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HVS Executive Search interviews Americans who have successfully transitioned into the European hospitality real estate industry in an effort to assess the feasibility of transatlantic transfers for European hires.
At the beginning of this year, I commented on the increasing need for Hotel Asset Managers in Europe, stemming from a fundamental and ongoing shift in European hospitality real estate. As we pass the middle of the year, the basic trend has continued. We have seen hotel management companies offload their assets in an effort to concentrate on their core business. These properties have been acquired by a variety of entities, from investment banks to private equity funds and general real estate companies. Thus, the European hotel industry is moving ever closer towards the "separation of bricks and brand" model of ownership that is prevalent in the United States.
At HVS Executive Search we have noted that this shift has not only increased the need for Hotel Asset Managers but has also led to a marked increase in inquiries for Acquisition Manager searches. As the title implies, the Acquisition Manager or Director/VP of Acquisitions handles all aspects of a single asset or portfolio acquisition for the investor, from the identification and evaluation of potential acquisition targets to the negotiation and underwriting of the deal. Depending on the seniority of the position there may be more involvement on either end of the process, i.e. more number crunching or more negotiation and deal sourcing. At some of the owning companies, a person may work both on acquisition and asset management but more often the roles are clearly separated, especially when a portfolio reaches a certain size.
As with asset management roles, due to the prevalence of hotel real estate ownership companies in the United States, the pool of experienced talent available across the pond is much greater than here in Europe. This disparity merits a closer look at transatlantic transfers.
Many European employers are sceptical about hiring Americans, citing the following issues:* Hassle of organizing visas/work permits
* Lack of language skills
* Lack of cultural adaptability
*Lack of specific market knowledge
Looking at the current players in the European hospitality real estate industry, we have noted that, in spite of the prevailing reservations, several Americans have made the transition over to Europe. HVS Executive Search spoke with some of them in order to gain an insight into their experiences.
Josh Wyatt is the Director of Hospitality and Leisure for Patron Capital Ltd, the investment advisor to Patron Capital Partners, which runs three property-based investment funds. He made the move over to Europe after graduating from Harvard Business School in 2005.
Alison Gendron is a Senior Consultant at PKF in London. She was hired straight out of The Hotel School at Cornell University to work with InterContinental Hotel Group's development team in London in 2000. Prior to joining PKF in 2005, she had been working for the Pinnacle Advisory Group in Boston, Massachusetts, and she will soon join Host Hotels & Resorts' European team.
Carmen Hui came to Europe as part of an internal transfer to help set up the European offices for Host Hotels & Resorts' joint venture with GIC Real Estate and Dutch pension fund ABP. The joint venture currently oversees a portfolio of ten hotel properties in five countries. Prior to joining Host three years ago, she worked for Morgan Stanley in New York and Hong Kong in their M&A and Real Estate divisions.
HVS: "Was nationality and obtaining a work permit/visa an issue in your hiring or transfer process?"
Carmen: "I am not a European national, hence, required a work permit to work in London. However, prior to my relocation, I was already working primarily on European transactions, so an internal transfer made sense from that perspective. Furthermore, it was important for Host Hotels & Resorts to have someone who would foster its corporate culture and values in its international expansion. So, aside from delaying the physical transfer as a result of the paperwork required for my work permit, nationality wasn't an issue and the company arranged everything on my behalf."
Alison: "Yes, but the firm sponsored me at the time. It was 2000 and the economy was booming, so more firms were willing to obtain visas, especially large global firms like IHG. I think it can be too much of a hassle at times for smaller firms. My second time returning to London I obtained a Highly Skilled Migrant Programme visa on my own. This is great because I am legal to work in the UK but not tied down to a specific firm. It was a bit of paperwork but as long as you satisfy the point system devised for the visa, it is not too difficult to obtain."
Josh: "As an American, the nationality issue worked for and against me. On the positive side, Patron Capital recognized that the American work ethic and an objective eye to the markets would handsomely benefit the firm and my career. However, the challenge for most Americans, including myself, is the learning curve - it was incredibly steep both in terms of understanding several different markets, cultures, jurisdictions, etc. This learning curve, once conquered, can only benefit one's career. With the use of the Highly Skilled Migrant Program (HSMP) and Patron's support the visa was no issue or concern."
HVS: "Have you had any problems communicating with clients or colleagues in terms of language?"
Alison: "No, surprisingly not. I thought only speaking English would be a great disadvantage both at IHG and now in my consulting role, but it hasn't posed too much of a problem. Of course I would love to speak another language, but I am lucky in the sense that most business is conducted in English. I have found that being a native English speaker has helped me in some instances, especially because my job requires a lot of written output which can be more challenging for non-native speakers."
Carmen: "Most professionals we interact with on a daily basis across Continental Europe, be it legal, tax or other advisors, are fluent in English. While having European language skills are certainly advantageous, especially when we're on the road doing property tours, most of the locals in the markets that we invest in are used to tourists and hence can communicate in English. I think the more important thing is to be culturally sensitive to those we interact with while living and working here."
Josh: "Given the fact that Patron has investments in 12 countries and offices in 6 countries, communication can at times be a challenge. However, even a rudimentary knowledge of a second or third language helps. Before attempting to work in Europe, all Americans should learn some form of French, Spanish or German. That being said, if one only speaks English, the key is to understand cross cultural communication traits and work patiently with the other party to ensure everyone understands."
HVS: "How well do you feel you have adapted culturally to your surroundings?"
Josh: "Working in Europe for Patron Capital has allowed me to adapt quickly. Furthermore, upon transitioning into leading the hospitality and leisure investing effort, my job has me on the road to several countries. In fact in 2007 I have been in 4 continents and 14 countries. With this amount of travel, it is easy to adapt as long as one is flexible, open minded and patient with other cultures and ways of business conduct. As real estate, and hospitality, is a highly localized business, my work is constantly influenced by these cultural implications."
Alison: "As consultants we have to be adaptable and quickly assimilate in new places, so I do believe that cultural adaptation is very important. I think this is really down to personality and I have coped quite well, primarily because I have always been open to new people and experiences and quite adaptable in general. I have been in London for quite some time as well, which helps."
Carmen: "London is an extremely diverse city and welcoming to people from various cultures and backgrounds. It's very easy to get acclimated here (once you overcome the Pound to Dollar conversion!) and I feel that I've assimilated well. It always helps to be culturally sensitive and malleable in our line of business as the ability to readily adapt to different cultures can oftentimes impact professional success."
HVS: "Do you feel that the European hospitality real estate market is significantly different to the U.S. and if so, how?"
Carmen: "The European hospitality real estate market is more complex than the US hospitality real estate market due to the fact that we really have to look at each country as a market on its own with unique legal, tax and employment regimes that impact how we transact and operate in these markets. There really is no single "European hospitality real estate market." This makes transacting in Europe continuously challenging as every time we enter a new market we have to learn a completely new set of rules."
Josh: "Patron Capital has been involved in European hospitality investments since the inception of the fund back in 1999. Patron has seen the industry grow and change from a relatively fragmented space to today's level where international operators are now mimicking what has happened in the US. Accordingly, while Europe has been different to the US market in the past, the challenge now is to find which US trend fits best into some of these developing European markets."
Alison: "The way that business is conducted in Europe can be quite different than in the States. There are many cultural nuances that I think you can only pick up after being immersed in a market for a while. Coming over and trying to conduct business as it is done in the States will not always be effective in Europe, and forming relationships and communication is especially important."
HVS: "Finally, do you feel in any way disadvantaged in comparison to European colleagues?"
Josh: "As I mentioned before, the learning curve can be a hindrance for the first few years of a new career in hospitality in Europe. Having a strong firm behind you, such as Patron, to support the learning period is vitally important to one's success. So, while there may be an initial disadvantage, ultimately with the right firm and proper hunger to learn, Americans can grow to equal their European peers."
Alison: "I suppose there are pluses and minuses to weigh out but in general I don't feel disadvantaged, and I have certainly never felt discriminated against for not being a local. Not being able to speak another language is an area where I am at a disadvantage, but that is only speaking for myself as many Americans are bilingual. I think if your work is primarily involved in one country, such as England, it could be beneficial to be a local, but this is not so much the case when working in a pan-European environment."
Carmen: "I guess it's hard not to feel disadvantaged to certain Europeans who know 4-5 different European languages, but given most cross-border business is transacted in English nowadays; language is not a material issue. Furthermore, one country in Europe can be very different from the next in terms of culture and transaction environment and, as such, being non-European really isn't much of a disadvantage, as long as one has an open mind and a recognition of that."
The impressions of our three interviewees are of course subjective and the findings are further biased by the fact that all three of them are based in London, which makes acclimatization easier both in terms of language and culture. They do however show that a person can successfully transition from America into Europe and that this option should not be dismissed outright by a hiring party.
Based on the quoted interviewees and other consulted Americans working in Europe, one can come to a few, admittedly un-statistical, conclusions:
In closing, there is certainly some merit in considering a transatlantic hire into Europe. The interviewees and their growing number of North American peers are proof that any possible disadvantages can be overcome. In the end, it is a question of weighing the pros and cons on a case by case basis and thinking outside of the Schachtel, scatola or boîte.
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