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Hotel Predictions for 2012

There are probably as many predictions for 2012 as there are pundits in the media. All doomsday forecasts aside, let me throw my hat in the ring with my own hotel predictions for the New Year.

  1. The rise of the OTAs will accelerate. If you think that the statistic of 10% of total rooms booked in 2010 was significant, wait for the final numbers for 2012. The stock market is already there, with priceline.com trading at 16 times earnings, and Orbitz nearly double its 52 week low. Expedia shares are not there yet, but give them a chance. Without a significant counterattack from the major hotel chain marketing teams, these companies are bound to set new sales records. My prediction is that the OTA market share will rise by a few percentage points to the high teens of total hotel sales by year end.
  2. Google will exert its muscle and step up its own OTA program. Google is still testing the waters with their current travel program. In a drive to increase revenue, I can foresee Google integrating their own OTA technology with their existing cross-related platforms like Google Maps and Google Plus; all in an effort to compete with existing OTA heavyweights and ultimately drive an even higher percentage of business into this channel.
  3. The return of meaningful meetings business. This segment was killed in late 2008. Businesses were afraid to book a meeting in anything but a facility that resembled your local gymnasium with cafeteria-style F&B. Now, despite continued high unemployment, businesses are starting to recognize that employee retention and business growth requires more invigorating event-style gatherings. It’s essential for boosting team morale and fostering in-house entrepreneurship. Be prepared for a lot more RFPs, and even with this increase in volume, be prudent to keep prices competitive.
  4. Condo-style conversions will increase. Hotels that do not show long-term suitable financial returns, and those in need of serious capital investment, will face further owner scrutiny for conversion potential. With low interest rates and increasing retirement rates amongst the aging boomer population, watch for this in overly competitive locations.
  5. Here comes China. Outbound tourism from mainland China will increase dramatically as their GDP, consumerist nature and middle class wages continue to solidify around a stable industrial base. I’ve felt the heightened presence of these curious travelers during my travels to Los Angeles, New York City and San Francisco, but rest assured their interests are not solely on the United States.  They are world travelers, and no matter where your hotel is situated, you should look to investing in programs that will accommodate their particular customs, language and cuisine preferences.
  6. Tablet computers for everything. In the North American theatre, Apple appears to have won the first of the tablet wars. The iPad was definitely a hot seller for Christmas and I can imagine that many other tablet competitors continue to leave their mark on the world market. As a hotelier, you have to assume that the number of tablet travelers – those with a tablet and no accompanying laptop – will represent a much larger share for 2012 and beyond. Think WiFi for your entire property as most tablets do not have Ethernet support. Think tablet computing for your management team, your F&B outlets and your in-room guides. Get on board now so you don’t end up playing catch up come next year.
  7. Indonesian cuisine will be the next Asian cuisine bandwagon. We’ve been through adapted iterations of Chinese, Japanese, Korean, Thai, and Vietnamese foods. Indonesia is the fourth largest nation in the world by population (behind China, India and the USA), yet it is hard to name but a few Indonesian-style restaurants outside of Southeast Asia. A recent trip to the region opened my palate to their unique infusions and spices. It’d be a great marketing differentiator to open a restaurant with their cuisine as opposed to one featuring food from one of the more traditional Asian countries. Ditto for Brazil. As the fifth largest country by population, their distinctive take on cooking will likely see a larger presence in foreign territories, especially given their rapidly proliferating bourgeoisie and outbound travel market.
  8. No rest for weary GMs. It’s going to be another 12 months of tight revenues, increasing costs, endless guest requests, social media headaches, vacillating online reviews and all the other fun that comes with the corner office. That’s just the way it has to be in this recovering economy.

(Article by Larry Mogelonsky, published on eHotelier on January 6, 2012)

Larry MogelonskyHotel Predictions for 2012