n the last ten years, cruising has become one of the fastest growing segments of the tourism industry, and many believe its reputation as a value-for-money holiday option will help protect it against the effects of recession. However, with consumers increasingly becoming cautious about spending, others consider these expectations too optimistic.
On June 15th, the Treasury Department published the “TARP Standards for Compensation and Corporate Governance.” Of note is the provision for recipients of government financial assistance under the Troubled Asset Relief Program to establish an excessive or luxury expenditures policy, which mentions entertainment and events and regulates excessive expenditures to the extent such expenditures aren’t reasonable expenditures for staff development, reasonable performance incentives or other similar reasonable measures conducted in the normal course of the TARP recipient’s business operations.
When was the last time you used the word “verve” in a sentence? It’s not a word you often hear but is a great word to define customer service that is refreshing, memorable, and leaves a lasting positive impression. A quick search on Dictionary.com provided these definitions: (vûrv) n. 1. Enthusiasm or vigor, as in literary or artistic work; spirit. 2. Vivaciousness; liveliness; animation. How often do the employees who provide you with customer service, serve with verve? In a recent survey, customers described the majority of customer service experiences they have as “bland and uneventful.” And nearly 70 percent of customers cite “employee indifference” as their top reason for leaving a company as a customer.
During the past several days there have been a lot of stories in the lodging, and indeed the general, press about the decline in lodging industry room rates during the past eight or nine months and how long it’s going to take to recover to pricing levels that existed at the end of last summer. Those addressing this issue have used STR data from the last downturn as a guide.
Talk about the ultimate Loyalty Program, “reuning” at your old school. I just returned from such an event, celebrating an untold date last century. Others have probably ventured out this month or last to similar events at high schools, colleges, universities, vocational and professional programs. I bet we all noticed the same thing – attendance had dwindled, yet the reunion event planning had gone full-tilt. You do not need a pareto analysis to appreciate that Reunions face a challenge, and that the historical approach to that special weekend must change.
The merits of interior versus exterior-corridor properties have been debated among economy chain hotel operators for some time. Exterior-corridor hotels offer convenience, value and a more like-home atmosphere, their proponents argue. Interior-corridor operators stress their properties’ greater guest security, value and more up-to-date product offering. Both product configurations have unique advantages. Let’s look at some facts that can provide better insights to this discussion. On average, economy chain exterior-corridor hotels are significantly older than interior-corridor properties. Seventy percent of existing exterior-corridor hotel rooms are 20 years old or older; about 40 percent of interior-corridor hotel rooms fall into this age category. Only 6 percent of exterior-corridor supply is 10 years old or newer, while 25 percent of interior-corridor rooms are in this group.
Look back over the multiple downturns the hospitality industry has experienced in the past 15 years and you’ll recognize two over-reaching patterns. First, recession is cyclical. Second, recession in the hospitality industry acts like evolution cubed, except the companies that survive each downturn have a lot more than natural selection going for them. “This economy holds significant opportunities and long-term rewards for hotel companies that are savvy, well-capitalized and flexible enough to act swiftly when opportunities arise,” says Gerald P. Chase, president and chief operating officer of New Castle Hotels & Resorts, a hotel owner, developer and third-party manager that grew through the last two recessions and emerged from each stronger than before the downturns.
Despite concerns about negative press coverage associated with meetings and bookings, the economic environment is the primary factor driving changes in meeting, booking and rebooking, according to a recent survey of 516 professional meeting planners throughout the U.S. “It’s clear as troubling as some of the press has been, the real culprit has been the economy,” said Peter Yesawich, chairman and CEO of Ypartnership, the research firm that conducted the study, during a virtual press conference last week.
In consulting for clients, in preparation for personalizing workshops and in evaluating topics for this regular column series, I regularly reflect on what the measures for success are. As an avid reader and an aficionado of history, I expand beyond my own career by examining the successes and failures of others to find knowledge. Hospitality (and almost every business in this now global economy) has evolved to a blend of high tech and high touch. Technology greatly facilitates research, marketing, distribution and communication. The people-skills side of business, however remains the fundamental center of all basics that pulls everything together.
The role of user-generated reviews is exploding. Nearly 1 of 5 travelers say they read online guest reviews of hotels before booking, and about 1 in 10 travelers will write a review after their stay. The percentage of travelers who read reviews prior to booking a hotel has remained stable for the past year, but the number of persons who are writing reviews about their hotel stay is rising.
The decision making ‘tipping points' for meeting and corporate travel planners have changed dramatically in relation to the recessionary economy. No longer are the perks of spas, golf courses, etc. a valued differentiator. Those perks are now a negative as incentive travel has diminished following the AIG effect. Meeting and travel planners are under intense pressure to demonstrate value for any off site meetings that they plan with defined business objectives and demonstrable results. They are trying to minimize the cost of travel to any meetings that they plan so those locations close to their office, airport hotels that minimize the need for rental cars and other ground transportation expenses have benefited from this trend.
If you are a regular reader of HospitalityMarketingBlog.com you know I’m a raving fan of TripAdvisor. With over 20 million reviews there’s hardly any guest who enters the door of a luxury hotel who hasn’t first read about the property on TripAdvisor. The TripAdvisor Home Page proudly boasts, “more than 15,000,000 travelers from 190 countries planned trips here this week.” A astonishing statement. Adding weight to this is word-of-mouth impact. Research shows consumers believe reviews read online almost as much as they do personal recommendations from friends and relatives.
First, some good news: Meeting planners appear to be booking again. Yes, there are definite signs of increased demand in inquiries and booking activity based on a recent cross-section survey I conducted with sales directors of group-driven resorts throughout the U.S. western region. Now for the bad news: A great many meeting planners are demanding heavily discounted room rates guaranteed for 2010, 2011 and beyond. I guess it depends on your perspective as to whether or not that represents bad news. While it might appear to be good news for meeting planners, I believe that in the long run it will end up as bad news for both.
Several months ago, I shared my definitions of the word HOSPITALITY in a column published in this service and asked readers to contribute their definitions. Reader input came in from many different people. There were definitions from people relatively new to the industry and from seasoned veterans. Some were individual operators and others who managed companies and multiple brands. There were educators and there were those who supported the industry. A sampling of the responses from a diversity of people and places were in a follow up column titled GLOBAL READER DEFINITIONS OF HOSPITALITY.
Did you ever notice that New York’s Essex House is the only building on Central Park South with a large neon sign on its roof? This roof-top sign preceded the current zoning rules and is, therefore, grandfathered. The 43-story hotel, now the Jumeirah Essex House was opened in 1931 and is owned by the royal family in Dubai. It recently completed a $90 million renovation that highlights its classic Art Deco design. The hotel was converted to a condominium by Marriott in 1974 and now consists of 515 guestrooms and 148 residential condominium apartments, of which 139 are privately owned.
A Review of the Impact of SARS on the Canadian Lodging Market as a Model for Managing through the Swine Flu Scare. As of the writing of this article, the Swine Flu pandemic was only a few weeks old. Yet it is clear that this event is already having a significant impact on the travel industry. In the first days following the World Health Organization’s (WHO) identification of the virus on April 24th, many travel companies – including airlines, cruise companies and hotels – saw decreases in their share prices. And while the WHO has yet to issue any travel restrictions or advisories, some governments have issued statements advising that citizens not travel to affected areas.
It's an undisputed fact that we are currently experiencing one of the grandest sea changes of this century - not only in the mindset of consumers, but also in the economic, social and cultural realities. Consumers are in the process of an identity shift, and this is the time to create new models and take advantage of new opportunities, which are there for the taking. The advent of neo-tribalism... What is this? Nationalism re-emerged back in the 20th Century, where each country trumpeted itself, and citizens saw themselves in patriotic terms. With the new millennium came globalization, the disappearance of borders, one world. Now, aided by the Internet, wireless technology, satellites and more recently, the breakdown of trust in governments and institutions (remember when "you can bank on it" meant a sure thing?), we are seeing the fragmentation of societies into smaller communities - neo-tribes.
ood Hotels & Resorts’ investments in their Sheraton and Four Points brands look to stabilize these hotels during the recession and pay dividends once demand rebounds. Over the last five years, Starwood has worked to convince owners and developers that its largest brand concentrations, Sheraton and Four Points by Sheraton, would benefit from an infusion of modern design attributes, product enhancements, and innovative business practices. These themes are unfolding from property to property across the brands, and the energy behind the movement is still strong even as a recessionary economy continues to take its toll on hotel performance around the nation.
In a word, VERY! A recent and extremely gratifying experience reiterates this point. Our client, a large and recently renovated hotel and conference center had twice failed to earn the AAA Four Diamond rating. On both occasions, the inspector had lauded the property’s outstanding physical facilities. On both occasions, inconsistent service delivery had denied the higher rating. We were retained to shop the property, identify the potential for a Four Diamond rating, and recommend a plan of action. Our evaluation confirmed that the physical facilities did support a higher rating. We also concluded that guest service delivery was the problem.
Examining the performance of group and transient rates through February 2009, rate interplay significantly impacts future rates because groups normally are negotiated based on the prevailing transient rate at the time of negotiation. In a market with increasing rates, negotiation circles around the factor by which that rate is increased to establish the group rate in the future. The hotel and meeting planner assume the transient rate at the future date is much higher than the current transient rate. Given group rooms are booked in advance in bulk, the future group rate should be a bit lower than the future transient rate. So, taking the current transient rate as a starting point for group-rate discussions makes sense.
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