HICAP: Asia in the spotlight

13-15 March 2008

Intercontinental, Hong Kong

As Asia’s longest running hotel investment event, HICAP has become the most important gathering of hotel investors, financiers and leading industry professionals in the region.

The 19th annual HICAP, held at the InterContinental Hotel Hong Kong, drew a crowd of around 800 leaders from Asia Pacific, eager to ascertain what the future holds for hospitality.

The event kicked off to a somewhat distressing start as news spread of the previous day’s dive in the Hong Kong Hang Seng index, forcing some speakers to rapidly re-think their presentations.

Opening comments from HICAP’s founder Robert Stiles observed the global slowdown and recession in the west, and suggested that it will have ‘a big impact on the growth of Asia’s hospitality market’.

An initial outlook for the region was provided by Robert Broadfoot, Managing Director of Political & Economic Risk, and veteran HICAP speaker. Broadfoot’s country-by-country overview took into account the reduced financial flexibility and deteriorating asset quality that Asia may be affected by, predicting Japan, Singapore, and China as the markets likely to emerge the strongest. Indonesia, Philippines, and Vietnam are expected to be hit to some degree, with Thailand and Malaysia feeling the full force.

The plenary sessions continued with a financial focus and the general consensus that Asia would continue to grow. “Growth will slow,” said one source. “But on the whole it will continue to grow.” Data from STR Global highlighted the fact that Asia has seen double digit RevPAR growth year-on-year up until August 2008, with Bali performing particularly well.

The hotel leaders forum, hosted by Deloitte’s Alex Kyriakidis, also demonstrated a construction slowdown rather than a standstill. Andrew Cosslett, Chief Executive of InterContinental Hotels Group, laid claim to the biggest pipeline on the panel, with 1,800 hotels of which 130 are in Asia Pacific. Cosslett, along with Frits van Paasschen, President & CEO of Starwood Hotels & Resorts, admitted that although they are committed to delivery of their respective projects, the current economic climate would likely delay them.

Marriott International’s Ed Fuller was also optimistic that the group’s pipeline projects would reach completion. It currently has 100 hotels in China with an additional 50 expected in the next three years. Amongst the planned projects for Asia Pacific are properties from Marriott’s new boutique Edition brand, the first of IHG’s Hotel Indigos, and a Jumeirah-branded property scheduled to open in Shanghai in early 2009, as announced by Executive Chairman Gerald Lawless.

As HICAP’s morning sessions concluded, a welcome break was provided by the sponsor’s exhibition. Over lunch, three visionary principals who have been designing destinations since 1945, were presented with HICAP’s prestigious Innovation Award by conference host James Burba of BHN. Gerald Allison, Gregory Tong, and Donald Goo, the founders of internationally acclaimed hospitality design firm WATG were honoured for their innovative ways to a rapturous applause. Tong and Goo, now retired though still active in the industry, dedicated the award to their co-founders Pete Wimberly and George Whisenand, as well as WATG’s current employees.

The afternoon was divided into breakout sessions of which highlights included a report of China’s post-Olympics market, Australasia’s hold, sell, develop, and buy debate, and an examination of emerging opportunities in Japan. Design-led discussions surrounded Asia’s boutique market, and how to create a resort with the ‘wow factor’.

Throughout the day, HICAP offered numerous opportunities to network, a key ingredient to these events, as well as evening gala receptions hosted by InterContinental Hotels Group, and Marriott International.

On the second day of the conference thoughts turned once again to
money matters and investment opportunities. John Smith, Managing Director for HTL Capital Advisors gave a reality check reporting a 76% decline in the total volume of global transactions, and a 65% drop in the Asia Pacific region. Despite these figures, panel members maintained that the region offered the greatest growth potential.

No conference would be complete without tackling the sustainability issue. With China fast becoming the world’s largest contributor of carbon emissions, how is this part of the world tackling climate change?

Peter de Jong, President & CEO of Pacific Asia Travel Association (PATA), went some way to explain. He spoke of the inaugural meeting of the PATA CEO Challenge in April 2008, in which hotel executives debated the issue of climate change in the region. De Jong’s research showed that despite fears that Asia lags behind, its people are ready to make changes. Concerns were raised over whether green issues were at the top of the agenda, particularly when money is down.

Michael Issenberg of Accor Asia Pacific said: “Whether it’s good times or bad, we need to think about sustainability.” The subsequent workshop followed up on this debate demonstrating some of the best practices being put into play by the region’s hotel groups. Judging by the passionate talk and in spite of the economic issues, the sustainability issue looks set to dominate the agenda for years to come.

Date and location are yet to be released for HICAP 2009 but organisers promise it will be a special occasion in celebration of the event’s 20th anniversary. Rumour has it that features will include a reunion of some of the original round-table panels.
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