It is so nice to have you, gentlemen. You're welcome again in Turkey and our tourism fair. And we are here to talk about the future of hospitality, but in reality we're talking about several different futures at the same time. And on one side we have Europe facing regulatory pressure and also sustainability requirements and also the rising cost and the labor shortage. On the other hand, we have Turkey and that means that different markets across the Middle East and Africa that we are really seeing new investments also, new destinations, and significant opportunities for growth.
And right in the middle of all of this we have a changing traveler also. They're no longer simply asking where am I going, I think. They're asking why am I going? This question is so important. And what kind of experiences do I want? That's the second question. And also, what do I expect in return for what I'm paying? And this is the biggest question. So, over the next minutes, I'd like us to explore one big question: what will shape the hotel of the future? Most capital, technology, people, or the changing guests, gentlemen? Again, welcome.
First, I would like to start with Alexandros because he has a flight, so Alexandros, I would like to start from you. From the Association of Hotels, Restaurants, Cafes in Europe, HOTREC's umbrella perspective, what are the primary regulatory, environmental and macroeconomic challenges currently shaping the future of European hospitality? What do you think about this?
Well, first of all, thank you very much for the invitation. It's a pleasure to share the... I won't say how we named the panel because they've all been to Greece and some are Greek. Nobody's perfect. So, you said a lot in your introduction. It's very clear that we have changing trends. And trends are here to change, but what is very different today is the speed of the changes. The speed of the changes that we see today have nothing to do with what we have seen in the past. And this creates a difficulty for everyone. For the hotelier, for the user of the hotel, because as the trends change, we're not sure if offer and demand are on the same page.
And also, you mentioned regulation. Regulation needs time in order to align with how the market is evolving. And we do have a lot of regulation in Europe. And Europe obviously tries to tackle most of these issues, but we must not forget one thing. These issues all end up with our client. And the consumer will be the one who will make the choices. Like you said, he will probably not even ask anymore where should I go or why should I go. He will have a personal assistant that will record the everyday life and will tell him at the end of the day, you know, you were discussing with Mr. Manikis how nice his holidays were in the French Alps. So, I booked for you this nice little chalet that I found at a good price and these dates that are free in your calendar and your wife's calendar and your children's calendars. I have checked that they have flights and they can all come over. This is where we're going.
So, today we all look at the situation as it is today, but it evolves very fast. The issues that we face today will not be the ones that we face tomorrow. Of course, there are some standard things that again have to do with our own responsibility as entrepreneurs. And in my opinion, two things that are much bigger than us, such as sustainability. We cannot have the feeling that we can operate in a region without being sustainable. This is something that in the future will be very strict from the consumer's point of view. So, there are many changes happening. The technological shift is very, very difficult to follow for the classical hotelier, the classical restaurateur.
Bear in mind that in Brussels, we represent about 2 million SMEs. 98% of our companies are SMEs. All the restaurants, the hotels, the cafes, the bars, they are the local communities where families run the business. So, it's not always easy for these people to be like in a big corporation where you would have an IT department that will offer the latest AI solutions, etc. You're on your own. And we need to make sure, and this is the main message I believe, because whenever I see the word future in a title panel, I say, 'Hmm.' Let's not try and make predictions about the future. In 2019, I said to my board of hotels in Greece, 'Don't worry, next year the planes will fly in the sky, tourists will come.' And then we had COVID. So, I refrain from doing prognosis now.
But one thing in the future that will be very important, and we know this today, we need to be what I said in the opening speech. We need to be the ambassadors of the region. We need to have this merge with the region where we operate, with the people, with the products, with other industries, with technology, with agriculture, with everything. We are here to act as multipliers. I was listening to the numbers for Turkey. 65 million arrivals creating 65 billion income. We are the multipliers, but if you want to have, and I finish with this, a good place in the future, we need to be integrated in the local society, and we need to act as multipliers, and enhance our national identity. That goes through music, through products, through manufacturers, through everything.
In the opening remarks, you told us that we are trying to find the solution and no fear about what will come. We have no fear. What do you think about it? Why do you say you take that kind of sentences in your remarks? Do we have something that we have to feel fear, or are we not looking all around the world in the perspectives, not just creating solutions?
Yes, well, I will tell you it's very easy and the people from the hotel business will understand very easily with examples. If you look at the past decades, we went through decades with very little changes. I mean, 80s, 90s, what was differentiating a hotel? Flat screen TVs, queen size beds, power shower. We had some features, but at the time the flat screen TV was very expensive as a product, so not available in the overall market and hoteliers used to put it because they had the pay TV. So they could take the money back. Today, a flat TV is nothing that you can put in a hotel and say, 'Oh guys, I have a flat TV.' So the evolution we used to know is now a disruption, a constant disruption. What you believe happens today, what you believe will happen tomorrow, suddenly might not happen. So you need to adapt very fast to the new changes.
But having said that, because this is going for all humanity and this is exponentially grown by the arrival of AI. AI will multiply the speeds, so it will be even more difficult to follow the speeds. But having said that, we need to have in mind a very simple number. When international arrivals started to be registered worldwide, the numbers we get in the 1960s are about 150 million international arrivals. Today, we're looking at what, 1.5 billion international arrivals. It's 50, 60 years later and we see the trends and we see some markets today that are dormant for Europe that do not have the amount of travelers that they used to have.
If you take the Chinese market, which we always talk a lot about because it's a game changer, the studies show that today the Chinese are still market-wise in a product-oriented consumer model. Like Europe was a few years ago, but it shifts and goes, like you said very rightfully, from product to experience. So, when the Chinese or the Indians will start to travel as well, then we will see other numbers. So, we are in the right business. We need to make sure that we use the right ingredients in our business mix towards the local communities and I'm sure we have a bright future. It won't be easy, but it won't be easy for anyone. The same goes for industry, the same goes for... We're looking at worldwide changes that we have not seen in the past. But we're in the right business. I insist on that.
Thank you for this insightful perspective. And Dimitris, maybe you would like to add something to what Alexandros talked about, but a special question for you. Wyndham continues to expand rapidly across secondary and tertiary cities in Turkey and also Europe, Middle East, and Africa. So, what key consumer shifts are driving this expansion and how is the brand also positioning itself? What do you think about it for the future demands?
No, thank you. Great to be here. The good news when you follow Alexandros, what you do is say, I just agree with everything he says and you move on. So, he's a great speaker. And obviously he said a lot of great things. For me, I think Alexandros is spot on. He represents an amazing group of SMEs and smaller businesses and entrepreneurs. I think the biggest problem we all, and the industry needs to wake up, is we're losing the narrative. The narrative is not with us anymore. The narrative is with the consumer and the local communities.
I think the biggest challenge we're going to have is not adapting AI. Actually, to be fair, I'm an old guy, so I thought AI was all-inclusive and then I realized it's not all-inclusive. It's actually something else. So, I'm really glad that Rufat had actually told me earlier what AI actually means. So, I think we need to take the narrative in our hands. Local communities are resisting tourism. I think technology is going to happen. All the great things are going to happen that Alexandros spoke about. The question is what happens with the local communities. When I live in a Greek island and I don't have water and I see a new hotel opening with 20 private pools and a huge Olympic pool, I'm actually wondering is that good for me and my community? Is that good for me and what my kids are going to inherit in the future? So, we need to get the narrative back.
Sustainability, unfortunately, is not in the center stage as it used to be. Now, everybody talks about AI. I'm a conference junkie. I go to conferences. I'm a panelist. People don't talk about sustainability anymore and that's bad. That's really, really bad. People talk about AI all the time, but we have to remember what brought us here is the resources. It is the countries that we all enjoy. So, that's fully agree with Alexandros in terms of what the focus is. Wyndham, I think for me it's very simple. I've got a great team. The only thing they have to do is make me look good, which they do. They're all here. And make me look good. They grow. Turkey is very good to us. So, thank you very much to all of you in Turkey, especially to the gentleman who's sleeping right there. 140 hotels.
Hello, sir. 140 hotels. We're growing. Great pipeline. Great team. Great talent. Yeah, we are very excited to be here. As I said, Turkey has been an amazing place for us. And Joachim was telling me the same. He said, 'We're opening up our office.' I'm not going to steal your thunder. You can talk about it. You know, we're opening office. We're expanding. So, this is an amazing country. 65 million arrivals as you said. Amazing new destinations. We are in 50 cities across Turkey. What is there not to like? But, as I said, keeping the narrative in our court and not giving the narrative to somebody else. We need to keep the narrative within our business and within our industry. And that's what he's trying, what these guys are trying to do, keep the narrative. Don't lose the fact that we need to control the narrative of what this industry is all about.
Yeah, thank you so much, Manikis. And Joachim, maybe you would like to add something to what we are talking about till that moment. Also, maybe you can add your opinions about this sustainability and this narrative thing. And I would like to ask you, Hilton has a massive operational presence across continental Europe as we know. And how is Hilton adapting its operational standards and also the guest experiences to meet the expectations of the next generation of travelers in the MEA region? What do you think about it?
Yeah, thank you very much and good to be here. Look, I think a lot has been said already in terms of keeping a narrative and what we need to do. I think if we go on the question and if we look at what are actually expectations of our clients, and it's not an easy cut because we've got many different kinds of travelers, many different kinds of customers that are coming for different reasons. May that be leisure, corporate, meetings and incentives, and not all the expectations are exactly the same. And they are changing very fast. Now, they're not changing at the same speed as technology or whatever, but technology influences the kind of expectations that are in hotels.
Now, what we do know, and some of it has been mentioned already, people like flexibility more than ever. People like an authentic, curated, personalized experience and they want to be rooted to the destination. So, they want to have that kind of experience and to the communities. And ideally, that's driven through our team members, but other things through interior design. And we've just been discussing the Conrad Athens, for example, is a great example which was renovated where we brought those roots of the city back into the hotel to tell the story and to let guests experience that. We've got the general manager Antonios here from the Hilton Istanbul Bosphorus. We just invested 90 million US dollars into this property. Our first hotel outside of the US opened by our founder Conrad Hilton. Fantastic story.
Now, ultimately, it is how we bring that story to life and let our guests and our travelers basically experience it. That's number one. Number two for me, it has something to do with scale. And that's the same as what you are doing because scale gives different options. So, may that be in lifestyle, in luxury, in full service, what we classify as full service Hilton DoubleTree's, focused service Hilton Garden Inn's and Hampton's. They offer a wider base and different kind of experiences for different travelers. And as a matter of fact, that's why we're bringing new brands to the market because now we have 28 different brands because there are still gaps.
Because one thing is for sure, and that I agree with both of you gentlemen, is the golden age of travel, as our CEO and president puts it, Chris Nassetta, is definitely unstoppable. And we have seen that coming out of the pandemic and the amount of cash that is linked to that pipeline is there. So, it is a very valuable business proposition, but of course, we need to adapt. Now, the last point of this, of course, is the digitalization. And I think there, you know, from dreaming of which destinations you want to connect to, to being able to book, you know, I just use a couple of examples, our Hilton Honors app, obviously. Yes, you can book, you can choose your room, you can check in, you can check out, you can go to the room with the app. So, ultimately, for me, that is all things that are here already. The question is, how is AI going to change that kind of path? So, they're all relevant, in my opinion, when you talk about customer expectations and the customer journey.
Thank you. Thank you so much. And Rufat, firstly, if you would like to add something, that's what we are talking about. But the question is, Hyatt has been strengthening its luxury and also the lifestyle portfolio in Turkey. And how does Turkey fit into Hyatt's broader Europe, Middle East and Africa strategy? What can you say about it?
Okay. Thank you. Thank you, Ms. Aslı Hanım. Turkey was and always will be a strategic market for us for growth. Having rich culture, history, culinary heritage, that creates for us a fantastic opportunity for the growth for our luxury and lifestyle portfolio. Luxury, I can say Park Hyatt, Miraval Resorts, and we're talking about lifestyle, which is upcoming. Very nice brands are Thompson, and we have already Andaz brand. At the moment, we are represented in Hyatt Turkey with five brands, which is Park Hyatt, Grand Hyatt, Hyatt Regency, Hyatt Centric, and Hyatt House. And more to come, inshallah.
For the growth, our focus for growth is intent. We're bringing the right brands to the right destinations, working and speaking with our owners. So, this is very crucial for us. For example, just an example of recent transformation of Hyatt Regency Izmir, if you haven't been, I advise you to visit the property, transforming it to be Grand Hyatt. Now we have two Grand Hyatts. We are not as big as colleagues, but we are proud and...
You're grand. You're grand.
We're grand and proud, and one more proud moment I want to share, we've been elected a winner of the World of Hyatt, our loyalty program, winner of the 2016 European Hospitality World — not hospitality, World of Hyatt loyalty program European Awards. So, Hyatt was selected number one World of Hyatt. So...
Thank you very much. So, thank you.
Just Europe. We got the world.
Just saying.
I'm just saying. I'm just saying. Look at the lifestyle. No shocks. That's lifestyle.
No shocks. You see? I love it. Lifestyle. No shocks.
And also, maybe Rufat, we can continue. What opportunities does the market offer compared to European destinations? Maybe you can tell us a little bit more about...
Well, the market offers everything. The market offers, first of all, venues, hotels, and I think, in my opinion, very good hotel expert talents that Turkey has. That's what my opinion is. I mean, the big events, like we had a NATO event in Ankara. Now, we're having a climate conference in Antalya. So, next year Formula 1 is coming. So, there is so much that the market can offer because of its size, because of its, as I said earlier, geopolitical strategic location. And of course, the number of hotels. The number of hotel room nights that we can give to larger events. So, this is the opportunity that we need to grasp.
Thank you so much, Rufat. Then, Alexandros, you said something, you summarized something, but I would like to ask this question. Maybe you would like to add something about it. How do European hospitality standards and sustainability directives impact the regional growth strategies in markets like Turkey? What can you tell about this?
Well, they impact in many different ways. There is a lot of legislation in Europe. That's not news. Everybody knows that. Most of our time in Brussels is to try and tackle the legislation, make sure that it doesn't come out with scenarios that would be difficult to follow, especially for small and medium enterprises. That being said, there are many laws being discussed, Fit for 55, the taxation of kerosene within Europe is something that will absolutely be in the benefit of neighboring regions like Turkey. But, if we look at the bigger picture, again, I strongly believe that in an ideal world, legislation comes to answer the consumer needs. So, it's not something that is absolutely linked to Europe. It is forthcoming. It is where things are going.
When we were discussing yesterday in Brussels the PPWR, which is the paper packaging of any products. This impacts us all. And at the end of the day, if this is what the consumer wants and finds it in Europe, sooner or later, he will ask for it in Turkey as well. So, I think that legislations, first of all, they copy each other. And again, in an ideal world, they represent where we're going. So, it's very important to have them. We have to start with that. But, it's also very important to make sure that they work for us more than they do against us. Legislation is always harsh to follow, but we understand why we need to have legislation, and I don't say this theoretically. We've seen other kinds of stages where you don't have legislations, like short-term rentals, and see the paradoxes where this can bring you on the consumer side very fast.
So, we need legislation, but we need to make sure that it's fit for SMEs. Big corporations, they will have the lawyers work on it, they issue a memo, and say, 'Because of law 2026, from tomorrow, this is how we do things.' Okay, but the SME doesn't have this. So, this is where we need to make sure that any law is applicable, and at the end doesn't create burdens, but creates what we need, which is what I was saying before, through authenticity, through the local communities, and what Dimitris said, the narrative.
You talked about labor shortage. I personally do not believe that labor shortage is a problem of tourism. Labor shortage is a problem of European society. It's a demographic problem. We have labor shortage in the construction industry, in the agricultural industry. I do not know any industry in Europe that says, 'We have as many as we need.' So, but that being said, we need to control the narrative. Too many times when we talk about tourism, we are on the defensive side. And we need to stop playing defense. We need to start playing offense. We are not only the first job for the student. How many career paths can you describe in your own companies? People who have started without studying anything, maybe coming from another country, starting work and ending up living their entire lives in a hotel. So, these stories we need to start to put ahead. We cannot always be on the defensive side. We need to start playing offense.
And you gave the answer to my next question. So, I would like to ask the gentlemen, maybe they agree or not, about the labor shortage. So, labor shortage and evolving workplace expectations remain major industry hurdles that he said. It's not, but what key initiatives, if it's like this, what key initiatives are your organizations taking to attract, retain, and develop hospitality talents? What are your expectations about this?
I'll tell you. First of all, I'm very happy because my younger daughter, she's 26 and she works in hospitality. Is there anybody from Marriott here? Because she works for Marriott. So, she works for Marriott and I never thought she's going to do it. I thought she did her economy first degree, then she did a master's in hospitality, and I'll tell you why she did it. And I said, 'Angeliki, why did you choose hospitality?' And she lives with me in London, so she works in one of the Marriotts in London. And she said, 'Dad, I did a list of the jobs that AI will disappear and the jobs that AI will not touch. And the number one job that AI will never touch is hospitality. No matter what you do with AI and the robots and all that great stuff, when you look at guests in the eyes, that will never go away.' So, I think the narrative is very important.
I keep on, you know, we're all storytellers. Our industry is about storytelling, right? When you are in sales, his brands, it's storytelling. When I sell my brand, it's storytelling. We tell a story. Now, we don't tell the story as well as we should have. That's why people haven't come back to work in hospitality. So, that's one. Second one, I work a lot with universities in Europe, with The Hague, with Lausanne. You know what is the number one reason why people don't stay in hospitality? Because we treat them badly when they are interns. We get these young kids with dreams. We get them in our hotels and we give them a shitty time. Why should they stay? 60% of graduates of business schools do not stay because we treat them badly when they are interns. Why would they stay? It's our fault, ladies and gentlemen. It's nobody else's fault. That's it. Period.
It's our fault when we don't treat the young kids with respect and we give them — sorry for my language, by the way — and we give them a hard time. Why would they stay? Every single graduate that I speak to, that's the main reason why they don't want to stay here. And you know what? We are the only industry in the world that teaches young kids social skills. We teach them how to eat. We teach them how to dress. Obviously, I didn't learn the lesson, but it doesn't matter. It's a personal thing. Don't make any comment, Dimitris. So, we teach them how to eat. We teach them how to behave. We teach them all that. And then who takes them? The banks. The banks, the private equity, the big consultancy firms. You know why? Because it's all about the human connection. We teach people human connection and we lose them. That is our biggest problem. It's our problem. It's not the industry. It's us. It's us.
Maybe we can mix our current understandings. Yes, we all know that. I'm an ex-national volleyball player. So, our trainer always said that pressure is privilege, but not that kind of pressure. It will be the right pressure.
I'm sorry, but because I don't like what he said. I believe...
I have a plane to catch. I'm terribly sorry. The panel was a bit late, so they're making me signs that I'm going to miss the plane.
