Greasing the wheels of the cycle 

Hilton Worldwide and Marriott International both found themselves sliding this week after Citi changed its view from buy to neutral.

The impending recession and possibility of new Covid variants drove the decision, rather than a loathing of the sector, where it remained overweight. 

Citi did like resorts group Playa Hotels & Resorts, which has seen a recent refinance and whose value tickled its fancy.

Which all serves to make this downgrade a story of our current times. The leisure aspect we have seen with the segment dominating investors’ and brand creators’ thoughts as the pandemic rumbled on and the need to drag your property and/or portfolio where the sun shone grew more pressing.

Citi’s cautious thoughts came as Mews announced its Series C round, raising $185m and valuing the company at around $865m. Or, as Skift put it, the highest hotel tech fundraise in recent years (and for more, go here)

Richard Valtr, Mews founder, said:  “The hotel industry has come roaring back this year across almost every region and segment. At the same time we’re seeing a very changed industry that’s embracing technology to modernise and streamline their operations.”

Valtr added in his blog that the latest round was “a demonstration that we’re ready to be a category leader, to forge a new path for hospitality.

“It will also allow us to invest more in key regions around the world. In areas like the Netherlands, for instance, Mews already has a 20% market share. There’s no reason Mews can’t achieve the same kind of market share (or higher) in regions like the US, UK and France. We already have the momentum, and now we have the financial support to do it.”

Products such as those created by Mews will be key to keeping the likes of Marriott and Hilton profitable when the looming recession dampens travel ability and generally makes the sector feel soggy and limp.

The ability to fully understand your business and swivel operations to the highest revenue-generating option at any given moment makes a hotel a more limber and attractive prospect than it was in the binary days of sell bed/don’t sell bed. And it’s more sophisticated than the early days of private equity showing an interest in the sector, which largely involved shouting ‘NO MORE FLOWERS ON RECEPTION’ when times were bad.

Hotel assets can now be shown at their full potential; as a fully-flexible asset which is no longer chained to the cycle. And for fans of economics, that doesn’t mean we’ve gone the full Gordon Brown and claimed an end to boom and bust, just a way to manoeuvre in changing environments. 

This is why, at a time when governments are working out which lights to turn off, the sector is still turning on investors. 




Image: Matthijs Welle, CEO and Richard Valtr, Founder of Mews

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