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Transforming Hotel Industry Growth Strategy

by RobertKCole on August 3, 2011

It is not often that one is able to corner three hospitality industry leaders and ask them about the challenges facing the industry – specifically how marketing, information technology and distribution can be better aligned to satisfy hotel brand growth objectives.

Transform Your Growth Strategy Now - Removing barriers between hotel technology,marketing and operations

Industry Expert Panel: Video of HITEC panel discussing the 'Transform Your Growth Strategy Now' RockCheetah/Amadeus white paper

Recently, at the Hospitality Financial & Technology Professionals annual HITEC conference in Austin Texas, I had the pleasure of moderating a panel comprised of Flo Lugli, Executive Vice President Marketing, Wyndham Worldwide, Mike Blake, Chief Information Officer, Hyatt Hotels Corporation, and Caryl Helsel, Director Central Reservations & Revenue Management, ARAMARK Parks & Destinations.

The three panelists were refreshingly forthcoming and candid in their remarks concerning some of the most daunting challenges facing today’s hotel industry leadership.

As they recover from a dramatic economic downturn, hoteliers are launching initiatives that rely on information technology to accomplish marketing objectives and profitability goals. However, as staffing and financial resource availability remains highly constrained, executive management must employ strategies that most efficiently utilize technology to help drive business growth.

A key conclusion of the white paper was that over the next three years, organizations within the hotel industry require an IT Pathfinder to help align hotel business and technology priorities. Each of the panelists did an outstanding job of providing examples of how their organizations are managing the challenge of advancing technology initiatives with fewer resources than in years past.

Most enlightening were the panel’s comments regarding critical nature of these initiatives and how they would serve as the foundation for brand and operational success over the years to come.

The following is a twenty-seven minute video summarizing the highlights of the white paper and the panel discussion:

A Discussion Between Industry Experts from Amadeus IT Group.

To read the white paper’s executive summary, please see my blog post from earlier this year, White Paper: Bridging Hotel Business and Technology Priorities.

The full white paper is available, free of charge, for download here: Transform Your Growth Strategy Now [Registration required]

My sincere thanks go to Flo, Mike and Caryl for doing a terrific job on the panel and validating the conclusions of the white paper, as well as Amadeus for its industry insights and sponsorship of the white paper.

NOTE: Please don’t hesitate to watch the video – I am not nearly as stern or grouchy as the placeholder graphic might imply… and, despite the severity of the economic challenges facing the hotel industry, that fire alarm to my immediate right was not a prop… ;)

Tagged as: customer relationship management, HFTP, hospitality, hotel, innovation, insight, marketing, mobile, recession, strategy, technology, travel, trends

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Seven Travel Planning Steps – Impact on Hotel Distribution Strategy

by RobertKCole on June 21, 2011

When it comes to moderating a panel, there is no greater pleasure than having a group of outstanding panelists to simplify the task at hand. This is particularly true when the event is promoted as a “Super Session”, there are 90 minutes to fill, and it immediately precedes happy hour…

For the Hospitality Financial and Technology Professionals 2011 HITEC Conference, held June 20-23 in Austin, Texas, I was charged with leading one of only two educational session held on the second day of the conference.

Hospitality

Distribution is not technology. It's about simplifying the consumer experience.

The topic of the Super Session was Seven Travel Planning Steps and Their Impact on Hotel Distribution Strategy. It was also decided to take a highly non-traditional approach to the subject.

Contrary to most distribution panels, the discussion would not focus on Global Distribution Systems (GDS), Online Travel Agencies (OTAs), private sale websites, group buying, XML interfaces, the merchant model,
search engine optimization (SEO), or mobile web versus native apps.

The presentation was built on the premise that distribution isn’t technology, it’s really about delivering the right product in the right place at the right time through the right channel at the right price for the right guest.

To illustrate the complexity facing hoteliers desiring to properly align that series of traveler “rights” to appropriately engage guests in relevant conversations, the following dimensions were highlighted:

    Seven Stages of Travel

  • Inspiration
  • Research
  • Planning
  • Validation
  • Booking
  • Travel
  • Sharing
    Six Hospitality Touch Points

  • Pre-Stay
  • Arrival
  • On-Property
  • In-Destination
  • Departure
  • Post-Stay
    Multiple Traveler Personas

  • Considerable Variation by Traveler

Engaging with a specific guest seeking inspiration for a romantic weekend getaway with a spouse is dramatically different than engaging the same guest who is in-destination, but offsite from the hotel during a family vacation. Under both scenarios, the individual is intensely motivated to create an unforgettable leisure travel experience, but the context is completely different. Unique opportunities for transactions also exist at each touch point.

Compounding the problem most travel suppliers confuse points/recognition programs with loyalty. This is a disturbing misconception. Points programs are games. While consumers derive value from these programs, that does not necessarily translate into loyalty. Travelers may quickly change allegiance if a competitor launches a richer program.

Loyalty sustains customer relationships through both good times and bad. Loyal consumers recognize an emotional bond with the product, a commonality of sensibilities or personalities. For service industries, this most often relates to the core values a brand exemplifies.

There is a big difference between brand value and brand values. Value drives transactions. Values drive loyalty.

Given these complexities and relational nuances, it becomes obvious that when it comes to websites, one size does not fit all.

To illustrate the point, a comparison of six hotel homepages for major upscale hotel brands was presented.

Unfortunately, all six websites were so depressingly indistinguishable (compounded by the fact that a frequent guest number provides little to no assistance in discerning traveler intent) in each case, there was negligible probability that website distribution was being effectively leveraged by hotels to create meaningful connections with their customers.

The good news was that the outstanding panel of speakers provided countless examples of how their companies successfully differentiated themselves from the competition, introduce guests to rewarding experiences and help earn consumer loyalty. For each stage highlighted, these organizations not only proactively solved problems faced by the guest, but in many cases, managed to monetize the value created.

Speaker Lineup:
Robert Cole (yours truly) – Founder, RockCheetah (Moderator/Inspiration)
Alan Glenin – Corporate Director of Revenue Management, Great Wolf Resorts (Research)
Ran Weerasuriya – Director of Revenue Management, Mammoth Mountain Ski Area (Planning)
Thomas Patchin – Senior Vice President of Interactive Marketing, Station Casinos (Validation)
Kurien Jacob – Senior Vice President of Revenue and Distribution, Highgate Hotels (Booking)
Loren Gray – Director of e-Commerce, Ocean Properties (Travel)
Tanya Pratt – Executive Director Customer Information Systems, Fairmont Raffles Hotels International (Sharing)

Below is a copy of the presentation. It may be downloaded by selecting the View on Slideshare link. continue reading →

Tagged as: customer relationship management, customer service, destination, HFTP, hospitality, hotel, innovation, insight, inspiration, marketing, personas, social media, strategy, technology, travel

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White Paper: Bridging Hotel Business and Technology Priorities

by RobertKCole on June 9, 2011

The hotel industry has survived the most dramatic downturn in its history. With a recovery well underway, hoteliers are launching new business initiatives that rely heavily on information technology to drive business growth and profitability.

Transform Your Growth Strategy Now - Remove barriers between hotel technology,marketing and operations

White Paper: Transform Your Growth Strategy Now - Remove barriers between hotel technology, marketing and operations

The challenge is that over the last three years, Hotel IT staffs were reduced, budgets slashed and projects deferred to weather the financial storm of the great recession.

Unfortunately, over the same period, there was also an unprecedented leap forward technologically with cloud computing, mobile technologies and social computing technologies all entering the mainstream.

The result was a more technically savvy guest with increased expectations pitted against a hospitality industry that was struggling in survival mode.

A gap materialized between hotel industry business priorities and IT priorities. Hoteliers will be spending the next three years closing that gap.

With hotel marketing departments, operations groups and information technology teams all seeking methods to advance divisional initiatives, the key question becomes who is responsible for bridging this gap and how can these diverse organizational objectives be aligned?

Amadeus IT Group engaged RockCheetah to explore how hotel companies can align business and IT strategies to drive business transformation during a period of economic recovery; specifically, the three year time period from 2011 through to 2013.

A proposed solution is the identification of an IT Pathfinder.

The white paper provides an overview of the current industry hospitality environment and key business drivers to provide insights into how hospitality executives can bridge business and IT objectives. The report draws on desk research, a global survey and executive level hotel interviews to reach its conclusions.

Below is the white paper’s executive summary: continue reading →

Tagged as: customer relationship management, HFTP, hospitality, hotel, innovation, insight, marketing, mobile, recession, strategy, technology, travel, trends

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Leading Hotels of the World – Marketing Conference Presentation

by RobertKCole on May 17, 2011

It was an honor to be invited to give the closing keynote address for The Leading Hotels of the World 2011 Sales, Marketing and Distribution Conference at the Kameha Grand Bonn in Bonn, Germany.

Leading Hotels of the World members understand luxury travel

Challenge: Identify a group that better understands the needs of luxury hotel guests than members of The Leading Hotels of the World

The topic of the presentation was Deconstructing Distribution – It’s all about the Customer with a focus on the customer, the channels and the future.

Setting the scene, the luxury hotel industry continues to recover from its steepest decline on record that unfortunately coincided with a period of momentous technological advancement – particularly mobile and social media that have significantly empowered consumers.

As a result, hotels and resorts target a changed guest, armed with access to information and backed by a network of trusted advisers – both corporal and virtual. The hotels also face an impossibly complex variety of distribution channels that have expanded into social networks and location-based services. continue reading →

Tagged as: advertising, Apple, customer relationship management, customer service, hospitality, hotel, luxury, marketing, mobile, personas, resorts, social media, statistics, technology, travel, trends

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Hotel Industry Survey – How to Align Business and Technology Priorities?

by RobertKCole on April 13, 2011

One of the most pressing issues facing the global hotel industry as it slowly recovers from the biggest economic downturn in its history is how to most efficiently bridge the gap between business and technology goals.

Survey Interview
Creative Commons License photo credit: keiichi.I

Make your opinion known. Contribute your insights to a hotel industry white paper focused on best practices to close the gap between business and IT objectives

With plummeting occupancy and depressed rate levels, the hotel industry radically cut spending, reduced headcount and deferred projects to survive the great recession. Now, with demand returning and some signs that rate increases are beginning to hold, many hotel group business leaders are betting that technology will help them maintain operational efficiencies and keep costs low as business volumes return to scale.

The challenge for hotel industry information technology executives is that in many cases, funding and staffing resources may be locked in at these reduced levels. Pressures are reportedly intense for technology teams to work smarter, faster and to be more productive when addressing the increased business demands.

The subject of the white paper is Bridging Hotel Industry Business & Technology Priorities. As opposed to providing generic platitudes and hypotheticals, the specific focus is specific plans of action over the next 36 months.

The objective is not to create a document that solely speaks for the hotel information technology community, but something that also provides perspectives from hotel marketing and operations leaders.

Excellent feedback has already been received from a number of leading hospitality industry Chief Information Officers, Chief Marketing Officers and Chief Operating Officers. The next step is to gain insights from those fighting on the front lines of the battle – hotel owners & investors, hotel management companies and property level management.

This is where you come in – Please take the survey and weigh in on the most pressing business challenges facing the hospitality industry, the top priorities for hotel IT groups, and most importantly, how can the gaps between these two areas be bridged over the next 36 months? continue reading →

Tagged as: hospitality, hotel, insight, marketing, poll, recession, strategy, survey, technology

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Five Year US Hotel Occupancy – Average Rate – RevPAR Comparison

by RobertKCole on January 7, 2011

First, thanks for all the positive feedback from my earlier post, What’s Wrong With the US Hotel Industry Recovery? Regardless of the pithy and enlightened analysis provided (my personal and unbiased self-assessment) there was a select group of readers that remained unappeased.

More Numbers
Creative Commons License photo credit: Patrick Gage

For those who requested a broader statistical comparison, all I can say is 'You want more numbers... Are you serious?'

There appear to be two categories of hotel industry data aficionados – gourmets and gourmands. You may know them better as the Smith Travel Research, Colliers PKF and PricewaterhouseCoopers fanboys & fangirls you see hanging out by the stage at the Hotel Data Conference.

The gourmands revel in devouring every data point in sight. They like their data raw and in large quantities. One would imagine these folks drink their wine from boxes and buy sides of beef that they cut themselves. Not afraid of getting their hands dirty, they have no use for utensils, but prefer to dig their teeth directly into their meal like lions savaging their prey.

The gourmets are a but more refined – They savor the nuanced flavors of the freshest, meticulously prepared, and most creatively presented information available. They prefer the finest cuts from the finest chefs, with portion size and cost being irrelevant as long as the quality is there. They even look at well aged data like wine – given expert handling and loving care, even the oldest statistics can yield valuable insights and points of comparison for the latest growths.

Despite my initial inclination to help organize interventions to get these individuals into some form of hospitality stats junkie 12-step program, I cooked up a few more data dishes as a belated holiday buffet. continue reading →

Tagged as: average rate, history, hospitality, hotel, occupancy, recession, RevPAR, statistics, travel, trends

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What’s Wrong With the US Hotel Industry Recovery?

December 20, 2010

While the US hotel industry recovery is being highlighted by occupancy growth relative to 2009, considerable ground remains to be covered to attain the occupancy, pricing and profitability levels of 2007 & 2008. At the present time, the hotel business is hovering around 2006 levels. The combined effect of the economic downturn, increased share of online travel agencies and the related merchant model, plus a reduction in US government per diem rates will continue to create challenges for industry rate increases moving into 2011.

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Wisconsin Hotel and Lodging Association Keynote

October 26, 2010

The closing keynote address for the Wisconsin Hotel & Lodging Association, Future Lodging Trends and Emerging Technologies, targeted the rapidly changing business landscape and the need to address many fundamental changes impacting marketing and technology. Topics covered included: Web 1.0 → Web 2.0 → Web 3.0; Four Traveler Mandates; Five New P’s of Marketing; Six Business Impacts and the Seven Phases of Travel. The WH&LA Annual Conference and Tradeshow was held at Hotel Sierra in Green Bay, Wisconsin on October 26, 2010

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Bathing in the Hotel Merchant Tax Quagmire

December 22, 2009

The hotel merchant tax issue is creating havoc for online travel agencies. At the present time, more than 200 municipalities, counties and states have lawsuits pending in an attempt to claim additional tax revenues based on the markups applied by Online Travel Agencies (OTAs.) In some cases, the suits are groundless as the current hotel occupancy tax laws are based on the revenue received by the hotel. However, some cities are changing their tax laws to base the taxes on the retail price paid by traveler. Unfortunately, there is widespread confusion – this article attempts to provide clarity on the key issues and a recommendation for resolving the hotel merchant tax problem.

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Travel Industry Site Traffic Rebound – Not a Hotel Slam Dunk

December 15, 2009

Compete produced an analysis that indicates traffic to hotel brand and Online Travel Agency hotel specific web pages have increased faster than airline and car rental sectors, indicating a faster path to recovery. Unfortunately, the increase in site traffic has not translated to improved hotel performance as hotels continue to deeply discounting their product to shift market share from competitors. As the hotels fight to support occupancy and average rate, share of leisure travel bookings is shifting away from hotel brand sites to the OTAs.

With the steepest drop in US hotel net operating income on record and non-performing Commercial Backed Mortgage Securities hotel loans hovering close to 15%, the US hotel industry appears to be preparing for a difficult stretch that will continue to provide travelers with excellent hotel values, but test the patience and wallets of hotel owners.

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