The classic model of competitive advantage is Michael Porter's five forces shown below. This is still a useful model for the hotel industry. The most interesting part of this in 2017 is the "substitute" portion of the grid–this is what Airbnb is all about and they will have had a huge impact on our industry by the time most people wake up to it.
We manage a great hotel in Sedona, Arizona, called Arabella. We pride ourselves on having unique features. These include a small hiking trail up to a spot that is ideal for star-gazing, a courtyard as a backdrop for an idyllic picnic or coffee sipping, an on-property puppy named Bella who greets guests, and a fine restaurant called the Elote Cafe.
Before we complete our business plans for 2018, a review of macroeconomic data is in order. China's growth might be slowing but we anticipate a fairly steady U.S. economy in 2018. We will likely slow to about a 2 percent GDP growth rate over the next year as this economic recovery reaches the 100 month mark next year.
Yes, it's summer but you might be outside a city. Either way, enjoy the remainder of revenues if you are in a strong market or the opportunity to position yourselves for a strong fall season if you are in Phoenix like we are with some of our properties.
2017 is on pace to be a profitable year but it might spell the end of profitable growth as labor and health care costs are escalating beyond revenue increases. If that occurs, this would be the first year since 2010 where profits did not grow.
No, for those of you who appreciated Alvin Lee and Ten Years After as a kid, this is not about music, this is about the 10 year anniversary of the technology explosion caused by Facebook, Twitter, iPhone and Android.
Whether you're an owner, industry executive, general manager or aspiring industry leader, 2017 is going to be a very solid year. One of the keys to success will be team member satisfaction. Without a satisfied hotel staff, we have no foundation upon which to build.
It is safe to say that social media and the marketing force that goes into it are here to stay. This is largely due to the space's ability to continuously evolve. Just 10 years ago Facebook morphed into a mainstream business tool, Twitter arrived, the iPhone exploded on the scene and Android phones followed closely behind.
According to Geoffrey Moore in his book "Living on the Fault Line: Managing for Shareholder Value in the Age of the Internet," stock price is a measure of future potential based on present competitive advantage.