In the latest instalment of The Future of Travel, David and Catherine speak to Marloes Knippenberg, CEO of Kerten Hospitality. She believes in a post-Coronavirus world the ‘new normal’ will see travellers, particularly the younger generation, ask many more questions about supply chains and sourcing, as well as how organisations looked after their team during the crisis.
While Marloes is is unsure about the future of social spaces in hotels, she does believe there is a great opportunity for mixed-used concepts—combining living, working, F&B and retail—because people will want to be in an environment with everything nearby.
In terms of Kerten’s own portfolio, temporary slowdowns in some markets are balanced by new signings and openings going ahead in Saudi Arabia and Turkey.
David Keen 0:08
Hi, this is David at QUO. We’ve worked for the last 20 years with many of the world’s best known travel brands. During this unprecedented global crisis, our world of travel has changed, possibly irreversibly. This series will see us speak with many global leaders to understand how they see the future of travel.
David Keen 0:43
Hi, Marloes Knippenberg. Welcome to episode five of the Future of Travel. Marloes is the chief executive officer of Kerten Hospitality, based in Istanbul. I’m again sitting with Catherine Monthienvichienchai, our chief branding officer at QUO. Marloes, what’s happening in Istanbul.
Marloes Knippenberg 1:06
And at the moment, it’s a it’s a bit of quarantine and a bit of people still going out. We kept one hotel open, so actually that’s why I’m here with the team at the moment. In Istanbul anybody over 65 is staying home; anybody under 20 is supposed to stay home; and everybody else is supposed to be careful and going between. But I think from a country perspective on being a big transit hub, they’ve kept going to find a balance between open and closed, I guess, and to keep the economy turning. So that’s what’s happening over here at the moment,
Catherine Monthienvichienchai 1:50
Marloes, what’s the situation with your hotels — I mean across your network, across the various markets that you’re in, how are you reacting to the process and what’s going on. And is there a big difference in terms of the different markets you’re in.
Marloes Knippenberg 2:02
Yes it is. Absolutely. And I think even with regards to owners — so we have, for example, an opening in Jordan. Jordan locked down the country really early onward it’s, they put it through and plays, but they haven’t harmed, so much, their economy in the sense that they didn’t have to spend a lot in health care and medication and emergency situations. But they have difficulty that they have to wait to open the country to anybody else.
Marloes Knippenberg 2:35
Now I think there’s a great opportunity there, but it’s always you know it’s the red or black kind of gamble. It’s the glass bowl. It’s — what about national travel? And I think when I look at a place, for example, like Georgia, where we have openings coming up. In Georgia, there was a lot of GCC investment, European investment, going in, and that country has been developing incredibly fast over the last — I would say — three or four years.
Marloes Knippenberg 2:37
But that’s a that’s a country that’s really — I mean — was or is or is going to be, and that’s the big question, I guess. Tourism is playing a much greater part. So, for example, Georgia has closed all hotels, bank loans, financing, etc., until further notice.
Marloes Knippenberg 3:25
Where places like for example, Saudi Arabia, and they’ve really been still going and going and they’ve been holding. When you look at the oil discussions between them and Russia — the way they’re picking up and even when you talk to people. For example, we have an opening end of this year in Jeddah, and the owners are doing everything on everything to continue — even if it’s five hours on the construction sides at a day. Even the the vibes that are coming from there are fairly positive.
Marloes Knippenberg 4:01
If I look at turkey we closed one hotel temporarily, becasue there is no real demand and in the old part of town. We kept one open just because there’s a residence attached to it so it gave us a good opportunity to really, you know, enforce the kind of community build. Step up with regards to F&B and just be feeding people without abusing the situation of, you know, cranking up the prices just for the sake of people not having any other option. And takign in stranded travelers that really changes the kind of target audience who are staying in the hotel at the moment.
Marloes Knippenberg 4:43
But from a future perspective — I mean we always had a very lean team — so we have people still know if our brand director is sitting in Jordan at the moment. I have our head F&B who is the opening GM for Saudi still. In Saudi, we decided not to pull back all people to their, their home countries, but most of the team actually decided to stay on project, and not in their home countries.
Marloes Knippenberg 5:11
And I have to say I think that makes us much stronger at the moment, because if I look for the last 10 days, our pipeline of potential projects is increasing. So we signed two new hotels earlier this week, actually, in in Turkey. They even did the payments. We’re working on another new project in Saudi Arabia. And yes, it might be changing a little in the sense that the timeline has changed a little or there’s more questions about co-living, co-working, how is this going to look like in the future and, you know, what’s that customer journey going to look like? But nothing about, oh let’s just not do it anymorek, let’s stop, etc.
David Keen 5:59
Marloes, I just want to take you back to Georgia, which you rightly said, it’s obviously it’s a new tourist destination. It’s a it’s a growing economic hub. How much is the recession and the after effects of the virus going to impact the development of that destination in your opinon?
Marloes Knippenberg 6:21
You know, I think it’s really about what people are going to do after everything opens. So, are people going to pick destinations that they trust and that they’ve always gone to just because — you know — Paris is a big city, and yes, they might not want to be in groups together anymore, but at least they know where they’re going? Or are people actually going to pick destinations that have been fairly clean of the virus, fairly well-handled, and therefore pickup much stronger? Like if I look at a place like Georgia, it has the mountains; it has the sea; it has the city. It has something for all religions. And it has something for a younger and an older audience. So they’ve not — from, from a disease perspective — they’ve been reallypretty well isolated.
David Keen 7:20
What does the destination have to do to adapt itself to become more attractive for the travelers in the new normal.
Marloes Knippenberg 7:30
You know, in the new normal, it’s really a question of if people are going to change as much as we think that they’re going to change. I mean, anybody who is who I’ve spoken to is still talking about a vacation — even if that’s not in the summer but it’s at the end of the year. Now, let’s say that 50% of those people are right, that means that we still have this number of travelers coming in. So then the next question is, are you going to keep the seats in between on the plane free with everybody?
Marloes Knippenberg 8:00
You know, I think it’s a matter of what’s sustainable and what’s doable at one stage. And so let’s say that you keep the seat in the middle open. Are you willing to pay double the amount for your for your flight ticket. So if people are willing to pay double or 50% more for what they were used to, for the sake of being safe and not having another epidemic — yes, absolutely. My question is how willing human kind is. I know that might be a very controversial opinion, but I’m not sure how — how flexible we are.
Catherine Monthienvichienchai 8:39
Building on the something you mentioned earlier when you were talking about your pipeline and some of the some of the owners asking questions about issues around co-working co-living and where do you see those trends going in the future? Do you see a big departure from those trends? Do you see it somehow evolving into something else. Or do you think people have short memories and will quickly go back to wanting to mingle again?
Marloes Knippenberg 9:02
I think one of the things that that for me for co-living and co-working and this co-everything, the one question I’ve always had about this even before the pandemic was the large social spaces. I don’t think you can ever force people to be social just for the sake of being social. What I still believe in and I believe in that, even stronger than before, is the mixed-use components is the — having your work at the same place that you live at the same place that you possibly have a hotel, and you have all of the retail or F&B kind of elements around you.
Marloes Knippenberg 9:43
So I think people are going to be wanting to be in an environment where if something happens they have everything around them. I think companies will become more flexible to have people work from home. I think larger companies will still have to downscale their offices and have, you know, mixed use or reuse of their office spaces. So I think the co-working components, as in , you know, if I look at some of the big brands, giving somebody two square metres in a little cubicle and everybody like kind of crawling through the same corridor — maybe this will change. But that was changing before, as well. that’s not just changing now.
Marloes Knippenberg 10:31
I think people being in need of flexible working spaces in different destinations. People looking for maybe smaller units to live in. People less willing to travel through a city or sit in public transport for too much of the time. Yes, I think those things people will definitely evaluate and I think that’s also where they’re going to look for places where — or hubs — where they can spend a much longer amount of time.
David Keen 11:10
How are you going to evolve, within your brands of Kerten, purpose and the emotional connect between your product brands and your and your customers and your guests. Because there’s no question: in the new normal, one there’ll be obviously a much smaller demand, and a much higher supply, and the consumer is going to be king.
Marloes Knippenberg 11:39
Yes, absolutely, but I don’t think all supply will come back as strong and in the same way as it went out — number one. Number two — I think, people were already conscious of the brands that they were picking.
Marloes Knippenberg 11:59
So you know this whole thing about community building and community building being based on, I don’t know, pizza Wednesdays or, you know, these kind of maybe easy to organise matters. I think this will disappear, more. I think — I’ll give you an example. I was, I was speaking at the at the one of the hotel schools in Europe last year. I was on sustainability, and it’s something that’s, you know, we all talk about — plastic and straws and all of these kind of things. That group of people, was asking about if when you serve a steak in your restaurant, do you know where the cow is coming from? Okay fine, yes okay. Yeah I know where the cow is coming from. Next question: Do you know where the food was coming from that that cow was eating? And no I have absolutely no idea. I think this much more than anything is what the consumer is going to pick on.
Marloes Knippenberg 13:00
The new generation is looking at a different sustainability, they’re looking at a different carbon footprint. They’re not just looking at, you know us, trying to change our brands are now putting one-and-a-half-metre of space in between. They’re saying, “Okay, wonderful. But now, who are you working with? Who are the local suppliers that you are supporting? Who are your team that you keep? What did you do with your team during this time?”
Marloes Knippenberg 13:25
Yeah, I think that’s a great point I think there’s going to be a lot — there’s going to be a need for a lot greater sense of transparency and accountability going forward, because the consumer, as you say, is just going to keep asking those those questions. And we’re going to all of us as a whole industry will have to be ready and willing to to answer those questions. I think we all realize that everyone in the travel and hospitality sector will survive this crisis, there will be casualties. What do you think that means in terms of the overall dynamic of the hotel world? Do you see greater consolidation, or do you see more emergence of smaller independent groups like yourselves coming through stronger?
Marloes Knippenberg 13:25
And this is one of the reasons that, you know, i mean i made a joke and when I posted on LinkedIn this week about, you know, me polishing cutlery. Well, that’s what I was doing with the team. And it’s, you know, you build a very different relation, even with your team in a time like this. You kind of, you know, humbled by it and you go back down to the core of the business I guess versus just the ideas. And I think the customer journey, the way that we look at it is always internal, never external. And I think this is — the new consumer will want to know what we’re fed FedEx-ing around. Where everything is coming from in their environment; what we’re doing with people’s salaries; and how we’re retaining them and everything else.
Marloes Knippenberg 14:59
I actually think that more smaller companies will pop up but I think in a different way. I think the smaller companies, taking on very challenging leases or rents or revenue shares, just to have key locations and key spots, just to bring the perfect brands to life. I think this is a question mark. I think the big guys will still grow and grow as much as they have to do. But I think from an owner perspective, people will start questioning, depending on how much attention they got and how they’re coming out after this time. And I think this is also where we’re going to see more brand collaborations that we’ve all been talking about but not have not seen so much about is, you know, combining with retail and combining with other brands, having a living component, the working component and understand component from an owners perspective — I think it might become a bit more cautious about spend-per-square-metre and necessities versus kind of pride projects. And how to create something that’s firstly more sustainable over 20 years, versus something that is cool now for a couple of years and then not not adaptable anymore.
Catherine Monthienvichienchai 16:26
But do you think that will have an impact on innovation? Do you think that owners will be more scared to take risks? You know, if you as a as an operator come to them and say we’ve got this amazing new brand it’s really cool. We want to really push the boundaries in this area or that area owners might be more likely in the future to push back because they’re scared of taking those kinds of risks?
Marloes Knippenberg 16:46
I think with new brands it’s dependent on how far you believe that a brand needs to be chewed out and be exactly that brand for the next 20 years. You know, if you create an adaptable brand that you can adapt to a certain owner, I think they’re much more positive towards going for something like that, just for the simple fact that they’re more flexible. They’re easier to adapt to change. It’s easier to compete with others. So, no, I think there is still the same opportunity I don’t think this Corona has changed that.
Marloes Knippenberg 17:32
I think that change was happening already. I think owners are much smarter now than they were before. I think our friends, Google, has educated many on contracts and what to do and how to do and where to do. I think from a distribution channel perspective, people are tended to really book online. I don’t think there’s a great loyalty to brands tt the moment — not to smaller ones, not to bigger ones. I think people are really going to pick and choose based on location, responsibility, what they know of a certain project, and I think owners will start doing exactly the same.
David Keen 18:16
Marloes Knippenberg, thank you so much for being on The Future of Travel. Stay safe.
Marloes Knippenberg 18:22
Thank you very much for having me.