As the dust settles and the sun begins to rise again on the hotel industry, it is clear that hotel sales and revenue management will be different than it was in 2007, the last good year before the industry and economy tanked! This time the differences will be driven by customer behavior in all segments. “The way consumers think about, plan and purchase travel has altered dramatically.”(Peter Yesawich, HotelNewsNow, 11/17/10)
To get an idea of the most significant issues confronting the American hotel industry in 2011, we asked DAVID KONG, President and CEO of Best Western International to share his insights with us. Not only does David head “the world’s largest hotel chain”, but also, having dealt with a number of industry concerns and initiatives as the Chairman 2010 of the American Hotel & Lodging Association (AH&LA), we thought: who would better have a finger on the pulse of the US lodging industry? Herewith his thoughts on 2011.
The lack of social media ROI standards unsettled many marketers and even organisations on the whole, preventing any form of experimentation, in the last few years. But with companies, including ones from the travel sector, starting to measure the social media ROI in several ways - be it for setting up their own metrics to working on monthly reports to evaluate exposure and revenue generated through such efforts - social media marketing is becoming an integral part of Internet marketing.
When is the right time to worry about your rating? I believe the best time to begin to worry, or at least to be concerned over the potential loss of a Diamond is when you first earn the rating. It is usually easier to prevent the loss of a Diamond or the loss of your AAA approval completely than to earn it back.
One of the lessons learned by hotel management during the 2001 to 2003 industry recession was the importance of attrition and cancellation clauses in group contracts. Because of 9/11 air travel stigma and the ensuing economic recession, meetings were canceled and attendance dwindled. All of the sudden, those attrition and cancellation paragraphs in the group contracts that were frequently viewed as "boiler plate" were rediscovered and helped to salvage some degree of revenue.
More on this return of meeting demand . . . Readers have responded to my recent articles where I’ve been writing about the return of demand, group bookings are up and the window for bookings is getting longer. HotelNewsNow.com’s Patrick Mayock’s recent series about group recovery served as additional validation, pointing out the improvement in group demand in 2010: 5 million more roomnights sold in March than February “with promising monthly upward bumps through June and strong numbers throughout the summer, according to Smith Travel Research.”
Now more than ever, most hoteliers are searching for demand generators and are relying on direct sales to impact revenues to fill the significant void left by the ailing economy. Depending on the type of property i.e. transient vs. group-based, direct sales could be responsible for as much as 50%-90% of the occupancy. But many times, the sales person or sales leader is at a loss as to find new prospects.
Those hotels that are waiting for the recovery to make phones ring with inquiries will not be the market leaders in this economic recovery! Those that are aggressively using new processes to stimulate sales will be the winners! Steve Rushmore, President and Founder of HVS predicts that “Revenue per available room in the United States is expected to end 2010 up 4.3%, with jumps of 7.1% and 8.1%, respectively, during 2011 and 2012, Rushmore said. These increases follow a RevPAR drop of 16.8% during 2009,” (HotelNewsNow, 9/28/10).
Bed bugs are the industry’s favorite topic—to avoid. Hoteliers fear that talking about bed bugs—or even their bed bug mitigation efforts—will bring unwanted negative attention to their properties. The problem is that while we rather would change the subject, no one else seems to be able to keep quiet about it.
Top hotel executives lamented the lack of new construction financing, discussed the comeback of luxury, and even dipped into politics during a CEO panel at The Lodging Conference Wednesday. The problem of rates kept arising. Speakers blamed online travel agencies for the problem. David Kong, president and CEO of Best Western International, said online travel agencies are “gaining more and more influence and control over pricing.”
There are certain things that make us all wonder. We wonder why the heck something is done a certain way or why it is done at all. Here are a few hotel-related questions I’ve long wondered about—and in some cases, the answers. I wondered for nearly two years why the head honchos at Hilton Worldwide would give up the glitzy, warm confines of the 90210 ZIP code for the hustle and bustle of Washington, D.C. (Although technically, the company’s new digs in McLean, Virginia, are located outside of the Beltway so no one can say they are Washington insiders.)
On a scale from 1-10, with 1 being “I cried tears of pain and anguish” and 10 being “I cried tears of joy and happiness,” how would you rate your last survey experience? (That includes taking a survey or developing your own.) In general, how useful do you think surveys really are in accomplishing their objectives (which are normally something along the lines of “measuring attitudes and opinions” or “exploring the relationships between ‘x’ and ‘y’”)? Do you ever see any changes come about based on the results of a survey?
Professional meeting planners - - deferring, cancelling or drastically cutting back on both size and frequency of meetings for more than a year now - - are scheduling more site inspections and booking much larger groups for 2011 and 2012. This was confirmed during a long interview conducted this month with John Washko, V.P. Sales & Marketing, The Broadmoor, Colorado Springs, CO.
Halfway through 2010, the hotel industry has finally started to shows signs of recovery from the worst economic downturn since the Great Depression. All three key financial indicators for the industry—occupancy, average daily rate and revenue per available room—decreased during every month of 2009, according to the latest STR data.
Search engine marketing is complex but it is luring simply owing to the fact it can be measured to a large extent. Barbara Pezzi, director of Web Marketing & e-Commerce, Fairmont Raffles Hotels, says she doesn’t find SEM any more complex than offline advertising, which is basically just “faith based”. Search is considered to be an option for its ability to target at a very granular and specific level. Search as a standalone channel is known for delivering tight cost-per-acquisitions.
In recent years a downturn in group sales has been the cause of our industry’s greatest pain. Massive numbers of meeting rooms, crucial to generating room nights in some of the largest and most marquee properties in our industry, sit empty. Waves of layoffs and hiring freezes have washed over hotels all across North America and beyond. Previously profitable hotels fall into receivership every day. Organizations of all types have been canceling group events at an astounding rate.
With most hotels and call centers seeing an increase in inquiry calls as demand rebounds in markets, it is more important than ever for your frontline sales representatives to maximize their call conversions and total revenue sold vs. goal. Depending on the type of lodging operation or call center, and of course your targeted market segments, this might include group sales managers, reservations agents, or even front desk staff.
Many hotels around the Gulf Coast are watching their vacancies grow by the day due to the oil spill. And even if the oil isn’t nearby, the worry about where it’s going is impacting properties all the way from Louisiana to southwest Florida. Still, some of these beach properties have continued to sell out, and that’s not by accident.
By all accounts during Tuesday’s ALIS Summer Update, things are looking up for the United States’ hotel industry. During the data-driven opening session, the news coming out of the industry was good: • “We’re seeing what I would describe as a moderate pace of recovery, but at least it’s a recovery,” said Arthur de Haast, global CEO of Jones Lang LaSalle Hotels. • “(The recovery) is better, quicker (than what had previously been thought),” said Mark Woodworth, executive VP with PKF Consulting. “It is all demand-driven.”
The Orbitz Worldwide Distribution practice has developed a new method for delivering highly customised private label solutions to its customers. The online travel company is now able to build highly-scalable, fully-customised solutions, unlike legacy template based solutions – which take a rigid, one-size-fits-all approach, says Ronnie Gurion, president, Orbitz Worldwide Distribution.