Marius Gomola, co-founder of HOTCO Hotel Investment Platform CEE & Caucasus speaks about the most recent major aspects and concerns of the hotel real estate investment industry as well as about the distinguished speakers who will share their insights at the HOTCO 2022.
You are now in the last days of preparation for HOTCO 2022. Could you give us some insights on what to expect?
Investing in hotels and resorts is very complex and requires discipline, expertise and experience including a series of decision points which build upon each other. Important to understand is that one decision determines the outcome and has an impact on the next thus if not executed correctly can result in a very poor investment. HOTCO makes it relevant for investors in the region to be encouraged and adapts success factors to their circumstances as they will differ in each country and even in each case within the same country. This is why HOTCO 2022 revolves around Hotel Investment and has the main aim of being a Platform for the Caucasus & CEE region to connect local hoteliers, developers and investors with industry icons face-to-face while promoting investment in hotel real estate as well. We aim to invite leaders who see beyond the daily events and plan for the longer term while combining their knowledge from past experiences.
You mentioned that you plan to invite industry icons to share their experiences, would you be able to provide us with a short preview of who will be joining us to speak this year?
We are proud to introduce our two main keynote speakers this year. Our day one keynote speaker, Mary Gostelow, President and Editor of Gostelow Media Global, is unique in her awareness, vertically and horizontally, of what is happening in the world of travel and hospitality while Ruslan Husry, the Managing Director of the HR Group, will reveal the company’s success story on getting to 73 hotels in 30 cities and 5 countries in some 12 years. In addition, we have been very successful in acquiring global hotel company leaders, first-time and seasoned hotel investors, real estate developers and lenders from 25 countries and three continents to discuss current topics during their panels.
To only name a few, Paulina Mazurkiewicz-Kurek the Chief Financial Director of Polski Holding Hotelowy, Ufi Ibrahim the Chief Executive Officer for Energy & Environment of Alliance, Valeri Chekheria a Partner and Strategic Projects Director at Slow Group, Theodor Kubak as Managing Partner of Arbireo Capital and Value One Hospitality, Pankaj Birla the Area Vice President of Eastern Europe at Marriott International and Noah Steinberg the Chairman and Chief Executive Officer of WING will all be joining us this year. Our goal is to connect these leaders who have proven their ability to strive irrespective of the obstacles and external factors and create a network where the region’s industry can benefit from their knowledge.
How would you describe the current state of the industry regarding the expectations of investors?
Great growth in interest has been seen in the hospitality real estate sector, many of these being first-time investors which I believe is a great achievement and shows a bright future for the industry. With investor interest at all-time highs, combined with the capital attracted the only question which remains is why bankers are staying away. We will hear the banker’s side of the coin during HOTCO to understand how various levels of moratoria introduced by the respective countries have influenced the lending decisions. Meanwhile, we have also experienced shifts in investment criteria when it comes to hotel real estate. A notion that still dominates is that the investment decision is based solely on expected returns. Yields and returns through asset value appreciation are still etched in stone as the foundations, however, clear evidence of emotions can be detected. Combining the emotional aspect with the support of those who can influence investors by way of government grants, tax breaks, larger development schemes, and diversification of risks into which hotels and resorts fit in perfectly, can trigger investor commitments leaving the industry with a bright future.
The hospitality industry has been challenged greatly recently, and it is not yet over. How is the industry changing as a result in your view?
The hospitality industry indeed has changed in many aspects, the three main ones being how the definition of the hotel itself is changing, the way human capital is viewed and lastly the impact of ESG. Consumer motivations and shifts in the social fabric drive product development. The definition of hotels has evolved to become multipurpose assets. This means to maximize space utilization, we often see the inclusion of multiple uses, by addressing different motivations to be the perfect real estate assets. This can mean the combination of co-working, co-living, retail and other experiences within the framework of a building envelope.
Human capital has taken centre stage in the industry. The hospitality industry, especially in this region, has been hard on its employees regarding finding a compromise between making a living and taking care of their families and their career plans. The government support programs in 2020 and 2021 were meagre compared to the ones in the western part of Europe, and this has caused migration to other industries, losing permanently a large pool of staff. The ability to run existing or open new businesses is not a question of investor willingness, but whether staff could be found to operate. The industry has not been very good at communicating its success stories. The hotel industry has always been rich in personal growth and career opportunities, giving a chance to all to work their ways up to the top as often demonstrated by the humble beginnings and meteoric rise of top executives who are in key positions in this industry.
The regulatory environment with pressures on energy solutions is gathering clouds over the hotel industry at unprecedented speed. ESG has always been perceived to revolve around the sustainability and energy efficiency perspective. ESG has most definitely taken centre stage relevant to hotel investments. Our region is yet to realise that ESG compliant assets have become the main driver of investor interests, particularly for institutional sources of debt and equity. This is coupled with consumer-driven expectations, putting pressure on existing and new hotels alike to comply. This tsunami is coming, and the industry needs to recognise this, understand it and find the solutions for it.
Does HOTCO have additional focus than addressing the burning challenges of the hotel industry?
HOTCO’s main aim will always be to portray key success factors. We will highlight the importance of asset management, to guide financial investors with limited time, if any, to be involved in their businesses and to assist owner operators in creating a win-win situation as well as maximizing their profits.
Aside from our many speakers, we are most grateful for the support we receive from our sponsors, without whom staging HOTCO would not be possible. These include Accor, Marriott, Kempinski, Radisson, HTL Capital Advisors, Wyndham, WING, Schneider Electric, Danfoss, Indotek, DVM Group, Seratus, Mellow Mood, Accent Hotels, Datasite, IHG, R8 Tech and a host of F&B supporters and media partners, such as you.
We understand that the industry is a fast-changing one, and strive to always shed light on current topics such as the global views shared by our speakers and the direction of the investment community. We aim to deliver the buzzwords of the industry and connect the industry experts that make it happen and continue to deliver the highest-quality content and value for money in this region when it comes to hotel investment conferences.