The 2021 Australian Hotel Industry Conference and Exhibition kicked off as the largest national industry conference taking place anywhere in Australia during the COVID-19 pandemic, with more than 900 people coming together at Adelaide Oval today.
The day began with a meteoric announcement from the two major industry associations. First heralded at AHICE last year, Tourism Accommodation Australia and the Accommodation Association united on stage and declared a firm intention to come together as one voice to strengthen the sector’s presence in the eyes of government decision-makers.
Meeting on stage, Tourism Accommodation Australia Chairman, Martin Ferguson and Accommodation Association Chairman, Julian Clark, said while no specific timelines have been committed so far, agreement had been reached by both Boards and that through further advocacy to each respective membership, the steps required to bring both associations together under one umbrella would be reached in the months to come.
“This is a monumental historic moment,” Ferguson said. “The fact is that Australia’s accommodation sector deserves and wants one united voice.”
“We’re committed to it as we know it is the right thing to do,” said Accommodation Association Chairman, Julian Clark.
AHICE then introduced its first international guests, first linking up with BWH Hotels Group CEO, David Kong, speaking live from his home in Chicago. Amid the arrival in Australia of the boutique brand Aiden, Kong said leisure and resort travel was providing the spark the global travel industry needed as the pent-up travel demand was materialising in many parts of the world that spent long periods of 2020 in lockdown.
Marriott International President – International, Craig Smith, dialled in from Washington DC. Recently promoted to the role, Smith spoke from the heart on the sombre mood that permeated the organisation in the wake of the recent passing of CEO, Arne Sorenson, while praising the leadership abilities of Tony Capuano, who has now been installed in the role. Smith said
“The Marriott family takes it as a personal affront whenever somebody leaves to work somewhere else. They always make such an effort to make sure their team members are happy.”
The focus then shifted to financial market dynamics with the first keynote presentation of the day then took place, with Westpac Chief Economist, Bill Evans, addressing delegates from Melbourne and providing a snapshot on the state of the economy and the market situation for hotels.
Evans said he was expecting the Reserve Bank cash rate to remain at 0.1% for the next three years, with the hold expected to provide the market with some stimulus and stability. Wage growth expectations had also largely failed to materialise in recent years.
The popular ‘What Owners Want’ panel discussion was next onto the stage, hosted by Kcom Director, Howard Kemball and featuring a panel of asset managers and investors. The underlying theme of the panel was how hotel operators had reset the cost base in the onset of COVID-19, with cost sharing among hotels and gradually scaling up as the recovery continues.
“Our focus at the moment is really on revenue recovery,” said Salter Brothers Asset Manager, Kate Harper.
“We’ve coined a phrase within our portfolio – rapacious revenue culture – so we’re really driving that in our hotels and really going after revenue opportunities, tailoring our hotel product and the way we sell our hotels to what the market is currently.
“It’s a domestic market. There’s a lot of leisure business out there so we’re making sure our hotels are set up to capture those key markets.”
The panel was unanimous in agreement that the pandemic had been something of a blessing for regional and country hotels, which have been setting record trading levels as Australians are prevented from travelling overseas and instead been setting out and discovering their own country.
After morning tea, proceedings resumed with a Q&A onstage between HM Editor, James Wilkinson and Radisson Hotels Australia Managing Director, Mark Bullock. The discussion focused on the potential that lies ahead over the rest of 2021 and 2022, with new brands coming in and a number of new hotel announcements expected in the coming months.
“We’ve got some real opportunities to come on midscale and economy brands,” Bullock teased.
Delegates were then addressed by Accommodation Association CEO, Dean Long, who said it was never more important for the industry’s leaders to be coming together. The key issue the industry needed to address was the skills crisis – in his view the single biggest issue for the accommodation sector.
“We can’t go back to an era where we are totally reliant on international workforces,” Long said.
James Wilkinson then returned to the stage for a chat with Hostplus CEO, David Elia, who reiterated the role that Hostplus plays in supporting the financial futures of workers in the hospitality sector.
“I’m incredibly proud of what we’ve been able to do to support workers in the hospitality sector. Our ability to continue to identify fantastic investment opportunities is a credit to our organisation.
“What we invest in is key infrastructure that supports the tourism and hospitality sector. We’ll continue to maximise the investment opportunities for our members.”
Next to present was Pro-invest Group Managing Partner, Dr Sabine Schaffer, beamed in from her home in Dubai. Dr Schaffer said after beginning with Holiday Inn Express, the strength of Pro-invest was evident in that it was able to work with many different brands, including Kimpton, which was today announced as the newest brand to enter Australian shores.
“The expertise of our team really allows us to work across many different brands,” she said.
A segment which debuted at AHICE last year and proved highly popular was the CEO Sessions, where the role of interviewer was conducted by a leading CEO, speaking with another. In the first of these sessions for 2021, Accor Pacific CEO Simon McGrath took the stage to conduct an interview with Experience Co CEO, John O’Sullivan.
O’Sullivan said a big opportunity for the local market was in Indigenous experiences.
“There’s some great products out there, such as what Voyagers are doing. We have a boat experience off the Queensland coast that tells the story from the view of the traditional landholders and that’s proving to be incredibly popular,” he said.
The second panel discussion of the day then took place, with Sustainability the key focus point. Hosting the chat was Axsia Asset Management Executive Director, David Fraser, who looked at the importance of being as sustainable as possible despite any cost increases that may eventuate.
“A lot of owners are interested in sustainability as long as it doesn’t cost any more,” said Dalman Architecture MD, Richard Dalman, who added that owners should try to repurpose an existing building rather than building new where possible. If a new structure must be built, significant planning should go into minimising building waste, with a great example being Auckland’s new Hotel Britomart, which cut its construction waste by 80% through good planning.
The next Hotelier Q&A was next on stage, with James Wilkinson crossing live to Honolulu to speak to Outrigger Hospitality CEO, Jeff Wagoner.
As an island state that has managed its exposure to COVID-19 fairly well compared to the devastation that the rest of the United States has endured, Wagoner said he was excited at the opportunities that the company was looking into.
“We’re starting to look at a lot of new destinations. There will be significant growth opportunities for us through the rest of 2021 and 2022.”
Tourism Accommodation Australia was next to the stage, with National CEO Michael Johnson adding his own emphasis on the skills crisis – an issue which he described as “predictably unprecedented” and references the relentless pace of new hotel development and the number of skilled workers simply not keeping up.
“The reality is that the local workforce to do jobs like chefs and cooks simply isn’t there.
“We’re working on ways to encourage more young people to choose our industry,” Johnson added.
In the first Investor Q&A for AHICE 2021 hosted by James Wilkinson, Dr Jerry Schwartz took to the stage to share insights into the three art exhibitions he has installed at Hilton Surfers Paradise, one of which is a human body museum, complete with sculpted replicas of human organs including a pulsating heart, a spinal cord and a dissected head.
Dr Schwartz spoke about his adventures through the pandemic and how he has invested further in his properties including a new water park at Crowne Plaza Hunter Valley and Fairmont Blue Mountains, with the latter in the process of adding a new ice-skating rink.
Hilton Vice President Australasia Heidi Kunkel was next on the stage, taking delegates through the company’s newest Australian hotel in Hilton Melbourne Little Queen Street.
“It’s elegant, it’s sophisticated and the restaurants are beautiful. The owners have invested significantly and they’ve done a beautiful job,” she said.
Following lunch, the room settled down for the afternoon session, which began with an inspirational keynote presentation by one of Australia’s most successful and revered athletes. Kurt Fearnley was born without the lower portion of his spine but did not let his disability deter him from reaching incredible heights. Fearnley is a three-time Paralympic gold medal winning wheelchair marathon competitor and is universally respected for both his athletic achievements and also the way he conducts himself in everyday life.
Fearnley shared videos of his journey crawling…yes, crawling…the Kokoda Track in Papua New Guinea along with stories from his adventure on the Sydney to Hobart yacht race among others.
Regular AHICE proceedings then resumed with the next Development panel discussion, this time focusing on luxury, boutique and lifestyle hotels. Hosted by Baker McKenzie Partner, Roy Melick, the panel featured Development executives from IHG Hotels, Accor, Hyatt, Marriott International and Hilton.
The panel reflected on the differentiation between boutique, lifestyle and luxury hotels and the key factors that make each hotel within these categories what they are.
“Lifestyle for Marriott is not limited to a tier. It starts with W and goes down to Moxy. If you build a new hotel and you’re not thinking lifestyle, you’re probably doing it wrong,” said Marriott International Senior Director of Hotel Development, Australia, Richard Crawford.
“How boutique hotels have evolved, they’ve evolved due to a need to differentiate,” added IHG Vice President Development Australasia and Japan, Abhijay Sandilya.
James Wilkinson then returned to the stage for the next Hotelier Q&A, this time linking in to Singapore with Radisson Hotel Group Asia-Pacific President, Katerina Giannouka.
Katerina spoke about development and growth and how when she joined Radisson, she was tasked with doubling the Asia-Pacific portfolio. Since then, she has grown it eight-fold.
“Asia-Pacific is a healthy market and we believe this will continue for some time to come.”
The next Hotelier CEO session was up next, with The Ascott Limited Australia MD, David Mansfield hosted a conversation with Voyages Indigenous Tourism Australia CEO, Matthew Cameron-Smith.
The Voyages CEO spoke about the uncertainty of border closures and the impact this had on the company, particularly one which operates in the centre of Australia.
“We need fluid borders and people being able to move in and out, especially in a place where the nearest star in the sky is closer than the nearest cinema,” Cameron-Smith said.
“The learning from us has really been about focusing on the guest experience, and when people could travel, they were willing to pay for a genuinely fantastic experience.”
Two more hotelier Q&A’s were then presented by James Wilkinson, first with Ovolo Hotels Founder and CEO, Girish Jhunjhnuwala, still fresh from the opening last week of his newest property in the form of Ovolo South Yarra in Melbourne. Wilkinson complimented the outstanding opening party and talked about new cities that Ovolo has in its sights.
“I would say that I could put my hand on my heart and say I think we’ve become pretty good experts on taking things from the ground up,” Girish said.
The second Q&A featured a chat with TFE Hotels CEO, Antony Ritch, who spoke about the two new brands that have debuted recently, these being A by Adina and Quincy. Ritch said the new brands create “a different type of stay”.
“We’re going to start to see a lot more of hotels mixing in not just with real estate but with restaurants as well,” Ritch said.
The afternoon continued with the next panel discussion, this time focusing on one of the industry’s most alarming issues, that being Human Resources and Staff Retention. The panel was hosted by KCom Director, Howard Kemball, who brought together key figures in hotel recruitment and leadership to look at how to appeal better to emerging labour forces.
The HR panel discussed ways to provide assistance to staff during trying periods in their life. This was put into stark contrast last year during the COVID-19 pandemic, especially for short-term casual employees who were not eligible for JobKeeper and therefore needed to change their career plans and move into other industries where more work was available.
The final Hotelier Q&A of the day then kicked off with Accor’s Presario and Global CEO, Sebastien Bazin, dialling in from Paris. Speaking from the Sofitel Paris, Bazin spoke about the impending 30th birthday of Accor in Australia and the strength of the company in the Asia-Pacific.
“We’re very proud to have been in your country for so many years,” Bazin said.
The Accor Presario spoke about the company’s recent investments in brands such as Hoxton, Faena and the lifestyle sector in general which is set to grow significantly as part of the recent partnership with Ennismore.
“People don’t want a product anymore. They want an experience. Personalisation and feelings are going to be so much more important for the next 40 years than the past 40. Lifestyle brands only exist if you have something positive happening to you.”
The focus then switched to London as IHG CEO – Europe, Middle East, Asia and Africa, Kenneth Macpherson, dialled in for the next scheduled Hotelier Q&A. Macpherson praised the company’s announcements from the week thus far, saying he was confident the AUD$32 million refurbishment of InterContinental Adelaide would completely regenerate the property and make it so much stronger.
“I think Kimpton Sydney is going to be a fantastic asset for the city,” Macpherson said.
Before delegates had the opportunity to break for the day and enjoy drinks and networking, the final session was a resurgence of a segment which debuted at AHICE last year, entitled ‘Drinks with the Bosses’. Hosted by Rob Williams from Watson, Farley & Williams, the stage was graced by Quest’s David Mansfield, IHG’s Leanne Harwood, Elanor Investors’ Marianne Ossovani, Accor’s Simon McGrath and Hilton’s Heidi Kunkel.
Williams challenged the panel to share examples of the cultural shift they have witnessed in the industry through the pandemic
“There is nothing more important than taking the time to see your employees and spend time with them. We talk about assets and investments, but without the hearts and souls that bring it all to life, we have nothing,” said Leanne Harwood.
Accor Pacific CEO, Simon McGrath, said the hospitality industry has withstood its fair share of mainstream media “potshots” but that on the whole, the quarantine program run to house returning Australians has played an enormous part in keeping employees in work and helping hotel owners with cashflow, even if it was far from optimal.
We’re halfway through AHICE. Stay tuned to HM’s website for more industry news as it breaks and for another detailed wrap from the second and final day tomorrow.
AHICE photography by Asher Milgate.