HM February 2018

2018 Industry Leaders Forum Global expectations for the hotel industry revealed

THE BUSINESS OF ACCOMMODATION IN ASIA-PACIFIC Vol. 22 No.1 Bi-monthly February 2018

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HOW TFE HOTELS IS CREATING

A Sense of Place TFE Hotels CEO, RACHEL ARGAMAN, looks at how the company is transforming itself using ‘placemaking’, ‘storydoing’ and mastering the millennial mindset.

Optimistic Outlook Australia’s Tourism Minister Steve Ciobo on a big 2018 ahead

Chasing China

Doctor’s Orders

Tourism Australia’s John O’Sullivan on inbound expectations

Dr Jerry Schwartz on adding more hotels in booming Sydney

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contents Bi-Monthly – February 2018

18

08

Features.

44 Leading Owners

08 The 2018 Industry Leaders Forum

An introduction to our special Leaders Forum edition of HM.

10 Global Leaders

Commentary from heads of leading hotels and chains across the globe.

16 Tourism Leaders Commentary from politicians and leading industry associations.

The 2018 outlook from leading hotel owner Dr Jerry Schwartz.

45 Australasian Leaders Commentary from heads of leading hotels and chains in Australia, New Zealand and the South Pacific.

Check In. 06 Inside Word

The editor’s letter

26 Asia Pacific Leaders Commentary from heads of leading hotels and chains based in Asia Pacific.

37 Leading Suppliers

2018 Industry Leaders Forum Global expectations for the hotel industry revealed

THE BUSINESS OF ACCOMMODATION IN ASIA-PACIFIC Vol. 21 No.6 Bi-monthly February 2018

Columns from eight of the leading suppliers in Asia-Pacific.

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HOW TFE IS MASTERING THE

Millennial Mindset TFE Hotels CEO, RACHEL ARGAMAN, looks at how the company is transforming itself using ‘placemaking’, ‘storydoing’ and mastering the millennial mindset.

Optimistic Outlook Australia’s Tourism Minister Steve Ciobo on a big 2018 ahead

Chasing China

Doctors Orders

Tourism Australia’s John O’Sullivan on inbound expectations

Dr Jerry Schwartz on adding more hotels in booming Sydney

14 TFE Hotels.

43

64

Why TFE Hotels is the one to watch in 2018. Photographed exclusively for HM in Sydney. A TFE Hotels promotion.

hotelmanagement.com.au 5

Acquisition action already The New Year was barely a couple of weeks old when the first major acquisition was already announced: Wyndham buying popular US chain La Quinta for USD$1.95 billion in cash.

The addition of one of the largest midscale brands in the industry will see Wyndham add close to 900 managed and franchised hotels – representing 87,500 rooms – to its system when the deal is finalised in the second quarter of 2018.

“La Quinta will immediately become one of our flagship brands,” said Wyndham Hotel Group President and CEO, Geoff Ballotti.

“It is an exceptionally strong brand that is led by service-minded associates who deliver some of the highest customer engagement levels in our industry.

“We expect that La Quinta guests and franchisees will benefit from our intense focus on product quality and our best-in-class technology, digital, loyalty and distribution platforms.

“This acquisition also significantly expands our hotel management business and provides us with substantial new opportunities to drive increased growth in our business,” he said.

The move continues the consolidation that has been sweeping the industry over the last two years, led by Marriott acquiring Starwood, and AccorHotels buying Fairmont Raffles and Mantra Group.

In the United States, Wyndham has been incredibly active. In 2017, the company acquired AmericInn and Three Rivers Hospitality for USD$170 million, a move that saw Wyndham add some 200 properties.

Wyndham’s moves to bolster its presence in the midscale segment will no doubt see the company target more hotel chains, while it remains interesting to see which chains look at luxury brands as the year pushes on, with the likes of Kempinski continually mentioned as a takeover opportunity.

Global mergers and acquisitions (M&A) is one of the many key themes of this special edition of HM magazine, our 2018 Industry Leaders Forum.

Once again we have compiled a comprehensive outlook from some of the world’s leading Hoteliers, tourism leaders, associations and suppliers to help set the scene for what the hotel industry can expect in 2018.

Enjoy the read and I look forward to your feedback.

Yours in hospitality, s Tourism Leader

Managing Director Simon Grover

Publisher James Wells

Editor-In-Chief

James Wilkinson jwilkinson@intermedia.com.au

Deputy Editor

Bonnie Tai btai@intermedia.com.au

Group Sales and Sponsorship Manager Adam Daff adaff@intermedia.com.au

Editorial contributors Ted Horner. Paul Kelly, Peter McBrearty, Richard Munro, Robert Williams, Paul Wiste

Production Manager Jacqui Cooper jacqui@intermedia.com.au

Circulation and Subscriptions Manager

Chris Blacklock cblacklock@intermedia.com.au

Subscription enquiries

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Published by

s Tourism Leader

Hon. Steven Ciobo

MP

The nt Tourism and Investme Minister for Trade, Australia ’s nal year for Australia yet another exceptio es were hit and both Off the back of and where many mileston tourism industry, records were broken, I am excited spend and arrivals c about the next 12 months. optimisti

John O’Sullivan Managing Director Tourism Australia

to Australia has al aviation capacity this. Internation 2017. a crucial role in 25.6 million in services connectivity plays seats in 1995 to of successful air fastest growing million inbound in part to the negotiation Turnbull Coalition grown from 9.3 was again Australia’s the increase is thanks ast year, China market, with This significant capacity’ agreement inbound tourism capacity. This initiative an historic ‘open and most valuable in 2018.

17 for unlimited airline agreements, including no signs of abating to Australia from with China, allowing Australia growth showing now able to fly in Australia. a successful China Government signed Chinese travellers flights to six ports Off the back of dividends with visitor spending 150 direct weekly continues to pay we have seen Chinese in every four operating around launch its inaugural Year of Tourism, to one with ten airlines China Southern seen cities, equating service; and we’ve now weeks alone, its Beijing to Brisbane surpass $10 billion, In the last few Air China launch spent in Australia.

Cairns service; to Brisbane route. tourism dollars have also climbed Guangzhou to of its Shanghai previously visitor numbers from frequency the flights million, boost Annual Chinese direct to 1.34 provide China Eastern are also enabling than 12 per cent challenge and largest advancements nationally by more and long-time continue to both Technological Australia recently of our neighbours Technology will as next month, example, Tourism le destinations. only 17,000 shy early For As Sydney ways. unimaginab many Experience New Zealand. the industry in become our s. pilot of its City arrivals market opportunities for and destination WeChat for the New Zealand and Sydney attractions Chinese platform China could overtake of visitation. to navigate top partnered with also be key to ensure in terms Chinese visitors international to largest market, capital cities will guide, which enables of Australia’s overall issues in some Strategy, we aim hotel capacity Indeed, the growth the Tourism 2020 driven by China Addressing the to be primarily industry. Under this with 39,116 a healthy tourism on track to exceed to visitor spend continues including India, Hong Kong, the fostering of 2020, and we are markets n until 2024 (according new rooms by and other Asian or under constructio create up to 20,000 rooms either planned tourists, Malaysia and Japan. potential new hotel popular with American Australia’s international visitor Australia was also to become alongside increased , underpinning STR global).

United Kingdom in capital cities, now at a record into regional destinations who overtook the The lack of opportunity tourism investor interest market, with spend regional increased valuable for consumer in most second rate, positive dispersal, has resulted foreign direct investment favourable exchange beyond major gateways. A capacity and t’s strategy to attract $3.8 billion. A of high aviation the visitor economy the Governmen knock-on effect. on a combination the benefits of lead to a positive confidence, and ideal time to capitalise is infrastructure, spreading many cases will and exhibition fares makes it an That infrastructure in Sydney’s convention competitive air important market.

Investment in facility. This replacement of this increasingly shining Centre Sydney this is the recent the potential of Australia will be great example of International Convention weeks, Tourism t of a host of upscale outstanding new why in the coming the developmen some exciting new centre with the only prompted America, with remains a world-class precinct has not a spotlight on North to ensure Sydney significant new it will also help pipeline. year in a row in its vicinity, but initiatives in the hotel offerings events. witnessed the third edge when it comes leisure and business We have also just than the national s a competitive events. destination for tourism grew faster offerings give destination incentive and association one of Australia’s where Australian Such world-class including represents now events, the amount spent on average twice lucrative business economy; the industry including to bidding for yielding, spending exports. of significant events visitors are high and despite the largest service play host to a range Business events be complacent annual Sibos also the that will cannot and we Australia However, Gold Coast y be challenges by a leisure visitor. delegation to the there will undoubtedl order to ensure g Infinitus China In positive outlook, right people. an 8,000-stron in coming years. the policy settings attended by 6,000 will face the industry strong progress, it is imperative endeavour to get driven by conference in Sydney, Government will n of this of 2018 will be the continuatio their part to ensure However, the success to ensure our unique The Turnbull Coalition ts at all levels do industry to thrive. that governmen who work tirelessly growth in the sector.

Australia’s tourism for industry continued our in world. of those in the the best in the Australia can sustain the concerted efforts tourism destination remain some of we need to tourism products To remain a desirable and spectacular global landscape, competitive and come, to increasingly reasons travellers more continue to give

L

16 HM The Business

of Accommoda

tion

record results, it n tourism achieved year when Australia rly as we draw closer to achieving Australasian Leaders particula off the back of another 2018 and beyond, gets underway, the prospects for Tourism 2020 goals.

As the new year time to consider our shared is an opportune 13 per cent to

Australasian Leaders

spend, growing in terms of visitor our largest market at $3.75 billion.

USA. China remains ahead of the USA t pace (up 12 per strong in the past year, at a double-digi one tourism is in a are still growing reach $10.3 billion hilst Australian be Australia’s number visitor numbers travel well on track to record levels of Notably, Chinese putting China to achieve its Tourism of position, with al and to 1.3 million, And, longer term, both internation by the end cent last year) spend in 2018. in Australia by seeing visitor expenditure for visitors and globally we are source market in overnight Chinese domestic visitors, models being $13 billion annually 2020 target of of traditional business rate of 10 per cent been growing at the ongoing impacts has – to this, competition decade.

USA position as the Adding performer - the the USA in a firm disrupted by technology. the tourist dollar has not waned The other standout last year. This puts spend. As the s for led ted 766,000 visitors market for visitor the between destination being more experience to an unpreceden and second largest plans to build on increasingly big visitors are has of source Australia and travellers our third largest results, Tourism of destination. in 2018. to deliver record is where Tourism in their choice focus on the US market continues International perspective, which with a greater on Business events. with industry, this opportunity From an inbound with will be our focus momentum of its efforts in partnership of Australian tourism, geographic strategy international Australia focuses yielding sectors Supporting this Of the business a record 8.7 million one of the highest the it as big as the US! market remains Australia welcomed per cent more than business events last year. This makes see Australia welcome This was seven a six per cent in the year to June and this year will visitors last year. $3.7 billion spent , these visitors drove remain significant period. With our time. over a three-week corporate incentives previous year. Importantly $41.2 billion for the first hope events market, in Brisbane we 10,000 pax to Cairns to reach hosted an Chief spend bringing as Executive being visitor that China, Officer it is vital rise in in the years the likes Amway Dreamtime, recently rate of growth, product showcase, of our visitor economy At this current depth of experiences s for this sector signature incentive the range and TFE offer Hotels business opportunitie of international industry we can to stimulate further of increasing numbers technology is something robust to meet the needs the influence of with Australia’s to come. you couple this in the prospective travellers, in new and impactful 39,116 rooms visitors. When In terms of attracting to to reach our target customers having a total of The year ahead than ever in connecting pipeline, adapting is one of opportunity until 2024, it serves investment a more influence we are constantly App, consumers especially is having a total of 214 projects for the of having fromhere hotel industry with the WeChat pipelineand at TFE and importance ways. Mobile technology As we have seen in China phones all within the opportunity Hotels wethese projects. the world. and pay on their are charging to highlight to support ahead with consumers with plan, book, connect expansion experiences ofour plans and technology to the right supply in Australia, emergence of new are using mobile New Zealand is the aircraft facilitating and seen Europe.

A good example Dreamliner 787 the Perth, which has with application. like one s aircraft who can is impacting aviation, prospect of other tion and attractions reinvigorated destination Technology too Australia and the New York - Australia investment in accommoda t to expand from Europe to to London and has the developmen non-stop travel Directors e are significant gearing up Elizabeth Coast of Australia 2018 toQuay ts Supersonic flight be our biggest with the from the East such as the for date, these developmen non-stopEach offering. And,growth year to our goal of having 100 hotels in will accessible. from as weflyreach be built onBeyond next generation standards for our portfolio services more Veriu Hotels & Suites on the city’s world-class directwithin five years. to build has never been altogether.

This means TFE the experiential andtravel of the new Qantas is now is in a good place social-minded to grow destination by an commencementHotels is setthis to disrupt long-haul our industry extraordinary 41% inpotential year the set. The goals, and climbing new year,millennial the next five years,tofrom March in themillennial Vibe Hotels ourincurrent 2020 brand offers portfolio ofour longest standing UK Perth Tourism embed ourselves mindset travellers now have 26 hotels inthe fivevisit So, as we to working countries. We been to one of 70 hotels in to towards our shared development connectivity,working everthree looks forward across social spaces, than it has reasons countries inspired It is set to be a truly exciting andtwo design Australia momentum in and excellent newsand Tourism continents. the Over this past year,closer new es before us. years. on two year ahead for conferencing our 11markets providing next – sought-after locations.to embrace the opportuniti ur ethos is to connect guests visitor European hotels performed exceptionally well. We towards $130 billion ininthe Veriu Hotels and Suites with with local experiences and immerse continue to seek out new in 2018 coast. opportunities The Adina the industry them in the we see the 2018 being via the west Apartment to open across unique fabric of inner city precincts hotels in Germany, Hotels brand has evolved two where partners where we the second largest operatorAustralia and fringe suburbs. With that are the with all its the year that our network will al markets, the 17 from its beginnings in Sydney in Of serviced and apartments in mind, investment in Australian locations the internation China ment.com.au (Horwath experience are in 1982 to become ahotelmanage year We have just opened the doors to two beautiful new es this HTL). as well as markets across the significant growth and expand major brand with 32 hotels opportunitihotels Adina Apartment Asia Pacific are on our radar, in areas where significant under its banner in five in hip Leipzig and in the port interstate, city of Hamburg as we most we feel we can contribute with countries - and another 13 celebrate our 10th year in Germany, hotel offering within the 25 a bespoke whilst continuing our strategy in the pipeline. We are to 150 room capacity. We will where we have many more projects in the pipeline. of growing look at opportunities to grow developing several precinct the brand wherever possible, Veriu’s presence in the most hotels including an Adina but we will not make investments In Australia the market is more in exciting just to have a presence and Canberra in 2020 that includes expansion will not be at the varied and we continue to see expense of the connection with a “Theatre Lane” which suburbs and precincts in Sydney opportunity for growth.

We are thrilled that in the next our guests and the local area. will form a new foodie and We see the leisure and business 12 months we will open two with retail lifestyle precinct set stunning new hotels in markets growing for all our Brisbane. We will open Adina openings in Surry Hills and Elizabeth hotels. The aim for our to re-enliven the city centre. leisure segment in 2018 is to Apartment Hotel Brisbane At Melbourne’s West End Bay. grow around 25% and we are later this year in a beautifully redeveloped heritage building confident we will hit that we have an exquisite hotel target with our offerings. The near the waterfront on George in the planning YOY Street, growth to date in the corporate whose design where we are currently completing an extensive draws on rainforest and futuristic travel segment has been significant and proves renovation that has preserved to us that the product we have elements, with a yoga its wonderful character.

It will have 220 apartments, rolled out for local corporates pod, massage studio, Jacuzzi, is being received as something a pool, signature restaurant day spa and an indoor and bar in the ground-floor unique and truly valued. lobby space, all right in the 25m lap pool and “social hub” heart of the CBD. Whilst the overall outlook for with indoor gardens as the accommodation industry We will also open The Calile is positive, it is not without a lobby. We will also open its challenges. The issues around in the James Street precinct beautiful Adina Apartment of Brisbane under our TFE the 457 Visa will continue to Hotels Collection brand, which present recruitment Hotels in Sydney’s CBD and challenges but we are focusing is a portfolio of beautiful hotels bustling Fremantle in on attracting talented people across Australia, each with individual character and that feel the connection with Western Australia. the brand and the spaces we charm. The Calile will launch offer to our guests. We are a as an urban resort in one of Australia’s cultural epicentres, bespoke collection of hotels With strong growth, excellent on the opposite end of the spectrum Fortitude Valley, with food, and operational results and drink and retail offerings at to the traditional hotel model. the hotel including a lobby remarkable talent coming through bar and poolside restaurant We welcome the disruptors with cabanas. Guests will emerge our Future Leaders’ and embrace distribution relationships from the lobby to find themselves Program, TFE Hotels is poised with the likes of Airbnb to supplement our own immersed in Brisbane’s most for an exciting era of distribution channels and provide energetic lifestyle mecca, the James Street precinct with expansion further our brand to a wider market. its galleries, museums and chic exposure for and excellence.

We are already experiencing boutiques.

The Sydney hotel market has a high volume of Chinese visitors to our hotels who are enjoyed a very strong year and finding us through third parties there are plenty of opportunities given the limited or through investing in good SEO, and 2018 will be supply of new product. We a year where we will roll out SNAPSHOT: TFE HOTELS have located areas where demand outstrips supply, including several options for our Chinese guests that will have an impact Mascot and North Sydney.

Number of hotels & rooms on their choice of stay.

We opened Travelodge Hotel Sydney Airport in Mascot (Globally): 71 hotels, With several new hotel signings in September, and it reached 9907 rooms 100 per cent occupancy the growth of new aviation in its first week, highlighting routes and airlines will be a boost that is required for all how Travelodge Hotels as a brand continues to go from in the industry. Optimising Number of hotels & rooms strength to strength, with 18 (ANZSP): 60 hotels, these new opportunities will come down to how we engage hotels now in Australia and New Zealand. with the guests from the emerging 8151 rooms We will soon open a Vibe Hotel markets and how they are made to feel while staying. at North Sydney’s exciting new Number of employees: 2218 retail, dining and commercial address, Northpoint, SNAPSHOT: VERIU HOTELS (Globally), 1892 (ANZSP) 2017 was extremely rewarding where guests will have access & SUITES Year first hotel opened: 1982 and set us up for a very prosperous to a rooftop bar and pool, a new eat street and a Number of hotels & rooms: (Medina Serviced 2018. The group retail precinct developed by opened two new fantastic design 4 hotels, 275 rooms Cromwell Property Group.

Apartments at Kensington, Sydney) hotels - Veriu Broadway, a warehouse Construction is about to start Number of employees: 100-plus conversion with New York Style Loft Apartments; at Vibe Hotel Hobart, Vibe Hotel Darling Harbour in Year the company was founded: and Veriu Central, a heritage Sydney and Vibe Hotel in Queen Year first hotel opened: 2016 building with art deco 1963 (TOGA), 2013 design, adding to our existing Street Melbourne. This marks hotels in Camperdown and (TFE Hotels Joint Venture) a huge milestone for the brand; Vibe Hotels will Year the company was founded: Randwick. A partnership with Folkestone property fund managers have a presence in almost every 2016 -Head office location: Sydney, capital city in Australia. for a hotel development at Green Brands in the organisation: Australia Square due to open in 2019 is underway and we Veriu Hotels & Suites celebrated two hotels in the Head office location: Sydney, top 20 for Sydney on TripAdvisor (Camperdown and Broadway).

Australia 64 HM The Business of Accommodation We could not be happier with how the brand has been embraced by the market and look forward to more exciting developments in 2018.

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Rachel Argaman

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Rhys Williams and Alex Thorpe

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hotelmanagement.com .au 65

James Wilkinson Editor-In-Chief HM magazine and hotelmanagement.com.au

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Publisher

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6 HM The Business of Accommodation

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The Industry Leaders Forum

The 2018

Industry

Leaders Forum

Welcome to the 2018 Industry Leaders Forum edition of HM magazine where once more we have compiled the most comprehensive wrap-up of the accommodation industry in Australia, New Zealand and the entire AsiaPacific region. Inside, you’ll find exclusive interviews with leading owners Hoteliers, major suppliers, Tourism Ministers and association and tourist board heads from across the region.

Edited by James Wilkinson Barry Robinson, President & Managing Director – South East Asia and Pacific Rim, Wyndham Hotel Group

8 HM The Business of Accommodation

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Global Leaders Is there any industry in the world other than hospitality that opens up so many bright possibilities for the future? I think not.

G

Sébastien Bazin Chairman and CEO AccorHotels

10 HM The Business of Accommodation

rowth prospects in the years to come remain strong. The market expands by roughly 5% every year and, because demand outstrips supply in the market, it is expected to follow that path in the next 20 years or so. This dynamic is one of the reasons why AccorHotels continues to open more than one hotel every 36 hours and is the biggest player in Europe, South America, in the Middle East and Asia Pacific.

We’re set to remain the biggest player in these regions because, of our pipeline of over 910 hotels due to open in the next 3-4 years, 81% are located in emerging markets that show better gross capacity and a better pace of growth, for reasons ranging from the enormous capacity and the lack of infrastructure in India and Sub-Sahara Africa, to the rapid development of tourism in Latin America. Our objective is to continue and even accelerate this development.

I’ve said on many occasions that our industry had been shaken up by the clientcentric culture brought about by new, emerging digital players that left us with no choice but to change. I firmly believe that this impulse toward transformation was for the better, in so far as it forced us to do something we should have done long ago: rethink our model and get bold enough not only to adapt but also to foresee future changes in our industry.

Concepts, products and brands have long been the main focus of hospitality experts at the expense of our guests’ experience. These are no longer our main priority – the Guest is. From this comes a necessity to embrace fully the transformation of our industry and of society at large not only by addressing customers’ demands but also by anticipating them. That’s why we closely monitor all kinds of innovations, whether they come from the outside – in which case we consider different types of collaborations: acquisitions, partnerships and so on – or from internal initiatives. In doing so, we encourage a spirit of open-mindedness which is central to the future of our business. Our three-pronged strategy has been developed precisely in support of this ambition.

Hotel services remain our core business and the outlook in this respect is strong. Our portfolio has never been more international and diversified, with brands covering all segments. The acquisition of the iconic Fairmont, Raffles and Swissôtel brands made us the second worldwide player in the luxury field, a position we had never held before. To further enrich our portfolio and embrace the diversity of our clientele, we invested in a lifestyle collection of brands with the likes of Mama Shelter, 25Hours and Banyan Tree.

Together with our latest, trail-blazing offspring Jo&Joe, a groundbreaking concept that mixes the best of hospitality and hostels for locals and travelers alike, our lifestyle brands enable us to address younger travellers’ demands for off-the-beaten-track experiences.

The past few months have also seen AccorHotels broaden its scope, through investments in businesses and brands that bring innovative extra services to our guests and partners, and extend our core skills. This is our second strategic strand that builds on the belief that we possess the assets and the capacity to provide our guests with a diversity of services that go well beyond purely overnight accommodation. Following along that thread are our latest acquisitions and investments in Availpro and Gekko, which reinforce our digital factory; in the private rental space with onefinestay; in the dining and premium concierge-services sector with Potel and Chabot and Noctis; and in the collaborative workspace with Nextdoor.

Lastly, we want to take hospitality where it’s never been before, to the service of the millions of people who live close to our hotels. Hoteliers in general have long been focused on the travellers visiting from abroad, whilst paying little to no attention for people living next door. And yet, just as we have the capacity to offer extra services to our guests, so too we can address the needs of locals living close by. Hotels play a pivotal role in their neighbourhoods and I’m convinced that our future is to take on this role fully. To this end, we’ve launched AccorLocal, a local services platform based on a model that creates social connections and value for small businesses, local communities and staff members at our hotels. Now live in over 250 hotels in France, this new local service platform will soon expand to the rest of the world. With our 250,000 employees and 4,200 locations around the world, we are ideally-suited to make people’s lives easier every day.

In order to move forward with the integration of all our new businesses and to achieve our ambitions, we’ve taken a bold move. Building on an assessment that real estate was both capital-intensive and required very specific expertise, we mapped out a plan to entrust dedicated teams with our real estate activities gathered under one single, dedicated company. This move will give us the means we need to keep ahead of the game and I am confident that, thanks to our strong development plans, a growing market and a solid strategy, 2018 will see AccorHotels grow even stronger for the benefit of the many.

2017 WAS A RECORD YEAR OF GROWTH FOR MANTRA GROUP

2017 New properties that joined the Mantra Group portfolio in 2017 include: • Mantra the Observatory, Port Macquarie NSW • Mantra Club Croc, Airlie Beach QLD • Tribe Perth, Perth WA • Mantra Hotel at Sydney Airport, Sydney NSW • FV by Peppers, Brisbane QLD • Mantra MacArthur Hotel, Canberra ACT • Arts Series Hotel Group - seven properties: · The Cullen, Prahran, Melbourne VIC · The Larwill Studio, North Melbourne VIC · The Olsen, South Yarra, Melbourne VIC · The Blackman, St Kilda Road, Melbourne VIC · The Chen, Box Hill, Melbourne VIC

2017 saw Mantra Group achieve its largest year of growth since its inception in 2009, with a record number of new properties (13) joining the Company’s hotel and resort portfolio.

Mantra Group Chief Executive Officer Bob East said the Group’s domestic acquisition focus throughout the year increased its presence in almost every Australian state and territory.

“The number of enquiries we received from hotel developers, owners and investors hit record levels this past calendar year.” said Mr East.

“This interest signals positive activity in our sector and is a clear indicator of confidence in an established, well-resourced hotel operator.”

The Art Series acquisition was completed in November by Mantra Group and marked one of the biggest property portfolio acquisitions of the year.

The acquisition of Art Series added another 1,000 guest rooms as well as a number of conference and event facilities, restaurants and luxury hotel-style amenities to Mantra Group’s ever-expanding portfolio of properties under management.

With Art Series added to the Group, Mantra Group’s portfolio now consists of 136 properties across four well-known and trusted brands in Art Series, Peppers, Mantra and BreakFree. This totals 23,000 rooms in properties under management across Australia, New Zealand, Indonesia and Hawaii, making Mantra Group the leading Australian-based hotel and resort operator.

mantragroup.com.au

· The Johnson, Spring Hill, Brisbane QLD · The Watson, Walkerville, Adelaide SA.

2018 & beyond A number of new property acquisitions were signed by the Group in 2017 and are scheduled to open in 2018 and beyond.

These include: • Mantra at Sharks in Southport is scheduled to open in April 2018 in time for the Gold Coast 2018 Commonwealth Games; • Peppers Silo Hotel in Launceston Tasmania is scheduled to open in May 2018; • Mantra on City Road, Melbourne is scheduled to open in June 2018; • Mantra Epping Melbourne is scheduled to open in mid-2019; • Mantra M-City in Melbourne’s south-east is scheduled for completion in late 2020.

Global Leaders

David Kong

Spencer Watson,

President and CEO

Acting CEO

Best Western Hotels & Resorts

Best Western Australasia

Best Western has enjoyed an exciting resurgence in the past few years.

A

t 71 years young, improving the guest experience is at the heart of all we do. The immediate future is enhancing our efforts of expanded offerings, introducing new brands, and putting the focus of our loyalty program, Best Western Rewards, firmly on the guest.

More and more, people are seeking out technological solutions to life’s challenges and daily routines. This digital shift has had a powerful effect on the marketplace. Customers are more informed than ever before, placing them in a position of power to determine the business solutions they want and expect. This drives our approach to advertising and guest engagement.

We recently launched our new Mobile Guest Engagement Platform globally.

Now utilised by 360 Best Western properties, the platform provides web-based guest communications tools pre-arrival, on property and at check-out. The technology has already delivered significant increases in guest satisfaction, overall experience and room revenue through native upselling and advertising functions. Net Promoter Scores (NPS) have increased by as much as 18 points, in turn increasing RevPAR. We are now also testing this technology’s integration with Amazon Dot. Further supporting our commitment to better guest experiences, we’ll continue to improve our Medallia and TripAdvisor guest satisfaction scores. Our NPS now positions us as one of the leaders in the industry, while in 2017, TripAdvisor awarded 54% of Best Western hotels worldwide with a Certificate of Excellence. Insights gained from analysis of this feedback have identified improvement in key areas of breakfast and internet (in Australia and New Zealand) will benefit both guest scores and ADR. With the prevalence of the sharing economy and ongoing company mergers, the value of a brand in our industry, and telling its unique story, has never been more important.

It’s what keeps our members investing in Best Western. 35% of our development pipeline comprises existing Best Western members, looking to expand their portfolios. Through our Design Excellence program, collectively, our members are currently spending over US$2 billion on renovations, improving RevPAR and asset value.

In terms of hotel development, Asia’s growth has slowed, but remains a lucrative investment opportunity. South America, the Middle East, Africa and some Eastern European countries are presenting tremendous prospects.

12 HM The Business of Accommodation

We have a renewed focus on brand development, with the introduction of quality hotels in high-profile locations.

To broaden our appeal, we’ve launched several new brands and expect a majority of all 2018 applications be approved under one of them. We were very excited to recently bring to market our economy brand SureStay Hotels, with 25 already open globally. Our midscale boutique brand GLO now has three hotels under construction, not to mention 42 approved hotels in our extended stay category, Executive Residency.

More and more, independent hotels are searching for an alternate source of business to OTAs. With this in mind, we have worked hard on developing our soft brand category.

BW Premier Collection is now 73 hotels-strong worldwide, while our very new BW Signature Collection has garnered great interest, with 4 hotels already approved. All up, we’re looking at more than 530 hotels in the pipeline globally.

To complement our local brand expansion efforts, we will be heavily promoting our Hotel Management Services, an area of significant opportunity for Best Western Australasia.

In an innovative approach, in 2018, we’re building a dual-purpose hotel, close to our headquarters in Phoenix, USA. This first 100% Best Western-owned property will be a fully operational hotel, and will include innovation rooms for each of our brands, so developers and new managers can experience the latest in brand offerings.

We are still seeing strong growth in our loyalty program, now with 32 million members. BW Rewards continues to be a focus in marketing activities, aiming to offer ease of redemption, maximise earning opportunity and improve the guest check-in experience through memorable recognition. We recently unveiled Experiences

by Best Western Rewards, providing loyalty members with exclusive, one-of-a-kind experiences in some of the most sought-after destinations around the world: Walt Disney World, Grand Canyon National Park, Broadway in New York City, and a culinary experience in Paris.

As hoteliers, we see the strength of the local tourism sector. Tourism’s value to our economy through visitor spend, coupled with increased airline seat capacity, has driven growth in the accommodation sector.

SNAPSHOT: BEST WESTERN HOTELS AND RESORTS

Number of hotels & rooms (Globally): 3,659 active hotels; 295,869 rooms Number of hotels & rooms (Asia-Pacific): 233 active hotels; 20,735 rooms Number of hotels & rooms (Australia, New Zealand and South Pacific): 125 hotels, 5,130 rooms Number of employees: 1,422 (globally), 31 (APAC), 30 (ANZSP)

Year first hotel opened: 1946 (globally), 1957 (APAC), 1957 (ANZSP) Year the company was founded: 1946

Brands in the organisation: Best Western, Best Western Plus, Best Western Premier, Vib, Glo, Executive Residency

by Best Western, BW Signature Collection by Best Western, BW Premier Collection, SureStay Hotel by Best Western, SureStay Plus Hotel by Best Western and SureStay Collection

by Best Western.

Head office locations: Phoenix, USA (global), Bangkok, Thailand (APAC), Sydney, Australia (ANZSP)

Global Leaders Some say the world is getting smaller. It may feel that way because more people are traveling, and that’s exactly how it should be.

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Geoff Ballotti President and Chief Executive Officer Wyndham Hotel Group

ravel is an integral part of the human experience. Research shows that even the anticipation of an impending experience brings higher levels of happiness than waiting for material goods. But, generally, and for far too long, the hospitality industry has been guilty of designing experiences only for those who can attain “status”, often catering to the frequent, high-end traveller or those who aspire to a luxury lifestyle. This is short-sighted for the hotel industry and short shrifts guests: aspirational doesn’t always mean expensive. All travellers deserve unique experiences and memories, regardless of budget or the reasons they travel. We believe it’s time to democratize travel.

Global forces such as the rise of emerging markets and advances in technology have created a seismic shift in the way travel is thought about and experienced. The global middle class, millennials and baby boomers are fuelling an unprecedented shift in the travel and tourism industry. And while the economy and midscale segment drives USD$100 billion in annual revenue for the industry, when it comes to enriching the experiences that travel enables, they present guests with limited, cookie-cutter options.

This is a missed opportunity.

Just like the luxury globetrotter, the everyday traveller – from the family headed for vacations, to road warriors looking for a home away from home, friends headed on summer trips to the shore to everything in between – deserves thoughtful service and a memorable stay. Traditionally, hotels have divided their properties (and guests) into economy/mid/upscale. This approach is outdated. An intensive 18-month study Wyndham conducted into the decision drivers of thousands of travellers worldwide confirms that each of these ‘segments’ are more nuanced than we imagined, reflecting the diversity of the millions of guests who book hotel rooms every year.

Other industries have successfully cracked the code. Target, for example, has democratized design, bringing high-quality, on-trend merchandise to a shifting demographic. JetBlue has disrupted the airline industry, providing superior service at affordable prices for all of its passengers. For the hospitality industry, there is untapped opportunity to deliver great experiences at great value: while discretionary incomes may be stagnating or shrinking for millennials and the world’s middle class, our research shows travel is still very much on their agenda. It’s time for the hotel business to level the playing field.

That’s why Wyndham has been making strides defining and differentiating our brands, adding brands to our family – both acquisitively and organically – and introducing more of our brands to more new markets helping us ensure we’re keeping meaningful travel within reach for travellers around the globe.

We’ve invested in growing our portfolio where we know travellers want to be. In the last year we introduced nine brands to 21 new markets around the world: bringing Wyndham Grand to Paraguay and Uruguay; Wyndham to Greece and Bahrain; Wyndham Garden to Chile, Ecuador, Kazakhstan and Bahrain; Tryp by Wyndham to Israel, China, Myanmar and the Philippines; Ramada to Greece and Vanuatu; Ramada Encore to Kuwait; Trademark Hotel Collection to Germany, Austria and Switzerland; Days Inn to France and Bangladesh and Howard Johnson to Korea; and we will continue doing so in the new year.

We increased our presence in the midscale segment with the acquisition of the AmericInn brand knowing our commitment to quality growth coupled with our proven track record enables us to transform this brand from a regional player to a national name with the potential for global growth. Throughout 2017 we continued the integration of Fën Hotels’ signature Esplendor Boutique Hotels and Dazzler Hotels brands establishing our management capabilities in the region and Buenos Aires as our Latin American headquarters. And our continued investment in our award-winning loyalty program, Wyndham Rewards, means today more than 53 million members are leveraging the simplest, most generous program to get what matters most: a free night.

As we look to 2018, industry forces are pointing in positive directions. According to Project Time Off – more Americans are taking their vacation days – moving away from nearly two decades of leaving vacation days on the table. According to American Express Travel, international bookings are up 44% in the first quarter of 2018, and each holiday AAA notes more people are on the road than in previous years.

Entering 2018 with the goal to becoming a pure-play, publicly-traded hotel company we expect to have a strong and resilient, fee-for-service, global franchise model with a resilient pipeline led by a proven and experienced management team. Because we know what’s important for hotel owners today: size and scale matters. Being part of the world’s largest and most diverse hotel business with 20 iconic brands, we have the power to make a difference in the industry, for our franchisees and for our guests. hotelmanagement.com.au 13

HOW TFE HOTELS IS CREATING

A Sense of Place

TFE Hotels CEO, RACHEL ARGAMAN, looks at how the company is transforming itself using ‘placemaking’, ‘storydoing’ and mastering the millennial mindset.

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s TFE Hotels embarks on its biggest growth year, preparing to open three new hotels and expanding our portfolio to reach 100 hotels in the next five years, we are continually assessing the key elements of hotel design to better engage and delight our guests. What is it that makes the modern traveller tick?

What do they seek out in hotel features and service?

To understand this we have carried out extensive research with our guests and via our partnership with TEDxSydney, to embark on a new era of design, built around applying the key concepts of ‘placemaking’, ‘storydoing’, the millennial mindset, connectivity and smart technology.

PLACEMAKING

TFE Hotels has a robust development pipeline, including 11 new Adina Apartment Hotels and five Vibe Hotels set to open in Australia, New Zealand and Germany in the next five years. We will also open three beautiful TFE Collection Hotels and three new Travelodge Hotels. We are working with developers and designers to create hotels that are integrated within a dedicated lifestyle precinct, applying the concept of ‘placemaking’.

Placemaking is all about creating or curating spaces that become a lifestyle precinct in themselves, where boutique shopping integrates with destination restaurants and bars, a social lobby and attractions such as micro-breweries, private cinemas and public parklands. These precincts 14 HM The Business of Accommodation

essentially become destinations in themselves and the hotel becomes an integral part of the fabric of that precinct.

We will soon open a Vibe Hotel at North Sydney’s exciting new retail, dining and commercial address, Northpoint, where guests will have access to a rooftop bar and pool, a new eat street and a retail precinct developed by Cromwell Property Group.

Construction is about to start on other precinct-designed Vibe Hotels in Hobart, at Darling Harbour in Sydney and Queen Street Melbourne.

Another hotel that will take placemaking to the next level will be The Calile, a beautiful new destination in the James Street precinct in Brisbane, under the TFE Hotels Collection brand. It will open this year as a spectacular urban resort within one of Australia’s cultural epicentres, Fortitude Valley, with food, drink and retail offerings at the hotel including a lobby bar and poolside restaurant with cabanas. Guests will emerge from the lobby to find themselves immersed in Brisbane’s most energetic lifestyle mecca – the James Street precinct with its galleries, museums and chic boutiques.

A flagship precinct hotel with placemaking at its heart will be our new Adina Apartment Hotel in Canberra, which will have a pulsing ‘Theatre Lane’, forming a new foodie and retail lifestyle precinct that will re-enliven the city centre. In Melbourne’s West End, we will have a magnificent new Adina Apartment Hotel with a futuristic Tron-inspired design, which will be integrated with apartments, nine bars and restaurants, a 50-seat cinema, and a wellness centre with a yoga pod, massage studio, Jacuzzi and day spa. These are all part of our drive to create hotel experiences that add a vibrancy and life to their city locations through the art of placemaking.

STORYDOING

Storydoing is emerging in the hotel space as a new way of designing experiences that allow guests to become the star of their own show. Ten years ago YouTube, Instagram and Twitter didn’t exist and Facebook was in its infancy. These days there are limitless opportunities to create and share stories around a brand – but the creation of the experience is up to the hotel

Cover Story

A TFE HOTELS PROMOTION

teams, knowing that the guests are now the storytellers who truly matter. Quality influencers have a trust and authenticity that traditional advertising did not possess.

Good hotel brands are not just telling a story anymore, they are creating a stage for guests to live and share their stories. Essentially this means creating a series of curated experiences, and inviting guests to enjoy and share them via Instagram and Facebook, and even word of mouth.

At Vibe Hotel Rushcutters Bay all the world is a stage, as shown in the number of influencers dropping in at the rooftop pool area for an impromptu swimwear shoot, or at the hotel restaurant, Storehouse on the Park, for brunch with their labradoodle, all snapped for Instagram of course. This hotel was completely reimagined with a Palm Springs styled refurbishment a year ago, which created a new weekend precinct for locals to combine their love of the natural outdoor locale with a swim, followed by brunch or breakfast with their pets, creating untold opportunities for social media stories. The new look rooftop pool fast became a magnet for photographers and models with a stunning backdrop of the Sydney skyline, allowing ‘storydoing’ to shine.

The Calile will soon be our fashion shoot locale for anyone who feels like a moment in the spotlight. This stunning urban resort will naturally lend itself to being the place where the stories are made and memories shared. The open-air pool with its cabanas, the laneway bar, the stunning lobby and the surrounding retail and dining precinct of James Street are the perfect backdrop for stories to play out on the social feeds of the local fashionistas, famous faces and those who simply love the limelight.

At TFE Hotels we are constantly innovating to create memorable experiences that allow stories to come to life.

We partner each year with TEDxSydney, harnessing some of the event’s keenest minds to help shape hotels of the future. We hosted an innovative workshop on the future of human interaction at hotels, asking how guests would best interact and connect with their fellow travellers. The research will inform the design of our new and refurbished hotels, how we use technology and service to connect guests with each other and with our teams in meaningful ways – another example of bringing storydoing to life.

MILLENNIAL MINDSET

tourist attractions in a tour bus. They seek connectivity; not just via technology, but in sharing social spaces with other guests, family and friends. In response, we adapted the way we design spaces architecturally, creating living lobbies that are a world away from stale transition points. Instead our lobbies are becoming vibrant social hubs for guests and locals to kick back, be ‘alone in a crowd’, and work or play on their laptop. An excellent example of this is Vibe Hotel Canberra Airport, winner of multiple design awards, and the refurbished Vibe Hotel Rushcutters Bay. Both provide a lobby culture that is internationally accessible, inclusive and laid-back, but with a vibrancy that becomes the centre point to hang out and interact. These are spaces that feel like a larger version of somebody’s living room, with fast WiFi, good coffee, great decor and a really cool bar.

We also know that millennial thinkers love to take the advice of those in their social network, and influencers they follow online. So every campaign we do involves highly relevant bloggers, a YouTube star or Instagrammer. We have had great success in engaging micro-influencers in campaigns for Adina Apartment Hotels and Gambaro Hotel in Brisbane. This year we will unveil exciting new influencer campaigns to promote the openings of our new hotels – Vibe Hotel in North Sydney, Adina Apartment Hotel in Brisbane and The Calile in James Street, Brisbane, as well as the newly refurbished Vibe Hotel on the Gold Coast.

TFE Hotels also launched a partnership with TwoSpace, a Sydney start-up that turns restaurant spaces into fun co-working spaces, by setting up a hub at Vibe Hotel Rushcutters Bay.

SMART TECHNOLOGY

We are working closely with major developers to design more than 26 new hotels that are set to open in the next five years. Our flexibility as a locally run company allows us to introduce and test new technologies to improve the guest experience. Overwhelmingly, our research shows that people want more valuable and meaningful connections when they travel. People want technology that allows them to better connect with people – our team members, other guests or their loved ones. If mobile digital checkin means less time spent queuing at the check-in desk and more time talking to the hotel’s knowledgeable sommelier about the best local Shiraz, everyone is happy. Good technology in hotels is about making the hotel experience seamless so that team members are better able to interact with guests and assist with their needs. Hotels are working on providing platforms that allow guests to use their own devices, allowing them fast, unlimited WiFi and the ability to direct stream to large monitors.

Harnessing mobile platforms as marketing and booking tools will be an even greater focus for us in 2018. We have developed our high-performing mobile website into an efficient booking tool. While Online Travel Agents remain true partners, we encourage guests to book directly on our own platforms, engaging them through various stages of the customer journey – building brand recall and loyalty via our own websites and social platforms, engaging them to reach our booking engine using SEO and SEM, using Facebook advertising and platforms such as TripAdvisor.

As we continue to grow, ensuring our guests have a wonderful experience every time they stay and recommend us to their family and friends, continues to be our core focus.

Making guests happy is always at the heart of everything we do. n

Adapting our travel offerings to suit the millennial mindset and better engage this subset of travellers is a key part of our expansion program. We know that millennials will make up 50 per cent of the travelling population by 2021 (Fjord Trends 2017) but also that a “millennial mindset” has emerged that doesn’t correspond with a particular age group. So, we examine the purpose of each trip – is it a family holiday, a ‘bleisure’ trip (combining business and leisure) or a staycation – then we design our guest booking and travel experience around that.

We know that those with a millennial mindset like to research and book their trip on their mobile device, using recommendations from rating sites, friends and influencers. We have developed a travel blog, Checkedin. com.au, providing travel inspiration for trip planning, and our mobile first marketing engages people with our brands at all stages of their booking journey, via our website, Facebook or video advertising.

When travelling, millennial mindset travellers like to explore local neighbourhoods rather than just hit big hotelmanagement.com.au 15

Tourism Leaders

The Hon. Steven Ciobo MP Minister for Trade, Tourism and Investment Australia Off the back of yet another exceptional year for Australia’s tourism industry, where many milestones were hit and both spend and arrivals records were broken, I am excited and optimistic about the next 12 months.

L

ast year, China was again Australia’s fastest growing and most valuable inbound tourism market, with growth showing no signs of abating in 2018.

Off the back of a successful China Australia Year of Tourism, we have seen Chinese visitor spending surpass AUD$10 billion, now equating to one in every four tourism dollars spent in Australia.

Annual Chinese visitor numbers have also climbed nationally by more than 12% to 1.34 million, only 17,000 shy of our neighbours and long-time largest arrivals market, New Zealand. As early as next month, China could overtake New Zealand and become our largest market, in terms of visitation.

Indeed, the growth of Australia’s overall international visitor spend continues to be primarily driven by China and other Asian markets including India, Hong Kong, Malaysia and Japan.

Australia was also popular with American tourists, who overtook the United Kingdom to become Australia’s second most valuable market, with spend now at a record AUD$3.8 billion. A favourable exchange rate, positive consumer confidence, and a combination of high aviation capacity and competitive air fares makes it an ideal time to capitalise on the potential of this increasingly important market. That is why in the coming weeks, Tourism Australia will be shining a spotlight on North America, with some exciting new initiatives in the pipeline.

We have also just witnessed the third year in a row where Australian tourism grew faster than the national economy; the industry now represents one of Australia’s largest service exports.

However, we cannot be complacent and despite the positive outlook, there will undoubtedly be challenges that will face the industry in coming years. In order to ensure the continuation of this strong progress, it is imperative that governments at all levels do their part to ensure Australia can sustain continued growth in the sector.

To remain a desirable tourism destination in the increasingly competitive global landscape, we need to continue to give travellers more reasons to come, and 16 HM The Business of Accommodation

connectivity plays a crucial role in this. International aviation capacity to Australia has grown from 9.3 million inbound seats in 1995 to 25.6 million in 2017.

This significant increase is thanks in part to the negotiation of successful air services agreements, including an historic ‘open capacity’ agreement the Turnbull Coalition Government signed with China, allowing for unlimited airline capacity. This initiative continues to pay dividends with Chinese travellers now able to fly to Australia from 17 cities, with 10 airlines operating around 150 direct weekly flights to six ports in Australia.

In the last few weeks alone, we’ve seen China Southern launch its inaugural Guangzhou to Cairns service; Air China launch its Beijing to Brisbane service; and China Eastern boost the frequency of its Shanghai to Brisbane route.

Technological advancements are also enabling direct flights from previously unimaginable destinations. Technology will continue to both challenge and provide opportunities for the industry in many ways. For example, Tourism Australia recently partnered with Chinese platform WeChat for the pilot of its City Experience Sydney guide, which enables Chinese visitors to navigate top Sydney attractions and destinations.

Addressing the hotel capacity issues in some capital cities will also be key to ensure the fostering of a healthy tourism industry. Under the Tourism 2020 Strategy, we aim to create up to 20,000 new rooms by 2020, and we are on track to exceed this with 39,116 potential new hotel rooms either planned or under construction until 2024 (according to STR Global).

The lack of opportunity in capital cities, alongside increased international visitor dispersal, has resulted in increased investor interest into regional destinations, underpinning the Government’s strategy to attract foreign direct investment for regional tourism infrastructure, spreading the benefits of the visitor economy beyond major gateways.

Investment in infrastructure in many cases will lead to a positive knock-on effect. A great example of this is the recent replacement of Sydney’s convention and exhibition centre with the outstanding new International Convention Centre (ICC) Sydney facility.

This significant new precinct has not only prompted the development of a host of upscale hotel offerings in its vicinity, but it will also help to ensure Sydney remains a world-class destination for leisure and business events.

Such world-class offerings give destinations a competitive edge when it comes to bidding for lucrative business events, including incentive and association events.

Business events visitors are high yielding, spending on average twice the amount spent by a leisure visitor. Australia will also play host to a range of significant events including an 8,000-strong Infinitus China delegation to the Gold Coast and the annual Sibos conference in Sydney, attended by 6,000 people.

The Turnbull Coalition Government will endeavour to get the policy settings right for Australia’s tourism industry to thrive. However, the success of 2018 will be driven by the concerted efforts of those in our industry who work tirelessly to ensure our unique and spectacular tourism products remain some of the best in the world.

Tourism Leaders

John O’Sullivan Managing Director Tourism Australia

As the new year gets underway, off the back of another year when Australian tourism achieved record results, it is an opportune time to consider the prospects for 2018 and beyond, particularly as we draw closer to achieving our shared Tourism 2020 goals.

W

hilst Australian tourism is in a strong position, with record levels of travel in Australia by both international and domestic visitors, globally we are seeing the ongoing impacts of traditional business models being disrupted by technology. Adding to this, competition between destinations for the tourist dollar has not waned and travellers are increasingly being more experience led in their choice of destination.

From an inbound perspect­ive, which is where Tourism Australia focuses its efforts in partnership with industry, Australia welcomed a record 8.7 million international visitors last year. This was seven per cent more than the previous year. Importantly, these visitors drove a six per cent rise in visitor spend to reach AUD$41.2 billion for the first time. At this current rate of growth, it is vital that as an industry we can offer the range and depth of experiences to meet the needs of increasing numbers of international visitors. When you couple this with Australia’s robust investment pipeline, having a total of 39,116 rooms in the pipeline from a total of 214 projects until 2024, it serves to highlight the opportunity and importance of having the right supply of experiences to support these projects.

A good example is the emergence of new and reinvigorated destinations like Perth, which has seen significant investment in accommodation and attractions such as the Elizabeth Quay development to expand on the city’s world-class offering. And, with the commencement of the new Qantas direct services from the UK to Perth in March this year the destination is now closer than it has ever been to one of our longest standing visitor markets – providing new news and reasons to visit Australia via the west coast.

Of the international markets, the two where we see the most significant opportunities this year are China and the

USA. China remains our largest market in terms of visitor spend, growing 13% to reach AUD$10.3 billion in the past year, ahead of the USA at AUD$3.75 billion.

Notably, Chinese visitor numbers are still growing at a double-digit pace (up 12% last year) to 1.3 million, putting China well on track to be Australia’s number one source market for visitors and spend in 2018. And, longer term, to achieve its Tourism 2020 target of AUD$13 billion annually in overnight Chinese visitor expenditure by the end of the decade.

The other standout performer – the USA – has been growing at a rate of 10% to an unprecedented 766,000 visitors last year. This puts the USA in a firm position as our third largest source of visitors and second largest market for visitor spend. As the market continues to deliver record results, Tourism Australia has big plans to build on the momentum of this opportunity with a greater focus on the US in 2018.

Supporting this geographic strategy will be our focus on business events. The international business events market remains one of the highest yielding sectors of Australian tourism, with $3.7 billion spent in the year to June last year. This makes it as big as the US. Of the business events market, corporate incentives remain significant and this year will see Australia welcome the likes of Amway China, bringing 10,000 pax to Cairns over a three-week period. With our signature incentive product showcase, Dreamtime, recently being hosted in Brisbane we hope to stimulate further business opportunities for this sector of our visitor economy in the years to come.

In terms of attracting prospective travellers, the influence of technology is something we are constantly adapting to reach our target customers in new and impactful ways.

Mobile technology especially is having more of an influence than ever in connecting consumers with the world. As we have seen in China with the WeChat App, consumers are using mobile technology to plan, book, connect and pay on their phones all within one application.

Technology too is impacting aviation, with the Dreamliner 787 aircraft facilitating non-stop travel from Europe to Australia and the prospect of other aircraft who can fly non-stop from the East Coast of Australia to London and New York – Australia has never been more accessible. Beyond these developments Supersonic flight has the potential to disrupt long-haul travel altogether.

So, as we embed ourselves in the new year, our industry is in a good place to build on the momentum in working towards our shared Tourism 2020 goals, and climbing towards AUD$130 billion in the next two years. Tourism Australia looks forward to working with all its partners across the industry in 2018 to embrace the opportunities before us. hotelmanagement.com.au 17

Key News Top spot: Queensland’s Surfers Paradise

Economic focus on tourism in Queensland welcomed The Accommodation Association of Australia (AAoA) has welcomed the increased profile of the tourism portfolio in the new Queensland Government Ministry and has congratulated Kate Jones on her success at the election and her promotion.

AAoA CEO, Richard Munro, said Jones’ elevation, together with confirmation of a majority Palaszczuk Government is a positive outcome.

“As the Minister responsible for tourism since early 2015, Ms Jones has been a strong advocate for the industry, therefore, her re-election and that she has retained responsibility for tourism and the upcoming Gold Coast Commonwealth Games is an excellent outcome,” he said.

“The passion Ms Jones has shown for the accommodation and tourism industries is to be applauded and we look forward to this continuing.

CANBERRA HOTEL MARKET UPDATE AND ECONOMIC FORUM

With over 40 senior hotel management representatives in attendance, the 2017 Canberra Hotel Market Update and Economic Forum hosted by Doma Hotels at Hotel Realm in Canberra was a great success.

The half day forum provided the accommodation operators with the latest in market intelligence, analysis and a performance outlook for Canberra with the presentations from leading industry analysts offering a thorough understanding of the dynamics underlying the trends in this sector of the market.

AAoA would like to thank our guest presenters: • Greg Clerk, Head of Investment Strategy for Hostplus; • Matthew Burke representing STR; • Bryon Merzeo representing Deloitte Access Economics; and • Avril Carter representing ReviewPro If you are interested in joining the AAoA or would like information on upcoming forums please contact Michelle King, National Membership Manager on 0425 767 867 or email michelle.king@aaoa.com.au

18 HM The Business of Accommodation

“It is also pleasing that Premier Palaszczuk has seen fit to elevate Ms Jones to the Government’s economic team.

“As well as being an endorsement of the work Ms Jones has been doing, it sends a message to the investment community that the Palaszczuk Government views tourism as a key economic driver.

“The accommodation industry welcomes the appointments of the Hon Shannon Fentiman MP as Minister for Employment and Small Business (and Minister for Training and Skills Development) and Ms Meaghan Scanlon MP as the new Assistant Minister for Tourism Industry Development.

“Our industry has the potential to grow significantly in the coming years and the accommodation industry is keen to work with the Palaszczuk Government to achieve this,” Munro said.

The Canberra hotel market update

PRESENTED BY

STRONG, STABLE LEADERSHIP FOR ACCOMMODATION INDUSTRY Stability and strength have been the major themes at the 2017 Annual General Meeting of the Accommodation Association of Australia.

The following four directors were reelected to the Board of the Association at the November meeting: • Simon McGrath, Chief Operating Officer - Pacific, AccorHotels • Trent Fraser, Chief Executive Officer, Choice Hotels Asia-Pac • Tomas Johnsson, Chief Operating Officer, Mantra Group • Zed Sanjana, Chief Executive Officer, Quest Apartment Hotels Office-bearers elected at the AGM were: • President: Julian Clark, Chief Executive Officer, Lancemore Group • Vice President: Simon McGrath, Chief Operating Officer - Pacific, AccorHotels • Treasurer: Bruce Copland, Independent Director • Vice-Treasurer: Col Hughes, Independent Director

AAoA President, Julian Clark

“We are delighted to have an active board with very senior leaders representing the interests of the accommodation industry,” Clark said.

“The board has commended the strategy of establishing state/territory-based advisory boards to enhance the Accommodation Association’s existing strong advocacy agenda on a national, state/territory and local level.”

AAOA’s Richard Munro, said: “The accommodation industry is facing many challenges, notably the dominance of global online travel agencies in Australia.

“Non-compliant accommodation promoted by sharing economy providers and a shortage of skilled labour are other hurdles.

“On behalf of the thousands of accommodation operators across Australia who are members of the Accommodation Association, I look forward to working with the board to try to achieve tangible outcomes which contribute to improving business conditions for them,” he said.

General Managers’ executive lunch in Melbourne The Pullman on the Park Melbourne was the perfect setting for the December 2017 AAoA Executive Lunch.

Our guest, Craig Tiley CEO at Tennis Australia and Australia Open (AO) Tournament Director provided Melbourne Hotel General Managers

with an overview of the upcoming 2018 Australian Open and shared AO initiatives designed to drive visitation to Melbourne during January.

AAoA would like to thank the host Erkin Aytekin, General Manager, Pullman on the Park and his team for a fabulous experience.

AAoA’s GM lunch in Melbourne was a hit

hotelmanagement.com.au 19

Tourism Leaders

Richard Munro Chief Executive Officer Accommodation Association of Australia

The outlook for the accommodation industry for 2018 is mostly positive with some recovery expected for markets hit by the downturn in the resources sector.

20 HM The Business of Accommodation

W

ith sustained growth, the industry has become larger and looks set to keep adding more new inventory. The big question will be: can the growth be sustained and are we adding rooms at the right pace? It is important to ensure the investment community works with operators so that a sustainable supply of new product does not adversely affect incumbent businesses.

Through the partnership between the Accommodation Association of Australia and STR, our members are accessing data that helps analyse the market in real time which assists in yielding a better revenue result.

Our industry has had a number of threats over the past 18 months that were set to impact the industry and the AAoA has played a major role in helping to ensure that no bed tax in any jurisdiction was able to be implemented, exorbitant increases to stamp duties were contained, trigger another investigation by the ACCC into the conduct of online travel agencies (OTAs) and keeping the pressure on State/Territory Governments over the regulation of Airbnb, as well as scrutinising the way this online offshore behemoth conducts business here in Australia (we’re still struggling to work out if it pays any tax in Australia!).

Our international tourism marketing agency, Tourism Australia, has performed superbly, with the evidence of this being consistent international growth and the appointment of Bob East as Chair was a welcome appointment. Industry growth under Bob, who’s a big supporter of the AAoA, looks set to be sustainable.

Our members have indicated the top three issues affecting their businesses via our latest annual industry survey. Preliminary results show that top issue for operators is still the dominance of the OTAs, terms of contracts with Expedia and Booking.Com and the general cost of doing business. Lack of regulation of Airbnb has crept up as the secondbiggest issue that has had AAoA busy engaging governments on adequate legislation. In second spot in last year’s survey was industrial relations, but this has slipped down the list of concerns. The third-biggest concern to our members is local and State/Territory Government taxes, levies and charges. It is no surprise that local governments are under fire from our industry given the lack of consistency in delivering services and the costs associated with non-productive taxes such as payroll and in Queensland, an unAustralian ‘toilet tax’. Local government authorities are also the ones consistently raising the spectre of ‘bed levies’ that have been defeated in every jurisdiction that this has been raised.

The AAoA celebrated 50 years of operations in 2017 and the Association continues to grow stronger with additional members joining daily. We have some exciting initiatives rolling out in 2018 with our new National Membership Manager, Michelle King, leading the charge on a very big event calendar, visiting hundreds of members and holding forums with our key partners across the country. Our newly launched State Advisory Boards, led by high-profile industry leaders, have made an impact on State governments and we will be continuing to engage the industry via these new boards in 2018.

Our industry has become large and is a huge contributor to the economic growth of our country and we are a major employer. It is important that we unite to ensure our voice is consistently heard so that we ensure our industry prospers and continues to provide opportunities for growth.

AccorHotels News

AN ACCORHOTELS PROMOTION

Jo&Joe

HOT BRAND:

AccorHotels has been diversifying its accommodation product in recent years, with the new Jo&Joe brand targeting millennials (people who became adult around and after 2000 and now are in their 20s and 30s) and all those who value sharing, spontaneity and experience.

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he ‘Open House’ concept will involve “establishing a cool, affordable and caring house, filled with ever surprising design, animations and talents. A house where you feel free to meet and mix, clink glasses, have a bite to eat together, cook, chat, laugh, unwind, dream, work, love, do yoga, play the guitar, explore the city... and sleep. A house where you will simply live life to the full”.

The first Jo&Joe Open House opened in Hossegor, France in May 2017, with new Jo&Joe’s set to open in Paris in 2018, with Warsaw, Budapest, Rio and Sao Paulo also confirmed. There is an overall target of 50 properties by 2020.

To find out more, HM caught up with AccorHotels’ Vice President of Projects, MATTHIEU PERRIN.

Will Jo&Joe be more like a youth hostel or a full-service hotel?

It is both and much more! With accessible prices and a social environment, Jo&Joe offers the best of hostels, but with privacy, safety and top standard quality as you would expect from any AccorHotels property. On top of this, Jo&Joe’s will each have a collaborative kitchen area, washing machines, lockers, movie rooms – so you can really benefit of the freedom of private rental. Jo&Joe is the ultimate living solution for inspired travellers.

What was the philosophy behind the choice of the brand’s name?

Human relationships are key at Jo&Joe – therefore, we wanted to put a personal spin on the brand name. Jo&Joe could be about a boy and a girl, two girls or two boys - we welcome everyone at Jo&Joe. What sort of services and facilities would a Jo&Joe offer and who is the main target market?

Jo&Joe’s are essentially a big happy place to meet, eat and drink where local people and travellers can meet. For travellers, it really is about providing a home away from home with all the convenient comforts you would find in a private home (kitchen, laundry facilities), plus Jo&Joe will have private rooms as well as shared rooms on offer. While the brand was

inspired by the millennial generation, we feel Jo&Joe can have a broader millennial minded market appeal.

Could a traditional hotelier work in a Jo&Joe?

Everybody’s welcome to join us. We have even thought of letting guests work for us, once again with a view to break the boring border of guests on one side and staff on the other side. We would welcome a traditional hotelier at Jo&Joe, as long as they had an open mind and the will to think and act differently.

A brand such as Jo&Joe would seem ideal for European cities, how suitable do you think the concept would be for the Americas or Asia Pacific? Are there plans for expanding to Asia Pacific?

The millennial generation tends to adopt usages to a much more global scale. We believe Jo&Joe will fit all markets as the concept can be so easily adapted to the local environment. Jo&Joe is ready for Asia, Pacific and Americas, in fact we have close to 40 Jo&Joe Open Houses in discussion. n

“We have even thought of letting guests work for us, once again with a view to break the boring border of guests on one side and staff on the other side.”

MATTHIEU PERRIN, Vice President of Projects, AccorHotels hotelmanagement.com.au 21

Tourism Leaders

Margy Osmond Chief Executive Officer TTF Australia What a year the hotel and tourism industries have ahead.

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he phenomenal growth of Australia’s visitor economy in 2017 that led many to proclaim we are currently in the midst of a new golden age of Australian tourism looks set to continue this year, with increased numbers of international visitors predicted to flock to our shores, domestic travel to be more popular than ever and visitor spending to continue its record-breaking run.

Over the next two years, international visitor numbers to Australia are expected to increase from 9.2 million in 2017–18 to 9.7 million in 2018–19.

This phenomenal growth is in large part due to the staggering rise of the Chinese visitor market. At some point in the very, very near future, China will for the first time overtake New Zealand as Australia’s largest inbound market. This is a staggering shift.

Four decades ago, 10 visitors from China arrived in Australia each week. Currently, the same number arrives every five minutes.

Chinese visitors are the highest spending of all nationalities visiting Australia with an average spend exceeding AUD$8000 per trip, and with the number of Chinese tourists traveling overseas each year expected to double to 200 million by 2020, the Chinese tourism boom is well and truly set to become the backbone of Australia’s visitor economy.

While much of the focus on growth is on China, there is a fantastic story to tell in the emergence of the broader Asian market. Across 2018 we can expect to see strong growth right across Asia, with established markets such as Japan, South Korea and Singapore continuing to rise and emerging markets such as Vietnam starting to boom. With Asian nations now comprising seven of our top 10 visitor source markets, the Asian Century is well and truly proving to be an economic gift to Australia’s visitor economy.

On the domestic front, as economic growth is predicted to rise throughout 2018–19, and the Australian Dollar is expected to remain near its long-term average, there should be a commensurate increase in domestic tourism activity, with domestic visitor nights expected to rise 2.9% and day trips 3.7%, spearheaded by a number of key drawcard events such as the Commonwealth Games to be held on the Gold Coast in April 2018.

One of the primary beneficiaries of this boom is our hotel industry.

After a strong 2017, revenue per available room (RevPAR) across Australia is expected to average 5.4% in 2018. Combined with overall national occupancy levels estimated to increase a further 0.7% in 2018, it is anticipated that further rate increases will occur as demand exceeds supply, with occupancy levels across Australia set to increase from 78.6% last year to 79.3% this year.

Leading the pack is Sydney, where factors such as the reopening of International Convention Centre Sydney (ICC), increased international visitor arrivals and an estimated 350 plus cruise ship arrivals will see occupancy rates ranging from 85 to 95%.

22 HM The Business of Accommodation

The rise and rise of our tourism sector and the numbers of international visitors flocking to our shores is fantastic news for Australia’s visitor economy, but the big question to face this year is: Are we ready for even more?

As important as China is we need to focus on the collective growth of visitor volumes from Asia, or risk losing the opportunity we have worked so hard to create.

Investments by the tourism and transport industries will go a long way towards supporting the growth of the visitor economy.

But our industries also need iron-clad support from governments to facilitate and invest in tourism, not only for the next year or five years or even decade, but for 20 and 30 years, and beyond.

As we continue to enjoy, and increasingly rely upon, record visitor arrivals, we are quickly discovering there are also costs associated with success.

The visitors we hoped for are now arriving in everlarger numbers, but this is resulting in lengthening queues and waiting times in our international airport terminals adversely influencing the first and last impressions which visitors have of our country - and is putting a strain on our transport infrastructure, in particular.

It is impractical and frankly unaffordable to continually build or extend infrastructure to absorb the growth – the sector and governments at all levels need to work more closely together to develop a long-term solution.

From our perspective, TTF has for many years been a vocal advocate of the need for a Future Economy Strategy to shape and support the growth of the industries that will deliver our future prosperity.

With a series of state elections in 2018 and a federal election in 2019, this year TTF will be saying loud and clear to all sides of politics and at all levels of government: stop treating the sector like a ‘cash cow’ and work with us to invest in growing our visitor economy with a long-term plan to meet our super-growth potential.

Tourism Leaders

Carol Giuseppi CEO Tourism Accommodation Australia The Australian visitor economy is in an unprecedented period of growth, and has rightly been identified as one of the super-growth sectors of the nation’s transitioning economy.

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xpenditure by international and domestic visitors is at record highs of AUD$105 billion for the year ending September 2017 (approaching the lower end of the Tourism 2020 targets), and up from AUD$70 billion in 2009.

In the 2016-17 financial year, tourism GDP grew by 4.9% to AUD$54.66 billion, significantly outpacing growth in the broader economy, which only grew at 2%.

This marks the third year in succession that tourism growth has exceeded the national rate of economic growth.

Underpinning this growth is strong demand from Asia for Australia’s tourism and education services, sustained by the low Australian Dollar. The recently released mid-year MYEFO also points to a strengthening in global growth post budget, which looks likely to continue in 2018.

Based on the current economics – low interest rates, a relatively low Australian dollar, global growth and improved business confidence – 2018 is expected to remain a strong year for the Australian tourism sector, tempered primarily by uncertainty around household consumption, a factor of slow wages growth and high household debt.

While conditions remain positive for growth in both the visitor economy and the accommodation sector in Australia in 2018, access to labour and skills, investment in promoting regional dispersal and addressing the barriers to investment in commercial accommodation need to be addressed to sustain long term growth.

International tourism to Australia continues to grow with the latest IVS showing a 7.3% increase in visitation, a 6.6% growth in visitor nights and a 6.2% increase in visitor expenditure. As outlined above this growth is driven largely from Asia, with China the stand out performer and a resurgence of traditional markets, in particular the US. Favourable economic factors together with a focus by governments on maximising airline capacity and investment, through bilateral air agreements (inclusive of the historic open aviation market arrangement with China), increased airline partnerships and enhanced airport facilities coupled with continued improvements in creating a seamless, automated experience for travellers (inclusive online visas, multiple entry visas, rollout of Smart Gates and trials of biometric processing), have contributed to this growth, which is anticipated to continue in 2018.

While international holiday visitor nights have remained stable, the Education (14.4%), VFR (7.6%) and Employment (7.2%) markets have all grown. 80% of all international visitor nights are in capital cities, with poor regional dispersal continuing to be an issue for growth markets such as China, Japan and India. This, combined with limited investment in infrastructure in the regions, including new hotel stock, is continuing to limit the potential of the Australian visitor economy.

The good news in 2017 was the resurgence of the domestic market despite concerns around household consumption, with overnight visitation growing by 7.20%. All

markets with the exception of Western Australia and South Australia showed solid growth in visitor nights with an Australia-wide increase of 6%. Once again the biggest lags are in regional visitor night performance, particularly in hotels, motels and resorts, with noticeable improvements in states such as NSW and Victoria which have intensified their focus and spend on the regional visitor economy.

The overall economic and market trends indicate strong growth for the tourism sector in 2018.

Ultimately for this growth to be sustained we need to attract quality labour and skills. The accommodation sector supports close to 200,000 full-time equivalent jobs directly and indirectly with employment growing by 7.1% in 2016-17.

Current shortages are being exacerbated by the growth in supply, with close to 40,000 rooms in the pipeline. There is no quick fix to this issue, given that the skilled migration reforms announced in 2017 have tightened pathways to permanent migration and increased costs. While we continue to advocate for pathways, as an industry our focus is on initiatives which attract Australians into the industry (i.e. the Hotel Career Expo), leverage government employment programs and funding and foster relationships with schools and universities.

The issue of sustainable supply growth will also dominate in 2018 with a focus on ensuring our current supply pipeline comes to fruition and further growth is encouraged, particularly in regional Australia. We have long advocated for the importance of demandled supply through investment by all three levels of government in the visitor economy (marketing, events, business events and infrastructure). Equally important is the need for government to address barriers to investment such as planning time frames, bureaucracy and the implementation of improved regulatory controls on short-term holiday letting, if investor confidence is to be sustained.

With 2018 the lead in to the next Federal election, it will be crucial that the tourism sector unites to ensure the economic benefits of the sector are highlighted and that both major parties are presented with clear, wellarticulated priorities that support future growth. hotelmanagement.com.au 23

Tourism Leaders

Jayson Westbury Chief Executive Officer Australian Federation of Travel Agents As 2018 kicks off there is no doubt that the regulatory challenges being presented to government and the travel and tourism industry in relation to software platforms driving the shared economy are bound to create debate and likely frustration this year.

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s the lead architect of the travel agency deregulation process now over three years ago, I can imagine how complex and difficult it is and will be for State and Federal Governments to deal with the various views across such a diverse range of stakeholders.

When it comes to the software platforms themselves, for the most part, they are really just another online travel agent.

The difference is that they have found a way to infiltrate the consumers very quickly and gain large market share much more quickly that traditional online travel agents.

Chris Roberts Chief Executive Officer Tourism Industry Aotearoa This year, 2018, is going to be the year when New Zealand’s tourism industry collectively takes responsibility for delivering long-term gains for our communities and economy.

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n November 2017, TIA launched the New Zealand Tourism Sustainability Commitment. Our vision is for New Zealand to lead the world in sustainable tourism.

This is aspirational but achievable and the right thing to do.

In delivering this vision, we will achieve ambitious economic goals while sharing the overwhelming benefits with supportive host communities across New Zealand, contributing in meaningful ways to restoring, protecting and enhancing our natural environment, and continuing to be a high-quality destination of choice for international and domestic travellers.

We also need to deliver for our host communities. Manaakitanga, the Kiwi welcome, is an essential part of what we offer our visitors. We want New Zealanders to be cheerleaders for tourism. So, as an industry, we need to do better at explaining what the benefits of tourism are, in terms of business opportunities, jobs, events, facilities and the vitality created in their communities.

24 HM The Business of Accommodation

The speciality of the websites and apps means that they have focused on one thing and are doing that one thing very well. Airbnb in particular, as a platform or OTA has become very popular.

They operate in Australia alongside travel agents both online and traditional agencies and in some cases have even found a way to work in a B2B scenario with travel agents.

From the regulatory framework the actual function of the booking engine falls in the same way as travel agents do and as such there is no regulation or legislation for that matter that specifically governs this function.

The travel agency community, of which more than 90% are active members of the Australian Federation of Travel Agents have been very happy with the system of industry lead accreditation that was put in place when the industry was deregulated.

In my mind this part of the equation needs no regulation, perhaps the likes of Airbnb and other OTAs should consider joining the industry association and becoming accredited along with their peers.

What seems to me to be the big challenge, and this is by no means a problem that Australia has independently of the rest of the world, is how to best balance the enormous amount of red tape, regulation and legislation that surrounds the accommodation industry.

Operators and owners of hotels, motels, serviced apartments and other forms of commercial accommodation operations do not have it easy when it comes to the laws of the land.

Over 120 businesses have already signed up, with good representation from the accommodation sector.

By the end of 2018, we are aiming to have 1000 supporters from every sector of the industry and every region of New Zealand.

Acting sustainably is a smart business decision.

Well-managed, welcoming, innovative and sustainable businesses have greater appeal to visitors who are increasingly demanding that providers share and live their values.

In the short term, the 2017-18 summer looks very positive with many operators reporting strong bookings.

If the early summer run of good weather continues, domestic travel will be strong and our three biggest overseas source markets are all performing well. Australia has had consistent growth, the Chinese market is expanding again after a slowdown in early 2017, and demand is high out of North America.

New Zealand is now served by 10 million international airline seats a year, provided by 30 airlines flying from 46 ports. This is roughly a 50% increase in capacity in the last four years, and includes 11 new airlines. The additional supply is unlocking latent demand to travel to New Zealand, including from emerging markets like the Philippines, South America and India.

The rest of 2018 is harder to predict. There are no big events like last year’s Lions Rugby Tour to give an offpeak boost. Global factors like oil prices, exchange rates and conflict can have big impacts on travel.

Hotel occupancy levels were quite static through 2017 but rates continued to improve. However, rate growth may slow in 2018, particularly as increased capacity comes into key markets such as Auckland and Queenstown.

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Asia Pacific Leaders Last year, 2017, was an incredible year for AccorHotels in Asia Pacific, adding 114 hotels and 20,000 new rooms to the network, meaning we opened, on average, one new hotel every three days.

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Michael Issenberg Chairman and CEO – Asia-Pacific AccorHotels

26 HM The Business of Accommodation

his was up 17% on the record year we had in 2016 and highlights the importance of Asia Pacific to the group globally.

Indeed 50% of our development pipeline is in Asia Pacific so this region will continue to grow in importance in coming years.

We were extremely busy in terms of acquisitions and investments – in fact over the past two years we have announced a new acquisition almost every month. These acquisitions are part of our strategy to become a full 360-degree service provider in the travel sector and accelerate our digital transformation, enrich the guest experience and offer more choice to our customers. To this end, we have acquired and invested in new hotel brands, entered into new strategic partnerships, expanded into alternative accommodation and bought adjacent businesses such as concierge services, event venues, catering, digital bookings systems and more. The addition of John Paul, for example, will play a major role in how people interact with AccorHotels and how we get to know our guests more deeply and deliver a more personalised loyalty experience.

During 2016, our major acquisition was the Fairmont, Raffles and Swissotel brands and for 2017 our biggest announcement in Asia Pacific was our intention to acquire Mantra (still pending approvals). We had a very strategic objective when we acquired the Fairmont, Raffles and Swissotel brands – and that was to position ourselves as a leader in the luxury and upscale space and increase our presence in the important American market. We have certainly achieved this, with AccorHotels now standing as the second largest operator of luxury hotels with a network of over 525 luxury and upscale hotels and resorts globally.

We will continue to expand our luxury and lifestyle brands as we see this is where demand is growing. In fact, since acquiring the FRS network we have signed more than 35 projects under these prestigious brands. At the same time we continue to grow Sofitel organically, with new flagships including Sofitel Sydney Darling Harbour, the first new-build luxury hotel in Sydney since 2000, and Sofitel Singapore City Centre, which opened as our 800th hotel in Asia Pacific. Our recent investment in 50% of Orient Express, one of the most iconic luxury brands in hospitality, will further allow us to grow our credentials at the top end of the market.

China continues to be a key focus for AccorHotels and has become the #1 source market for many countries across Asia Pacific. With the world’s largest population and the fastest-growing outbound tourism market, we have launched a new China 2020 project to ensure we are capitalizing on the 200 million Chinese expected to travel by 2020. This strategy addresses the challenges and unique technology platforms that exist in China to ensure we make Chinese guests Feel Welcome when they stay with us. Our strategic alliance with Huazhu Hotels, now the ninth largest hotel group in the world, will further enable us to expand our network in China and reach their 100-plus million loyalty members to drive outbound business into our hotels globally. But while other hotel groups are concentrating the majority of their APAC expansion in China, AccorHotels has always and will continue to focus our expansion more evenly across other key source markets including Indonesia, India, South Korea and Japan.

For 2018 we will have a strong focus on the guest experience through our Heartist program which empowers our staff to deliver service with passion and heart. We will be expanding in new lifestyle brands to appeal to millennials who want boutique hotels, social spaces and immersive local experiences through brands including Jo&Joe, Mama Shelter and 25hours Hotels. We are also transforming our business model to be more open to new practices, new generations and new businesses thanks to our Innovation Lab and a Disruption and Growth team who are working with start-ups and new technologies to create the travel experiences of tomorrow. If the past three years are anything to go by, I am sure that 2018 will be another exciting, dynamic year for AccorHotels and one that will continue our transformation.

Asia Pacific Leaders Last year, 2017, marked the start of an exciting new era for our company, following our acquisition by HNA Tourism Group, which closed in December 2016.

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Katerina Giannouka President - Asia Pacific Carlson Rezidor Hotel Group SNAPSHOT: CARLSON REZIDOR HOTEL GROUP

Number of hotels & rooms (Globally): 1,435 / 226,558 Number of hotels & rooms (Asia-Pacific): 198 / 31,018 Number of hotels & rooms (Australia, New Zealand and South Pacific): 5 / 1,047 Number of employees (APAC): 124 Year first hotel opened (APAC / ANZSP): Radisson Blu Beijing – 1995 / Radisson on Flagstaff Gardens Melbourne & Radisson Hotel & Suites Sydney open in 1998 Year the company was founded: 1990 in Asia Pacific Brands in the organisation: Quorvus Collection, Radisson Blu, Radisson, Radisson RED, Park Plaza, Park Inn by Radisson, Country Inn & Suites by Radisson Head office locations: Minneapolis Minnesota, U.S.A (global), Singapore (APAC)

28 HM The Business of Accommodation

his historic agreement was highly strategic; as part of HNA Group, a Fortune Global 500 company with over US$90 billion in assets, Carlson Rezidor will be able to secure our position as one of the world’s largest hotel companies and leverage opportunities for accelerated future growth across all areas of our business.

So, what opportunities and challenges lie in store for Carlson Rezidor in Asia Pacific in 2018? First of all, the economic outlook for our region remains positive; according to the latest forecast from the IMF, Asia Pacific will experience estimated economic growth of 5.5% in 2018, led by China, Japan, South Korea and the ASEAN region.

With consumer confidence in China – the world’s largest travel market – still buoyant, the prospects for the tourism and hospitality industry remain strong.

International travel is accelerating rapidly. The seven per cent increase in cross-border arrivals seen in 2017 (revealed in a recent report by the UNWTO) is well above the average growth rate of previous years. China is playing a crucial role, with outbound trips made by Chinese tourists expected to exceed 150 million for the first time in 2018.

This vast outbound market is the main driver of intra-Asian travel to short- and mediumhaul markets such as Japan, Thailand, Cambodia, Vietnam and Indonesia, all of which are enjoying record visitor arrivals. With Carlson Rezidor’s Asia Pacific hotels now catering to the needs of Chinese guests, and HNA offering us extensive exposure in this all-important source market, we are perfectly placed to capitalize on this growth 2018 and beyond.

Another key market for Carlson Rezidor is India, which is also registering rapid tourism growth. Inter-state tourism trips by Indian domestic travelers now exceed 1.6 billion per year, and we will continue to accelerate our expansion plans to capture demand from the huge pool of Indian domestic tourists and the rising number of inbound international travelers. Having signed 14 new hotels in India last year, Carlson Rezidor will pursue further opportunities across India in 2018.

Of course, the blue-skied business outlook for 2018 is not entirely free of clouds.

Competition is strong and over-supply of rooms in many markets is hindering hotel performance. The average daily rate (ADR) in Asia Pacific has increased by less than one per cent in 2017 and occupancy remains relatively subdued in many areas, including parts of Southeast Asia and India.

This issue of over-supply has been partially blamed on alternative accommodation providers such as Airbnb. But while these operators are becoming increasingly integrated into the mainstream, research suggests that they present only a minimal amount of disruption to traditional hotels. Instead of trying to compete with these companies, it is important for Carlson Rezidor to retain the core values of hospitality and service excellence that have helped us establish such a strong reputation and loyal customer base over the last 75 years.

It is also vital however, that we anticipate and address new consumer trends, especially those driven by the now well-established millennial market. Many of our customers in Asia Pacific now demand complete technological convenience and interaction, which we are delivering through the development of personalized solutions that manage every step of their journey, from the initial online search to the post-stay experience. We will continue to develop our ageless hotel concepts, such as Radisson Red, plus cutting-edge solutions for the benefit of our guests.

Other challenges that could impact Asia Pacific destinations include ‘forces majeure’, unforeseeable events such as volcanic eruptions in Indonesia, cross-border disputes and potential political upheavals. What is reassuring however, is that the overriding appetite for travel, especially within the Asia Pacific region, appears to remain stronger than ever.

Many countries are reducing administrative barriers to travel, including the expansion of e-visa and visa-on-arrival programs, and airlines – including low-cost carriers – are facilitating travel by launching new routes all across the region.

Asia Pacific’s airlines continue to enjoy sharp demand growth, especially on domestic and intra-regional routes. According to data from IATA, traffic on Asia Pacific-based airlines has seen double-digit growth in 2017, with domestic routes in India and China proving especially popular.

As travel continues to thrive in the world’s most populous region, Carlson Rezidor is well positioned to capture demand from all key sectors of the market with an expanding portfolio of brands and hotels. We now have a pipeline of approximately 80 hotels across Asia Pacific, which will boost our overall regional portfolio to almost 200 hotels.

Come March 2018, exciting changes will be unveiled, Carlson Rezidor is set to embark on one of the most exciting years in its history, and Asia Pacific will continue to be at the forefront of this growth.

Asia Pacific Leaders

Suphajee Suthumpun Group CEO Dusit International This year will be a year of innovation for the hotel industry. Not just in terms of technology and service, but in terms of how business actually gets done.

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aced with an ever-increasing number of agile start-ups and disrupters, hotel companies must work quicker and smarter than ever before to maintain competitive advantage. Anticipating change and identifying new opportunities has become an essential part of the hotel business, and we must now all think like entrepreneurs to find creative ways to expand the scale and reach of our operations.

We must be open to diversification, embrace disruption, and learn from it. We must leverage digital technology to enhance the guest and customer experience through increased personalization of services. And we must ensure that community always comes first, wherever we set foot.

We must accept that Airbnb and similar companies are here to stay and will only continue to proliferate. Rather than simply pose a threat, however, I believe they also present an opportunity for hotel companies to step up and beat them at their own game – especially in terms of providing ‘local’ experiences for guests to enjoy, streamlining the booking/stay experience online, and interacting with guests and customers on social media.

The long-term winners will be those companies that successfully manage to do this while also enhancing the human touch that defines a superior hospitality experience.

After all, this is an area in which the sharing economy, with its online-only operations, simply cannot compete. Guests will always value human interaction; high tech services should be used to enrich this differentiation, not detract from it.

At Dusit, we enter 2018 optimistic that we have the strategy and brands in place to further our sustainable development and continue our mission to deliver gracious hospitality to the world.

Last year, our Development team signed 17 properties across Bahrain, Bangladesh, China, Ethiopia, Nepal, Thailand and Vietnam, taking our tally of properties in the pipeline to over 60.

At least eight new properties are scheduled to open this year, including our first hotels in Bahrain, Bangladesh, Bhutan, Singapore, and Vietnam.

In line with our strategy to continuously improve our operations, last year we began adding value to all of our properties by leveraging digital technology to enhance the prestay, in-stay, and post-stay experience.

Alongside upgrading our IT systems companywide, we adopted WeChat Pay and Alipay at all of our properties in Thailand (allowing quick and easy payments for our Chinese guests), and we plan to roll these out to our international hotels soon.

We also launched a brand new app which provides users with one-touch booking and a host of local experiences offered by carefully selected partners, ultimately adding value beyond the traditional stay.

Seeking further collaboration and connection, we also invested in FavStay, a Thai hospitality start-up offering condos and villas for rent in Thailand’s top destinations.

We have realised that, by embracing the sharing economy and leveraging its success, we can add value to our existing hotels informed by the lessons we learn from the sharing economy.

This includes leveraging data to personalize services at all of our properties worldwide.

These lessons will also lead to the introduction of a new hotel brand, operated by Dusit, which is designed to meet the needs of the fast-growing millennial-minded market which

places high value on genuine local experiences. We plan to officially introduce this brand in mid-2018.

Among the other markets we are actively pursuing are China and India. The latter is now one of the fastest growing outbound markets in the world – expected to reach 20 million by 2020. We began tapping into this last August by opening our first Global Sales Office (GSO) in Mumbai.

Last year we also signed a strategic partnership with Dossen International Group, one of the fastest growing hotel groups in China, to operate and develop DusitPrincess resorts and residences in China. The country provided some 9 million tourists to Thailand last year, and is expected to be the world’s largest travel destination by 2020, so now is the perfect time to expand our presence there.

With these solid foundations in place, this year we will continue to enhance our operations by exploring hotel management and franchise agreements in key destinations worldwide. And innovation will be our modus operandi.

The best example of our long-term vision for the company can be seen with the redevelopment of our flagship property, Dusit Thani Bangkok, which will open alongside a USD 1.1 billion landmark mixed-use project being developed in partnership with Central Pattana PLC. Designed to mirror the same vision the hotel’s founder, Thanpuying Chanut, had when she first opened the property some 48 years ago, the new hotel is destined to become a new landmark, for a new era of tourism, which benefits the community and city as a whole.

By embracing our past, reflecting our present, and anticipating our future, the new property will usher in an exciting new chapter for our company – and many other exciting developments to come.

The hotel as it stands will operate as usual until January 5, 2019.

SNAPSHOT: DUSIT INTERNATIONAL

Number of hotels (Globally): 27 and 50 in pipeline Year the company was founded: 1984 (the Princess on Bangkok’s Charoenkrung Road) Brands in the organisation: Dusit Thani, dusitD2, Dusit Princess, Dusit Devarana Head office locations (Global): Bangkok, Thailand

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Asia Pacific Leaders the garage of McLaren-Honda during the Melbourne Formula 1 race, to driving a McLaren supercar along The Bund in Shanghai. These exciting initiatives have resulted in record-breaking Hilton Honors enrolment, with more than 7 million members now in Asia Pacific.

LEADING IMPACTFUL GROWTH IN THE REGION

Alan Watts Executive Vice President & President - Asia Pacific Hilton International Having recently joined Hilton, I have been hugely impressed by the passion and talent on display from our Team Members.

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e are part of an industry that is rapidly on the rise in Asia Pacific, in a high performing company that has enormous ambition and even greater potential.

We have previously spoken about the centre of gravity shifting to Asia Pacific and that holds true, with notable growth in international tourist arrivals across Asia Pacific last year. It was a transformative time too for Hilton, where we continued to grow our portfolio and create thousands of career opportunities.

Having opened an average of one hotel a week last year in Asia, including the introduction of the Curio Collection by Hilton brand to Australia and China, today nearly one in four hotels under construction in Asia Pacific carries a Hilton flag. At the same time, we have been named one of Asia’s best multinational workplaces and a Great Place to Work in several key markets.

We have an excellent platform on which to build at a time when Asia Pacific is becoming an increasingly important part of the global industry, both from a domestic consumer and outbound travel flow perspective.

The concerted initiatives across the company demonstrate our sustained commitment to delivering shared value for owners and heartfelt experiences for guests, but also meaningful opportunities for all our Team Members and positive impact on communities.

As I begin my new role with Hilton, building on the amazing legacy left by Martin Rinck, there is no better time to take over the reins.

TRANSFORMING HOSPITALITY THROUGH INNOVATION AND FORESIGHT

Having been in hospitality for close to a century, Hilton has always sought to take the guest experience to new heights through innovative concepts and services as well as new brands that cater to their individual travel needs. After all, delivering hospitality is not just about building well-located hotels with well-appointed rooms, but also about curating experiences at every step of the consumer journey.

This is why we are leveraging digital innovation to create a more seamless and personalised travel experience. Our award-winning Hilton Honors mobile app is equipped with industry-leading digital tools like digital check-in with room selection, giving our loyal guests the ability to choose their own room and preferred view. We have also been actively rolling out our industry-first Digital Key, which allows Honors members to use their smartphones as their room key.

Last year, we also relaunched our guest loyalty program Hilton Honors to give guests greater flexibility and ways to use their points. Through the Honors Access platform, for instance, numerous Honors members got to enjoy money-can’t-buy experiences – from attending sold-out concerts like Coldplay’s hugely popular tour in Asia, touring 30 HM The Business of Accommodation

We currently operate 225 hotels in 21 countries and territories across Asia Pacific, but the larger story lies in the 400 hotels in our pipeline. Yet in spite of record growth, we remain under penetrated in certain markets and that represents a huge opportunity, whereby we aim to leverage foothold markets and create what I call anchor tenants.

China is leading our growth, where we opened our 100th hotel last year, Hilton Quanzhou Riverside, while Waldorf Astoria Chengdu became our 200th hotel in all of Asia Pacific. With diverse natural landscapes and rapidly rising Tier-2 and Tier-3 commercial cities, China will continue to grow as a travel destination, and Hilton’s pipeline of 300 hotels there will be well positioned to meet the growing demand.

At the same time, we also recognise the abundance of growth opportunities in other destinations throughout Asia Pacific. At the end of 2017, we opened Australia’s first Curio Collection by Hilton hotel – the botanicalinspired West Hotel Sydney, which offers a distinctive experience through its beautiful open-air garden atrium and white waratah motif in the lobby.

2017 also saw us expanding the presence of our successful brand DoubleTree by Hilton, which has now surpassed the 50th hotel milestone in Asia, with the openings of DoubleTree by Hilton Resort Penang and DoubleTree by Hilton Melaka in Malaysia. This signals the brand’s popularity among guests and our confidence amongst owners.

Across other emerging destinations, we signed a series of landmark deals that will bring the world’s travellers to wildlife reserves, sandy beaches, tea plantations, and even a UNESCO World Heritage Site in Sri Lanka and Vietnam. Having closed 2017 with a deal signed on the sidelines of the Asia-Pacific Economic Cooperation Summit in Da Nang, Vietnam, we have a pipeline of more than 50 hotels in South East Asia.

SNAPSHOT: HILTON INTERNATIONAL

Number of hotels & rooms (Globally): 5,239 hotels, 847,874 rooms Number of hotels & rooms (Asia-Pacific): 211 hotels, 65,324 rooms Number of hotels & rooms (Australia, New Zealand and South Pacific): 22 hotels, 5,063 rooms Number of employees (Globally / APAC / ANZSP): Over 380,000 (global), 51,000-plus (APAC) Year first hotel opened (Globally): 1919 Year the company was founded: 1919 Brands in the organisation: 14 (Canopy, Conrad, Curio Collection, DoubleTree, Embassy Suites by Hilton, Hampton by Hilton, Hilton, Hilton Garden Inn, Hilton Grand Vacations, Home2 Suites, Homewood Suites, Tapestry Collection, Tru by Hilton and Waldorf Astoria) Head office locations: McLean, Virginia, USA (global), Singapore (APAC), Sydney (ANZSP)

Asia Pacific Leaders

Simon Manning Chief Sales and Marketing Officer Langham Hospitality Group We had a good year in 2017 and the outlook for 2018 continues to be positive for the Langham Hospitality Group.

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e have just announced a new Langham in Bangkok and are looking forward to the opening of our hotels in Phuket, Chongqing, Hefei and Ningbo Dongqian Lake later this year.

We see opportunities in the Pacific, especially in Auckland. New Zealand attracted international arrivals of over 3.3 million (2015/2016) and the number is expected to continue to grow by over 10% annually. We have re-branded our Auckland hotel to a Cordis, recently idue to the size of our hotel and large inventory of rooms as we see an opportunity to re-brand it to an upper-upscale property to complement the growth of Auckland city and the buoyant tourism environment. With the events and conventions facilities and infrastructure in place and in development in the region, the outlook is positive for MICE, leisure and business.

The Langham Sydney is the most exclusive harbour side address in the city and we are very excited with the development of Barangaroo, the city’s new waterfront precinct which is only a short walk away from our luxury hotel. We look forward to the opportunities from a destination and business perspective from this development.

Our hotel in Melbourne is in one of the best locations in the city. The Langham, Melbourne, a favourite amongst the locals for celebrating special occasions will be undergoing a renovation and we look forward to sharing more details and unveiling a new updated product in the near future.

Greater China continues to be a key focus. Domestic travel (both business and leisure) will continue to grow steadily ahead of the rest of the world. There are 120 million-plus Chinese outbound customers who are seeking to travel out of China which is a great opportunity for the hospitality industry worldwide. Being a Hong Kong owned company, the Langham Hospitality Group takes pride that we know the Chinese travellers well.

We have developed the Ying programme which is specially catered to the Chinese, a welcoming programme designed especially for the unique needs of our Chinese guests with an effortless and enjoyable experience which include; local information written in Chinese, Mandarin speaking colleagues to assist Chinese guests; Ying In-room where guests can find Chinese tea, Chinese newspaper titles, selection of Chinese television channels and essential amenities that make the Chinese guest more comfortable; and Ying Cuisine where Chinese guests can seek comfort food like traditional Chinese breakfast congee, dim sum, noodles prepared by our experienced Chefs.

We are going through an exciting time in North America. The Langham, Chicago continues to be top of mind as one of the best hotels in the city and country. The Langham, New York has completed its renovation last year and we are very proud that it is recently voted the best hotel in New York and number three best hotel in the USA by readers of Conde Nast. Our Roche Bobois Penthouse Suites at The Langham, New York are designed by the acclaimed French interior design retailer, Roche Bobois. Each suite is unique, with interiors inspired by the vibrant industries of fashion and music that thrives in New York. The Langham, New York also housed a collection of Alex Katz, Amercia’s modern great artist’s works which offset the character and design of our well-loved New York hotel.

Southeast Asia is an important market to watch from a business, leisure and MICE perspective. There is a rising middle class who are affluent, young and tech-savvy consumers, eager to travel within the region and beyond. In view of this growth in the region, we are also very excited with our recent announcement of The Langham, Bangkok, scheduled to open in 2021 and the upcoming opening of our hotels in Jakarta

and Phuket in the next 18 months. The group is also actively seeking opportunities in the region and have projects in negotiation.

The industry is evolving constantly and at a faster pace now than it was five years ago. Consumers have access to information at their fingertips and on real time social media platforms. The hospitality industry needs to adapt and also respond to the customer at a much faster response rate today.

We see new businesses like Uber and Airbnb in the market complementary to the traditional service oriented hospitality business. They offer options and alternatives to consumers who seek a different experience.

The growth of the aviation industry is crucial to the hospitality industry. With direct aviation access to the destination where the hotel is located, there will be more potential business and opportunities to drive tourism and arrivals. More airlines are now competing on the same routes, giving consumers more options. Younger airlines are now competing with the national carriers, introducing fresher, newer product with more competitive fares. These are all good news for us.

We have also increased Cordis’ footprints last year.

New Cordis hotels have been signed in Hangzhou, Phuket, Shanghai East Bund and Ningbo, Donqian Lake. In addition to Cordis Hong Kong, we now have Cordis Shanghai Hongqiao, Cordis Auckland and Cordis, Beijing Capital Airport all in operation in 2017.

In 2017, we announced Langham hotels in Bangkok, Tokyo, San Francisco and Jeddah.

Our hotels in key destinations like London, Sydney and New York have all completed their renovations last year – so we have new products to showcase to the rest of the world.

SNAPSHOT: LANGHAM HOSPITALITY GROUP

Number of hotels & rooms (Globally): 22 hotels and 8,882 rooms Number of hotels & rooms (Asia-Pacific): 16 hotels and 5,684 rooms Number of hotels & rooms (Australia, New Zealand and South Pacific): 3 hotels and 897 rooms Number of employees (Globally): 8,400 Year first hotel opened (Globally): 1865 (The Langham, London) Year the company was founded: 2004 Brands in the organisation: Langham Hotels & Resorts, Cordis Hotels & Resorts and affiliate brands Chelsea Toronto and Grand West Sands Resorts and Villas Phuket Head office location (Global): Hong Kong

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Asia Pacific Leaders

Craig Smith President and Managing Director - Asia Pacific Marriott International

With great growth comes great opportunity for our industry and local communities

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ollowing a year of change, 2018 promises to be one of growth. Asia Pacific is booming, creating a unique opportunity for our industry and the local communities in which we operate.

Over the next year, the region is expected to maintain its position as the world’s fastest growing, with China and India leading the charge. Understanding and accommodating this burgeoning, yet diverse, middle class is the most important challenge for our industry. In China alone, the middle class includes over 100 million people and across ASEAN over 67 million households are able to afford discretionary travel, according to the WTTC. At Marriott International, we’re working to meet this rising demand by accelerating our expansion across the region: In 2018 we expect to open 80 new hotels in 16 different markets. By 2020, we expect to operate 1,000 hotels across the region, nearly doubling our current portfolio of 620 properties.

As travel becomes more ordinary, guests will increasingly expect the extraordinary, irrespective of their budget. Global luxurians will continue to demand authentic and engaging experiences, challenging our industry to further elevate this category.

At Marriott International, we’re responding to this trend by opening 11 new luxury properties across the region while our premium brands, such as Sheraton, Le Meridien and Marriott, will open in daring new destinations such as Auckland, New Zealand, Hobart, Tasmania and Siem Reap, Cambodia. To accommodate those travellers who seek to experience quality international brands at affordable prices, we’ll continue to expand our select brand portfolio, including classic brands like Courtyard, Fairfield and Four Points as well as distinctive brands such as Aloft, Moxy, Element and AC Hotels, in key markets like Greater China, India and Indonesia.

Given the rise of the middle class, it’s no surprise that this portfolio is set to be our fastest growing tier of brands in 2018.

Corporate travel will also continue to drive spend across the region: by 2025, it is expected to account for half the world’s total, according to Amadeus. As someone who travels frequently, I know firsthand that our guests expect us to deliver ever smoother trips and events. This past year, our Starwood Preferred Guest (SPG) programme was recognized as the region’s best at the Business Traveller Asia Pacific Awards and we’re set to unveil even more rewards and technology-enabled convenience.

But we cannot become complacent – relentless innovation will remain critical to our industry’s growth in 2018 and beyond. I’m often asked how traditional hospitality companies, like Marriott International, are responding to disruptors like Airbnb.

The truth is that we offer a fundamentally different guest experience. Hotels create

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communities that can’t be replicated and I’m excited to see how our industry continues to innovate both traditional and digital hospitality services. At Marriott International, for example, we’re building on our new partnership with Alibaba’s Fliggy to offer Chinese travellers an even more personalized and convenient travel experience. We’re also working to integrate our Marriott Rewards and SPG programmes so all our 100 million global guests can access one unparalleled world of rewards and incentives.

Despite this race for apps and amenities, our industry will continue to be grounded in the people and places that underpin our growth. As we expand our footprint across Asia Pacific, we all have a great opportunity and responsibility to ensure that our local communities share in our success. At Marriott International, we just recently launched our a new global platform, Serve 360, that seeks to address some of the world’s most pressing issues of our time – environmental sustainability, youth unemployment, human trafficking and additional human rights challenges. Having started my own hospitality career by folding towels, I’m living proof of the opportunities our industry creates for ambitious young people.

But we alone cannot address the region’s important issues. This year, we must continue to work together and with our partners in business and government to ensure Asia Pacific’s workforce and infrastructure develop apace of the tourism industry. In many cases, tourism is growing faster than the economy as a whole. If we cannot upskill local talent and upgrade local infrastructure together, then none of us will reach our growth potential.

I have great optimism for the opportunities ahead.

Asia Pacific offers growing economies, an ambitious new class of travellers and freshly charted destinations. As our industry grows, so should our local communities in 2018 and beyond.

Asia Pacific Leaders

Scott Dalecio President & CEO Outrigger Hotels and Resorts Global travel and tourism in 2017 was strong and for good reason. There were flights aplenty, the global economy was healthy, barriers to travel were lower and traveler use of mobile technology kicked in. For Hawaii specifically, the visitor industry saw record arrivals and visitor spending.

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t Outrigger Hotels and Resorts, a combination of overall industry strength and internal refocus led to solid RevPAR gains, a fruitful first year of the Outrigger Discovery loyalty program and record growth of our international portfolio.

With these basics remaining in place and with further capital and operational improvements, I expect our growth run to continue throughout 2018.

We’re now full stride into Outrigger’s 70th Anniversary year – honoring our founders who were pioneers of modern Hawaii tourism, and reflecting on our legacy of sharing the spirit of aloha with the world. It is with this reflection of our past and respect for what got us here, we’re fully focused on the future of this iconic hospitality company.

As such, we have deployed a multi-pronged strategy for reinvestment – both in our properties and in our people: that is propelling Outrigger forward and will continue to differentiate our brand from the competition.

Innovation and technology play a vital role in our sustained success. With reinvestment in a best-in-class revenue management culture, we have overhauled Outrigger’s management systems and processes. Deploying Duetto and Demand360, in combination with our direct-connect wholesale and OTA partners recently converting to the Sabre SynXis platform, has transformed our distribution system. We have also enhanced the outrigger.com website and booking engine as well as launched a fully translated Japanese site at jp.outrigger.com.

Continuing our legacy as an employer of choice, Outrigger has upgraded companywide training for professional growth and has engaged Talent Plus to improve recruiting and retention. Our distinct 4Keys training platform (directly linked to Unifocus) is driving increased guest service and recommend scores. By optimizing our talent, systems and processes, we continue to deliver on our premium global brand promise, remaining relevant and meeting the evolving demands of consumers in a constantly changing international market.

Today, Outrigger’s portfolio includes nine premium beachfront resorts in Hawaii, Fiji, Thailand, Guam, Mauritius and the Maldives – alongside 27 owned and/or managed hotels, resorts and vacation condominiums. We’re a Hawaii-based company, but with our global expansion, more than half of our guests now originate from outside of North America. We expect this trend to continue and will further tailor our offerings to meet the needs of our guests. Outrigger’s recently launched Guibin ‘Distinguished Guest’ program tailored to our China market is a recent example of this customization.

Coupled with an influx of capital and resources from our new parent company, an affiliate of KSL Capital Partners, we are in a unique position to grow and thrive.

First up for 2018 is our introduction of Waikiki Beachcomber by Outrigger. This 496-key property, located steps from the sands of Waikiki and adjacent to the reimagined International Market Place, is undergoing a USD$25 million renovation that will usher in a new chapter of this cosmopolitan retreat. With a completion date anticipated for late summer, we look forward to welcoming guests to an upscale, urban oasis.

This reinvestment is just the first of many exciting capital projects to come and part of our larger strategy to ensure sustainable growth for Outrigger’s authentic and iconic brand.

As the undisputed hospitality leader in Hawaii with a unique collection of assets in Waikiki, we’ll continue with the majority of our properties in the Aloha State for the foreseeable future. Neighbor Island expansion of our full-service Outrigger Resort brand is a key priority: Maui, Kauai and Hawaii Island are three very unique destinations, each with their own culture to share.

Our portfolio is brimming with bucket-list beach destinations and we continue to comb the sands of iconic vacation spots for appropriate sites to expand.

Bridging the Pacific Ocean, from the shores of Hawaii to the US Mainland and Mexico, is a logical next step.

This includes growth for our Outrigger Resorts brand, our endorsed by Outrigger brands and our extensive resort management services that provide owners with a proven brand solution.

As both a hotel owner and manager, Outrigger has withstood the test of time and will continue to distinguish itself from the industry noise of emerging and consolidating hotel brands because of our next-level authenticity and distinct positioning – where local culture meets world-class hospitality. Caring for the guest, the host and the place is embedded in our corporate culture through a system we call Ke `Ano Wa`a, translated from the Hawaiian language to mean The Outrigger Way. As we navigate this next leg of Outrigger’s journey, we’re excited and hope you are too. Stay tuned.

SNAPSHOT: OUTRIGGER HOTELS AND RESORTS

Number of hotels & rooms (Globally): 36 properties with approx. 6,500 rooms Number of employees (Globally): approx. 4,000 (as of 6/03/17) Year first hotel opened: 1947 (Hawaii) Year the company was founded: 1947 Brands in the organization: 3 (Outrigger Resorts, Hawaii Vacation Condos by Outrigger and Ohana Hotels

by Outrigger) Head office location: Honolulu, Hawaii, USA

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Asia Pacific Leaders

Girish Jhunjhnuwala Founder and CEO Ovolo Group Looking at 2017 in the rear-view mirror, the breadth of change has been amazing.

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hange has affected the hotel industry in areas of technology, artificial intelligence, the sharing economy and customer evolution, changing the look and feel of 2018.

2017 global trends impacted hotel revenues as well as driving business change through new opportunities. There’s no denying geopolitical and economic uncertainty has impacted travel demand and hotel pricing within the US, and I’ve seen some statistics that tout reductions in hotel pricing by up to 39% in certain International tourist hotspots which is a huge impact.

Fortunately travel demand and airline growth has remained positive within APAC, which has helped carve the way for our own business developments this year including the purchase and transformation of two new properties.

Reports suggest international visitor demand into the Asia Pacific region is forecast to grow at an average rate of 4.6% each year to reach in excess of 657 million by 2020 which is exciting to consider in line with our growth plans. We’ve also seen a growth in production from emerging markets with China in particular showing a significant increase of over 20%.

There’s obviously a few key changes that have had a significant impact.

Technology powerfully influences the hotel industry, and the rise of mobile is significant with consumers now expecting to make immediate decisions using mobile devices. We’ve noticed a 5% increase in mobile bookings over the year.

Advances in artificial intelligence have led to consumer interest in a variety of AI solutions. I believe natural user interfaces like voice and gesture represent the next evolution of this technology given they put the user experience first. With this in mind we’ve just invested in Amazon Alexa voice activated speakers and have rolled these out within our Ovolo Woolloomooloo and Ovolo 1888 properties with plans to further expand across the group.

The sharing economy, like Airbnb, is having an impact, but notably that the impact is non-uniform, with lower-priced hotels and hotels not catering to business travelers being the most affected. As a boutique hotel brand, we’re in a fortunate position as our price positioning and assured high service and luxury product standards offer a different proposition to that of Airbnb.

With economic fundamentals for consumer spending looking solid moving into 2018, I’m optimistic for high consumer travel demand leading to new growth opportunities next year.

Ovolo Hotels will be starting 2018 with a disruptive outlook and vision to change the perception and definition of hotel service and experience. The modern customer wants to be a creator and collaborator as opposed to just a consumer. We are tapping into this and calling it the Customer Evolution.

The ability to ‘remote in’ is transforming business, lifestyle and community by enabling the rising tide of digital nomads. They’re working professionals characterized by not having a fixed home location, instead moving from job to job, place to place over time. Nomads are attracted to the co-living ethos, unite around their common interest to collaboratively manage a space and share resources.

On December 22, 2017, we officially launched our new brand Mojo Nomad, with the opening of our first Mojo Nomad property in Hong Kong’s Aberdeen Harbour. Mojo

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Nomad is a new co-habitation concept for global nomads that combines travel, lifestyle and community at its core.

Mojo Nomad fulfils the modern nomad, who seeks new ways of living as a community, appreciating the experience of exploring the local lifestyle and values openness and collaboration. It departs from the traditional rigid hotel model that requires a direct quidpro-quo benefit against every square metre in favour of Return on Experience.

Instead, we’re focusing on offering collaborative and fun environments that will expose our residents to new experiences that inspire them to be active creators and contribute creatively and intellectually to the world around them.

We’re excited to be one of the first brands to shake up the Hong Kong hospitality industry and are looking forward to bringing our new concept to other markets across APAC into 2018 and beyond.

The Mojo project and design teams visited 36 existing establishments around the world during the brand conceptualization process. Learning from the best designled hostels and boutique hotels in Europe, evaluating pricing models, value added services, ancillary income generators, guest facilities and characteristics of these popular properties, we created Mojo Nomad. The result is a constantly evolving co-living Mojo Nomad brand that is driven by the sharing economy.

In addition to the new Mojo Nomad developments, the Ovolo Hotels brand will also further strengthen into 2018 as we look to expand with some additional product announcements to be expected early in the year. We are very positive about Ovolo Hotels brand growth in all markets and I can’t wait to announce more developments soon!

SNAPSHOT: OVOLO GROUP

Number of hotels & rooms (Globally): 9 Number of hotels & rooms (Asia-Pacific): 9 Number of hotels & rooms (Australia, New Zealand and South Pacific): 5 Number of employees (Globally / APAC / ANZSP): 175 employees – HK + 230 employees – AU. Total 405 with an increase expected in 2018.

Year first hotel opened (Globally / APAC / ANZSP): 2002 Year the company was founded: 2002 Brands in the organisation: Ovolo Hotels, Mojo Nomad Head office locations (Global): Hong Kong

Asia Pacific Leaders

Lothar Nessmann Chief Executive Officer Pan Pacific Hotels Group Several predictions suggest there is room for optimism in 2018.

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he IMF has raised its most recent forecast for global GDP growth to 3.1% as more than half of economies started recovering. Asia Pacific, which outperformed the rest of the world in 2017, is expected to grow 6.2% this year, moderated by China’s transition to slower but more sustainable growth.

Intra-regional travel will continue to rise in the region, which also sees outbound travel growing at an average rate of 6% to 8% annually .

Compared to last year, people are prepared to travel more for business and leisure this year. In the first quarter of 2018, international bookings by American Express are up 44%. Corroborating this interest in international destinations is another survey where one in four respondents cite learning about history, art and culture across the globe as their most important travel goal for 2018. Experiential travel is the buzzword for 2018 as people seek to be inspired and transformed by travel. This is particularly true of Millennials and Post-Millennials and the centre of this growth will be Asia, where approximately 60% of the world’s Millennials reside.

In terms of travel, the Chinese made 4.44 billion domestic trips in 2016, an increase of 11% from the year before. Revenues from tourism grew 14% according to the China National Tourism Administration. At the same time, outbound travel went up by 4.3% to reach 122 million trips. This is projected to increase to 234 million by 2020 , and China will surpass the United States as the country with the highest propensity to travel overseas by 2022.

As a region, Southeast Asia markets are forecast to grow at 5% in 2018 while the strong demand for travel to this region will generate a 6.3% growth per annum in the next ten years. Five major destinations – Singapore, Thailand, Vietnam, Indonesia, and Malaysia – together account for over 80% of ASEAN’s international arrivals and tourism contribution to GDP, and our footprint has also expanded in tandem with the development of the tourism sector in these markets. With China’s One Belt One Road initiative, Singapore and other countries along the Belt will enjoy greater connectivity, giving the tourism sector a further boost.

Excluding our Singapore headquarters, China is one of our largest operating regions with one-fifth of our portfolio. We opened Pan Pacific Beijing in the capital city last year and will continue to seek opportunities to expand our presence in other first-tier cities this year. Our priority is to reach out to and to engage Chinese consumers on platforms where they are most active such as WeChat and Fliggy (formerly Alitrip), where we made hotel vouchers available for purchase on Singles’ Day, and looking at ways to make our Chinese guests feel comfortable when they stay with us (e.g. providing services such as in-house TV channels in Chinese, offering Chinese items on our daily breakfast menu).

Vietnam is an important piece in our wider strategy for Indochina and now that we already have a presence in its two largest cities (Pan Pacific Hanoi in Hanoi, and Parkroyal Saigon in Ho Chi Minh City) we plan to venture into key resort destinations

such as Danang and Nha Trang. We have plans to introduce two more Parkroyal resorts in Malaysia, bringing the total number of resorts we operate in this market to three including Parkroyal Penang Resort. In the later part of the year, we will debut our Pan Pacific brand in Malaysia with the opening of Pan Pacific Serviced Suites Puteri Harbour in Iskandar, Johor, just a ten-minute drive from Singapore via the Tuas Second Link. In 2020, we will launch Pan Pacific Serviced Suites Jakarta in the Thamrin area right in the city centre.

We debuted our Pan Pacific brand in the global cities of Beijing and Melbourne, and launched Pan Pacific Yangon in the historical and cultural heart of Myanmar. We’re refurbishing our Parkroyal hotels in Penang and Beach Road, Singapore, elevating their market positioning to serve guests who are accustomed to quality full service stays.

To capture customers who are increasingly researching and making purchases on their mobile devices, we enhanced the mobile sites for Pan Pacific and Parkroyal with the latest technology to shorten the booking process.

We intensified engagement with Chinese consumers through platforms such as Fliggy (formerly Alitrip) such as making hotel vouchers available for purchase on Singles’ Day, the biggest online shopping event in the world. To strengthen our global sales network, we opened our first Global Sales Office in Hong Kong to cover the Hong Kong, Shenzhen, Guangzhou and Taiwan markets.

The hotel industry will have to leverage the right technology resources to meet the needs of a younger set of consumers through mobile technology and online channels. These consumers want greater personalisation in terms of recognition, and increasingly demand for more sophisticated levels of service. Great service to them isn’t just about stunning spaces, impressive facilities, or a fantastic location, but customisation and flexibility.

While technology has allowed greater efficiency (through faster check-in times) and higher levels of customisation (selection of rooms), many opponents will argue that service will become less personal as human interaction is reduced. Ultimately it is up to the hotel to make technology an enabler in order to free up time for personal interaction with guests and create more meaningful work for its employees. This means hotels must attract the right employees through the ranks with the right service mindset as part of their people strategy.

Many airlines are investing in new aircraft and better passenger experiences, with the net result being more options for consumers. This expansion in air travel will open up new markets and bring in new guests and room nights for the hotel industry; particularly so in Asia Pacific where the International Air Transport Association (IATA) has forecast an extra 1.8 billion annual passengers by 2035, for an overall market size of 3.1 billion.

Regional airlines, which carry one-third of world passenger traffic, will play an increasingly bigger role in the development of the aviation industry in Asia Pacific as China, India, and the Southeast Asia markets drive the economic growth of the region. The aviation industry in Asia is being reshaped by different business models and airline strategies, with low cost carriers in particular helping to increase accessibility within Southeast Asia.

This has benefitted us as many of our hotels are located in key cities – from Kuala Lumpur to Ho Chi Minh to Yangon, which are within a three-hour flight radius from Singapore, the region’s hub for air travel. hotelmanagement.com.au 35

Asia Pacific Leaders The world continues on its juggernaught of disruption.

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Gavin Faull Chairman and President Swiss-Belhotel International

SNAPSHOT: SWISS-BELHOTEL INTERNATIONAL

Number of Hotels and rooms (globally): 150 hotels and projects in 22 countries totalling approximately 18,000 rooms and keys.

Number of Hotels and rooms (Asia Pacific): 110 hotels and projects with 11,000 rooms and keys.

Number of hotels and rooms (Australia and New Zealand): 6 hotels and projects with over 800 rooms, suites and apartments.

Number of Employees (globally): 12,000 including hotel operational staff.

Year the company was founded: 1987.

Brands in the organisation: Grand Swiss-Belhotel, Grand Swiss-Belresort, Swiss-Belhotel, Swiss-Belresort, Swiss-Belsuites, Swiss-Belboutique, Swiss-Belvillas, Swiss-Belresidences Swiss-Belinn, Swiss-Belcourt, SwissBelexpress, Zest plus, Zest, Zest OK. Head office locations: Auckland, New Zealand (global), Hong Kong (corporate office).

36 HM The Business of Accommodation

hether we are talking of the continuing power and growth of the internet; the power of on-line e-commerce; the huge change in retail shopping; whether we are talking of the political challenges of the USA, North Korea; the European Economy or Brexit; whether we are talking of the security issues in The Middle East; Asia or Europe; or whether we are talking of the economic slow-down of Asia and the strong economic growth of the USA. Our thoughts, as we prepare to manage our way through 2018, continue to be concerned with the unexpected; the disruptive; and yet the exciting opportunities of the entrepreneurial world.

My Group – Swiss–Belhotel International – continues to be very positive, yet careful, of the opportunities of our medium sized international hotel management company.

I am continually aware of the need to change; the need to challenge; of the need to understand the market and we have to be prepared to change and question what we are doing. I find this very challenging at times as the hotel management industry has come from a conservative background; has come from traditional management structures; has come from an executive approach which has been reactive rather than proactive; has historically lacked questioning of itself and executives with ‘other people’s problems’ attitude. This is why the major changes in the hotel and hospitality industry have so often come from non-hoteliers; from property experts; from the e-commerce industry; from the distribution industry; from the transport industry; from the investor and capital raising industry.

Do you really see the Hotelier being an investor? Do you really see the Hotelier looking at new building techniques? Do you really see the Hotelier looking at major systems changes until they are forced to?

This is because the Hotelier is a reactive manager rather than a proactive manager.

This is because the Hotelier so often does not question why or how. This is because the Hotelier thinks of profitability as a resultant rather than the key driving force for which they are responsible. The Hotelier must start thinking; must start understanding disruptive environments.

With Airbnb, Uber and other disruptors, as an industry we continue to ignore them and we do not see the long-term changes and challenges. When the biggest and richest companies in the world operate by using other people’s assets for ‘free’ – which is what Airbnb and Uber does – there must be a total change in the thinking of the business and financial structures of the world.

When these huge companies escape the regulatory and governance requirements that asset based corporations have to conform to, then there must be a total change in the governmental process and Government regulations. Where taxation structures are avoided and transfer pricing takes on a whole new dimension then governments have real funding challenges with their geographical functions and responsibilities.

These are disruptive changes and disruptive challenges. The hotel industry is a global operation and must also recognise such issues and such challenges. We are now seeing Airbnb investing in property and balance sheets. We now see global hotel management companies investing in distribution companies like Airbnb. We now see horizontal and vertical business integration on a global scale.

This is exciting and Swiss-Belhotel International is in positive discussions with potential partners and potential distribution companies to investigate how we can grow into this exciting consolidation process.

With these challenges in mind, Swiss-Belhotel International has acquired the real estate of Swiss-Belresort Cornet Peak, Queenstown New Zealand: has bought the management rights of Swiss-Belsuites Pounamu, Queenstown, New Zealand; has taken a long term lease on Swiss-Belsuites Victoria Park, Auckland, New Zealand; has taken on a long term lease of Zest Ok budget brand hotel in Auckland, New Zealand which will open in December 2018; has taken on a long term lease of Swiss-Belhotel Brisbane, Australia and has renewed for 10 years the management of The York by Swiss-Belhotel, Sydney Australia. These are real development changes for a purely international hotel management company with 150 hotels and projects in 20 countries.

Swiss-Belhotel International is a privately owned international hotel management company with limited capital resources. However 2017 and 2018 has seen the Group modify its strategy and taken investment positions in Australia and New Zealand, two key markets where tourism is growing at a record rate. This approach is bringing strength and stability to its global expansion.

Our culture of Passion and Professionalism and our unique accessibility for owners and investors to the senior executives of the Group, is giving the investment market an exciting and viable alternative to the large and consolidated hotel management groups.

Leading Suppliers

Peter Deveny Group Manager Commercial A.H. Beard It would be easy to assume that a company with 118 years of history would simply rest on its laurels and let that history be its key to business success.

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othing could be further from the truth where AH Beard is concerned.

Innovation and research are the bywords that drive our business and our customers, and their guests, are the beneficiaries of that thirst for knowledge about what makes the perfect sleep.

As a business, we are constantly looking to improve the quality of sleep that is a result of people using our beds, in fact our mission statement is exactly that ‘Improving lives through better sleep’.

Over the years, hundreds of hotels, motels and apartments have been fitted with AH Beard beds, either from our AH Beard range or the King Koil Commercial

by AH Beard range.

We pioneered the use of latex in mattress construction, and it’s now regarded as the premium comfort material available in bedding. Ask any guest who has spent a night sleeping in a Rydges Dream Bed and they will tell you exactly how luxurious and comfortable latex is. When it was first introduced to the market in 2008, this bed was revolutionary in its construction and the types of comfort layers it used.

Now, it’s still a benchmark for the hospitality industry in terms of its quality and comfort.

That innovation continues to drive our business. Our Reflex Pocket Coil spring system is now the choice of many of the region’s leading hotels and groups. It delivers outstanding comfort and support, giving your guests an unrivalled nights rest.

Most leading hotel brands specify Pocket Coil support systems as part of their brand standard due to its superior comfort and performance. Our Reflex system takes this technology to another level, providing a secondary layer of support when and where it’s needed

and this system, developed and patented by us right here in Australia is now being sold all around the world.

The innovation will continue this year, as we launch several new products that will give properties more flexibility in terms of what comfort feel they offer their guests, and also give them the ability to change that feel very simply.

We have recently gone to market with a range of Sleep Technology products that, when linked to our Sleep Tracker app, provide you with measurable data around the length and quality of your sleep and how to improve it.

Of course our ‘6 Week Sleep Challenge’ will continue, giving subscribers the ability to sign up, share their questions and challenges and receive tips and feedback from our Sleep Experts to improve their lives through better sleep.

We’ll also launch at AHICE during May a brand new design concept that has the potential to be the ultimate hotel bed. Featuring technology that will allow guests to monitor their sleep quality, and adjustable comfort to satisfy the most particular guest, this product is really exciting. It even has the potential to link to a hotel’s loyalty programme so that when the guest arrives in their room, the bed is preset to their comfort setting.

For me, one of the most exciting things about our industry right now is the drive for quality and to deliver the guest an experience that makes them want to return to a property, or to go away and tell their friends about the “amazing hotel they stayed in”. We are seeing new brands emerging in our market, brands that are well known in other parts of the world, but that now recognize that Australia and New Zealand are influential and important markets that they need to be present in.

These new brands bring a different, sometimes new, approach to the guest and to some of the perceptions and expectations when it comes to the guest room fitout.

Of course, it’s not just new brands that are stepping up the game, many of the existing groups and properties are getting on board and meeting the challenge that is being mounted by these new standards of comfort and luxury. Travellers are now presented with a myriad of outstanding choices when they are planning their travel, either corporate or leisure. All in all, it’s a great time to be a hotel guest.

It’s also an exciting time to be a supplier to hotels and resorts and our network of manufacturing and distribution facilities in Adelaide, Auckland, Brisbane, Hobart, Melbourne, Perth, Sydney and Suva mean that you are never out of reach. We have a specialist Commercial sales team, well versed in the industry who are ready to help you with your bedding choice. hotelmanagement.com.au 37

Leading Suppliers

Jason Kuner Executive General Manager AHS Hospitality This year, 2018, will show continued growth in international tourism numbers on the back of strong domestic travel.

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oth Melbourne and Sydney will continue to hold high occupancies, with Brisbane and Adelaide close behind. Perth and Darwin are slowly recovering from the effects of the slump in mining and major infrastructure works which should show improvements in 2018.

Rooms supply in 2018 year will grow in all major cities and tourism destinations, with several medium to large hotels under construction.

With high demand in Melbourne and Sydney, occupancies and rates should not be effected. With other locations, this increased room stock

Melissa Kalan Founding Director Australian Revenue Management Association - ARMA From a revenue management (RM) perspective, I am really looking forward to 2018 for our region.

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ustralia has strong RevPAR growth predicted over the medium term with supply growth expected to be absorbed by demand.

We therefore have an incredible opportunity to ensure our RM strategies convert this into strong profit results.

Similarly, the outlook for New Zealand is positive and both countries have strong demand and spending-growth forecasted from international arrivals, particularly from China.

With this in mind, it is vital all opportunities are maximised across distribution platforms that drive and capture this demand effectively. RM is not a set and forget process – managing channel mix, knowing costs per channel, analysing results, constantly forecasting and identifying new opportunities is essential for all accommodation operators. This also holds true when positive results have been achieved – there are missed revenue and profit opportunities even in great results.

ARMA supports industry with up-skilling in the discipline of RM. Our goal is to provide a consistent base-level of education through our online foundations program (Think-Change-Grow) supported by 38 HM The Business of Accommodation

will put pressure on existing hotels and their RevPAR could reduce some points.

With the amalgamation of key hotel brands, positioning of product in the marketplace will be critical in maintaining margins. Along with the strong growth in rooms supply, there is increasing pressure on labour across all segments of the industry. Hospitality is not generally seen as a career of choice so the existing scarcity of staff coupled with low retention and the expected market growth is a major challenge facing the entire industry.

New hotel construction is showing efficient use of space and maximising total numbers of rooms. Public spaces are being reduced, with modern elegant design ensuring excellent guest experience is maintained. Strategic positioning of hotels near large conference and food retail precincts, enables hotels to reduce or eliminate the need to provide these facilities. Technology integration in room design is ongoing, with high speed, consistent WiFi still the most critical guest requirement.

Several mixed-use developments with combined hotel rooms and strata apartments will be added in 2018. There are ongoing challenges to provide complete guest experiences in these facilities, with guests mixing with holiday letting and permanent tenants.

AHS continues to grow strongly in Australia and through 2017 extended its footprint in NZ with a number of major brands. With an emphasis on providing financial efficiency to all our partnerships, we are focussing on strong OH&S and sustainability platforms being provided.

AHS will continue to develop its on-line learning management system ‘iLearn’ to embed these processes within the workforce.

Industry demands on regulations with employment conditions and strong corporate governance has seen AHS engage in further partnerships within the hotel sector. Our robust compliance management ensures we continue to be the leading outsource provider in the sector.

ARMA trainers and to provide educational pathways for employers in this critical discipline. This program – the first of its kind for industry – has been available for over four years, is interactive engaging learning and designed to appeal to all sectors of our diverse accommodation industry.

ARMA also supports education through the vocational education and training (VET) sector with the only nationally accredited short course in revenue management, which is due for release in 2018 via our registered training partners. ARMA will also continue to offer independent face-to-face workshops in 2018, our popular ‘live doing-days’ focus on foundations learning, practical exercises and lots of discussion.

As the busy year gets underway, it is timely to remind industry that data tells a story and there are many parts that make up that data story.

Accessing all data points available to you can dramatically shift your RM approach when all the pieces are pulled together. Looking at one number in isolation is only the first step of many.

Some critical elements to include as part of your RM data story are your property KPIs including profit results, bench-marking and competitor set comparisons (or index figures), property KPI and index percentage change results (growth) and current market trends. The opportunity lies in the detail, breaking your story down from a total property level to day of week, segment, booking channel, product category and looking at total revenue/profit management across all revenue generating streams is essential to success.

RM is a constant process made up of many elements driven by both science and art. Looking forward, a continued focus on trusting the science and developing the art is paramount to your success and profits. Creativity, innovation, thinking ‘out of the box’ and shaking up traditional approaches is vital. Step out of your business and look at every element with ‘fresh eyes’.

Human focused insights and consumer behaviour psychology are also areas of huge opportunity for both conversions and pricing strategies.

Today, there are many organisations that value the skill-set of our revenue managers. Succession planning and training in revenue management must remain a high priority agenda item for industry - your people and your business will love you for it.

Leading Suppliers

Michael Benikos Sales Director – Oceania ASSA ABLOY Hospitality This year, 2018, is aimed to be a major year for innovation in the global hospitality market.

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obile key implementation is steadily increasing, as it is slated to become a standard requirement for many large and independent hotel brands across the globe. With this technology being in high demand, not only for hoteliers but for guests as well, the global hotel market continues to head toward the direction of establishing itself as an industry that uses the latest innovations to streamline operations while enhancing the guest experience and ensuring an unprecedented level of security.

Being in the digital era, hackers are prominent now more than ever.

For Hoteliers, the challenge is deciding which innovative hotel security technologies will ensure heightened security at their property.

This includes the implementation of technologies that go beyond mobile key, such as the best electronic lock to meet their property’s needs, the most secure electronic in-room safe and the most efficient software solutions, among others.

Jerome Casteigt General Manger, Hospitality Laureate Australia and New Zealand - Torrens University Australia While reflecting on 2017, I look back at the projections made early in the year for the hospitality education industry in Australia – specifically, which areas needed to be addressed.

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oth Blue Mountains International Hotel Management School (BMIHMS) and William Blue College of Hospitality Management at Torrens University continued to offer quality industry focused hospitality education, with strong support networks for our students – particularly those who have come from overseas, and an emphasis on maintaining a high graduate employment rate. The higher education sector again saw strong growth both domestically and internationally, with record numbers of international

For us, its convincing guests and hoteliers that there are ways to prevent occurrences such as hacks, and that our solutions can provide them with the utmost security to ensure that everyone feels safe within the confines of a hotel.

With keyless entry steadily becoming an industry standard, a trend that we continue to see on the rise in the global accommodation industry is hoteliers providing guests with an all-encompassing mobile application.

With enhanced convenience being the focus of much of today’s consumer-facing technologies, integrated mobile applications have gained in popularity due to their ability to give guests access to multiple property services from a single source.

From booking to room service to Mobile Access, this approach not only streamlines the guest experience, but also provides guests with a greater incentive to download an app as a result of its increased value.

This in turn provides hotels with a greater possibility to promote their services and an increased likelihood that guests will interact with them, ensuring that this trend will only continue to strengthen in 2018.

As we witnessed the increasing demand for mobile key within our industry, we have also witnessed the need for more user-friendly locks to make it easier for installation and access, both for hoteliers and their guests.

Our latest innovation, the new VingCard Essence, answered the call of streamlining this process, to give hoteliers an electronic lock that is not only Mobile Access compatible, but that is future-proof, to allow hotels that are not yet ready for mobile key to easily switch over to offering Mobile Access with simple and minimal procedures when ready.

The key to any successful technology is therefore solving pain points for the user and making processes easier and more efficient.

Streamlining property operations and enhancing the guest experience is the end goal for any hotel technology solution, and it’s no different for door locks and security. It’s about utilizing the most advanced technologies available to accomplish the aforementioned objectives.

Solutions that streamline the check-in process benefit both hoteliers and guests, and as door lock technology continues to advance we’ll see an incorporation of more user-friendly and robust technologies.

students coming to study here – a testament to the reputation of our institutions and the quality of our education system here in Australia.

More broadly, we again worked closely with hoteliers and tourism operators over the past twelve months to help address the industry’s ongoing challenges, particularly the employment and retention of quality staff. The continual review and update of our programs is ensuring that our course content is relevant to the industry’s needs in the current climate.

The biggest highlight for my team and I in 2017 would be having BMIHMS again voted the Number 1 Hotel Management School in Australia and Asia-Pacific, by those working in the hospitality industry.

The independent survey also reported that our reputation climbed globally, with leaders across the world ranking BMIHMS in third place. A testament to the immensely skilled, passionate and dedicated team at BMIHMS. Our forecast for 2017 is bright for both BMIHMS and William Blue at Torrens University. The new partnership between Torrens University and Flight Centre is one that we are looking forward to growing.

Through the Flight Centre Academy our Diploma of Tourism program is being delivered to students, with rolling monthly intakes. It is so great to see so many students who are passionate about perusing a career in the tourism sector.

With the continued strong growth of the hotel sector across Australia and the wider Asia-Pacific region, as a collective – BMIHMS and William Blue – we will continue to grow with students choosing to study with us from across the region. BMIHMS has recently had its first intake of students at our brand-new Melbourne Campus. A decision made due to strong demand from students internationally to study in Melbourne and the booming industry growth in the state. hotelmanagement.com.au 39

Leading Suppliers It was an exciting year for Chroma Group in 2017 as we firmly established our business and gathered intelligence. Understanding from clients, operators and consultants where they see their greatest challenges in a buoyant market and the current limitations of the hotel development and building sector.

T Brett Patterson Director Chroma Group

he abundance of new hotel projects is at unprecedented levels in Australia and particularly in Melbourne and Sydney. There is also a solid pipeline of hotel redevelopment, rebranding and refurbishment likely to commence in 2018. With limited hotel development over the past 20 years, the requisite skillset of consultants, builders, subcontractors and suppliers is inadequate. The major concerns for hotel developers are: • Inexperienced Consultant and Design Firms (limited or no hotel experience) • Building Contractors with Residential capability is not hotel experience • Insufficient subcontractor capabilities to deliver luxury hotel projects; and • Sourcing suitable furniture, casegoods and joinery for hotel use It is important that every member of the project team has hotel experience (not just the company). Too often we see clients with limited hotel development experience procuring their consultants based on price, rather than experience.

Efficient hotel space planning and design, budget and materials selection done with the foresight that only

comes with experience, lessens redundant work for the project team and the need to do things twice or worse!

As we know, there is numerous new design oriented lifestyle brands and established luxury brands entering our capital cities on a large scale. With limited recent hotel development, particularly of true luxury properties, sourcing suitable contractors and suppliers to service this demand will prove a strain on these projects. We are already seeing a severe shortage of suitable specialist joinery contractors and sourcing furniture capable of meeting the quality, durability and price demands of these hotel developments in large quantities requires consideration.

We have negotiated a number of consultancy and construction management projects over the past 12 months which will see us well into 2018. We have been appointed early thus providing our clients with significant value through the feasibility and design phase ensuring that they can make informed decisions regarding budget, program and impact on hotel operations. Chroma Group has also been approached to provide feasibility reports for potential hotel development sites as well as identifying locations for new hotels.

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40 HM The Business of Accommodation

Leading Suppliers

David Elia Chief Executive Officer Hostplus Global pickup in growth is the strongest it has been in 18 to 20 years.

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entral banks have lowered interest rates, which has given people cash to spend, supported by quantitative easing through buying assets to appreciate their value. Now that this job is done, and unemployment is the lowest it’s been in 10 years, people are assuming it’s time to raise interest rates, however we don’t believe this to be the case.

In normal times, deflation in considered by central bankers as a destructive force. That is because a reduction in the price of goods is usually associated with a slowing economy and increased unemployment. In this case, however, deflation is a good thing – at least for consumers.

Everything from Uber to Airbnb, to the advent of fracking technology, has increased the supply of certain materials and services, catapulting competition and putting pressure on prices. Whilst this paints a rosy picture for some; technological disruption poses increasing threats to traditional, long-established industries.

There are four main focus areas we see for the hospitality and tourism industries in 2018.

RISE OF THE SHARING ECONOMY

The hotel industry is one of the fastest growing sectors of the world, as well as an integral and indispensable part of the hospitality industry we serve. While the hotel industry has shown little signs of slowing down over the years, even during economic recessions, the rise of peer-to-peer markets – collectively known as the ‘sharing economy’ – has streamlined the process for supplier market entry, facilitated searchable listings for consumers, and kept overheads low.

As the size of the sharing economy has grown, so has the magnitude of its economic impacts. With Airbnb’s peer-to-peer hospitality exchange service now valued at over US$10 billion, the industry outflows don’t just stop at the hotel room – it impacts the money guests would have spent on food and beverages at the hotel’s restaurants and bars.

CREATING EXPERIENCES KEY TO CUSTOMER LOYALTY

We all know Airbnb’s services are less than imperfect with many people opting to stay in our hotels for their additional services, luxury and security. This is why customer loyalty is more important than ever in ensuring repeat business. Hotel chain brands or welldesigned rooms and facilities are no longer enough anymore – it’s about the experience.

‘GREENING’ HOTEL OPERATIONS

With renewable energy coming in, older coal-fired generation shutting down and halfbuilt energy policy continuing to boil, Australia’s power storm is expected to continue in 2018 with electricity bills predicted to rise sharply in the first quarter. Energy management and conservation programs are also integral for hotels to mitigate exposure to dramatically escalating energy costs.

ATTRACTING, DEVELOPING AND RETAINING TALENT

As our industries continue to rapidly grow, so does the need for new workers each year.

However, restricted labour market mobility, seasonality of demand particularly in regional areas, considerable growth in consumer demand and labour competition from other sectors

all combine to create substantial labour market gaps across the industry. The productivity growth of the tourism and hospitality industry is crucial to Australia’s successful and ongoing transition from a resources-based economy to a services-based economy.

THE ROLE WE PLAY

As the national superannuation fund for hospitality, tourism, recreation and sport, we are committed to going the extra mile in the sectors and communities we serve.

One way we are playing our part in bridging this labour market gap is through enabling outstanding talent to be developed and promoting hospitality as a rewarding career option through a range of scholarships with the William Angliss Institute, The International College of Management and the Melbourne Food and Wine Festival.

Hostplus is also dedicated to creating brighter futures for all Australians. Last financial year (30 June 2017), we were delighted to again achieve the number one position as the best performing Balanced fund in the country, delivering a 13.2 per cent return to our one million members. Our 144,000 employers, predominantly from the hospitality and tourism industries, have enjoyed our industry-leading returns over one, three, five and seven years – according to SuperRatings’ SR50 survey.

BEYOND INVESTMENTS

In conjunction with providing the best value superannuation offering, we continue to innovate and adapt to changing member and employer needs. In the past 12 months, we have launched three new investment options, secured our second round of insurance premium savings in less than two years and guaranteed these through to 2020, as well as transitioned to daily unit pricing allowing close-to real time balance updates and faster investment switching.

We look forward to continuing this strong momentum and success from 2017, having been awarded Money magazine’s Best Balanced and Lowest Cost Super Fund awards, alongside Rainmaker SelectingSuper’s MySuper Product of the Year Award and the Long-Term Performance Award. My team is dedicated to working closely with our employers and their staff to make 2018 another prosperous year. hotelmanagement.com.au 41

Leading Suppliers The Gold Coast Commonwealth Games are sure to deliver a huge boost to the accommodation and industry in Australia. And this shouldn’t be limited to Queensland. It’ll bring a boom in tourism, infrastructure investment, upgrades and tens of thousands of new jobs. I’m really looking forward to watching Australia show the world that our accommodation industry is second to none.

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Brendan O’Farrell Chief Executive Officer Intrust Super

42 HM The Business of Accommodation

ood trends continue to have a significant influence on where people stay in today’s market. Innovative menus, healthy options and creative spaces are currently the big drawcards. The online world and social-media-loving crowds spend a lot of their time telling the world about their experiences. Their enthusiasm can only mean more good things for industry growth in 2018.

Competition continues to be one of the biggest challenges in the industry, especially in attracting return business. It’s fantastic to see how the industry faces these challenges each year. There’s so much I, and Intrust Super, continually learn from the its innovation and leadership.

After a challenging market in 2016, I was pleased the team at Intrust Super were able to deliver some fantastic returns for members in the 2016/17 financial year. Intrust Super’s Balanced option returned an impressive 12.15 per cent for the financial year to 30 June. Welcome news, I’m sure, for any staff members using Intrust Super. The figure represents the fourth year out of five that the Fund has delivered double-digit returns, and the eighth consecutive year of positive returns since the global financial crisis. It was a fantastic result.

As challenges go, July 1, 2017 brought some of the most significant changes to super I’ve seen since the inception of the system. The Government legislated the numerous changes on November 23, 2016. Some of these new rules included changes to contribution caps and super taxation rules, and the introduction of a transfer balance cap on pension products. The new rules had to be implemented by July 1, 2017, and communicated to any members that were likely to be affected. I was incredibly proud of the team for keeping our members informed and preparing for the changes in such a short timeframe.

In addition, Intrust Super was awarded ‘Best Value Insurance in Super’ by Money magazine for the sixth year in a row! Protecting our accommodation partners, their staff and their super balances has always been a priority for Intrust Super. It was fantastic to receive this recognition from Money once again.

Finally, Intrust Super has been rated as a Platinum ‘best value for money’ fund by SuperRatings for the 12th consecutive year. The Fund was also a finalist for SuperRatings’ ‘MySuper of the Year 2018’ award, the third consecutive year we have received the nomination.

Staff members using Intrust Super will probably be very interested in our new Rewards Program. Intrust Super Rewards gives members access to over 4,500 discounts and special offers over a range of categories – many of them discounts for travel and accommodation across Australia. It’s a fantastic way to bring new business to our partners, while at the same time rewarding our members.

Possibly the biggest update for any staff members holding insurance cover with Intrust Super was the announcement of two insurance premium reductions. On 1 October 2017, the insurance premiums for Intrust Super’s income protection cover were reduced by approximately 12%. Not only that, we were thrilled to announce another premium reduction, this time for our life and total and permanent disability insurance.

From 1 January 2018, Intrust Super members paid seven per cent less for their life and total and permanent disability insurance. It’s so important to not only protect our members and their families, but also their super balances. And I’m so proud the Fund continued improving our members’ insurance cover in 2017.

We also introduced interactive Annual Statements to members in 2017. The interactive statements were easy to digest and are accessible across multiple devices.

Members can engage with their accounts whenever it suits them – even on a break at 2am. Additionally, each individual member received personalised messages with their statements, to show them ways to improve their super situation.

And finally, our financial planning arm, Intrust360, introduced a new service called Phone360. Making time to book an in-person appointment can be difficult, especially for time-strapped members in the accommodation industry. Phone360 is a convenient, lowcost alternative to receive simple super advice over the phone. It’s just another way we’re trying to make superannuation easier for accommodation staff.

The team at Intrust Super works hard to continue improving the super experience for our members. We are constantly developing ways to deliver superior customer service and easier interactions with superannuation for our accommodation members.

Leading Suppliers

Melissa Starbuck Commercial Key Account Manager Sealy of Australia The last six months has been really invigorating with the transition of a number of major projects from build to opening, new client activity and successes with our valued long-term clientele.

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ff the back of a successful 12 months our business is reflecting the optimism and growth in the marketplace. Pleasingly, developments and refurbishments have been strong in all States, with CBD locations in Victoria, Queensland and New South Wales leading the way and Western Australia and South Australia looking to benefit from new openings over the next 12 months.

Sydney, Melbourne and Brisbane are perhaps the most dynamic markets with numerous major projects coming on line over the next five years. Leisure destinations have benefited too, with Cairns and Hobart remaining strong.

The number of international passengers visiting Australia and the resulting tourism spend is ensuring the demand for rooms is healthy. Whilst global economic uncertainty due to the US elections and Brexit has caused some political uncertainty, the strength and growth in Asia has benefited our tourism marketplace. Investment in mixed-use developments remains a key focus, allowing developers to leverage greater floor space and ratio. This in turn means more dynamic, greener architecture, accessible retail spaces and eateries.

One of the most exciting things is the emergence of some new and some existing 5-star premium luxury brands such as Marriott, The Westin and Ritz-Carlton emerging in the Australian marketplace.

Across Australia, New Zealand, South East Asia and the Pacific Rim, Sealy’s commitment is consistency of product and service. In Australia we work closely with our R&D Testing Department to ensure we are meeting our customers’ brief whilst ensuring the product meets our criteria of unique, proprietary and superior. All products must then pass simulated testing to 10 years use prior to being released to the marketplace.

In an increasingly global market where the expectation is specialised, premium product that meets a strict ‘brand standard’ criteria, our commitment is to meet that brief in terms of comfort, value and durability. The ability to design, manufacture and deliver on this is made easier due to our cross functional Australian team of experts, incorporating engineering, textile and manufacturing specialists, and of course our commercial team.

Our commitment to our customers is value for money, meaning the product needs to perform at its best for a long time. I think it’s this long-term value for money equation that sets us apart.

Looking forward, the challenges we face are external ones but certainly nothing new.

Expanding our relationship base in light of the growth of mixed use developments, the need to develop branded products and the increase of cheaper imports remain at the forefront. The integration of a number of significant players in the industry and the rise of global supply requirements make the next 12 months an exciting time to be in the Industry, but I think we’re well set up in terms of people and knowledge to meet these challenges.

Sealy have been committed to ‘Australian Made’ and best practice since the Company was established in 1923 in Brisbane. Continuing to manufacture our spring units, base components and source raw materials within Australia is paramount to our success.

We take tremendous pride in delivering quality products with short lead times. To this end we’re continuing to invest in technology, our people and our Manufacturing Facilities.

For the past three years we’ve had a product Innovation Team working on technology for the future, bringing new products to the marketplace. From a global perspective it is this Team that is leading the way developing industry leading products incorporating spring technology, aesthetics and innovation. This plays an integral role in ensuring the product we supply to our commercial clientele is both durable, comfortable and a solid return on investment. In addition we’re expanding our digital systems and working to improve our reporting and ordering processes to ensure our Customers have transparency, purchase history and supply expedited when they need it.

Our people are our greatest asset and the wealth of knowledge accumulated across our five Sealy manufacturing plants has ensured generations of visionaries and specialists. Our management team have always been fully committed to the Australian manufacturing industry.

To this end we have seen an expansion of our Sydney, Adelaide and Brisbane manufacturing facilities, and brand new plants built from the ground up in Melbourne and Perth. This is to ensure our daily bed build capacity is increased, to the highest standard of manufacturing excellence. We always welcome our Customers to visit us, tour our Plants, and see for themselves.

Great relationships with our customers are vital. We’ve been proud to continue working with many of Australia’s leading hotel groups, owners and brands including Marriott, Hyatt, Mantra Group, The Westin, Wyndham, Pan Pacific, Quest, Langham, IHG, Delaware North and many others. It’s these long-standing relationships that make our job so enjoyable.

Customers’ feedback in terms of our product, service and follow through is positive. We offer them peace of mind in terms of their investment and assured long life value of their purchase. Like all things we work extremely hard to ensure the process from quote to supply is flawless. hotelmanagement.com.au 43

Leading Owners

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Dr Jerry Schwartz Director Schwartz Family Company Last year, 2017, was a very exciting year for the Schwartz Family Company – in fact, for the Australian hotel industry – with the crowning achievement being the opening of Sydney’s first new international 5-star hotel this millennium.

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hile the rest of Australia has seen a vast injection of new room supply, the reality is that Sydney is the engine room of the country’s tourism industry, and the opening of the Sofitel Sydney Darling Harbour will deliver benefits to the industry way beyond Sydney. It will be particularly important for the meetings and events sector, as the Sofitel is located right next to the ICC, and the extra room capacity will allow Sydney to bid for more world-class events.

For me, the hotel was particularly special as it was the first new-build development I’ve been involved with. Given that it is Sydney’s first new international 5-star hotel of the 21st Century we obviously had to ensure that it was state of the art. We’ve achieved that through in-room technology, such as 4K TVs that allow Chromecasting for business and leisure. Our Champagne Bar is a Sydney first for hotels, recognising Sofitel’s French legacy, and we can use the building exterior for regular ‘Vivid’ style displays.

With our city running at 90% occupancy, the hotel started in fifth gear. I knew it would, so I wanted to ensure that we gave back to the city even before it opened, with a charity night enabling 33 charities to raise funds for some tremendous causes. Over $500,000 was raised, and given its success we are looking to do the same thing with my next Sydney hotel – the Four Points by Sheraton at Central Park. It will be a very lucky addition to the city’s hotel inventory, so what better day to launch it on than 08/08/2018 – you can’t get more auspicious than that!

Sydney is indeed booming and while some people might think I would be unhappy with the fact that so much competition is about to come onto the market, I’m not, because it will tell the world that the city is fresh and revamped, and hopefully even more visitors will come.

And when times are good, it is incumbent on hotel owners to invest in capex. In fact, I will be adding a further 40 rooms in the first quarter of 2018 through an extension to the Rydges Sydney Central, along with upgrades to rooms and public area facilities across the SFC network.

It’s equally important for hotel management groups to ensure they are delivering to hotel owners in both good and difficult times. The Four Points by Sheraton at Sydney’s Central Park is my first foray with Marriott, which I hope will be the start of a productive relationship. In the meantime, I decided on changes of management at The Victoria Hotel in Melbourne and the former Crowne Plaza Newcastle, both of which will be taken over by Rydges.

The hurdles to tourism haven’t changed all that much in recent years. The development boom is at its peak and to service all the new hotels, a massive injection of talented new staff is required. This means that management companies need to invest

44 HM The Business of Accommodation

in both talent acquisition and development to ensure we deliver the service to match the new product. We know it is not easy to attract talented new staff to our industry, so it is vital that we create strong and supportive workplaces, where self-education and advancement are encouraged.

Then there is that perennial hurdle created by legislative rule enforcers (i.e. the planners at councils), who fail to capitalise on the tourist attractions of each area, and stymie the efforts of entrepreneurs who wish to increase tourism facilities. I am currently involved with an expensive land and environment court case with Cessnock Council, as well as other rejected DAs which hardly support public statements by local administrations that they want to encourage tourism growth and development to benefit their ratepayers.

Despite that, I will never stop pushing the boundaries!

I have exciting plans to resurrect part of the temporary Sydney Exhibition Centre from White Bay and to establish a new Aboriginal Cultural Centre. I will also continue my plans to operate a seaplane service between Rose Bay, Newcastle Harbour and Cessnock Airport in the Hunter region. And given that we started with Sydney, I’ll end with Sydney – if you think I’ve given up on the heliport above the Sofitel Sydney Darling Harbour, think again.

SNAPSHOT: SCHWARTZ FAMILY COMPANY

Number of hotels and rooms: 12 hotels, 3268 rooms (plus in 2018, 299 rooms at Four Points by Sheraton Sydney Central Park) Hotel Management agreements: AccorHotels, IHG, Rydges, Marriott (2018) Number of employees: Approx. 3000 Year the company was founded: 1977

Australasian Leaders

Simon McGrath Chief Operating Officer – Pacific AccorHotels Last year, 2017, will be remembered as the year Australia’s hotel accommodation sector entered a new era with new supply, new investors and new exciting hotel product to the market.

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e’ve been fortunate enough to play a role in the sector and we relish the opportunities the Pacific market presents. Growth in tourism out-paced the rest of the economy for a third consecutive year, while international visitors to Australia climbed 7.4%. This shows just how robust and buoyant our sector is and highlights the need for us to keep pace, keep innovating and keep working with all levels of government to ensure tourisms remains at the forefront of the investment pipeline.

Innovation is something that AccorHotels in the Pacific has truly embraced and the way in which we have overhauled our F&B product and turned our venues into lively meeting places has been incredibly well received. Hacienda at Pullman Quay Grand Sydney, The Cliveden at Pullman Melbourne on the Park, Cucina on Hay at Mercure Perth and The Ternary at Novotel Darling Harbour are just some of the outlets we have turned into profitable, atmospheric places that people are drawn to. Tourism Australia has done a fantastic job of invigorating Australia’s restaurant scene and putting our F&B on the international stage.

We are privileged to work with wonderful owners and investors who share our vision, and this year alone, across the Pacific we will open 10 new-build hotels. SO Sofitel Auckland, Pullman Nadi Bay, Novotel Melbourne South Wharf, The William Inglis Hotel, MGallery by Sofitel and Novotel and ibis Melbourne Little Lonsdale Street are just some of the hotels we will be adding to our network throughout 2018. The dual tower that will house Novotel and ibis Little Lonsdale Street will be our first development where two brands share public spaces including reception, lobby restaurants and leisure facilities across one tower. With scarcity of real estate and the high price of construction, it makes perfect sense to scale up and maximise the investment across two brands and two price points.

In this new era of hyper-connectivity, consumers decide what brands stand for and it is about what you do, not what you say. To that, a main focus for us across the Pacific is on creating amazing memories and special moments, and cultural tourism is forming a large part of what we do in our hotels. Pullman Bunker Bay, for example, has an amazing program run by local Elder, Bill Webb which educates children and their parents about the region’s vibrant Indigenous history through tours and tastings. Indigenous food is used across a number of our F&B outlets and we encourage our Indigenous employees, who make up 5% of our workforce, to share their stories with our guests. The best way to sell Australian tourism to the world is through an Indigenous voice and we are proud of the strides we have made in this space and proud of the talent we are retaining.

Sustainability is incredibly important to us, and in 2017 we released our inaugural Corporate Responsibility Report, which outlines our achievements in reducing emissions, food waste and our commitment to our partners, guests and employees. As a result of our work in the field, we won the Large Business Sustainability Leadership Award in Australia’s most prestigious sustainability awards, The Banksia Awards. Our guests appreciate our commitment to reducing the impacts associated with our operations and we have done studies which show just how high on the priority list the environment is to the modern day traveller.

At the heart of all of this progress is our people, and we are committed to growing our teams and supporting the communities in which we operate. Last year we made

three key appointments, welcoming Sarah Derry to the role of VP Talent and Culture; Gillian Millar, Senior VP of Operations, New Zealand, Fiji and French Polynesia; and Nathan Frost, Area General Manager Operations for Western Australia. These three senior executives are making a real difference within our business and positively impacting our teams across the Pacific.

Education in our industry is so critical and it is important that we play our role in developing the talent of tomorrow. Our Academie Accor runs an outstanding nationally accredited program which provides a range of nationally recognised qualifications and training programs to address the shortage of professionally trained workers in the tourism industry. It also promotes the continued learning and development of AccorHotels staff and hospitality employees.

We are incredibly proud of our Academie and Inclusion and Diversity programs, which encourage mature age workers, those with various forms of impairment and Indigenous people into long-term jobs.

This is real cause for satisfaction and highlights the positive role the hotel industry can have on benefiting the wider community.

SNAPSHOT: ACCORHOTELS

Number of hotels (Globally): 4300 Number of hotels (Asia-Pacific): 830 Number of hotels & rooms (ANZSP): 210 hotels/29,069 rooms (Australia), 32 hotels/4366 rooms (New Zealand), 7 hotels/810 rooms (South Pacific) Number of employees (Globally / APAC / ANZSP): 260,000 (globally), 100,000 (Asia Pacific), 10,000 (Australia) Year first hotel opened: 1967 Paris (globally), 1982 Singapore (Asia Pacific), 1990 Sydney (ANZSP) Year the company was founded: 1967 Brands in the organisation: Raffles, Sofitel Legend, So Sofitel, Sofitel, Fairmont, Orient Express, Banyan Tree, OneFineStay, MGallery by Sofitel, Pullman, Swissotel, Grand Mercure, Quay West, The Sebel, Angsana, 25hours Hotels, Novotel, Mercure, Adagio, Mama Shelter, ibis, ibis Styles, ibis Budget, Jo&Joe Head office locations: Paris (global), Singapore (APAC), Sydney (ANZSP)

hotelmanagement.com.au 45

Australasian Leaders We are excited for what lies ahead this year and with a strong development pipeline and a massive marketing push in 2018, we expect our portfolio to grow substantially, with many new properties joining our brands in metro, regional and key gateway locations.

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Trent Fraser Chief Executive Officer Choice Hotels Asia-Pac

SNAPSHOT: CHOICE HOTELS ASIA-PAC

Number of hotels & rooms (Asia-Pacific): 228 hotels / 10,636 rooms Number of employees (Asia-Pacific): 5000 Year first hotel opened (Asia-Pacific): 1999 Year the company was founded: 1939 Brands in the organisation: 5 (Econo Lodge, Comfort, Quality, Clarion, Ascend Hotel Collection) Head office location (Asia-Pacific): Melbourne, Victoria 46 HM The Business of Accommodation

rom a performance perspective, we see RevPAR continuing at around the 4% mark in Australia and expect it to remain strong in the New Zealand market this year. This is a slight reduction from the high’s experienced in 2016 and the early part of 2017, but still a phenomenal result.

2018 will also be a year where we look to challenge the status quo and diversify our traditional business model as well. We will have some exciting news to share on this shortly.

From a corporate perspective, our major focus will be on continuing to increase direct corporate bookings and developing direct relationships with organisations in the SME market.

From a leisure/VFR perspective, we are expecting continued strong growth. Last year we had a real focus on this segment to ultimately inspire people to take more short breaks throughout the year, utilising their accrued annual leave and ultimately benefiting their mental health.

We launched a new platform called NeedaBreak.com which will continue to be a key driver for us in this segment and we look forward to expanding on this significantly in 2018.

The key challenge for us and many independent operators is the cost of distribution.

To combat this, we will continue our focus on driving direct business through our online channels and encouraging our franchisees to use third party websites as an acquisition source to convert to a loyal Choice customer.

Our Choice Privileges loyalty program will continue to be a key asset we use to influence our guests to book through our channels as opposed to an OTA or thirdparty site.

Last year we launched many new features, including new discounts and pricing structures available exclusively to members. This led to almost 50,000 people joining the program in 2017 and we expect to see similar results and new functionality in 2018.

We can learn a lot from competitors and disruptors alike and we will continue to monitor Airbnb and others closely to see what affects they are having on our market.

The focus for our franchisees is on ensuring the customer experience at their properties is the best it can be in terms of service, recognition and added benefits, which most of these disruptors can’t compete with.

After opening new properties in China last year, including Clarion Hotel XiChang and Clarion Resort Leishan Hot Spring Resort, we are looking forward to opening many more across this region in 2018. We will also be targeting Malaysia, Singapore and the rest of South East Asia for further opportunities to grow our portfolio.

With an extremely healthy pipeline of prospects we expect to add a number of properties to the Choice Hotels Asia-Pac network, many of which will open in the next 12 months.

We will have an asserted focus on introducing more Ascend Hotel Collection properties in key leisure destinations where we are currently light on for product and targeting the Quality and Comfort brands towards metro and major regional destinations.

It has been a huge year for the company, with strong corporate business and the diversification of our offering in creating a niche in the domestic leisure segment with our new NeedaBreak.com platform.

This was amplified by the biggest marketing push we’ve ever executed, including the branding and wrapping of a Jetstar plane, the creation of an innovative television commercial, TODAY breakfast show and TVNZ1 breakfast show partnerships, largeformat location-specific outdoor advertising, targeted radio sponsorships within the Hamish and Andy drive show, innovative programmatic digital advertising and a new social direction.

We have already seen a significant lift in brand awareness for the ChoiceHotels. com.au, ChoiceHotels.co.nz and NeedaBreak.com platforms since launching this media in June.

This year is all about continuing what we started in 2017 and capitalising on our new strategies to grow our portfolio and increase Choice Hotels’ direct online contribution to all of our properties. We are very excited about what 2018 will bring.

Australasian Leaders

Jure Domazet Managing Director Doma Group Last year, 2017, was a busy year for Doma Group for both our property development business and hotels. Market conditions have been buoyant in Canberra, which has led to strong results for our hotels over the past 12 months.

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SNAPSHOT: DOMA GROUP

Number of hotels & rooms: 6 hotels, 620 rooms Number of employees: 357 Year first hotel opened: 1985 (Heritage Hotel Canberra) Year the company was founded: 1974 (residential), 1985 (hotel company) Brands in the organisation: 6 (Hotel Realm, Burbury Hotel & Apartments, Little National Hotel, Pinnacle Apartments, Brassey Hotel, & Huskinson Hotel) Head office location: Canberra, ACT

uring 2017. we completed the refurbishment of Pinnacle Apartments, our heritage-listed Brassey Hotel and opened our luxury wellness centre Hale Gym and Spa, which is located in the Brassey Hotel. This facility is one of the best hotel facilities in Australia and will be the centrepiece of our wellness offering that is being deployed into our new and existing properties. We are passionate about this and our boutique size brings a very personal focus to it. We plan to deploy a Hale facility into each Little National Hotel that we open.

We turn our attention to Hotel Realm in 2018 with a staged refurbishment due to commence in May of the entry, ground floor reception, first floor conference space and lobbies. Our flagship hotel will be 11 years old in 2018, and this is the final phase of its refurbishment, with rooms now having had a soft refurbishment completed. This will provide significant benefits to our guests and customers, providing the highest quality space in Canberra and consolidating the hotel’s position as one of the strongest five star properties in the city.

During the year we successfully secured new hotel sites in Canberra, Sydney and Newcastle which will boast our room stock once complete to 1140 keys. The Newcastle and Sydney hotels will be Little National Hotels and we are particularly excited to be bringing this brand to Sydney after securing the air rights above Wynyard Station’s Clarence Street entrance. This will be a brilliant location to showcase this product to an international market.

2018 will see us continue to look to secure further sites for our Little National and Burbury brands in Australia’s major cities along with exploring opportunities in New Zealand and the UK. In saying this, the major challenges for growth in the industry will be the new supply that is proposed in many cities. There is a massive amount of supply mooted for Canberra, but as we look around the country we see the same thing in Brisbane, Perth, Hobart and Melbourne. Some cities may be able to absorb some of this, but many cannot and it will be interesting to see which ones do go ahead.

We are also concerned with markets where there has been an oversupply of apartment development accompanied by rental vacancy on completion. The ‘grey’ serviced apartment market has always existed when this happens, but platforms such as Airbnb mean that these can have a greater influence on the market. We are confident that our product differentiates itself from this market, but the reality is that it is all still part of the same overall pie so must have an effect. hotelmanagement.com.au 47

Australasian Leaders

Robert Dawson Area Vice President - Pacific Region Hyatt Hotels & Resorts This year, 2018, will be another strong year for the hospitality industry.

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orporate demand continues to remain strong, driving occupancies mid-week, and leisure demand remains positive both domestically and from inbound markets. With the ICC now open and the MCEC continuing an expansion, Meetings and Events will still provide a backbone to both key cities ensuring the demand remains positive.

We are positive on the outlook both globally and especially in the Pacific region as markets strengthen across most cities.

In Australia, while the demand for MICE is growing steadily, many of the key cities are becoming expensive given high occupancy levels over key business months so we are seeing a shift in conferences taking place to cities like Canberra, Perth, Brisbane and Adelaide – as well as regional destinations. Overall though, Australia and New Zealand continue to remain strong destinations for both domestic and inbound MICE business… especially out of Asia and the US. We see meeting planners shifting their focus to bringing more meaningful and enriching experiences to their delegates. That being said they are looking for the destination experiences and how they can be incorporated into their events. So innovation and creativity is becoming an area of focus when delivering MICE events. We continually evolve how we deliver exceptional meetings and events and I think the industry as a whole still needs to develop in this space. Technology, value and service remain the key areas of focus.

We are positive about the outlook of the leisure travel market in the region, building on the last three years of solid growth from our key international markets.

Along with expanding airline networks and frequencies, including international airlines now flying into Canberra, we expect leisure travellers to be looking at a wider range of destination options instead of their usual choices. It’s about the authentic experiences, opposed to the traditional iconic attractions that seem to be more popular among the leisure travellers. It’s experiencing the destinations as a local and uncovering moments that can be shared virally via social channels.

‘Bleisure’ is also a word used frequently when travelling for business but making some time to see the destination so ensuring we can support that customer to see the destination in a very short time.

The key inbound markets still continue but we are seeing better yielding business coming from the US, India and certain markets in South East Asia.

Business travel in the Asia Pacific region is strong and has grown by 7.6% annually since 2000. We expect growth within the markets where we operate to continue at a similar level.

As occupancies continue to grow in this sector it will put further upward pressure on corporate rates, especially in key gateway cities.

Travellers today are more informed than ever about travel and experiences. They are more knowledgeable because of the information available so readily in this digital world. Guests are looking for experiences that are unique and local to that community. Moments they can share socially. So the evolving nature of hotels is very much now about localising the hotel experience and what that looks like. Hotels need to remain on brand but also have moments throughout the hotel that are indigenous to the community. This is certainly becoming a focus as we see new hotels open and hotels opening in unique locations.

Booking hotel direct channels is still an area hotels continue to invest time and effort into. Knowing our customer through the use of loyalty programs, data and meaningful engagement is how we build loyalty. OTAs play an important role in offering choices and

48 HM The Business of Accommodation

introducing Hyatt brands to new customers. However, they are evolving and building their own loyalty programs – building engagement with their customers, and getting to know who their customers are now in a deeper way than ever before.

It will be harder now for hotels to retain loyal customers and loyalty programs will need to continualy evolve as we focus on providing the best experience possible when travelers book with us directly.

Emerging markets like China and Southeast Asia have been one of the key drivers for Hyatt’s Asia growth strategy and we are optimistic about the outlook for these markets.

Airline capacity into Australia continues to grow especially into key hubs like Sydney and Melbourne but some interesting new routes now into Canberra and Perth.

Driven heavily by China airlines we are now seeing some routes re-established out of other key markets like the US and Japan.

The departure of the Qantas codeshare with Emirates to Europe will be interesting and open up more inbound from Asia, as routes via Singapore and Bangkok are reestablished and the direct flight from London to Perth will only be positive to the Perth market.

This growth will definitely bring opportunities for the hotel industry and benefit us, as we are continuously looking for opportunities to introduce hotels to places where our guests are travelling as well as making sure we are introducing the right brand to the right market.

We take a strategic and thoughtful approach to growth that is focused on the key markets that are most relevant to our target guests. We are actively looking at the development opportunities in key markets such as Australia and New Zealand.

We are constantly looking for key destinations where our customers are travelling to, and for brands that appeal to our customers’ mindset.

We successfully opened our first Select brand Hyatt Place Melbourne, Essendon Fields which has now opened opportunity and interest for the brand to be established across Australia and New Zealand. Our Up-scale Lifestyle brand Hyatt Centric continues to dominate the development space as we see this model – a seamless, design driven brand a popular choice to provide the returns but also to support the mindset of the current traveller.

Park Hyatt Auckland and Hyatt Centric Hobart are planned to open in the next 18 months and we continue to see strong demand for opportunities in Melbourne, New Zealand, Perth and Tasmania.

SNAPSHOT: HYATT HOTELS & RESORTS Number of hotels (Globally): 739 hotels Number of hotels (Asia-Pacific): 132 hotels Number of hotels & rooms Australia : 7 hotels Number of employees: 110,000 (globally), 33,622 (APAC), 2081 (Australia) Year first hotel opened Globally: 1969 Hyatt regency Hong Kong opens as first international Hyatt hotel Year the company was founded: 1957 Brands in the organisation: 11 (Park Hyatt, Grand Hyatt, Hyatt Regency, Hyatt, Andaz, Hyatt Centric, The Unbound Collection, Hyatt Place, Hyatt House, Hyatt Zilara/Ziva, Hyatt Residence Club) Head office locations: Chicago, USA (global), Beijing, Hong Kong, Melbourne (APAC)

Australasian Leaders Visitors from the USA, UK and Germany are also major markets for us. The US in particular is reinvigorated and buoyant. Brexit at this point has not affected UK visitor numbers.

The MICE market continues as a main stay for our hotel group with great patronage particularly in Queenstown from this business sector.

To augment our MICE presence in the region, the Heritage Collection Lake Resort Cromwell has opened a conference centre on the edge of Lake Dunstan and is adding new over-water villa accommodation for the anticipated increased delegate numbers.

Corporate travel was strong throughout the year, but for the predicted hiatus during the lead up to the election and whilst the country was in stasis waiting for a government to be formed post the election.

Graham Yan Chief Executive Officer Heritage Hotels Solid inbound numbers into New Zealand saw the industry perform well in 2017 and in 2018 the sights are firmly on the Chinese market once more.

SNAPSHOT: HERITAGE HOTELS

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he inbound international market has boomed yet again this year with international arrivals into New Zealand up 8.6 % on last year. Australia remains our largest source market at 1.4 million visitors, up 6 % from last year. China is New Zealand’s second largest market and has grown 24% from last year.

Air capacity is a factor with increased numbers of Chinese airlines operating services into Auckland and Christchurch.

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Number of hotels & rooms: 19 Hotels, 1490 rooms Number of employees: 700 Year first hotel opened: 1995 Year the company was founded: 1994 Brands in the organisation: Heritage Hotels, CityLife Hotels, Heritage Collection Head office location: Auckland, New Zealand

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Australasian Leaders

Leanne Harwood Managing Director - Australasia & Japan IHG Australasia is the place to be – our tourism sector remains exceptionally strong, with growth in both international and domestic visitor numbers, so demand for hotels here is increasing.

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ur faith in this market is demonstrated by our investment in both new hotels and large renovation projects.

We’re coming off the back of one of IHG’s most successful years ever in this region, and that momentum looks set to continue in 2018.

The MICE market continues to be a strong performer for IHG, with no signs of slowing down in 2018.

It’s a reality that many organisations continue to put their MICE spend under the spotlight, but we see the impact in buying patterns, rather than a slowdown in spend – shorter lead times, an emphasis on preferred supplier relationships and a more streamlined contracting process.

More people are travelling for MICE every year, which presents huge opportunities for us to cater to them through our world-class meeting facilities.

The big challenge for our industry, across the globe, is the crusade for talent. Here, with such a positive industry outlook and IHG’s strongest pipeline in a decade, attracting and growing the best talent will continue to be a priority area for us.

We are focused on redefining careers in hospitality, catering to Millennials’ desire for fast-tracked career advancement with industry-first employee L&D opportunities, flexible working conditions, accelerated growth and diversity initiatives such as RISE for female leaders who aspire to be hotel general managers.

One challenge I’m surprised to see persist in this market is speed of DA approvals, especially in Sydney, which is a pain point we’d love to see addressed. Approvals here typically take far too long and if we want to boost tourism and new hotels then we need to improve that.

We work closely with industry bodies such as TTF to push for change and promote the hospitality industry to the workforce of the future.

I’m a big fan of disruption, it pushes our industry to think differently. But it’s time to retire the ‘disruptor’ tag when referring to Airbnb and other sharing economy players.

Yes, they probably played this role in their early days but, let’s face it, it’s not a new phenomenon to rent other people’s houses – they simply tapped into this concept by using technology to open it to the world. Today they are simply part of the ecosystem, providing a service which a certain type of customer values.

IHG meets those same guest needs through our boutique and lifestyle brands, Hotel Indigo and Even Hotels, giving people a local and unique experience, albeit with the benefit of providing the reassurance of security, safety and amenity of a global hotel chain.

The challenge is parity and uniformity – the sharing economy is in desperate need of regulation, with the law treating Airbnb differently depending upon which state or locality the property is situated. That needs to change. It’s only fair and right that they should be taxed appropriately and held to the same standards as other accommodation players.

Disruption will continue to be the norm in our industry. IHG’s scale, business model, brands and approach mean that we are agile and ready to adapt and respond to change – whatever it may look like in the future.

Growth in the aviation market over recent years has been a big factor in boosting the hotel industry. With new routes and capacity continuing to expand, tapping into new feeder markets, we expect to see ongoing growth in both guests and crew.

We fully intend to continue our growth trajectory in 2018 and hope to have some key signing announcements early in the year.

50 HM The Business of Accommodation

In terms of focus markets for development, the Australian east coast continues to be a priority, in particular: Sydney, Melbourne, Sunshine Coast, Cairns, Gold Coast and Far North Queensland. We also keep an eye on key regional satellite cities such as Wagga Wagga, Albury and Ballarat.

I feel very fortunate to step into my role as Managing Director – Australasia and Japan on the back of a cracking year. Karin Sheppard and the team have delivered some spectacular results and I’m excited to build on that legacy.

Our strategy for growth in Australia is to deliver value for our owners and pursue quality expansion, with a strong focus on building brand integrity.

SNAPSHOT: IHG

Number of hotels & rooms (Globally): 5,272 hotels, 785,544 rooms Number of hotels & rooms (Asia-Pacific): 505 hotels, 148,445 rooms Number of hotels & rooms (ANZSP): 47 hotels, 10,411 rooms Number of employees: 350,000 (globally), 5,500-plus (ANZSP) Year first hotel opened: 1949 (globally), 1962 (Australia) Year the company was founded: 1777 (Bass), 2003 (InterContinental Hotels Group PLC) Brands in the organisation: InterContinental Hotels & Resorts, Kimpton Hotels & Restaurants, Hotel Indigo, EVEN Hotels, HUALUXE Hotels and Resorts, Crowne Plaza Hotels & Resorts, Holiday Inn, Holiday Inn Express, Holiday Inn Club Vacations, Holiday Inn Resort, avid hotels, Staybridge Suites and Candlewood Suites.

Head office locations: London (globally), Sydney (ANZSP)

ENHANCING HOTEL GUEST EXPERIENCES ALL DAY, EVERY DAY ACROSS THE GLOBE.

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Australasian Leaders

Bob East Chief Executive Officer Mantra Group

In 2017, Mantra Group had its largest year of growth since our inception in 2009, with a record number of new properties (13) joining our hotel and resort portfolio. Our strong year was underpinned by double digit growth in inbound travellers.

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ur priority markets are China and the United States particularly; with other markets all supporting this and we believe our top 10 markets will all grow in 2018.

Domestically, we have seen 3-5% growth which will continue to outpace supply coming into the market except for in the Perth market where supply will be greater than demand.

Corporate travellers will see our CBD markets continue to prosper, particularly on the East Coast and our leisure markets will prosper mainly through rate increases. The growth in the leisure markets will be a combination of increased occupancy and average room rate growth. With the Commonwealth Games taking place on the Gold Coast in a matter of months, we predict the leisure markets will outpace the CBD markets in terms of growth.

Tourism hotspots in this part of the world include Gold Coast, Sunshine Coast, Cairns, Byron Bay and Queenstown and they will have the strongest growth throughout 2018.

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52 HM The Business of Accommodation

Australasian Leaders Development and growth will continue to occur in the major leisure markets particularly North Queensland, Gold Coast and Sunshine Coast as they continue to thrive off the back of favourable exchange rates and surging inbound arrivals. In CBD markets, the cost of entry is increasing however corporate travellers will see this market continue to prosper, particularly on the East Coast.

In terms of MICE, there will be increased activity in 2018 and Australia will be competing on more of a global scale. As CBD properties gain in occupancy levels, more of the conference activity will head to more regional areas and visiting family and friends will increase this year, which will be strongly fuelled by cheap air travel.

The growth of the aviation market will continue to help boost the hotel industry.

With more direct flights internationally, the planned second runway in Brisbane, the expansion of airports at the Gold Coast, Sunshine Coast and Hobart, international flights to Canberra and direct flights from Perth to London, will add to competition, increase capacity and make air travel more affordable and convenient than ever before.

A major challenge in the hotel industry at present is the lack of supply of hotel rooms.

The industry is doing well but hotel rooms are in short supply. To help combat this, Mantra Group has a number of upcoming properties scheduled to open in 2018, 2019 and 2020.

Another major challenge facing the hotel industry is staying ahead of technology, in line with our customers. Online Travel Agents (OTAs) have improved the digital user experience immeasurably. Hotel companies are typically playing catch up and need to increase investment in e-commerce technology, with a constant focus on user experience refinement, to maintain a level playing field with OTAs. We must observe, listen to and keep up with consumers who are constantly finding new and improved ways to research and transact hotel bookings.

In 2017, I am pleased to say that we completed a landmark acquisition for the industry by adding luxury boutique brand, Art Series Hotels to our portfolio. The acquisition saw seven luxury hotels, (representing more than 1,000 guest rooms and

including a number of conference and event facilities, restaurants and luxury hotel-style amenities) added to Mantra Group’s ever-expanding portfolio of properties under management.

In 2017, Mantra Group also entered into a scheme of arrangement with AccorHotels for a potential transaction which will be a key consideration for this business and its future planning over the next 12 months. Mantra Group’s strategy will be largely resolved as this transaction plays out.

The scheme is subject to regulatory approvals being met however we are proud that we have been able to build up this business to be considered for this. It is a real credit to the entire team that work across our 136 properties and 23,000 rooms in Australia, New Zealand, Indonesia and Hawaii.

SNAPSHOT: MANTRA GROUP

Number of hotels & rooms: 135 properties and 22,000 rooms in properties under management.

Number of employees: 5,500-plus Year first hotel opened: 1984 (Peppers Guest House, Hunter Valley) Year the company was founded: 2009 Brands in the organisation: Art Series Hotels, Peppers, Mantra and BreakFree Head office location: Surfers Paradise, Gold Coast, Queensland

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Australasian Leaders

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Sean Hunt Area Vice President, Australia, New Zealand and Pacific Marriott International

SNAPSHOT: MARRIOTT INTERNATIONAL

Number of hotels & rooms (Globally): Over 6,400 properties and over 1.2 million rooms.

Number of hotels & rooms (Asia-Pacific): Over 639 hotels and 319,654 rooms.

Number of hotels & rooms (ANZSP): 27 hotels, 6,492 rooms.

Number of employees: Over 500,000 (globally), over 120,000 (APAC), over 4800 (ANZSP) Year first hotel opened (Globally): 1957 Year the company was founded: 1927 Brands in the organisation: 30 (The Ritz-Carlton, Ritz-Carlton Reserve, JW Marriott, St. Regis, The Luxury Collection, BULGARI, W Hotels, EDITION, Marriott Hotels, Sheraton, Marriott Vacation Club, Delta Hotels, Le MERIDIEN, Westin, Renaissance Hotels, Gaylord Hotels, Courtyard Hotels, Four Points, SpringHill Suites, Protea Hotels, Fairfield Inn & Suites, AC Hotels, Aloft Hotels, Moxy Hotels, Marriott Executive Apartments, Residence Inn, TownePlace Suites, element, Autograph Collection Hotels, Design Hotels) Head office locations (Globally / APAC / ANZSP): Bethesda, Maryland (global), Hong Kong (APAC), Sydney, Australia (ANZSP).

54 HM The Business of Accommodation

Last year, 2017, was an exciting year for Marriott International in the Pacific.

ot only did we sign five new properties in Australia and New Zealand, our owners invested significantly in extensive refurbishments of Sheraton Grand Mirage Resort, Port Douglas, Sheraton Grand Mirage Resort, Gold Coast and Sydney Harbour Marriott Hotel at Circular Quay. A $45 million renovation of Sheraton on the Park is also underway with several more planned in 2018. We’re delighted to start 2018 with these milestones under our belt and our business outlook for the year ahead looks equally as impressive.

Australia’s hotel industry continues to enjoy robust growth and according to Tourism Research Australia, inbound visitor arrivals are expected to increase by 13.1% and local visitor nights are expected to climb by 1.5% between 2018 and 2019. Encouragingly, local visitor nights are expected to continue growing at an average annual rate of 2.2% over the next 10-year period. As visitor numbers climb, demand for quality accommodation rises and there is a significant shortage of hotel rooms in major cities around the country, especially in Sydney and Melbourne.

This is also an exciting time to invest in New Zealand as the hotel market is performing extremely well. The limited introduction of new hotel inventory over the past five years continues to raise occupancy and average daily rates. We look forward to debuting the Four Points by Sheraton brand in Auckland in 2018, which will offer travellers affordable and quality accommodation. We will also open The Ritz-Carlton, Auckland in 2022 to attract luxury travellers looking for an unforgettable experience.

As the world’s largest hospitality company with 30 brands in our portfolio, we are in a great position to capitalise on this growth. Currently, we have 27 properties in operation and 22 under construction in our Australia, New Zealand and Pacific portfolio, representing 12 of our 30 brands. We are on track to grow to 50 hotels by 2020 and will introduce four new brands, as we significantly expand our footprint.

In Australia, while we continue to build on our leadership position in gateway markets, including Sydney, Melbourne, Perth and Brisbane, we explore additional opportunities beyond these destinations. Examples of this are the recent signings of the Four Points by Sheraton Parramatta, The Westin Resort and Spa Coolum, and The Westin Darwin.

We are also on track to boast the largest portfolio of luxury brands across the Pacific region by 2020. This includes the introduction of three hotels from Marriott International’s top-tier luxury brands, signalling a demand for upper upscale services in the market. We will see The Ritz-Carlton re-enter Australia with the opening of The Ritz-Carlton Perth and The Ritz-Carlton Melbourne, and 2018 will see the re-entry of the famed W Hotels brand with the opening of W Brisbane.

A key hotel industry challenge is discovering and retaining extraordinary talent. Our commitment to associates has been recognised externally by Great Place to Work Australia and Fortune. We are therefore well-positioned to create career paths for those seeking to join the hospitality industry. We’re also asked a lot about disruptors such as Airbnb but as we offer a completely different guest experience and advantages, and we don’t see them as a threat.

Hotels create communities that can’t be replicated.

As we continue to grow, the business events industry remains a primary focus, as a substantial portion of our revenue is linked through MICE sales. A fresh and disruptive approach is needed for the MICE industry, which is why we introduced Meetings Imagined – tools to manage the perfect meeting experience. Innovations and renovations go beyond hotel rooms for Marriott International. This is seen with re-imagining food and beverage concepts such as ‘hatted restaurants’ like The Gantry at Pier One Sydney Harbour and cutting-edge venues like Silvester’s and the Three Bottle Man at Sydney Harbour Marriott. With the expansion of our loyalty programs into our food and beverage venues, our guests will continue to be rewarded.

In terms of expansion, China continues to be a primary source market for us.

Driven by a growing Chinese middle class and an increased air capacity (five new aviation routes to Australia launched in 2017 alone), Chinese visitor growth is the dominant contributor to the strength of the hotel market in Australia. The growing number of visitors from Asian countries are also fuelling a growth in luxury travel. We foresee China, India, South Korea and Japan playing a key role over the next few years as airline capacity increases.

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Australasian Leaders

John Warren Chief Executive Officer – Australia and New Zealand Next Story Group Next Story Group is seeing the hotel market continue to grow steadily overall with the Australian economy growing at a subdued pace.

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conomic growth within Australia over the next year is expected to broadly match average estimated growth over the last ten years (2.6%), before improving to 2.9% in 2018-19. Conditions in the other states however are far less favourable with new supply outstripping demand.

We see our regional properties in NSW being positioned well to take up new opportunities as a result of the new initiatives implemented by Adam Marshall, Minister for Tourism and Events in his efforts to grow regional tourism.

With improved global economic conditions, and the Australian economy showing positive indicators; with increases in business investment and business confidence; we see 2018 as being positive from a MICE and business perspective. With household consumption softening, there will likely be a weakening in outbound leisure travel in favour of domestic holidays. The traditional inbound markets of Europe and North America remain strong, and the emerging economies of Asia show no signs of stopping.

We see today’s mobile citizens wanting something different from the traditional hotel model. We feel they are looking for a blended space that’s more customized to their particular needs. Hoteliers, whether they be owners or operators, need to adapt to the changing landscape and at Next Hotels and Resorts, through our varied brands such as Next, Sage, Country Comfort and a new brand soon to be released targeted at Millennials, we have the flexibility to meet their needs.

There will always be disruptors in any industry and as Hoteliers, we need to accommodate the change when new players such as Airbnb, enter the marketplace. We don’t see Airbnb as a particular threat to our business model. The Airbnb model caters to a specific niche customer in the market and while we continue to provide the quality of product and service that our brands offer our customers will continue to remain loyal to us.

With Asia being an emerging market and given the fact that our head office is in Singapore we feel that Next Story Group is well placed to take advantage of the great opportunities within the region. Being an Asia based company we have a focus on the emerging economies, with Next Story Group now having a physical presence in North East Asia, South East Asia and South Asia.

Over the next two years, international visitor numbers to Australia are expected to increase by more than 13%. We see Asia outperforming all other inbound markets and this combined with the domestic market remains our focus for 2018 and beyond.

To meet this increased demand, airlines are adding additional capacity to accommodate these emerging markets.

Sydney and Melbourne are the two strongest markets in Australia. Development is important, especially in Sydney which is borne out by very much higher occupancy and average room rates being enjoyed by Sydney properties. The issue that remains for Sydney is the high-cost of entry which will continue to inhibit development.

56 HM The Business of Accommodation

We need to make sure that Sydney is sustainable so that it doesn’t become too expensive and price itself out of the market.

Over the past 12 months the company has undergone significant change, including a rebrand to Next Story Group; the introduction of Next Hotels and Resorts; the acquisition of a new media marketing agency, Brand Karma; the development of Virsa, our tech services division and the creation of Kafnu, a real-life social network, integrating the best aspects of living, working, playing, learning, and recharging.

These developments came from a need to recognise the changing landscape of consumer demand and to ensure the returns from every asset are optimised. We see Kafnu as an opportunity for asset owners to future-proof their businesses as we can adapt quickly to changing market circumstances and audiences.

The future for the group includes the acquisition of a well-located hotel in Singapore which will be announced in the New Year. We will also be announcing further transactions across the region and specifically in South East Asia and South Asia shortly.

Franchising is another focus for Next Story Group.

The company has completely revisited its approach to franchising and is rolling out a highly competitive model to the market under the Sage and Country Comfort brand portfolios.

SNAPSHOT: NEXT STORY GROUP

Number of hotels & rooms (globally): 29 hotels, 2, 293 rooms Number of hotels & rooms (APAC): 14 hotels, 1,483 rooms Number of hotels & rooms (ANZSP): 29 hotels Number of employees (Globally): 566 Year the company was founded: March 2003 (it was previously the Constellation Hotel Group Pty Limited)

Overall, the outlook for business and leisure travel in 2018 remains positive. Developing countries especially in Asia Pacific region will continue to see strong inbound visitors.

L Kurt O Wehinger General Manager of PARKROYAL Darling Harbour, Sydney and Area General Manager - Oceania Pan Pacific Hotels Group

eisure travel is expected to continue its growth in 2018 especially among the Millennials in the workforce. By 2025, Millennials are expected to represent 75% of the global workforce and their travel patterns will increasingly shape the strategies of hotel companies.

With more business travellers extending their trips for leisure, it also opens up a lot of exciting opportunities for accommodation suppliers.

For MICE, unique destinations will play a key role. Attendees are interested in locations off the beaten track. Asia Pacific has a great upper hand this year given the prices for both accommodation and airfare will stay relatively the same while the costs in other regions continue to rise.

One of the key challenges our industry faces is getting personalisation right.

Travellers, business or leisure seek authentic experiences that speaks to them. However, their needs vary depending on their trips. How we can offer the right personalised experience for guests is an interesting problem for our industry to tackle. To overcome this, we continue to focus on our biggest asset – our people. We actively seek feedback from team members on how we can provide our guests an authentic experience.

Another one will be navigating technology. We need to identify where consumers still value human interactions versus pure digital transactions.

In view of disruptors in our sector, we will continue to focus on our raison d’être – to serve our guests well.

We are constantly finding new ways to enrich our guests’ experience whether it is a friction-less stay or connecting them to the city they stay in. We are investing in technologies that aim to remove all the key pain points for visitors. Our websites are

Australasian Leaders getting a facelift to improve consumers’ online experience. Meanwhile, our mobile sites are constantly tested and updated for optimization.

Furthermore, our website features a destination page for each property where our guests can find out what attractions and events are in close proximity. Parkroyal Picks, our first mobile app also offers access to more than 1,000 curated guides in cities where Parkroyal properties are present.

China has grown into an undeniable force in outbound tourism. By 2022, it is expected to surpass the United States as the country with the highest propensity for travel aboard. Hotels become increasingly equipped on catering to Chinese tourists.

Its inbound visitors are on a steady rise as well. Similarly, India and Indonesia will experience impressive growth in outbound travel.

2018 is set to be another strong year for aviation. With more routes are being opened especially direct flights, people are encouraged to visit new destinations which bring in new guests and room nights for the hospitality sector.

Asia Pacific will continue to lead strong growth for the aviation market with an average forecast GDP of 3.9% annually over the next 20 years. The growing middle class in China and India are significant drivers for traffic growth. The region is also known for its low cost carriers that provide great accessibility to a wide range of destinations.

Singapore’s expanded Changi Airport will also be able to handle 135 million passengers by 2020.

2017 was an exciting year for us. In Australia, we acquired Hilton Melbourne South Wharf, which is now Pan Pacific Melbourne. It marks our fifth property in the country.

We also opened Pan Pacific Beijing and Pan Pacific Yangon. Located in the prime Xicheng district, Pan Pacific Beijing features 220 luxurious guestrooms and suites. Pan Pacific Yangon is the first truly international luxury five-star hotel in the Myanmar market. The 25-storey property is close to some of the most legendary landmarks in the city with extensive range of refreshing facilities.

We will continue our expansion in the next 12 months and beyond. Pan Pacific Serviced Suites Puteri Harbour in Nusajaya, Malaysia is set to open in 2018. It will offer 205 luxuriously appointed studios, one-bedroom and two-bedroom suites, each featuring breathtaking views of a private marina, the Straits of Johor and the Singapore skyline. We are also excited to extend our footprint with the launch of Parkroyal Langkawi in 2019 and our first property in London, Pan Pacific London in 2020.

SNAPSHOT: PAN PACIFIC HOTELS GROUP Number of hotels & rooms (Globally): 40 hotels/ 12,574 rooms Number of hotels & rooms (Asia-Pacific): 35 hotels/ 11,477 rooms Number of hotels & rooms (Australia, New Zealand and South Pacific): 5 hotels/ 1,784rooms Number of employees (Globally / APAC / ANZSP): 7,331 Year first hotel opened (Globally / APAC / ANZSP): 1971 Year the company was founded: 1968 Brands in the organisation: 2 (Pan Pacific Hotels and Resorts; Parkroyal Hotels & Resorts) Head office locations: Singapore (global)

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Australasian Leaders

Zed Sanjana Chief Executive Officer Quest Apartment Hotels It’s been a year of consolidation, growth and capitalising on favourable market conditions. It’s now time to plan ahead to ensure the future of the accommodation sector continues to be as bright as the recent past has been.

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his past year, we’ve continued to see a rebounding of industries such as mining that have been driving our economy over the past five years. The resurgence in property, as well as public and private infrastructure investment across the country have continued to drive growth in poorer performing markets.

The core markets of Melbourne and Sydney continue to perform strongly, and Brisbane has recovered this year.

As an overall market, we continue to benefit from record numbers of inbound tourism arrivals and growth in domestic tourism within the country.

With the completion of ICC Sydney and the expansion of the Melbourne Convention and Exhibition Centre, we are seeing a greater focus on Australia as a business and tourism destination for conferencing, events and exhibitions, and we expect this sector will continue to grow significantly over the next 12 months.

The leisure market is also expanding and we are seeing investment in less Sydneycentric inbound tourism, with airlines broadening their footprint across the country. An example of this is the recent announcement of direct flights from China to Perth which will begin to reinvigorate the leisure tourism market in that state.

Corporate demand has been extremely stable and we’re seeing a slight resurgence in investment into projects and infrastructure which has driven room-night demand over the course of the last 12 months. We expect this to continue during the next year across our properties.

As a business, Quest is very optimistic about 2018 in terms of organic revenue as well as network growth, as we continue to benefit from really strong underlying conditions.

We’re seeing very strong government and defence demand. And whilst there are still some sectors – such as retail – that are languishing, most of the key sectors underpinning the Australian economy continue to perform strongly in terms of corporate travel demand.

The Melbourne and Sydney markets as well as Hobart remain undersupplied, and Quest will continue to pursue opportunities in these cities, as well as benefiting from the strength of some of the mid/lower tier markets in suburban and regional areas, where the quality of supply is quite aged and reaching the end of its useful life as hotel assets. There are still significant opportunities for operators that recognise the strength, growth and resilience of these markets – and are prepared to allocate some investment capital here.

During the past 12 months, Quest has cemented its partnership with The Ascott who took a controlling stake in the company to become 80% owners of the group. This has enabled us to begin the process of fully integrating the Quest business into the largest global serviced apartment operator. This move follows the trend of the past five years during which we’ve seen the majority of all the domestic hotel and serviced apartment operators combining forces with international groups.

For Quest, it’s an exciting development, enabling us to form true partnerships with our global corporate clientele, offering them an extended stay accommodation solution in almost every part of the world. Given that most companies are moving to increased consolidation, centralisation and globalisation of decision making, being able to have the breadth of network to deliver this offer to corporate clients is quite a powerful asset to have.

This past year Quest opened eight new properties and took over three properties previously operated by other hotel groups. We currently have the highest number of apartment hotel rooms under construction in the history of our group, with construction 60 HM The Business of Accommodation

commencing this year at Docklands New Quay. We announced our first apartment hotel in the UK city of Liverpool, and we’re optimistic that we will see the brand grow within that market over the next 12-18 months.

However, in the face of all this overwhelming success and optimism, the major challenge for the industry is the question of whether – as hotel operators – we are sophisticated enough in our ability to benefit from this really strong period we are going through, in terms of driving average rates in strong markets across the country.

As a sector, we have a diverse set of backgrounds and understanding of core business principles. This means we sometimes act quite irrationally in the face of certain economic conditions. Will we be equipped to set this industry up for the future and ensure that it is resilient enough to withstand the busts that always follow a boom?

Over the next 12 months, Quest will be developing a very focused development plan for leaders in our sector.

The Franchisee Accelerator Program will be extended to people from right across the industry in an effort to improve the quality of business education within the hospitality sector, and to educate young leaders. The program will give them the opportunity to grow their personal wealth in a meaningful way through owning their own business, and overseeing the growth of their own equity. It will comprise both training, ongoing support, a 12-month program as well as financial assistance and support to enable young leaders within our industry to be able to afford to have the opportunity to buy into their own franchise.

Now is the time to capitalise on the advantageous conditions of today, by setting the industry up for ongoing future success.

SNAPSHOT: QUEST APARTMENT HOTELS

Number of hotels & rooms (Globally): 161 properties, 10,155 rooms Number of employees (Globally): Over 2,000 Year first hotel opened (Globally): 1988 Year the company was founded: 1988 Brands in the organisation: Quest Apartment Hotels Head office location: Melbourne, Victoria, Australia

Australasian Leaders Looking to 2018 we believe that the current strong market for accommodation will persist. Buoyancy will remain, and though we expect the rate of growth to slow down, it won’t flatten.

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Sudesh Jhunjhnuwala CEO and Founder Sudima Hotels & Resorts

SNAPSHOT: SUDIMA HOTELS AND RESORTS

Number of hotels & rooms: 4 hotels, 718 rooms (plus 2 hotels to be added in 2018 making it 1006 rooms under management) Number of employees: 410 Year first hotel opened: 2000 Year the company was founded: 2000 Brands in the organisation: Sudima Hotels & Resorts and (Hind Management) will manage Novotel Christchurch Airport Head office location: Auckland, New Zealand

62 HM The Business of Accommodation

ew Zealand is consistently seen as a safe destination, and that is always very good for our tourism.

Looking at the prospects for specific channels, growth is spread evenly between the segments. This won’t change until the New Zealand International Convention Centre opens in downtown Auckland in 2019. This will affect the MICE market enormously by creating the capacity to host up to 4,000 delegates in a conference, which we can’t do at present.

The single biggest challenge to the hotel industry at present is the rising costs which are driven by the local and central government. There is the new minimum wage proposed by the new Government which will come into effect over the next four years. It will increase the minimum wage by 27% which is higher than normal rate of increases we have had in the past.

In Auckland, the council has imposed targeted rates against hotels. This will have an immediate effect on hotels’ profitability. Although Auckland Council calls the new rates a ‘room tax’, and it was sold to the public as a cost that could be passed on to guests, this isn’t how it’s applied. It’s a doubling of our property rates, from $200,000 to $400,000 a year, so we can’t simply pass it on to our guests. It wasn’t on Phil Goff ’s agenda when he ran for the mayoralty, but it has come from left field and forced on the hotels in Auckland. Now other local bodies around the country are watching it closely and we can expect them to follow suit.

Additionally, the labour supply has shrunk with new immigration restrictions brought about by pandering to fear mongers in an election year. This will not only cause further pressure on wages but also on finding good people to work in the tourism industry which is very labour intensive. It also has an effect on our construction industry which can’t find sub-contractors to finish new developments and hotels. All the projects I know of are running late and over budget.

The prospects of tourism from emerging markets are largely driven by airlines. China is still growing, with 55-plus direct flights a week, but the visitor profile is changing. Shopping tour groups are being replaced by higher spending independent travellers who do their own research and want a real Kiwi experience.

The Indian and Brazil markets are still growing, but we would see better growth once there is a direct flight. Both markets are constrained by the relative paucity of air connections to New Zealand – again, something carriers could remedy.

The biggest growth is coming from South-East Asia – direct flights are increasing from Thailand, Malaysia, the Philippines and so on. Singapore Airlines and Cathay Pacific have just added another daily flight to New Zealand and new carriers are considering adding flights too.

A booming market is North America, and this is heavily driven by the carriers.

United, American Airlines and Hawaiian Airlines are in on the game with Qantas and Air New Zealand, which has driven down fares – and there is already a cost appeal from our low dollar. Truly, the Lord of the Rings and Hobbit movies have done wonders for New Zealand, because people saw how beautiful the country is and there is a special themed destination for them.

Over the last 12 months, Sudima has concentrated on brand-building and getting our story out there in the public. We have invested heavily in our commitment to accessibility and looking after the community. Our company won the Environmental Tourism Award at the New Zealand Tourism Awards, our Auckland Airport hotel has a gold accessibility rating, we had four finalists and two winners among our staff at the New Zealand Hotel Industry Awards, and we were very proud that our team won more than two dozen medals at the New Zealand Hospitality Championships.

All this has created more awareness about us and we are considered a reputable and caring hotel brand. It’s important to me that we’re seen as a business that not only provides wonderful service but is doing good things.

In the next year we will open a new 88-room, five-star hotel in Christchurch CBD. All rooms will be self-contained with kitchenettes, and we’re considering creating a day spa on the ground floor. We’re also looking at new projects in Wellington, Queenstown and the Auckland CBD. Our hotel management business is very strong and we are in negotiations with several owners at present: Overall, 2018 is looking very positive.

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Australasian Leaders

Rachel Argaman Chief Executive Officer TFE Hotels The year ahead is one of opportunity for the hotel industry and here at TFE Hotels we are charging ahead with our expansion plans in Australia, New Zealand and Europe.

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e are gearing up for 2018 to be our biggest growth year to date, as we reach our goal of having 100 hotels in our portfolio within five years.

This means TFE Hotels is set to grow by an extraordinary 41% in the next five years, from our current portfolio of 70 hotels in five countries. We now have 26 hotels in development across three countries and two continents.

Over this past year, our 11 European hotels performed exceptionally well. We continue to seek out new opportunities to open hotels in Germany, where we are the second largest operator in serviced apartments (Horwath HTL). We have just opened the doors to two beautiful new Adina Apartment hotels in hip Leipzig and in the port city of Hamburg as we celebrate our 10th year in Germany, where we have many more projects in the pipeline.

In Australia the market is more varied and we continue to see opportunity for growth.

We are thrilled that in the next 12 months we will open two stunning new hotels in Brisbane. We will open Adina Apartment Hotel Brisbane later this year in a beautifully redeveloped heritage building near the waterfront on George Street, where we are currently completing an extensive renovation that has preserved its wonderful character.

It will have 220 apartments, a pool, signature restaurant and bar in the ground-floor lobby space, all right in the heart of the CBD. We will also open The Calile in the James Street precinct of Brisbane under our TFE Hotels Collection brand, which is a portfolio of beautiful hotels across Australia, each with individual character and charm. The Calile will launch as an urban resort in one of Australia’s cultural epicentres, Fortitude Valley, with food, drink and retail offerings at the hotel including a lobby bar and poolside restaurant with cabanas. Guests will emerge from the lobby to find themselves immersed in Brisbane’s most energetic lifestyle mecca, the James Street precinct with its galleries, museums and chic boutiques.

The Sydney hotel market has enjoyed a very strong year and there are plenty of opportunities given the limited supply of new product. We have located areas where demand outstrips supply, including Mascot and North Sydney. We opened Travelodge Hotel Sydney Airport in Mascot in September, and it reached 100 per cent occupancy in its first week, highlighting how Travelodge Hotels as a brand continues to go from strength to strength, with 18 hotels now in Australia and New Zealand.

We will soon open a Vibe Hotel at North Sydney’s exciting new retail, dining and commercial address, Northpoint, where guests will have access to a rooftop bar and pool, a new eat street and a retail precinct developed by Cromwell Property Group.

Construction is about to start at Vibe Hotel Hobart, Vibe Hotel Darling Harbour in Sydney and Vibe Hotel in Queen Street Melbourne. This marks a huge milestone for the brand; Vibe Hotels will have a presence in almost every capital city in Australia.

64 HM The Business of Accommodation

Each will be built on next generation standards for the experiential and social-minded millennial set. The Vibe Hotels brand offers millennial mindset travellers connectivity, social spaces, inspired design and excellent conferencing in sought-after locations.

The Adina Apartment Hotels brand has evolved from its beginnings in Sydney in 1982 to become a major brand with 32 hotels under its banner in five countries – and another 13 in the pipeline. We are developing several precinct hotels including an Adina in Canberra in 2020 that includes a ‘Theatre Lane’ which will form a new foodie and retail lifestyle precinct set to re-enliven the city centre. At Melbourne’s West End we have an exquisite hotel in the planning whose design draws on rainforest and futuristic elements, with a yoga pod, massage studio, Jacuzzi, day spa and an indoor 25m lap pool and ‘social hub’ with indoor gardens as a lobby. We will also open beautiful Adina Apartment Hotels in Sydney’s CBD and bustling Fremantle in Western Australia.

With strong growth, excellent operational results and remarkable talent coming through our Future Leaders’ Program, TFE Hotels is poised for an exciting era of expansion and excellence.

SNAPSHOT: TFE HOTELS

Number of hotels & rooms (Globally): 71 hotels, 9907 rooms Number of hotels & rooms (ANZSP): 60 hotels, 8151 rooms Number of employees: 2218 (Globally), 1892 (ANZSP) Year first hotel opened: 1982 (Medina Serviced Apartments at Kensington, Sydney) Year the company was founded: 1963 (TOGA), 2013 (TFE Hotels Joint Venture) Head office location: Sydney, Australia

Australasian Leaders

Rhys Williams and Alex Thorpe Directors Veriu Hotels & Suites It is set to be a truly exciting year ahead for Veriu Hotels and Suites with 2018 being the year that our network will experience significant growth and expand interstate, whilst continuing the strategy of growing Veriu’s presence in the most exciting suburbs and precincts in Sydney with openings in Surry Hills and Elizabeth Bay.

SNAPSHOT: VERIU HOTELS AND SUITES Number of hotels & rooms: 4 hotels, 275 rooms Number of employees: 100-plus Year first hotel opened: 2016 Year the company was founded: 2016 Brands in the organisation: Veriu Hotels & Suites Head office location: Sydney, Australia

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ur ethos is to connect guests with local experiences and immerse them in the unique fabric of inner city precincts and fringe suburbs. With that in mind, investment in Australian locations as well as markets across the Asia Pacific are on our radar, in areas where we feel we can contribute with a bespoke hotel offering within the 25 to 150 room capacity. We will look at opportunities to grow the brand wherever possible, but we will not make investments just to have a presence and expansion will not be at the expense of the connection with our guests and the local area.

We see the leisure and business markets growing for all our hotels. The aim for our leisure segment in 2018 is to grow around 25% and we are confident we will hit that target with our offerings. The year-on-year growth to date in the corporate travel segment has been significant and proves to us that the product we have rolled out for local corporates is being received as something unique and truly valued.

Whilst the overall outlook for the accommodation industry is positive, it is not without its challenges. The issues around the 457 Visa will continue to present recruitment challenges but we are focusing on attracting talented people that feel the connection with the brand and the spaces we offer to our guests. We are a bespoke collection of hotels and on the opposite end of the spectrum to the traditional hotel model.

We welcome the disruptors and embrace distribution relationships with the likes of Airbnb to supplement our own distribution channels and provide further exposure for our brand to a wider market. We are already experiencing a high volume of Chinese visitors to our hotels who are finding us through third parties or through investing in good SEO, and 2018 will be a year where we will roll out several options for our Chinese guests that will have an impact on their choice of stay.

With several new hotel signings the growth of new aviation routes and airlines will be a boost that is required for all in the industry. Optimising these new opportunities will come down to how we engage with the guests from the emerging markets and how they are made to feel while staying.

2017 was extremely rewarding and set us up for a very prosperous 2018. The group opened two new fantastic design hotels – Veriu Broadway, a warehouse conversion with New York Style Loft Apartments; and Veriu Central, a heritage building with art deco design, adding to our existing hotels in Camperdown and Randwick. A partnership with Folkestone property fund managers for a hotel development at Green Square due to open in 2019 is underway and we celebrated two hotels in the top 20 for Sydney on TripAdvisor (Camperdown and Broadway). We could not be happier with how the brand has been embraced by the market and look forward to more exciting developments in 2018. hotelmanagement.com.au 65

Australasian Leaders

Barry Robinson President & Managing Director – South East Asia and Pacific Rim Wyndham Hotel Group This year is looking to be an exciting one for Wyndham Hotel Group in South East Asia and the Pacific Rim with more than 240 hotels (53,602 rooms) open or in the development pipeline.

T

ourism in the region is booming thanks to increased accessibility and the sector’s growing affluence. Responding to an ever-increasing demand for quality accommodation, we have launched brands in new markets and expanded our reach in existing markets. Nine of our 20 global hotel brands are flourishing in the region.

Over the course of 2017, we achieved significant milestones and enjoyed steady growth. An additional 27 hotels (7,519 rooms) were committed last year through acquisitions, management contracts and franchise agreements across South East Asia and the Pacific Rim. China has also seen unprecedented growth with 1,383 hotels and a target of more than 2,000 to open by the end of 2019.

A key focus for our team this year has been expanding our portfolio in South Korea, where we currently have the biggest presence of any international hotel group with 32 hotels and 27 of these are Ramada hotels reflecting the demand for quality mid-scale accommodation.

We intend to grow our presence in Japan, Vietnam and Indonesia, and have plans to enter the emerging markets of Laos and Cambodia.

In the midscale sector, we have 23 Ramada hotels under development or slated to open this year. Our upscale Wyndham Hotels and Resorts brand will also be a key focus with six hotels opening across Australia, Indonesia, and Vietnam in 2018. In the luxury tier we have significant Wyndham Grand developments opening in Myanmar and Vietnam in the next 18 months.

Asia’s robust economic growth has seen business travel and the meetings, incentive travel, conventions and exhibitions (MICE) industry thrive. Singapore remains a hub for meetings and events because of its abundance of conferencing space and excellent air links. The MICE market is also flourishing in Vietnam with visitor numbers on the increase thanks to further infrastructure development, improved connectivity and accessibility. We believe Vietnam’s overall tourism economy has a strong future ahead. It is certainly a hot market, which we are pleased we have entered in the early stages.

We are tapping into Vietnam’s growing business and leisure travel markets with our first golf resort in South East Asia. Wyndham Grand Cam Ranh will be situated on a 27-hole golf course designed by legendary Australian golfer Greg Norman. This luxurious property will offer multiple restaurants and bars, swimming pools, extensive spa and wellness facilities and a convention centre seating up to 2,000 people.

New Zealand has seen double-digit visitor and RevPAR growth over the past two years with occupancy at record levels. We always target markets that show consistent growth and have expanded our portfolio across New Zealand to match market demand with a number of new Ramada properties opened in Auckland and Queenstown. More are in the pipeline.

Our upscale Wyndham Garden brand will also debut in New Zealand this year.

66 HM The Business of Accommodation

In Australia, Sydney and Melbourne remain firm favourites for both acquisitions and franchises. It is also pleasing to see Brisbane starting to see improvement as demand starts to catch up with supply. Recent forecasts show that with increasing prosperity and the continuing growth of millions of people into the consumer-oriented middle class, the volume of Asian visitors to Australia should increase by 17.4 per cent by the end of 2019 and Asia will account for over half of all visitors to Australia.

This of course forms a large basis of our planning.

One of the challenges of the rising visitor numbers from China in particular is the increasing demand for Mandarin speakers and writers. Our staff must also be aware of cultural differences and varying expectations international visitors might have. Hiring employees who can speak multiple languages, as well as offering multilingual services and information in languages, has become a focus for us and something we know has to remain in the forefront of our operational planning.

The growth of the aviation sector continues to boost the hotel industry. Low cost carriers offering affordable flights are changing the way people travel across the region. This is helping us grow our portfolio into second and third tier Asian locations.

The creation of new airline routes to emerging beach destinations such as Jeju in South Korea, Sihanoukville in Cambodia, Phu Quoc in Vietnam and Lombok in Indonesia, to rival the traditionally popular Bali and Phuket, demonstrate there is so much more for travellers to explore in South East Asia.

In the coming year, Wyndham Hotel Group will continue to expand into key South East Asian and South Pacific markets and we will launch our globally recognised brands in emerging destinations. Along with our established offices in Australia, our accelerated growth is now further underpinned by our new headquarters in Singapore and support offices in Indonesia, South Korea, Singapore, Clark in the Philippines and Shanghai in China.

We will continue to strengthen the region with new hotels, new investments and new resources while delivering on our promise to create personalised and memorable experiences for our guests.

SNAPSHOT: WYNDHAM HOTEL GROUP Number of hotels and rooms globally: 8,100 hotels / 708,500 rooms Number of employees globally: 8,800 Year company was founded: 8, August 2006 (Wyndham Worldwide spun off from Cendant Corp and began trading on the NYSE under the symbol WYN on this day) Brands in the organisation: Super 8, Days Inn, Howard Johnson, TRYP by Wyndham, Ramada Worldwide, Ramada Encore, Microtel Inn & Suites by Wyndham, Hawthorn Suites by Wyndham, Wingate

by Wyndham, Travelodge, Knights Inn, Baymont Inn & Suites, Wyndham Garden, Wyndham Hotels and Resorts, Wyndham Grand, Dazzler Hotels, Esplendor Boutique Hotels, The Trademark Hotel Collection, AmericInn and Dolce Hotels and Resorts.

Head office locations: Parsippany, NJ, USA (global), Singapore (SEAPR), London (EMEA), Shanghai (China).

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