Author: Suzi Johnson

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IHG to launch new all-suites upper midscale brand

InterContinental Hotels Group (IHG) has announced plans to launch a new all-suites upper midscale brand in its preliminary 2018 financial results.

The company said launching the new brand this year would build on its “existing mainstream strength”, targeting an $18b (£14b) industry segment where strong guest and owner demand has driven around a 70% increase in room supply in the last four years.

The group reported total revenue for the year of $4.34b (£3.36m), an increase of 6% on the previous year, and operating profit of $670m (£519m), down 7%.

Global revenue per available room (revpar) increased 2.5% and IHG also announced it was raising the total dividend for the year by 10% and follows the payment of a $500m (£387m) special dividend in January 2019, taking total shareholder returns announced for the year to more than $700m (£542m).

The hotel company reported its strongest net system size growth in a decade of 4.8% including the addition of 56,000 room additions, up 17% year on year. After the removal of 18,000 rooms, this leaves IHG with 837,000 rooms globally.

Chief executive Keith Barr said: “We have made excellent progress in 2018 executing against the strategic initiatives I set out a year ago to accelerate our growth, whilst delivering a strong financial performance. The investments we have made have had a significant impact, allowing us to further evolve our established brands, move quickly to strengthen our portfolio both organically and by acquisition, and create real momentum in our business.

“Our strategic focus on accelerating our net rooms growth helped drive a net system size increase of 4.8%, and our best performance for both openings and signings in a decade, leaving us well-positioned for future growth.

“The investments we have made have been funded through our group efficiency programme which is on track to deliver $125m (£97m) of annual savings by 2020. We have successfully implemented a more efficient and agile organisational structure while building resources and capabilities focused on the most attractive growth opportunities.

“The fundamentals of our business remain strong, and while there are macro-economic and geopolitical uncertainties in some markets, we are confident in the year ahead and that our strategy will deliver industry-leading net rooms growth over the medium term.”

The group’s revpar in the UK grew just 1%, with London up 3% and the provinces flat. Fourth quarter revpar in the UK was up 4%, with strong leisure demand driving revpar in London up 10%, while the provinces were up just 1%.

2018 saw IHG acquire Principal with Covivio, enabling it to convert properties into the group’s first UK Voco and Kimpton hotels; as well as its acquisition of the luxury Regent Hotels & Resorts brand. IHG announced its acquisition of Six Senses Hotels Resorts Spas just last week for £232m.

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Travel buyers not impressed with new technology

Travel buyers are yet to be convinced by next generation technology, according to new Business Travel Show research.

More than half of the 134 European buyers polled believe that bots, Blockchain and alternative realities – such as augmented and virtual reality – will have minimal to no impact on the industry over the next three years. And just one fifth of buyers believe the technology will ‘significantly improve booking, saving time and money’ by 2022.

There appears to be marginally more faith in the opportunities presented by artificial intelligence (AI): 17 per cent believe it has the potential to ‘revolutionise’ the travel industry by 2022, one quarter feel it will ‘significantly enhance the traveller experience’ in that time, and just 39 per cent reckon it will have little or no impact.

Interestingly, the survey – which is part of the Business Travel Show’s ‘Travel 2022’ theme – also asked buyers how the industry will best survive the next three years. Despite the apparent nonchalance surrounding new technology, two thirds of those polled claim its survival will depend on innovation; 30 per cent believe it will be through evolution. Just 4 per cent think the sector needs a total reboot.

We Build Bots founder Paul Shepherd, who is taking part in a panel session about bots at the show, said: “When built and used correctly, chatbots can transform customer service, increase efficiencies and even help companies to save and make money. Multinational airlines and online travel sites would offer a competitive advantage if they were to offer a full integrated chatbot using AI and machine learning combined with customer service agent support in order to deliver a 24/7/365 intuitive service.”

Over the next three years, he said, “Natural Language Processing (NLP) will continue to improve, which means that chatbots will become easier and more intuitive to interact with. As well as this, the rise in voice will continue to have a huge impact. The possibilities of using voice are endless. Imagine asking your smart home device to check you into your next flight and receiving your boarding pass directly into your inbox. Or alternatively, ask it to search for a holiday that meets your needs, whether that be in school holidays, a particular temperature or less than a four-hour flight away. Chatbots use of voice is improving and evolving consistently and going forward, we’re sure to see huge developments in this space.”

The Business Travel Show is taking place on 20- 21 February 2019 at Olympia London.

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New HBAA Executive Committee train to be Mental Health First Aiders

As the first step in the HBAA’s 2019 major initiative to encourage action on mental health issues in the event industry, the new HBAA Executive Committee members have been trained to be Mental Health First Aiders.

The two-day course at Wyboston Lakes Resort gave the Committee members many valuable practical skills and increased their awareness and understanding of what affects mental wellbeing. The course taught them how to spot triggers and signs of mental health issues and gave them enhanced non-judgemental interpersonal skills. They also learnt how to reassure and support a person in distress and how to help someone recover their health.

The HBAA is arranging for this course to be available to members, setting up open courses to take place in April and June.

After completing the course Angie Mason, HBAA Chair said: “The last two days have been so enlightening. It totally reinforced in my mind what a vital issue this is and how important our campaign is. There is so much that most of us don’t know about mental health issues so we want as many people as possible to sign up for these courses. Anyone could save a life.”

The HBAA Executive Committee, which comprises the Committee Chairs and Past Chairs, has three new members for 2019.

Alexis Moreau is the new HBAA Tech & Innovation Chair and Lex Butler is the new HBAA Events Committee Chair for 2019 while Nick Scott of ArrangeMY now chairs the Business Accommodation Committee.

Nick Scott joined ArrangeMY in 2004 and has been Managing Director since 2008.

Alexis Moreau - Head of Conference and Catering Services at Robinson College at the University of Cambridge.

Alexis Moreau is the Head of Conference and Catering Services at Robinson College at the University of Cambridge.
Lex Butler - Creative Director and Owner of Wolf & White.

Lex Butler is the Creative Director and Owner of Wolf & White.
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Challenges ahead warns Millennium & Copthorne

Millennium and Copthorne Hotels has warned investors that the hospitality industry faces ‘intensifying’ challenges in the near future in the form of staff shortages and competition from the growth of Airbnb and serviced apartments.

The company’s chairman Kwek Leng Beng made the comments as it revealed a drop in pre-tax profit for 2018 to £106 million – down 28 per cent on 2017 in constant currency. The fourth quarter was particularly hard, with profits falling 76 per cent to £7 million.

Beng blamed “a range of geopolitical and global economic headwinds”, including US and China trade relations, Brexit and increasing minimum wage levels in several markets.

The company also saw revenue per available room fall 7.4 per cent in London, mostly driven by the closure of its Mayfair hotel for refurbishment. Excluding that property, revenue grew 3.3 per cent. The hotel is set to reopen as the Biltmore, Mayfair in the second quarter of this year (new bedroom pictured).

Millennium and Copthorne says a particular challenge in the UK is the effect of Brexit. It claims to be struggling to recruit EU workers, “which currently comprise more than half of the London workforce”. Minimum wage increases in the UK have also reportedly added to cost pressures for the group.

Looking ahead, Beng said: “The board’s priority is to evaluate and develop new and innovative strategic plans to meet the challenges facing our fast-changing operating environment. The shortage of talent – from rank and file to senior management – is intensifying with many new hotels being built around the world, not to mention the growth of Airbnb and serviced apartments. Any hospitality business that wants to progress will need to evolve and embrace these changes to stay relevant and profitable in the immediate and medium term. Restoring profitability in our New York hotels also remains at the top of the board’s objectives.

“Meanwhile, we continue to invest in and reposition our hotels. We look forward to our Mayfair hotel being rebranded and opened as the Biltmore, Mayfair in the second quarter of this year. This is the first opening under Hilton’s new LXR Hotels & Resorts collection in Europe. This also will mark the group’s debut in the London five-star deluxe market and it is our aim to fast-track our lost earnings growth at this hotel after it re-opens.

“2019 will be another challenging year for the group, with significant capital projects underway and several large hotels earmarked for major renovations. These investments will be carefully managed and phased to deliver the right returns to shareholder and underline the group’s intention to maintain strict control of costs throughout the business.”

Millennium and Copthorne Hotels operates the Leng’s Collection, M Social, Studio M, Millennium, Grand Millennium, M Hotel, Copthorne and Kingsgate brands.

In September 2018, the group’s CEO Jennifer Fox stepped down after just three months in the role.

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RBH properties boosted by customer service recognition

Several properties operated by UK independent hotel management company, RBH, have been given the BVA BDRC seal of approval following glowing customer service feedback.

Nine hotels within the RBH portfolio were named among BVA BDRC’s VenueVerdict Gold Standard Accreditations, with a further nine properties commended for their performance in 2018.

The recognition comes from the only meetings accreditation programme driven solely by the voice of the customer, with scores generated following event feedback from meeting bookers and event hosts between January and December 2018.

The hotels which have achieved BVA BDRC Gold Standard Accreditations for 2018 are:

Ashford International Hotel, Chesford Grange Hotel, Crowne Plaza London – Docklands, Crowne Plaza Reading, DoubleTree by Hilton Glasgow Westerwood Spa & Golf Resort, Dunston Hall, The Cheltenham Chase Hotel, Doubletree by Hilton Oxford Belfry and The Queens.

Rob Ledson, group director of Sales at RBH, said: “Our properties have consistently produced exceptional VenueVerdict scores over recent years, and 2018 was no exception.

“It goes without saying that we’re thrilled to see our teams’ hard work and commitment to providing first class service and facilities for meetings and events clients recognised. Our focus is to ensure these standards are maintained in 2019.”

BVA BDRC is the UK’s largest independent research consultancy and BVA BDRC VenueVerdict accreditations are based entirely on genuine, verified customer feedback, reflecting the cream of the nation’s meetings providers.

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IHG acquires Six Senses for £232m

InterContinental Hotels Group (IHG) has acquired Six Senses Hotels Resorts Spas for $300m (£232m) from Pegasus Capital Advisors.

The cash acquisition includes all of Six Senses’ brands and operating companies but not real estate assets.

Six Senses manages 16 hotels and resorts, with 18 management contracts signed into its pipeline, and more than 50 further deals under active discussion, adding to IHG’s luxury portfolio.

Six Senses will sit at the top of IHG’s luxury portfolio, complementing its InterContinental Hotels & Resorts brand; the recently acquired and repositioned Regent Hotels & Resorts and Kimpton Hotels & Restaurants. The acquisition takes IHG’s portfolio of open and pipeline luxury properties to 400 hotels (108,000 rooms) globally.

IHG has revealed plans to grow the Six Senses estate to more than 60 properties globally over the next 10 years, including bringing Six Senses to urban markets, with a property already under construction in Manhattan, New York City.

Keith Barr, chief executive of IHG, said: “Six Senses is an outstanding brand in the top-tier of luxury and one we’ve admired for some time. You only have to look at its iconic hotels and resorts to see how this acquisition will further round out our luxury offer.

“This acquisition continues the progress we’ve made against the strategic initiatives we outlined a year ago, which included a commitment to adding new brands in the fast-growing $60b (£46b) luxury segment.”

Neil Jacobs, chief executive of Six Senses Hotels Resorts Spas, said: “An outstanding business has been built over the past 20 years, and a respected portfolio of hotels and resorts, with wellness and sustainability at their heart. This distinct proposition and the popularity of our award-winning estate, combined with IHG’s scale, systems and expertise gives us the opportunity to accelerate Six Senses’ global growth.”

David Cogut, principal, Pegasus Capital Advisors, added: “Six Senses fit well with our core themes of investing in sustainability and wellness with a focus on ESG (Environmental, Social and Governance) integration, and we’re proud of the work we have done to build it into one of the world’s best luxury hotel brands. Since acquiring the brand in 2012, we have taken the Six Senses experience to some of the world’s most select locations. IHG shares many of our values and will protect what’s special about the brand as it drives Six Senses’ next phase of growth.”

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Proposed cuts by City Council to Convention Bureau budget condemned by Edinburgh’s academic leaders

More than 75 of Edinburgh’s most respected academics and researchers have united in their condemnation of the proposed 2019/20 budget cuts to Marketing Edinburgh, as drafted by the City of Edinburgh Council last month.

Speaking in support of Convention Edinburgh, the business tourism arm of Marketing Edinburgh, leaders from across fields including medical sciences, paediatrics, ecology and data sciences, have voiced their concern that the cuts would not only damage the city’s future as a superior conference and meeting destination, but the ‘world-leading academic ecosystem’ Edinburgh is renowned for.

More than 75 members of the ‘Edinburgh Ambassador’ Programme, managed by Convention Edinburgh, have voiced their concerns through letters to councillors or by submitting their views through the City of Edinburgh Council consultation hub. Between them, they represent some ofEdinburgh’s most respected business, scientific and academic institutions, including all four of the city’s universities, Roslin Innovation Centre and Edinburgh Royal Infirmary. They have all worked or are currently working closely with Convention Edinburgh to bring prestigious and valuable conferences to the city, which have a lasting legacy for the Scottish Capital. From research collaboration to driving forward innovation, hosting conferences in Edinburgh benefits the city in the long term through economic and social progress.

With Marketing Edinburgh facing 89% budget cuts over the next two years, a reduction of £790,000, the future of the organisation and the Edinburgh Ambassador Programme is in jeopardy. This is a group of more than 540 academics and industry leaders who Convention Edinburgh support to bring conferences to Edinburgh.  Since 1998, Edinburgh Ambassadors have secured 1,348 conferences with 528,605 delegates to Edinburgh which resulted in an economic impact of £900M for the city. 

Felicity Mehendale, honorary senior clinical lecturer at the University of Edinburgh, said: “Without the professional expertise and help from Marketing Edinburgh, I would not have been successful in winning the bid for the four-yearly International Cleft Conference in 2021 – this will be the first time it has ever been held in the UK.

“Winning bids for prestigious international congresses brings significant business to Edinburgh and many repeat visitors. However, bidding is now extremely competitive, and we simply cannot rely solely upon the academic reputation of Edinburgh – we absolutely need an organisation like Marketing Edinburgh to help with the many aspects of conference bidding which is beyond our remit as academics.”

In a letter to City of Edinburgh Council, Dr Richard Reardon, senior lecturer in Equine Surgery, The University of Edinburgh University said: “Removing more than £0.5M from Marketing Edinburgh’s financial plans would leave Scotland’s Capital as the only major city in the developed world without a Convention Bureau. Who else will champion Edinburgh on a national and global scale as a conference destination? Who else will act as the critical lynchpin between academia and the city, leading on city bids and persuading associations to hold their conferences in Edinburgh? As plans currently stand, no-one will. I would ask that all Councillors play your part in ensuring their survival.”

Professor Jessie Kennedy Dean, research and innovation office, Edinburgh Napier University said: “Convention Edinburgh has assisted me in bringing several conferences to the city, without their help this would have been less likely to happen. Running conferences is work over and above normal academic duties, which brings esteem to the University, in addition to the economic benefits to the city and therefore plays a vital role in the success of Edinburgh’s institutions.”

Brian Corcoran, CEO, Turing Festival said: “Turing Fest brings many business visitors into Edinburgh every year. Our mission is to take that number – of investors, entrepreneurs, start-ups, global tech companies, technical talent, customers – up to 10,000 over the next few years, which will help establish Edinburgh internationally as one of Europe’s best tech hubs. Marketing Edinburgh has been a great support to us in our journey so far – helping source venues and hotels and creating synergies by connecting us to other operators in the city.

“Frankly, we are much more likely to be successful in creating the UK’s flagship tech conference in Edinburgh if there are resources like Marketing Edinburgh in place to help us.”

Amanda Ferguson, head of business tourism, Convention Edinburgh said: “Conferences foster knowledge exchange, innovation and networking, attracting world-leading specialists as delegates and speakers. As host city, this is a unique opportunity to showcase their research and Edinburgh’s strength in that field. This results in collaborative research, investment and ultimately jobs.

“Reducing our budget by such a large amount means we would no longer be able to support our ambassadors to bring conferences to the city and thereby deny the city important economic impact and opportunity to show case the strength of our knowledge economy.

“Without a body that unites public and private sectors in the city’s promotion and economic development, we will severely compromise Edinburgh’s ability to attract conferences. I would ask that Edinburgh’s Councillors work with us to find an alternative solution that will not jeopardise the good work underway by Marketing Edinburgh and our ambassadors.”

Business tourism is a significant contributor to the Edinburgh economy with delegates spending double that of a typical leisure tourist and critically coming out with the busy summer months. This helps sustain a year-round tourism sector in Edinburgh.  In 17/18 Convention Edinburgh confirmed 108 conferences, meetings and other corporate events with a total economic impact of £72m.

Edinburgh Councillors will vote on the city’s 2019/20 proposed budget on 21 February.

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New partnership between London and Paris for joint incentive experience

The official convention bureau for London and Paris have announced a new partnership which they claim will see the two cities working together for the first time to deliver a “unique two-in-one incentive trip”.

The agreement is aimed at inspiring North American incentive buyers to book a 2-in-1 trip for their clients. 

The itineraries have been curated to showcase how easy it is to enjoy both cities in one incentive trip and includes an official partnership with Eurostar.

Joshua Novick, VP Business Tourism at London Convention Bureau said: “London and Paris are two of the world’s top business and leisure travel destinations, making this a really powerful offer for incentive planners. With so many great hotels, cultural attractions, parks, restaurants and experiences, we are excited to be able to bring such a unique incentive offering to the market. London is open to collaboration with other likeminded, global cities and by working together as we are doing in this way, we can offer a once-in-a-lifetime incentive travel experience that allows delegates to experience two amazing cities in one epic trip.”

Corinne Menegaux, general manager of the Paris Convention and Visitors Bureau added: “Paris & London are an ideal 2-in-1 destination to hold a conference or an incentive. These cities are internationally renowned for numerous reasons such as the quality of their infrastructures, their trendy hotels and innovative activities. Both cities combine leisure & business attractions that are the keys to successful events and they have a constantly evolving offer to make the ‘Old World’ very attractive! If you’re looking for an unusual place to organize a meeting or a dinner, the two capitals are available for private hire, with a wide range of venues ranging from iconic museums to cutting-edge galleries and revolutionary conference centres.”

Inge Bauwens, lead sales manager, Eurostar concluded: “It’s easy to fit the best of London and Paris in to a single trip, with a seamless Eurostar journey between the two cities in just over two hours. For those looking to make the journey even more enjoyable, groups that have booked an entire coach can add an exclusive experience on board, with themes ranging from food and drink to arts and culture available to entertain guests whilst they travel.”

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2019 will continue to see high levels of cross-border investment

The strong levels of cross-border investment into the European hotel market – which reached $4.9b (£3.8b) in 2018 – will continue in 2019.

The JLL’s Hotel Investment Outlook 2019 predicts that, despite political uncertainty, tourism and business fundamentals remain solid thanks to strong infrastructure developments in the region, which will continue to attract international investors towards strong assets and opportunities in these markets.

Germany and the UK account for nearly 60% of pipeline rooms currently under construction and are expected to absorb additional supply in the medium term due to strong tourism growth forecasts.

The report predicts that the European hotel market will be driven mostly by single asset deals, with portfolio trades expected to reduce, given the significant volumes of transaction of this type seen over the past two years. Overall investment volumes across Europe, the Middle East and Africa are expected to soften to $21.2b (£16.3b) from $22.9b £17.6b) in 2018.

It also predicts the sector will see new investors emerging, with diverse sources of core and core-plus capital are increasingly considering investment in the hotel market, and an increase in hotels entering the flexible workspace market transforming hotel lobbies into communal workspaces.

Philip Ward, EMEA CEO, JLL Hotels & Hospitality Group, said: “Political uncertainty and the volatility in equity markets will test investors’ sentiment throughout the year. However, we expect hotel investment volumes to hold steady on 2018 levels owing to hotels’ attractive yield profile compared to other sectors.”

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Tourism industry confident despite Brexit, says UKinbound research

The research, which was collected by Qa Research, found that 59% of UKinbound members stated they were confident about business in the upcoming 12 months. This was the highest rate recorded since October 2017.

The increase in confidence was influenced by an influx of forward bookings, the value of the pound, and increased interest from North American and Asian markets.

Business also signalled that the number one activity they’re expecting to be most in demand from inbound tourists are cultural experiences, followed by ‘bespoke activities’.

However, businesses also stated the industry faces a number of problems in the upcoming months, notably the uncertainty around Brexit.

Staff recruitment and retention, improving the UK’s product offering and offers for visitors, attracting visitors from new markets, and currency fluctuations were also cited as general concerns.

A review of 2018 found a few interesting statistics:

  • Throughout 2018 China and the US remained the two top growth markets
  • Less than a third (28%) of members felt that over-tourism has a negative impact on their business
  • A key challenge for many members continued to be the reduction of available EU workers

UKinbound CEO Joss Croft commented: “It is encouraging that even with the uncertainty surrounding Brexit, our latest Business Barometer shows that forward bookings are strong and that there is an increase in confidence levels amongst some of our members.

“However, we remain concerned about the Government’s proposed immigration strategy post-Brexit, which will look to restrict employing EU nationals to those only earning over £30k. 

“Recruitment and retention of staff in the industry is already a challenge – due in part to Brexit, and this proposed restriction could have a real impact on the industry, which relies heavily on its EU employees due to their language and customer service skills.”