‘The big disruptor is how instagrammable a hotel is,’ said Ali Imraan, director of debt & special situations, LaSalle Investment Management. ‘Brands and chains that are able to provide that special moment to customers will be the winners.’

Customers now value the experience more than the established brand or the size of the room. ‘We lend a lot to lifestyle hotels, which offer a complete package that includes the urban congregation experience, atmosphere, retail and food & beverage,’ said Imraan. ‘The F&B element is becoming an ever-bigger part of the equity return of the business. This is probably the biggest change that I see happening in terms of product offering.’

New demand and new clients are pushing the creation of new products, said Dirk Bakker, head of EMEA hotels, Colliers International: ‘There is so much going on, with new brands coming into the market all the time and it is all about experience. F&B is becoming a major part of the business but it has a dampening effect on returns.’

Experiential product and lifestyle hotels
It is a very interesting time for the sector, as the change in occupier demand puts pressure on the big brands to prove what their value-add is, said Mark Rajbenbach, partner at law firm Taylor Wessing: ‘The bigger brands are responding, but there is a prevalence of newer brands able to give that experiential product.’

Customers expect different things from different locations, said Duncan MacPherson, head of capital markets Europe, Starwood Capital Advisors: ‘There is a definite trend in lifestyle hotels, with many new brands being created. In cities the communal areas are more important, there has to be a sociable feel to the amenities, even if it means the rooms are smaller.’

In Edinburgh Starwood added 40% more rooms to a hotel while increasing the communal areas, but in resort locations things are different, he said: ‘Rooms must be larger because guests want comfort. Opposing trends can exist simultaneously.’

In-house expertise is vital
It is part of the beauty of the hospitality industry, and the reason why a specialist hotel team is essential. ‘The good thing is that there are so many levers, so many interesting things a value-add investor can do, from revenue management to cost management to completely transforming an asset,’ said MacPherson. ‘The key thing is having the in-house expertise.’

Tourism to Europe is increasing, powered by the 20,000 people who retire every day in Europe and have time on their hands, but above all by visitors from Asia and China in particular. Catering to their needs is therefore crucial, experts agreed.

‘The nature of travel is changing in China and shopping is a big driver,’ said Bakker. ‘In the UK, the Netherlands and elsewhere hotels are being built around outlet centres just for Chinese tourists.’