Conrad Hotels & Resorts announced the launch of Stay Inspired (www.stayinspired.com), a global, brand-wide initiative that marks a cultural shift and overhauls the way the brand trains its team members as storytellers of their destinations. At each one of its 24 global properties, Conrad now offers guests who seek out inspired experiences a more customized and curated collection of 1, 3, and 5 hour experiences available through Conrad Concierge mobile app and at StayInspired.com.
Spearheading the Stay Inspired initiative is Nilou Motamed, the luxury brand’s first ever Director of Inspiration, who is responsible for developing and implementing the Stay Inspired vision and what it means for travelers. Nilou joins Conrad having previously served as Editor-in-Chief of Condé Nast’s digital food brand, Epicurious, and Features Director and Senior Correspondent for Travel + Leisure.
As Director of Inspiration, Nilou has traveled to Conrad properties worldwide to create the initial series of Stay Inspired experiences. Catering to the modern traveler’s desire to merge work, life, and pleasure, StayInspired.com now offers experiences in convenient 1, 3, and 5 hour increments, or what the brand is calling the Conrad 1/3/5. Each Conrad 1/3/5 recommendation reflects an inspired view into each destination covering food, shopping, art and design, culture, family, and adventure.
“Today’s luxury traveler wants to discover destinations where they can be truly inspired. So we are shifting how not only our concierges communicate and connect with our guests, but all of our team members,” said John T.A. Vanderslice, global head, Conrad Hotels & Resorts. “Through our partnership with Nilou, we have trained our team members and empowered them to make thoughtful recommendations within our destinations, stepping away from the standard transactional relationship between a concierge and a guest. We now have become more like storytellers.”
StayInspired.com, accessible via mobile device through the Conrad Concierge mobile app, offers a modern luxury traveler on any schedule the ability to browse activities in 1, 3, and 5 hour itineraries, or by interests. Using StayInspired.com, travelers can now save and share their Conrad 1/3/5 itineraries, access custom content in the form of photos, videos, and maps, or book a room and an experience through the hotel’s concierge. On property, concierges will be equipped with tablet devices to guide guests through the itineraries.
“Guests want to use whatever free time they have while traveling to discover something new. They want to find those hidden gems that are off the beaten path and that can’t be found in the pages of a guidebook,” said Nilou Motamed, Director of Inspiration, Conrad Hotels & Resorts. “This collection called the Conrad 1/3/5 curates content and experiences in a way that aligns with the way our guests live their lives.”
Singapore construction and property group Chip Eng Seng Corporation Ltd will make its foray into the Maldives together with Singapore-based Park Hotel Group with the acquisition of Kodhipparu Island Resort for US$65 million. JLL was exclusive advisor on behalf of the resort owner, Kodhipparu Investment Private Limited.
Located in the North Malé Atoll, the resort has 120 villas and is a 15-minute speedboat ride from Malé International Airport. Set to open in second quarter of 2017, the resort is under development by world-renowned hospitality design firm Hirsch Bedner Associates, and will offer two restaurants, a harbour beach club, an infinity pool and bar as well as comprehensive spa facilities. The Resort will be managed by Park Hotel Group as Grand Park Kodhipparu, Maldives as the Group enters Indian Ocean’s most dynamic hotel market.
“As an investment destination, the Maldives provides a transparent policy-making environment and generous incentives for foreigners, including full ownership rights, legally-backed investment guarantees and the ability to fully repatriate profits. This paired with its positive economic outlook is attracting Asian investors seeking to enter the international market,” says Nihat Ercan, Executive Vice President, JLL Hotels & Hospitality Group, Asia.
“As a result, we’re starting to notice a rising trend of Southeast Asian, and in particular Singaporean property developers, who are drawn to the market because it offers high yields underpinned by healthy trading fundamentals.”
Excluding the Kodhipparu sale, the Maldives has seen more than US$120 million in investment transactions so far in 2016. Tourist numbers to the island nation reached 1.23 million in 2015, a 2.4 percent increase on the previous year according to JLL’s report Hotel Destinations Indian Ocean.
This deal will mark the ninth resort JLL has sold in the Maldives since 2012, taking the group’s resort sales in the archipelago to US$500 million and over US$600 million in the Indian Ocean region. In February 2016, JLL also advised on the sale of Zitahli Kuda-Funafaru Resort and Spa to Singapore-listed Roxy Pacific Holdings Limited.
In past articles, PKF Hospitality Research (PKF-HR) has labeled the period 2000 to 2010 as the “lost decade” for the U.S. lodging industry. During this volatile period, hotel revenues remained virtually flat through two major recessions and one extended period of prosperity. On the surface, it appears that hotel food and beverage (F&B) revenue followed a similar pattern.
To understand recent trends in hotel food and beverage departments, PKF-HR studied the financial performance of hotel restaurants, lounges, and catering departments for the period 2000 to 2010. The information came from a same-store sample of full-service hotel operating statements taken from PKF-HR’s Trends® in the Hotel Industry database. These hotels average 413 rooms in size, and offer multiple F&B outlets and extensive banquet facilities. Hotel data was estimated for 2010.
Total hotel food and beverage revenue decreased slightly from 2000 to 2010 within the study sample. Measured on a compound annual basis (CAGR), F&B revenue declined 0.6 percent. This is comparable to the 0.5 decline in total hotel revenue experienced by these same properties. However, when analyzed on a dollar-per-occupied room basis, hotel F&B revenue increased 1.6 percent on a compound annual basis during the decade. This is significantly greater than the 0.1 percent rise in total hotel revenue per occupied room. During the study period, the number of occupied rooms declined 0.5 percent CAGR.
The relative stability of F&B revenue per occupied room can be partially explained by the ability of hotels to attract local patrons to their restaurants, lounges, and catering facilities. This is especially evident during the recessionary years of 2001, 2002, 2003, and 2009 when the declines in food and beverage revenue were less than the decreases observed in rooms revenue.
Conversely, during the prosperous years of 2004 through 2007, total hotel revenues grew stronger than F&B revenues. During these years, stout increases in both occupancy and average room rates boosted total hotel revenue. This implies that the ability of hotel managers to raise room rates is greater than their ability to increase F&B prices.
Sources of F&B Revenue
Averaging 413 rooms, it is not surprising that banquet related revenue was the greatest source of F&B revenue for study sample in 2010. The combination of catering revenue, public room rental income, audio visual fees, and banquet service charges accounted for an estimated 55.5 percent of total F&B department revenue. Other sources of F&B revenue included restaurants (30.2%), lounges (5.6%), and room service (4.4%). It is interesting to note that the combined beverage sales within the hotel restaurants were twice as great as the liquor revenue generated at the bars within these properties. Whole bottle wine sales in the restaurants partially explain this disparity.
Due to changes in the Uniform System of Accounts in the Lodging Industry(USALI) it is not possible to equitably compare changes in F&B revenue by source over the 2000 to 2010 period. However, changes in revenue can be estimated for 2009 to 2010.
From 2009 to 2010, total F&B revenue increased 8.6 percent. This compares favorably to the 6.5 percent increase in total hotel revenue for the study sample during the same period. The greatest increases were observed in beverage revenue (9.4%), followed by food revenue (9.1%) and other F&B revenue (6.2%). Other F&B revenue consists of public room rental, audio/visual, and service charge income. Of note is the fact that the majority of growth in beverage revenue came from catering events as opposed to the hotel bars.
Expenses and Profits
Food and beverage profitability is dictated by management’s ability to control the prime costs of labor and costs of goods sold. From 2000 to 2010, the prime costs of F&B departments in our sample averaged 64.3 percent of total department revenue. Labor costs during this period averaged 43.4 percent, while the cost of goods sold averaged 20.9 percent. This cost of goods sold number includes expenses associated with the other F&B revenue sources. If you examine the combined costs of goods sold for just food and beverage sales, the average ratio rises to 29.1 percent.
Hotel departmental profit margins averaged 26.4 percent from 2000 to 2010. In accordance with the USALI, this ratio is calculated before undistributed expenses such as marketing, maintenance, and utilities. Once again, the depth of the recession becomes evident. The lowest level of F&B departmental profitability was experienced in 2009 (21.6%), while the greatest profit margin was observed in 2000 (32.6%).
Haves and Have Nots
Food and beverage operations within the lodging industry have become a story of haves, and have nots. The vast majority of new properties and brands entering the U.S. lodging industry offer either limited, or no F&B service at all. On the other end of the spectrum are full-service hotels with multiple restaurants, lounges, and banquet facilities. For these full-service hotels, the offering of F&B is not just a source of revenue, but an amenity used to position the property within the marketplace.
Losses within the F&B department are no longer tolerated by owners. F&B managers struggle to contain costs and grow revenues. The ability of management to attract local patrons, boost catering revenue, and increase beverage sales within their restaurants are examples of successful tactics that have generated profitable revenue.
Marriott International announced that 2016 represented the strongest year of rooms growth in its history. Marriott opened a record 55,000 rooms in 2016, excluding the 381,000 rooms gained with the Starwood acquisition. The combined company signed 880 new hotel deals, representing nearly 136,000 rooms, under long-term management and franchise agreements, and opened over 400 hotels with more than 68,000 rooms around the world. Marriott now operates or franchises over 6,000 hotels and nearly 1.2 million rooms.
“2016 will go down as a remarkable year in Marriott’s history. We completed the acquisition of Starwood and posted record growth that underscores the strong preference that owners and franchisees have for our unmatched brand portfolio, best-in-class sales and marketing platforms, and the most dedicated associates in the industry,” said Arne Sorenson, Marriott’s President and Chief Executive Officer. “Our accomplishments this year position Marriott for continued success and create greater opportunities for our guests, associates, development partners, shareholders and the communities where we do business.”
“We achieved strong global growth across both established and emerging markets in 2016,” said Tony Capuano, Marriott’s Executive Vice President and Global Chief Development Officer. “According to STR as of December 2016, Marriott’s North American pipeline accounted for a leading 36 percent of industry rooms under construction and 14 percent of industry rooms open. For the first time in Marriott’s history, more than half the rooms in our development pipeline are outside of North America, with 44 percent of those rooms under construction.”
The combined company’s global distribution of select-service hotels included nearly 4,000 properties at the end of 2016. The combined company’s select-service portfolio continues to experience strong global momentum with 275 openings and over 640 new deals signed last year. Growth should accelerate with nearly 1,800 select-service projects in the pipeline. The powerful, select-service growth trajectory was led by the established Courtyard by Marriott, Fairfield Inn and Suites, and Residence Inn by Marriott brands and bolstered by the newest members of the company’s select-service portfolio, Aloft and Element, each of which recorded their highest number of signings ever.
The combined company further strengthened its leadership in STR’s high value luxury and upper-upscale segments with the signing of 236 new hotels, representing over 50,000 rooms, and the opening of over 100 hotels, representing over 27,000 rooms, in destinations such as Singapore, Houston and Sanya, China as a new generation of travelers seek distinctive experiences around the world. Marriott’s share of the industry’s luxury rooms pipeline is 29 percent. Independent hoteliers have more options than ever to leverage Marriott’s powerful loyalty and distribution systems with the Autograph Collection, which last year exceeded 110 open hotels, as well the Tribute Portfolio and The Luxury Collection brands. Combined, these three brands generated nearly 80 signed deals during the year, contributing to the opening of 28 hotels in 2016.
“Marriott is well-positioned for continued strong growth in the years ahead,” continued Capuano. “We offer our development partners the benefits of scale and competitive advantages that can help them maximize their returns on investment. We also offer the broadest portfolio of brands and the industry’s leading loyalty platforms. We have the right brand for the right place, whether a new hotel development or an opportunity to reposition an existing asset.”
Renowned hotel brand and management company Dream Hotel Group signed two hotels in the Maldives with local entrepreneur Mohamed Manik and Alpha Kinam Holdings to develop The Chatwal Maaga Maldives and Dream Gasveli Maldives. Set to open in 2019 and 2020 respectively, the new locations triple the group’s presence in Asia and mark a pivotal step in Dream Hotel Group’s global expansion strategy.
“Last year, we signed more new hotels and resorts than ever before,” said Dream Hotel Group CEO Jay Stein. “I’m thrilled to announce another equally strong year of growth momentum with the signing of The Chatwal Maaga and Dream Gasveli in the Maldives, one of the strongest luxury leisure resort markets in the world.”
Nestled in picturesque North Ari Atoll, The Chatwal Maaga Maldives will feature 80 ultra-luxury villas, six private beach villas and two presidential villas, as well as three world-class culinary experiences bringing fine dining and casual barefoot elegance to the lagoon’s edge. The Chatwal Maaga Maldives will be the second location to debut in The Chatwal collection of luxury hotels.
Dream Gasveli Maldives will feature 500 villas, eight experiential dining and nightlife venues, including the brand’s signature Dream Beach Club, a 20,000-square-foot wellness spa and a dozen designer brand retail outlets for exclusive duty-free shopping on site. Spanning across three islands in Meemu Atoll, Dream Gasveli will be the largest fully-integrated resort ever developed in the Indian Ocean.
“I’ve been in the resort and hotel business for over 30 years in the Maldives,” said Mohamed Manik, Chairman of Alpha Kinam Holdings. “I am pleased to partner with Dream Hotel Group in bringing its leading edge lifestyle brands to the Maldives and look forward to taking our luxury market experiences one step beyond here with many more projects in the future.”
“I have known Mohamed Manik for a number of years and there is no better partner we’d rather work with to bring The Chatwal and Dream brands of hospitality into the Maldives, delivering on the standards of excellence we hold so high.” said Kevin Wallace, Managing Director, Asia Pacific, Dream Hotel Group.
Late last year, Dream Hotel Group announced the signing of its first hotel in Vietnam with locally owned Beegreen Group to develop Dream Oceanami Villas & Spa in Long Hai, Ba Ria-Vung Tau Province, the country’s top tourist destination. Set to open in June 2017, Dream Oceanami Villas & Spa will be the first of four new resort hotels developed by Beegreen Group and managed by Dream Hotel Group in Vietnam over the next two years. Future locations include Vung Tau City, Hoi An, Ho Tram and Con Dao.
Dream Hotel Group plans to sign more than 150 hotels and resorts worldwide across all its brands – Dream, Time, The Chatwal and Unscripted – over the next four years, continuing to solidify its burgeoning portfolio worldwide.
“This will be a milestone year for us as we welcome an unprecedented number of new hotels into our ever-growing family of brands across the globe,” added Stein.
Mandarin Oriental International Limited will acquire the freehold interest in the property that houses Mandarin Oriental, Boston together with its hotel business for US$140 million. Mandarin Oriental has managed the 148-room Hotel, which is situated on Boylston Street in Boston, under a management contract since its opening in 2008. The Group also manages 85 privately owned Residences at Mandarin Oriental connected to the Hotel.
Mandarin Oriental has exercised its right under its long-term management contract to acquire the Hotel from CWB Hotel Limited Partnership. The Hotel had been offered for sale by auction, and a number of bids had been received. Under Mandarin Oriental’s management contract, it has the right to acquire the property for a sum equivalent to the highest bid. Completion of the sale and purchase of the Hotel, subject to final court approval of the terms agreed at auction, is currently expected to take place in the first quarter of 2016.
Edouard Ettedgui, Group Chief Executive, said, “We are delighted to acquire the property that houses our luxury hotel in the heart of Boston. This acquisition ensures the continuity of our position in Boston, and we look forward to maintaining our award-winning service in this key gateway city.”
Mandarin Oriental’s total investment of US$140 million will be funded through a mixture of existing cash reserves and debt. The acquisition of the Hotel is anticipated to have a positive impact on the Group’s earnings. For the year ended 31st December 2014, the Hotel generated earnings before interest, taxes, depreciation and amortization (‘EBITDA’) of US$5.0 million. For the same period, the Group received management fees and other contributions of US$2.3 million, which were charged against the Hotel’s EBITDA.
The existing AccorHotels luxury portfolio of Sofitel, MGallery and Pullman will grow to include FRHI’s three brands: Fairmont, Raffles and Swissôtel. The unification of these two hotel companies establishes AccorHotels as a leader in the global luxury hotel market. The two chains combined form a network of over 4,000 hotels and resorts globally across 20 brands. In the Middle East, AccorHotels has now added 28 Fairmont, Raffles and Swissôtel properties in operation and in the pipeline, representing over 14,000 rooms in the luxury and upscale segments. Granet believes that the integration of the FRHI brands is the perfect addition to Accor’s existing portfolio, particularly in the Middle East, as over 70 percent of the chain’s key partners within the region are interested in the further development of the multi-segment market.
Transaction’s financial returns
Through the transaction, AccorHotels announced an objective to generate approximately USD 71 million (€65 million) in revenue and cost synergies in the medium-term due to the combination of brands, maximization of hotel earnings, increased efficiency of marketing, sales and distribution channel initiatives, and the optimization of support costs. This will also be supported by the combination of operational expertise and talent within the combined entity.
The integration will enable AccorHotels to bring in additional talent, expertise and resources around management and development of luxury and upscale properties. The deal will allow Accor to re-focus on the importance of innovation and provide positive dynamism to the hospitality market. All brands within both FRHI and AccorHotels’ networks will maintain their positioning and brand promise while being part of a more globally established organization. “On a global level, the deal will provide us with a sizeable footprint in the North American market, enabling us to enter into the growing branded residential business,” explained Granet. For the Fairmont, Raffles and Swissôtel brands, this deal allows them to enjoy the scale and growth made possible by AccorHotels’ global platform. FRHI will also be able to yield new development opportunities, increased sales and marketing presence alongside greater cost and revenue synergies.
As of July 12, 2016, employees from both groups have access to job opportunities and career development prospects throughout the combined network. On another level, AccorHotels is known for its community outreach programs that are specially designed for this region. “We are the only international hotel group in the region with a permanent and dedicated
training academy: Tamheed,” explained Granet. AccorHotels is also the first and only international hotel group in KSA to develop the Saudi Management Training Program, a special management program, which is certified by the Saudi Commission for Tourism and National Heritage. It encourages nationals to engage with the hospitality industry and nurture their skills. These programs will benefit FRHI’s properties in the Kingdom too. “Following the acquisition, we are keen to further develop and increase the scale of our regional training programs.”
Eye on the future
With this merger, two investment groups are now part of AccorHotels’ board: Kingdom Holdings and the Qatar Investment Authority. “With their presence, our focus on the Middle East as a key growth market is now stronger than ever,” he explained. AccorHotels’ long-term development strategy for the region continues to remain aligned with regional initiatives such as Dubai’s vision for 2020 and Saudi Arabia’s plan to welcome a larger number of visitors, especially in the holy cities. These factors increase the region’s demand for quality accommodation across each market segment. “AccorHotels is now the second largest hotel operator in the region with the most significant presence across all segments, allowing us to be ideally positioned to meet this need for diversified accommodation. We are planning to open over 100 hotels within five years in order to double our network and reach 50,000 rooms in operation by 2020,” he concluded.
Singapore — Pan Pacific Hotels Group has announced the resignation of Mr Bernold O. Schroeder, its Chief Executive Officer, with effect from 1 January 2017.
Mr Schroeder, who has been with the Group for three years, will be pursuing other interests. The appointment of a new CEO will be announced before the end of February.
In the interim, Mr Gwee Lian Kheng, Group Chief Executive of UOL Group (Pan Pacific Hotels Group’s owning company) will oversee the management of the company.
Pan Pacific Hotels Group owns and operates more than 30 properties worldwide, and remains focused on pursuing its strategic growth in key cities in Asia, North America and Australia. Following the opening of Pan Pacific Hanoi last year, the Group will open Pan Pacific Beijing in May and Pan Pacific Yangon in September this year.
Here’s What Hotels Can Learn About What Guests Want
By Alex Shashou, President & co-founder of ALICE
When Airbnb’s CEO asked his Twitter community for their Airbnb product wish list, what he got was a comprehensive look at what guests want from lodging today.
When Airbnb CEO Brian Chesky asked his Twitter followers for Airbnb product recommendations in the late hours of Christmas day, Chesky said he expected about 10 people to respond.
Instead, some 2,200 people offered their suggestions, with product recommendations still coming in.
Chesky spent the rest of the 25th, and then many hours on subsequent days, responding to input from users. The Airbnb CEO facilitated a wide-ranging conversation about short and longer-term product ideas for the company, and also fielded commentary about issues important to Airbnb’s future, like regulation and discrimination. User feedback has long been integral to Airbnb’s model. But this real-time user dialogue, initiated by the company’s CEO, and facilitated by Twitter is something new altogether.
Reading these exchanges between Chesky and Airbnb users is instructive for hoteliers on many fronts.
- It is uncommon for CEOs of multi-billion dollar companies, in hospitality or otherwise, to solicit feedback from their users, let alone engage in such thoughtful, open and candid discussion. How can hotel management take a similarly direct approach to feedback, rather than rely on post-stay TripAdvisor commentary and largely ignored guest surveys that often feel like an afterthought?
As the editors of Hotel Management put it, “One has to wonder if a hotel CEO asked the same seemingly innocuous question, would it bring the same kind of deluge of response? Had, say, Hilton Worldwide CEO Chris Nassetta asked on Twitter: ‘If @HiltonWorldwide could launch anything in 2017, what would it be?’ would it be met with thousands of replies? Better yet, would he have answered them?” Perhaps, as the leader of public company, Hilton’s CEO might not be able to take to Twitter in the same way, but Chesky’s question is a crucial reminder of the value in seeking feedback from your users or guests. This is especially true now that Airbnb – what many see as the industry’s biggest threat – has set this precedent, showing users its openness to feedback and eagerness to improve its product.
- Chesky’s exchange with his users offers foresight for hoteliers, in that the discussion pointed to the CEO’s vision for the company long-term – a future in which Airbnb graduates from being a platform for lodging to a platform for all things travel. How will this affect the hospitality industry (beyond just hotels) in the long term?
User suggestions for the company included financing options for homeowners, more service partnerships, tools for landlords and property managers, RV rentals, and disruption of the rental car industry.
Chesky and his followers also discussed “Flights” – Airbnb’s much anticipated move into booking air travel, which Skift reported on last month. Flights would potentially give Airbnb an advantage over hotels in packaging deals, helping to engender more loyalty.
But within lodging itself, the discussion also raised a number of trajectories for Airbnb that would circumvent some of the company’s recent regulatory hindrances, and, in so doing, threaten incumbents in more fundamental ways.
Indeed, Airbnb has already started experimenting with first-party lodging. The company unveiled a communal housing project designed to revitalize a small town in Japan in August of last year. If successful, the company says it will scale this model to declining small towns across the world.
And we’ve speculated ourselves about what an actual Airbnb hotel might look like. The company’s platform approach to hospitality gives it several advantages should it decide to build or invest in its own hotels. Hosting its own long-term rentals specifically would circumvent many of the regulatory restrictions placed recently on the company, and reinvigorate its advance on traditional hotel demand.
One particularly interesting aspect of the conversation was that a (possibly surprisingly) large subset of user recommendations had to do with ideas for Airbnb that are already hallmarks of hotels or innovations spearheaded by the hospitality industry more generally.
These ideas included, but were not limited to, loyalty programs (complete with credit cards), business travel rewards programs, provision of amenities to guests (from gyms to shower gel), better corporate travel functionality, a stocked fridge, on-demand meals (aka room service), a true luxury segment with full-service treatment, eco-responsibility, and accepting Bitcoin for payment. Many users expressed a desire for quality controls and the institution of quality standards, pertaining to everything from the cleanliness of rental spaces to the speed of the WiFi.
- But hotels shouldn’t get too comfortable. Chesky’s response to many of these product requests was either to directly or indirectly confirm that these popular features or characteristics of hotels would soon be coming to Airbnb.
Hotels might have taken a collective sigh of relief after what’s seemed like a worldwide crackdown on Airbnb in recent months, but if this conversation is any indication, they shouldn’t get too comfortable. As the tweets above illustrate, many of the things that have formerly set hotels apart from Airbnb might soon be features of the Airbnb product. It’s imperative hotels continue to innovate and ask their guests what else they can offer to set themselves apart.
- To that end, it’s worth looking at the many user ideas for Airbnb that could improve the hotel offering as well.
Users asked for ways to connect with like-minded travelers, Airbnbing in the same location. Many asked that this happen over food – either through shared cooking experiences, or by connecting with local chefs or foodies. As Chesky noted, food is the largest area of spend in travel after accommodations and flights. How can hotels capture some of this spend (especially since room service in the traditional sense is possibly being phased out) and connect their guests in so doing? (Other players in travel, like TripAdvisor acknowledge this growing trend, announcing this morning their integration with EatWith to power “social dining.”) And, dining aside, what else can hotels do to foster connections between like-minded guests?
Similar to requests for ways to make connections between fellow travelers or with locals, many users asked for better functionality for group travel. Hotels often make it cheaper for two people to book together rather than separately, but how else can hotels reshape their offerings to appeal to guests who might be traveling in larger groups? Could hotels innovate by directly controlling group purchases and communication?
A “Smarter” Concierge and Virtual Travel Agents
Users also asked for more personalized local experience recommendations, based on user data, as well as app functionality that helped with arranging all aspects of travel, not just lodging. Frequent ALICE partners Hello Scout and Porter and Sail are growing players in the AI-driven concierge and travel planning space. How can hotels support their concierges with data-driven tools to improve guest recommendations? And can they expand their own (app or partnership) offerings to provide more comprehensive travel services to guests?
Local Experiences and Activities
In addition to more personalized experiences, users asked Chesky for more nuanced sets of local activity recommendations, like “parents in town,” or “Saturday morning in Madison” (similar to how Netflix built a competitive advantage by catering to the long tail of movie preferences). Users also asked to be able to rate these experiences. How can hotels start to curate their guest experience beyond the room and on-property amenities? How can they differentiate themselves by drawing on truly local experiences? As Skift writes in their prognostications for 2017, “Hotels need to stop thinking of bringing “local” into the hotel through artisanal hand soaps or ‘locally sourced, free-range bacon.’ … Hotels need to start thinking more about their local community, too.”
Smart Home Functionality
Airbnb users also clamored for smart home features that would centralize control for Airbnb while also providing a better customer experience. Skift has identified the “Smart Hotel” as a guest experience trend for 2017. All eyes are on the innovators in this space, like the Wynn Las Vegas, which recently equipped every room with its own Amazon Echo smart speaker device. While hotels are often saddled with legacy in-room systems, Airbnb might have an advantage here, since homeowners are more likely to upgrade their spaces with the latest Amazon, Google, or Apple product, which is naturally integrated with the web. The openness of consumer electronics allows for integrating systems easily, potentially easier than enterprise versions.
Airbnb already uses what it calls “smart pricing,” which modulates the price of rentals based on supply, demand, timing and other factors. One user suggested, however, Airbnb take these pricing manipulations even further by asking hosts for a minimum price and a “desired” price. Airbnb would then drop the price of the rental over time to guarantee a booking. Hotels have long employed pricing variations to capitalize on their fixed inventory, and have gotten more comfortable with steep last minute discounts, in partnership with companies like Hotel Tonight, but there’s more room here for innovation. ALICE friend Beewake, and a host of similar startups, offer hotels the opportunity to make money from extra daytime capacity. How else can hotels using pricing to their advantage?
Some users were critical of Airbnb’s approach to content marketing, encouraging the company to make more use of real, unscripted video and vlogging. Marriott has set a high bar for the industry with its marketing initiatives, which include experiments in virtual reality and 2015’s real-life, city-wide guest request simulation #AppYourService. What else can hotels do in marketing to set themselves apart?
In the couple of weeks following Chesky’s conversation with Airbnb users, many other tech CEOs have taken to Twitter to ask their own customers for product ideas. Among those are Jack Dorsey, Twitter and Square (who asked his followers about both products), Jon Oringer, Shutterstock, Chris O’Neill, Evernote, and Brian Armstrong, Coinbase. It’s not surprising these are all companies actively disrupting incumbents in their respective spaces — being actively attuned to customer needs and market opportunities is how these companies have set themselves apart and built customer loyalty, gaining market share in the process.
Hospitality is an industry preoccupied with guest experience. But most hotels conceive of their loyalty programs as a way to lock-in guests, rather than endeavor to build real loyalty by listening to their customers. Brands that actively seek customer feedback have an incredible opportunity to gain market share. Brands focus on transactional loyalty instead of engagement may eventually lose their customers altogether.
What would happen if hotel CEOs also followed Chesky’s lead and asked their guests about what they want? Would hotels get an opportunity to learn about the next generation of customer needs and distance themselves from Airbnb by innovating, as the homeshare company is catching up? Would engaging in a genuine dialogue with their guests about what they want seed the future of a new breed of customer loyalty? It’s clear that if hotels don’t ask how to innovate, once Airbnb reaches parity with hotels, the company will surely be asking where to go next. And Airbnb will be bringing its customers — and hotels’ customers — with them.
Unless you still operate from one of those quaint, last-decade entities called a ‘shop,’ your customers are online and on the move.
Your relationship with them is essentially an impersonal one. No real people dealing with real people and exchanging such real things as smiles and handshakes. No face-to-face opportunities to show them what lovely people you are. Somehow you have to convey your sincerity, professionalism and all round loveliness down a coaxial cable. Here are a few ways to be a real player in the virtual world.
Be a good corporate citizen
Hungry Jacks have just announced they will transition to 100% cage-free eggs 16 months earlier than planned. Their customers asked for it. They pledged to do it and now they’ve met that pledge well ahead of time. That’s how to keep customers and gain new ones. Any company that is vehemently and publicly ethical in their approach to business covers all their products and services in a warm glow no discount voucher or two-for-one deal can compete with long term.
Reward loyal customers
Make very customer feel like they’re your only customer or they soon will be. So personalise the relationship any way you can in ways that are both commercial and comforting. Loyalty programs and points systems can still create enough carrots to keep customers shopping.
Give stuff away
And no, that doesn’t necessarily mean products. It means information, advice and insights. A well constructed online content program is one of the best ways to keep customers coming back to your site. The more you enlighten them with free information, the more indebted they’ll become. When they are in the market for something you sell, chances are you’ll be the virtual shop door they open.
Remember, it’s the thought that counts
Giveaways don’t have to be weekends in Hawaii to wow your customers. Even the smallest unexpected gesture can surprise simply because it’s a gesture and it’s unexpected. For as little as 10 cents you can give someone a moment of unanticipated pleasure and leave a lasting impression.
Show there is safety in numbers
One of the best ways to keep customers and get them buying online is to show them everyone else. In other words flaunt your numbers. ‘15,000 already and growing!’ ‘20,000 people just like you already swear by this product!’ None of us wants to be a sheep, but when it comes to buying decisions, we certainly are!