Hospitality Paradigm

By 2050, there will be 3 billion people enjoying middle-class wealth – meaning more middle-class consumers enjoying more travel, creating more jobs and generating more GDP. Growth opportunities ahead should be a wake-up call to the private and public sectors of travel and tourism to join together and plan sustainable, long-term strategies.

By 2023, WTTC forecasts that travel and tourism’s total economic contribution will account for 10% of global GDP, US$10.5 trillion and one in 10 jobs. Total travel and tourism employment is forecast to add over 70 million jobs over the next decade, with two-thirds of those additional jobs in Asia. Asia will continue to lead growth of the industry, with annual average growth of over 6%.

Government leaders must realize that taxing the tourist does not lead to positive economic growth – in fact, it leads to the opposite. Too many people still find it too complex and too difficult to cross borders as international tourists. Governments need to balance security needs with a change in mindset and implement visa waiver and trusted traveller programs. The travel and tourism industry needs to continue to lobby for change and demonstrate to individual countries the economic opportunities, which will be generated, through improvements to visa processes.

You’re not going to fool your guests if you rely too much on smaller portions or inferior quality product as they’re not going to come back. It’s a very delicate balance when you weigh out the experience for the guest.

Here are a few of the strategies which may work for your restaurant.

• Don’t focus on selling menu items that don’t make a lot of money. Lower cost doesn’t necessarily mean a lower margin. Items with a high cost and a high margin are much better than those with a low cost and a low margin.
• Know what is available seasonally and use those products, as they often have low costs and high margins.
• Purchase product carefully. Too often chefs and kitchen managers purchase too much product and sell it at a low price, driving up cost.
• Consider creative plating and pairing higher-cost proteins with lower-cost choices. For example, a pork chop can be plated with a house-made pork sausage to enable operators to offer a smaller chop while still satisfying the guest.
• Fixed-price menus offer value to guests while allowing operators to limit portion sizes.
• Build strong relationships with vendors, and communicate with them to find out when their oversupply issues might translate into good deals for their customers.

Wellness Tourism Worldwide, which provides wellness-focused market intelligence and education, has released its top 10 wellness travel trends for 2013.

The forecasted trends are based on analysis of consumer and B2B surveys, site visits and feedback from travel suppliers.

1. Wellness takes flight

To draw more passengers and increase revenue, airports renovations are featuring sleek, ultramodern designs incorporating natural light, art installations, high-end dining and shopping venues as well as a plethora of health and fitness offerings such as spas, swimming pools, gardens, walking paths, private napping cabins and cultural centers.

2. Health-focused hotels

Hotels have realized there is an unmet need for guests to maintain health during travel that goes beyond gyms, pools and spas. Now hotel rooms are designed to alleviate altitude sickness, reduce jet lag, induce better sleep, humidify the air and eliminate bacteria, waterborne chemicals and allergens. Guests also can access in-room fitness equipment and healthy lifestyle education as well as take-home tips, programs and wellness apps.

3. Digital detox

Surrendering laptops, tablets and smartphones at check-in are a part of several hotel “un-plug” programs. Some destinations are also creating technology-free vacation campaigns as a way to market their rustic settings.

4. Reconnecting through nature

Natural assets are the most critical component to wellness tourism product development. Destinations are beginning to fully leverage their landscapes in response to the human need to explore and relax outdoors.

5. Sleep at the forefront

Micro naps in urban spas create a respite from the frantic pace of cities. Private napping cabins offer respite for weary travelers. Hotel designs have evolved to combat jet lag and to help both business and leisure travelers sleep well and prepare for the day ahead. Even airlines are catching on, with well-appointed linens on a full-size bed and turndown service in first-class private cabins.

6. Spiritual seekers

The interest in non-religious spiritual practices is growing around the world. An increasingly secular global society is seeking meaning and purpose in spiritual pilgrimages, retreats, temple stays and workshops.

7. Indigenous healing traditions

Exporting a region’s traditional healing practices gives consumers the opportunity to experience them firsthand.

8. Rewarding wellness travel

In light of the economic downturn, companies are seeking peak performance and maximum efficiency. Consequently, meeting planners are seeking destinations that align with corporate initiatives for maximum ROI. In addition, most U.S. companies plan to increase the dollar value of the incentives they offer employees to participate in health improvement programs.

9. Celebrity instructor retreats

Yoga, Pilates, meditation and fitness gurus have been elevated to rock-star status with their own following and are taking their expertise on the road.

10. Intergenerational family travel

Grandparents are more active and fit, and the travel industry has designed programs to bring several generations of families together to learn, love and play.

Posted in Hotels Magazine by A.B.Storck on 1/21/2013

Social intelligence firm newBrandAnalytics has analyzed information from 2012 to make some predictions for 2013 on what key ways businesses will use online feedback to enhance customer experience.

The key trends that will unfold in 2013:

Good-bye surveys: In 2012, organizations witnessed a 25% increase in online customer reviews. With a consistent, reliable and free source of feedback coming from the web, social intelligence has rendered solicited surveys pointless, and businesses will start to eliminate spend on solicited surveys in 2013.

Industrial espionage is now legal and free: Forget old-school normative assessments and anonymous data. Smarter companies will use social intelligence to dig into their competitors’ performance. They will not only benchmark competitors’ social data to try to outperform on operations, but also as inspiration for product creation. “We predict that more than one-third of businesses adding products or menu items will be inspired by their competition’s online customer feedback,” said Kristin Muhlner, CEO newBrandAnalytics.

So long traditional performance evaluations: Social intelligence will drive the real-time 360° performance evaluation system of the future. Forward-thinking companies will see the value of using online feedback from customers, guests and co-workers to assess performance, make hiring/firing decisions, and motivate staff.

Social media, not just for marketing anymore: Social media will break through the walls of the marketing department. Operations, human resources, customer service, and product development teams will have their own personal views into the intelligence. Ultimately, disseminating the information to more individuals ensures that investments in new locations and product offerings have the desired results in revenue and profitability.

Star ratings are so yesterday: Consumers and businesses alike will start ignoring the once-coveted star ratings as they are proving to be misleading, unreliable and not actionable. Instead, they will flock to online review analysis tools to gain the meaty insights and details they’re looking for. Consumers will seek verbatim reviews in making their purchase decisions; businesses will decipher the true meaning and uncover important themes discussed in these unstructured reviews to drive improvements.

Everything’s local: Companies will move from trusting brand level intelligence to wanting location-specific intelligence. The conclusion – it’s no longer about the brand. Savvy companies will use location-specific social reviews and alerts to quickly pinpoint trouble spots and react in a way best suited to deliver the best possible customer experience in that location or store.

One billion tourists have travelled the world in 2012, marking a new record for international tourism – a sector that accounts for one in every 12 jobs and 30% of the world’s services exports. This cements tourism’s position as one of the world’s largest economic sectors, accounting for 9% of global GDP (direct, indirect and induced impact) and up to 8% of the total exports of the world’s Least Developed Countries (LDCs).

I am proud to be part of an industry which at one point of time in my country was not viewed very positively and even suffered from a social stigma!

Social media plays the largest role in inspiring travel and in the travel experience itself, according to a study commissioned by Text100 Global Communications examining the importance of social media and mobile technology during the four major stages of consumers’ travel decision-cycle: inspiration, decision, purchase and experience. The study, which was conducted by Redshift Research among 4,600 consumers in 13 countries, found 63 percent of survey respondents consider recommendations by friends and family the number one factor to inspire travel, and social channels make sharing among friends and family easy.

Other findings included:

• Of people surveyed under the age of 34, 87% use Facebook for travel inspiration.
• More than half surveyed also use Twitter, Pinterest and other social media platforms for inspiration.
• In the experience stage, 68% use their mobile devices to stay in touch with friends and family while on vacation — more than taking photos (43%) or checking the news (20%)
• In Asia-Pacific, more than 70% of travelers have used social media to inspire their holidays and base their eventual choices on friends’ recommendations (52%) and convenience (42%) — higher than other regions.
• In the United States, 58% of respondents under the age of 34 use social media to inspire destination decisions, while 37% of respondents consider travel blogger reviews first when making travel decisions.
• In Europe, 33% of travelers rely on online travel blog reviews to make initial decisions about travel destinations.

“The study suggests there is no ‘one-size-fits-all’ approach to engaging travelers in all areas worldwide,” said Text100 Global CEO Aedhmar Hynes. “Today’s vacationer bases their decisions on far more digital, mobile and physical touch-points than ever before, therefore, companies need to be consistent in communicating their core values via authentic audience engagement.”

Micros’ 2012 eCommerce in Independent Hotels Report examines how independent hotel operators are using web and mobile technologies to engage with guests.

• 37% of hotels respond to every TripAdvisor review of their property, whether positive or negative.
• 6% allow the guest to book a table in the hotel restaurant during online room booking.
• 10% have a website that is optimized for mobile phones.
• 85% have a Facebook page, although the quality of updates vary, with only 43% of hotels putting details of promotions and offers on the site.
• 75% have a Twitter account, but only 35% responded when asked a question via the site.
• 39% did not appear on the first page of Google results for their keywords

Decreased demand coupled with increased supply is set to depress the profit margins of 5-star hotels in India over the next two years, according to new data from Crisil Research. According to Crisil, decline in both occupancy rates and ADR will shrink operating margins and rising costs will accentuate that pressure. Operating margins will drop to just over 16% in 2013-14, the lowest in 10 years.

Slowing demand growth and large-scale room additions will cause occupancy rates of premium hotels in these cities to slip. As the global economic slowdown affects both business and leisure travel, annual demand growth for premium hotel rooms is likely to stay subdued at 7% in 2012-13 and 2013-14. The slowing demand growth will coincide with large additions of rooms, with 14,500 new rooms to be added by 2013-14 to the existing 46,200 rooms. Occupancy rates of premium hotels will, therefore, fall from 64% in 2011-12 to 56% in 2013-14.

As the increased room inventory intensifies competition and aggravates the demand-supply imbalance prevailing in the segment, ADR for premium hotels will dip by about 10% over this period. The fall in both occupancy rates and room rates will precipitate a sharp decline in RevPAR, the revenue from rooms occupied divided by the number of rooms available. The average RevPAR for premium hotels will plummet from Rs5,000 per day in 2011-12 to Rs3,900 per day in 2013-14. RevPAR will decline in 10 of the 12 Indian cities. Premium hotels in Ahmedabad and Chennai will be the worst affected, with an annual decline of over 20%. Hotels in Bengaluru, Hyderabad, NCR, Jaipur and Kochi will also record a significant fall, of 15% annually. By contrast, limited room additions will keep RevPAR stable in Agra and even increase it marginally in Goa.

The decline in RevPAR will erode the profitability of premium hotels, as room revenues make up almost two-thirds of their total revenues. Rising costs will add to the pressure on profitability, too. A shortage of personnel will increase employee costs, whereas energy costs are also expected to rise significantly. Operating margins will dip from around 24% in 2011-12 to slightly over 16% in 2013-14.

“Operating margins will drop to their decadal lows in 2013-14,” said Binaifer Jehani, director at Crisil Research. “The margins had previously dropped to 16% to 17% in 2002-03 and 2003-04, when the 9/11 terror attack and the SARS outbreak had countries issuing travel advisories, sparking a drastic fall in demand. But that fall was temporary, and the margins recovered to their earlier levels of 30% to 35%. But this time around, the recovery will be slower. A continued oversupply, at least till 2015-16, will maintain the pressure on profitability of premium hotels.”

Hotels in the areas hit by Superstorm Sandy this week may see revenue losses as the northeastern U.S. begins to recover from the devastating damage inflicted.

Keeping in mind the fourth quarter is typically New York City’s highest-occupancy and highest-rate period, it is expected that the calendar fourth quarter performance results will be off substantially.

Analysts project that the revenue impact will be comparable to that of the 9/11 terrorist attacks for hotels in the New York City region.

“The effect of the storm on the lodging industry will be unprecedented with the exception of September 2001,” said Dr. Bjorn Hanson, divisional dean and clinical professor at New York University’s Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management. “The extraordinary advance notice of the storm resulted in record lodging cancellations, and a reduced level of ‘stranded guests,’ which can be a source of lodging demand with other weather events.

Hanson noted that late October to early November is a peak time for meetings and conventions, which were cancelled in anticipation of the storm, and meeting planners have become more sophisticated than ever before in negotiating cancellation provisions that shift the burden of these types of cancellations to hotels.

A lodging analyst at FBR & Co., told Bloomberg that he has lowered his expectations for U.S. RevPAR growth in the fourth quarter from above 6% to 5.5%-5% due to the storm’s impact.

Chinas rise to a superpower cannot be ignored even by hotels. According to Expedia –  strategies U.S. hotels plan to use to capture their share of China’s burgeoning travel market include

• 52% of US hoteliers plan to add Chinese teas to their in-house menus
• 71% plan to partner with China UnionPay
• 63% plan to establish on-site translation services
• 46% already offer a Mandarin-version of its website
• 59% plan to offer Chinese newspapers or magazines

So when is India going to make this much of an impact?

A survey of almost 400 meeting planners by Destination Hotels & Resorts identified 2013 trends including the importance of location, sustainability and a hotel’s culinary offerings.

Here are some of the survey’s findings:

Location, location, location

While planners consistently referenced budget parameters as their biggest challenge, “location” led as the most important consideration in selecting a venue (with “rate,” “flexible space” and “amenities” following closely behind).

Being green affects the bottom line

Eco-friendly practices are not new to the meetings industry, but meeting planners are well ahead of the general leisure travel market in evaluating green practices as part of their booking decision, the survey found. While 45% of planners said eco-friendly practices are “somewhat important” when choosing a venue, an additional 18% said they are “extremely important.”

What’s on the table matters more than who’s in the kitchen

More than 78% of planners identified culinary offerings as an important part of their selection process, with 30% of them noting it was “extremely important.” Surprisingly, after years of seeing big-name chefs attach their moniker to hotel and resort restaurants, meeting planners were very clear on one thing: they don’t care. Less than 10% cited a “signature chef” as an important factor in how they evaluate culinary options. What do they care about? Smart, well-planned CMP packages that focus on health and nutrition (43%) as well as specialized dietary offerings (35%).

Building a team adventure

Healthy eating options aren’t the only lifestyle factor that meeting planners are focusing on in the coming year. When asked about team-building trends, more than half (54%) indicated that adventure/active options were of the greatest interest.

Meetings go social

Half of meeting planners cited social media as an integral part of the planning process and check TripAdvisor and online reviews before deciding on a hotel or resort.

Technology

More than 36% noted an increase in technology integration with meetings compared to a year ago, with strong indications that the trend will continue. Streaming media, web conferencing and on-site video production were the most common uses, with more than 25% of meetings relying on at least one of those.