Tractor leveling soccer field grass using heavy metal lawn roller

Leveling the Sharing Economy Playing Field

I attended an interesting travel panel earlier this month in my hometown of Toronto. The topic was the leisure segment, with the panelists all senior members of tourism bureaus and hotel organizations, while their presentations quoted the usual ream of statistical gobbledegook. The mood was rosy as Canadian travel statistics have never been better with the nation approaching its 150th anniversary. The ebullience in the room was so thick that I felt that it couldn’t be cut with even the finest Japanese samurai sword. Bu then I asked the question with a somewhat naïve tone, “Have you seen any impact on the hotel sector from alternate lodgings?” The responses revealed a sharp dichotomy. Those representing the tourism sector clearly want more accommodations, with Airbnb and the like fitting that bill to a tee. A hotel can take several years to build while Airbnb rooms can be added almost instantaneously. Contrarily, those …

lmaadminLeveling the Sharing Economy Playing Field
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Thoughts on the Major Chains’ Cancellation Policy Change

The slew of recent announcements that major chains including Marriott, Hilton and IHG will now require a minimum notice (48 hours for the first two and 24 hours for the other) to cancel a reservation and avoid a penalty should come as no surprise to anyone. There are a few exceptions to this rule, of course, but overall the policy is fair and appropriate given the current business landscape and the ever-vital need to maximize revenue. Taken together, these three chains dominate the largest segments of the hospitality marketplace and one should anticipate that many additional hotel companies operating in other niches will soon follow suit. And for good reason, too! But first, you must understand why policies have been undertaken at this particular moment in time rather than, say, ten years ago or even five decades ago when they were equally applicable. It all has to do with the …

lmaadminThoughts on the Major Chains’ Cancellation Policy Change
Chiang Mai, Thailand - September 4, 2016: Apple iPhone 6s plus with Airbnb application on the screen. Airbnb is a website for people to list, find, and rent lodging.

Analyzing Airbnb’s Advertising

I have to hand it to the folks running Airbnb. Their brilliance in communicating their message makes all of us in the hotel business look a bit amateurish. And incredibly for that matter, Airbnb’s latest TV missive has nothing to do with travel or even accommodations. For those who have restricted their television viewing to Netflix or other streaming services and have missed the advertisement, here’s a short synopsis. The ad depicts an retired couple talking about how renting out a room in their home helps them keep up with payments. It goes on to suggest that Airbnb is helping thousands of friendly folks just like them make ends meet. Moreover, the ads are geotargeted. The one I saw focused on Toronto – my home city – with classically iconic CN Tower photography thrown in for good measure. My sister reported similarly bespoke cutaway stock shots adapted for the New …

lmaadminAnalyzing Airbnb’s Advertising
Chiang Mai, Thailand - April 26, 2016: man hand holding screen shot of Uber application showing on Asus Zenfone 2 mobile phone. Uber is an American multinational online transportation network company.

How the Sharing Economy Impacts Select-Service Hotels

Outer space may be the only place to escape the onslaught of the newly famous cadre of alternative lodging companies categorized as a part of the sharing economy, including but not limited to HomeAway (owned by Expedia), HomeToGo, Vacation Rentals By Owner (otherwise known as VRBO), Couchsurfing, onefinestay (recently acquired by Accor), FlipKey (owned by TripAdvisor) and, of course, the behemoth that is Airbnb. Even those select service, limited service and all other hotels that primarily cater to the business crowd have largely escaped the direct impact on their occupancies and ADRs from this rapidly burgeoning section, it is only a matter of time before the alternative lodging industry starts to influence every hospitality establishment in every corner of the earth and becomes a direct competitor for your property. On its most fundamental level, the sharing economy is changing the way consumers think about travel and how to go about …

lmaadminHow the Sharing Economy Impacts Select-Service Hotels
Bangkok, Thailand - June 6, 2016 : Apple iPhone5s showing its screen with popular travel applications.

Real Data Validates Home Sharing Segment Impact on Hotels

Much has been said about the impact of the sharing economy and the proliferation of alternate lodgings on the hotel industry, but there hasn’t been much concrete evidence to directly and undeniably support this claim. This evidence has mostly been tangential and more based on consumer behavior theory than on showing an immutable link between the growth of one and losses for the other. Recent data, however, is sobering. Bank of America Consumer Spending Snapshot tracks the utilization of 40 million credit and debit card users, sorted by industry (SIC code). By examining longer term data – in this case seven continuous quarters – we can start to visualize trends that properly illustrate the causality we hoteliers have long purported. Below are four charts revealing slightly different perspectives on the same comparison. This first chart looks at the change in expenditures for the home sharing and hotel segments. As you …

lmaadminReal Data Validates Home Sharing Segment Impact on Hotels
Businessmen using a mobile app on a smartphone and working at office desk with laptops and financial reports

CEO and Chairmen’s Views on the OTA Challenge

A recently published white paper on the state of the hospitality industry by Egon Zehnder’s executive search and leadership consulting team brings into focus the need for senior managers in the hotel industry to holistically re-examine how they approach their business, and ultimately their hiring practices, to meet their future needs. I had an opportunity to carry on a three-way conversation with the authors, Hicham Sharaa from the Dubai office and Paul Liu in Shanghai. The paper is based upon interviews with CEOs and Chairmen of two dozen major hospitality companies around the world. Their research in the sector highlights three major trends. First, digital engagement with customers is the game-changer for the hospitality industry, even though the interviewees admit to falling short in this area. Elaborating further, it was stated that CEOs must now have both the curiosity and insights to drive functionality digital strategies for revenue management, financial …

lmaadminCEO and Chairmen’s Views on the OTA Challenge
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Can Hilton Break The OTA Stranglehold Through Advertising?

The saying goes, “Misery loves company.” This cultural expression is based on the concept that people who are unhappy may get some consolation from knowing that others are unhappy as well. Does this adage apply to our hotel industry? It appears so! Now, some ten years after the advent of the OTA, hoteliers seem to be finally awakening to the fact that operating hotels with this arduous booking commission structure is a burden then can no longer withstand. Most hoteliers love the bookings the OTAs deliver, though. It’s great ‘billboard’ advertising, and these channels are great for offloading unsold inventory. Hoteliers just can’t stomach the fact that these bookings come with such a huge cost, both directly off the gross via commissions as well as indirectly through the concurrent changes to consumer purchase pathways. Increasingly, we are starting to embrace different ways of looking at our business model in an …

lmaadminCan Hilton Break The OTA Stranglehold Through Advertising?
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Converting OTA Customers

If you’ve been following my writing over the years, you’re well aware that I’m not a fan of the OTAs. They are strong marketers, and exceptionally well run. In a way, I’m awed by their clout. But, nothing personal, I see their business model as contrary to many hospitality organization’s long-term goals. Three key arguments I’ve inculcated are margin erosion, commoditization and brand dilution. To sum them all up in a neat bow: the design of an OTA website subliminally conditions a user to search for the cheapest room available and not to take into consideration the unique qualities of each particular hotel brand. Although the OTAs extol the fact that they are taking on a big chunk of the marketing burden on behalf of hotels, this does not negate the often-gigantic commissions they command, nor does it remedy the psychological effects of becoming accustomed to using one website for …

lmaadminConverting OTA Customers
Chateau Frontenac in the day with colorful buildings on street in Quebec City

Fighting Back Against Airbnb, French Canadian Style

The Canadian province of Quebec, with a population of some 8,200,000, is known as the last great bastion of the French language in North America. French Canadians, as they are better known, enjoy a joie de vivre unique to this continent – thousands of square kilometers of untouched wilderness, great skiing and cheeses that rival even that of their ancestral nation of France. While you’ve all marveled at pictures (or had the pleasure of visiting) the Fairmont le Chateau Frontenac, other visitors with more modest resources stay at smaller bed and breakfast establishments that the province is known for. These fiercely independent properties are regulated by Quebec law as well as through licenses which cover safety, health and other related matters. These B&B owners also pay commercial property tax, contribute to local tourism contributions (in essence, another tax), and provincial and federal sales taxes. In a nutshell, these are good …

lmaadminFighting Back Against Airbnb, French Canadian Style
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Living in the Review Age

Corporate transparency, social responsibility and responding to customer reviews in real-time are but three examples of 21st century business practices that have transitioned from value-add to consumer expectation in under a decade. It’s this third instance that concerns us today as we descend into a literal ‘Review Age’ where everything under the sun can be given an online user evaluation. Moreover, when it comes to hospitality, guests will also pass judgment on you, as a hotel operator, for how well you curate your property’s online criticisms. Respond too slowly to reviewers who cite operational problems and it makes you look like you aren’t allocating the proper amount of resources to electronic monitoring or, worse, that you don’t care about guests’ needs. Don’t thank past guests for their positive support and it may earn you contempt. Respond emotionally to a negative critique and it draws suspicion as to how you act …

lmaadminLiving in the Review Age