Tell us more about the history of your company and main activities.
AA+G Hospitality Management was founded in London during the challenging times of COVID-19 by a trio of hospitality enthusiasts and professionals. Alongside myself, the co-founders include Jayne Alexander from Dovetail and Mark Allvey from Untold Story Travel. Our inception was driven by a shared passion to empower independent hotel owners and entrepreneurs, aiding them in realizing their visions from the earliest conceptual stages right through to the operational and strategic execution.
AA+G primary mission is to support privately owned hotel groups and independent properties of various sizes, as well as entrepreneurs looking to diversify their business interests. We provide comprehensive services that cover a wide range of needs including brand launching or repositioning, financial and asset management, hotel operations, sales, revenue management, media relations, and marketing. Our approach is to offer tailored solutions that enhance efficiency and accelerate the return on investment for our clients, ensuring that each hotel’s unique identity and value are maximized.
You specialised in independent hotels in Italy. Do you have plans to expand your portfolio? Tell us more
Yes, AA+G is actively expanding its portfolio, particularly focusing on enhancing our presence in Italy as well as pursuing international opportunities. Currently, we support the development and operation of hotel properties in four key Italian destinations: Milan, Assisi, Rome, and Bari. Each project is unique, reflecting the local culture and character, which is essential for the independent hotels we specialize in.
Internationally, we’re excited about our partnership with Clinique La Prairie, supporting their global development strategy. This collaborations align with our focus on luxury and wellbeing, areas that are increasingly important in the hospitality industry.
Looking ahead, we’re particularly thrilled about the development of a new ultra-luxury wellbeing resort in Puglia, expected to open in the next 36/48 months. This project promises to be a standout addition to our portfolio and in the region, emphasizing exceptional wellbeing experiences in a luxurious setting.
Additionally, we are in discussions for potential new partnerships in Genova, involving a condo hotel concept, and two other properties in Rome—one in the luxury segment and the other a lifestyle hotel. These developments are part of our strategy to diversify our offerings and strengthen our presence in the luxury and lifestyle hotel markets.
How did the Italian hospitality market perform in 2023 in the cities your current have a portfolio hotel? What are the expectations for 2024?
The Italian hospitality market saw a robust recovery in 2023 across both urban and resort destinations, marking a significant comeback from the impacts of COVID-19. Notably, many areas achieved occupancy rates comparable to pre-pandemic levels, but with enhanced ADR, leading to improved financial outcomes.
Specifically, in the cities where AA+G has a presence —Milan, Assisi, Rome, and Bari—three of our four hotels opened post-2021, and one underwent a significant renovation last year, elevating it from a 4-star to a 5-star facility. While direct historical comparisons are challenging due to these changes, all properties notably exceeded our initial targets and performed better than anticipated, outperforming similar hotel categories from 2019.
As for 2024, the year began with some uncertainties, particularly in Milan, where the first quarter showed slower pick-up and occupancy. However, from April onwards, we observed a return to the previous year’s levels, and cities like Bari, Rome, and Assisi are now anticipating a great percentage increases in revenue and occupancy compared to last year to date. Milan, too, experienced its best April since opening, significantly boosted by the Design Week, showcasing remarkable ADR and occupancy rates.
Looking forward, I am optimistic about 2024, expecting another outstanding year for our properties and the Italian hospitality market.
Which are the biggest challenges but also the biggest opportunities?
In the hospitality industry, we face both significant challenges and exciting opportunities. Many times, these challenges and opportunities are two sides of the same coin, where addressing one can help us capitalize on the other.
One of the primary challenges we encounter is economic uncertainty. Global economic fluctuations, including inflation and shifts in consumer spending habits, greatly impact travel frequency and expenditure. This directly affects our operations and financial planning. Alongside this, navigating the complex and sometimes divergent regulatory environments across different regions poses its own set of challenges, especially with the frequent changes in health, safety, and environmental standards.
Another critical area is talent acquisition and retention. In a competitive market, securing and keeping top talent is essential because the stability of our workforce directly influences the quality of service and operational efficiency.
Technological adaptation is also a key challenge. Keeping pace with rapid advancements and effectively integrating them into our operations to enhance guest experiences and improve operational efficiency is crucial.
Moreover, we’re observing a shift in the demographics of our travellers. Younger generations like Millennials and Gen Z are reshaping the travel landscape with their unique preferences for experiences, sustainability, digital integration, and personalization. They’re influenced heavily by social media and peer reviews and seek immersive, authentic experiences.
Turning to opportunities, the growing trend towards sustainable and responsible travel presents a significant chance for us to align with market demands while reducing operational costs and enhancing our brand reputation.
Our focus on digital transformation is extensive, aiming not just to enhance the guest experience but also to revolutionize how our personnel interact with guests using cutting-edge AI technologies. This involves using AI to enable our staff to provide more personalized service, anticipate guest needs, and streamline operations from inventory management to routine tasks. It also includes investing in AI-driven training modules that provide our staff with real-time feedback and adaptive learning paths, enhancing their skills and job satisfaction.
Furthermore, safety and security are bolstered by AI tools that monitor and analyze patterns to prevent potential issues, ensuring the well-being of both guests and staff.
Lastly, our market expansion efforts in Italy are particularly promising. We see tremendous opportunities to introduce new urban and resort destinations that offer unique and culturally rich experiences, such as in parts of Campania like Cilento, Bari, and Umbria. These previously off-the-radar destinations are now becoming essential parts of travelers’ itineraries, driven by the demand for truly local and immersive experiences.
Has the guest profile changed post pandemic? – behaviour, spending, time of booking, type of accommodation, length of stay etc.
Since the pandemic, the profile of hotel guests has certainly evolved, and we’ve observed a number of trends in guest behavior and preferences that are shaping our approach.
People are increasingly looking for personalized experiences and prioritize safety and wellness more than ever, which influences their accommodation choices. There’s a heightened demand for properties with robust health and hygiene protocols. Additionally, sustainability has become a crucial part of our operation—it’s not just a buzzword. For instance, our property in Assisi integrates its historical and natural environment deeply. We manage two hectares of organic gardens, cultivating vegetables and fruits as the Benedictine monks did over 600 years ago on the same land. This not only enriches the guest experience but also minimizes our environmental impact.
In Bari, we embrace the ‘km 0’ or ‘farm-to-table’ concept. Our menus are crafted to reflect regional offerings, showcasing local flavors and reducing our carbon footprint. This practice supports the local economy and ensures our guests enjoy the freshest and most authentic regional cuisine. Additionally, our Bari property is a leader in energy sustainability, producing 40% of the electricity we need from solar panels.
On the spending front, there’s a bit of a divide. Some guests have become more budget-conscious due to economic uncertainties, while others engage in what’s often called “revenge travel,” spending more on luxury and exclusive experiences to make up for lost travel opportunities during lockdowns.
As for the type of accommodation, there’s a growing preference for boutique hotels, private villas, and serviced apartments, which offer more space and control. This is particularly appealing now as families and small groups look for accommodations that can serve as a ‘home away from home.’
Lastly, the length of stays has generally increased, with many travelers combining work with vacation, leading to longer stays. This ‘workation’ trend is particularly exciting as it opens up new possibilities for guest engagement and services.
These changes are fundamentally reshaping how we think about our services and offerings. It’s a dynamic time, and we’re continually adapting to meet these evolving guest expectations.
Is there still a clear divide between corporate and leisure travel? What about the MICE business?
The traditional boundaries between corporate and leisure travel are becoming increasingly blurred. This trend is something we’re actively embracing, especially in our properties in Milan, Rome, and Bari. We’ve observed a significant uptake in corporate travelers choosing to extend their stays to enjoy the local culture and attractions, often bringing family members or friends along to make the most of the destination while they attend to business needs.
In response to this shift, we’ve adapted our offerings to cater to the needs of these “bleisure” travelers. This includes providing facilities that support both work and relaxation seamlessly—like high-speed internet for business needs and luxury leisure amenities for downtime. We’re also enhancing our family services and creating more engaging local experiences, ensuring that the extended stays are not only productive but also enjoyable and enriching for all involved.
As for the MICE business, it’s definitely making a strong comeback and is more vibrant than ever. Particularly in Rome, our MICE offerings have been met with tremendous enthusiasm. The demand for well-integrated business facilities alongside exceptional leisure activities is high, and our venues are equipped to offer just that. We provide state-of-the-art conference technology, flexible meeting spaces, and superb hospitality, all set against the backdrop of some of the most beautiful destinations in Italy.
This resurgence and evolution in both corporate and leisure travel, and the strong performance of our MICE business, are clear indicators that the travel landscape is rapidly changing. We’re committed to staying ahead of these trends, continuously adapting and enhancing our services to meet and exceed the evolving expectations of our guests.
How important is consistency when it comes to service? What about relevance and value?
Consistency in service is absolutely critical in the hospitality industry. It’s the backbone of guest trust and satisfaction. When guests choose our properties, they come with certain expectations based on their previous experiences or the reputation we’ve established. Ensuring that every aspect of our service—from the cleanliness of the rooms to the quality of the dining experiences—meets these expectations every single time is crucial. It builds a reliable brand that guests feel comfortable returning to and recommending to others.
However, while consistency lays the foundation, relevance and value are equally important and must evolve with guest expectations and market trends. Relevance in our context means staying attuned to what is current and significant to our guests. For instance, as we’ve discussed, there’s a growing demand for sustainability and personalized experiences. Adapting our services to include these elements ensures that we remain relevant to a changing customer base.
Value, on the other hand, is about delivering services that not only meet but exceed guest expectations for the price paid. This isn’t just about being affordable; it’s about ensuring that every aspect of a guest’s stay feels worth their investment—whether it’s through exceptional service, unique property features, or memorable experiences.
To sum it up, consistency gets guests to come back, relevance makes them choose us in the first place, and perceived value turns them into advocates for our brand. All three are pivotal in their own way and need to be balanced to ensure the success and growth of our hospitality ventures.
Is there an ideal recipe to keep a consistent balance between desirability and relevance?
Finding that perfect balance between desirability and relevance in hospitality is like crafting a fine dish—it requires the right ingredients, timing, and intuition, all centered around our guests. For me, it’s crucial to be involved from the very first moment of a project. This early involvement allows us to shape and craft a unique product that truly resonates with our guests.
It starts with a deep understanding of our guests: what they want, what they need, and what they might look for in the future. This guest-centric approach involves gathering insights through regular feedback, market research, and keeping a close eye on emerging trends.
Personalization plays a huge role here. By using technology and data analytics, we can tailor experiences to individual preferences. This not only makes our service more desirable but also shows that we are in tune with what’s relevant to each guest right now, making our approach incredibly guest-centric.
While we’re keen on innovation and staying current, we never stray from the core values that define our properties. Maintaining these values ensures that our innovations feel right at home with what our guests have always appreciated about staying with us. This constancy is comforting and builds trust.
We also love to bring in new flavors through strategic partnerships. Working with local culinary talents, wellness experts, or cultural institutions not only enhances the guest experience but also keeps the offerings at our properties fresh and exciting.
In essence, being involved from the start is essential for us to be thoroughly guest-centric, blending tradition with innovation and keeping a pulse on the shifting preferences of our guests. By doing so, we ensure that our properties remain both desirable and relevant, leading the way in hospitality rather than just keeping up. It’s a dynamic, ongoing process, but incredibly rewarding.
Tell us more about the current trends in branding in hospitality? Defining the DNA of a brand etc.
It’s fascinating that you bring up this topic. Throughout my career, I’ve always been a staunch advocate for the unique identity of each hotel property rather than the broader hotel chain. I firmly believe that every single hotel should express its own character and be chosen for the experience it provides, not just the brand name on the sign or the loyalty points program it offers. I resonate deeply with Philippe Zuber, the CEO of Kerzner, who stated in an interview that “Luxury cannot be traded for points.” This notion emphasizes the uniqueness and irreplaceable nature of true luxury experiences, which cannot be comoditized.
Professor Chekitan S. Dev from Cornell University also sheds light on a critical issue in his article “Hotel Brand Overload: The Coming Shakeout.” He describes how, with over a thousand brands now in existence, hotel owners and guests often encounter a “sea of sameness” where many brands are only marginally distinguishable from one another. The real challenge today is discerning the subtle differences among them. This saturation begs the question: Do you really want to be just another part of this crowded field?
Back in 2012, I co-founded with Andrea Delfini the NERO Hotel Group, now known as NERO Lifestyle, which was a collection of 30 properties around Italy. Our guiding principle wasn’t about the brand name, the type of beds, or the number of stars. Instead, it was about the unique experiences each property offered in its location. We focused on finding the right property for that specific location, emphasizing that each should stand out based on its inherent qualities and the memorable experiences it could provide.
Look at our properties now; they are a statement to this philosophy. Each one stands as a testament to uniqueness and distinction in a market often clouded by uniformity. This approach has shaped my philosophy for over a decade: Create your own brand, make it known using all the sales and marketing tools now available, and revel in the fact that you are unique. You are not just one of many; you’re one of a kind. In today’s market, where distinctiveness is a rare commodity, this philosophy not only sets our properties apart but also deeply resonates with guests looking for something truly special and personal.
Gianluca Giglio, Managing Director, AA+G Hospitality Management
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