How Tech is Helping Revolutionise the Hospitality Industry

Over the past five years, food delivery services have steadily grown in both popularity and most recently necessity, with many restaurants rising to meet the demand. A primary reason is that diners love the perfect melange of restaurant quality and at-home comfort that food delivery offers. About one third of individuals aged between 18 and 24 eat takeaway and delivered food several times a month in the UK alone (Statistica, 2020).

At Deliverect, we’ve seen this come to life as we’ve helped to process an average of more than 1.5 million orders per week this past year. That’s a 750% increase from the year before. But as beneficial as delivery services can be, behind-the-scenes details like last-mile logistics can be expensive and challenging to manage.

It’s clear that digital solutions have helped restaurants better serve their customers and adapt to life in the new normal. Online ordering is here to stay – so implementing the right technology in restaurants is crucial for helping to create an excellent at-home dining experience for your customers.

That’s why this past month we introduced a new suite of products to help our customers enable further growth and empower control within the competitive hospitality landscape.

We’re excited for more restaurants to have access to top technology that enhances day-to-day and delivery operations. Any updates that make our platform operate more seamlessly for restaurants is a win – our team is motivated by helping the hospitality industry continue to succeed and thrive after a tough year.  Let’s take a look at some of the new feature and how they’ll help restaurants to continue thriving:

Deliverect Insights: Deliverect Insights offers upgraded dashboards that allow restaurants to utilise their data more extensively, answering key questions that will enable them to see how their performance is trending on delivery platforms and to spot outliers. Insights offers three sub-sections:

• ‘Menu Item Performance’ allows restaurants to compare products and identify the best and worst performers.
• ‘Location Performance’ enables restaurants to gather insights surrounding the performance of individual locations and generally understand performance over time.
• ‘Channel Performance’ helps compare channels, easily identify best selling items and see how sales fluctuate on different delivery channels.

Pickup Manager: Deliverect’s Pickup Manager permits drivers and restaurants to view the status of their order with the pickup screen, making overall communications smoother.

• Restaurant staff can easily manage order statuses to keep drivers and restaurants well informed.
• A look at the pickup screen will tell drivers when to go to the counter to pick up their order, improving user experience and shortening wait times.
• Through real-time and clear order status updates, orders that are ready are brought to customers faster and more accurately.
• Dispatch: Dispatch enables restaurants to manage the complete delivery experience through their direct channels, helping them to increase customer satisfaction.
• Restaurants can easily offer delivery on their direct channel by assigning online orders to delivery drivers.
• They can also follow orders through the entire delivery, as real-time driver updates and driver details are shared.

Chat: Chat provides conversational support, allowing our customers to reach us directly from our platform tools anytime and anywhere.

In the food service industry, everything restaurants do is for the benefit of diners. They cook delicious food to delight their palates, they offer a variety of dining options to match their needs and preferences, and they craft balanced menus to cater to every kind of eater. Everything is to ensure that the end customer has an excellent experience and returns to dine time and time again.

Incorporating online ordering software to improve delivery capabilities will positively impact diners’ experience, especially how restaurants communicate with their customers. Maintaining stellar customer communication is vital to creating brand loyalty, as it  shows them their experience and opinions are important.

Source: https://www.hospitalityandcateringnews.com/2021/10/how-tech-is-helping-revolutionise-the-hospitality-industry/

Hotel stocks in demand

Shares of 11 hotel companies rose by 1.10% to 15.94% after the Indian government announced that it will start issuing tourist visas from 15 October 2021.Kamat Hotels (up 15.94%), Lemon Tree Hotel (up 7.82%), Indian Hotels Company (up 4.41%), Asian Hotels (North) (up 4.15%), EIH Associated Hotels (up 3.53%), Chalet Hotels (up 2.91%), TajGVK Hotels (up 2.74%), Asian Hotels (West) (up 2.05%), EIH (up 1.57%), ITDC (up 1.17%) and Asian Hotels (East) (up 1.10%) jumped.

India’s Ministry of Home Affairs (MHA) on Thursday said it will begin granting fresh tourist visas to foreigners coming to India through chartered flights with effect from 15 October 2021. Foreign tourists travelling to India by flights other than chartered aircraft will be able to do so with effect from 15 November 2021.

“With this, the restrictions placed on visa and international travel stand further eased given the present overall COVID-19 situation,” the home ministry statement added.

All visas granted to foreigners were suspended last year due to the COVID-19 pandemic. Various other restrictions were also imposed on international travel by the central government to arrest the spread of the COVID-19 pandemic.

Source:https://www.business-standard.com/article/news-cm/hotel-stocks-in-demand-121100800577_1.html

Expert’s Voice: Top ten F&B revenue-management tips for hotel restaurants

Silvie Cohen and David Israel of hotelAVE suggest practical measures that hotel restaurants can adopt to boost their top lines and minimise the impact of spiralling costs.

As restaurants emerge from the Covid19 pandemic, operators remain challenged by nationwide labour shortages, the rising cost of wages and the increasing cost of goods.

To mitigate these bottom-line issues, just like hotels and airlines deploy revenue-management techniques to push sales, there are strategies F&B teams can deploy to optimise their top line as well. This article takes you through F&B revenue-management tips to help restauranteurs improve profitability.

Top ten F&B revenue-management tips for hotel restaurants:

• Prix-Fixe menus: Explore offering a fixed three-course menu for a set price, which will help drive average check. This is a popular option for weekday lunch as well as weekend brunch (bottomless brunch) or family / holiday meals.
• Dynamic pricing: Evaluate surge pricing based on demand levels or meal period to drive incremental revenue (weekday versus weekend, lunch versus dinner). Given the increased use of digital / mobile menus (eg utilising QR codes), this strategy can be implemented with minimal cost.
• Entrée additions: Highlight certain additions to entrées on the menu. For example, provide the option to get bacon added to a burger, a fourth taco (if the dish serves three) or egg-white substitutions amongst other combinations for an additional upcharge. If it is highlighted on the menu, guests are likely to order it.
• Time management: Consider the length of time customers sit at their table to maximise the amount of turns during service. Set table limits or provide express meal options (eg one-hour power lunch) to optimise the number of covers the restaurant does during certain meal periods. Offer additional points or incentives via reservation systems (OpenTable, Resy, etc) to motivate guests to book at off-peak hours. Allow guests to pay via mobile QR code to expedite the checkout process.
• Hotel cross-collaboration: Incentivise hotel guests to come to the restaurant via offering different benefits. Destination fees: If the hotel has a destination fee, include F&B offerings within the fee to encourage guests to come to the restaurant. Data suggests a modest discount or free drink / appetiser generates substantial incremental revenue from hotel guests when offered. Prioritise hotel guests: Offer guests priority seating and reservation access to drive covers.
• Competitive price shop: Complete a quarterly shop of comparable food, beverage and event prices within the competitive set. Be sure to evaluate if menu prices are too low or too high and adjust, as necessary.
• Find menu ‘stars’: Evaluate product mix (PMIX) and menu costing to understand which menu items are highly profitable and sell (eg French fries). Train servers to understand which items they should be selling in real time based on inventory and pricing (eg avoid guacamole if there is an avocado shortage). Eliminate loss-leaders during high-demand periods and eliminate menu items that take a long time to cook or require additional culinary / front-of-house resources to execute.
• Lucrative happy hours: Provide enticing happy-hour offerings to increase foot traffic in the early hours post-work. Another creative option includes offering a ‘reverse happy hour’, which is reduced pricing during later evening hours (starting at 9pm versus 4pm). Utilise limited menus with enticing offers (US$1 oysters, half-off cocktails, etc).
• Ancillary spend: Give guests the option to purchase their favourite restaurant items to take home (eg homemade cookies, make-it-yourself pasta kits, Bloody Mary mix, etc).
• Flexible seating: Evaluate flexible seating options to ensure four-tops can be turned into two-tops to mitigate lost revenue due to differences between party size and available seating.

Source: https://tophotel.news/experts-voice-top-ten-fb-revenue-management-tips-for-hotel-restaurants/

Weak jobs report as delta impacts travel, tourism

The unemployment rate, however, dropped to 5.2% from 5.4% in July.

America’s employers added just 235,000 jobs in August, a surprisingly weak gain after two months of robust hiring and the clearest sign to date that the delta variant’s spread has discouraged some people from flying, shopping and eating out.

The August job growth the government reported Friday fell far short of the sizable gains of roughly 1 million in each of the previous two months. The hiring jumps in June and July had followed widespread vaccinations that allowed the economy to fully reopen from pandemic restrictions. Now, with Americans buying fewer plane tickets, reducing hotel stays and filling fewer entertainment venues, some employers in those areas have slowed their hiring.

Still, the number of job openings remains at record levels, with many employers still eager for workers, and overall hiring is expected to stay solid in the coming months. Even with August’s tepid job gain, the unemployment rate dropped to 5.2% from 5.4% in July. With many consumers still willing to spend and companies to hire, the overall U.S. economy still looks healthy.

The details in Friday’s jobs report showed, though, how the delta variant held back job growth last month. The sectors of the economy where hiring was weakest were mainly those that require face-to-face contact with the public. More Americans said they were unable to work in August because their employer closed or lost business to the pandemic than said so in July.

“The delta variant has taken a bigger toll on the job market than many of us had hoped,” said Sarah House, a senior economist at Wells Fargo. “It’s going to take workers longer to come back to the labor market than we expected.”

A few months ago, many economists, as well as officials at the White House and Federal Reserve, had expected a fading pandemic to encourage more people to resume their job searches. Worries about getting sick on the job would fade, they hoped. And as schools reopened, more parents, particularly women, would return to the workforce.

So far, that hasn’t happened. As a consequence, many economists now predict that the Fed will delay an announcement that it will begin withdrawing the extraordinary support for the economy it unleashed after the pandemic erupted in March of last year.

The August jobs report “slams the door” on the prospect of the Fed announcing a pullback when it meets later this month, said House, the Wells Fargo economist. Fed Chair Jerome Powell made clear last week that the central bank would begin to reverse its ultra-low-rate policies later this year if the economy continued to improve.

Hiring in a category that includes restaurants, bars and hotels sank to zero in August after those sectors had added roughly 400,000 jobs in both June and July. Restaurant dining, after having fully recovered in late June, has declined to about 9% below pre-pandemic levels, according to reservations website OpenTable.

Some live shows, including the remaining concerts on country star Garth Brooks’ tour, for example, have been canceled. Businesses are delaying their returns to offices, threatening the survival of some downtown restaurants, coffee shops and dry cleaners.

Health care and government employers also cut jobs in August. Construction companies, which have struggled to find workers, lost 3,000 jobs despite strong demand for new homes.

Government employers shed 8,000 jobs, mostly because of a sharp declines in local education hiring after strong gains in June and July. That decline occurred mostly because the pandemic has scrambled normal hiring patterns as schools have closed and then reopened for in-person classes.

Yet many employers are still looking to hire. The job listings website Indeed says the number of available jobs grew in August, led by such sectors as information technology and finance, in which many employees can work from home. And the National Federation for Independent Business said Thursday that its surveys show that half of small businesses have jobs they cannot fill.

Walmart announced this week that it will hire 20,000 people to expand its supply chain and online shopping operations, including jobs for order fillers, drivers, and managers. Amazon said Wednesday that it is looking to fill 40,000 jobs in the U.S., mostly technology and hourly positions.

And Fidelity Investments said Tuesday that it is adding 9,000 more jobs, including in customer service and IT.

The difficulty in filling jobs is forcing more companies to offer higher pay. Hourly wages rose a robust 4.3% in August compared with a year earlier. Walmart, for one, said it was giving over 500,000 of its store employees a $1 an hour raise.

Governors in about 25 states, nearly all led by Republican governors, cut off a $300-a-week in federal supplemental unemployment benefits in June and July because, they said, the extra money was discouraging recipients from looking for work. Yet the proportion of Americans with jobs or searching for one was flat in August, Friday’s report showed, suggesting that the cutoff has had little impact so far.

Source: https://www.mercurynews.com/2021/09/03/weak-jobs-report-as-delta-impacts-travel-tourism/

Nando’s, a Chicken Chain Beloved in Britain, Struggles With Poultry Shortage

The restaurant has beguiled British palates for almost three decades. But a recent chicken shortage saw almost 50 stores temporarily close this last week.

LONDON — If Oliver Twist were to sing a modernized version of “Food, Glorious Food,” it could be re-appropriated as, “Nando’s, glorious Nando’s!”

Since the Johannesburg-based restaurant chain opened its first store in London in 1992, its signature peri peri chicken has enamored British consumers’ appetites.

Marinated with a variation of Afro-Portuguese spices, including lemon and herb for those with more sensitive palates, Nando’s hallowed flame-grilled chicken — which, it declares proudly on its website, is neither American nor chlorinated — is a British culinary institution.

But in the latest series of food shortages that have hit British supermarkets and restaurants — exacerbated by a perfect storm from the fallout with Brexit, a declining number of truck drivers, and the coronavirus pandemic — Nando’s announced on Tuesday that it had to temporarily close around 50 of its stores across England, Scotland, and Wales because of a shortage of chicken.

Across the country, British customers were greeted this week by signs posted onto the windows of gloomily empty branches. The source of the poultry catastrophe? Issues with the supply chain, according to a spokeswoman.

“The U.K. food industry has been experiencing disruption across its supply chain in recent weeks, due to staff shortages and Covid isolations, and a number of our restaurants have been impacted,” said Nando’s, in a response to The Times.

Nazish Zeb, 38, who lives in Solihull, the West Midlands, was forlorn, when her son arrived home on Wednesday, to break the news that their regular Nando’s branch in Birmingham — one of a handful in the city with halal chicken prepared according to Islamic guidelines — was temporarily closed. “I am a chicken lover,” she said in an interview. “It’s a shame, I can’t tell you how much we are missing out.”

Other disappointed customers took to Twitter to air their grievances, to which Nando’s responded apologetically that their supply chain was experiencing “a bit of a ’mare,” as in nightmare.

Among the culprits responsible is the ‘pingdemic,’ which has seen hundreds of thousands of people ‘pinged’ by a government-sponsored phone app since July, asking them to self-isolate for 10 days because they were in contact with someone who had tested positive. British supermarkets and businesses have borne the brunt of its consequences, with staff shortages and vacant shelves reported across the country.

Last Wednesday, KFC released a statement on Twitter, warning customers that some items might not be available because of unspecified “disruptions.”

“I remember when my local KFC ran out of chicken,” said a Nando’s employee, Saffi, describing the great chicken shortage of 2018, that caused rival KFC to close nearly two-thirds of its British branches because of similar issues with a new delivery contract. “I can understand people’s frustration.” Saffi asked to be identified by his first name only because he was not authorized to speak to the media.

“Luckily, the branch I work at, we’ve been running as normal,” he said. “The suppliers have had problems delivering products to us. It’s not like Nando’s have done something wrong.”

In England, where a third of its restaurants are, Nando’s appeal transcends class, boasting devotees including the actor, Dev Patel, Bella Hadid, and even Prince William.

“One of the interesting things about Nando’s, is that it reaches the restaurant-going demographic that almost none of the other high-street chains do,” says British food critic Jay Rayner. “It transcends race.”

“Cheeky Nando’s,” a popular phrase British consumers of Nando’s often use, is permanently embedded into British vernacular. The existence of a mythological Nando’s ‘black card’ — said to grant its possessors an unlimited Nando’s chicken supply — is gleefully speculated over by internet users. A Nando’s spokeswoman would neither confirm nor deny its existence.

“The proposition, grilled chicken, salads, chips, places it as one of the healthiest on the high street, if they got rid of those bottomless soft drinks,” said Mr. Rayner. “It’s brilliantly priced. They do it very, very well.”

It should come as little surprise, then, that numerous British publications have their own “homemade” recipes for peri peri chicken, though they are little consolation for those craving Nando’s.

The chicken shortage might not be just a temporary problem. Britain is struggling with a national shortage of truck drivers, and a shortage of workers in its meat industry. The coronavirus is part of the problem, but so are new immigration and paperwork rules that came into effect with Brexit. According to the Financial Times, around 60 percent of the U.K.’s poultry workers come from E.U. countries.

“The fact that it’s happened should take nobody by surprise,” says Mr. Rayner, who predicted a national food crisis in Britain’s supply-chain after Brexit, three years ago.

Nick Allen, chief executive of the British Meat Processors Association, which represents the majority of companies working in the red meat industry, said Brexit had left the country’s entire meat industry vulnerable because it reduced immigration.

“When Brexit happened on Jan. 1, 2021, access to most E.U. workers was switched off, abruptly,” he said. “Since then, many of the E.U. workers who were in the U.K. could not travel during Covid. A lot of them are now going back to their home country, but they’re not returning.”

On Thursday, The Guardian reported that Richard Griffiths, the chief executive of the British Poultry Council, had written a letter this month to the home secretary, Priti Patel, asking for the government to relax immigration rules.

Christmas preparations should already be underway in meat factories, but Mr. Allen said shortages are inevitable. With vacancy rates in meat factories now rising to 15 percent, a Christmas poultry crisis could be looming. “Currently, there’s limited staff for that, so we’re about six weeks behind.”

At least for now, there is some respite on the horizon. All of Nando’s restaurants are expected to reopen on Saturday.

Perhaps then, Britain’s Nando’s devotees can resume their love affair with a restaurant where, as British food writer Ruby Tandoh writes, one “could happily just order the same thing every time you come here until you die.”

Source: https://www.nytimes.com/2021/08/20/world/europe/nandos-chicken-shortage-closures-britain.html

Marriott Execs: Don’t Expect More Hotel Mega-Mergers Even in Covid Times

Major hotel companies are massive enough. Mergers and acquisitions departments need to think more about smaller, strategic deals rather than mega-takeovers that take tens of billions of dollars and years to integrate companies.

The airline industry’s last two decades of consolidation are no longer the blueprint analysts once saw as a foregone conclusion for hotel companies.

Hotel industry analysts expected massive rounds of industry consolidation due to the pandemic. Instead, hotel companies have focused more on conversions — deals centered around organic growth that involves the owner of an existing hotel to take on a new brand affiliation.

While mergers and acquisitions aren’t entirely off the table, Marriott leaders don’t expect a repeat performance of its $13 billion Starwood Hotels & Resorts takeover in the future.

“First of all, you need a big checkbook to get one done,” Timothy Grisius, the global mergers and acquisitions and real estate officer at Marriott International, said Monday at a reporter breakfast at the 2021 Americas Lodging Investment Summit in Los Angeles. “I think people are trying to keep their house in order today and make sure that they act in a financially disciplined way. There’s not a lot of need to grow even larger for a company like us. We do that organically and don’t necessarily need to buy additional brands.”

Hotel companies may analyze and pursue larger mergers and acquisitions, but there likely won’t be much traction, Grisius added.

The consolidation, or lack thereof, forecast comes amid a faster-than-expected recovery in the leisure sector. At the worst point of the pandemic, rumors revived about a potential Accor-IHG pairing as well as predictions smaller players like Wyndham Hotels & Resorts, Choice Hotels, and Extended Stay America were low-hanging fruit for global giants like Marriott and Hilton.

While Extended Stay America traded during the pandemic, its $6 billion joint takeover came from investment groups Blackstone and Starwood Capital rather than a competing hotel company.

“I think the biggest thing right now is the difference between buyer expectations and sellers,” said Leeny Oberg, Marriott’s chief financial officer. “You’ve got the reality that, depending on what kind of player you’re talking about, the bigger ones would be looking for kind of one-offs that can fill in a hole rather than needing to go and do very large kind of transformational deals.”

The buyer-seller price expectation disparity, along with various rounds of federal pandemic relief, played a major part in why there hasn’t been a massive wave of hotel transactions so far.

But smaller, regional acquisitions could complement organic brand growth. Accor has generally followed this trend in beefing up its U.S. footprint, adding brands like 21c Museum Hotels and SBE in recent years.

Smaller brands might get dissuaded from the hefty costs required to invest in technology infrastructure. That could be an added incentive that eventually drives some smaller, regional brands to consider a sale, Marriott CEO Anthony Capuano said.

Marriott already follows the trend. AC Hotels was concentrated in Spain when Marriott first partnered with the brand in 2011. Acquiring South Africa-based Protea Hotels in 2014 gave the company a significant presence in sub-Saharan Africa.

“You may see some of these smaller transactions that follow a pattern where we have a small regional player that allowed us to get a footprint in a market where we struggled to grow,” Capuano said.

But the industry shouldn’t necessarily gear up for a major wave of these deals, either.

“I think you’ll see some of that, but Leeny’s point about the gap between the bid and the ask may mute the volume of transactions,” Capuano added.

Source: https://skift.com/2021/07/27/marriott-execs-dont-expect-more-hotel-mega-mergers-even-in-covid-times/

France fines Google €1.1 million for ‘misleading’ consumers with its hotel rankings

France has fined Google €1.1 million for allegedly “misleading” consumers with their rankings of hotels and other tourist accommodations.

A 2019 investigation by the French consumer watchdog and finance ministry found the tech giant was guilty of “misleading commercial practice”.

Google Ireland and Google France have agreed to pay the fine as part of a settlement, after approval from the Paris public prosecutor, the ministry said.

Both organisations have since altered their practices, it added in a statement.

France’s Directorate-General for Competition, Consumer Affairs and Fraud Control (DGCCRF) had launched a probe into Google in September 2019 after complaints from hotels.

Businesses had argued that the display of around 7,500 hotels on Google’s search engine was unfair, compared to the official classification issued by Atout France, the country’s Tourism Development Agency.

The watchdog found that Google had replaced the Atout France ranking with their own criteria, but had used an identical system of 1 to 5 “stars”, which was “highly confusing” for customers.

“This practice was particularly damaging for consumers, who were misled about the level of service they could expect when booking accommodation,” the authority stated.

“It was also detrimental to hoteliers whose establishments were wrongly presented as being lower than in the official Atout France classification.”

Since September 2019, Google has “corrected their practices” and reverted to the official classification issued by Atout France.

“We have now settled with the DGCCRF and made the necessary changes to only reflect the official French star rating for hotels on Google Maps and Search,” a company spokesperson told Euronews.

Google stated that their previous classification of hotels used a variety of sources, including Atout France, as well as feedback from hoteliers and other party sources.

The settlement with the DGCCRF does not affect users’ ability to rate and review hotels on Google.

In December, Google was also fined €35 million by France’s online data privacy watchdog for allegedly breaching rules on cookies.

• French watchdog fines Google and Amazon over their policies on cookies

The National Commission for Informatics and Liberties (CNIL) said both Google and Amazon had automatically placed advertising trackers on users’ computers without asking for consent.

Source: https://www.euronews.com/2021/02/15/france-fines-google-1-1-million-for-misleading-consumers-with-its-hotel-rankings

Reintroducing Costly Hotel Brand Standards Threaten Owners Just Getting a Taste of Recovery

The U.S. hotel industry, buoyed by summer leisure travel, exceeded expectations in recent months and even surpassed pre-pandemic performance levels last week. But if another aspect of hotel operations quickly snaps back to normal, hotel owners could be in trouble.

Most hotel companies relaxed brand standards, which range from what kind of cereal to serve at a continental breakfast buffet all the way up to costly renovations of guest rooms and public spaces, during the pandemic as a way to help owners save money during a long stretch of minimal demand.

Should the U.S. hotel recovery momentum continue into the fall, enforcing brand standards are likely back on the table. That could spur a wave of long-awaited hotel property sales.

“It might be the looming capital expenditures and property improvement plans and lack of cash that might cause the capitulation,” said Alan Benjamin, founder and president of hotel furniture and equipment procurement firm Benjamin West.

The combination of more than a year of deferred maintenance and renovations combined with hotel companies looking to avoid bad reviews from travelers coming out of the pandemic will push capital expenditures to all-time highs between 2022 and 2024, West estimates.

The overwhelming demand stems from both hotels that put off these costs during the pandemic as well as from normal maintenance and renovation schedules from hotels that opened or were previously renovated in the last seven years. But some owners may not be able to afford to stick around long enough to go through a renovation cycle.

Hotel owners are typically expected to have cash reserves of 4 to 5 percent of gross revenue readily available for capital expenditures to keep up with brand standards. But owners got permission to tap into these reserves to stay afloat through the pandemic.

“For the first time ever, the lenders greenlit taking that money to hang on to control the asset,” Benjamin said.

Many analysts doubt these reserves have been restored over the last few months, especially in hotels outside leisure markets still struggling to recover. Revenue at U.S. urban hotels in May was still down 52 percent from the same month in 2019, the American Hotel & Lodging Association reported this week.

Eager investors have been salivating over pandemic-related opportunities and bargains to emerge from the hospitality sector, given its outsized impact from the health crisis. While some owners may not discount the pricing of their hotel, many could decide to sell instead of pump money into an asset after a year of tanked revenue and an uncertain recovery trajectory in the years ahead.

A Long-Simmering Debate

Owners and investors have decried brand standards for years over their perceived excessive costs and limited return on investment.

Starwood Capital spent $250 million on property improvement plans on a portfolio, and the investment firm’s CEO, Barry Sternlicht, claimed last year at the Saudi Arabian Ministry of Tourism’s Future Hospitality Summit the company didn’t gain any market share following the investment.

“If you own a Courtyard and it is number one in its [competitive] set, they’ll ask you to spend $7 million when it rebrands, and none of that money has been worthwhile,” he added. “It’s like throwing money in the ocean.”

Sternlicht and Starwood Capital are more in the camp of buy mode, but analysts think other owners could be in a more vulnerable position.

“Brand standard upgrades and renovations can either crush a hotel or help reposition it into a more desirable market ‘sweet spot,’” said Chekitan Dev, the Singapore Tourism Distinguished Professor at Cornell University and an expert on hospitality branding. “Bringing back a full set of pre-pandemic standards is going to be a hard sell for brands and a hard slog for owners who are trying to recover lost profits.”

There was already a pre-pandemic tension around brand standards issued from hotel companies to the owners responsible for paying for them. The brands want to add enhanced amenities and design with the hope more customers will choose their property instead of a competitor’s. Owners are typically more focused on reducing costs to boost profit.

Both stances are likely to continue during the pandemic recovery. Brands are likely to do what they can to differentiate a property in a more competitive market with limited travel demand — like urban markets the rely more on business travel — while owners will want to find efficiencies to save money.

Dev sees four options for hotel owners: revert to pre-pandemic brand standards, convert to a different brand with different standards, debrand entirely and become an independent hotel, or sell.

“Ultimately, the decision will be driven by a multitude of factors including the renovation cost per key vis a vis the ability to raise rate, the owner’s bargaining position with the brand, the brand’s desirability, the availability of alternate brands, the owner’s marketing and operating expertise, the availability of third-party management companies, the location of the hotel, and buyers for the hotel,” he added.

Solutions Beyond a Sale

Not every hotel owner necessarily needs to panic about a quick revert to the way things used to be with brand standards.

Hotel executives indicated in recent months there are at least some conversations around how to reintroduce these measures without breaking the bank for owners only just beginning to see occupancy rates on the rise.

“We are currently assessing post-COVID renovation of brand standards with a view toward finding more ways to improve hotel profitability while preserving the quality and experiences guests expect of our brands when they stay with us,” Leeny Oberg, chief financial officer at Marriott, said on the company’s first quarter earnings call before later adding: “We’ve got to make sure that we’re taking into consideration the dramatically lower cash reserves that the hotel owners have and picking our spots and making sure that we’re picking the renovation work that is critical to the customer experience.”

While she didn’t provide specifics, Oberg noted she expected the company to have a finalized approach on brand standards sometime next year.

For owners that are expected to snap back into costly renovations, there are other options. The Curator Hotel & Resort Collection launched last year aimed at appealing to hotel owners wanting a bit more autonomy than they would have associating with a bigger brand, including around brand standards.

Global hotel companies would be wise to note they aren’t the only option for owners coming out of the pandemic.

“Many brands permitted hotels to gut brand standard to help the hotels stay alive. The consequence of this is hotels that have learned to operate with a lot less and differently than they did before the pandemic,” Dev said. “To preserve the brand-hotel relationship, and to bring back the standards that define the brands’ reason for being, brands must draw on learnings from the pandemic and be creative to help hotels meet their standards.”

Source: https://skift.com/2021/07/09/reintroducing-costly-hotel-brand-standards-threaten-owners-just-getting-a-taste-of-recovery/

Accor Joins Forces With Hoxton Hotels Owner to Form Lifestyle Brand Giant

Accor continued its focus on lifestyle brands Tuesday with plans to join forces with Ennismore, the owner of Hoxton Hotels.

The two hotel brands’ resulting lifestyle entity, which will be called Ennismore, will be headquartered in London and jointly led by Gaurav Bhushan — CEO of Accor’s lifestyle division — and Ennismore CEO Sharan Pasricha. The 73 hotels making up the combined company include brands like Hoxton, Gleneagles, SLS, Delano, and Mondrian. The entity will be two-thirds owned by Accor and a third by Pasricha.

“This exciting autonomous entity with Accor — one with culture and brand purpose at its heart — allows us to come together to build on our combined portfolio of unique lifestyle brands, accelerate our growth and explore new markets,” Bhushan said in a statement. “I look forward to working with Gaurav and [Accor CEO] Sébastien [Bazin] on this exciting next chapter as we become an unrivaled player in the hospitality industry.” 

The new Ennismore entity will comprise 12 brands and a development pipeline of 110 hotels with an additional 70 under discussion. More than 150 restaurants and bars are also part of the merger.

“Joining forces with Sharan and Ennismore’s talented teams will be a major step in Accor’s development strategy,” Bhushan said in a statement. “With this combination, we are putting together an unrivaled portfolio of unique brands that appeals to owners, partners and guests, supported by the greatest set of talents in the industry, state of the art distribution and tools and a common ambition to continue to grow and innovate. I very much look forward to our journey together.”

What’s more, Paris-based Accor intends to take on full ownership of the SBE brand in a $300 million investment in order to make the Ennismore deal possible. Accor took on half ownership of SBE — owner of brands like SLS, Delano, and Mondrian — in a 2018 deal valued at $319 million. Tuesday’s announcement comes after Accor announced in September plans to launch an independent division for its lifestyle brands.

Bazin has repeatedly touted lifestyle brands as a key source of growth for Accor in coming years, but navigating the space required more autonomy.

“There are a lot of outside partners knocking on Accor’s doors trying to partner with their own similar brands,” Accor CEO Sebastien Bazin said of the new lifestyle division in September at Skift Global Forum. “But they would only do so if they’re welcomed into dedicated business unit rather than under the large Accor umbrella.”

Source: https://skift.com/2020/11/24/accor-joins-forces-with-hoxton-hotels-owner-to-form-lifestyle-brand-giant/

The Ethics of Travel Advisors Are Being Challenged, and It’s Not Right

A column in Friday’s USA Today has rankled the travel industry in general and sullied the name of travel advisors in particular.

And it’s not right.

The column is entitled, “Is it ethical to recommend travel while the world is in the grips of a second COVID-19 wave?” and was written by Christopher Elliott. In the piece, which you can read here in its entirety, Elliott not only questions the idea of selling travel now that a new surge of the virus is engulfing the country but also challenges the integrity of travel agents who do so as well as airlines and cruise lines and hotels for offering deep discounts to customers.

Elliott quotes a few experts, particularly those in ethics law.

“With both infections and hospitalizations increasing in many countries, including the U.S., it’s worth remembering the most fundamental ethical principle of all: do no harm,” says Bruce Weinstein, an author and ethics expert. “With that in mind, it is ethically unintelligent to travel now – especially for leisure.”

“I do not think it is ethical for companies to be recommending travel,” says Emily Waddell, who publishes a blog called The Honest Consumer. “The travel companies are just looking out for their own best interest in regards to sales. They’re not taking into consideration the seriousness of the pandemic and how more people traveling could increase the spread of the virus.”

Added Robert Foehl, professor of business law and ethics at Ohio University: “We have an ethical duty to prevent harm to others.”

Okay, as a pragmatist I can see some of their points.

Now let me make mine.

This logic is flawed.

If we were to follow this logic to the letter, then the author and the experts should also use their soapbox to talk about everything that is, allegedly, unethical – both during the pandemic and without this cloud hanging over our global heads.

Such as … where is the outrage for retailers who sell cigarettes, knowing the dangers of smoking and knowing the dangers of second-hand smoke to non-smokers? What about the tens of thousands of liquor stores across the nation selling alcohol, when we know the dangers of becoming addicted to booze? What about the rosy commercials for cleaning products that promise to turn everything sparkling, but fail to warn you that some of the chemicals used to make the product are harmful to your health? Where’s the outrage there?

Granted, I get it. The USA Today piece is directly connecting the ethics question to the pandemic. But again, you could make the same argument with any of the other examples I brought up. Drinking is up — why don’t we castigate liquor store owners who push specials during the crisis? Depression is up — why don’t we criticize schools, for instance, for not doing more to bring their kids into the schools to foster more socialization?

My point is simple – it’s called freedom of choice. Neither travel advisors nor tobacco manufacturers nor liquor salesmen nor the makers of window cleaners are going door-to-door and forcing you to buy their products. They might entice you with sales and specials, sure, but how does that make travel agents any more unethical than any other salesperson?

No, this is a personal decision to travel that rests solely with the client. Just like buying a pack of Marlboros or a fifth of Grey Goose.

There’s no question the entire travel industry is in a fight for its collective lives because of the coronavirus, but the circumstances are extraordinary. Ten percent of jobs in this country are somehow travel related. It’s not just the industry itself but the health of the U.S. economy at stake.

And to suggest, as the column does, that travel advisors could omit, downplay or outright lie about the guidelines and the situation regarding travel at this moment, is not only disingenuous but unethical in and of itself. Times are tough, yes, but travel agents have built an unparalleled reputation they are hardly going to risk for an eight to 12 percent commission. For that kind of reward vs. risk, they better be booking one hell of an around-the-world trip.

(Which, uh, aren’t allowed at the moment anyway.)

Look, the bottom line is this. We’ve already seen how bad the pandemic has been. It has shut down the cruise lines completely and, at one point earlier this year, had planes leaving the gate with just one or two passengers. But to stop selling travel – or, in effect, to shut down the entire industry as the column seems to be suggesting – is not the answer.

And to say that selling travel right now is unethical is a slap in the face to everyone from a hotel CEO to the person who cleans the airport bathroom – all of whom contribute to an industry that makes this country go.

Source: https://www.travelpulse.com/opinions/column/the-ethics-of-travel-advisors-are-being-challenged-and-its-not-right.html