The Sleep Event 2008 Conference Review

Now in its seventh year, The Sleep Event Conference is the only conference in Europe devoted to hotel design, development and architecture. Taking place over two days in the Business Design Centre’s purpose-built auditorium, it attracted over 200 delegates from owners to operators, architects to designers, developers to investors, and consultants to contractors.

A line-up of speakers from across the hotel sector took part in a variety of presentations, interviews, and panel discussions to review developments in the year-to-date, to reveal new hotel concepts shaping Europe, and forecast the market’s prospects for the future.

DEVELOPMENT DAY – A WAKE UP CALL
In the words of Winston Churchill, ‘if you’re going through hell, keep going’. That was the advice given to delegates at the start of a somewhat gloomy Development Day in the wake of the economic crisis that has hit the UK and parts of Europe.

Playing host for the day, financial journalist Andrew Sangster offered his thoughts on the situation declaring: “Two months ago I was optimistic. Unfortunately, I had to rapidly change my perspective, and in my 15-20 years of reporting I have never known a period of so much uncertainty.” Sangster urged the industry’s leaders to “keep doing business, keep doing deals, and keep going. That is the great challenge we have ahead.”

In a more upbeat ‘Wake Up Call’, keynote speaker Chris Sanderson, co-founder of The Future Laboratory, presented a fascinating insight into the consumer of the future. He suggested that the ‘bleisure generation’, identifying a shift in the way the under-30s work and play, will have a profound affect on hotel development. He predicted that the blurring of boundaries between business and leisure mean it will be the business centre that drives profitability of the hotel of the future. Continuing with the optimistic approach, Shawn Ford spoke of his own experiences in Europe backed up with Lodging Econometrics’ research report: “Virtually everywhere I travel, the hospitality industry has the honour of being one of the strongest industries.” With all regions at or close to record levels, Ford still anticipates opportunities for 2009 and 2010. Data showed that the brands leading the way for active development are InterContinental with 133 projects, and Accor with 84. 

CRUNCHING THE NUMBERS
Back to number crunching and the first Development Debate of the day discussed what impact the credit crunch will have on future hotel development in Europe. Arthur de Haast talked of transaction volume and delivered news from Jones Lang LaSalle Hotels that: “As at the end of September, money invested in existing hotels was down 70% with the US being worst affected.” He went on to say that it was Europe that had seen the least impact... until now that is. “All transactions we have been working on are on hold,” explained de Haast. “We are certain that this will affect new pipeline over the next twelve months.”

It was suggested that the reason these figures sound so depressing is because prior to this, the industry was booming. Is all this doom and gloom not a little overdone? Marty Kandrac Managing Director of The Blackstone Group said not: “I think it’s going to get a lot worse. For the first time ever this is global and I see very few opportunities through 2009.”

Daniel Poser of London & Regional Hotels agreed with Kandrac adding that there is little or no financing available, but reserved judgement on how long the downturn will last.

A glimmer of hope through all this was Russia. London & Regional Hotels is actively developing in the country. However aspirations as to how upscale these hotels will be are ‘under review’. “I am confident that they will complete,” said Poser. “We will be slightly more cautious but economic activity hasn’t come to a complete halt.”

PROFIT AND PIPELINE
Moscow proved to be Europe’s development hotspot cropping up in conversation more than once throughout the day. David Bailey, Director of TRI Hospitality Consulting identified the city as having the highest RevPAR in the world. Further panels agreed that Russia presented the best opportunities and while some suggested that the market would remain healthy for some time, others claimed that ‘the cranes have even stopped moving in Moscow’. 

Other hotspots included Paris, a leading MICE destination, and London in the run up to the 2012 Olympic Games. On the downside, Bailey’s report showed that the slowdown had begun to bite in the two months leading up to September in which hotel groups were significantly behind in profit variance disproportionately affecting the luxury market. The profits of five-star hotels slipped by 24% compared with 7% for three-star properties.

In Eastern Promise: The Potential of Europe’s Emerging Markets, Kenneth Rupar of Orco Property Group revealed expansion plans for MaMaison Hotels & Apartments, the group’s primary investment vehicle for setting up operations in new territories. “We are not looking for new developments at present. Instead we will expand the chain through a management role in Eastern Europe, Russia and Croatia.” Rupar went on to say that despite Eastern Europe’s promising pipeline, there are still greater risks than developing in the west. The panel also described their experiences of the complexities of heading east, citing bureaucracy as a major issue.

Leaving the immediate credit crunch issues behind, a fresh panel told of the lifestyle brands coming to Europe in ‘Luxury Reinvented’. As guests’ perceptions of luxury are changing, hotel concepts are emerging and evolving with them. Jasper Muller, Director of Acquisitions at CitizenM explained the model being rolled out across major cities: “We have focused on the needs of the traveller, included the best of what they want and left out the rest,” said Muller. “It’s not about reinventing luxury, it’s about reinterpreting it.”

SLEEP TALKING
The Sleep Event offered delegates the chance to see Sir David Michels in conversation with Patrick Reardon of ReardonSmith Architects. Michels is Senior Independent Director at Strategic Hotels & Resorts, Jumeirah Hotels, and EasyJet, and is credited with the £4.7 billion sale of Hilton International to the Hilton Hotels Corporation.

Michels gave his take on the financial crisis claiming that he had never seen a time when things got so bad, so quickly. He identified opportunities for those with experience in refurbishment projects, particularly for those who can complete the job whilst the hotel continues to trade.
Michels also gave a pragmatic view on the relative lack of importance of hotel design claiming instead that location and service are the fundamental elements for attracting guests, a comment which inevitably attracted a few mumblings from architects and designers in the auditorium.

DESIGN DAY – THE NOW, THE NEW AND THE NEXT
Having established that good hotel design does matter, Day Two kicked off with an interactive session hosted by Chris Luebkeman, Director of Global Foresight & Innovation at Arup. Joining him on stage was colleague Neil Grange, Simon Ford of IHG, Clare West of Six Senses Spas, and Jan Peter Bergkvist of Scandic Hotels. The forum focused on The Now, The New and The Next for Sustainable Hotel Design, a topic that was top of the agenda last year’s conference.

The first question that had to be asked was whether green issues are slipping down the agenda as the economic downturn worsens? “Sustainability is a long-term investment”, explained Luebkeman, “and in periods of decline people only think in the short-term”. Alternatively, it was suggested from one panellist that money struggles would result in a renewed commitment to sustainability in order to make savings in the future.

Members of the panel were each asked to highlight sustainable practices they are actively involved in. Jan Peter Bergkvist, who has built the entire Scandic brand on sustainable principles, spoke of the eco-room, a 97% recyclable hotel room introduced in 1995: “We have since built ten hotels and 18,000 eco-rooms.”

IHG has made a significant development by introducing an online monitoring system to control energy usage for each individual hotel, and Six Senses Spas is to launch a new eco-brand in 2012, which aims to be carbon positive.

The panel accepted that the hotel industry in general is making a move towards a more sustainable future, but expressed their frustration in the challenges they face in achieving targets. All agreed that the biggest challenge is trying to obtain coherent and intelligent information to measure energy usage. There were however confident predictions that being sustainable will soon become standard, and that the introduction of a sustainability code for all newbuild hotels is imminent.

SLEEP TALKING
Hotel consultant Guy Dittrich returned to The Sleep Event to host the remainder of Design Day, which included an exclusive interview with Pierre-Yves Rochon. The winner of 2008’s Outstanding Contribution Award at The European Hotel Design Awards, Rochon spoke with passion of his work in some of the world’s most renowned hotels. He credits his inspiration to all that he sees in everyday life and imparted his ‘listen, think, dream, draw’ approach to an attentive audience. The French designer’s current project, the refurbishment of London’s landmark Savoy Hotel, is one which excites him greatly. Rochon revealed that the hotel will feature traditional English design elements combined with Thirties influences.

QUALITY VS QUANTITY?
The first Design Debate of the day was not to be missed as players from the industry’s leading brands, namely Accor, InterContinental Hotels Group, Hilton Hotels, and The Rezidor Group, discussed how hotel groups can deliver innovative design on a mass scale. Under Dittrich’s probing it was revealed that big brands can’t always be innovative and are far from leading the way in terms of cutting edge design. Simon Ford, Senior Vice President for Design & Engineering for IHG explained that as guestrooms evolve, innovation in design is now at the budget end of the market. He added that in a branded hotel chain, change has to be incremental due to the high volume of stock in the portfolio, and stressed the importance of getting the design right, if it is to be rolled out and stand the test of time.

As discussions moved on to the challenges that brand standards pose, design practices HOK, Rockwell Group Europe, Hirsch Bedner Associates, and Woods Bagot, expressed concerns about the difficulty in creating an authentic experience, and capturing the essence of a location when faced with a big book of brand standards.

Staying with brands, the afternoon session picked up on the previous day’s debate of new lifestyle brands coming to Europe, this time focusing on the architects and designers shaping them. One particular project, from Jeroen Vester of Concrete Architectural Associates stood out. The design of CitizenM came about from frustrations with the price and facilities of current hotels, and inspiration from new building techniques. The result is a 14m2 guestroom of ‘affordable luxury’.

CitizenM is already a resounding success at Amsterdam’s Schiphol Airport, and Concrete is currently working on the group’s second property in the city, with a third on the way in Glasgow. It is expected Europe will see a lot more of them.

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