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CMS Hospitality Conference, London (10.23)


Philip was invited to attend this year’s annual CMS Hospitality Conference, which was a well-attended seated affair, with some very interesting panels sessions. Here below his take-away nuggets:


  • The economist highlighted that the primary drivers of inflation were international events and it is these that have led to rises in interest rates, but no mention of Brexit.
  • Inflation may have reached an inflection point and interest rates may have peaked (MPC did not raise rates at their last meeting), but GDP growth remains low. Next move on interest rates will be downwards but not for some time.
  • According to Bank of England estimates, inflation will not fall back to 2% until Q2 2025. This delay is due to the higher proportion of fixed rate mortgages compared to history. There was a high level of renewals in mid-2023, but the biggest hit could be towards end of 2024 when a higher proportion of renewals could be at rate premiums of over +2.5 %.
  • Consumers have spent their C19 savings, thus GDP growth likely to be under pressure looking forward, but no recession expected.
  • Recent tourism statistics indicate that there has been some recovery to pre-C19 levels for international arrivals and are expected to continue to grow through 2023 (thought: this will be critical if the 16 new luxury hotels recently opened or about to open in London are to survive).
  • Interest rates of over 5% are expected until Q3 2024 and will drop to only 4% by end 2026. The drop back to low interest rates will be slow.
  • There will be no room for major tax cuts for at least the next five years, even with a general election expected within the next 12 months or so.
  • ESG important for Hilton.
  • ESG reporting by hotels will become a legal requirement from 1 Jan 2025, so hoteliers should use 2024 to train staff accordingly.
  • Green Loans v Sustainability Linked Loans (SLLs) – SLLs are more formalised with published guidelines. Lloyds Banking Group can offer 20bips discounts on Green Loans and can consider SLLs (discounts to be determined). SLLs require third-party verification usually by an auditor or environmental consultant, and high levels of reporting add to cost of project.
  • When valuing property in terms of ESG, in the office sector properties with high ESG credentials may result in 0.5% lower yield and benefit from higher rental levels. When valuing hotels, there is no adjustment to yield (as yet), the ESG credentials of a hotel are considered sufficiently reflected in the operating efficiencies.
  • If a property cannot hit EPC targets in future, it will be impossible for such property to get financing. Owners need to plan to mitigate such risk factors.
  • ESG lenders have varying requirements for now, need to harmonise going forward. SLLs could become the standard.
  • Looking forward, banks are unlikely to enforce covenants but refinance pressures could bring opportunities to the market.
  • Hotel websites need to become more personal (such as Netflix), whereby pages are personalised to your viewing habits. New AI makes this possible, so website should no longer be simply an online brochure. Guest journey personalisation is the future according to Gandalf the Chief Evangelist.
  • If you are using AI, be very careful what you put into it. It could be reused elsewhere without your knowledge or approval.
  • Gandalf also called the coming of 'OTA-zero'. In future, all bookings will come through Look out for: “The OTA is dead. Long live the brand.”


Many thanks and many congratulations to our wonderful hosts, Louise (loved your wrap up) and Tom, and to the catering team for the moreish lunch delights.

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