Hogan Lovells and CBRE were delighted to recently welcome over 450 clients and contacts to our annual hotel industry conference, held virtually for the first time.
In the wake of a tumultuous year for the hospitality industry, the 2021 conference looked into the key challenges facing the industry, how to tackle these and what the road to recovery will look like as restrictions are lifted and hotels can reopen.
Whilst the conference was virtual, our usual mix of topical briefings from CBRE and Hogan Lovells, lively discussions and an informative panel of industry leaders went ahead. We were delighted to include speakers from innovative and important industry players such as AJ Capital Partners, Brookfield, Castleforge, Hotstats, L&R Hotels and NewDog PR.
Jackie Newstead, Head of Hogan Lovells Real Estate Industry Sector, said of the conference, ‘The Hotel Conference was a fantastic opportunity to hear from our clients about the issues that matter to them most. Whilst 2020 was an incredibly difficult year for the whole hospitality industry, there was a real sense of excitement and enthusiasm from across the industry as we look to what the future holds on the road to recovery’.
A poll taken during the conference showed a number of interesting results:
- 90% of our audience of industry experts were confident that there would be some degree of recovery in the investment market in 2021, with over 80% saying they believed there would be some recovery for London REVPAR from the depths of its 2020 performance.
- Over 85% of attendees said the single most important factor aiding that recovery would be the lifting of COVID-19 restrictions and the speed of vaccine roll outs.
- Aside from issues pertaining to COVID-19, insolvencies look set to be the next most important issue for the industry as it looks to recover, with 60% of attendees voting for this factor. Interestingly, labour shortages and interruptions in supply chains were also mentioned as being crucial problems that the industry is likely to face in 2021.
For those looking to invest into and develop UK hotels in 2021, our Hogan Lovells lawyers had the following top tips on planning, banking and solvency issues:
- Although on the face of it none of the recent planning reforms are targeted at the hotel sector, there is real opportunity there to mix up and maximise the potential of supporting uses, such as F&B. In many cases this diversification of use is providing an invaluable lifeline. Caution is needed though – how a planning permission is structured will dictate the ease with which this new flexibility can be put to use.
- Now is a time of opportunity, planning wise. Even where the legal changes aren’t of immediate assistance, local planning authorities are sympathetic to the plight of the industry, and are generally keen to maintain activity in their areas. Now may be the perfect time to revisit restrictions on how hotels can operate, or look to restructure planning permissions, not only to assist with the immediate recovery period, but to give far greater operational flexibility for years to come.
- In spite of various Government Support measures, there is only so far liquidity issues can be left for another day. Lenders want a permanent solution in 2021 and definitely by 2022.
- Distressed borrowers must engage early and act fast to achieve a successful restructure for the long-term against a backdrop of increasing creditor and liquidity pressure.
- Lenders are being increasingly selective on where they spend their time, key determining factors being quality of sponsor, asset and location. Size matters!
For more information on the conference please contact Georgina Bale, or if you are interested in listening to the full recordings of the conference, you can access them on demand here.