Dear Industry Partner

The real first day of the 2008 International Hotel Investment Forum (IHIF) currently held in Berlin, Germany took place yesterday (Tuesday 4th March 2008). This was a day full of interviews and discussion sessions where major players in the global hospitality sector shared information and developments within their groups, their future plans and industry forecasts or insights. Although the focus was on European developments and future plans, the discussions and interviews were about emerging markets of Eastern Europe, China, India, Middle East, Africa and the Southern part of America.

The day kicked off with an opening speech by Jonathan Worsley, Chairman of The Bench - the company giving organisational support to the IHIF. In his speech, he paid tribute to individuals and companies who gave support to the IHIF since its inception in 1998 when it only attracted 336 delegates, to date the event managed to attract a whooping 1850 delegate’s. The profile of delegates range from investors, legal experts, real estate investors, property investors and owners, hotel operators, bankers and financiers coming from mainland Europe. These included CB Richard Ellis Hotels - the founding patron of IHIF; and long time sponsors such as InterContinental Hotel Berlin, The Marriott, The Hilton Family, Starwood, The Rezidor Hotel Group, and many more.

Then the conference moved into top gear with the on-stage interview with IHIF Conference Chair, Andre Martinez - MD and Chair of Global Lodging at Morgan Stanley. His comments included the meaning of the conference theme - that to him "changing gear" is how global industry players could get involved in emerging markets - build budget resorts that are inexpensive and "green" - fast. He also commented on what he regards as challenges faced by investors in emerging markets which includes availability of information needed to make investment decisions (openness of emerging markets); availability of finance and cost of construction materials. Above all, he sees the biggest challenge in this markets been that of the ability for industry players to hire, retain, train and incentivise human resources  - to encourage them to work in the sector.

Then it was over to "The Economic Outlook for Europe" by Roger Bootle - Economic Adviser at Deloitte. His presentation was around the current credit crunch in the USA which threatens to affect the whole world - Europe and Asia in particular. Highlight of his presentation included the fact that:-

Eurozone will not be adversely affected by the credit crunch due to two

main factors which remain strong in the zone - the levels of savings vs. borrowing/expenditure within the zone; and emerging markets growth prospects which includes Eastern Europe, China, India and Middle East. He is however concerned about the strength of the Euro and suspects that the European Central Bank will cut interest rates which will go well for the zone.

Then it was over to the Leader’s hard Talk Session – a view from the top as follows:-

First up it was with Alex Kyriakidis, Managing Partner of Real Estate Hospitality & Leisure, Deloitte - interviewing Sir Richard Michels, Senior European Strategist - Strategic Hotels & Resorts.

Then it was over to Simon Johnson, Investment Banker - interviewing Reto Wittwer, President & CEO of Kempinski Hotels. He spoke about their expansion plans into China, Middle East and Africa in a focused manner. This is a 108 year old company with the understanding that luxury cannot be infinitely expanded - the need to manage their growth. They may consider going into resorts mainly to respond to consumer needs of wanting "end destinations" with all amenities. Their vision is to make the Kempinski hotel group to be "non comparable" in the market place - to develop unparallel trophy or market leading hotel properties.

Then it was Simon Johnson interviewing Sarmad Zok - CEO of the Kingdom Hotel Investments. This is a company that is involved in the African continent and mentioned their investment in Kenya.

Then it was Alex Kyriakidis interviewing Frits van Paasschen, President & CEO of Starwood Hotels & Resorts Worldwide. The highlight of this interview centres on his company's plans with their various brands. His brand related priorities include $1,4 billion investments globally. Focus will be on driving consistency in their Sheraton brand and Le Meridien - emphasise on refreshing the brand. Their Westin brand continues to grow and it's in good space currently. On their expansion plans, their plans are into the Middle East, North Africa - not only in the luxury segment but to fill the gaps in the market place.  

The next session was about - The Outlook for the European HOTEL

This session was moderated by Russell Kett, MD of HVS and it centred on the outlook for the European hotel industry. The penal members included the following:-

Paul Brown, President of Expedia Inc. Partner Services Group 

James P. Chappell, MD of The Bench; and 

Chris Day, MD of Christie +Co

Their combined view is that hotels in Eurozone still offers better returns than other properties, and that there is no need for property owners and investors to panic with the current credit crisis - that all the fundamentals are still in place and that the markets will recover later in 2008 to early 2009 - status quo will remain with flattish RevPAR in the Eurozone

The conference then moved into Break Out Sessions with the following topics:-

Where Are Hotel REITs (Real Estate Investment Trends) in Europe Headed with Timothy Lloyd-Hughes, European Head, Leisure Hospitality & Gaming at Deutshe Bank AG London. The penal members included the following industry leaders:- 

Mike Goodson, MD Europe Host Hotels & Resorts

Sir David Michels, Senior European Strategists, Strategic Hotels and Resorts

Yan Perchet, CEO of Foncier des Murs

Matthias Roche, Partner - International Tax Services/EU Law, Ernest & Young  

Hotel Ownership Strategies to maximise Values which was moderated by Martin Armitstead, MD Head of EMEA Hospitality DTZ Hospitality Group. See panellist on IHIG programme on their website on www.berlinconference.com.  

See all the other topics online ' 

Highlight of the Day

The highlight of the day's proceedings was no doubt the Lifetime Achievement Award which was given to a long time industry player and advocate, Michael B Hirst OBE, Consultant at CB Richard Ellis. More about this award online, if there otherwise visit the CB Richard Ellis website to read about him on www.cbrehotels.com

 Warm Tourism Regards

Mmatsatsi Marobe in Berlin