Left to right: Arthur de Haast, Jones Lang LaSalle; Cody Bradshaw, Starwood Capital Group; Andres Braks, EVENT Hotels; Peter Norman, Hyatt International, John Ozinga, HotelInvest/AccorHotels
Several of the major European hotel players arrived in Cannes and sat down to discuss how to compete and maintain their growth in a constantly evolving market. The highly charged feeling in the room came with little surprise as they quickly acknowledged the current state of the market. Topics of discussion ranged from the giant mergers to disrupters such as onefinestay and Airbnb.
Jumping right into the action, moderator Arthur de Haast of Jones Lang & LaSalle asked about the mergers, particularly what the immediate and long term implications might be? Anders Braks, CEO of EVENT Hotels, didn’t hesitate to admit that, “the growth for the hotel brands is not the solution.” He continued, “Just doubling in size doesn’t function. If they are slow now, they’ll be twice as slow later.” However, Peter Norman of Hyatt International sees things differently, suggesting that the mergers will spur innovation, bring to light what’s really working and allow the hotel groups to keep up with the market place.
It didn’t take long for the panel to transition the conversation into holiday & vacation rentals, with Starwood Capital’s Cody Bradshaw stating that, “the hotel industry is being attacked on all sides by disrupters,” and the rest of the panel expressing no disagreement. Interestingly, it appears the hotel industry believes they have something to learn from the new competitors. John Ozinga, of hotel giant Accor, acknowledged two recent purchases, a 49% stake in Squarebreak, an online service offering upscale properties in resorts across Europe as well as a complimentary purchase of a 30% stake in Oasis Collections, an online private rental service that caters more to leisure and corporate travelers.
Hyatt’s Peter Norman also acknowledged his company’s recent investment in onefinestay, a popular European online vacation-rental booking site. When pressed about what they hope to accomplish, they really couldn’t say. Ozinga admitted that they’re really, “just getting our feet into it” and that it would likely take 2-3 years to see how the two different styles of accommodations would mesh. However, Ozinga was able to sum up their position that with the new acquisitions they’re “hoping to find synergies and learn” from their rapidly-growing competitors. “We need to target the millennials,” he added.
Norman, of Hyatt, made the argument that Airbnb is very much adjacent and complimentary to the hotel industry, shows what the customer is looking for and that it will just become another facet of the hotel industry. He also added that, “Airbnb is not going to disappear.” Perhaps the most striking comment was from Cody Bradshaw of Starwood Capital, who when discussing hotel’s shortcomings said, “you can stay in somebody’s flat and get better service than you can in most hotels,” but also added, “Airbnb, they’re not idiots, they know where they fall short.” Mr. Bradshaw was also quick to point out that Airbnb’s impact is mostly, “skimming form the top of high compression periods,” meaning the hotels are mostly feeling the pinch when a large event comes to town.
The hotel industry is clearly evolving, using tools such as mergers, acquisitions and consumer research. While they don’t know for certain where the industry is headed, it appears they are making investments to be prepared to go multiple directions.
*While not quoted, a big thank you to Adam Maclennan of PKF Hotelexperts in helping write this entry.