Hospitality x Disruption: HXD212
HXD212 turns up the heat with real conversations that challenge comfort and spark action. Hosted by Thibault Catala, founder of Catala Consulting, the show brings together leaders, creators, and rebels shaping what comes next across hospitality, AI, technology, and life design. No scripts. No filters. No polished talking points. Just curious minds, honest dialogue, and ideas pushed one degree further. To the boiling point.Human-to-Human. At 212°F.
Hospitality x Disruption: HXD212
What Hotel Owners See That Operators Don't. Philipp Huterer | Ep. 008
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A hotel can be fully booked and still be a bad investment. Most operators don't see it. Most owners don't say it. Until now.
🎙 Episode 008 of HXD212: unfiltered conversations with leaders, rebels, and builders shaping what's next.
Philipp Huterer, Managing Director of MRP Hotels, did not build his career chasing occupancy numbers. He built it understanding what those numbers actually mean to the person who owns the building.
After training at Glion Institute of Higher Education and IE Business School Madrid, Philipp moved into hotel asset management - the discipline that sits between ownership and operations, translating what investors need into what operators deliver. Today, as Managing Director of MRP Hotels, he oversees a portfolio of over €1.5 billion in hotel assets across Europe, advising owners, investors, developers, and banks on what is really happening inside their hotels.
In this episode, Thibault Catala and Philipp Huterer explore:
◼️ Why a full and guest-loved hotel can still be a bad investment
◼️ What owners and operators see differently when they walk into the same property
◼️ Why GOPPAR matters more than occupancy or RevPAR when you own the asset
◼️ What active asset management actually looks like week to week
◼️ Why the best asset managers act more like sparring partners than police officers
◼️ How to spot a fantasy business plan before you sign it
◼️ Why operator EBITDA margins are under pressure
◼️ Which operators may struggle to survive the next wave of consolidation
◼️ The real trade-off between big brands and white-label operators
◼️ How distribution costs and hidden brand fees quietly erode profitability
◼️ Why CapEx planning is often broken in hotels
◼️ How to build a 5-to-10-year investment plan that protects long-term asset value
◼️ How leases, HMAs, and hybrid models are evolving
◼️ Whether more data transparency helps operators or puts them under pressure
◼️ What boutique and Alpine hotels risk if succession and climate resilience are ignored
◼️ What AI will actually change in hotel asset management, and what it won’t
🎧 Follow Philipp & MRP Hotels:
Philipp Huterer on LinkedIn: https://www.linkedin.com/in/philipphuterer/
MRP Hotels: https://mrp-hotels.com/
🔥 Follow Thibault & HXD212:
Follow Thibault Catala on LinkedIn. https://www.linkedin.com/in/thibaultcatala
Follow HXD212 on Instagram. https://instagram.com/hxd212
Follow HXD212 on TikTok. https://www.tiktok.com/@hxd212podcast
Catala Consulting. https://catalaconsulting.co.uk
Revenue Management Online Course. https://learn.thibaultcatala.com/revenuemanagement
#HotelInvestment #AssetManagement #HotelManagement #RevenueManagement #HospitalityLeadership #BoutiqueHotels #HXD212
Introduction
SpeakerOkay, so welcome back to HXD212, where we have unfiltered conversations with leaders, with builders and thinkers shaping what comes next in the hospitality and of course beyond. Today's episode is about the tension that exists in almost every hotel but is rarely discussed openly. The hotel team looks at occupancy, ADR, RevPAR, guest satisfaction, brand standard, you know, like all the neat and greedy of operation. But the owner sometimes looks at something totally different, like the cash flow, the risk, the debt, the capex, contract structure, asset value, and exit strategy. Quite a lot of uh fancy words that we're going to cover today as well. And sometimes both sides are looking at the same hotel but seeing two completely different realities. So today my guest is Philipp Huterer, managing director of MRP Hotels. And Philipp works at the intersection of hotel operation, real estate, investment and asset management, as well as transaction and restructuring and as well as revenue management. And at MRP Hotels, he focuses on the asset management and all the operational and financial restructuring of hotel assets. And together with his team, he oversees a hotel asset portfolio valued at around 1.5 billion, if I'm not mistaken. So what makes this conversation interesting is that Philip does not only look at hotels as places of hospitality, he looks at them as living assets where every operational decision eventually connects back to value, risk and return and long-term ownership strategy. So today I want to explore a simple but powerful question. What do hotel owners see that operators often don't? Okay. So Philip, thank you so much for joining me and welcome to HXD212.
Speaker 1Well, uh, hello to everyone. Hello Thibault. Thanks for having me on the on this podcast. It's actually my third podcast, and I'm really looking forward to it. And thanks for having me.
SpeakerThanks so much. And it's very warm today. So if you see us uh red or anything, it's because it's very warm today in Vienna. So I apologize. But my name is Thibaut Catala, I'm the founder of Catala Consulting, and this is HXD212.
Can a full hotel still be a bad investment?
SpeakerHXD212. So, my first question: can a hotel be full, loved by guests, and still be a bad investment?
Speaker 1Well, absolutely. Um, I believe I even have an uh current example we are working on. It's a property in Vienna. I unfortunately I can't name it. Um, but uh it was bought from uh um in terms of due diligence for uh actually a wrong reason, or the analysis was was done badly. Um I believe uh especially like when you look at hotel assets, you have to really look at from different angles. Um it's actually like a uh a mice hotel, like with a very deep and and strong mice share. And it was bought by the investor with the hope to extend this mice capacity, and and it's really loved by guests because due to its uh um generous rooms and also the facility, it's actually from the layout, it's a perfect mice hotel, um, literally. Um, it's even a branded one with one of the the big rents to name them all, Marriott Hilton Hyatt, etc. Um, but the problem was that from the location, um, the the business case was not really scalable because it was actually in the outskirts of Vienna, and so from an investment perspective, um actually the case was um to exchange the operator, bring in a new operator and a new brand, and then scale up the case and basically lift up the rent. But unfortunately, although left by guests, because if you look at the TripAdvisor um recordings and and remarks, it's like a triple-A-rated hotel. Um, but we could not or the the investor could not scale up the case simply due to its location. So, yeah, there you had the trap. Um, and we're speaking really about a long period of investment, so not the classical IRR case, flip it in two years. So the investment period was like over seven, eight years, but all um um although um uh even ADR-wise, we um it was not able to scale it up. Uh, we are still centering around the ADR level about 100 euros, but inflation really catches up. And this was the classical case, um, just from an from an outside perspective, um, and from from TripAdvisor Radix, a perfect hotel, also from the layout and modern build, but due to its location, um, absolutely uh best investment case.
SpeakerYeah, so I see this as well happening sometime where like in the news saying like um, oh, this hotel was great, it was full, revenue was great, and so on, but you still have to close. And uh you know, like um uh we feel that okay, there is a side of the hotel that we don't see, such as um investment, such as a debt, uh that sometime owner uh cannot repay, and then the bank step in and so on. So, yeah, that's all of this. But you see, like uh the front face of a hotel, even if it's successful, it doesn't mean the hotel is still successful. You know what I mean? Can you comment on that?
Speaker 1Yeah, absolutely. Uh, I actually have a recent example we were working, I can officially know it because it was in the it was in the newspaper anyhow. Um we were working uh together with Art Invest at the 25 Hours Hotel in Vienna, which was uh recently transacts um uh last autumn, and there it was also the um um the business case that or the classic example that um right from it it's a hotel that performs really well and it's really well um um um known in Vienna and also TripAdvisor ratings very strongly. Uh it was one of the first um lifestyle deaths in Vienna, but from an operational perspective, like if you for example, it's um it's an asset that's um um where, for example, hallways are very narrow, it was not built as a classic hotel. Yeah, so from an operational perspective, yeah, uh you need way more kitchen stuff because the kitchen is actually located, freezers are one level below the kitchen, classic example. So you need at least two more kitchen staff to be able to move the things up into the main kitchen, which makes operation way more costly. But if you just see it from the outside, you will think um great asset, SDR asset performs really well, but cost-wise, the operator has a let's say a bigger burden uh with this asset, and that directly reflects also the potential rent that the asset can deliver.
SpeakerI see. No, that's uh
Who is Philipp Huterer and what does MRP Hotels do?
Speakerfascinating. And um, so to come back to your to your profile, can you give us a bit of uh of introduction on who you are and what you guys are doing?
Speaker 1Yeah, absolutely. Uh we are an Austrian-based uh hotel consulting firm, or actually, we would say um uh we'd like to say uh hotel real estate consultancy firm with the specialization on hotel real estate. Yeah, and we are based in Vienna, uh Austria, and also in Berlin. Okay, around uh 15 staff, and we focus basically on the consultancy of the entire hotel uh real estate lifecycle. So, really from the first um analysis where I should basically purchase a hotel, um, then we focus also on asset management, or we love to call it actually performance management because we administer and manage a lot of HMAs, and then another pillar is uh classical revenue management, where actually third-party operators would come to us, um, smaller family office that own a couple of hotels. Um, and so we also do the direct revenue day-to-day revenue management for these for these clients, and then we are also um very strong in uh commercial consulting, um, where it goes um where we focus on um basically hotel lease contracts and also on uh exchanging operators and finding uh new operators uh operators and basically focus on operator selection, and so we feel very, very confident um with with hotels um really from the start uh to the to the exit.
SpeakerExcellent. So, yeah, in a way we are a bit competitor on the on the revenue management uh side. I would say so, yes. So, yeah, maybe a little bit about the end of this episode, not all good. I think like um there's still like uh revenue just to talk about revenue management. I I still believe revenue management is so um underused and so many hotels that don't do any revenue management. So I believe there's space even for new players, even more players than uh than there is today. Um, because yeah, that's something which uh which we yeah needs to be developed more and more.
Speaker 1Yeah, absolutely. I I always exchange um myself with my my colleagues that lead the revenue management team, and um even with small twists, just drawing up uh a classical rate sheet, you
Revenue management as a fast value lever
Speaker 1know, um doing proper business on the books management, having a pace report, so really like I mean you're more in-depth into revenue management than than even I'm but these are these small tweaks within um I would even say within then a week of working, you already see results because um compared to the costs, the top line is can be pushed very, very fast and and easily.
SpeakerYeah, and uh without change on CapEx, without change of uh big investment expenses, management fees, but it's uh that we saw some increase quite uh quite uh quite big.
Speaker 1Absolutely, and even you know, we focus um uh usually if you if you read in a newspaper or or read some articles, it it very often focus on city central hotels or or urban spaces, but we must not forget like in France, in Austria, and Germany, you have such a a wide variety of local hotel-run hotels with 50, 60, 70 rooms, and you would be surprised how much revenue they do, and they still work with um an Excel spreadsheet, you know.
SpeakerI have so many stories on this. Like uh when uh uh more recently I asked like um an independent hotel owner to show me the um the to give me access to the PMS, and he sent me uh uh a shared uh Google uh calendar. He was doing all the check-in, checkout on Google calendar nowadays. Can you imagine? Amazing, but it's still the case today. I I'm I'm still surprised and uh I'm amazed by this, but again, it's not a question of uh or are they stupid or not, it's a question that they don't know what they don't know, and they have been they've never been exposed to hotel tech or never been exposed to rough management, so they don't know that they could do things differently. You see what I mean?
Speaker 1Absolutely, and and very often we recently had a uh a customer in in Tirol area, um, very beautifully run, I would say, boutique apart hotel, um, but really on the luxury side, yeah, and uh really doing like um uh around half a million euros in Ibita. Okay, so we really speaking, and this with 20 rooms, so very, very strong. But the owner's main uh basically concern was he's faced on an everyday basis with so many different systems that they are almost at this point where they are overwhelmed and and where they're not even using their systems correctly due to the lack of time because you um I mean we touched on this uh basically uh before um you are faced to uh on a day-to-day with checking in guests, you are um must uh care about your accounting, you have a debate with your basically with your chef in the kitchen, and then you must besides do revenue management, and there where you have companies like like you, for example, um where even an outsource solution is then the better fit because um then you can really focus on on the matter.
SpeakerThat that's an interesting as well,
What owners see vs what operators see
Speakerperspective. But when um when an owner and an operator walk into the same hotel, so that's a very same hotel, what do you think they see differently?
Speaker 1Um well I would say uh quite a lot because even I would start with personality-wise, usually like the investor type and and also the operator type, um, are completely controversial personality also from the from the perspective because they're usually the the owner type or the investor not only owns hotel but has other maybe invested in ETF, maybe invested in other asset classes as well.
SpeakerAre you saying they're dressing differently and so on?
Speaker 1Um I have to be careful what I'm saying here, but I would even say um yes, it's a just a different type of personality. This is the bit of the beauty of also industry, it brings so many different types together, and I think it's still a people business. Okay, so you have to understand also your counterpart. So, yes, the perspective is quite uh quite different. I would even I would even dare to say that the owner um or the investor type doesn't really see the hotel as a whole, it really is like from a pure investment angle, and the operator really walks in and sees um how are the runways, um, what where might be operational challenges, and the investor already thinks about what can I what what yield or what return would I be able to um to basically to realize on it. So it's this investment angle and the operational angle um they see completely different.
SpeakerIt's true, but you see as well, it can be um,
Why hotels are not just spreadsheets
Speakerand that's an open question, huh? Do you see it as well maybe as a risk where investors manage hotels as kind of an investment on the stock market, while actually um hotels are people business, you know what I mean? Because sometimes you may have investors who are just looking at the figures, at the numbers, like they are looking at the screen on the on the on the stock market. Uh well, actually, hotels are run by people with guests and so on. So you see it's a people business, not single. So do you see that can be a bit of um balance here?
Speaker 1Absolutely. I would even I would even argue, and this is a very hot debate, and I think it has emerged over the over the last years, that investors, banks, stakeholders have to be way more educated about operations because I mean, yes, it's absolutely true. You always say, like uh in Austrian, you say Lage, Lage, Lage, or location, location, location. Completely true. Um, but um, there is a second pillar that emerges, and this is really, I mean, we have to do with an operating entity that you know uh works with uh serves the restaurant, checks in and checks out people, cleans the rooms, it's an operations-heavy, um, even in a limited service, you have a lot of service, yeah. Um, and we have to understand that a maximum rent potential is defined how efficient this operation is. And this is if this is the second side or this is the second page uh behind this profit and loss statement, what the investor is analyzing, and you have to understand what the operator is doing. You really have to be educated about operations, about revenue management. Just to give you an example, I mean you really have to understand um also what the guest segments are, where are the guests coming, how uh the mice capacity is utilized, how the packages are created. Even if you have a um uh revenue uh revenue share or a hybrid share lease, understand what your operator is doing with the the breakfast splitting. Yeah, so um if I in a nutshell basically um um investors have to get way more educated about um operational matters um than in the last 10 years. That's true.
SpeakerUh a few years ago I I had uh I had this discussion with uh with uh with some owners, and they were saying like, oh last last last month you did um 25% GOP. You were supposed to do the 30% GOP, so you can remove 5% of your payroll and you will go you will you will go up to uh to 30% GOP. And I was like, Yeah, actually no, it's a people business, and if you remove the people, you may not do the performance as you had. So you see, but for them it's just like um a mathematic thing. Well, in hotels it's not only mathematics, there's like people behind, there's a satisfaction, guest satisfaction, the employee satisfaction, even if I dare to say so. But you see what I mean? There's a lot of interconnection that I believe where education of ownership as well is important. Absolutely.
Speaker 1I mean, let me quickly explore this a bit more in depth. Um, we recently were working um on a transaction. Um it was actually together with also a broker partner, we worked with CBRE together, and we had one investor, and uh, you know, usually an in uh transaction goes over six, uh, eight, nine, nine months, very long period. And um, the funny thing is um the hotel then in May, June was doing basically was last year, uh, bad numbers, and the investor, really professional, professional, um um institutional investor, said, No, we cannot continue this transaction because now we had two or three bad months compared to the market. And we were then arguing, okay, fully understand, but we're speaking about a 25-year investments plus two times five years uh extension period. Yeah, and we now have like uh uh we are leveling off um or have a little dispute um during a period over two months, a group might have cancelled, you know. There are um there are so minute details that cause a bad month, um, and this is a bit the problem that you cannot assess um how successful a hotel is over a period of a couple of months. Um, it's determined over a couple of year basis, and also the operational team needs to be given some time that the changes are effective.
SpeakerYeah, and yeah, that's super interesting. And would you say that um for different um
Matching the right owner to the right hotel asset
Speakerassets and different properties, you will recommend different um owners as well? Because, for example, like you have um hedge fund which wants very quick money on a very short period of time, um, you have more long-term investors and you have more uh maybe like um uh independents. So you will say like you will guide different ownership to different structure?
Speaker 1Um I think in reality it's a bit more complex than this, but uh you know from a simplified perspective, um, I would argue currently if you speak about Central Europe, um, because also markets are different, I'd say, like, especially when you speak ultra luxury um about properties like a Park Hyatt, a Mandarin, a Rosewood, for example, brands like this, an Uetka collection, um, where usually, if it's not a distressed deal due to some reason, um like a high net worth individual with a long investment horizon um is more suitable to these ultra-luxury properties because from a um uh also cash flow and IRR perspective, it's very hard to make an IRR plus 15% with a luxury property very capex heavy over a three-year period because markets are Paris, for example, Vienna. If you look at ultra luxury, it's already a very saturated market. Um, whereas if you look at, for example, um boutique hotels um or office conversion in the right locations, there you can still do the classic flip deals where the PE money comes in, um where you have some distressed um or some really value-add components where I would say like um uh the PE guys would be happy to purchase, and then you have the classical um, I would say also merge and acquisitions of entire operator vehicles. I think this is also I would not say it's an asset class coming in, but it's another um investment perspective comes in that it's now very attractive, I would say, for large PE funds, um, because you get the volume simply. Yeah, if you purchase an operator, you scale it. Um I think this is this is a very, very interesting perspective currently because the operator market um is consolidating at the moment, and we have a very in-depth, I would say, knowledge because we do a lot of operator selections, so very close, close with a lot of operators, and I believe that some operators without even without naming naming any um will will fold in the next years, and there will be some consolidation opportunities. Okay.
SpeakerFirst,
Operator consolidation and margin pressure
Speakeryou have to um you have to clarify as well the kind of uh of the um language that you have in investment, like PE for audience. Sometimes you have to make it a bit more clear. Absolutely, yeah. So PE. Um sorry, yeah, private equity. Thank you. I absolutely sorry so yeah, but um no, I think it's very interesting. And and you see as well uh a trend of uh of uh white label operator coming in.
Speaker 1Um I would I would say not renew operators coming in, but operators consolidating, like bigger ones uh eating up, so to say, uh smaller ones. Um, because a lot of operators have grown with I would say even um lose of control, so to say. So scaling is important that you're not eaten up, but uh the processes that you need operationally, like uh proper revenue management, you know, proper human resource management have not grown with the pace how they have grown. And this causes now a lot of operational inefficiencies. And you think about that uh inflation has now boosted over the last couple of years almost 20%. Uh leases uh leases have risen, operational costs have soared. Um I mean it's a simple it's a simple Excel spreadsheet where you can calculate that operator margins, so um uh e-bita margins have have really vanished, and a lot of operators uh are fighting for for survival. It it it sounds very drastic, but it's a it's a drastic um world we currently live in.
SpeakerThat's interesting. And but I again do you see like sometimes when uh you have an owner in front of you and they are deciding between going to uh to a big brand or going to a uh a white level operator to manage the asset, um, where you will guide them, or do you see like the brand are still very strong on this, or do you think like the white level could be a good alternative?
Big brands vs white-label operators
Speaker 1Yeah, it's I think you it's uh Thibaut, it's a very good question because I think it's um especially this this uh I would say fifth re uh wheel on the on the car is uh with the with the franchise ours, the big brands is uh a very hot debate at the moment. Uh a lot of clients are faced of us are faced with this um with this question um because um it really depends and I believe it depends on the strength of the operator, and especially it depends on the location of the hotel. If I for I'm I'm personally convinced if I have a well located city hotel with a strong, might even be a very local operator that has a professional revenue management and uh it's a well known city. Um, I dare to say um. That um the fees the brand charges this eight-nine percent of total revenues is very costly and it will not deliver you this excess demand and this excess rate potential. Um, but whereas if you are uh, for example, located at a classical airport hub, for example, you know, where you have um where you have where you need the brand, or you're at like um, I would even say uh we have we are basically consulting one hotel close to Teganse location, close to Munich, um, where the American market is very strong, and a lot of um basically Hilton Marriott owners um or membership um loyalty customers would use their points, for example, in this hotel um close to close to Munich, there the brand is uh uh a very big big value and and and asset. So I think it really depends, and you have to look at by asset by asset by asset. It's very hard to generalize.
SpeakerI find it fine. But first of all, the the I have to say the brand can be very strong for uh distribution and for the loyalty scheme, something which uh we cannot compete uh yet um but uh I feel as well on the on the operation like revenue management, HR, and so on. I see some operators, like smaller operator, or like you know, like asset manager and so on, which are ex uh big brands, and they do this for a fraction of a cost of the big brand. So you can replicate those kind of of uh of um of corporate branded uh management at a fraction of a cost by going into a white label operator, for example. Um, so I think that's a trend which is coming. Um, the only part which I see where the brands are still very valuable and very strong, um, that's on brand recognition and uh and uh loyalty scheme behind and distribution.
Speaker 1Yeah, I I I fully I fully agree. Um, especially like um we have to be also a bit careful because also uh a lot of white operators use also the the revenue management services also of the the big brands, and then uh when you have one revenue manager revenue managing um multi-properties, you really have to make sure as an operator or also as uh or as an owner that um you also receive the best service and the right service, and that your it's always like in in kindergarten, you say the kid that screams the loudest um gets the most attention, and we see this phenomenon literally also in professional um services provided by brands.
SpeakerIt's very true. So if for anyone listening, if you have a brand, uh screams the loudest. So if you want to be taken care of by the brand, that's what you're saying. But actually, it's right, yeah, it's the same with any with anything, any services. I feel when I I'm not going to say this, if not my clients are going to shout me, but uh it's true, like uh sometimes when uh when people are not delivering enough, uh you have to to shout, you have to scream to be heard.
Speaker 1And uh it's it's also we are confronted with this phenomenon in in our performance management mandates where you have HMAs, so the entire um entire economic risk actually lies with the owner because it's his prop co, it's his opco, yeah, and the uh the brand is just managing the hotel. Um and um in in hotels that are basically struggling, it's basically the first asset management or performance management move to bring in the exec team from head office uh to bring in the regional team, regional GM, to get the focus back on the asset. It's usually the initiative that drives the most or has the most immediate effect because the attention center is back without even touching revenue management, without even firing any employees, is just bring the attention back to the asset. And this is one of our uh yeah, biggest, biggest challenges when we onboard a new new asset.
How to spot a fantasy hotel business plan
SpeakerYeah, actually it's a it's a good segue because when you review an hotel investment case and when you onboard a new hotel, what are the fastest signs that the business plan is a fantasy?
Speaker 1The business plan is a fantasy. It's also it's also a good question. Um, let me quickly quickly think about it. Um yeah, um I think I think I know the answer to this. Um it's we always the first thing we look at it, it's actually forecast accuracy from the past. Okay. Yeah, because that's um a budget is drawn up very fast, a five-year plan is uh drawn up very fast, but have the past goals been reached? And I think this is the best indicator to benchmark against if the if the plan makes sense, and also we look at market developments, um, about peer groups, if uh what has the market done and how might the market continue, and what is this hotel projecting? And it's really off. I mean, I'm not saying you can't outperform the market, but it's very hard to say you outperform the market by 20%.
SpeakerYeah, this is highly, highly unrealistic because I feel sometimes like um uh people who are valuing uh hotel and creating business plan and everything is great, and they're like projecting, like they're selling the moon to the to to ownership and to to everyone, and then they make the deal, and then they go, and then they give the business plan to Thibaut. And Thibaut said make it up, and they're like, What? What's going on? And the boss of the operators are in this position when they're like, Who sold this? Yeah, who did this?
Speaker 1Fair point, or or another comment I might I might I might add is um that um really go a little deeper. If you go department by department and your room's departmental profit goes from 65 to 70 percent, really ask how are you gonna um uh achieve this goal? Um, why is the FMB departmental profit rising? Um, are you um do you have a new concept? Um, do you have a new cost-cutting initiative? You know, are you doing things differently? So really go this level deeper and really challenge um the actions behind the numbers.
SpeakerUh, we'll even go a step further. I agree with you. I will say like involve people
Why rolling forecasts matter more than static budgets
Speakeron the hotel side and on the revenue management side as well for the market and uh and uh analysis and the projection. Um, that it doesn't should be it shouldn't be a one-man show doing the evaluation uh on this kind of thing on the business plan, it should be like a common effort. And if it's built by other people who understand the business inside, um I think that could be uh a bit more accurate. Yeah, I agree 100 100%, yeah. That's uh that's a that's an issue which I see for the last uh yeah 15 years or more where we have a crazy business plan and then an operation we struggle because sometimes it is a bit too fantasy to be this way.
Speaker 1Absolutely, and and I mean it's very nicely and the that we always do the budget once a year, you know, and and the owner is then happy. But I think the budget is is is is one metric, but it really comes then down into professional ethical performance management. What is the 12 months rolling forecast doing, you know? What is the um uh is that uh I'd say the the goals you set throughout the year doing, you know, because um uh the budget we always say is it's for uh it's a one-time it's a one-time snapshot. And usually in March, April it has moved to the drawer, and then you really have to challenge the forecast, push the push the forecast, because the budget is done once once per year. I'm not saying it's uh it's unimportant, absolutely not. It sets a certain goal, but um very often in March, April, the market has developed either positively or negatively, and then you have to adjust and re-forecast and work throughout the year to either achieve the budget, or maybe there is still some um some a lot of gas left in in the tank, and you can uh way outperform the budget. And we've very often then worked um also with uh a bit of a trick with with uh actually two budgets, uh one owner budget, official one, also for banks and etc. And a second budget for employee bonuses so that GM and local staff is not discouraged. And there's a lot of tweaks and and I think also a strategy behind um when to push push uh what what lever.
SpeakerOkay. I don't know about the stock budget. That's yeah, that's a good trick, but it shouldn't be that far though. No, absolutely not. Be careful. Okay, no, but that's uh that's important, and and another dimension here which is important is uh capex
CapEx. Creating value or just a nicer hotel?
Speakerbecause I believe CapEx is also where dreams meet spreadsheet, where you have to as well make sense of renovation and so on. So, how do you know if an investment creates value or just create uh a nicer hotel? And I will as well um put some things in perspective because I've heard this um this angle as well on um defensive capex and offensive capex. Can you explain a bit more on this?
Speaker 1Yeah, absolutely. I mean, I mean this is now the the owner side putting basic investing into the the hotel asset and it would not go without it because uh um a hotel needs constant impulses, the market is constantly changing. And um we have actually done a lot of projects where we used to to joke, especially in in Western Austria, um, where especially in the ski resource and wellness resource, we used to joke and say, like um the owners have the the statement or the the notion that at least once per year that the crane um and the construction firm must be at the site and build something new. And this has been really actually a problem also for for a lot of hotels, ineffective, not cash flow generating, um, badly ROI percentages, um, where you build, for example, another uh another auto pool, another outdoor sauna, for example, not really generating any value. And this is also completely applicable to the urban hotels, to the professional Holiday In, to the professional Hilton Quo Blue, um, where you um need to make smart investments that pushes your yeah I ROI and also most importantly supports operations. So we always say like an investment must do two things: it must either bring new business in um or support operation into cost measures. So it's either so it's bottom line uh relevant, then it's a good investment. And and um yes.
The CapEx with the strongest ROI
SpeakerAnd by your experience, what is um the most successful um CapEx that you will always recommend where you have the strongest return?
Speaker 1Um the strongest return currently, if you uh think about classical business hotels, urban hotels, you think about markets like Vienna, is uh classical room renovation. Okay, um, because um we have actually done a regression analysis for a couple of years ago. Um, what drives the most ROI and it's directly linked to directly linked to um basically return levels. It's obviously location of the hotel, it's a no-brainer, and then it was room size and quality of the room. Those threes have the the the biggest effect on your ADR levels, and this needs to be constantly, constantly yeah, monitored and and needs to be at least um on the top top Capex list um for for uh investors. Um I'm not saying energy measures are not uh not important, etc. Absolutely it is, yeah, but there we have seen the most or biggest direct effect.
SpeakerYeah, I was expecting you to say today a pool will be super important, that would be your stronger around and AC. AC and pool, uh, because uh yeah, it's currently like what 36, like 34 or something like that.
Speaker 1Yeah, we're getting 40 40 degrees. Uh 40 degrees, my god.
SpeakerSo a pull here could be a very good investment.
Speaker 1AC, for example, would be uh uh apply for me to room renovation, quality of the room, yeah, a guest experience. Although even in a city hotel, you don't spend so much time in the room, yeah, but the guest still appreciates it.
SpeakerYeah, that's true. And as well, um I I see uh uh a trend and an issue nowadays with hotels. I see it happening in um in a mountain as well in Switzerland or in uh in Germany or in Austria, where owners they don't invest in uh in uh in renovation or capex for for a while, and then they said okay, now I need to invest, uh, need to renovate
FF&E reserves and long-term renovation planning
Speakerto make much better. But do you see there is a tipping point where is uh it's too late, maybe? You see what I mean? And so what do you recommend? Doing like uh a capex or doing like kind of uh renovation step by step a bit uh every time, or wait until it's uh drawn out and then you can uh do a big one.
Speaker 1Um yeah, I think you you're touching a very nice topic. I would like to bring in the the also the topic of FFNE reserve, so furnishes, fixtures, and equipment, where you where the operator usually is is uh basically two options, um, like an obligation to spend it every year, like two, three percent off of total revenues, um, or save it up and invest it at a later stage. But you um this is for renewal of a sofa, for example, of curtains, whatever, so that that the the I would be saying a bit of the soft components in the room um stay nicely. Um, and this is a bit the dilemma because if you have like, for example, very often big institutional owners, very often the communication with the operator, um, because the asset manager is asset managing 30 properties, you know, they you so they usually have a contact twice per year, if yeah, and so I recommend to have, and this is a bit the dilemma because you have a fixed lease contract in in the DAC region, uh meaning you basically don't have so much involvement with your asset, uh, basically receiving like you rented out an apartment, the classical rent, but to keep your product constantly up to date, but also supporting the operator of what she or he needs. And we always recommend to have like a five and ten year capex plan, but including the FFNE reserve, not spending it stupidly, and very often after three five years, sit together and make a plan for the next five years. What amount of Capex can be expended um invested or expected by the investor, and how are we gonna use the FFNE reserve so that no funds are are invested inefficiently? Um, but I would to answer your question, um, I would strongly recommend to constantly keep your product um up to date because we are living in such a fast-moving world where your product also gets assessed on a day-to-day basis, and once you have these bad reviews, it's hard to record to recover.
SpeakerYeah, that's true. And do you think like some owners are postponing
Why owners delay investment and the risks it creates
Speakeras well the necessary investment because um financing is order?
Speaker 1Uh 100% uh 100% sure. Uh already the exit comes closed. Okay, and then last years were very hard for the for the real estate industry. Uh we hardly have seen any any transaction, it's slowly slowly picking up. Um, but if you're an owner and you know you're gonna sell it in two or three years, why would you invest in CapEx? And this is a bit a dilemma. A lot of operators are somehow trapped, and then the transaction gets postponed and postponed, and suddenly out of two years, it has been five, six, seven years, and then you have the backlog.
SpeakerYeah, yeah. Yeah, yeah, that's uh that can be you understand as well because you see, like I'm not going to invest in much. But the issue is that you say, like, I'm going to sell it now in a few years, so I don't I'm not going to invest, but then the sell never comes. Absolutely. So then you're selling, yeah.
Speaker 1And you know, we are we are taking the the operator on such a short rope and are really hard to the operator. The operator must do this, the operator must do this, you know, the reporting, etc. And I think also in a rental agreement, um, or hybrid lease agreement to name it, there should also be an obligation from the investor to invest. Yeah. Because as soon as we're speaking about CapEx investment, it's already voluntary, you know, and then it becomes very vague. And I think it should be like a uh a way more fair, fair uh because it's a relationship, it has to work from from both sides.
SpeakerYeah, it's true. And and the same, like um we we talk about this, like this kind of relationship on on both sides, but you think as well the hotel management agreement and the leases are still
Are hotel leases and HMAs still fit for today?
Speakerdesigned for the market we are in today?
Speaker 1Um no, they have the no a classical no. Um if I mean leases and and and agreements have changed, have changed slightly, you know, especially reporting obligations um have grown. Uh if you look at leases 10 years ago, yeah, the reporting obligation was like even if it had a paragraph, it was very short of a few lines, and this has now grown because we need more transparency, the banks need more transparency, the stakeholder need more transparency, we need to know what's going on basically. Yeah, um, but I think there is so much room for improvement still that I'd say we are still lagging behind, and also there is no real standard for leases, you know. If I uh look at the last 10 commercial diligence we have done over the last two years, every contract is I'd say completely different. Okay. And um, I somehow feel because um so much investment is going into holding transactions, there should be somehow, I don't want to say it's regulation, but like a classical international template for leases that would make it way more uh transparent and way more easy for banks, stakeholders, and would somehow boost also the investment cycle.
SpeakerSuper interesting, very similar to uh U Zal E for absolutely accounting.
Speaker 1There you have it, yeah, and somehow there you don't, which does not really make sense, yeah.
SpeakerFor anyone listening, if you have a you have a new business idea today or a good idea. For any lawyers listening, yeah. For any lawyers listening, there you go. But um, and and same with um with the fees, do you believe like the um the operator are rewarding enough
Hidden fees, brand charges, and transparency
Speakeron the on the profit and the performance?
Speaker 1Um yeah, fees is another difficult topic, no matter if it's franchise or operator, etc. Um, with fees, there is a bit, um, if I may touch on the franchise side uh again. Um, very, very often, even in the franchise agreements, it's not clearly laid out what fees are charged. I mean, the base fees obviously, yes, but then over the years, you know, um brands lay out uh completely different uh um or introduce new fees somehow, and it's get very often it gets very complicated, not really transparent, and it owners have a very hard time, or we uh also as asset managers a very hard time um sorting out if the field calculation is done correctly, and and I think there needs to be uh a lot of catch-up um to be done, also from the brand side, to have um to have uh uh a clear picture on the on this on this fee matter, especially the hidden fees, you know. The the uh I mean there you are really in depth with your revenue management team, and also uh we are. I mean, everyone focused on this big fees, base fee, incentive t fee, but all about these cluster charges then and etc. And one year it's booked under sales and marketing, then it's a bit of an A and G, then suddenly it's below GOP. And and I think this is also not really responsible from uh brand side.
SpeakerBut yeah, do you think they do it on purpose? Do you think they do it on purpose to have a black box on this?
Speaker 1Um, I think it it I don't want to accuse anyone, but at least from my experience, yeah, um, I'd say uh we could have uh easier times and an easier picture. Um and and yeah, absolutely.
SpeakerI'm sure uh on this podcast we may have someone else in uh on the brand side on another episode that could defend himself or herself. But I I hear you like uh every year the fees are it's the same fees or sally higher or sorry lower, but change in different categories, it seems like that's a bit on purpose to make it complex.
Speaker 1Very often it's not even the fee height or the amount, very often it's what is the actual service of the brand behind this fee, and this I would like to understand. You know, what is actually the service I'm receiving?
SpeakerThat's interesting. And on the on the main um the main uh fee, like uh link to the performance, do you think it's better to link it to the GOP or the cash flow directly or the IBITA? What where what is the best um performance here?
Speaker 1Yeah, I'd say so. I mean, for uh for any incentive fee, um, as long as it involves also the cost management side, I think it's you can go direct to EBITDA or GOP. I would stick to the GOP level because very often, depending on the structure the owner has, um, you have below GOP items where you are not operationally uh responsible for. Yeah, um, so I would still uh stick to GOP, but would also make sure that the GOP is calculated correctly, that USALI is correctly applied. Yeah, um, but uh, if it's a performance bonus, it must involve the cost measurement because this is the topic we're speaking about, and this is moving the industry right now.
SpeakerAnd I feel as well we should we need to have a way to share the risk between
How risk should be shared between owners and operators
Speakerthe owner and operator. Um, because yeah, I think like um so I will reframe the question. How should risk be shared between operator and owner?
Speaker 1Um, very good question. Um, I think it's a bit of a if a tricky scenario at the moment because we live in this fixed lease or uh in this lease culture with a high fixed lease component. Okay, so this does not really enable uh somehow risk sharing because I'm leasing out my property. Um, so it's a very uh very uh hard general market condition. Um I think there the awareness of the market would have would have to change. And I believe that as especially e-bita margin and also lease levels, you know, the the return levels, it doesn't matter if if investor or or um operator side is I don't want to say it's diminishing, but it's it's getting tough off there. Capex requirements, um, loan arrangement costs, financing condition, everything gets a bit tougher. So I I still think that the hybrid component will or must gain in in size, and there this is basically also the answer to the to the to the question. Um and I believe that uh lease level can climb if um you have for example a hybrid lease with also a component of a somehow profit share yeah yeah so but then also the investor must gain more operational insight because you're transcending from fixed lease to you're not h right now but you're somehow in the middle but then operator needs to deliver investor needs to gain more insight and then you can can somehow uh start to to share a profit but I would not recommend any of my clients to sign up profit share lease without having any insights because this is chill uh it can only be a catastrophe makes sense yeah definitely and I I made some research as well on a on on MRP and as well on on some of your past interviews and you argued on a on um on active asset management which is becoming very critical
What active asset management really means
Speaker 1that's a success factor for for hotel and what does active asset management actually mean on a week week on week yeah I mean there again it depends a bit if you go on a you are you in a fixed lease scenario or you are in an HMA scenario um I mean it's relevant for both both points yeah but especially in this HMA world it's really um although some points already also apply to the fixed lease contract is that you actively involve yourself with the asset okay you actively manage it so you have a strong relationship to your operator you question the operator you challenge the budget you also bring in new ideas that the operator might use you basically uh confront the opex team every second week with new ideas you uh make sub-business plans how to push the the FMB performance yeah um should you uh renovate the rooms are is capex spent uh correctly so you this is why we call it active asset management really performance management because you really try to squeeze out um the last IBITA margin of the asset with but under basically the umbrella or with um uh respecting the operator and also basically being a sparring partner um with the with the the operational team because they are actually responsible for delivering the the service and um this makes a difference from a yeah successful to unsuccessful hotel and this is what we call actually performance management yeah I've seen different angles on the on the asset management I've seen asset manager who are stepping in as kind of the police of uh of ownership and so on who are trying to squeeze
Asset manager as police officer or sparring partner?
Speaker 1as you mentioned uh the hotel team and I've seen another angle where asset managers step in as a sparring partner as a as part of the team and trying to bound some ideas and to to to do this both angles have different uh approach and different results we'll so you you are will be more on the second one right yeah absolutely I mean let me give you an example is uh we were we were um a long time doing the asset management also of the the Anders Vienna Belvedere um uh that has now been sold to to um uh Dekka and is now managed by MAMHP but there we had some great initiatives also um about um because it's a mice hotel yeah how to basically push um or make the sales team more effective and it was a higher managed property and we had a very great relationship with the higher team they were doing an amazing job but we brought in still some ideas how other properties um are basically doing uh their their uh sales activities so having basically at the same to split the sales team to have one contracting team and one planning team and those teams switch every six months yeah and they had prior to that basically one team that were doing everything. This was a classic performance management idea although a uh a brand managed property but we knew the Vienna market needs a bit of a different structure and without the input from MRP here um I still believe the um uh the performance would not have been there um if we had not restructured this team together with the with the uh a local local team so in the spirit
The future of hotel asset management and AI
Speaker 1of HXT212 I wanted to ask you this question on what do you see is next for hotel asset management and hotel investment over the next five ten twenty years or more yeah um I think uh I won't I will not surprise a lot of listeners with this but it's uh the implementation of of AI or integrating um AI tools into your uh daily work workspace especially that uh uh the asset manager the senior asset manager gets way more time to spend um actually time on site in the property I think this is a very very important part and the analytics behind are just yeah on on steroids so to say um I think this will be uh a drastic shift um that you actually get more time to spend as an asset manager with the OPEX team and to um because with the the beauty of a hotel property is that you actually can step in it you know you need to observe things you need to feel things and I think you have then way more time to actually spend time in the property itself and not behind the desk. And the behind the desk work will be um supported uh by strong analytics tool etc so you see in the next few years the next um the future um um AI hotel asset manager and hotel being asset managed by an AI only um I might think so I'm thinking about small fixed income portfolios where you really think about um call it easy properties yeah like for example an EBIS um next to the motorway etc or airport hotel etc where a big part of the analytics or of the the reporting etc or where the the recommendation suggestions comes from an i tool and then it's uh fine-tuned by the asset manager absolutely believe so and I believe that uh asset management will become also affordable for family owned business for smaller hotel change for small investment companies and not just for the big institutional owners for the big family offices so it will bring also the price point down because I won't then have a consultant spending three four or five days per asset per month because um it will be maybe a flat fee solution that becomes simply more accessible I I I I agree like I see the AI element on the on on asset management um as an extension of the team not as a replacement um and as well he can um he can help you brainstorm ideas and can help you gather uh information uh look at the insight and analytics I think that can help a lot I I I'm I don't know I'm just thinking uh out loud can you imagine like um you're you're you're connecting to your to your board review board monthly review and the hotel team connect and then they connect in front of an avatar of an AI asset manager and they discuss with the AI and so on yeah then they report to the fund which then you have human looking at the data can you imagine this world um I I think it will be the new normal so to say yeah absolutely and I think it will be scary how much credibility we also give then that the AI solution yeah it's always like I even have this in uh I had a discussion actually last last week with with one of our clients where the client say yeah well it's correct because I analyzed it with AI so as soon as it's done with AI it's automatically correct so I would doubt this um because but it will get acceptance um it will get acceptance uh stronger and stronger and um but I still believe the human element especially in this if I look at a a complex luxury property for example yeah um I still you know you have the revenue management team you have the sales team you have the FMB team you have the kitchen team you have the rooms division manager you know it's a it's a it's a it's a network from from C-level staff so to say um now there's a new solution to change the menu to uh do a new layout in the restaurant to change the FMB concept what whatsoever yes it's maybe AI backed it's researched it's a nicely graphically displayed but still you need a meeting and you need to convince now the exec team as an asset manager you need to have the discussion and also you have to onboard them to convince them that they are fully behind this idea and I don't really see an Avatar you know shaking your hand or tapping you on the shoulder or saying great meeting now we're gonna we're gonna go for it great idea let's implement it I think this emotional element this can only come from a human and there will simply more time for this I agree I was going to say not yet yeah not shaking hands up and so on but I agree yeah it's still a a
Overhyped hotel concepts
Speaker 1very big um uh human industry uh human to human industry and I think we we never need to forget this kind of thing where um the human element is still super duper important because it's emotion it's influence it's communication and that's something which yet AI cannot replace yeah absolutely so that's something which I believe will continue here yeah absolutely okay and in terms of uh hotel concept do you think like um um there are some concepts which are overhyped at the moment yeah um I I believe so um what what always strikes me a bit is uh this uh serviced apartment boom okay I recently read an article I think until 2032 or 2030 uh the German market uh will have another 40 to 50 thousand service apartments okay um now I had a recently uh also a good colleague of mine Sven Kustemann from from Numa um we are we recently had an event together um um corrected me and said like no it's not called service apartment it's called now limited service hotel you know because uh they also move away from uh fully equipping their um um every room with a kitchenet yeah and but what strikes me is markets like let's call it C markets or B markets in France Austria Germany where in the fifth row behind the railway station you have the next serviced apartment or limited service paying an AAA location rent because the business they are private equity backed and want to scale and want a big exit and these kind of lease levels really strike me because um I can guarantee you these leases are not sustainable because the location the brand might be great yeah but the location does not support this this strong demand and um so um I think technology concepts are great limited service hotels are great it's a it's a great add-on to the market but not in every location. Okay interesting and which hotel concept are you in your opinion underrated at the moment um underrated um underrated i am i'm not sure if if a segment is really underrated right now um I would argue there's a lot of demand currently in if you look at Austria for example or
Underrated hotel investment opportunities
Speaker 1or europe wide at still mountainous um alpine alpine locations where um local families that run 30 40 50 room properties um have a generation gap problem big one yeah and where you could basically really make an investment case out of it we actually supported a couple of years ago the entire gasteinatal close to close to salzburg um for a tourism master plan where properties were identified where you could new build or basically um we spoke with um or the the local uh tourism region identified and spoke with with local stakeholders and identified room for for for improvement where you could basically move real estate together so to create like from two family run properties a property like for um hundred rooms and where we had like um an uh created an own agency where um basically uh stakeholders could meet like investors could meet brands could meet local banks and actually realize projects so I think this local alpine region um where you really have this boutiqueish um experience with a local host yeah but maybe supported with technology yeah um I think this is a still uh a big big um um uh gap that needs to be filled agree and that's that's a big one and uh and as well you you touched on on on something you you talk about the generational gap where you have a lot of hotels which are um mom and pop in a in a mountain or or somewhere else even pretty much everywhere um and then the the generation like the family like the new generation doesn't want to take over from the parents or the grandparents and they are not they they don't have anyone to take over. Exactly and that's a big ones and we spoke about CapEx earlier um wrong capex investments were made they kind of um they kind of um have overseen the uh the boost in technology or these technology innovations yeah a lot of is still manually and um a couple of bank loans running um the local bank is really pressuring so it's a bit of a a trap where it's hard to get out and I think this is a lot of uh would be a lot of beautiful investment cases we've actually um also um um consulted a couple of of these customers where the local family basically sold recovered from the debt but is still running now the the um uh the property so it this can also be a win-win situation but I think also from a brand perspective if you still look at this alpine region western Austria for example there is massive potential for brands like uh for for brands like Hilton Marriott Hire to name them all aqua
Alpine hotels, climate change, and summer demand
Speaker 1um to also brand this um these uh spots I just have a small caveat to add to it which is like the um the um climate change because for example like if you go to the mountain uh and the snow the snow is great and there's a lot of snow until when yeah or same with the with the summer are getting warmer and warmer um so you see it as an opportunity or as a risk and again we I don't know maybe that tomorrow we're going to find a cure to global warming I hope so and it would be fine but you see what I mean yeah as well but but uh I want to contradict you a bit here politely um that um yes um um uh the the the snowing zone gets higher and higher and higher absolutely but we see a rise especially during summer yeah for this alpha because um in Austria we had a world it's called summer sommerfrische um so basically like a summer refresh um it was uh it was a thing back in the 60s 70s 80s and uh then globalization came everyone wanted to go to Thailand to to uh foreign foreign places but it's a bit of a return to the local and we see especially like a lot of mountainous regions have realized the potential also during summer and if you look at at um um locations like Söld in Austria or Bad Gastein um and you look at the overnight during summer peak it's almost close to winter it's true and so they have um recognized mountain bike trails all the activities what you could do hiking it's it's amazing it's it's I think it's also a trend this nature loving this being outdoors with your family you know we have so much behind screens so yes with skiing it's getting skiing will turn I think to a complete luxury sport yeah um but uh I think the importance of the the mountains etc will still have its validity also during summer or off seasons yeah I agree I agree that's uh that's that's a good point and again it's um you bring us as well to to the next point because it's um currently uh in Vienna with a heat wave and you do you see like with all those kind of heat wave becoming
Climate resilience and ESG in hotel investment
Speaker 1more and more frequent and intense across uh across Europe how should hotel owners think about uh climate resilience as an asset management topic like for example uh we we briefly touch about um uh ESG um how important ESG is in this angle of of uh global warming and heat wave and so on I mean uh I think I dare to say that we have a it doesn't matter if it's investors operators um stakeholders we have a big responsibility towards our our generation but also more importantly about our kids next generation and I mean it's it's uh obviously returns etc is very very important but I have very often to um and I see it on a daily basis about business cases um super heavy IR driven just flip it um don't really care about any environmental measures and I think we need to have a bit of a rethinking shift um otherwise we're really getting into a dilemma as an entire society and I think we have this obligation and um fortunately um I've recently spoken with with uh someone from uh UBM or other other um in uh regional family office we consult in in um in Munich family office Knoa Bremse um they have uh really understood yeah that we need to do something and yes return for the investors is important but we also have an obligation I think this this balance is is really key to be able to travel somewhere where it doesn't get too hot and we have uh at last IHF in Berlin I spoke also with uh with a big institution investor they said they are not gonna invest in the south of Spain anymore because it's a long-term investor because it's getting too hot and I mean this is crazy you know if you think about it yeah yeah but at the same time you also have investors who only invest in uh ESG friendly properties and that's becoming like a a critical factor to see if if they're going to invest put money if banks are going to lend you money and so on.
SpeakerSo the ESG is is becoming very critical and I was giving a class um uh last week at Ecole Teliard de Genève and we touched on the on all those kind of uh certification or ESG initiatives and to bring to your point as well there's still an ROI on ESG initiatives yeah because people can pay more I think the the data was showing like a plus a 15 or 18% premium on a rate the moment you invest in a ESG. Guests are actually uh it's becoming a decisive factor when they choose a hotel to stay at uh so there is some ROI on it as well.
Speaker 1Yeah don't want to don't want to interrupt you on your own podcast but um I think this is this is a very crucial factor is the the guest demand and the guest choice and um I'm really encouraging any brand to label it like truly and thoroughly and and generally like to what is the actual CO2 footprint that overnight is generating you know so that the guest has a also like we spoke about operators before but also um the brands are important here that um they have the transparency so that the the guest can make an educated choice and um so absolutely important topic um and um especially I think also EU-wide regulation yeah yeah this is the foundation it's so complicated even if you speak with even if you speak with industry players you know um and and people in the industry it's really hard to see through to understand um also from a bank side there needs to be a stronger push and to encourage more recently we had a panel discussion and there were the classical Austrian banks um all present and we asked them what would be the the uh basically the interest premium but in a in a positive way so what would be my interest rate if I had two properties next to each other same building structure same operator same brand and one is super ESG friendly with a perfect operator and one is basically old and no one could tell me for this loan you would pay I don't know 50 basic point less or what's what's actually the um the goodie okay and this has to become way more transparent and way more encouraging otherwise we will see see way too little investment into ESG and economically friendly uh buildings.
SpeakerI agree I agree ah it's good so to have more yeah to show some ROI to have some case studies on this yeah I agree so banks as well yeah who are sometimes the main decision uh maker needs to understand as well ESG is is not only a cost it's
Skills needed for the next generation of consultants
Speakeralso an investment with strong ROI yeah absolutely interesting and my last question before we we jump into the the lighting round um and uh it's more like um because you know we um we went to school together absolutely so as well I know that we have a lot of uh of new graduates coming into the into the into the hotel world and so on and um for someone joining in a hospitality consulting team to today like like like you um what skills or ways of thinking matter the most any advice as well you would give to new graduates any advice I think um since we hired recently also two new two new um uh colleagues and I think especially in this heavy technology world we live in with uh all these new EI tools and uh ai agents coming every day almost I think this really critical thinking and being able to explain things in a very simple and short manner.
Speaker 1So really passing on information you so you get so much information you know from chatGPT, cloud, uh statistic databases but really being able to explain to a colleague to explain to um any peer or to your boss in a very few lines very clearly what you have researched and what's the outcome of it. And I think this is Ability to communicate in a very simple and smooth way, I think, is the so somehow the new goal, so to say. Um, because um you need to being able to untangle and extract information, pass it on quickly and clearly.
SpeakerInteresting. I will add another one. I will say, like, uh be very curious, uh, embrace as well, like being with uh with experts like you and the team to embrace this kind of knowledge, to have this kind of uh of um of education, like on the spot. But be curious is very important to stay open on new trend, new innovation, what's going on, and so on. Ask questions, and something like when you graduate, sometimes they're a bit scared of, or sometimes not at all, but that's too extreme, to bring new ideas, to say, like, okay, I see that you have done this. Why are you doing this? Maybe we should do differently.
Speaker 1Yeah, the questioning part I'm I for sure, for sure agree. I mean, it's a sure uh a summary of or a uh collection of of different skills, but uh really questioning things, um 100% agree is is is a very valuable skill, skill to have, yeah. And I think still social and people skills, you know, it's a different way how you communicate, you know. I are you are empathic, etc. You know, because I have the feeling that throughout these um vast um investments in technology and this uh rapid pace where we are developing that um this human connection element, um I think there's also be a huge boom in the meeting industry, people meeting together, passing on information, and I think being able um to humanly communicate in an empathic way, because with every person, you know, I mean you have your own company, you know it, you know, you need to speak and communicate differently. You need to communicate differently with an investor, private equity driven, then you have an operator, then you have like a colleague, and so I think this communication and how you communicate in an empathic way is uh because you also want your message to be heard and you know somehow adopted, yeah. And I think um this is very important.
SpeakerIt's funny because we always go back to the same discussion, even on this podcast. We talk about tech, innovation, so on, but you always come back to human skills, yeah, true innovation, communicate, uh uh influence, communication, uh relationship,
Lightning round
Speakerand that's all about human. Like that's beautiful. I like it. Cool. Um, so let's go a quick lightning round. I give you I'll give you like a very quick question and you you you give a quick answer. Okay, absolutely. Most overrated hotel KPI.
Speaker 1Um in in this context of the modern industry, for sure. Um occupancy because you can push it um basically with hundreds of initiatives. Okay, and the most underrated hotel KPI, um for sure uh GOP per available room due to the cost importance.
SpeakerOkay. And uh, what are the best signs of a strong operator?
Speaker 1Um, full transparency and willingness to adapt changes and being really eager. Biggest red flag in a hotel due diligence, um negative uh cash flow uh after rent.
SpeakerOkay, least franchise HMA or owner operator?
Speaker 1Uh for me HMA, uh perfect setup uh if you are hotel educated.
SpeakerOne hotel concept you would avoid. I see you touched on this already.
Speaker 1Um yeah, service apartment in the fifth row behind a train station in Bremen.
SpeakerOkay, and if you had one million to deploy into hotels tomorrow, what would you buy?
Speaker 1I would I would uh create an own um limited service uh uh apartment brand in Vienna um or internationally with uh luxury apartments uh technology based.
SpeakerAnd what is one trend in hotel investment that most people still underestimate?
Speaker 1Yeah, we spoke about this uh environmental measures, ESG, um, otherwise uh we are thinking a big big dilemma long on the long term.
SpeakerAnd one trend in hotel investment that is overhyped?
Speaker 1Um overhyped is is for sure um FMB lifestyle concept, uh sharing concepts with very overpriced um without any differentiating factor, I'd say.
SpeakerAnd what will asset management look like in 2030?
Speaker 1Um very human focused and AI being done almost exclusively, um AI almost exclusively focusing on the analytical part.
SpeakerVery
One message for every hotel owner and operator
Speakernice. And my very last question: if you could put one message on a billboard for every hotel owner, operator, GM, and revenue manager to see, what would it say?
Speaker 1Um be very curious and and involve yourself uh with your own hotel, no matter if it's HMA or particularly if also if it's List.
SpeakerOkay, excellent. But for everyone listening, um, thank you so much for still being here. I think like uh to today was a very um interesting conversation around this kind of offside on uh on what hotel owners see that operators don't. And you can see as well a lot of uh synergies between the two and a lot of different trends and so on. Yeah, so very um, very happy with the with the conversation today. I have learned as well a
Final thoughts. What owners see that operators don’t
Speakerlot. Um, if there was any um um jargon or any question that you have on on any uh anything that we talk about, uh let me know as well. I'm happy to answer any of your questions. Um and the closing uh idea, um, what hotel owners see that operators don't.
Speaker 1Yes, um, also very good question. Um, I think especially um really this uh financial return profile investors really required to make their investors also happy and to reinvest, so we can also scale other other further opportunities to be able to list the operators again, because very often operators um are so focused on the operational part, and I think the understanding of pure free cash flow uh needs to be adopted uh way way better, I'd say. Excellent.
SpeakerBut for everyone listening, where can
Where to find Philipp Huterer and MRP Hotels
Speakerwhere can we find you, uh Philip? Where is any resources, any website? What do you think?
Speaker 1Absolutely. Um you find us on our homepage. If you just type in Google MRP Hotels, you will find us uh directly. And also you can find me, uh you can write me a direct email at philipp.hottera at mrp-hotels.com, and I'm sure you link me link me down. I will. And um if you have any hotel-related questions, feel feel free to reach out. And it was a real pleasure having done my first podcast with you.
SpeakerWell done. You did you did very well. Um, but yeah, thanks so much, Philipp. Thank you. Um thank you for everyone listening, and uh, I'll see you next time.
