Key takeaways from the Annual Hospitality Conference in Manchester and the 2024 Expo Real Conference in Munich

Delegates at AHC, which focused on the UK market, projected optimism for the hotel sector, while the sentiment at Expo was more cautious, reflecting Europe’s broader economic concerns. We have summarised below some of the comments and sentiments we noted from listening to speakers and from our conversations with delegates, grouping them into the following four key themes.

Navigating Uncertainty in Hospitality and Real Estate

AHC highlighted the ongoing political uncertainty in the UK,. Industry leaders expressed concern over the lack of clear support for hospitality. Financial Times Editorial Director Robert Shrimsley pointed out unresolved questions about government direction. Although Labour’s growing interest in hospitality, noted by IHG’s Joanna Kurowska, is encouraging, Louisa Green of RBH Hospitality Management emphasised that progress is still needed. A recent Autumn budget announcement of “two permanently lower” tax rates for retail, hospitality, and leisure properties from 2026 to 2027 has since provided welcome news for hoteliers and F&B operators.

In contrast, Expo attendees were cautiously optimistic about Europe’s real estate sector. Messe München CEO Stefan Rummel reported strong attendance and highlighted the “Sustainable Construction Hub,” which demonstrated a commitment to sustainability and digitalisation. Miki Yokoyama of Aurum Impact Invest acknowledged Germany’s economic volatility, citing concerns about profitability but reinforcing the sector's determination to build a sustainable future. The “Transform & Beyond” area equipped stakeholders with practical tools to adapt to changing demands and industry leaders like Nassauische Heimstätte’s Sebastian Jung emphasised the need for innovation. Meanwhile, Fabian Hellbusch from Union Investment Real Estate observed signs of stabilisation in core markets, suggesting that property values are levelling, potentially enabling new investments and transformative projects.

Real Estate & Hotel Finance: Current Trends and Alternative Financing

At AHC, rising hotel construction costs were another major concern. According to Zain Kajani of JMK Group UK, costs have tripled over the past decade, complicating development efforts. However, alternative financing options, providing up to 80% loan-to-cost financing, have offered crucial support for projects. This expanded pool of lenders allows developers to secure more flexible funding, especially in secondary markets where traditional bank loans are less available. Local authority involvement has also been essential in urban hotel developments. Kajani cited the Radisson Blu hotel in Sheffield, which opened in July 2024 with a 10-20% council investment, as an example of how public-private partnerships can help address high costs and long project timelines in a competitive market.

A key Expo takeaway was that refinancing challenges remain a top concern for lenders. Due to uncertainties around asset values, lenders have focused on refinancing existing loans rather than new acquisitions. This cautious approach prioritises stability and risk management. While recent interest rate cuts have boosted sentiment slightly, overall market dynamics remain fragile, slowing recovery. Acquisition financing may rise in early 2025, but opportunities are still limited due to ongoing market challenges.

Adoption of AI in the Hospitality Sector

Artificial intelligence (“AI”) is transforming hospitality by increasing productivity and profitability. At AHC, technology entrepreneur John Straw highlighted AI’s potential to improve efficiency. While industries like financial services and entertainment have seen AI-driven job cuts, hospitality is poised to benefit without facing the same threats. AI is already streamlining both back-office and front-office functions, such as automated financial reconciliation and communication between departments, enabling businesses to operate more efficiently. Companies like Fattal Hotel Group and RBH Hospitality Management use AI to recover lost revenue, reduce queues, and optimise operations, freeing staff to focus on higher-value tasks.

Speakers emphasised the irreplaceable human element in hospitality. Louisa Green from RBH Hospitality Management noted that while AI can handle mundane tasks, human input is essential for improving guest experience. AI-powered Revenue Management Systems assist with dynamic pricing and decision-making but require human oversight. Shaun Sequeira of HiJiffy recommended that hotels carefully consider automation levels and customer service when adopting AI. Additionally, AI’s ability to personalise guest experiences is helping hotels like those managed by Agilysys’s Paul Finch to increase revenue beyond standard metrics such as RevPAR, making AI a valuable tool for long-term growth.

Hospitality – A Career and Community Pillar

The hospitality industry is increasingly recognised as a long-term career choice. At AHC, industry leaders discussed the need to promote hospitality as a rewarding profession with clear career progression. Whitbread PLC’s Managing Director Simon Ewins emphasised that many hotel executives started in entry-level roles, showing how the industry offers growth from "bar to boardroom." Stephen Cassidy of Hilton noted the sector’s shift from casual to permanent employment, which has helped improve retention. Kate Nicholls OBE and CEO of UKHospitality, argued that the industry needs to better communicate its career opportunities to attract talent.

Hotels are also becoming crucial community hubs. Cherise Cochrane of Colliers noted that new hotel developments support local economies and increase area appeal. Accor’s Philip Lassman pointed out that hotels, whether budget-friendly or luxury, often serve as community landmarks. This role goes beyond business success, as hotels contribute to creating vibrant, thriving destinations. With nearly 99,000 rooms under construction in the UK and positive economic signs, hospitality is a driver for growth as both a career path and a driver of local development.