The Sleep Event 2009 Conference

Running alongside The Sleep Event Exhibition, it attracted speakers at the forefront of their field from owners to operators, architects to designers, developers to investors, and consultants to contractors, as well as those involved in the day-to-day running of the world’s largest hotel groups. With perhaps its most impressive line-up yet, its biggest coup was an exclusive guest appearance from design extraodinare Marcel Wanders.

A Stable Year Ahead?
Day One, dubbed ‘Development Day’ and hosted by Hotel Analyst Editor Andrew Sangster, asked the burning questions in a series of debates: What is the economic outlook? What are its effects on the future pipeline and performance for the hotel sector? Is the pipeline for the major hotel groups blocked? Which developers, hotel groups, and investors are still active?

Eager for answers, delegates piled into the conference theatre after a much-needed Bloody Mary brunch, an attempt to heal the sore heads from the previous evening’s European Hotel Design Awards. Proceedings kicked off with talks of a recovery with panellists reporting a stabilisation of revPAR decline and some predictions of growth in 2010. “Hopefully the worst is over,” remarked Chris Rouse, Senior Director, CBRE Hotels, adding that there was positive news in terms of “flat or a little growth”. His co-speakers were less optimistic. Jonathan Hubbard, Managing Director, Jones Lang LaSalle Hotels, reported that although occupancy had remained good, it would be a “slow rise” out of this recession. Peter Anscomb, Senior Corporate Director, Royal Bank of Scotland said that it would be quite some time before the industry sees true stability. And David Bailey, Deputy Managing Director, TRI Hospitality, put forward the suggestion that it would be 2012 “before we see significant improvement”.

Moving on to the subject of finance, Sangster asked: “Is development finance dead?” Rouse said not but believed that: “Small is beautiful. Keep it small, keep it practical.” This was also the case with Royal Bank of Scotland with Anscomb having financed just one small property in the past year, instead concentrating its efforts on supporting existing clients.

Despite mixed confidence for the year ahead, all agreed that the worst is over. Bailey concluded: “We are seeing projects that have slowed, mothballed, or delayed but things are moving on.”

Achieving stability seemed to be the topic of the day with later panellists seeing a stable year ahead. They stopped short of predicting growth however. Bob Lewis of International Hotel Property Services said: “I don’t see much of a lasting recovery next year... There will be an improvement, but 2011 is the earliest we’ll see a recovery. 2012 is more realistic.”

Cashing In On Conversions
With representatives from four of the biggest players on the international hotel scene, the highly anticipated ‘Arrested Development’ debate provided an insight into where the major brands are headed. Top dogs from IHG, Starwood, Marriott and Hilton were keen to prove that for them, development had not ‘arrested’. Marriott and Starwood reported pipelines of 120,000 and 500,000 rooms respectively with Bart Carnahan, Senior Vice President Acquisitions & Development EMEA, Starwood Hotels & Resorts stressing that the group’s pipeline will continue to expand, albeit at a slower pace.

Timothy Walton, Vice President International Hotel Development, Marriott International earmarked the full service sector as a platform for growth following the signing of the first Edition Hotel earlier in 2009. Carnahan admitted that Starwood’s St Regis had limited growth opportunities in Europe but is performing well in the Middle East. He sees further growth in the lifestyle sector with brands such as W and Aloft. Patrick Fitzgibbon, Senior Vice President Development Europe & Africa, Hilton Worldwide, took the view that: “If you’re a big player there’s no better time to develop a hotel as you open into a rising market... The opportunities are still there.”

Talk turned to the conversion pipeline, thought to be a growth area for international hotel chains in the current economic downturn, especially as 70% of guestrooms in Europe are currently unbranded. Fitzgibbon predicted a significant increase in conversion from unbranded to branded guestrooms owing to the difficult lending conditions. He believed that some smaller hotel groups would be swallowed up and questioned: “How long they can they survive?” Allan McEwan, Senior Vice President Finance & Development EMEA, InterContinental Hotels Group added that a “mass conversion” is yet to come.

The panel agreed that any arrest in development is due to the economic situation. “It won’t come as any surprise that financing is very difficult when it comes to new developments,” explained Walton, with others claiming that owners needed to be “serious players” with 40% equity to qualify for funding.

Keynote speaker Chris Sanderson, Strategy & Insight Director, The Future Laboratory later issued a stark warning for the “turbulent teens” ahead: “The hospitality and leisure sector has undergone changes but there is more to come... Businesses that can’t or won’t change will wither and die.” He predicted that airlines will continue to suffer, having a knock on effect on the hotel industry with the price of oil set to define how we do business. Sanderson also claimed that the era of the ‘design hotel’ was over and eco-tourism was taking its place as the fastest growing sector in a time of “environmental acknowledgement”. 

Sleep Talking
Hosted by Hotel Consultant Guy Dittrich, Day Two’s design-themed seminars were interspersed with appearances from two of the world’s most eminent designers. First up, Marcel Wanders, a self-confessed novice at designing spaces, told of his beginnings as a product designer from an award-winning invention back in his student days, through his career designing for some of the biggest European manufacturers namely Capellini, B&B Italia, Bisazza, Poliform, Flos and Moooi.

More recently, he has turned his hand to hotel design creating the seven Lute Suites in The Netherlands, the ‘Sleeping Beauty’s castle’ inspired Mondrian in Miami, and the newly opened Kahema Grand Bonn, each telling a story through the detail of the interiors “It doesn’t matter that I don’t know much,” said Wanders, who believes that “innovation needs the doubt, the curiosity.” Wanders prides himself on designing the furniture bespoke in each of the hotels, and controversially quipped: “I get paid to design, not to go shopping.” He is currently working on a new hotel project in Amsterdam.

In the second one-to-one interview, Adam Tihany, widely regarded as the founder of restaurant design, took the audience on an entertaining journey through his career spanning three decades. “I don’t take the credit for inventing the profession but I pigeon-holed myself,” he said recalling the ‘Adam Tihany, Restaurant Designer’ sign hanging above his door back in the early days. He established his own studio in 1978 and has since created concepts for Remi in New York, Charlie Palmer at The Joule, and The Mandarin Bar in London.

Tihany’s restaurant design developed to hotel work including the One & Only Cape Town developed by Sol Kerzner. Based on “our view on what contemporary Cape Town is today”, the hotel features locally-sourced materials, and 275 pieces of custom-made furniture, all but one crafted in South Africa.

Fit For Multi-Purpose?
There was a consensus by industry figures from Marriott International, Proof Consultancy, and Conran & Partners, that as hotel guestrooms become smaller, guests are increasingly being driven into the public spaces. As a result, we are seeing the reception double up as a bar, the lobby as a lounge, and the restaurant as a business centre meaning. Panellists argued that spaces should be designed as multi-use rather than multi-purpose with the defining difference being about creating different personalities to divide a space rather than a physical barrier.
Rob Wagemans, CEO & Creative Director, Concrete Architects, shunned ‘multi-purpose’ and said that it takes a smarter designer to create a multi-use space: “There is a concept that you can put your make-up on, check your emails, brush you teeth and drink champagne all within the same square metre.”

The Green Issue
“In times of austerity, who cares about sustainability?” asked Guy Dittrich of the final panel of the day. Well, David Jerome, Senior Vice President for Corporate Social Responsibility, InterContinental Hotels Group, Jeremy Blake, Senior Partner at Purcell Miller Tritton, and Stephan Oberwegner, Managing Director, Max Bentheim do for starters.
Jerome believed that interest in sustainability had not diminished with Blake suggesting that developers and owners are taking even more interest now because of new legislation and in a bid to reduce running costs.

Despite this, frustrations remained in the challenges to achieve sustainability. Max Bentheim’s recently completed Scarlet Hotel in Cornwall aimed to be fully sustainable but it fell short of the mark due to the transportation of materials. Recycling furniture and installing solar panels is one thing, but “getting the supply chain green will take a lot more work,” stressed Blake, who’s tip for the future was eco-luxury. “If you don’t embrace this now,” he said: “you are effectively building a derelict hotel.”

Continue Reading: The Sleep Event 2009 Exhibition

Continue Reading: European Hotel Design Awards 2009