It goes without saying that in 2016 hotel industry was recognized as a rapidly developing
industry that raises solid investments. It is not strange taking into account the fact that over the
last few years hotel industry has been regarded as one of the most attractive businesses. This is
due to unstable position of world economy since 2013. Hotel business is the industry that can
rapidly response to external changes. Hotel industry is flexible and profitable due to chance of
effective work in a down economy and maximized revenue in the time of economic growth.
Today hospitality industry attracts more and more attention of people who have experience in
it and newcomers. It is possible to define major industry trends in 2017 taking into account
main events in hotel industry that took place in 2016.

1. Collaboration
Collaboration means joint activities of people or companies aimed at achieving common goals.
This is one of the most remarkable trends both in hotel industry and in many other industries.
Collaborations mix completely different and even fantastic ideas and as a result new welcome
and successful products emerge.

For example, one of the latest collaborations in 2016 united world's largest professional
network LinkedIn and world's leading hotel group AccorHotels. Companies introduced new
service called Business Check available for users of AccorHotels app. Business Check helps the
user to find his/her business "contacts" currently staying in the same place and get in touch
with them either directly by E-mail or via Inmail. Business Check supports 18 languages.
Cooperation allows companies to exchange and get experience, new ideas to develop business,
new partners and (the most important thing) new customers. Moreover, due to mutual efforts
in the result of collaboration new things are created; these things attract public attention and
become great news hooks.

2. Companies That Are Not Focused on Hotel Business entering Hotel Market

Due the fact that hotel business is more adaptive to external environment than any other
industry it becomes highly popular among companies that are not focused directly on hotel
business.

Thus, International Direct Investments Fund Hermes-Sojitz that is focused on mining projects
for oil & gas and metallurgy as well as on development and food industry and implements its
boutique hotel chain investment project. The chain will include 12 exclusive hotels with 20–
50 rooms located in the north of Italy. According to media reports, a well-known hotel group
will manage hotels. Real estate items for construction have already been determined and will
be commissioned on a step-by-step basis. An opening of a fully implemented chain is planned
by the end of 2017. At the present time, construction and design of Palazzo Gallo is almost
finished. It is the first boutique hotel of the future chain that is located in Piedmont, the largest
region of Italy.

US lifestyle retailer West Elm and hospitality management company DDK implement one more
hotel project. They launched a chain of hotels called WestElm Hotels characterized by a unique
design and local color and located in five cities within the USA. An opening of the first hotel is
planned by the end of 2017.

The fact that new players enter hotel market shows that the interest to hotel business is
growing. Such interest is cased by various factors, e.g. Increasing flow of tourists. According to
World Travel & Tourism Council, world tourist rates (arrived/departed tourists) have increased,
at average, by 3.1 % advancing global economic growth forecast by 2.3 %.

3. Opening Hotels on behalf of Well-Known Brands

The trend of opening hotels on behalf of fashion brands is still under way. Fashion has moved
beyond clothes and accessories. Today fashion is a global concept that helps to introduce new
products in this or that way related to well-known names and famous brands to the market.
Versace, Armani, Missoni, Moschino and other well-known brands open their own hotels all
over the world.

A new luxury hotel from Bulgari jewelry manufacturer that will be opened in Moscow in 2019 is
just one more proof. This project will be seventh hotel together with others opened under
Bulgari Hotels and Resorts brand all over the world.
Other brands keep up with famous jewelry company. For example, Italian fashion house
Missoni plans to open four hotels located in Kuwait, Cape Town, Oman and Brazil. Now a hotel
on behalf of Missoni functions in Great Britain.

4. Management under Large Hotel Operators

World's largest hotel groups, e.g. Marriott, Accor, Hilton, Wyndham, etc. close deals and buy
hotels all over the world to expand their chains. Both luxury hotels and lower class hotels
attract attention of hotel operators.

There are obvious benefits that a hotel gets from a famous brands. First of all, well-known
name, i.e. guests are sure that they will have certain service level that local hotels can not offer.
World service quality standards offered in branded chain hotels are indicators for guests who
visit a country or a city for the first time. Secondly, use of brands in hotel projects allows to
attract hotel long-standing customers who visited the hotel before. It is necessary to point out
that often this or that chain becomes corporate partner for companies that make the chain
really profitable. Finally, in addition to evident profits cooperations with brands offer other
advantages. For example, advertising, positioning, servicing, training of the personnel, concept
development and design form the proven development and promotion scheme for existing
brands. The scheme is set and proven after years of its implementation. This fact allows to
relieve some pressure that the project manager has to deal with.

Due to these advantages owners of local hotels will go on closing deals with major hotel market
players in order to save and develop their business.

5. Exclusive Luxury and Customized Services

Well-known name supported by world quality standards is not enough to make a hotel project
successful. Moreover, new hotel industry trends must be taken into account.

A modern traveler is looking for more than just a place to sleep and spend time when free from
entertainments. Now tourists tend to choose hotels with specific features that offer them
unusual environment. Such places are called boutique hotels.

Boutique hotel is a small hotel with about 40-50 rooms. Staff in such hotels does its best to
offer guests exclusive luxury and high-level services. Attention to such hotels from well-known
chains and big companies proves that boutique hotels are really popular.

For example, famous hotel group Marriott opened a chain of "boutiques" called Autograph
Collection Hotels. Interior and exterior designs of each hotel are characterized by high quality,
creativity, atmosphere of wealth and peculiar features. Autograph Collection Hotels are aimed
at free independent travelers who prefer something unpredictable to standard hotels.

Sports elite also follows this trend. CR7 Hotel is one more interesting hotel project that proves
that "boutiques" are highly popular. CR7 boutique hotel is a result of cooperation between one
of Europe's largest hotel operators Pestana Group and famous football player Cristiano
Ronaldo. The hotel is located in Funchal (Portugal), administrative center and largest sea port of
Madeira. According to Dionisio Pestana, Chairman of the Board of Directors of Pestana Group,
CR7 boutique hotel chain will expand. Thus, in 2017 Pestana CR7 hotels shall be opened in
Madrid and New York.

The fact that boutique hotels become more and more attractive for investors allows to
conclude that customers' priorities change. Today a hotel is more than just a place for
temporary staying, for guests it is more like home and it has to look like home.
World hospitality industry develops rapidly. Changes in priorities of large hotel operators
concerning development of chains are evident; more and more market players from other
industries emerge and democratization takes place: hotels try to attract both wealthy and
middle-class guests. Due to these and other external factors new hotel industry trends are
developed. We shall witness them in 2017.