In conversation with Carine Bonnejean: Managing Director of Hotels at Christie & Co

As Managing Director of Hotels at Christie & Co, Carine Bonnejean has unique insights into the hotel transactional market across the UK and Europe. Here, she shares her thoughts on how the landscape has changed during her 20-year career at Christie & Co, what role AI, technology and sustainability will have in the future for hotels, and the biggest challenges and opportunities that they face. 

How has the hotel acquisition market changed since you first joined Christie & Co? 

The hotel market has changed significantly, in both perception and the way it is structured. Today hotels are seen as operational real estate, and they’ve become more mainstream. The perception of the risk and reward of owning a hotel has changed to match this. People are not as averse to the risk offered by hotels and instead see the benefits of owning them. 

Awareness of the market is better too, so we have clients who are seeking in-depth expert advice, because they already have a strong base knowledge of the sector. We’ve also seen significant shifts in the way that real estate operations are structured and how they interact with each other, through management contracts, franchise agreements or hybrid leases, which have led to owners and operators becoming more creative in how they work together. This has pushed operators to evolve, but I think this structural shift has been beneficial to everyone. 

Where are you seeing the biggest market activity and what are the key drivers behind this? 

The UK has historically always been the backbone of the European hotel market in terms of transactions, and that’s been the case for over a decade, bar 2023 following the mini-budget. We’ve also seen the rise of other markets too, including France, Spain and Italy in particular. 

This has been led partly by the fact that KPIs and performance have been quite strong and the opportunities offered by this market in terms of fragmentation, under-representation of brands and repositioning opportunities. Investors are more comfortable with the concept of seasonality, particularly since COVID, and therefore are not as risk-averse as they used to be as they can see the upside it can also deliver. 

What role do you think new technology and AI will play in the hotel acquisition market in the future? 

If we think about acquisition in itself, it goes back to how the market has evolved and how it’s still evolving today. In the past, the market was quite opaque, so a lot of the data was with brokers and valuers. But now, thanks to technology, data is more widely available to support business decisions. 

How you decrypt the data and leverage it to inform your strategy will be essential. We sell hundreds of hotels every year so we have a wealth of data to leverage through technology to best serve our clients going forward. 

Automation is the key thing. We are seeing more and more hotels where processes are automated and unstaffed.

How important are sustainability credentials when it comes to selling a hotel today? 

It’s been a slow burn but it’s becoming increasingly important. For key cities and institutional investors, sustainability has been on their roadmap for a long time, because there are fund requirements. On the financing side, sustainability is also top of the agenda for lenders. 

Additionally, sustainability has become more and more important for customers, and as such, operators have to embrace customer demands to remain competitive. Of course, the reality of making any hotel investment means that for privately-owned hotels which may not yet have been invested in, it’s often about education. 

For many, it’s a balancing exercise of what makes sense for the planet versus what makes sense from a business perspective. The theory is that if you have green credentials, your hotel will have a higher value and command a so-called ‘green premium’, but this has not yet been fully proven. Once we have greater comparable evidence, we will be able to quantify this premium more clearly. 

What are the current strategies of hotel groups to grapple with the economic crisis? 

Automation is the key word. We are seeing more hotels where processes are automated and unstaffed. For example, check-in can be arranged without the need for an employee, and there are fewer 24-hour reception desks or overnight services. 

From a sustainability perspective, it has also become more common to limit room servicing, which can positively impact the bottom line. We’re also seeing a move towards converting other real estate into hotels, even if it’s just a few rooms, or better optimising every inch of space within a property, particularly during daytime hours when hotels tend to be less occupied. 

What are some of the long-term trends you expect to see in the next decade for the hotel market? 

I think the way that hotels are defined is going to evolve. It’s something we’re currently researching. For example, one hotel group has recently rented out space to an office occupier, so people can work from a hotel rather than working from home. 

Companies can now rent hotel spaces for several weeks so that office workers can spend time together. I think the way hotel rooms are designed will change too, with more pod-style layouts and innovative concepts such as in-built gym walls and personal training schedules. 

We’re also seeing international markets such as India travelling more, while at the same time Western markets are travelling in greener ways – staying longer in one location and choosing train travel over flights where possible. 

What do you think the biggest challenges and opportunities will be? 

There are significant opportunities to adjust business models in response to the way customers use hotels today. There is a lot of discussion around the 24-hour life cycle of a hotel, which is often mainly active from early evening to early morning, and how properties can better utilise their space during the quieter periods. 

The biggest challenge will be the ability for operators and owners to adapt quickly enough, whether due to financial constraints or time pressures. That said, the hotel sector continues to offer strong opportunities and resilience. We are seeing buyer appetite at all levels of the market, both domestically and internationally, and unlike sectors such as office or retail, the fundamental need for accommodation remains – we all still need a bedroom to sleep in.