How can luxury hotels boost city development?

The Adria Hotel Forum was held in Zagreb, one of the leading hotel and investment conferences in Europe, which from year to year monitors and questions relevant phenomena in the hotel industry, and these ...

The Adria Hotel Forum was held in Zagreb, one of the leading hotel and investment conferences in Europe, which from year to year monitors and questions relevant phenomena in the hotel industry, and this year addressed the issue of development in the central theme "DEVELOPMENT AND BEYOND". The conference featured very interesting panel discussions with leading and eminent tourism experts from all over Europe, which it would be a shame not to convey and present important conclusions and statements.

Thus, the second day of the international conference ADRIA HOTEL FORUM: Investments in the Hotel Industry began with a panel discussion "How can luxury hotels boost city development?" moderated by Ben Godon (Colliers International). Guest panelists: Ivan Artolli (Hotel de Paris Monte Carlo), Paul Pisani (Corinthia Hotels), Hylko Versteeg (InterContinental Hotels Group) and Jason Wischhoff (Dream Hotel Group) talked about all the aspects they consider when coming to invest in the city, whether rather be the pioneers in a new market or prefer to come later and whether it is possible to set up a luxury brand in a city that is not.

Hylko Versteeg (InterContinental Hotels Group) believes that before coming to a certain city, one should first analyze the demand specific to that city, and his company's strategy is to be present in all major and capital cities of Europe and beyond. In addition to observing the existing demand, they also create demand, as they succeeded in Porto: they first built a 5-star hotel, after which they attracted guests, which changed the offer in the city, which did not exist before. Paul Pisani (Corinthia Hotels) says that they first look at the competition in the target market, while Jason Wischhoff (Dream Hotel Group) also "records" the demand of the local market, but also the community to better ensure market presence.

On Question is it possible to set up a luxury brand in a city that is not, Ivan Artolli (Hotel de Paris Monte Carlo) answers with a counter-question: what is a luxury hotel in general, if a night is up to 100 euros? What is the definition of luxury? Luxury today is in generosity, if you are not generous, you cannot be luxurious, Artolli believes. But the question is does the city support a new luxury brand?

Hylko Versteeg reveals that he refused 50-60 collaborations in Croatia, because sometimes the requirements of the brand and investors do not match, as well as other factors. What, then, is required and expected of local partners? Jason Wischhoff says they are always looking for the “different” in a particular environment and that they expect and rely on supplier input. But how to help an inexperienced investor build in a new situation? Paul Pisani believes that it is an educational process that requires trust, and there is no mold - every relationship is different.


How does investor pressure and cost decrease when a hotel is built and fails to do business? Hylko Versteeg points out that these are long-term contracts (10-20 years) with the owners, which they help with the help of various tools, depending on the individual case. Also, the location should be in line with the new brand, this is as important as the choice of partner, Artolli believes. Often, the biggest criticisms are directed at luxury brands for neglecting the investing partner, and all guest panelists stated that they would not "franchise" the brand they represent, primarily because of the risk it brings.

Big brands often change management, so it is a great challenge to keep educated staff and prevent the outflow of quality people. The usual services that a luxury brand in the city must have is a wellness center, but you should also look at other forms of earnings (meeting room, for example) that are less and less traditional (restaurants and the like). Benefits for the community from luxury brands, in addition to employment, could also be a relationship with the community, children, the elderly - socially responsible topics; the luxury brand needs to connect with people from the community, Artolli believes.

Authenticity, the word most commonly used word of this conference, is also key in hiring people, who are educated after selection, which is also the role of luxury brands.


Next panel discussion "Are hotels on the Adriatic developing in line with the global market or are existing actors only using their current competitive position? ”  gathered panelists: Ivana Budin Arhanić (Valamar Riviera), Tarik Bilalbegović (Ascendant Project Finance), Federica Holzmann (Catalonia Hotels), Sebastian Lodder (T3 Hospitality Management), and moderated by Philip Camble (Whitebridge Hospitality). The question was asked whether the brand is necessary today, to which the panelists gave different answers.

Federico Holzmann believes that the brand is less and less important today, and the product is becoming more and more important, change is brought about by technology, and today in Barcelona the first three places are occupied by hotels that are independent. How can Croatia sustain this great growth and make it sustainable? Ivana Budin Arhanić stated the problem of connectivity, emphasizing that only 7% of all guests arrive in Croatia by plane and that there is an imbalance between high demand and supply (4 or 5 stars) that is missing in the market.

Tarik Bilalbegović believes that a big obstacle is the government that is not oriented towards business support, as is the case, for example, in Montenegro. Federico Holzmann also notes that a big problem in Croatia is the outflow of educated employees, along with seasonality. Ivana Budin Arhanić, on the other hand, states that today the challenge in Croatia is to find a qualified workforce because the capacities have been exhausted. Sebastian Lodder believes that the solution for seasonality is not golf courses, but other solutions should be sought, for example in the aging population of Europe, which enjoys traveling and has time throughout the year.

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