(GA, Jan. 2015)
(By Giovanni Angelini, January 2015)
I HAVE BEEN INVITED TO TALK ABOUT CHANGING INDUSTRY TRENDS AND WILL DO MY BEST TO GIVE YOU AN OVERVIEW OF WHAT I KNOW AND MY COMMENTS ARE FOR BOTH THE CORPORATE OFFICE AND FOR THE HOTELS.
KEEPING-UP WITH THE NEW TRENDS IS BECOMING VERY DIFFICULT, LOT OF ACTIVITIES WITHIN THE INDUSTRY AND IF WE WANT SUCCEED WE MUST KNOW WHAT IS HAPPENING IN THE MARKET AND OF COURSE RESPOND.
AND ACCEPT THE FACT THAT THE ONLY THING CONSTANT IN LIFE AND IN BUSINESS IS CHANGE.
SO MANY CHANGES OUT THERE AND IS BECOMING VERY CHALLENGING AND EXPENSIVE FOR SMALL-MEDIUM SIZE HOTEL GROUPS AND FOR START-UPS TO RESPOND AND COMPETE. BUT IF WE DON’T COMPETE, WE GO UNDER.
A QUESTION THAT WE HAVE TO ASK OURSELVES IS; ARE WE FACED WITH “EVOLUTION” OR WITH “REVOLUTION”?
I BELIEVE THAT WE ARE FACED WITH BOTH;
– “EVOLUTION” WHEN IT COMES TO CONTINUOUS PRODUCT, DESIGN AND SERVICES IMPROVEMENT AS CONSUMERS WANTS AND EXPECTS MORE.
– BUT “REVOLUTION” WHEN IT COMES TO COMMUNICATE WITH THE MARKET AND WITH THE CUSTOMERS AND, IN PARTICULAR, ON THE BOOKING PROCESS.
THE INDUSTRY “MIND SET” HAS TO ADAPT AND CANNOT AFFORD TO GET STUCK ON OLD WAYS. CHANGES, INNOVATIONS, NEW TECHNOLOGY, NEW EXPECTATION, EVOLVING CONSUMER BEHAVIORS ARE EVERYWHERE IN THIS INDUSTRY.
INNOVATION WILL SPIN FASTER AND WILL DEFINE THE WINNERS.
FORTUNATELY SOME BASICS IN HOTEL BUSINESS WILL NOT CHANGE MUCH LIKE;
1. THE “WOW” FACTOR ON SERVICE, EXCEEDING CUSTOMERS EXPECTATION AND EXPERIENCES
2. MAINTAINING THE PHYSICAL PRODUCT IN A COMPETITIVE STATUS.
3. PROVIDING “VALUE FOR MONEY” AT ALL TIMES.
4. IT IS A PEOPLES BUSINESS (CUSTOMERS AND EMPLOYEES) AND IT WILL REMAIN AS SUCH, MUST TAKE GOOD CARE OF BOTH.
5. GENERATING AN ACCEPTABLE RETURN ON INVESTMENTS.
THOSE FIVE BASICS ARE HERE TO STAY AND WILL NOT GO AWAY.
BUT WHAT ARE THE HOSPITALITY INDUSTRY TRENDS IN 2015 AND BEHIND FOR HOTELS?
– DESPITE OF ALL WHAT’S IS HAPPENING OUT-THERE, I WILL ALWAYS PUT PRIORITY ON UNDERSTANDING AND RESPONDING TO THE MARKET SITUATION OF EACH DESTINATION.
AND THE IMPORTANCE OF MANAGING THE ROOM SEGMENTATION INCLUDING THE TYPE OF BUSINESS, SOURCE OF BUSINESS, LENGTH OF STAY AND AN HEALTHY MARKET AND SEGMENTATION MIX.
– PLEASE REMEMBER THE “RULE-OF-THUMB’ THAT MORE THAN ONE/THIRD OF THE TOTAL ROOM BUSINESS FROM ONE SEGMENT OR FROM ONE SOURCE IS VERY DANGEROUS AND DAMAGING IN THE MEDIUM-LONG TERM.
(AS AN EXAMPLE LOOK AT THE RECENT DROP OF THE RUSSIAN BUSINESS IN MANY LEISURE DESTINATIONS)
– ONE CLEAR TREND THAT THE INDUSTRY IS PUTTING LOT OF ATTENTION IS ON THE “BOOKING MORE PROFITABLE BUSINESS” THIS BECOMES VERY IMPORTANT AS THE GROWTH IN DISTRIBUTION COSTS AND RELATED OPERATING COSTS HAS GROWN OUT OF PROPORTION.
AN EXERCISE THAT YOU ALL CAN DO IS TO COMPARE THE INCREASE ON COST OF ACQUIRING A CUSTOMER OVER THE PAST 3-5 YEARS VERSUS THE INCREASE OF REVPAR.
FYI, IN MOST CASES, COST OF ACQUIRING A CUSTOMER HAS INCREASED 3 TIMES OVER THE INCREASE OF REVPAR AND THIS, MY FRIENDS, IS NOT SUSTAINABLE.
BY PROPERLY MANAGING YOUR SEGMENTATIONS YOU WILL NOTE THAT BOOKINGS VIA THE COMPANY WEB-SITE IS NORMALLY LOW.
YOU ALSO WILL NOTE THAT THERE IS LOT OF POTENTIAL ON PROMOTING PACKAGES AND MICE BUSINESS. ALSO HAVE A GOOD LOOK AT HOW MUCH BUSINESS IS BOOKED VIA MOBILE.
– MOBILE BOOKING IS COMING VERY STRONG IN MOST PARTS OF THE WORLD AND IT WILL NOT GO AWAY. MOBILE BOOKING IS A PRIORITY FOR MOST HOTEL COMPANIES IN 2015.
(BOOKING.COM REPORTS THAT 50% OF BOOKINGS MADE WITHIN 48 HRS ARE MADE ON A MOBILE DEVICE. CTRIP IN CHINA REPORTS THAT 45% OF ALL BOOKINGS ARE DONE VIA MOBILE).
SO IMPORTANT FOR ALL HOTEL GROUPS-OPERATORS TO HAVE AN EFFICIENT AND EASY TO USE CORPORATE APP.
– ANOTHER PRIORITY FOR ALL HOTEL COMPANIES IS TO STRENGTHEN THEIR LOYALTY PROGRAMS AS THOSE CONTINUES TO GENERATE GOOD BUSINESS.
– THIS BRINGS ME TO ADDRESS THE “OTA’S”. PERSONALLY I HAVE BEEN VERY VOCAL AGAINST THE OTA’S IN THE PAST. BUT I HAVE LEARNED TO ACCEPT THEIR STRENGTH AND REALIZE THAT THEY ARE MUCH SMARTER AND EFFICIENT THAN HOTELS, IN NO WAY HOTELS CAN WIN AGAINST THEM.
WE HAVE TO ACCEPT THAT THEY ARE A REALITY. WE NEED TO STRATEGIZE WITH THEM AND NOT AGAINST THEM.
OTA’S ARE HERE TO STAY AND IN MANY HOTELS AROUND THE WORLD IS BECOMING THE LARGEST ROOM SEGMENTATION.
IN GENERAL, OTA’S ARE CASH RICH AND SPEND LOT OF MONEY ON TECHNOLOGY, FUNCTIONALITY, AND ON ADVERTISING. IN NO WAY HOTELS CAN MATCH WHAT THEY DO, BUT SHOULD TRY AS MUCH AS POSSIBLE.
THERE ARE CLEAR INDICATIONS THAT OTA’S ARE GOING TO HANDLE BOTH THE INDIVIDUAL TRAVELERS AND BE WHOLESALER AS WELL, LIKE CTRIP. THIS WILL DRIVE THE ROOM RATES DOWN.
OTA’S HAVE MADE HOTEL AND TRAVEL BUSINESS A COMMODITY, NO GOOD.
COMMISSION TO OTA’S FROM HOTELS RANGE BETWEEN 10% TO 25% WHILE OTA’S GETS ONLY 3 TO 4 USD FROM AIRLINES PER RESERVATION. (A BIG DIFFERENCE). HOTELS HAVE BEEN EASY TARGETS.
OTA’S ARE THE ONLINE AGENTS BUT PLEASE DO NOT UNDERSTIMATE THE POTENTIALS FROM THE TRADITIONAL TRAVEL AGENTS. THEY ARE GETTING VERY INNOVATIVE AS WELL. WORK WITH THEM AND PLEASE PAY THEIR COMMISSION IMMEDIATELY AND ONLINE.
OTHER INDUSTRY TRENDS TO UNDERSTAND AND RESPOND TO;
– ACCELERATION IN SHIFT FROM DESKTOP TO MOBILE & TABLET.
– AVAILABILITY OF DATA AND MORE CHOICE FOR CUSTOMERS.
– LESS LUXURY APPOINTMENTS BUT MORE EXPERIENCE AND CUSTOMER NEEDS.
– REAL TIME MARKETING THAT MUST TAKE PLACE ON A REGULAR BASIS AND INCORPORATE GUEST-GENERATED CONTENT. BUT DO NOT DISCOUNT THE IMPACT OF TRADITIONAL MARKETING AS WELL
(MANY OF YOU MAY NEED ASSISTANCE WHEN COMES TO REAL TIME MARKETING AND SUGGEST YOU GET CORPORATE OFFICE ASSISTANCE).
– ON REPUTATION MANAGEMENT; TRIPADVISOR IS LEADING IN THIS AREA BUT OTHER PLAYERS ARE INCREASING THEIR IMPORTANCE LIKE YELP, YAHOO, FACEBOOK, EXPEDIA AND OTHERS.
CTRIP IS THE LEADER IN CHINA IN REPUTATION MANAGEMENT AND GETTING STRONGER.
BE PROFESSIONAL ON ANSWERING THE COMMENTS ON TIME AND UNDER THE GM NAME. EXTREMELY IMPORTANT.
– MOBILE BOOKINGS, AS MENTIONED BEFORE, WILL SEE THE FASTEST GROW FOR ALL MARKETS AND OPERATORS MUST FACILITATE THIS GROUP-WIDE PLUS SET NEW TARGETS AND INCENTIVES BY MONTH AND BY YEAR.
– GDS’S ARE EXPANDING THEIR REACH IN A BIG WAY AND THEIR PLATFORMS OFFERS SEVERAL HUNDRED THOUSAND HOTELS.
ABACUS, AMADEOUS, TRAVELPORT ARE INVESTING IN TECHNOLOGY AND ACQUIRING DISTRIBUTION COMPANIES LIKE HOTELZON, BEDS-ONLINE, DESTINATION OF THE WORLD, CONTENT-PLUS AND OTHERS.
– SMALL & MEDIUM SIZE OPERATORS SHOULD MOVE FAST WITH OWN PRIVATE LABEL WITH DIRECT ACCESS TO GDS AND NOT RELAY ON 3RD PARTY.
A NEW TREND THAT IS MAKING HUGE IMPACT IS THE SO-CALLED P2P ACCOMMODATION BOOKING SITES OR THE “SHARING ECONOMY”
1. AIRBNB CONSIDERED THE FIRST AND THE LARGEST, STARTED OPERATION IN 2008 AND AT PRESENT HAS MORE THAN 800,000 LISTINGS IN THOUSANDS LOCATIONS WITHIN 190 COUNTRIES. OVER 20 MILLION GUESTS HAVE USED AIRBNB SO FAR. NO HOTEL GROUPS HAS GROWN AS FAST AS AIRBNB IN THE PAST.
2. A CLOSE SECOND TO AIRBNB IS “TRIPADVISOR VACATION RENTAL”. THEY ALSO STARTED IN 2008 WITH THE ACQUISITION OF US-BASED “FLIPKEY” AND THEN “HOLIDAY LETTINGS”, “NUMBA” AND “VACATION HOME RENTALS”. AT PRESENT IT HAS 630,000 LISTINGS IN 190 COUNTRIES AROUND THE WORLD.
3. “ROOMORAMA”, WAS LAUNCHED IN 2009 AND HAS OVER 120,000 LISTINGS. THEY ARE WORKING ON A PRICE OF 30-40 PERCENT LOWER OF HOTELS OF AN EQUIVALENT STANDARD.
4. WITHIN ASIA THERE ARE TWO PLAYERS BOTH BASED IN SINGAPORE AND BOTH STARTED IN 2012;
“TRAVELMOB” AND “PANDABED”.
ALL THOSE P2P ACCOMMODATION BOOKING SITES ARE COMPETITION TO THE HOTELS IN BOTH THE CITIES HOTELS AND THE RESORT HOTELS IN PARTICULAR.
ANOTHER NEW TREND AND EXPECTATION IS THE DEMAND FOR “HEALTH AND WELLNESS” FACILITIES IN HOTELS AS THOSE WILL CONTINUE TO DRIVE CUSTOMERS’ DECISIONS.
THE OLD SPA CONCEPT IS OUT-DATED AND MUST COME-UP WITH A NEW ONE. MOST HOTEL GROUPS ARE LOOKING A THIS IMPORTANT SERVICES.
NEED TO UNDERSTAND AND RESPOND TO THE NEEDS OF THE YOUNGER TRAVELLERS AS IN SOME CASES THEY MAY HAVE DIFFERENT REQUIREMENTS. (PERSONALLY I FEEL THAT THE REQUIREMENTS OF THE MILLENNIALS HAS BEEN OVER-BLOWN BY SOCIAL MEDIA BUT MUST LOOK AT IT)
ON THE TECHNOLOGY SIDE, ALL HOTEL GROUPS ARE COMING-UP WITH INNOVATIONS;
– THE MOBILE KEYS TO UNLOCK ROOM DOORS IS BECOMING A STANDARD.
– DIGITAL CHECK-IN & ROOM SELECTION COMING VERY FAST, HILTON AT THE AVANT GARDE.
– MULTI LANGUAGE BOOKING ALSO A MUST, AS AN EXAMPLE HILTON IS WORKING ON OFFERING 22 LANGUAGES.
– LOT OF FUNDS BEING INVESTED IN LOYALTY PROGRAMS AND COMMUNICATION WITH EXISTING MEMBERS AND WITH NEW POTENTIAL CUSTOMERS.
– PMS MOBILITY AND CLOUD-BASED PROGRAMS MUST BE LOOKED AT. THIS WILL BE THE FUTURE.
– MORE AND MORE MEDIUM SIZE HOTEL GROUPS ARE LOOKING AT THEIR OWN “CRS”.
– GOOGLE IN PROCESS OF MAKING SOME BIG CHANGES TO THE WAY HOTELS ARE DISPLAYED ON SEARCH RESULT PAGES AND THIS MUST BE LOOKED AT.
– MORE AND MORE HOTEL GROUPS ARE USING DIGITAL MARKETING FIRMS FOR WEBSITE REVENUE OPTIMIZATION. DO LOOK AT IT.
– META-SEARCH HAS A HUGE IMPACT ON HOW CONSUMER PURCHASE TRAVEL TO-DAY AND, PROPERLY HANDLED, CAN SHIFT SOME SHARES FROM OTA’S TO OWN WEB-SITE. ALSO A MUST TO LOOK AT.
– LOT OF REVENUE MANAGEMENT SYSTEMS & TECHNOLOGY OUT THERE, SOME VERY USEFUL AND SOME A TOTAL WASTE OF MONEY.
– FYI COUPLE OF TECHNOLOGY SUPPLIERS FROM JAPAN ARE SERIOUSLY LOOKING AT AN INTEGRATED SOLUTIONS CONSISTING OF; CRS, PMS, PABX, LOYALTY PROGRAM, DATA WAREHOUSE AND REVENUE MANAGEMENT. THIS WOULD BE GREAT FOR THIS INDUSTRY.
– DIMINISHING RETURNS FOR OWNERS ARE SETTING IN MOTION LARGE-SCALE CHANGES IN REVENUE MANAGEMENT STRUCTURE, SYSTEMS, AND RESPONSIBILITY. MUST LOOK AT THE DIRECTOR OF REVENUE ROLE.
THE HOTEL INDUSTRY IS LOOKING AT A MUCH MORE AGGRESSIVE WAYS ON CHANGING PRICING STRATEGIES AND ELASTICITY FOR VARIOUS CONSUMER SEGMENTS AND DISTRIBUTION CHANNELS. AIRLINES ARE DOING A MUCH BETTER JOB IN THIS AREA. CAN HOTELS CATCH-UP?
WHAT ARE THE THREATS & RISKS IN 2015 & BEHIND?
– POLITICAL INSTABILITIES AND IMPACT OF TERRORISM ARE PERHAPS THE BIGGEST THREATS TO HOTELS AND UNFORTUNATELY THIS WILL CONTINUE IN THE FUTURE IN MANY PARTS OF THE WORLD.
– IS THE INDUSTRY FACED WITH ANOTHER ECONOMIC RECESSION FROM IMPORTANT SOURCES OF BUSINESS, EUROPE IN PARTICULAR? IS EUROPE FACED WITH LONG TERM DEFLATION LIKE JAPAN?
– EUROPE IS MOVING TOWARD ZERO INTEREST RATES, WILL THIS IMPACT HOTELS IN ASIA AND AROUND THE WORLD?
– THE DEVALUATION OF COUNTRIES’ CURRENCIES IS MAKING A NEGATIVE IMPACT FOR MOST HOTELS IN ASIA. WE ARE SEEING CURRENCY DEVALUATIONS IN RUSSIA (MOST SEVERE), EUROZONE, JAPAN, INDONESIA, BRAZIL AND OTHERS.
– IS THE PRICE OF CRUDE OIL WILL MAKE AN IMPACT IN HOTEL BUSINESS? POSITIVE OR NEGATIVE?
– AND AT THE SAME TIME, WE ARE EXPERIENCING A SHORTAGE OF SKILLED LABOR FORCE PREPARED TO WORK IN OUR INDUSTRY. LABOR COST WILL INCREASE.
WHERE ARE THE POTENTIALS & OPPORTUNITIES FOR BUSINESS?
– PERSONALLY I BELIEVE THAT THE BIGGEST OPPORTUNITY AT PRESENT IS TO ATTRACT THE CHINESE OUTBOUND TRAVELLERS. VERY FEW HOTELS ARE DOING A GOOD JOB WITH THIS MARKET.
LAST YEAR THERE WERE WELL OVER 105 MILLION TRAVELLERS OUT OF CHINA AND IT IS ANTICIPATED THAT BY 2020 THERE WILL BE OVER 200 MILLIONS.
DO YOU KNOW HOW THEY BOOK AND WHAT ARE THE EXPECTATIONS? CAN YOU COMMUNICATE WITH THEM? NOTE THAT THE WHOLE WORLD IS AFTER THE CHINESE BUSINESS.
– KOREA REMAINS AN IMPORTANT SOURCE OF BUSINESS IN PARTICULAR THE HONEYMOON SECTOR FOR RESORT HOTELS. DO LOOK AT THE FLIGHTS PATTERNS TO YOUR DESTINATIONS.
– MIDDLE EAST, HONG KONG, SINGAPORE, TAIWAN, INDIA ARE ALSO STRONG POTENTIALS.
– A MARKET THAT HAS POTENTIAL IS AUSTRALIA. THIS CAN BE A GOOD SOURCE OF BUSINESS FOR RESORT HOTELS.
HOWEVER, HAVE TO COMPLY WITH THEIR SPECIFIC REQUIREMENTS IF SOME HOTELS WANT THIS BUSINESS. ALSO FOR THIS MARKET, LOOK AT THE FLIGHTS PATTERNS.
– THE NORTH AMERICA ECONOMY AND ITS CURRENCY HAVE DONE WELL IN THE PAST COUPLE OF YEARS. WILL THIS MARKET BE ABLE TO GENERATE ADDITIONAL BUSINESS FOR HOTELS IN ASIA?
– MUST ACCEPT THAT THE WORLD WILL BE LOOKING AT THE USA AND AT CHINA TO DRIVE GROWTH AND NOT ONLY IN HOTEL BUSINESS.
LOOKING AT THE FUTURE, FEW TRENDS THAT WE HAVE TO FACE WITH;
– LESS & LESS BRAND LOYALTY. THIS IS A CONCERN FOR ALL HOTEL GROUPS.
– HERE YOU HAVE TO ASK YOURSELF HOW CLEAN IS YOUR CUSTOMERS DATA BASE AT BOTH THE HOTELS AND AT CORPORATE? AND HOW OFTEN YOU COMMUNICATE WITH YOUR CUSTOMERS?
– DATA BASE AND REPEAT CUSTOMERS IS THE SO-CALLED “BREAD & BUTTER” FOR HOTELS, PLEASE GIVE PRIORITY ON UP-DATING YOUR DATA BASE AND DO NOT SHARE IT WITH 3RD PARTIES.
– WE WILL CONTINUE TO SEE NEW BRANDS AND NEW PRODUCTS ENTERING THE MARKET BY BOTH THE LARGE GROUPS AND BY THE NEW STARTERS. THIS WILL DEFINITELY CREATE NEW COMPETITION AND ALSO CONFUSION AMONG THE CONSUMERS.
– HOW CLEAR YOU ARE ON YOUR COMPETITIVE EDGE? AND WHAT YOU DO ABOUT TO WIN NEW CUSTOMERS?
– THERE WILL BE LESS AND LESS MANAGEMENT AGREEMENTS AND MORE FRANCHISING ALL-OVER ASIA. (JAPAN IS AN EXAMPLE).
– AT SAME TIME ALL HOTEL GROUPS WANTS AND NEED TO EXPAND AND GROW AND HAVE TO RESPOND ACCORDINGLY.
– HOTEL OWNERS ARE MUCH MORE DEMANDING, INVOLVED AND ARE CALLING FOR INCREASED SCRUNITY IN PARTICULAR ON BUSINESS GENERATED BY THE OPERATOR SYSTEMS.
– A VERY CLEAR TREND IS THAT OWNERS AND DEVELOPERS OF NEW HOTELS WANTS AN INTERNATIONAL BRAND FOR THEIR PROPERTIES BUT AT SAME TIME WANTS TO RUN THE HOTEL WITHOUT MUCH INTERFERENCE FROM THE OPERATOR.
– IT HAS BECOME IMPOSSIBLE FOR THE OPERATOR TO APPLY SAME CORPORATE POLICIES FOR ALL HOTELS AND THIS MAY BE ON REIMBURSABLES, ON PROGRAMS, INSURANCES ETC….
FLEXIBILITY HAS TO BE EXTENDED BASED ON SIZE AND ON LOCATION OF THE HOTEL.
– OPERATING COSTS WILL CONTINUE TO INCREASE IN PARTICULAR DISTRIBUTION COSTS AND LABOR COSTS.
IN MANY CASES OPERATING COSTS INCREASE PERCENTAGE WILL BE HIGHER THAN THE REVENUE INCREASE PERCENTAGE. THIS IS A DANGEROUS TREND.
– IN RESPONSE TO THE GROWTH OF THE MIDDLE CLASS THROUGHOUT ASIA, WE WILL SEE MORE AND MORE BUDGET HOTELS, ALL OF THEM HOPING TO REPEAT THE SUCCESS OF IBIS BY ACCOR AND OF HOLIDAY INN EXPRESS.
– WE HAVE SEEN BRANDS LIKE ZEST; BNB, HOP INNS, TUNE, FAVEHOTELS, CENTARA, SILKA, ETC…GROWING VERY FAST WITHIN ASIA.
– THE AIRLINE INDUSTRY IS RESPONDING VERY FAST WITH THE NEW LOW COST CARRIERS AIMING AT THE GROWTH OF THE MIDDLE CLASS WITHIN ASIA, HOTELS HAVE TO-DO THE SAME.
– WE WILL SEE MORE OTA’S CREATING COMPETITION AMONG THEM. (AS AN EXAMPLE IS AMAZON ENTERING THE HOTEL BOOKING SPACE?) MOST PROBABLY YES. WE ALSO WILL SEE CONSOLIDATION AMONG THEM AND THE RECENT PURCHASE OF TRAVELOCITY BY EXPEDIA IS A CLEAR EXAMPLE.
WILL TRIPADVISORS BECOME AN OTA’S? FROM RESEARCH TO RESERVATION, VERY POWERFUL.
GOOGLE, APPLE, FACEBOOK AND OTHERS ARE RAPIDLY BECOMING SIGNIFICANT PLAYERS IN HOSPITALITY.
– FOOD & BEVERAGE PROFITABILITY WILL CONTINUE TO DECLINE, HERE THE INDUSTRY HAS TO LOOK AT MORE CREATIVE RESTAURANT CONCEPTS AND MAXIMIZING POTENTIALS FROM MICE BUSINESS.
– THE INDUSTRY HAS TO LOOK AT THE CANCELLATION POLICY AND IN SOME CASES PAY IN FULL UPON MAKING RESERVATION (LIKE AIRLINES)
– MOBILE WILL ALSO BE USED FOR PAYMENT AND MANY OTHER HOTEL SERVICES LIKE CONCIERGE.
SO MANY APPS ARE BEING DEVELOPED FOR THE HOSPITALITY INDUSTRY “IPHONE” AND “IPAD” AND WORTH LOOKING AT SOME OF THOSE.
– HOTEL’S BATHROOMS AND BEDDINGS STANDARDS WILL CONTINUE TO IMPROVE AND CANNOT AFFORD TO BE LEFT BEHIND, AT THE END OF IT, THIS INDUSTRY SALES SLEEP.
– INTERESTING TO SEE WHO WILL BUY WHOM IN 2015. DEFINITELY THERE WILL BE SOME CONSOLIDATION WITHIN THE INDUSTRY.
– ALSO INTERESTING TO SEE WHO WILL BUY KUONI UK, MOST PROBABLY A LARGE OTA AND IF THIS HAPPENS YOU CAN IMAGINE THE CONSEQUENCES FOR HOTELS.
– CHINESE INVESTORS LIKE WANDA, JIN JIANG AND OTHERS ARE SERIOUSLY SEARCHING TO ACQUIRE HOTELS AND GROUPS AROUND THE WORLD.
FORTUNE MAGAZINE JUST REPORTED THAT CHINA HAS 4 TRILLION USD IN FOREIGH EXCHANGE RESERVES. FOR SURE SOME OF THIS MONEY WILL BE USED FOR PROPERTY PURCHASES, INCLUDING HOTELS.
– WE ALSO HAVE TO ACCEPT FACTS THAT WITH THE EXCEPTION OF VERY FEW DESTINATIONS, NEW DEVELOPED HOTELS WILL NOT GENERATE HIGH RETURNS FOR THE SHAREHOLDERS. 5% IS ALREADY GOOD. NO LONGER THE 10% AND PLUS.
– IN ADDITION OF REVPAR, GOP AND ROI, NEW METRICS ARE BEING PUT IN PLACE BY SOME OWNERS LIKE;
PROPOR; PROFIT PER OCCUPIED ROOM.
PROPAR; PROFIT PER AVAILABLE ROOM.
REVENUE AND PROFIT BY SQUARE METER
NET REVPAR; ETC……
– ASSET MANAGERS HAVE TO JUSTIFY THEIR EXISTENCE…….. AND BANKS WANT MORE TRANSPARENCY.
WITHOUT OFFENDING ANYONE, WOULD LIKE TO TOUCH ON SOME OF THE BAD HABITS BY HOTELIERS (IN GENERAL), WE ALL ON “SAME BOAT” AND MADE SIMILAR MISTAKES IN THE PAST;
– COMPETING ON PRICING IN MOST CASES.
– MANAGING RATES TO MEET BUDGET INSTEAD OF MAXIMIZING REVENUE (BUDGETS ARE STATIC WHILE CUSTOMER DEMAND IS DYNAMIC).
– STICKING TO BAR PRICING VERSUS DYNAMIC PRICING.
– NOT TRACKING WEBSITE BOOKING INQUIRES.
– NOT STUDYING LOST BUSINESS.
– NOT AWARE OR UNDERSTAND HOW CUSTOMERS BUYS/MAKE RESERVATION.
– NOT RESPONDING TO GUEST FEEDBACKS ON TIME.
– NOT FORECASTING DEMAND.
– POOR CUSTOMER’S RECOGNITION AND NOT OFFERING DEAL ON DIRECT ONLINE BOOKINGS.
– SLOW ON FACILITATING CUSTOMERS WEB-SITE EXPERIENCES AND SLOW ON UP-DATING THE WEB-SITE AND RECOGNISE THAT GUEST EXPERIENCE STARTS BEFORE THEY ARRIVE AT THE HOTEL.
– NOT CLEAR ON OWN COMPETITIVE EDGE.
– NOT RESPONDING FAST TO THE MOST ANNOYING FACTORS TO CUSTOMERS IN TERMS OF PRODUCT, SERVICE, SECURITY AND TO WHAT IS IMPORTANT TO THEM.
– CONDONING POOR SERVICE ATTITUDE FROM STAFF.
– NOT ANTICIPATING TRENDS & EXPECTATIONS.
– PUTTING MORE ATTENTION TO DÉCOR THAN DISTINCTIVE AND AUTHENTIC SERVICE.
– NOT THINKING OUT OF THE BOX.
– BELIEVE THAT BRANDS AND IMAGE IS BUILT BY ADVERTISING AND BY MARKETING. VERY WRONG. IT TAKES MUCH MORE THAN ADVERTISING.
SUCCESSFUL BRANDS ARE BUILD WITHIN THE ORGANIZATION FROM THE CEO OFFICE ALL THE WAY DOWN AND IN THE HEARTS AND MINDS OF ALL OF THOSE WHO WORK WITH THE ORGANIZATION.
– BRANDS STANDARDS ARE IMPORTANT BUT PLEASE NOTE THAT STANDARDS CAN BE COPIED. SERVICE ATTITUDE CANNOT BE COPIED IN PARTICULAR IF THAT ATTITUDE IS BASED ON THE UNIQUE CULTURE BEHIND THE BRAND.
– THIS WHY I HAVE STATED FEW TIMES THE IMPORTANCE OF A CLEAR COMPETITIVE EDGE.
– NOT SOLVING COMPLAINTS ON THE SPOT (THERE IS A BOOK OUT THERE TITLED “COMPLAINT IS A GIFT”). AVOID BAD REVIEWS ONLINE, (BAD REVIEWS COMES FROM COMPLAINTS).
– FAILURE TO RECOGNISE THAT CONSUMERS ARE WILLING TO PAY A LITTLE MORE IF THEY PERCEIVE IT IS A GOOD DEAL.
– KEEPING PRICE OF SUITES FAR TOO HIGH FOR CONSUMER TO BUY.
AND SO-ON…
ON CLOSING MUST STATE THAT HOTELIERS ARE FACED WITH A CHANGING LANDSCAPE THAT REQUIRES A CHANGE OF “MIND SET” ON GENERATING BUSINESS, ON PROFITABILITY, AND ON THE HIRING, MOTIVATION AND COMPENSATION TO EMPLOYEES-STAFF.
HOTELIERS MUST BE VERY CLEAR WITH WHAT THEIR BRAND STANDS FOR AND WHAT IS THEIR COMPETITIVE EDGE. ALSO MUST BE VERY CLEAR WHY A CUSTOMER WOULD CHOOSE YOUR HOTEL OVER THE COMPETITION.
IF A COMPANY CANNOT FULLY UNDERSTAND ITS OWN BRAND STRENGHTS AND ITS OWN COMPETITIVE EDGE, IT WILL BE IMPOSSIBLE FOR THAT COMPANY TO CREATE CUSTOMER’S EXPERIENCES.
THANK YOU.
