Alex Slors, welcome to the insider podcast.
It’s a pleasure to be here, Martin.
No worries. Now, we’ve spoken before and you told me how the world of travel and tourism has been a fascination for you from an early age. Now, for the benefit of our podcast listeners, can you just tell me a little about that childhood time and those first inklings of this passion?
It was always there, to be honest. I grew up since I was about six in Indonesia and we lived there because my dad worked as an expat and I remember that’s when the fascination started. This was in the early seventies. So in Indonesia, there was nothing. We went to Bali and I think there were three hotels on the entire island.
Wow.
There was nothing there and it was all very pristine… how different it is now. And I was just fascinated by the whole business, the whole business of hospitality, of welcoming people. And that, yeah, in those days, it was also very personal and it was… I suppose it was for a few, although we also stayed in, like, guest houses. We did a lot of road trips as well back in Indonesia and it was, yeah, very fond memories and, and that triggered it. And it actually, I don’t think it’s ever really gone away.
And of course that meant you took your first professional steps in hospitality, but it wasn’t in Indonesia. It was in Amsterdam. And I understand it was, you know, pretty much on the first, the first rung of the hospitality ladder.
Very much so.
Can you think back to that time and tell us a bit about it?
Very much so. So when I finished secondary school, I didn’t really know what I wanted to do. So I stayed behind a little bit and I helped in the school. It was a boarding school and the boarding, obviously the structure of a boarding school is not that different from a hotel. When it comes to, well, it’s a big kitchen, you’ve got to do food and beverage, bedrooms, housekeeping, all that sort of stuff exists. And then a management trainee position came up in Amsterdam, which I took, but it was really from the basic pulling pints, making beds. It was a small 80-bedroom hotel, and I learned the ropes. I literally learned the ropes. I remember the first PC being dragged into that hotel, and it just sat in the office for about a month because no one dared to touch it. And then I thought, I might as well get that thing out of the box. And that’s where I created my first spreadsheet, and everyone was scared. Everything was on paper, everything. Our reservation system was with magnets on the wall and then there was a piece of string for each day, so each day we moved it to the next one, then took off the previous day and then added a day and that’s how we did our reservations! And we had 80 keys so we had 80 lines and then we had names of people and how long they were staying and that’s how it worked. The great thing is… it worked. And the other great thing is that I did a lot of night shifts there as well and everything was manual, and if you didn’t balance anything, no one was going home. And that… gives you an understanding of what is actually happening behind the scenes. And now it’s all automated, I sound like a bit of an old fool here, but it is all automated and you press a button it tells you what to do. But there you have to balance the books every night. And if you didn’t balance the books, you weren’t going home.
Yep. You had to work it out basically.
And then when it gets sort of 10am that’s a real slog and it happened.
Yeah, yeah. And obviously it was from there that you got your first big break in this business and really moved your sort of career forward. Tell us a bit about that.
I’ve had a few, few lucky moments and there was one. So obviously I was not going to stay there. It was a small property. So I started looking around after about two years and then a job as a night manager at the Trust House Forte hotel, the Apollo in Amsterdam came up and that was very prestigious and I applied for the job, I went for it and we were interviewed by the finance director, an Englishman, and I didn’t get the job and I was gutted. I was really like: this is… this is not good. Where do I go from here? And then a week later, the phone rang and it was there was Mr. Martin and he goes, “You didn’t get the job, but I felt that we really get on. My deputy is at pensionable age, but I can’t do anything about it. But I need someone beside me to sort of start moving things forward. Are you interested?” So I became number three in the accounts department in the Apollo. And that then set off sort of a string of events because I loved the operation. I loved the five stars – it was then five star, I hate to think what it’s now in the same property – but I loved all that. And the general manager at the time picked up on that and I go, do you want to be front of house manager? And I was like, yeah, but I was, I was young and front of house manager is an interesting position, right? Because you’re also in charge of concierge and luggage porters. Those are the guys that are there for life. So I had guys who were 30, 40 years older than me, yeah, who, who were in the concierge and concierge in Amsterdam is a rather lucrative, erm, environment, shall we say. And I understood that also from what I’ve learned in the accounts department, but then bring in the lads and lead from the front. And it was great. In hindsight, it was a wonderful experience.
But do you think in terms of that moving up, it was… obviously there’s a sort of ticket of entry, you’ve got to be in the business to start with. Do you think it was your sheer enthusiasm that these people picked up on? Because that’s a pretty rapid rise up. And as you say, you didn’t come with, if you like, with a sort of hospitality degree or whatever. Yeah.
But do you think there was some other kind of X factor that people saw?
And look where we are.
I think so. I think it’s an enthusiasm and it’s a passion and it’s a drive. What we do – and that goes for everyone in hospitality – is never going to be a 9 to 5 job. It is a hospitality, it’s welcoming guests from whatever background, with whatever purpose, corporate, leisure, and making them feel welcome. And I was excited, I wanted this. And obviously, in those days, Trust House Forte was a big English company. We had, I don’t know, 1,200 1,400 hotels. We owned all the TraveLodges in the States. I was proud. I had a sticker on my first car.
I won’t do that again, but, but we were proud about that. And of course, a little bit of brainwashed, but it was, it was good. And yeah, that gives you that passion, but also the opportunity was there, right? And then the opportunity developed, because two years on, a question came from one, we had 22 hotels in London at the time, we were like the market leader in everything. Do you want to become… do you want to go back to finance and do you want to come to London for two years? And here we are.
Thirty three years on.
I think also with the hospitality business, with the hotel companies, I mean, the time I’ve spent around people now, and I’ve interviewed a lot of people who work in the hotel business at all levels of seniority, and I’ve also in my career worked across a vast range of industries. I don’t think I’ve ever come across a sense of loyalty and love for the business and indeed the brands that they work for than the people I speak to in hospitality. There must be something. You mentioned it with the UN Trust House. It’s not the first time I’ve said, you know, people really love their companies. I mean, not all of them, obviously, but there’s a lot that do.
Yeah, yeah, yeah. And it’s interesting now with Barry Sternlicht bringing back Starwood, all the old Starwood. And interesting because Starwood for us was the enemy when they took over what was left of the Forte empire 10 or 15 years on from what we were talking about. That ‘Starwood proud’ thing is all of a sudden shooting up and everyone is talking to each other. And in those days, they were the enemy because they took us over. But when they got then taken over by Marriott, we were all in the same boat. So there is a certain pride and a certain loyalty, but I think it really depends on the people that you work with. I think the environment that you can create, and that hasn’t changed significantly since I moved into education either. It’s just, you have to create an environment that we all hear for the greater good, whatever that might be. And in the case of hotels, and I’ve recently taken over… because I still work in practice as well… a hotel as an asset manager. And the first thing I do is, it’s all about the hotel. It’s not about you, Mr. Owner, it’s not about you, Mr. Operator, it’s not about you, Mr. General Manager in your team. It’s about the hotel, because if the hotel is not there, none of us will be there. Right? But if we embrace that together and we all start thinking together, even though we all have a different agenda, right, because we do, the owner wants something different from the brand, etc., etc., but if we do it like that, then we reach the best target for all parties involved. And I think you could do that everywhere. But it’s also, let’s not forget, it’s a 24-hour operation that involves beds and alcohol. And I think that makes it sort of easier at times as well.
Yeah, yeah, no, definitely it’s a more … it’s a more vivid, living business than a lot of others.
It is a very much… It is a very much living business, it’s not a cheese factory, because I couldn’t do that. You deal with living people, which gives you a lot of challenges, but it also gives you an enormous amount of pleasure.
Yeah, you’re not one step removed from your customers. You’re right on top of them.
You’re right in there and it’s always interesting, especially now, because people are always focused towards the luxury end, the five-star end, etc., etc. My best years have been in two, three-star hotels. And the reason is because your guests are so excited, even though the press tells them that there’s bed bugs in the hotel, but they had to save for six, seven, eight months to spend a week away in your two, three-star hotel. No one’s going to ruin that. And then you get a vibe and an atmosphere. And the staff will pick up on that as well, because it becomes a pleasure to work. And that’s the only hotel where I worked with pleasure over Christmas.
Now, you mentioned that you do still practice outside of all your work with Glion as in your consulting life and I know that sort of started almost, well, getting on towards two decades ago now.
Thank you, Martin!
But I also know that it wasn’t quite plain sailing to begin with. Can you tell us a little more about that?
Yeah. It was interesting. I ended up my, my working career at the Dorchester Collection and it didn’t work with me. It’s almost irrelevant. And then I sort of thought, like, what I have, I can spread over two, three, four clients and add value in that way without being involved with the gossip, without being involved in other things. But I really didn’t think much beyond that, to be honest, and in my first pitches. And I have to say, 20 years ago… asset management in particular was not well known in Europe and, in America, it was there because the REITs were there and it functioned slightly better, but differently. And then you slowly grow into a position. And that’s where my second lucky break came, because when I started my business was, let me think. I think I started in 2006, yeah, it must have been the end of 2006. So, it was just before the crisis.
And my last big job, and most of my working career, I worked for the Meridien Hotel Group, which was then owned by the Forte family. Meridien had to go somewhere, Lehman Brothers was interested, and then all of a sudden, they needed a real asset management, and I sort of had the opportunity to work with the lenders. So that’s where the whole lender element came in, in which I didn’t know much. I had the head office experience, I had the hotel experience. Starwood, by then, had just acquired the Meridien brand, but they didn’t know anyone. And I knew everyone, because I’d been a deputy vice president of finance. I was in charge of Northern Europe. I knew all these people. So I walked into the hotel in Vienna, and I knew the concierge by name. I knew the kids.
They needed that. They needed that bridge. That business they’d bought.
They needed that bridge. So it was sort of a shaky start, but then when we all found our place, it was great. And I was just lucky that that position came up at that time. And that then dragged me through the whole financial crisis, the end of Lehman Brothers, which created other opportunities as they came along. And the Meridien portfolio of owned hotels at the time was, top of my head, 35 properties. They were selling them off one by one. So slowly, that diminished and I could build my own practice. But at the same time, I had a certain amount of job security and that was just very helpful.
Did getting so deeply enmeshed in the financial side of the business, did it at any point kind of dull the passion for the business itself?
No. Never. Absolutely, because it’s the way you look at finance that’s very important for me. And that was also when I was a financial controller. Then when I was a VP finance, I worked in head office for a couple of years as well doing group balance sheet reconciliations and consolidations. But it was always about the hotels and it was always about the people in the hotels. And I think that’s the crucial factor there. And the fact that you’re dealing with the people and I had the fortune to have the operational experience.
And there’s a lot of people in asset management who don’t really have… I know what it’s like to do 200 check-outs. I know that if you do 200 check-outs, you will make mistakes and that’s fine. Yeah? And in those days, that was like… it was all proper cash, Canadian dollars, US dollars, God help us. And obviously, there’s 200 businessmen waiting, because they need to get to their meetings and all that sort of stuff.
So I know the operation. I know what it’s like to run a wedding and stand on your feet for 18 hours. Where actually, apart from the dinner and the bar service, there’s very little happening. So you create that understanding and you can use that in your day-to-day. So when you, from a financial perspective, go aggressive against a hotel, then you need to understand what’s behind that and what those people do and what they go through. And that’s the important thing. And that’s what makes this so much fun.
And I love going into hotels. I still love going into hotels. It’s the fact that it’s alive, that there’s things happening, and that makes it. It’s the understanding of both sides and then the understanding of how a head office functions, because those people have another different set of priorities, and bringing that together and making sure that all parties have an understanding of what the other parties want. That’s how I see my job. Now, that’s anchored in finance and I love balance sheets. I hate to admit it. Ask my students, I love balance sheets… but, it’s the mechanism around it, but then you get all the fun parts that come with it, or the interesting parts, or the expansion parts. And again, you need those people for expansion. You need, these days. But it goes wider and that’s what I’ve recently started in, like, bringing in interior designers and architects into the school for just… as… for a talk, because these days an architect, when he or she is designing a building, needs to have 15 ‘Instagrammable’ moments at that point when you design the building.
Now, that input can only come from the people at the front, so we need to get that communication going from the start.
Yeah, if the architect doesn’t understand the hospitality business, how can they design for it basically?
And the same applies for an interior designer and it’s that input, but yeah, just to go back to define it. When I was financial controller in a hotel, there’s two ways of approaching it. You can put yourself on a pedestal and you can say: ‘I’m very important’ and use difficult words like accruals that no one ever understands and everyone sits there nodding. Or you can go to the experts, because an executive housekeeper can tell me more about linen accruals than I will ever know in my lifetime. The same applies for a chief engineer, yeah, who can tell me about light bulbs and LED and stuff like that. And if you create that interest and if you share your data with them and let them know how their department and their hotel is performing, then they come back to you over a certain amount of time and go, you know what? Your linen accrual is wrong. And then you have that connection. Plus, it’s a lot easier because they can help you. They know this stuff.
They’ll stop you making mistakes and I guess, you know, a bright idea that actually causes huge operational problems… is not a very good idea at the end of the day. And I suppose it’s part of it is ironing those out before those mistakes are made as well.
To a certain extent, but also having the guts to do them. As long as you have a time window, that applies on the commercial side as well. You’ve got to have the balls at a certain stage to… to stand up and try something.
If it doesn’t work, you’ve got to be very quick to get it back, especially if you have a large operation, right? If you have 800, 900, a thousand keys, then two weeks going the wrong way has an immediate impact on the profit… and a significant impact. But you’ve got to take the risks. You got to know where your boundaries are… from a pricing perspective, but also from a cost perspective.
Yeah, yeah. Now, one of the biggest trends, if you like, or one of the biggest things that’s happened in the hotel business in your time within it, of course, is there is many of the big operators going asset light. In a sort of practical sense, has it made a difference? And if so, what sort of difference has that made to the life of the hotel?
I think you can build a brand, obviously, a lot faster, yeah? And, as such, that gives you a wider exposure that can drive your distribution networks, your loyalty schemes, etc., etc., from a branding perspective. But the difficulty that you get is that you add a third party and now, with franchises in white labels, you add a fourth party to the game. And that communication needs to be managed, which is great news for asset managers, because it just needs to be managed properly. That’s all. So that means that the brand needs to be educated about an investor and you can have a high net worth individual who is completely different from an aggressive private equity fund, yeah? So that makes it more difficult, but it should not stop the hotel from operating in exactly the same way.
And you need to let the people get on with it. And I think that’s the important… and if you have a situation where you have four parties, so you have a franchise brand, a white label operator, an owner and an investor, and you have the general manager and his or her team in the hotel, then that takes a bit of work and it takes a bit of understanding. But as an asset manager, you could say, like, all ownership information is going to funnel through me, yeah? And I would like to have someone on the other side, the franchise is not that, but on the operational side, yeah? That I could talk to on a regular basis. And once you’ve established that, yeah, you have a funnel of connection and then you can make it work. But the people in the hotel, know [the] hotel, know us. So the people in the hotel need to be able to do their craft and to do it right and to have the tools to do so. And if that’s not the case, that means that, as an asset manager, you need to push back to your owner. Nothing is more useless than a budget whereas in the first week of February, the whole hotel knows that it’s never going to be achieved, yeah, because the motivation is gone, the brand is going to be less interested. That doesn’t work. No matter how ambitious you are, you need to manage that process as well. So it needs to be managed from all sides. And if you can get that puzzle to work, life is good.
Yeah, I know, obviously that is an added complexity, but for the benefit of the laymen listening to this podcast who don’t know the industry so well. What… for the, you know, for the big brands, for the big companies… what are the, what are the advantages? Why have they been so keen to go down this route? I mean, just so people can put it in context.
It’s pure growth, less risk, more growth. Because at the end of the day, they don’t have to invest in real estate, they don’t have to maintain real estate. And if you want to grow fast, and, I mean, let’s say you want to move to Albania, yeah? We know nothing about Albanian law, we know nothing about health and safety in Albania, we know nothing about, like, building structures, etc., how that works. So all of that falls away is with an investor and your risk is limited to the amount fees that you take. And if part of your fees have been taken from turnover and a lesser part has been taken from profit or operating profit, life is good.
We’ve seen a big growth in investor interest in, in hospitality real estate over the last, uh, over the last, well, probably a decade or more now. I mean, the numbers are significant. It might be the world’s greatest chicken and egg question. What came first, investor interest or availability of stock through asset line models, or have they both dovetailed?
It’s a… it’s a sexy business, right? Yeah. If you own… no disrespect to our good friends at Coca-Cola… but if you own a Coca-Cola factory, you own a Coca-Cola factory, and particularly in the beginning, if you own hotels, it speaks to people’s imagination. So I think from that perspective, it’s always been there. It’s relatively risk-free. There’s always going to be demand for hotels. Of course we’re going through cycles as we all do. Of course we have problems and we’ve seen, for instance, after Covid, that corporate business is still not 100% back, yeah? Because we figured out that Teams and Zoom and can do a certain amount, not all the face-to-face, but it can take away a certain amount.
So there are trends, but there’s always a need for hotels. And it’s in the DNA of people, yeah, to travel. And it’s also hotels are sexy, but we saw after Covid that there was a massive spike. We wanted to travel no matter what. So what we saw is that perhaps there was less money to go by, but people were still willing to go out. And we still see that at the moment. So people are happy where they used to go, I don’t know, to a mid-scale hotel, to now take a budget hotel as long as they can go away. And I think that’s also an aftermath of the Covid… of being locked up for a certain amount of time. So that plays. So it’s relatively safe. The risks can be managed. And that makes it a reasonably good investment.
I think that’s the attraction. If you’re… you’re a pension fund or high net worth or whatever, that’s why they’re getting into this market.
Yeah. And it’s not going to go away. It’s not going to go away. And if you see, even now, if you see the amount of hotels being built here in central London, it’s a lot, it’s a lot, and it grows and it’s alive. It works. So you have a relatively solid investment. There will be trends, but over time, I think you’d be okay. So from an investment perspective, that’s clear. From a brand perspective, it’s very clear, because you have less risk and your fees will come in. And based on that, you can grow faster and you can plant your flags in Albania if you want to.
Yeah. Yeah. And it’s true that, I mean, things are back on the up. I mean, our friends at Cushman and Wakefield are forecasting 25 billion euros in European hotel transactions this year. I mean, it may or may not happen, but it’s a pretty bullish number. There’s clearly, there’s deals out there.
It’d be interesting to see. At the moment, my focus is very much on London for whatever reason, and it will shake out. By March, we will know what the direction is and if there’s a couple of good deals, there’s a lot of movement as well within sort of the funds. Heads of funds are moving around at the moment. And I think that’d be good. Fresh air in the business and then see where we go. And there’s some exciting projects. There’s some exciting hotels, which is great.
Yeah, excellent. Looking more widely at the sector, what are the other kind of interesting or important trends in the hotel business that we should be keeping our eyes on?
I think it’s all about experiences. I think experiences have become more important than multi-ply Egyptian cotton in your bed sheets and all that sort of stuff. I think things are getting more and more personalized and I think that’s a good thing. There’s an enormous amount of data out there if you use it right. The use of the internet is becoming more and more personalized. We should not forget that. And here’s the AI topic, AI, ESG, those are the other two, but that AI could be very beneficial for the back office, but we are a hospitality and a peoples business. Based on that, it depends on what you travel for. If I arrive in a hotel 10 pm and I know that I have to leave the premises at six, I am not interested in a chit chat about the Arc de Triomphe or whatever, right? I just want a key and go to bed. And if that key is given to me by a machine or comes on my phone, I’m happy.
So it’s the understanding of what your guest is and what they require. Because if I come to the same hotel with a family, then I do want to know about the Arc de Triomphe and the theaters and the show-around and so on and so forth, yeah? And it’s finding that balance. But I think from an efficiency perspective, we can do well in the back office by utilizing AI. And then on the other side, ESG is becoming more and more important. And it’s going to be now involved in politics, in interest rates. And as such, we have to work with that. And I think we should. I think there’s also some plus points to it, because if you implement the ESG and if you keep the individualism and the demands from certain people, you keep those to one side, then if you combine those two, it can work. ESG is not only heating costs, ESG will be good for the planet, it also will be good for marketing, and I think it will be good for our products.
It’s great to see in some hotels that there’s no more plastic for your bedroom supplies, that your laundry bag is paper, that your comb, not that I need a comb, but that your comb is made out of wood, all those things. And if you work them together, even in the luxury business. I’ve seen a lot of, like, there’s those honeycombs on breakfast buffet. It’s great. It tastes great. It looks great. It’s all about bees. Yeah?
And then one hotel that I’ve visited recently, then they have the beehives, their own beehives, yeah? And you can get a show-around from someone. Kids are fascinated. You all put on the gear and the hats… and it works. And I think that’s the direction we need to take and we need to work towards anything related to ESG and we need to do it together. And I think if it’s pushed through by governments, hopefully it will work. Although of late, there has been some challenges.
Some pushback, let’s say. But you think from a consumer perspective, there’s still a pull element, if you like, from people who want to feel better about their travel, basically.
And if that costs you 15 or 20 euros more per room, then I think that demand will be there. But you need to make it attractive. You need to make people feel good. It’s a little bit like, yeah, and that’s where the marketeers come in, right? One of the brands did a whole thing about culture. I’m not the most cultured person in the world, but I remember checking into one of those hotels and they gave everyone a free museum ticket and some curated music stuff, and I was very excited. I was genuinely there and going, oh, wow.
Partly because of the novelty factor, I suppose getting something like that…
Yeah, the fact that I was sort of recognized cultured, of course, it’s a marketing spiel. And as soon as I was in the lift, I was never going to go to the museum, right? And I was probably never going to listen to the CD. It doesn’t matter. It’s just the way you engage and you create an atmosphere. And if you can do good at the same time, and if you can think about things a little bit more at the same time, I think that’s good.
Yeah. And obviously a brand like One Hotels, for example, has made it their USP. And then, from what I’ve seen, I’ve never had the fortune of staying there, but they seem to be doing a very good job of making quite a holistic approach and making it attractive.
But that brand has been 15 years in the making, literally. Probably it was around about the same time that I started and everyone was going like, that took a long time to develop and now they’re coming out. I mean, London is good. The one in Miami is spectacular. The one in New York is great, but that’s a great guy. People love it. Absolutely love it.
Yeah, they’ve made it their stock in trade, basically. And I suppose the experiential side is probably the other big move. There’s been, in recent times, experiential brands, you know, these hotels as part of the community and ‘We’ll get you closer to where you’re staying’. I mean, is that what you buy into from a professional and also from a guest point of view?
Yeah, you need to be honest about it. I think you can. It depends on where you are in the world. Because for some reason, in Europe, you don’t go to a hotel to eat unless there is like a celebrity chef or what have you, but it’s not practice, whereas in the Middle East or in the Far East, yeah, it’s common practice. If you go out for dinner, the first thing you look at is hotels, yeah, and hotels in the Middle East and Far East, five, six, seven restaurants in one hotel, and that’s what you do. And you get fine food. So, that creates a little bit more of that influence, but I think you can. And I think if you get the local community involved, it works so well.
I was in a small hotel in Paris. They had a corporate trade Monday to Thursday. They were a little bit off the beaten track, so to get tourism was, or leisure travelers was hard. They really worked on the local community and I stayed there and they did me a show-round on a Saturday morning. There was a yoga class for the locals. Then there was a function or a wedding or a bar mitzvah or whatever happening, but it was all integrated. And if you work like that, I don’t see any reason why you can’t. And I’m trying to get that into a certain hotel in London at the moment. I don’t know if it’s going to work, but it would be great. That it would be someone’s local. Yeah?
Or it would be where mom, when she walks the dog in the middle of the morning, goes for a coffee and a cake or meet with her friends. And then you have that overlap, because that would be good for the locals. It’d be interesting, but it would also be good for the leisure travelers, right? Because there is someone local there where you can have a chat about the Tube station, it doesn’t matter, but where you get that communication and interaction, I think there’s a long way to go. Starbucks did that very well when they started. The whole third space thing. But actually people coming together, getting to know each other, supporting a local charity, but support something really local, bring in some people to help out from the local community, who then get that pride of working for a big establishment. I think that works.
I think there are brands that do it well. I mean, I just think of Locke Hotels. I stayed at the Locke up in Dalston and it’s got a rooftop bar, which is open to all. It’s locals, it’s guests. It was very, you know, there’s a, there was a co-working space.
That’s it.
That’s kind of what you’re talking about, isn’t it? It’s that integration. It’s that integration with the community around. And if you like, not being guests only, because I can also remember back in the early days of my first of the few hotels stays, it was residents only. Everything was residents only, you couldn’t even walk through the door if you weren’t a resident, that does seem to have completely changed now or not completely. I mean, I’m sure there are brands where that is still a thing, but I suppose the more lifestyle brands, they’ve chucked that away, basically.
I think you need to chop it away and that brings the liveliness into places as well. Of course, if you have members, then it becomes more difficult. Locke is a very good example, to be honest, of where they sort of in that four-star range, slightly funky, long stay, little kitchenettes in the rooms as well, so you get a different… and it works well and it’s nice.
And I suppose it’s also playing to this digital nomad trend and we’re seeing other brands bringing co-working. I mean, that genie is, despite some attempts to push it back in the bottle, it doesn’t appear to be going back into the bottle. I mean, I think particularly for the younger, more digital kind of employees, they are going to try 10 months here and 10 months there and work remotely. There are, you see on LinkedIn, there are jobs where people saying it’s fully remote, you work where you like.
We all look slightly different on LinkedIn, right?
True. I’m up on stage at Glion looking like I’m sort of a professional presenter!
But I think in general, yes, and even on a smaller scale, if I look at my daughter, she works two or three days from home and she has her own, like, facility there and two or three days from the office and there’s a balance in between the two. I think you can save on travel time, etc., but you still have your social… because I think it’s important as well to have a social connection when you work… and that’s not going to go away and the digital nomad’s not going to go away. Also, because we thought that co-working was the golden goose. And it’s not. Everyone was cold and obviously we had the whole, WeWork, um, interesting scenario, see what happened there. And then everyone was doing co-working, uh, co-working commercially is hard work, yeah? And there’s a lot of competition out there.
So again, it’s finding a balance where you provide something for that, that if people need a space to co-work, but don’t make it a massive thing. I think that’s the important thing. And then you have the whole ‘bleisure’, sort of, business-leisure crossover, which is roughly the same as what you described. So you’ve got to have a certain amount of facilities, but it doesn’t have to be over the top. And it doesn’t have to be, like, with a check-in desk and you have 30, 40 desks, because that’s not the way I can see it develop. We work everywhere. Yeah.
Yeah, so this will only ever be really just that one element, the overall package.
Obviously, WeWork, it’s got to function. Yeah. If you don’t want an office and you want to rent something, then that is perfect. But I spoke to a colleague yesterday, literally a colleague in the consulting business, and he has a very posh address in W1 in central London. But I said, do you really use it? He goes, because it’s a post office address, but they have meeting rooms, they have coffee facilities, etc.etc. They got actually, coming to think about it. We don’t use it that much. It’s nice. The post goes to a good address, yeah? And if we need a meeting room, it’s there. And we’re happy to pay for that, but we don’t use it as much. But, on the same side, nothing is worse than being locked up in your own house for two weeks. And so it’s all about balance.
So from an investment, development, new builds, new markets, what do you think are going to be some of the sort of hot stories if we’re looking ahead to 2025 or the rest of 2025, where do you think we might be wise to sort of keep our attention in terms of that kind of, you know, the investment development side of the market?
I think there’s a lot of luxury being built at the moment, and I’m not sure if that will hold. There is a certain market, but obviously, we got some massive, massive things moving in Saudi. Huge. And even if part of that will materialize, that will make a significant change. There’s huge, huge investments taking place there, which will be different. I think we will continue down this experience route.
I think that’s… the interest rates will only slowly come down and that will then generate, like, more traction in the deal market. But I think that, we touched on Locke, but the mid-stay, the long-stay in the three-to-four upper upscale market will be the future. There’s a lot of people that have an interest there. Even in saturated markets where there is enough hotels, a brand like Locke could break and bring in. Mövenpick has just come up with Mövenpick Living, which is a nice Swiss-based brand. Okay, it’s owned by Accor now, but yeah, that has, and it’s just a step up. And if you need to be somewhere for business or leisure for a week, that those are the good alternatives.
I mean, the markets are transparent, so revenue management is super, super important and makes sure that, from a hotel perspective, that you know and understand where you sit, what your competition is. Yeah? And then challenge yourself to march with how they march and together. Cause in a way, you compete… in another way, you’re all responsible for that market and if you’re in central London and you’re somewhere around like one of the big convention centers, then together you make that convention center. And we forget that sometimes. Sometimes it’s them, sometimes it’s us all together.
Yeah, yeah. I mean, when I first started getting involved in the hospitality business, there was talk that the battle against the OTAs had been lost and the industry was sort of struggling to fight back. And if you like, kind of, take more control of the channel? I mean, where’s the state of play with that particular situation in terms of own bookings versus OTAs?
I think the OTAs are here to stay and I think we need to be honest about it. But we also need to be honest about, because the OTAs obviously sort of drew a wedge in huge sales and marketing budgets from the brands that all of a sudden had to be justified. So from that point, I think we reached a balance. And if you think about it from a consumer perspective, right? I mean… If you book a flight, where do you go?
I tend to go direct, actually, but yeah. Because unfortunately, I’m generally only an EasyJet man myself, so I can book directly with them.
Yeah, okay, you go direct, but I go to booking.com, I go to Expedia, I actually go to Metasearch sites just to give an overview of what we have in the market. And if you know the price difference is minimal, it’s just a comfort and it’s an easiness. But we need to work together. Good friend and colleague of mine approximately 10 years ago at a conference made a statement and said, like, why don’t we give all our hotels to booking.com, fire everyone in sales and marketing and we reach a similar cost point? No, that didn’t go down too well…
I bet!
… and was open for it. A lot of conversation, but the conversation was had. And I think that’s the important thing. I think when it comes to it, we’re all growing in a certain direction. Okay. The OTAs are there. They’re not going to go away, yeah? The consumer likes what is in the OTAs, but you need to find a balance. And if you can get your business direct, you can get it. But, at the same time… OTAs could be very beneficial for you. And then the question is: what is happening on the other side? What are your marketing and salespeople doing? So you need to find a balance.
You need to convince the customer either to come direct, yeah, or to say, like, we know where we have to go when it comes for an RFP for a corporate contract for a year, etc., etc. So one doesn’t exclude the other as far as I’m concerned.
Yeah. They’re just there, that is the market now.
It’s a fait accompli It’s not going to go away, but it’s good for the consumer, and I think it’s our job, and especially from an asset management perspective, to sort of make sure that what you get from the OTAs is at reasonable rate, because sometimes you need your OTAs.
I mean, Sunday night’s a perfect example, right? Difficult for leisure, difficult for corporate, so it’s not that they’re all at fault.
And of course brands play the OTAs now. I mean, there are sponsored listings. You can get yourself up the top when someone’s doing a search for central London. There’s, you know, I think the brands are getting a bit wiser to how to make the most of the OTAs as well, but I think also it’s interesting. I mean, on times I’ve booked through an OTA with a hotel, I’ve usually then had a follow-up from the hotel, you know, for our best rates, book direct… loyalty points, this, that and the other, I think they’ve woken up. Definitely. I think. There’s a fair fight now.
Let’s say there’s a mutual understanding.
And I think it works
I think it’s not going to go away. You got to keep in mind, right? Because, um, well, let’s, let’s go back probably 35, 40 years ago. There was travel agents. They’re virtually gone. Apart from my, like, my mom, but the travel agents world is gone. And I remember going to the travel agent when EasyJet started. And I wanted to go home to Amsterdam. What do you got? KLM, British Airways, whatever.
And I went like, what about these new guys? EasyJet? Crooks, absolute crooks! Don’t do it. Long story short, EasyJet is the first or the second biggest airline in Europe. Yep. Travel agents long gone. So, and they also took commission.
Of course, they’re a business.
But on a small scale. So there was huge mountains of like travel agents and it each got their 20, 30, 40 pounds a month, and now that’s all going through one big funnel. I think it’s also if you work with them, booking.com has become so big, yeah, that if you work with them and you’re not start off with like, you guys are the enemy, but it’s like, okay, how can we make this work together? They’re always and means.
Yeah, for sure. Excellent. Now we’re sitting at Glion London campus, for the benefit of those listening on audio. So let’s talk a little bit about your program, the Master’s in Real Estate, Finance and Hotel Development. Now, the name of the program gives a bit of a clue that a lot of the people are coming to this program with a view to getting to that part of the business. But interestingly, how many of the students do you think have actually experienced the operational side of a hotel before they come to you? And is that a benefit?
It’s definitely a benefit. It’s a huge benefit. It’s like I said, if you’ve been pulling pints, making beds, doing your foreign exchange, doing your check-ins, checkouts, it’s a huge benefit. So I’d say about 50% have had some touchpoints. The Bachelors that come through have done their internships and are familiar with a certain amount of things. Other people don’t, but then perhaps they’ve missed out on a certain aspect of corporate finance, a certain aspect of real estate, which the people with the practical experience haven’t had.
So I think having the combination of the two makes it really, really interesting and makes it mutually beneficial, because then we can grow on that. And of course, it depends on what you want to do after the milestones, because you could go back into, sort of, the hotel development, working for a brand in development, understanding that you can go into asset management. I mean, the understanding is always valuable, but you could also end up for a fund and for an owner side where you have to do constant calculations, work on return on investment, where it’s a little bit more mathematical and theoretical.
But I would always recommend that people at least have the touchpoint, but sometimes it doesn’t happen and that doesn’t make them bad students at all.
And we have people that are crossing over from other industries and all of a sudden want to make a career change and that works as well.
And obviously for those, if you like, the ones without that hospitality background, presumably there are, like, field trips and, and visits to hotels. They can start to immerse themselves in that world as well and get up to speed, if you like.
Yeah, totally, and get the understanding, but it’s not the gritty part. But you could, of course it depends on how you want to do your internships, because you could do your internship on the gritty side. And the cohort that’s just left, literally just left. I got two guys that’ve actually gone into operational hotel finance for six months to get experience… I think that’s really good. It gives them a good base. Whatever they decide after that, to have that understanding of what’s happening, what actually drives the business.
Because ultimately, like, going back to where we started, if there’s no hotels, then there’s none of us. And if you have an understanding what happens in the core, I think that’s great. And we’ve managed to get them with a very respectable high-end five star brand, it’s good, but I got another student who’s going with the brands into development, who just started at Hilton yesterday, right? To work with the development team for six months and sitting in between, if you like. Now, this particular gentleman has a good amount of hospitality experience and is going to take it to there and then selling the brands to the investors. So the choice is quite broad within the niche that we sit, the choice is quite broad.
Yeah, yeah, and once they graduate, what are some of the… I mean, you’ve talked about some of the sort of destinations in terms of areas, but what are some of the actual roles that the students end up going into once they’ve graduated?
Well, like I said, you can end up with the brands and doing development. You can enter the wonderful world of consulting. Yeah? But consulting is quite broad, because it could also include brokerage, it can include valuation. So you can work with the bigger brands, the JLLs, the Christie’s, the HVSs, CBREs, that sort of, and then they have also capital markets departments that really sort of work towards ownerships and with ownership. said the larger consulting businesses gives you a really good playing field to go, so you can do that. And then you could work directly for investment companies, for private equity funds, etc.. So those are the three areas, so you have the whole, and consulting is a big, big word.
Like I said, it can be with the brands, and then you can end up directly with the investment side. And anything in between.
Yeah, once you’ve got that knowledge and that…
What? Yeah, that knowledge is there.
Yeah, it can work across those things. So I want to finish by asking you to gaze into your crystal ball somewhat. We’ve talked about a lot of the kind of trends that have happened, the rise of the lifestyle brands, asset light, how sustainability’s become, quite a USP for several brands. Looking further ahead, what would you predict is the next big trend… maybe not on our radar at the moment… which might be about to land on the hotel business.
You got me, Martin. We’ve seen Airbnb, we’ve seen the rise of Airbnb. And again, that was like an EasyJet moment. I don’t know what else. Get them out. But it’s there to stay. And funnily enough, going back to EasyJet, they also allowed an enormous additional segment of people to travel who didn’t travel before in all of our benefit. And the whole budget airline has driven that out. So there will be good things. I think… And from a little bit of experience, there will be a lot of demand in going really back to basics, back to very small properties.
And that’s a huge challenge, right? Because you’ve got your overheads. So we need to find our way in order to make that profitable. But for people to genuinely experience a country, a region, a countryside. And some brands have already started with that. If you take the, I always use the Six Senses in the Douro Valley in Portugal is a good example. Now, that’s a big property, yeah? But they really focus on the immersion within the Douro Valley and all that you do. And it works, it works. We want to believe it, we enjoy the food, we enjoy the drink in a very casual atmosphere. I think there’s a lot more to be expected from there.
I’ve been helping someone in Somerset, where there’s remarkably little hotels for some reason, apart from a couple of luxury, to work towards something like that, which is more immersed in nature, very much farm to fork, but also commercially interesting. And I think that’s the point, where we need to find something that is actually commercially interesting. And that will take time, because when we go on through that process, once you get a little bit further, they go like, okay, so where’s the profit? And it shouldn’t be mommy and daddy profit, but it should still have the feel, yeah? Of that immersion. And it would be great to see that.
Yeah, yeah, I know. That authenticity factor, basically.
Authenticity. Immersion in the locals, farm to fork, but of a high quality and commercially interesting. And the challenge is to make it commercially interesting. But I think if you work with people and if you create a certain amount of centralized functions, if you can work with AI in the back of the house, but really have that experience.
But I think also to turn the conversation right around, I think it’s also fair to say that, to make something like that work with that level of authenticity, you cannot do it unless you have the passion for it. I don’t think you could fake it. I don’t think you could fake what you’re talking about.
That’s a very valid point. That’s the good point. But it goes with everything. It has to be genuine. The first Hard Rock Cafe, yeah, down Piccadilly was genuine. The Hard Rock Cafe, no disrespect to Phuket. There’s not enough guitars in the world to hang up on the walls of all the Hard Rock Cafés, right? It’s not. But the first one was genuine. They’d had authenticity. They wanted to bring rock music and hamburgers and it’s a great place, yeah?
And the people that work there, and I think there’s one lady who’s been there since the opening in 1972, whatever. That’s great. You need that authenticity. You need to have that passion and you can’t make it too corporate. But you also need a certain amount of rigor from a corporate perspective in order to make it commercially workable and profitable. And that’s the dilemma. And I would love to do that for the remainder of my working career.
Excellent. Alex Slors, thank you very much indeed.
Martin, it’s my pleasure.
