Latin
American hospitality executives discuss the opportunities and challenges they
are facing and how to get deals done.
MIAMI — When discussion during a panel at the Hotel Opportunities Latin
America (HOLA) conference turned to getting deals done, Thomas Dubaere wanted
to make his stance official — using key money should be a last resort. Dubaere, CEO of the Americas — premium,
midscale and economy brands for Accor, was quick to point out that the company
would still look at the option when it makes good business sense, but he thinks
it should be a last resort because the company needs to prove and show to its
investors that a hotel’s top line services can increase not only RevPAR but
also TrevPAR.
We have so many square meters in our hotels, we should use them... And when you talk about augmented hospitality, it’s not just about the room.
Thomas Dubaere
Dubaere participated in a “Views from the
Boardroom” panel at the 14th annual HOLA conference, which was held at the
Loews Coral Gables Hotel in Florida. He was joined on the panel by Jorge Apaez,
COO of Mexico, Latin America and the Caribbean for IHG
Hotels & Resorts, and Marco Roca, CEO of Reveille Hospitality. Jeff
Weinstein, editor-in-chief of Hotel Investment Today, moderated the panel.
Dubaere often uses a phrase that he calls
“augmented hospitality.”
“We have so many square meters in our
hotels, we should use them. Unfortunately, we have had, in the past, many
unused square meters," he said. “And when you talk about augmented hospitality, it’s not
just about the room.”
Dubaere gives an example using food and
beverage. “For years, we’ve been using the term food
and beverage, but it’s not just about food and beverage,” he said. “It’s about
entertainment. It’s about experience. It’s about using the square meters. It’s
making your bar, not just a bar. It’s making your restaurant a certain concept.
It’s opening your doors, not only for the sleeping guests but also for the
local community. So, this is where we can prove that we can increase the
TrevPAR when we used to have a focus on the RevPAR.”
Access to North American customers
Apaez said the brands can make a huge
difference in the region by adding value and giving formerly unaffiliated
hotels access to North American customers.
“The most important component is value,” he
said. “Adding value to a new project or an existing property makes a big
difference.”
Apaez said consumers’ appetites for
experiences can be a big incentive for prospective owners.
“Investors want strong support, great value
and access to North American consumers. That’s what most independent properties
are looking for, particularly in markets with international inbound travel,” he
said. “We’ve been approached by different organizations that tell us, ‘We have
a strong brand but we cannot access the U.S. market like you guys. Can you
help us?’”
Apaez said there will be plenty of new
opportunities in the coming years. “There is big potential and a strong focus
in a diverse portfolio of brands and an appetite from new investors or existing
hotels,” he said. “We’ll see more conversion opportunities in the next few
years and more on the luxury, lifestyle and experiential demand.”
Getting deals done
Roca said his company has about a half
dozen ground-up developments in its pipeline. When asked how Reveille
identifies those opportunities and gets deals done, he said the company is able
to partner with many different developers and then slide into the co-general
partner role for the ones that fit.
“Our big benefit is that we are able to see
multiple deals across so many different brands and companies that we
represent,” he said. “As developers, as we see interesting opportunities, we
can partner with those developers, add value, and insert ourselves in the
[general partner] portion of it.
Condo hotels are not a bad word. If condo hotels are done properly, it’s a great vehicle for financing.
Marco Roca
“We’ve had exposure from so many different
companies to the actual development piece of it. That’s largely been the way
that we’ve been able to identify these interesting opportunities for us. So, we
always entered a co-GP manner.”
Roca said that the company has returned to
an old model in markets like Costa Rica and the Dominican Republic (where
Reveille has had success in eco-tourism and travel experiential).
“Condo hotels are not a bad word. If condo
hotels are done properly, it’s a great vehicle for financing,” he said. “Many
brands are still struggling with understanding it. But, as long as you put the
right guardrails on the condo hotel, it’s a great financing [vehicle].”