Impressions from Expo Real 2009 – An exploration through hospitality
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| "We love hotels" - the GBI slogan at the Expo Real booth. |
Munich (October 9, 2009). Rationality and quality are back. The financial and economic crisis also has positive effects, as could be seen at Expo Real, Europe''s leading commercial real estate fair, this week. The exhibition halls were well filled despite the crisis and some (city) stands made visitors marvel just at their size. Russian and Arabian exhibitors were obviously missing. There was general consent about the desire for content and clues in the current situation. Therefore, the Expo Real forums were well frequented.
The "Hospitality Industry Dialogue" hotel conference was also happy about well-attended panel discussions, and the first networking event staged by hospitalityInside and Expo Real on Monday evening was subsequently a great success. The sign of the times points to those showing seriousness, competence and endurance. The only drop of bitterness: the investment speed has slowed down substantially – in the hospitality industry, too.
"The overall mood is very realistic – neither depressed nor enthusiastic," says Ulrike Schueler, Partner of PKF hotelexperts Munich, describing the basic feeling at Expo Real. "Compared to the previous year, we''re not being overrun by appointments," compares Juergen Pehrisch, Asset Manager Hotels at Union Investment Real Estate AG in Hamburg. "The talks are much more intense and better in terms of quality," he says summing up.
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| Will "credit bottleneck" become the faux-pas word of the year? These two bank managers are still happy with hotels: Dirk Schuldes of Eurohypo (l.) and Uwe Niemann of Deutsche Hypo, having fun during the GBI reception. |
A lot of those people hospitalityInside.com talked to at the stands and in the hallways agreed in this respect. Juergen Pehrisch, however, put things into perspective on the topic of project talks: "We don''t want new projects;" he says with respect to numerous offers, "we would preferably buy hotels that have been on the market for three to four years with a track record hinting at sustainability." However, there still seem to be numerous offers for hotel projects.
Accordingly, Michael Kirschner, Corporate Manager Development at ArabellaStarwood Hotels, is happy about the fact that his company is offered projects of better quality solely at top locations, even in small towns. There are still enough projects on the market, confirms a project developer from Frankfurt; however, planning and financing took twice as long as usual. The projects got literally stuck in the bottle neck called banks (see below).
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| For the first time, the Schoerghuber Unternehmensgruppe presents its hotel group at the booth. |
Consultancies like PKF hotelexperts with common stands for their offices in Munich and Vienna at Expo Real, reflect the various interests in manifold nuances. Accordingly, the consultants from Vienna report a lot more orders for repositioning hotels and having to carry out evaluations of existing properties time and again. When it comes to new projects, clients often request that a corresponding operator be found at the same time. "Overall, consulting has strongly increased," says Jakob Forstnig, Senior Consultant, who recently switched over from Mountain Capital London to PKF hotelexperts in Vienna.
The hotel conference on Monday produced several different evaluations as to whether and how many banks are still willing to finance hotels. "Banks analyse everything very thoroughly," says Guide Schuerken, Associate Director at Christie + Co. in Duesseldorf. "There seems to be almost solely regional financing." This trend became significant in the final panel at the hotel conference, when Antje Zumsande, Hotel Real Estate Consultant, quoted her results from a bank survey (details will be stated in the next issue).
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| Hotels in Tbilisi - marketed by the city at Expo Real. |
The "Hospitality Industry Dialogue" reflected the details of the market with its mixture of topics and panel discussions arranged for the second time by Maria Puetz-Willems, Editor-in-Chief of hospitalityInside.com. Accordingly, there hardly seems to be any moving together of investors/banks and operators: both parties fear the risk. It is said, that, above all, banks are increasingly refusing management agreements – and on the other hand, operators fear lease obligations.
Agreeing on a hybrid contract mentioned on many occasions, requires both sides to give in – and that seems to be something not everyone is ready to do. At "hallway talks" during Expo Real, insiders said that hardly any hybrid agreements had been realised so far.
Martin Bowen, Vice President Development Continental Europe of InterContinental Hotels (IHG), insisted on the power of brand operators while talking to hospitalityInside.com during the fair, saying that there was no alternative to management agreements – no matter how intensely banks and project developers tried to force lease agreements on them.
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| Stylish in budget heaven: B&B. photos: map |
The following short insider story shows how tense the situation can be between financial institutions and hoteliers: this summer, an Austrian consultancy invited bankers and hoteliers to a financing workshop in Vienna. The bankers agreed – under one condition: hoteliers were not to be invited. As a result, the workshop on hotel financing took place without any hoteliers. Welcome to reality!
About 150 selected guests had the chance for interesting talks "off the records" without the media at "Bricks & Brains". Investors, developers, consultants and hotel operators from all over Europe met at the Special Real Estate Forum of Expo Real. Expo Real and hospitalityInside hosted this exclusive round with many top-flight and well-known names. / Maria Puetz-Willems
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