to engage in restructuring will prevail.

2. What are the markets/countries that you looking at for future development and what makes them an attractive investment?

DACH (Deutschland, Austria and Switzerland) is and will remain our core market. In addition, we are expanding into the Netherlands and Hungary. Spain, UK and Ireland, Scandinavia and Poland are under scrutiny for our brand niu.

3. With so many brands in the marketplace, what makes them a success and are they differentiated enough in the market? Do both customers and developers understand the differences?

From our point of view, the hotel brand world is in chaos. New brands are constantly being launched and there is a lack of differentiation and transparency about which market elements are even addressed. Guests are not able to differentiate within this extensive brand landscape and even developers are losing track. Nevertheless, most brands have their justification and work because of their mass-oriented concepts.

David Etmenan

4. What are the strategies hotels are employing now to boost revenue and curb costs?

Personnel costs are reduced with the help of new technologies, such as self-check-in and self-check-out or virtual assistants which replace the concierge. New processes, structures and synergies, such as combining the bartender and receptionist, are also innovations increasing the efficiency with regards to personnel management. Nevertheless, the human component must not be neglected. The guest wants to be able to check in and out flexibly, as is the case with airlines, but service and personal contact is still desired and must be available. 

5. How has the role of new technology, home-sharing disruption and online travel agencies impacted your business?

We perceive the development as positive and as a new possibility to address the guest. We do not consider the OTAs and home-sharing concepts as competitors.The market was rightly agitated and made the hotel industry aware of what the target groups want. In doing so, we are being inspired how we can exceed the guests’ expectations as supposed to what OTAs [and others] can offer. Our experience and growth over the past years have also shown us that we do not have to be afraid of new concepts as we have not broken any business. Rather, it is likely that international brands will lose value in terms of distribution channels.

6. What has been keeping you busy in the past year and what will you be focusing on in the year to come?

Novum Hospitality can look back on an eventful year. We have restructured and further developed ourselves as an employer and, in addition to numerous takeovers, launched the niu brand and prepared its rollout. This will continue to occupy us in the coming years. We will continue to focus on our development as an employer brand and are excited to open our first niu hotels.

The International Hotel Investment Forum is March 5-7, 2018, at the InterContinental Berlin. Find out more at ihif.com