Hospitality 2013

(by Giovanni Angelini, Feb 2013)

“An industry managed by people for the service of People”

As we move forward in 2013…….smooth or bumpy road ahead?

Demand from “above” to perform and produce higher results continues to grow in 2013 and in future years, competition is strengthening and is much more aggressive, customers are more sophisticated and demanding. The workforce is less engaged and required to-do more with less, increased services throughout technology. Managing more business channels and new source of business, capturing online shoppers, maximizing on the social media, response to more complex demands, innovation & product improvements, continuous justification of operating costs, cash flow, ROI, etc. is what the hospitality-hotel business is faced with in 2013 and onwards.

Now more than ever, hotel executives and leaders must be fully aware and familiar with the economic trends and of the hospitality industry indicators in order to respond on time and with efficiency.

Executives and leaders are fully responsible and accountable for the hotels-business under their supervision and the followings are some basic “guides and reminders” to keep us on the right path in order for our business to prosper and generate the expected results;

1 – Challenges and opportunities facing the industry (Continuous changes…)

–       Dwindling demand growth & tight revenues in several markets

–       Increasing competition and too many brands creating confusion in the market

–       Shortage of trained & committed labor force, mid-high management in particular

–       Increased guest requests & expectations

–       Compounding costs & continuous increases

–       Commoditization; too late? or can we prevent it?

Full understanding of what’s motivate customers to select a hotel;

FYI, survey by Market Metrix;

Global results; Responses from American, European and Asian Travelers 2012  
Note: Brand and Loyalty Program Points/Rewards on the low side. Going forward, would           customers have similar motivation on selecting a hotel in 2013 and onwards?  

Responding to the many changes, opportunities and potential danger of e-commerce;

–       Meta-search price manipulation by others

–       Brand protection from 3rd party users

–       Search engine optimization

–       Manage the online presence

–       Adapt to online marketing without losing the personal touch

–       Continuous up-grading of web-site

–       Electronic oriented travelers

–       Mobile consumers

–       What would be the impact if Google become a full-fledged OTA?

–       Faster and simpler online booking. Superfast internet as basic standard

–       Control on OTA’s volume and rate plus commission (Important to manage this)

Diversification of distribution and maintain an healthy balance (not all eggs in one basket).

How hotels/groups can maximize revenue/business from call centers?

Forecasting customer values & expectations.

Implement/manage rolling demand calendar for the following 12 months and loading of rates accordingly (Discipline).

Flat demand from the West, increase demand from Asia and must adapt to cater to those new sources of business and expectations.

Less importance to the traditional hotel representative model.

Stagnant innovation within the industry and insufficient allocation of funds.

Leadership & senior management long term commitments.

Higher/unrealistic expectations from owners & investors.

Extreme competitive environment on securing Management Agreements.

Global power and political shifts and growing inequalities and instabilities.

Economic successes but at same time declining of social traditions and in many cases erosion of the family structure.

Air travel is getting more cumbersome by the day.

Climate change, extreme weather and natural disasters.

Question:  Can you identify other challenges first for 2013 and then for future years as it relates to your business-property and to the industry in general?

2 – Changing Trends

Hotel chains/operators will have to grow much faster than the past.

Emergence of the new middle class in many part of the developing world with strong appetite for higher consumption.

Shifting in consumer dynamics and expectations that international organization provides a local and human touch and not only hide behind a brand.

Surveys show that more & more customers want value and prepared to pay more for top of the line quality in particular if the product is perceived to be exceptional.

Communication between people around the world continues to be faster & faster.

Less tolerance for impersonal and sub-standard services

Technology: (fully exploited?)

Increase on customers travelling with iPads, Blackberries, Computers, Smartphone and request for simple to use in-room connections/recharging facility.

Superfast/high speed connections with both wireless and cable and with significant download capacity (Plus all international multi-socket plugs in the rooms).

Free uninterrupted, multiple users, Wi-Fi everywhere within the hotel including public areas, restaurants, hotel limo, elevators, rest rooms, etc.

iPods and/or tablets in the rooms.

Increase of online reviews, rating and scores (TripAdvisors & others).

Integration between POS and PMS systems incorporating customer relationship management with objective of customer recognition & response to customers’ needs & changes.

Increase of online meetings-teleconferencing-webinars as a second alternative to face-to-face meetings.

Popularity of Smartphone to access mobile websites.

Increasing availability of media within the hotel.

Increase on electronic check-in & check-out.

Check-in’s at any place; airport, limousine, lobby, room, etc. with the latest tablets.

Online Travel Agents (OTA’s):

The hate/love relationship between OTA’s and hotels/operators will continue. Both parties will have to accept each other.

OTA’s are beating branded hotel websites both on social media and on search.

In general hoteliers are not good at cooperating for the common good of the industry and the OTA’s are fully aware and taking advantage of it.

OTA’s may add value and they only get paid if they “close the deal” of booking the room but commission paid by the hotel remains far too high.

OTA’s will continue to be quick on establishing a dominant position in the market place.

Consolidation among the OTA’s, small operators being taken over by larger players creating dominance.


More & more hotel chains offering own booking online capabilities to independent hotels and to small hotel groups (referred as white label) like “Autograph” by Marriott and similar.

Most hotels expected to be much more proactive on managing their portfolio of distribution channels and look at a much broader picture in order to minimize risks.

Health fitness and well-being are becoming essential needs by most and there is an increasing expectation that hotels have to provide top of the line facilities & services in this area and not only the pampering Spa.

 Increase in demand for rest, relaxation and preventive health programs.

Increasing demand for healthy & nutritionally balanced menus with focus on local & seasonal items. “Vegetarian” and “Gluten-free” items/choices is a must to have.

“Healthy” in room mini-bar with careful selected items (less sugar-sodium-fats and with items that enhance hydration) as standard items.

Large “wet room” style showers preferred over traditional bath-tabs. Showers with strong pressure but without wastage of water.

Larger & better quality in-room TV and interactive TV solution & entertainment (HD, sound, etc…)

Paperless check-in and check-out and reduction of paper consumption in general.

Reflagging of hotels, brand to brand conversion due to performance, on the increase.

Increase on conversion of traditional hotels into condo-style concepts and selling of units to the public plus provide management of those.

The rise of the unhotel concept (pairing top private homes with hotel services).

Confusion on the overused terms “Lifestyle and Boutique” as customers expect clarity on facilities and standards offered by those concepts.

Stronger focus on CSR strategies and investments towards equipment and in particular education & attitude.

Well-stocked vending machines replacing room services late night.

Quality pump dispensers in the bathrooms rather than little toiletry packs.

Better quality of “Beddings” in general.

Leasing of in-house restaurants to outside specialists.

Safety and Security becomes more & more important.

The emergence of the “innovation director” position at groups/chains corporate office.

Will we see a very large merger in 2013? (IHG, Accor, Marriott, Starwood, etc.)

Question:  Where do you see the hotel industry in 5 years and in 10 years from now? What’s need to be done to survive and prosper?

3 – Brand (Useful reminders)

Clarify the brand standards carefully and clearly.

Brand standards have to be first sold internally then externally.

Is the DNA of the organization reflected in the brand expression / vision?

Is there clarity on the brand promises? Do customers understand it? And is the promise delivered? Can you measure it?

Hotel brands tend to be too ubiquitous that they have somewhat lost their soul and uniqueness.

Hotel branding is much more than just putting a logo everywhere.

Global brands must consider the local-driven “Micro-branding” promoting particular facilities & services aimed at the local clientele.

Do not rely too much on “traditional” or “interactive” agencies on being the best keeper of the brand image.

What is done to prevent brand erosion? Are you on top of this?

Have you measured the brand position-perception within the industry?

Of the total advertising and promotion budget, how much (%) is directed to the image-brand position and how much to tactical? How much print advertising and how much electronically?

In your specific case, what is more important for a customer to choose your hotel; the brand, the location, the rate or …? (See the Market Metrix 2012 Survey)

Also is the price (room rate) more important, for a customer to choose your hotel, than for your brand or your location?

What is the volume of room business generated by your repeat/loyal customers (% of total) and do you know why they choose your hotel?

Is there image consistency throughout the hotel/group on brand’s related material? Who controls it? And is the Corporate Identification Manual updated and implemented?

Question:  Are you and your staff proud of your brand? And what you do to strengthen it?

4 – Managing business (Trends & Suggestions)

Delivering customer’s satisfaction remains the ultimate objective of hospitality.

Differentiate between hospitality excellence and mediocrity.

Always deliver what has been promised, avoid overpromising. Also avoid fancy-complicated advertising, promotion and tactical messages.

Growing business in a down economy is tough, but possible.

In times of crisis you find who your friends are.

Lowering rates is an ineffective strategy to increase revenue and market share. It brings the whole competitive set and the destination down and it takes years to recover.

Do not fall behind your competitors. Aim for market leadership within your competitive set.

How do you cater to the new demographic of travelers?

Loyal clients make the difference between success and failure.

Invest in resources that add value (value to customers, to staff and to the product).

Observe first-hand how guests are treated and of the efficiency of the operation and compare with your competitive set.

Very difficult to satisfy guest needs without proper systems support and consistency.

Think and plan for profit contribution from all profit centers.

Ensure sustainable business and effective cash management.

Global companies need to think regionally and involved in the community.

Respond to the ever increasing demand of mixing business with wellness and leisure from various segments, MICE in particular.

What is done in response to the increase in demand from female business travelers?

More alignment to take place between investor and operator in standards, quality, labor-people and product improvement.

Set ambitious goals but avoid creating “Stretch budgets”. If not properly handled, those could become counter-productive. If for a specific reason, stretch budgets are created, it is a must to highly compensate the staff on achieving those targets.

Annual business plan: How an owner is assured that the operator has explored all potential revenues and enhancements to optimize returns and asset value for the hotel and is given the right benchmark? Do the owners buy in the operator budget process? Is the budget developed on zero-based principles? And are each month properly forecasted? Are the forecasts pro-active or are reactive?

Question:  Has your company the policies, the standards, the systems and the procedures in place to deliver outstanding customer service and customer friendly rules? “Rules are to serve the business, not vice-versa”.

5 – Do’s & Don’ts in Marketing (Guidance)

Avoid the long annual marketing plan. Have a document that is a useful working tool and with a clear mission statement for the fiscal business. Must have strategies for each segment of the market place with flexibility to modify tactics as necessary.

The marketing plan is to be supplemented by a “Working Dir. of Marketing manual”. This is a “live” document containing programs, activities and measurable performance reports and it must be updated on monthly basis.

Develop a “sales-revenue culture” in the hotel that takes priority over any other activities and involve all Division-Department Heads on sales and customer relations activities.

Reevaluate what worked and what did not work the previous year. Learn from mistake and do not repeat them.

Plan and execute practical campaigns aimed at increasing market share. Listen to your customers and reflect on what’s need to be done.

Practice balance on increasing rate, occupancy (objective is the RevPAR) and on making best use of marketing funds. Customers will know if there is an element of “greed” on increasing-setting rates.

Be pro-active on social marketing, not just “lip service”, respond to customers’ comments & recommendations

Constant manage OTA’s activities, refocus on your own website and manage a dynamic pricing system.

Involve all divisions heads on the forecasting process; month, 3-months, year-end and set targets for accuracy.

Your traditional markets (source of business) are important but always look for new markets as there are always new travelers with “spending power”.

Worth to consider creating or participate at hotel search engine websites like the with objective of reducing costs (commission) and expanding source of business?.

Give your revenue manager necessary tools to analyze data and plan accordingly. Revenue managers are critical part of the executive committee.

Manage your rates and ensure rate parity, if necessary adjust your bar rate on daily or even hourly basis.

Don’t allow the OTA’s to control your inventory and to purchase rooms below your bar rate. Do business with OTA’s on a win-win situation.

In some markets a “booker program-recognition” works and should be explored directly by the hotel/s.

Loyalty program; recognition or point system? An individual hotel or a group-wide program should be in place and properly managed.

Is there a daily revenue meeting at the hotel/s chaired by the GM?

What’s the condition of the hotel/s database? It is used? (Very powerful tool)

Is conversion rate optimization measured? (Lost calls & conversion of enquiries)

How is the reservation team performing? Also what is the volume of business generated by the regional sales offices? Are there clear KPI?

Address what’s need to be done/improve in the E-commerce and technological innovation.

Is SEO (Search Engine Optimization) understood by all, in particular by the organization leaders and by the head/s of marketing? Or there is confusion? And what’s being done?

Must understand that throwing money at marketing may not necessary result in higher performance.

Are you measuring the amount of commission paid and compare year-on-year?

Do the OTA’s have access to your special tactical packages and to your contracted corporate rate to top producers? Be alert/dangerous.

Is there a clear strategy for each segment and how it is measured? What is the volume and % of MICE business? What’s need to be done to increase this important business? Plan of action in place?

Who controls the catering book? (Normally one responsible person).

Is the % of repeat guest measured? And the length of stay?

More focus on weddings as those are revenue generating specially when rooms are involved and are recession proof.

Importance of update/change the website within 24-36 months. Gradual replacement of printed documents with tablet-based reporting, iPads are becoming an essential tool for one-on-one presentations and other uses.

Question:  Are the room’s segmentations properly forecasted and managed? And is the hotel/s managed by the GM-team or the hotel/s manages the GM-team? (Leadership)

6 – Leadership & Alignment (Basic suggestions)

Is the hospitality industry experiencing a gradual decline of strong-capable-experienced leaders? Do to-day’s leaders fully understand the very basics of hotel business? Of course generating the desired ROI is the final objective of a leader but do corporate leaders respond to the fact that revenue and profitability is not created at Corporate but at the hotels-units by a team of motivated-committed people and by having a competitive product and by actively responding to the ever-changing customer/market needs? Do today’s hotel leaders are fully committed to train & develop people and not only focus on retrenchments during low periods? In this demanding industry, strong and experienced leaders are necessary at both corporate and at hotels.

Creation of strong and clear aligned vision towards a common objective addressing both people and customers are one of the first priorities for a leader.

Be credible, bold, engaged, adaptive, caring and create respect.

Be much more proactive on all what you do and less reactive.

Avoid procrastination at all levels, decisions and actions have to be taken on time and do not rely on others. Respond very fast to the needs of staff and of customers.

Lead by example (not just “Do as I say” approach).

Delegate and recognize results and achievements.

Be a solid communicator and have an on-going creative communication with your team at all times.

Need of holistic vision to lead. Decide what’s important and focus on it.

Hire the right people around you, “smarter” people than yourself.

Priority on taking care of the people who care for the organization. (Proactive vs. Reactive)

Cut “rotten apples” quickly, don’t waste time on this one.

 Importance of team work, accept that you cannot do it alone.

Differentiate between leader and manager.

Coach versus command. Handle challenges as positive opportunities for learning and growth.

Be visible “Get out from behind your desk”.

Promote and guide people to set priorities in life.

Avoid lengthy unnecessary reports and also avoid 3rd party consultants who claims to know “everything” and that they can change the company’s performance. Note that a good and motivated in-house team can produce much better than consultants.

Always remember that with the right team and absolute aligned vision, you can achieve the desired targets and the organization will prosper.

“Fact of life question”, Do you trust and respect your boss? Is there alignment and do you trust your co-workers? In the end, trust, alignment and engagement breed success.

7 – People (Your success)

Always remember that we are in people’s and in service delivery business.

Attracting good people has become very challenging and even more challenging to retain them particularly in Asia (Greater China most severe).

Accept that in most cases employees are more important than guests.

Develop the right people and it has become a must to provide an attractive career path and personal growth.

Ensure that the compensation and incentive package is among the top 3-4 industry’s package within the city/region and it is reviewed-updated on annual basis. A long-term provident fund for executives/management is a must.

Continuously build & maintain a smart, engaged and “healthy” team, a winning team.

Drive your team towards continuous self-improvements and to new-positive ways to think-plan.

Treat your team with respect, admiration and appreciation.

Celebrate success but do not accept underperformance in your team.

Create confidence and provide support in good and bad times.

Open your team to new ideas, let them participate & contribute. Provide an environment of risk-taking.

Avoid overloading your team with complex-multi programs and heightens their knowledge in technology, social media, etc.

Always let the people know where they stand, do evaluation often and reward the top performers.

Work is so much more fun when you really care about each other and remember to have some fun.

Be honest with your team and avoid politics.

Productive staff: how it is measured and is there a labor productivity program that can be measured like revenue per labor hour, rooms cleaned per shift, cover per service period and similar. Also any indicators how the number of A & G and management staff are set and controlled.

Staff facilities: time to upgrade/renovate the basic facilities? Lockers, showers, toilets, recreation and most important the staff restaurant/cafeteria. Do all staff take meals in the cafeteria including top management?

Remember the balance: Happy staff and unhappy guests mean poor business and happy guests and unhappy staff also means poor business.

Question:  Is your company a fun place to work? Do you respect the leadership? Are you learning and do the company gives you opportunity to grow?

8 – “Wow” the customer (Importance of First Impression)

Remember that in addition to “Value for Money” customers will also expect memorable experience, reliability and convenience on selecting a hotel where to stay.

In line with the above and with management ultimate objective of delivering satisfaction at all times, hotel leaders must ensure that all customer’s contact points are efficient, are customer’s friendly, are representative of the brand promise and all staff are properly trained on responding-handling at all situations.

The following is a simplified check-list and a useful guide focused on guests’ first impression;

–       Efficiency of the hotel/company website easy to navigate, availability of all necessary information about the hotel, easy to book and importance of comparing own website with the competitive set.

–       Clarity of the reservation-confirmation document (number) that the guest receives. Are all necessary information included and easy to understand? Plus do compare it with same document of the hotel competitive set.

–       Does the hotel send a reconfirmation note (electronic) close to the arrival date with the latest information of what the guest will expect at the hotel on arrival?

What’s need to be done to make the guest feel special from the very first interaction/first impression?

–       Status of drive-way and exterior-surroundings of the hotel.

–       Traffic flow and efficiency of doorman.

–       Response and efficiency of bell staff and handling of luggage.

–       What is your guest first impression on entering the lobby?: Lighting, décor, directions, smell, sense of welcome, etc.

–       Are the front desk staff welcoming, warm, attentive, efficient and informative? How long it takes for a guest to check-in? And are the staffs distracted by other activities (like answering the phone) during the check-in process? Remember that guests may be tired of a long trip and expects full attention.

–       What’s the status of the hotel front desk system? Does it give immediate response-information and are tablet computer provided-used to facilitate check-ins at different locations?

–       Does the guest receive all necessary/basic items-information at the front desk? Working condition key, access code to Wi-Fi, room rate, check-out date, method of payment, etc.

–       Are the elevators clean at all times, speedy-fast and with updated advertising-information material?

–       Are the lift landing clean, attractive, well-lighted and with an in-house phone?

–       Are the corridors well-lighted with clear indications, not noisy and are the room numbers easy to find-read?

–       Is the room key easy to use and are door locks in good working order at all times? (Extremely upsetting for a guest to go back to front desk to have a non-working key changed)

–       What’s the first impression the guest gets of the room on opening the door?; Lighting switches-controls, cleanliness, TV, working desk, connectivity, temperature control, luggage rack, black-out curtains, sound proof, amenities etc.

Important: First impression is so critical and all the above guest interactions are to be efficient, pleasant, welcoming, creating that sense of good choice of hotel and trust that will reflect on value for money in the guest perception.

All the above appear to be routine but are extremely important and in many cases overlooked. (It is well-known within the industry that one of the biggest guest complaints as reported by quality surveys, are on arrival/check-in and on departure/check-out). Interesting to assess how hotel/s respond to this and of what is being done to reduce those complaints.

Of course guests also expects other basic services/attention during their stay at the hotel like recognition, personalization, efficiency, latest technology, security & privacy, a top of the line beddings, good bathroom with strong pressure shower & efficient drainage, fast response to any requests, etc…and most important a good night’s sleep, a quality/healthy breakfast, a well-equipped exercise room and of course appreciation.

Hotel management must have “clear standards” and “step-by-step” guidelines addressing all possible interaction with the guests and a well-trained and engaged staff at all levels committed to deliver guest satisfaction.

Question:  When was the last time you stayed in a competing hotel with objective to compare services & attention? And what was the last time you directly experienced the services-attention-response to efficiency-unusual situations in your hotel?

9 –  Company E-mail (Pluses & Minus)

E-mail has drastically changed ways to communicate and interact but we always have to ask ourselves if e-mail is the best vehicle to communicate or we can achieve better results on communicating via phone or even better “face-to-face” specially within the same office?

Avoid being driven by e-mail, have full command of your time and actions. You must plan not only respond.

Recognize that e-mails are creating “silence” as people are messaging and not interactive.

Suggest to check your e-mail only at specific times of the day and dedicate more personal attention to your colleagues-staff and customers.

On sending e-mails, be direct and get to the point at the beginning of the message.

State who should respond and when.

Keep e-mails short and to one topic.

Consider eliminating/disabling the “Answer to all” button (give serious thoughts on this).

Send only business messages.

Avoid misunderstandings, remember the rules of punctuation and grammar.

Remember that a simple phone call or in-person can solve many issues much better and faster that via e-mail.

As a good practice (Standard policy in several top organizations) all portable electronic, communication tools/gadgets like blackberry, mobile phones, tablets, etc…,are banned at meetings, at customer interactions/entertainment and at employee interactions like interviews, evaluations, counseling, etc.

Question: Have you tried to reduce the amount of e-mails by 50%? Is it possible? And what are/would be the benefits?

Quoting Albert Einstein;

“I fear the day that technology will surpass our human interaction, the world will have a Generation of Idiots”.