Between 29 September and 1 October 2024, senior representatives from across the UK hospitality industry will head to Manchester for the Annual Hospitality Conference (AHC).
This year’s speakers include renowned investor Luke Johnson, political commentator Robert Shrimsley as well as senior representatives from Whitbread, Starwood Capital and Pandox.
Not only will you hear from leading hotel investment executives, but the multiple networking opportunities mean you’ll be able to capitalise on the return to dealmaking we are seeing this year.
You can book your ticket here.
Franchise, management, lease, or hybrid: which is the best model? Well as always it depends on the asset but what we can say is that for any of them to be a success they need the buy in of all the stakeholders in the hotel stack.To get a sense of what is happening on the subject, we recently caught up with Devin Grosse, CEO of Focus Hotels Management.
Grosse will be speaking on a panel entitled 'Partnering for Success: Defining the Right Operating Agreements for All Stakeholders' (Tuesday, October 1, 2024 11:30 AM to 12:15 PM)
Hospitality Investor: What are the key trends you have noticed with regards to operating agreements over the last few years? Are we seeing more flexibility in the market?
Devin Grosse: Many owners have different objectives when requiring third party management services. Although similar, there is definitely a requirement to match the agreements to the objectives whether they are short, medium or long term holds. The standard base and incentive model is no longer a one size fits all. Operators are certainly becoming more creative in their agreements.
With increased competition in this space there is a tendency to see fees reduce to secure management contracts. As 90% of operators cost base are support teams working for the hotels, any reduction in fees can only mean a reduction in service. As most hotel owners know, asset value is derived from asset performance so we have got to work hard to show quality and value in what we deliver.
Hospitality Investor: Did the pandemic alter the relationship between owners, operators and brand partners?
Devin Grosse: I would say the pandemic strengthened the trilogy between us all. Well managed, strong branded, forward thinking owner partnerships certainly were the quickest hotels to recover. All three parties understanding they need each other, and a strong healthy positive working relationship will always yield the best results if ‘partnership’ is at the core of the agreements.
Hospitality Investor: What are the biggest challenges regarding the UK hotel market at the moment?
Devin Grosse: Hotel margins are being squeezed from all angles with high inflation, high interest rates and higher minimum wages, along with revenues that market forces are limiting, meaning that many assets are being starved of capital investment. The opportunities will certainly come for those owners that are able to maintain the quality of their assets. Although investment will be challenging in the short term, creating future proofed hotel experiences that focus on evolving guest demands will certainly drive success in the medium to long term.
Hospitality Investor: The theme of this year's event is Proven Paths, New Horizons. Is there anything that has changed recently with your strategy?
Devin Grosse: It is easy to overcomplicate hotels. Looking after your people who look after your guests and maintaining the property well, will always be a successful strategy. We may have to innovate and be flexible in how we do this however we have to stay true to the basic principles of good hotelkeeping.