The recession is not quite over. But after almost two years of a downward spiral, PKF Hospitality Research (PKF-HR) recently forecast that the decline in U.S. hotel demand will be over in the second quarter of 2010. Whether that happens in the next few months is yet to be seen, but a long road to recovery is imminent. There's one channel, however, that seems undaunted and is growing at a rapid pace again -- online marketing.
Although PKF-HR's research shows that RevPAR will drop another 1.1% in 2010, and occupancy will basically remain even, they're also optimistic that online marketing will continue to grow. Their research shows Internet bookings for the top 30 hotel brands grew by 6.6% in 2009's third quarter, compared to 2008. With constantly evolving search marketing, increased social media popularity and the advent of mobile marketing, sound strategies will keep direct online bookings on the rise.
Wednesday, March 31, 2010
Monday, March 29, 2010
Is your hotel getting it's fair market share?
Do you use KPI like MPI, ARI, RGI to benchmark the results of your hotel performance. What is your market penetration index?
Compare regional arrivals statistics with yours. Stats can be obtained from airport, tourism boards.
Are you getting your part or fair share of the pie?
Are you getting your part or fair share of the pie?
Patrick has some great insights...Enjoy...
ADA defense lawyers: When disabled hotel guests' needs go beyond the norm for typical guests, what do hotel owners and managers have to do?
Hoteliers can face certain extreme situations that are not addressed in plain language of Title III of the Americans with Disabilities Act (ADA). In relevant part, it provides that, among other requirements, places of "public accommodation" must provide certain "auxiliary aides and services". In these unusual cases, the counsel of an experienced ADA lawyer like Marty Orlick, a senior member of JMBM's Global Hospitality Group®, is invaluable. He has helped numerous hotels and restaurant clients establish compliance with all aspects of the ADA and resolve more than 300 ADA claims.
Friday, March 19, 2010
Economist: Worst is over, but still pain ahead
I'm not sure that I quite agree with this...........
ATLANTA—The festive nature of St. Patrick’s Day provided a perfect backdrop for economist Rajeev Dhawan on Wednesday during the opening session of the 22nd annual Hunter Hotel Investment Conference.
“A simple fact of life is that all hangovers are lousy,” Dhawan said as he explained the current global financial situation to the hotel-industry executives in attendance
Dhawan, the director and associate professor of the Economic Forecasting Center, J. Mack Robinson College of Business at Georgia State University, said the overhang of toxic debt in the banking system will continue to be a headache for economies worldwide, and the United States might be one of the lead dogs on that runaway sled.
ATLANTA—The festive nature of St. Patrick’s Day provided a perfect backdrop for economist Rajeev Dhawan on Wednesday during the opening session of the 22nd annual Hunter Hotel Investment Conference.
“A simple fact of life is that all hangovers are lousy,” Dhawan said as he explained the current global financial situation to the hotel-industry executives in attendance
Dhawan, the director and associate professor of the Economic Forecasting Center, J. Mack Robinson College of Business at Georgia State University, said the overhang of toxic debt in the banking system will continue to be a headache for economies worldwide, and the United States might be one of the lead dogs on that runaway sled.
Hard times send hotel industry into 'survival mode'
Neil Cornelssen says he misses the free cookies in the evening at one hotel and the daily newspaper outside his door at others.
He's also noticing that bath towels in a growing number of hotel rooms are shabby and need to be replaced.
Cornelssen, a sales manager in Marlton, N.J., is one of many frequent travelers who say they see the tangible effect that the recession has had on the nation's hotel industry. Among them: run-down rooms with fewer bathroom amenities, closed club lounges, fewer concierge staffers, slow room service, reduced hours at restaurants and bars, and infrequent airport shuttles.
"The unfortunate reality of today's marketplace," says Hotels magazine Editor-in-Chief Jeff Weinstein, is hotels are "more focused on saving cash than delivering the best service."
Hit by a declining demand for rooms, low room rates and plummeting revenue, hotel companies have laid off hundreds of thousands of employees and are struggling to maintain quality. A record number of hotels are defaulting on mortgage payments. Hundreds have been taken over in foreclosures, and some have closed or are about to.
"Because of the recession and the credit bust," says Ed Watkins, editor of the trade publication Lodging Hospitality, "it's the worst downturn in decades — perhaps ever."
As a result, says Robert Habeeb, president of Chicago's First Hospitality Group, which operates 40 hotels in eight states, "The industry is in survival mode."
He's also noticing that bath towels in a growing number of hotel rooms are shabby and need to be replaced.
Cornelssen, a sales manager in Marlton, N.J., is one of many frequent travelers who say they see the tangible effect that the recession has had on the nation's hotel industry. Among them: run-down rooms with fewer bathroom amenities, closed club lounges, fewer concierge staffers, slow room service, reduced hours at restaurants and bars, and infrequent airport shuttles.
"The unfortunate reality of today's marketplace," says Hotels magazine Editor-in-Chief Jeff Weinstein, is hotels are "more focused on saving cash than delivering the best service."
Hit by a declining demand for rooms, low room rates and plummeting revenue, hotel companies have laid off hundreds of thousands of employees and are struggling to maintain quality. A record number of hotels are defaulting on mortgage payments. Hundreds have been taken over in foreclosures, and some have closed or are about to.
"Because of the recession and the credit bust," says Ed Watkins, editor of the trade publication Lodging Hospitality, "it's the worst downturn in decades — perhaps ever."
As a result, says Robert Habeeb, president of Chicago's First Hospitality Group, which operates 40 hotels in eight states, "The industry is in survival mode."
Thursday, March 18, 2010
New luxury hotel in Chicago has no-tipping-necessary policy; rival says it's worth watching
(Barbara DeLollis writes so intriguing articles..)
As a customer of luxury hotels, hotel developer David Pisor grew to dislike the pressure and hassle of tipping, whether a $5 for the valet who retrieved his car, a $10 for the bellman who took his luggage and $5 for the concierge who recommended a restaurant. So when Pisor recently opened the 188-room, luxury Elysian Hotel in Chicago - half a block away from rival Four Seasons, he adopted a no-tipping-necessary policy. (The cheapest rooms at Elysian start at around $350 per night.)
"I don't want to hear, 'Do you need a hand, sir?'," Pisor told me the other day in an interview. "I don't think it's luxurious. I think it's incredibly not luxurious. You're thinking about it the whole time as opposed to just enjoying yourself."
As a customer of luxury hotels, hotel developer David Pisor grew to dislike the pressure and hassle of tipping, whether a $5 for the valet who retrieved his car, a $10 for the bellman who took his luggage and $5 for the concierge who recommended a restaurant. So when Pisor recently opened the 188-room, luxury Elysian Hotel in Chicago - half a block away from rival Four Seasons, he adopted a no-tipping-necessary policy. (The cheapest rooms at Elysian start at around $350 per night.)
"I don't want to hear, 'Do you need a hand, sir?'," Pisor told me the other day in an interview. "I don't think it's luxurious. I think it's incredibly not luxurious. You're thinking about it the whole time as opposed to just enjoying yourself."
Wednesday, March 17, 2010
Hotel segments and the laws of economics
With an opportunity to examine hundreds of hotel markets and thousands of competitive sets since joining STR Analytics, I have observed that, to its detriment, the hotel industry operates somewhat counter to other sectors of the economy.
During a severe economic recession, most industries find products that cater to the budget-conscious lose less or even increase demand relative to those that appeal to the luxury segment. But STR data indicates the opposite occurs in the hotel industry.
In other industries, customers continue or even increase demand for products offered by the likes of McDonalds, Wal-Mart and Hyundai, while Ruth’s Chris, Neiman Marcus and Cadillac suffer lower demand than ever. But in the hotel world, the economy and luxury segments both lost 8.8 percent in occupancy from 2008 to 2009 based on the 2009 year-end results. Something inverted is going on here.
During a severe economic recession, most industries find products that cater to the budget-conscious lose less or even increase demand relative to those that appeal to the luxury segment. But STR data indicates the opposite occurs in the hotel industry.
In other industries, customers continue or even increase demand for products offered by the likes of McDonalds, Wal-Mart and Hyundai, while Ruth’s Chris, Neiman Marcus and Cadillac suffer lower demand than ever. But in the hotel world, the economy and luxury segments both lost 8.8 percent in occupancy from 2008 to 2009 based on the 2009 year-end results. Something inverted is going on here.
Tuesday, March 16, 2010
Some Sobering Thoughts on Hotel Pricing Trends..
When it comes to setting room rates, hotels are in the process of losing control, says Roman Peskin in this important article from the Hotel Yearbook 2010.
He explains how guests (and even previous guests) are gaining in influence. This is a sobering read for all marketing managers!
He explains how guests (and even previous guests) are gaining in influence. This is a sobering read for all marketing managers!
green lodging news
Sustainability Guide a Worthwhile Read
Jan Peter "JP" Bergkvist, one-time vice president sustainable business at Scandic and former director of environmental sustainability for Hilton International, recently released a self-published book called "Sustainability in Practice, A Fast Guide for Business Leaders." I highly recommend reading the book. Using The Natural Step framework, Bergkvist presents examples of practical measures hotels or hotel companies can implement in order to create more sustainable organizations.
"My honest recommendation is that without the buy-in and fully engaged commitment of the CEO of the company (or the chair of an organization) it is not meaningful to start a sustainability program," Bergkvist says in his book.
Why do leaders ignore sustainability? Bergkvist says it is often because they do not understand the business case for it, or they don't understand the concept at all. To help upper level managers move their organizations toward sustainability, Bergkvist offers suggestions in areas such as energy management, chemicals, waste and recycling, traveling and transportation, water, procurement, diversity, food, and sustainable construction.
"My honest recommendation is that without the buy-in and fully engaged commitment of the CEO of the company (or the chair of an organization) it is not meaningful to start a sustainability program," Bergkvist says in his book.
Why do leaders ignore sustainability? Bergkvist says it is often because they do not understand the business case for it, or they don't understand the concept at all. To help upper level managers move their organizations toward sustainability, Bergkvist offers suggestions in areas such as energy management, chemicals, waste and recycling, traveling and transportation, water, procurement, diversity, food, and sustainable construction.
Monday, March 15, 2010
We propose to implement another KPI. NREVPAR, or Net Rooms Revenue per Available Room.
Patrick has some good insight and key points on Revenue Centers...........
In the early days we all measured the performance of our hotel based on occupancy. and ADR Then the revenue management phenomenon hit our industry and we all shifted to REVPAR. Nowadays the keyword is GOPPAR. We want to see how every booking affects our GOP. But something is missing…
On a flight last week back from London to Barcelona I have been pondering on the fact that we are moving from REVPAR or revenue on our profit and loss statement all the way down to GOP or gross operating profit to fast. Mind you the first articles on GOPPAR I find online date back from 2003. But we are missing a few steps here which are crucial to fully understand our GOPPAR.
And don’t get me wrong, I am one of the biggest fans of GOPPAR as REVPAR does not give us enough insight as KPI (key performance indicator). However we need to fully understand what the GOPPAR represents.
So lets a take a step back and run through the definition of REVPAR and GOPPAR.
In the early days we all measured the performance of our hotel based on occupancy. and ADR Then the revenue management phenomenon hit our industry and we all shifted to REVPAR. Nowadays the keyword is GOPPAR. We want to see how every booking affects our GOP. But something is missing…
On a flight last week back from London to Barcelona I have been pondering on the fact that we are moving from REVPAR or revenue on our profit and loss statement all the way down to GOP or gross operating profit to fast. Mind you the first articles on GOPPAR I find online date back from 2003. But we are missing a few steps here which are crucial to fully understand our GOPPAR.
And don’t get me wrong, I am one of the biggest fans of GOPPAR as REVPAR does not give us enough insight as KPI (key performance indicator). However we need to fully understand what the GOPPAR represents.
So lets a take a step back and run through the definition of REVPAR and GOPPAR.
Lodging Hospitality Launches Franchise Fee Calculator
Penton Media's Lodging Hospitality, the leading source for information for the hotel management industry, today announced the launch of a new, online tool to assist hotel owners, developers, and investors in calculating the basic franchise fees for more than 60 of the top hotel brands. Accessible from the home page of the Lodging Hospitality website (www.LHonline.com), the Franchise Fee Calculator is the first of its kind, presenting a powerful and convenient way for those interested in a hotel investment to make educated decisions when considering their business options and brands.
The Franchised Fee Calculator is free of charge. Hotel executives who are considering changing flags, building a new hotel, or just looking to compare fee structures simply enter the number of rooms, average daily rate, and occupancy rate into the online calculator. Each calculation supplies accurate, straightforward comparisons for up to five brands with links to additional information on each of the franchise brands.
The Franchised Fee Calculator is free of charge. Hotel executives who are considering changing flags, building a new hotel, or just looking to compare fee structures simply enter the number of rooms, average daily rate, and occupancy rate into the online calculator. Each calculation supplies accurate, straightforward comparisons for up to five brands with links to additional information on each of the franchise brands.
Want To Improve Staff Productivity? Hire Teachers
Every once in awhile an author’s think-piece hits the bulls-eye. A recent article by Elizabeth Green titled “Building a Better Teacher” (New York Times, March 7, 2010) does just that. But what does this have to do with hospitality? Actually, it’s a no-brainer.
Ms. Green describes how a veteran educator now working as a turn-around consultant came to the realization that despite all his knowledge and skills, he had no clue how to advise poor-performing schools to accomplish their main purpose: how to teach. So he set about researching what makes a great teacher, how can new teachers be trained to be more effective from their first day in the classroom, and how can the quality of teachers already in classroom be improved. The intended result is to produce a better product – fully-educated students capable of achieving success both academically and socially.
This isn’t far off from what we expect of our supervisors in hospitality. We expect them to educate employees to become fully capable contributors and to create outstanding guest experiences thus contributing to an increase in revenues and profits. We expect our supervisors to be accountable leaders.
In sum, teaching is all about leadership. And leadership is all about teaching. The two are almost synonymous.
Ms. Green describes how a veteran educator now working as a turn-around consultant came to the realization that despite all his knowledge and skills, he had no clue how to advise poor-performing schools to accomplish their main purpose: how to teach. So he set about researching what makes a great teacher, how can new teachers be trained to be more effective from their first day in the classroom, and how can the quality of teachers already in classroom be improved. The intended result is to produce a better product – fully-educated students capable of achieving success both academically and socially.
This isn’t far off from what we expect of our supervisors in hospitality. We expect them to educate employees to become fully capable contributors and to create outstanding guest experiences thus contributing to an increase in revenues and profits. We expect our supervisors to be accountable leaders.
In sum, teaching is all about leadership. And leadership is all about teaching. The two are almost synonymous.
Wednesday, March 10, 2010
'Ricco Suave' strikes again
Barbara DeLollis writes about this daring Hotel thief in LA. Sounds stranger than fiction. Like a novel or a Movie..Who remembers Karl Malden as the thief in the 1966 Classic Movie "Hotel" based on the Arthur Haley book.
Hospitality Conversations - Keys To Success
Property Improvement Plans or PIPS, are a reality to today’s hotel owners and management groups. If a property is part of a franchised system, dealing with PIPS can be an expensive proposition both at the time of sale as well as in continuing operations. The purpose of PIPs is to keep properties in compliance with all existing and new brand standards, as franchisors strive to maintain brand standards to protect their brands as well as the investments of all the other franchisees.
The cost of PIPs could be staggering if they seem to all come crashing down at once, especially if a property is not meeting all of its current standards at a time when there is a potential change in ownership. Almost all franchisors have a Property Improvement Plan system, because their goal is to maintain the quality of each of their franchisees.
The cost of PIPs could be staggering if they seem to all come crashing down at once, especially if a property is not meeting all of its current standards at a time when there is a potential change in ownership. Almost all franchisors have a Property Improvement Plan system, because their goal is to maintain the quality of each of their franchisees.
Recovery Over A Year Away, Say Hotel Executives
A survey of 417 European hotel executives by international law firm DLA Piper has revealed weak industry confidence and dealt a blow to hopes of recovery this year. Only two per cent of respondents expect a sustained upturn this year, despite 37 per cent predicting one year ago that 2010 would bring solid growth. These worse-than-expected results are compounded by fears from over half of hoteliers (55 per cent) that room rates will not return to pre-financial crisis levels until after 2012.
Monday, March 8, 2010
Boosting Your Budget with Barter: Jody Merl on how Hotels Trade Unsold Rooms for Advertising
Jody: Innovative Travel Marketing uses barter as the financial tool to bring added value to your marketing buy. As a strategic media buying and planning company, we barter with the media and hotels.Whether it’s radio, television, outdoor companies, trade magazines or consumer magazines, ITM trades with them, and that’s a benefit for the media. It’s very hard for one hotel to go to XYZ publication and say “I want free full page ads” because that publication may have no need for that hotel.
Revenue Managers as Agents of Change
Revenue management in its present day format did not exist until the mid 90’s. Propagated as the ultimate tool to optimize seating capacity and revenue in the airline industry it found its way gradually into the hotel industry. Skeptics prevailed for the first couple of year’s as they did not realize the potential strategic approach to managing room inventory and rates had - but they were quickly converted with new measurements, benchmarks and the quantifiable growth patterns of RevPAR. In the past the distribution platform was managed by Reservation Managers under the tutelage of sales and Marketing Directors whose priority was to achieve budgeted sales volume and rates. Until 15 years ago Yield Managers (as they were called during those days) did not exist in hotels, they were viewed highly skeptical as an additional expense item on payroll with no clear functional responsibility, an ambiguous job description and no clearly defined authority. The underlying assumption of revenue management rested on the notion of (a) distressed inventory, (b) unconstrained demand and (c) a perishable product (rooms). Thus the credo of revenue management was born under the umbrella of selling the right product to the right customers at the right time for the right price. It also heralded the end of static pricing and ushered in the age of dynamic and seasonal pricing. Revenue Managers in conjunction with their sales counterparts identified the right target market and their segments, they identified consumer behaviors of these micro segments, determined corresponding price points, understood demand patterns and off they went selling their products.
Thursday, March 4, 2010
Lodging Econometrics releases 2010 EMEA construction outlook
At the end of Q4 2009, the total Construction Pipeline for EMEA has 1,373 projects/285,770 rooms. Pipeline counts have now declined 22% by projects and 23% by rooms since the Q2 2008 peak. They are expected to decline further, as concerns about the pace of economic recovery, the industry’s operating performance and lending issues persist and continue to impact developer sentiment.
Depleted by high cancellations and a late surge in New Openings, total Pipeline counts are in an end-of-cycle contraction. In 2009, total Cancellations/Postponements in EMEA removed nearly 96,000 rooms from the Pipeline. As the lending environment is not expected to rebound any time soon, Cancellations/Postponements will likely remain high for the near-term. New Hotel Openings coming online as additional supply will stay at an elevated rate, particularly in the Middle East and Africa, where New Openings will accelerate through 2011.
Depleted by high cancellations and a late surge in New Openings, total Pipeline counts are in an end-of-cycle contraction. In 2009, total Cancellations/Postponements in EMEA removed nearly 96,000 rooms from the Pipeline. As the lending environment is not expected to rebound any time soon, Cancellations/Postponements will likely remain high for the near-term. New Hotel Openings coming online as additional supply will stay at an elevated rate, particularly in the Middle East and Africa, where New Openings will accelerate through 2011.
Wednesday, March 3, 2010
Hotels approaching point where they can't cut costs anymore; do you agree?
I've been pondering the question for a while but decided to bring it up again after hearing Harmit Singh - Hyatt Hotels' chief financial officer - tell Wall Street analysts that "we are at end of the runway in terms of expense cuts."
Barbara De Lollis wites for USA Today, and brings up a Critical Point that I myself have wondered?...
Barbara De Lollis wites for USA Today, and brings up a Critical Point that I myself have wondered?...
Just How Green are Green Hotels?
Are Green Hotels as Green as they say They Are ?
CNN takes a Look....
CNN takes a Look....
Tuesday, March 2, 2010
Successful leaders will adapt…
The economic crisis has brought about new norms, affecting hospitality organizations in countless ways, large and small. According to GENE FERENCE, PhD., President of FERENCE LEADERSHIP AND STRATEGY and a leading consultant on improving organizational and service culture, these new norms will require business leaders to take a new approach to peak performance in the coming year....Good Stuff..
New Hotels.com Study Shows the Average Price of Hotel Rooms Down 14 Percent in the U.S.
Hotels.com®, the largest provider of lodging worldwide, today unveiled its 2009 Hotel Price Index(TM) (HPI®), the definitive annual report on hotel prices paid around the world. The index shows hotel prices in the U.S. fell 14 percent during the last half of 2009 compared to rates in the same time period in 2008. Hotels.com attributes the falling prices in North America to the economic slowdown and the subsequent reduced demand for rooms.
With 2009 being the year of the travel deal, some cities did see a rise in prices paid as a result of the cause to currency movements, but also with travelers spending more for a little more luxury. The gap in price between 3, 4, and 5 star hotels narrowed in 2009 meaning travelers could spend less to get more. 2010 promises to be another great year for the travel deal and value.
With 2009 being the year of the travel deal, some cities did see a rise in prices paid as a result of the cause to currency movements, but also with travelers spending more for a little more luxury. The gap in price between 3, 4, and 5 star hotels narrowed in 2009 meaning travelers could spend less to get more. 2010 promises to be another great year for the travel deal and value.
Monday, March 1, 2010
Lux in flux: will 2010 spell a redefinition of high-end hospitality?
What is the difference between pre- and post-crisis luxury? Luxury hospitality has been hit harder by the worldwide financial disruption than any other segments of the hotel business. It follows, therefore, that it is likely to take awhile for this sector to recover. HOWARD WOLFF, Senior Vice President at destination design firm WATG, says that for 2010, bling has blung.
The Hotel Yearbook is a uniquely forward-looking annual publication. Each year, dozens of CEOs and other senior executives from the hotel industry worldwide, as well as leading analysts and observers, use this platform to share their expectations for the coming twelve months. Each of the 70+ contributors looks specifically at his or her area of expertise, describing the likely developments for the year ahead. As a whole, The Hotel Yearbook thus offers readers a comprehensive overview of the trends and factors that will have an impact on the performance of the hotel business in the year to come – as perceived by the industry’s leaders themselves. For more information visit www.hotel-yearbook.com.
The Hotel Yearbook is a uniquely forward-looking annual publication. Each year, dozens of CEOs and other senior executives from the hotel industry worldwide, as well as leading analysts and observers, use this platform to share their expectations for the coming twelve months. Each of the 70+ contributors looks specifically at his or her area of expertise, describing the likely developments for the year ahead. As a whole, The Hotel Yearbook thus offers readers a comprehensive overview of the trends and factors that will have an impact on the performance of the hotel business in the year to come – as perceived by the industry’s leaders themselves. For more information visit www.hotel-yearbook.com.
2010: Hitting the bottom and beginning to recover?
Once again takes Hotel Yearbook readers on a tour d-horizon of the world of hotel finance in the year ahead. Will lenders want to take on additional property exposure when balance sheets have been so badly battered? Will pressure on operators to meet owners’ cost-cutting demands finally ease? Find out here....
The Hotel Yearbook is a uniquely forward-looking annual publication. Each year, dozens of CEOs and other senior executives from the hotel industry worldwide, as well as leading analysts and observers, use this platform to share their expectations for the coming twelve months. Each of the 70+ contributors looks specifically at his or her area of expertise, describing the likely developments for the year ahead. As a whole, The Hotel Yearbook thus offers readers a comprehensive overview of the trends and factors that will have an impact on the performance of the hotel business in the year to come – as perceived by the industry’s leaders themselves. For more information visit www.hotel-yearbook.com.
The Hotel Yearbook is a uniquely forward-looking annual publication. Each year, dozens of CEOs and other senior executives from the hotel industry worldwide, as well as leading analysts and observers, use this platform to share their expectations for the coming twelve months. Each of the 70+ contributors looks specifically at his or her area of expertise, describing the likely developments for the year ahead. As a whole, The Hotel Yearbook thus offers readers a comprehensive overview of the trends and factors that will have an impact on the performance of the hotel business in the year to come – as perceived by the industry’s leaders themselves. For more information visit www.hotel-yearbook.com.
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