Insights from the Annual Hotel Conference 2022

The “Peak of Uncertainty” 

Our very own Guy Lean attended the recent Annual Hotel Conference (AHC) and shares some of his observations and insights from the event.  

As Hoteliers and Investors prepared to attend the first sessions of the event in Manchester, news of the tax policy backtrack came through from Westminster, shifting the economic goalposts once again.  

We are becoming increasingly used to operating in a state of flux and it is no surprise that “adaptability” became a theme throughout the conference. One attendee even suggested that the AHC was taking place at the “Peak of Uncertainty” for the UK. 

Annual Hotel Conference in Manchester
The AHC has always been an impressive event and has grown year on year. It is generally considered to be a more intimate version of IHIF in Berlin, but since the UK continues to be the most valuable region in the European investment market, it is one that attracts a lot of interest from investors, owners and hotel executives.  It has always been innovative, being one of the first to go paperless and it has evolved to now offer a seamless app experience that gives more control back to the user. 

The Economy
As expected, the economy was the most common topic of discussion, but the most fascinating aspect of this was the general positivity that surrounded the event. There was a lot of talk at the beginning of 2022, about just trying to hit 2019 numbers. And actually, many attendees spoke of how they’ve shattered those numbers. 2022 has been a phenomenally positive year. The success could be partly attributed to the huge pent-up demand from customers, who were still catching up on delayed experiences.  

Forecast for 2023
Naturally, the ongoing war in Ukraine, rising inflation and interest rates are still keeping hoteliers cautious. As we plan for 2023 and another very uncertain future, there is continued pride in the resilience that has developed and embedded over the past couple of years. This ability to adapt to changing circumstances is no longer merely a tool to survive, but a highly prized asset now being used to drive success. A few of the speakers at AHC suggested that 2023 will be about bringing things back to basics, keeping things simple and doing what they do really well; cutting out waste and mistakes, looking after employees, working hard and ensuring that guests have great experiences time and time again. As a big rugby fan, it is a mantra that reminded me greatly of Paul O’Connell, former captain of the British & Irish Lions, who said “Let’s be the best at everything that requires no talent”.  

So how are investors planning for 2023? 
As costs continue to increase and the pent-up demand stabilises to normal levels, which business will continue to outperform the market?  

Investors are hopeful that energy prices will settle in the second half of 2023 and feel that there are still great opportunities out there, especially in the luxury market. While the economy hospitality sector will be less able to pass inflation costs onto the consumer, luxury hotels have a history of being able to do exactly that and are seen as a safer hedge against inflation.  

ESG Investments
The Investor influence is also being strongly felt in terms of ESG. An investment in a building is generally planned for longer-term value, and buildings that exceed current sustainability measures will be better placed to future-proofing their investments. Inevitably, operators are now being forced to prove their eco-credentials, with roadmaps to carbon net zero and green certifications now de rigeur for attracting investment. If they can’t do this, then then they simply won’t get the funding they are looking for. As the competition for corporate clients in 2023 is also likely to rely heavily on eco-friendly commitments, ESG is no longer a can to be kicked down the road. It is here and now, and needs to be treated with care and authenticity if you’re going to progress. 

Recruitment
I couldn’t sum up the event without also looking at the current state of recruitment. We’ve all heard about how businesses have struggled to recruit since the pandemic and the phrase “War for Talent” has been used frequently. At AHC, the operators that were most positive about the future tended to be the ones who spoke of strong cultures in the workplace. Being great communicators and focussing on retention has helped them drive employee satisfaction, keep their best talent and consequently helped attract new candidates when needed.  

From our experience, there is no doubt that there is a huge pool of talent out there, but they may just be a little more selective about where they will move next and are looking to work with employers that share their values.  

If you would like to arrange a chat about your recruitment strategies or to discuss any points raised in this article, then please get in touch on +44 (0)208 600 1182 or +44 (0)7813 009 787 or guylean@madisonmayfair.com 

 

Success Stories – In conversation with Guy Pasley-Tyler

Guy Pasley-Tyler has extensive experience in the international hospitality sector.  In his current role as Director, Portfolio & Fund Management with Archer Hotel Capital B.V., he is responsible for the review and development of market and fund strategy, the oversight of material value enhancement projects across the portfolio and the identification of opportunities to maximise fund-wide returns. Archer Hotel Capital BV enjoy a long-standing relationship with a number of international brands, including Marriott International, as well as developing iconic independent hotels, including The Dilly in London.  

Guy was responsible for European Portfolio Strategy & Feasibility with Host Hotels, prior to creation of Archer Hotel Capital B.V which followed the buyout of Host’s position by Dutch pension fund APG and Singapore-based GIC Real Estate. 

Before this, Guy worked for six years at AECOM Economics, where he was engaged in feasibility and advisory work on a wide variety of hotel and mixed-use real estate projects across the EMEA region. With diverse hospitality experience, Guy also has eight years’ experience in hotel management across operations and sales & marketing, an MBA from Hult International Business School in Cambridge, MA and is a Member of the Royal Institution of Chartered Surveyors.  

Madison Mayfair continues to have a long-standing relationship with Guy, having placed him in his role as Director – Feasibility & Investment Strategy at Host Hotels.  

In conversation with Guy Pasley-Tyler  

How did you get into Hospitality?   
My first exposure to hospitality was rather indirect in that during my school holidays I got myself a job working in the post room of the head office of InterContinental Hotels in Mayfair. I really enjoyed the experience but was also fascinated by the business, albeit with limited understanding, and that inspired me later to seek a management trainee role at The Milestone Hotel in Kensington, which helped me to get a better understanding of all aspects of the business. In different ways I have enjoyed every subsequent role I have taken on in the industry. 

What are the most important aspects of portfolio management in hospitality and how has the role evolved over the years?    
At Archer, we aspire to be an active asset manager that seeks to improve and maximise every aspect of our investments – from the real estate itself to the concept to any associated contractual relationships (e.g. management agreements and leases). The key point for me is that the overall performance of the portfolio is the over-riding consideration in all our decision making, not necessarily the individual assets. This approach is made easier by having the same two aligned shareholders across all our investments so there is no conflict of interest. For asset managers handling multiple sources of capital across different investments there is a more careful line to tread in this regard. 

What do you consider your biggest achievement so far and why?  
The set-up of Archer Hotel Capital over the past 3 years. My colleague Dominic Seyrling and I had a shared vision around Archer and we were lucky to have two trusting and supportive shareholders who have backed us along the way, as well as sharing their own insights and experience to the benefit of Archer. Clearly, the pandemic has been a dominant feature of the last 18 months but we have used the time to focus on long-term value creation across our portfolio which will hopefully stand us in good stead in the years to come. 

What advice would you give to someone who is just starting their career in the industry?   
Firstly, it’s a very varied business with lots of different roles available so don’t be afraid to test yourself in different areas to find out where you can excel. That rounded experience will stand you in good stead as your career develops.
Secondly, we are in a people business and forging strong relationships with mentors, colleagues and counterparties is essential to your development. It’s also important to treat people in the way in the manner you would want to be treated, not least because it’s a small industry and you never know who you might end working with in future! 

What are the biggest opportunities in the hospitality industry as it recovers from the pandemic?
We are in the business of creating experiences and I think that is an aspect of people’s lives that they have greatly missed during the pandemic.  In all our concept development and renovation planning we are trying to better differentiate our hotels to make them distinct offerings in their individual markets – just because a hotel is corporate-focused it doesn’t have to be boring. 

What would have been your Plan B?
A former Australian Prime Minister, John Howard, described himself as a ‘cricket tragic’ and I fear that I may fit a similar description. Given that insufficient talent meant that a playing career was never even a remote possibility, my childhood dream was to be a commentator, ideally the BBC cricket correspondent, in charge of Test Match Special. 

For support with your next career move or to enhance your recruitment strategy, please call Madison Mayfair on +44 20 8600 1180 or contact Guy Lean on mm@madisonmayfair.com now.  

 

Will flexible working become the norm?

By definition, flexible working offers employees increased freedom –working from where they choose, flexible work schedules and fitting work around other responsibilities. Whilst flexible working has been increasingly adopted by companies over the years, it’s been accelerated since the start of the pandemic.

Research on the UK Government website shows that 9 out of 10 job seekers want increased flexibility, be it remote working (60%), flexitime (54%) or reduced hours (26%).

In March 2021, the Minister for Women and Equalities, called for flexible working to be “normalised” as part of the UK economy’s Covid-19 recovery, to capitalise on the shift in mindset triggered by the pandemic. Ministers are now preparing to make flexible working a permanent feature of British life post-pandemic, with plans to strengthen employees’ rights to work from home or ask for different hours.

Benefits of Flexible Working

Increase in Job Applications – UK Government-backed Behavioural Insights Team (BIT) and jobs website Indeed, shows offering flexible working explicitly in job adverts increases applications by up to 30%. The research, which analysed nearly 20 million applications and is the largest of its kind ever conducted in the UK, shows greater transparency in job adverts would create at least 174,000 flexible jobs to the UK economy per year.

Best of Both Worlds – Flexible working offers the freedom of working from home but access to the community of the office to drive increased collaboration. According to a recent survey of 2000 UK workers by Currys PC World and Canon, 37% identified a better work-life balance as one of the main benefits of remote working, with 54% citing not having to commute as their favourite part.

Increased Opportunities for Equality – According to the minister for women and equalities, “flexible working could help boost job opportunities for women (who are more likely to have to disrupt their careers as a result of caregiving duties) and reduce geographical inequality.”

Spreading the commuter coin – Whilst city-based businesses are reliant on the influx of commuters to city centres across the world, there has been a re-balancing of revenues, with more local businesses benefiting from the shift of working patterns. Over time, with a return to a combination of part office, part home working, it’s encouraging to see this wealth being spread across businesses both in city locations and in local communities.

Is flexible working here to stay?

It depends on many factors – there are many predictions that flexible working is here to stay but on the flip-side, the Centre for Cities think tank predicts the five-day office week will become the norm again within two years as featured in a BBC News article in June 2021.

Ultimately, it will be driven by individual businesses and employee’s wishes, and won’t be a one size fits all approach.

Sector Specific – A flexible working environment naturally suits some sectors more than others. For hospitality, the pandemic was a catalyst to introducing more flexible working practices which improved work-life balance. As the business of hospitality re-opens, naturally many roles are guest-facing so require employees to be present in their place of work

Hospitality, like many sectors, are aware of the importance of their employees’ wellbeing and its impact on performance and productivity, so have been adjusting their return to work policies to introduce a variety of measures to create a better work-life balance for their teams. Hybrid working for those working in non-customer facing roles and a four day week have been some of those policies being trialled currently.

Re-imagining of the Office – With changing working patterns evolving and a move to increased hybrid working, the office space will need to be used differently. More collaborative space, places where people can come together and create and innovate and a revised layout of desks are all some of the practical changes that businesses are adopting as they look to navigate the road back to the office.

At Madison Mayfair, we work with clients across all areas of hospitality and associated industries to navigate flexible working. We work alongside our clients to showcase their company’s approach to work-life balance and its employee wellbeing focus to find the best candidate for the role.

We belong to the Hospitality People Group who offer a wide variety of roles from c-suite level and everything in between.  For support with your next career move or to improve your recruitment strategy, please contact Madison Mayfair using any of the below details:

Office +44 20 8600 1180  Email mm@madisonmayfair.com
Guy Lean +44 7813 009787  Email guylean@madisonmayfair.com

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