R&R Preview: ESG strategies that enhance asset value

Between 9 and 11 October, more than 400 decision makers from across the hospitality industry will head to Lisbon for the Resort and Residential Hospitality Forum.

This year’s speakers include senior representatives from Hotel Investment Partners (HIP), Brookfield, Pestana Hotel Group and many more.

The following interview is part of a series aimed at bringing you a flavour of the conversations you can expect on stage, highlighting some of the big-picture trends and themes ahead of the event.

Register now to make sure you don’t miss out.

How easy is it to align ESG strategies with cost management? It's a tricky subject that gets to the heart of the debate about capital and climate change.

And while there is obviously a cost to any changes an owner might want to make regarding energy efficiency or social commitments, the benefits are there.

Ahead of appearing at the upcoming Resort and Residential Hospitality Forum (R&R) we caught up with Ramon Tomàs Ranz, portfolio principal and head of asset management at Pygmalion Capital to get his take on the state of the market.

Hospitality Investor: You're speaking on an ESG panel at this year's event. Is it possible for ESG strategies to enhance an asset's value in the long term while helping cost management?

Ramon Tomàs Ranz: It is indeed possible for ESG strategies to enhance an asset's value in the long term while helping cost management. Replacing hot and cold production equipment at the end of the lifecycle in hotels with the existing aerothermal heat pump technology is a clear example of this. Savings in terms of energy consumption can be above 50 per cent and returns will depend on the cost of gas and electricity in a certain geography but can be double digit. This should contribute to enhance an asset’s value.

Hospitality Investor: How can operators deliver the experiences and manage the costs without harming the guest experience?

Ramon Tomàs Ranz: Technology provides tools such as BMS to control and monitor the environment in which guests spend their time especially indoor and to a lesser extent outdoor. This can clearly contribute not only to limit harming the guest experience but to improve it whilst trying to be more efficient with the use of resources. Other examples in F&B include waste reduction (food specially) whilst offering the same experiences to guests. So, yes, operators can be more efficient without harming the guests.

Hospitality Investor: Are there any specific travel trends that you are keeping a close eye on?

Ramon Tomàs Ranz: We are a 100 per cent hotel investor. So far, we have not invested in other alternative accommodation asset classes, but we do keep a close eye on consumer preferences and new lodging models, which are sometimes making up most of the new supply in certain destinations. We are also constantly talking to operators and brands, which innovate through design, technology, and operating efficiency to satisfy changing guest needs and to be able to tell a story that can become a sustainable competitive advantage.

Hospitality Investor: What is Pygmalion’s strategy for the Spanish market?

Ramon Tomàs Ranz: We are now present in two countries in the south of Europe: Italy, and Spain. We want to expand operations in these two geographies to leverage our know-how and capabilities. So, yes Spain is a key market to us, but we are constantly looking at hotel investment opportunities across Western Europe.

Hospitality Investor: The tagline of this year’s event is “leisure to the core” and long-term investors seemingly now have an increased appetite for resorts. What makes a property or portfolio attractive to these types of owners?

Ramon Tomàs Ranz: In the last years, we have all observed how important leisure travel has become to most of us. To the existing market but also to the younger generations that now prioritize travel over other expenditure (apparel, mobility, access to home ownership). Also, for people who could afford a second residence and that now prefer to be able to spend their holidays in different places every now and then. Not to mention the increasing number of travellers from emerging economies which means an increase in the total number of global travellers. It is for these reasons and for the fact that resorts are an investment of a certain scale with a professional and potentially efficient operator, that resorts can be attractive to this kind of investors over time.

Ramon Tomàs Ranz, portfolio principal and head of asset management at Pygmalion Capital, will be speaking on a panel entitled: ESG Strategies for the Top and the Bottom Line at this year's R&R Forum.

Stay tuned for more preview interviews and if you still haven’t registered yet, you can do so here. You can also view the latest programme, here.