News: HOTCO, Budapest – Day One

The fourth annual Hotel Investment Platform CEE & Caucasus, HOTCO, kicked off yesterday, Monday 20 January 2020, at Kempinski Hotel Corvinus, Budapest, Hungary (GM Stephan Interthal).  Chairman Marius Gomola, who heads the Budapest office of Horwath HTTL, as always had worked a whole year to pull it together so successfully, and attracted 350 registered delegates.

Two additions stood out.  First, an invitation-only Hotel Investment Platform HIP allowed those looking for operators to spend 45 minutes one-to-one with parties looking for projects and/or financing. Four meeting rooms allowed absolute privacy for all concerned.

I was also extremely happy to see a new exhibiting sponsor among HOTCO’s supporters. Schneider Electric took a large stand to show its Integrated Hotel Solutions. There were working models to show EcoStructure Architecture, and how, for instance, window controls allow instant cessation of air-conditioning when a window is opened. Looking at both sustainability and cost control, Schneider Electric says its technology lowers energy costs 25-44%,

The most impactful presentation on the first day was a 35-minute talk by Kempinski’s Martin Smura but since it was I talking to him, impromptu, on stage, it is impossible to remember accurately what he did say. Messages from him on maintaining the one-brand company included choosing owners carefully, and if they are HNWIs, high net worth individuals, do make sure they really do have money (he did let slip that Kempinski is not in a position to be able to pay large amounts to get, or keep, a hotel).  In fact Kempinski does have other brands.  The relationship with German healthcare investment company 12.18 is leading to lifestyle 7 Pines Kempinski re-brands, as in Ibiza, and 12.18’s Manhattan property, currently being refurbished, will have a rooftop club.  Kempinski’s China brand, NUO, already has potential in Dubai.   Smura is looking hard for proper representation in India. He is really happy with Kempinski’s co-ownership of Global Hotel Alliance GHA.

Instead of the usual economic summary, it was clever to have asked Andrew Wrobel, Founding Partner of London-based Emerging Europe (which holds its annual Leaders’ Meeting on 18 June 2020 in Brussels). The good news, said Wrobel, is that the 23 countries that Emerging Europe covers represent 200 million people with a total GDP of $2 trillion, attracting annual incoming investment of over $55 billion. Forecast growth in 2020 is 3.1%, down from 2019’s 3.9% As a tech hub, these countries are transitioning from imitation to innovation • What are the challenges? Wrobel’s list includes migration, political instability (regulations and the role of law), rising labour costs, the lack of willingness to grant EU membership to some countries – and pollution. The opportunities include conversion potential of historic buildings, and mammoth growth in incoming tourism, especially in sports and culture sectors.

A programme on ‘to brand or not’ was frankly underwhelming. Any panel with six soberly-dressed participants sitting in line on one stage is bound to fail. Fortunately there was an uplifting question from the floor, from Ukraine, talking about movement of brands.

Ingo Schweder, Horwath HTL’s wellness guru as well as the brains behind GOCO Hospitality, made a really strong case for both true wellness operations and for wellness real estate. The wellness economy is worth $4 trillion and growing at 7.1% – overall, highest growth in spend is for preventive, not surprising given increased longevity. Differentions in the wellness resort are pre-arrival consultations, charges per person rather than per room, the need for healthy food, schedules, and on-site rules. Wellness resorts can be characterised as spiritual, aesthetic, medical, activity, or traditional healing.

There are 749 wellness communities worldwide, roughly half in North America, which is seeing 50% growth. Schweder used GOCO’s Glen Ivy Hot Springs development as an example. GOCO bought what was essentially a day spa, dating back to 1860,  in the desert near Corona CA in May 2016 and it is adding accommodation and residences: plans also include organic farming and a range of educational classes (GM of Glen Ivy, which has the maximum-800 day spa visitors year-round,

The first day’s events closed with a round-table on Hungary, and there was a most generous evening party hosted by Stephan Interthal and Kempinski Hotel Corvinus, Budapest.  TO BE CONTINUED TOMORROW







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