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HOTEL BUSINESS REVIEW

SEPTEMBER FOCUS: Hotel Group Meetings

 

How Hotels Can Continue to Stay On Top Despite the Changing Times

By Claire Repass Manager of Communications, Social Tables | August 2015

There is no stopping the sharing economy train, and the route that conductors like AirBnb are navigating cut directly across the existing revenue paths laid by hotels. It's no longer an option to ignore the presence of the sharing economy, nor is it wise to fight against it. Managing the horizon of this rapidly changing marketplace, however, is where hotels will find their greatest strength.

By tailoring the consumer and corporate travel sectors with a personalized service strategy, and looking across the tracks at AirBnB's best practices, your hotel can both compete and flourish in light of the sharing economy.

Occupancy Rates On The Rise & The Consumer Hospitality Shakeup

To point out that hotels must rethink their sales and marketing strategies to compete with disruptive companies like AirBnB and HomeAway is akin to saying hotels must embrace online booking. Before this section gets cloudy for hotels, let's examine the good news for U.S. room nights:

  • According to research published by the World Travel & Tourism Council (WTTC). The United States will retain its status as the world's largest travel & tourism economy in 2015. Projections say the sector will contribute over 8 percent of the GDP of the U.S., injecting $1,445 billion into the economy.
  • STR and Hotel News Now reported that April saw the highest occupancy ever (66.8%), and the highest room demand ever (99.4m rooms)
  • If these numbers continue pacing, 2015 will usher in the highest national occupancy rates since the first hotel occupancy report was published in 1987 by STR Inc.

Now for the challenging news: those room nights aren't just springing up from competing hotels, they're also coming from the sharing economy; AirBnB just announced they now manage over 1 million rooms. "So many rooms are coming online each month inventory is constantly growing, and new areas are springing up all the time," says Zabrina Hazelitine, CMP, CMM of Hamilton Group Meeting Planners, Inc. "It's difficult to narrow down the choices."

How does a hotel succeed in this age of disruption? How can you make the sharing economy work to your advantage while maintaining ground against your traditional competition?

Help your guest narrow down that choice by providing authentic personalized service.

Deploying an Authentic Personalized Service Strategy

In Deloitte's 2015 Analytics Trends Report, they dove into the need for increased data accuracy on an individualized level, which is harder to ascertain than directionally focused data. For example, a hotel's marketing team may know that Corporation X books 20 room nights per year for their traveling employees, but knows nothing about the employees themselves. "The ability to gather and leverage detailed and accurate information about current and potential customers could allow marketers to better tailor specific advertisements and offers to consumers, target customers for optimized offers, and reduce offers to disinterested customers,"the report states.

To those of you reading this thinking that the explosion of diversification in hotel portfolios through recent mergers, acquisitions or market introductions - focused on providing a brand that services every "type" of customer - constitutes individualized service: you're wrong.

I'll speak with authority here: I don't care that you have a lifestyle brand targeting millennials anymore than I care that I can tap my keycard on my door instead of inserting it into a traditional keycard reader.

Drew Patterson, CEO of Checkmate, said it best: "Too few hotels are keeping pace with AirBnB's innovation around the guest experience. To staunch the bleeding, hotels must raise their game in the guest experience, and stealing a few Airbnb practices is a good place to start. The definition of service is evolving, and growing percentage of consumers now expect immediate access to service and information via a mobile device. Hotels must cater to this audience."

Let's say you're trying to figure out my user profile for the first time. Here are some ideas to get to know me:

  1. In my user profile, ask me what my favorite band is. Use that information by having that band, or genre of music, playing when I open the door to my room. Kick it up a notch: can you partner with Spotify, SoundCloud, Pandora, etc. in the same way that Uber has to allow me to sync my playlist to my room?
  2. When I receive my reservation reminder email, ask me if I'd like to have a dinner reservation made for me at a trendy restaurant near your property, to help me enjoy my stay. If I say yes, ask me what type of food am I most fond of so you can create an appropriate reservation.
  3. Tell me that if I download your app, I'll get access to a free happy hour on one night of my stay. Then ask me what my preferred beverage from your happy hour menu is.

If you were to accomplish each of these bullets above, you would now know that I have a predilection for Americana tunes, prefer tapas fare, and have a penchant for a robust Cabernet Sauvignon. Now take that information, and use it to greet me when I'm creating my next reservation. Imagine the delight a customer would have if they received this email prior to their stay:

Hi Ms. Repass,

Great to have you back with us at the Hilton Anatole. We are excited for your visit, and wanted to let you know that we have curated a special Americana playlist for your arrival.

Additionally, we have taken the opportunity to make a reservation for you at the Meddlesome Moth, an incredible Houston favorite that specializes in small plates and has a great Cabernet selection.Please let us know if 7:30 pm works for you and a guest on Friday.

Looking forward to seeing you,

James Smith

In a market that offers a universe of choices for would-be guests, that type of individualized data accuracy is gold for customer retention. The correlation between grand efforts and greater profits will surface. It may not occur immediately, but in the long game, this personalized experience strategy will win over your customers.

Case Study: No Meeting Space? Queue the Sharing Economy

Nestled in the heart of New York City, The Roger Hotel is renowned for its boutique ambiance, chic design, exceptional service and amenities…that don't include meeting space. Group meetings are a vital client segment for The Roger, but this demographic had historically been difficult to keep due to the lack of meeting rooms.

In search of a solution, Liza Lipstein, Director of Sales at The Roger, turned to Convene, a New York-based company that provides nonresidential, stand-alone conference center space to collaborate.

"Conference centers like Convene's provide space for smaller meetings of up to 400 people,"wrote New York Times author Amy Zipkin in her profile piece about stand-alone conference centers. By partnering with Convene, Lipstein now has the ability to give guests an alternative solution to their meetings business outside of the hotel, and provide exceptional, personalized service by working with them from the room block to the transportation to the introduction to her peers at Convene.

"Historically, we had to turn away great business because we didn't have the meeting space they required," said Lipstein. "Convene filled that delta for us, and now our group business is strong thanks to our ability to provide for our guest's needs."

For other hotels that are in need of a partner meeting space, or a back-up to augment a small inventory, the sharing economy is showing up in full force to support you; the International Association of Conference Centers (IACC) just reported its highest single-year growth in global membership, and "nonresidential facilities are the fastest-growing category of our membership,"reports Mark Cooper, chief executive of the IACC.

On the Horizon: The Fight for Corporate and Business Travel

Nearly 50 percent of all corporate travel and accommodation bookings end up falling outside of corporate travel systems. AirBnB has responded to this market opportunity by partnering with Concur to create Triplink, a product designed to deal with the issue of accommodation leakage that takes place in the business travel industry.

Additionally, they've created a business-only search site that helps individuals and corporate travel managers mine for locations best suited for group travel, only displaying properties with WiFi, filtering out unique rooms, etc.

As AirBnB enters the corporate travel world, honing in on group bookings, hotels must be prepared to respond. How can your hotel streamline your business travel process?

A Shared Existence

To summarize this article, three things must occur if hotels intend to coexist with the rapidly expanding sharing economy:

First:

Position yourself as the destination of choice. Occupancy levels are reaching historical numbers, and options abound for consumers to choose from. If you aren't positioning yourself as a customer-oriented property, you'll lose your guests to someone who will.

Second:

Begin creating a strategy for competing with AirBnB on group business. When they figure out the formula for wooing groups (and they will), it will signal a death sentence for hotel sales teams that haven't made the proper plans to combat them. Do this, now.

Third:

Redefine your personalization efforts. Take inventory of the "personal touches" your property provides, strip away the surface-level personalization and drill down into creating customized profiles for each of your guests. In a world with so many options, help your guests make you their go-to choice by providing them with the personal attention they can't find from the sharing economy.

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Hotel Newswire is a newswire service that distributes press releases on behalf of our users. If you decide to submit a press release for distribution through our system we will transmit your entire press release including any personal information therein contained to our media contacts and online distribution points including search engines. This is the only redistribution of your information that we engage in. Your submission of press releases through our system indicates consent with this policy. The information we collect during your registration process is used to notify users about updates to our service and inform users of any special events hosted by Hotel Newswire. This information is not shared with other organizations for commercial or non-commercial purposes.

Cookies: Our system requires the use of cookies to enable the user to log back into our website to access information from the newswire, without having to log in each time using the required username and password.

If you do not want to receive email from us in the future, please let us know by following instructions included in our communication with you. Users who supply us with telephone numbers online may receive telephone contact from us regarding their account, or informing them of new products and services available on the HotelExecutive website. If you do not wish to receive such telephone calls, please edit your account and remove your phone number from your account profile. This can be done from your user account menu.

Ad Servers: We do not partner with or have any relationship with any ad server companies. From time to time, we may use customer information for new uses not previously disclosed in our privacy notice. If our information practices change at any time, we will post the policy changes to our website to notify you of these changes and provide you with the ability to opt out of these new uses. If you are concerned about how your information is used, you should check back at our website periodically.

Upon request we provide site visitors with access to all information (including proprietary information) that we maintain about them. Users can access this information by logging in to their account.

Security: We always use industry-standard encryption technologies while transferring and receiving user data exchanged with our site. We have appropriate security measures in place in our physical facilities to protect against the loss, misuse, or alteration of information that we have collected from you on our site. We do not store credit card information in our systems.

If you feel that this site is not following its stated information policy, you may contact us.

Bendegul Okumus How Can Automation and AI Applications Help With Labor Shortages in Hotels?
  • By Bendegul Okumus, Professor, University of South Carolina School of Hospitality & Tourism Management

    • The hospitality industry faces a critical labor shortage that affects operations, service quality, and overall customer satisfaction. This growing challenge arises from a complex combination of economic, demographic, and social changes. Addressing this urgent issue is essential for stimulating the sector and ensuring the high standards of service that characterize the hospitality experience. Immigrants constitute over 20% of the U.S. restaurant and food service workforce. The National Restaurant Association and the Restaurant Law Center are closely monitoring upcoming changes to immigration policies to keep the industry informed and prepared. The US government has stepped up immigration restrictions, prompting...

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Andy De Silva How Can Budget Hotels Adapt to Sustainability at Their Own Scale?
  • By Andy De Silva, Co-Founder & CEO, Hotel Emporium

    • Hilton. This is a name that over time has become synonymous with sustainability in the hospitality space, which is no surprise considering the number of changes and initiatives they’ve taken to make a positive impact on the environment. According to Business Traveller, the hotel giant has committed to cutting the emissions intensity of Hilton-managed hotels by 75% and Hilton-franchised hotels by 56%, not to mention the reduction of water and waste by 50%, all by 2030. We’ve also seen strong efforts made by Marriott International (the sourcing of local food, the goal to reduce its water consumption by...

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Laszlo Puczko Wellness: Move Over. Welcome Permah!
  • By Laszlo Puczko, CEO & Co-Founder, Health Tourism Worldwide

    • Hotels with strong wellness provisions tend to perform better. Wellness tourists spend more. Hotels are increasingly recognising the value of wellness as a key differentiator in the hospitality industry. How frequently have you encountered such statements in recent years? In the industry, there are two extreme understandings of wellnessification and wellness-washing. And the struggle of moving wellness forward (see ELLE’s article!). Wellnessification is the term used to describe the approach of infusing every aspect of service delivery or product use with a wellness orientation. Wellnessification assumes that every aspect of a service delivery or a product use may have...

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Alexander Mirza Winning Moves: How Hospitality Can Score Big With AI
  • By Alexander Mirza, Founder & CEO, Mogul

    • Having once again demonstrated its resilience in the face of long-term labor shortages, inflationary pressures and geopolitical uncertainty, the U.S. economy remains the envy of the world. However, two parallel and contradictory trends - the spread of the union contagion pushing into new sectors and the growing pull of the freelancer gig economy (which represents 56 million Americans or 36% of the workforce) - reflect elevated levels of distrust in the corporate world and all levels of government. These trends have spilled into a now turbulent technology sector which is shedding thousands of jobs being replaced by artificial...

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Robert O'Halloran Career Pathways from High School to the Board Room
  • By Robert O'Halloran, Professor & Director, Hospitality Management, East Carolina University

    • The demand for strong employees and managers is great. The skills that each individual needs have evolved over time and therefore the connection between experience and perpetual education at all levels has become increasingly important. A career development path per the Society of Human Resources Management (SHRM) provides employees with an ongoing mechanism to enhance their skills and knowledge that can lead to mastery of their current jobs, promotions and transfers to new or different positions. In general, career theories are usually contingent on environmental, economic and social factors. Career paths and development have been structured by organizations, which...

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Ayana Rodriguez Family Travel: Emerging Trends You Should Know About
  • By Ayana Rodriguez, Founder, itavi

    • In the post-COVID era, today’s traveler has evolved into one invested in meaningful experiences. As a result of the strict travel limitations that lingered for several years following the global crisis, there’s now a stronger desire to travel with the ability to discover, explore and learn about new destinations. Viewing travel as a gift has encouraged more families to take trips together to create valuable memories, and parents are prioritizing their children’s regular exposure to worldly experiences. The good news is that family travel is a booming segment, which means hotels and resorts must work strategically to market to families...

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Adoniram Sides Revolutionizing Tipping Culture: The Digital Transformation in North America's Hospitality Industry
  • By Adoniram Sides, SVP, Hospitality, Lightspeed Commerce

    • Tipping culture in North America has long been ingrained in the fabric of the hospitality industry. For decades, customers have shown appreciation for good service by leaving gratuities in various forms, ranging from cash to credit card slips. However, with the advent of digitalization, this age-old practice is undergoing a significant transformation. In order for the hospitality industry to maintain the best standards of practice for their customers, we need to better understand how tipping is evolving, explore its impact on the hospitality sector and how businesses are leveraging technology to address staff shortages and boost employee motivation. ...

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