IHIF Preview: Doing deals in a difficult market

Between 15 and 17 May, more than 2,500 senior representatives from across the hospitality industry will head to Berlin for the International Hospitality Investment Forum (IHIF) 2023.

This year’s speakers include: the CEOs of IHG and Accor as well as senior representatives from Blackstone, Brookfield Asset Management, Goldman Sachs, and 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.

Berlin-headquartered HR Group has been one of the most active participants in the European hotel transaction market with a series of eye-catching deals, both as a buyer and a seller.

The firm’s CEO and owner Ruslan Husry will be appearing on a panel entitled 'Driving Alpha: Efficiency, Productivity, Profitability' (Wednesday 17 May, 10:35am), and we recently caught up with him to discuss the transaction market, buyer and seller disconnect and the company’s expanding partnership with Wyndham.

Hospitality Investor: How have market conditions developed over the past year?

Ruslan Husry: We have mastered the pandemic quite well, but there is still a difference in market conditions. Asian and Americans are hesitant in making travel decisions; MICE bookers are looking for smaller rather than bigger events. But a significant change happened in our industry. The expectations of the labour market conditions shifted drastically. This is something we have to deal with fast. The other significant change is that we must understand that technology and digitalization fuel our future. Our clear goal is to become one of the biggest tech-enabled multi-brand hotel operators. Also, how we travel and live is in a state of upheaval. We see new areas in hospitality arising where hotel services meet residential living concepts, Revo in Munich is such an example. These new concepts are here to stay.

Hospitality Investor: You’ve made a few recent acquisitions over the last year (Amedia and Vienna House). Were these difficult deals to source? Are you working on any others at the moment?

Ruslan Husry: Actually, all the deals, also the one with Success group, were a result out of my long-term relationships as well as my off-market experiences and contacts, which I have strongly built up over a long period of time. We recently expanded our business into Asia, to shift from a major European to a global player.

Hospitality Investor: What was the thinking behind expanding your partnership with Wyndham with Vienna House?

Ruslan Husry: Wyndham was looking for a lifestyle brand with which they want to grow in the European market. Vienna House was exactly the right brand for them. What is new for Wyndham is that they manage the brand with their brand values from Europe. This shows how seriously the investment is valued.

Hospitality Investor: Which European markets are the most interesting at the moment?

Ruslan Husry: We are still looking for investments and growing opportunities in the German speaking countries but also into Central Europe. I want to grow in this region, especially in countries where we are not yet represented enough. And besides the above mentioned business growth in Asia, we expect one or two portfolio deals to come in the foreseeable future.

Hospitality Investor: Is there still a big gap between buyer and seller valuations?

Ruslan Husry: Yes, the gap is still there; there is little movement in the valuation of the Opco side. Conversely, I see an increase in Propcos valuation back to pre-pandemic levels, but we are not there yet. 

If you still haven’t registered yet, you can do so here. You can also view the latest programme, here.