IHIF: Colliers execs on Airbnb, Brexit and what's ahead for European investment

BERLIN, Germany — At IHIF 2017 in Berlin, Questex Hospitality Editor-in-Chief David Eisen spoke with Dirk Bakker, head of EMEA Hotels at Colliers International; Clive Hillier, asset management, Colliers International; and Marc Finney, head of hotels & resort consulting at Colliers International about why Airbnb is growing, how the Brexit has changed investment in UK hotels and how Europe is adjusting to new normals.

Video of the interview can be found below, along with highlights from the conversation.

1. Supply is lagging behind demand—and giving Airbnb room to grow

Thanks to low-cost airlines, travel numbers are steadily growing. In 2012, the numbers hit 1 billion, and by 2015, overall arrivals had reached 1.2 billion. "That growth is a compounded annual growth rate of 5 percent going forward," Bakker said. 

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But, he noted, supply is lagging behind at 2 percent, leaving a gap of 3 percent that needs to be filled. That, he said, is where Airbnb and homesharing service shave jumped in. "We just don’t have enough supply."

Last year, Bakker said, Amsterdam saw a 474-percent growth of Airbnb usage. In the same period, hotel occupancy in the city increased by 8 percent and supply increased by 12 percent, while rates went up by 14 percent.

2. Europe is adjusting to a new normal

In the wake of terror attacks and dramatic elections, Europe seems to be holding steady. "The Brexit hasn’t really had an effect," Bakker said.

France and Brussels, meanwhile, are recovering from recent terror attacks that hurt visitor numbers. Paris, however, is on the rebound, although Bakker noted that the recovery has taken some time. "France hasn’t had much shock yet," he said. "This was two times they got hit bad. That hurt the economy for a year."

"We are getting used to shocks," Hillier said, "and whether they are terrorist shocks [or] political shocks, we are becoming immune to them." 

3. Europe's investment scene is changing

Private equity in the UK, Hillier said, is almost completely flat. "In fact, they will be divesting now over the next few years of products that they bought into over the last few years." The Brexit brought the shutter down, he said, "but it was a shutter that was coming down anyway, because they were pretty much sated on their investment in the UK." 

Now, he said, investors are eyeing central Europe, where there’s "ample product" available with distressed bank lending.

This puts the UK and mainland Europe in very different positions, Bakker said. "The UK is a seller’s market at the moment, and in Europe, it’s the other way around." Germany and Holland have "an enormous amount of new supply coming in," while portfolios are changing hands in the UK. 

4. Mergers & Acquisitions are affecting brand identities

Now that the Marriott/Starwood merger has been finalized, Hillier said, the industry will be watching to see how it fares with 30 brands. The number of brands in the industry "grows every Thursday," he quipped, but wondered if it was ultimately diminishing the value of the parent brand. "Do clients now realize that in checking into a Curio, they are getting a Hilton?" he said. "And then the second question is—who’s next?" 

AccorHotels has also sought to capture new demographics by investing in new types of accommodations like OneFineStay and 25Hours. "What we haven’t seen yet is what they’ve done with those acquisitions," Finney said. With AccorHotels' spin-off of HotelInvest, Finney predicted, the company is poised to attract a whole new range of owners."Maybe one big owner or a series of smaller owners."

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