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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… ;)

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Below is a copy of my presentation on Social Commerce for the June 29, 2011: “Where We’ve Been, Where We’re Going” webinar sponsored by Tnooz & Amadeus IT Group. It was great to have over 600 people register for the event.

The panelists and the topics that were covered included:

The Moderator was Kevin May, Editor of Tnooz

Unfortunately due to a family emergency, Stephen Joyce, CEO, Rezgo and Chairman, OpenTravel Alliance was unable to present his perspective on Search, New players and New Horizons.

We wish Stephen and his family all the best and definitely missed his insights on all the topics covered.

My presentation is embedded below and is available for download by clicking the Slideshare link.

Social Commerce – Yesterday, Today and Tomorrow


For those who did not attend the webinar, the point of selecting The Beatles notorious Butcher Cover for the opening slide was to highlight that the only certainty for the future of Social Commerce is that some big mistakes will be made along the way. The Beatles, undeniably the greatest social phenomena of its time 45 years ago, came very close to broadly distributing this cover image as a commentary on the Vietnam War for a US album release.

Travel organizations aspiring to be known as Social Commerce pioneers will undoubtedly attempt to break convention and venture into uncharted territory. As The Beatles learned, it is sometimes difficult to determine exactly where the “creepy line” lies until you have crossed it…

By the way, if you are interested in acquiring a rare 1st state copy of The Beatles Yesterday & Today with the Butcher Cover, one sold at auction for $4,800 in 2009.

My compliments to my fellow panelists on the content and insight provided by their presentations and to Mr. May for his typically exceptional job moderating. If you would like to learn more about Kevin’s fascinating background, please feel free to enter “Kevin May” into the Views from a Corner Suite Blog site search feature in the right sidebar – Sorry Kev, couldn’t resist… (maniacal laughter…)

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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 →

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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 →

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Henry Harteveldt, Forrester Research‘s Vice President and Principal Analyst for Travel opened his keynote for the OpenTravel Alliance 2011 North American Advisory Forum with Bette Davis’ famous quote as Margo Channing in All About Eve, “Fasten your seat belts, it’s going to be a bumpy ride.”

Fasten your seat belts, it's going to be a bumpy ride
Creative Commons License photo credit: Jerad Heffner

Travel distribution executives are warned to fasten their seat belts. They may be encountering more than a bump.

Speaking to over 100 travel industry distribution executives at the Aria Resort and Casino in Las Vegas, Henry’s premise was that when the greater degree of customization demanded by consumers collides with the direct connections proposed by suppliers and is further complicated by market forces pushing for new Global Distribution System business models, the flight will encounter considerable turbulence.

The following is a synopsis of some key factoids and snippets of Henry’s always insightful perspective.

Travel Industry

  • Overall Retail Sector (all products) is up 13% year to date through March, 2011
  • Airlines Reporting Corporation reports that Airline Revenue is +10.7%, but the number of passengers flying is down 1.6%
  • Fuel price increases are removing discretionary income from travelers prior to the peak summer travel season
  • 30% of travel suppliers report that the booking window in 2011 is shorter than in 2010

continue reading →

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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 →

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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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Changing Global Travel Trends From 2010 to 2020

November 7, 2010

“The Travel Gold Rush 2020,” the Oxford Economics research study sponsored by Amadeus recently concluded that Asia would dominate travel spending in the future. Looking beyond the pretty infographic into the underlying statistics, it is important to recognize that Europe and North America will continue to be important components of the global travel puzzle. European travelers will continue to be the largest group, but North Americans will continue to spend the most per visitor.

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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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US Hotel Performance – Time for a Baseline Reset?

November 12, 2009

US hotel industry performance has not yet shown signs of recovery. Declines in all key industry metrics – occupancy percentage, average daily rate (ADR) and revenue per available room (RevPAR) continue to decline in 2009 when compared to comparable periods in 2008. Smith Travel Research (STR), PriceWaterhouseCoopers(PWC) and PKF International (PKF) all forecast that ADR and RevPAR will continue to decline in 2010. Reviewing peak period weekly performance statistics, it appears that the US hotel industry needs to prepare for “A New Normal” with lower corporate and group business and value oriented leisure travelers when supply and demand reach equilibrium.

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