Hospitality Paradigm

Many hoteliers are rationalizing Airbnb’s entry into the lodging space as non-competitive. As the hotel industry learned from the dawn of vacation rentals and online travel agencies, ignoring groups that fulfill lodging demand at scale is a bad idea. Airbnb is now operating at scale, and just getting started.

Airbnb takes an asset-light strategy to a new level, operating a digital exchange that matches individuals to individual lodging units. Airbnb has A-tier investors, smart management and a sizeable valuation. Its next funding round will value the company at over US$13 billion. As of mid-December, that put the firm slightly below Starwood (US$14.2 billion) but above Wyndham, InterContinental and Hyatt.

One single night, during July 2014, Airbnb housed 330,000 total guests (20,000 in Paris alone). It should be noted that Airbnb offers three distinct types of product – host present/shared rooms, host-present/private rooms, and host absent/full unit stays. The third option may be most directly competitive to hotels, but as mainstream travelers become more familiar with Airbnb, traditional hotel guests, particularly Millennials, may start considering alternatives. The biggest difference, however, is the guest experience. Airbnb’s ultimate goal is to provide a great host to guest match. When it works, visitors are no longer tourists; they live like a local and get an expert insider perspective on local experiences that can make a stay truly unique and memorable.

Airbnb disrupts the hotel industry not only by introducing supply at a lower price point, but also while enhancing the guest experience through personalization. That improved value proposition is the future battleground for traditional hoteliers. To successfully compete with Airbnb, hoteliers must ask “why“ guests are staying and organize service delivery standards to offer unique guest experiences – just like Airbnb.

The Internet is everywhere. Customers can browse and buy, anytime and anywhere. There are approximately 13.4 billion Internet-connected devices in the world and roughly two Internet-connected devices for everyone on the planet. Context is important to the connectivity conversation. For instance, hotel marketers need to think about where their guests are when they access information, what is most important to guests within those contexts and how marketers can use that information to drive consumers to book. Think about how you can segment customers by context: observe, measure and learn your customers’ pain points in each context.

We’re all publishers now. We need to help our customers find the content they need in the contexts that matter to them. Great content can lead to: product differentiation; more inbound website links; websites that are “sticky” and convert at a higher rate; engaged customers and an increase in loyalty; and the ability to leverage social media channels. Marketers need to cut through the clutter and create content that is: snackable: simple text, easy to read and easily scanned; shareable: use imagery to convey your brand because images sell; and sharp: content should be large, bold, clear and should answer customers’ questions quickly.

Deep customer insights. Guests are leaving digital footprints. This data gives access to deep customer insights into what your customers really care about. Data can highlight customer behaviors, wants and desires; leads to product, promotion, placement and pricing decisions; and cannot be easily duplicated by the competition. Marketers should be willing to start small. “This isn’t about big data; it’s about big questions. What are the things that matter to your guests? What are the questions that they have? And how can you use the data that is created to help them answer those questions and help them make a booking decision?”

Storytelling. Storytelling should be kept top of mind when it comes to content marketing. If you are trying to tell your story and differentiate, your website needs to be more like a book, more like you’re telling a story and more engaging. This is going to make people want to come in and visit and learn a little bit more: a) Sell the experience with a consistent story. b) Make pictures easily viewable across different devices             c) Incorporate video to engage customers (keep it short for mobile users) d) Use Facebook, Instagram and Pinterest to share photos e) Create a YouTube channel

Design for mobile. Hoteliers need to keep mobile in mind for marketing as travelers will often abandon non-mobile-optimized websites. When it comes to designing for mobile: a) Leverage unique capabilities (swipe, zoom and pinch features) b) Make the experience easy with features such as click-to-call and interactive maps c) A mobile-optimized booking engine is mandatory.

People — especially employees — must come first in 2015 on the operational front. This is just one of the predictions revealed in a wide-ranging forecast for the coming year published in the December print edition of HOTELS. Hoteliers need to be proactive about training and retaining staff, according to Russell Kett, chairman, HVS London.

So what is really new about this? Many international hotel chains truly follow this motto and that is why they have been so successful in spreading their wings internationally. On the other hand, many of our Indian chains barring the exception, just mention this in their credo but blatantly look the other way when other interests come up. Thus profitability, guests, ego, personal agenda, etc. take over and the employee is left behind.

In the current trough that we are undergoing since the past 3 years, it is only the ethically strong who have supported their employees through falling bottom lines and declining revenues. Don’t get me wrong – I am not talking of downsizing in the case of excessively staffed hotels… I am referring to the pink-slip being given merrily in some organizations with no thought of the employee. Even in the case of downsizing, I have yet to hear of hotels assisting the employees who are let go, to get new jobs.

What these hotel owners need to realize is that the atmosphere created is negative and will only take their business down further. Also, when the business trend begins moving north in a year’s time, as is forecasted; their employees will not be loyal to them.

Hence People — especially employees — must come first in 2015 on the operational front.

If you have decided to simply own a hotel, but not run it, you have two first choices: branded or non-branded? We are assuming here the choice of a brand, due to advantages for distribution. Here are some of the key considerations to take into account whilst choosing a branded operator to manage your hotel:

• How many hotels does the company currently operate?
• Does the management company operate competing hotels in the same zone?
• Length of agreement?
• Procedures for extending or terminating contract?
• Contract terms in event of the hotel’s sale?
• Base fee to be applied?
• Incentive fees earned or penalties assessed relating to operating performance?
• Reporting relationships and requirements?
• Break-off clause

Furthermore, is it a first tier or second tier company? First tier refers to management companies that operate hotels for owners using the management company’s trade name as the hotel brand. Hyatt, Hilton, Sheraton are examples. Second tier is management companies that operate hotels for owners who have entered into an agreement to use one of a franchiser’s flags as the hotel brand. Tiering does NOT refer to the quality of the management operating the property. It can be worthwhile to talk to other owners, and look at some of the key issues they have had to deal with. When it comes to management agreements, brands have a lot of power to unilaterally impose changes in standards that all system hotels must meet. These include such things as computer systems and software, new signage and logos, loyalty programmes, design requirements, promotions and centralise services. For some owners, the cost of these brand-imposed standards may simply not be worth it. The question then has to be asked as to whether the standard benefit the brand or the hotel… Is the brand growing too fast? In recent times, some issues have arisen due to the fact that some brands and operators expanded so fast that they lacked the adequate expertise, procedures, systems and personnel to manage properly.

While the impact of loyalty programs has long been assumed beneficial, a study published by Cornell University confirms it: After guests enrolled, they returned to a hotel nearly 50% more often, and hotels increased their incremental annual per guest revenue nearly twice over.

An emerging key component to a successful loyalty program strategy is the marriage with social media. Every day, consumers are checking in and snapping photos all while looking for the next best amenity.

Here are a few things every luxury hotelier should consider to multiply the efficacy of their efforts:

1. Use your loyalty program as a social conversion activity.

Social has much greater impact when used beyond gathering likes and other vanity metrics. Social has the biggest impact when focused on driving conversion actions. Motivating socially activated consumers to join your loyalty program is an ideal conversion activity.

2. Recognize and reward members for social engagement.

Foundational to most loyalty programs is the idea that the more a customer participates the more they receive. Additionally, luxury consumers have come to expect high-touch brand interaction. By recognizing and rewarding social participation of loyal customers, you can encourage positive word of mouth and make participants feel special — a feeling you want connected to your brand.

3. Socialize your existing member list.

Socialize an email list by combining social intent with an offer — such as a room upgrade — sent over email to analyze which social channel your audience prefers and to move a private offer into social. This allows the brand to increase engagement and acquire new loyalists organically. Utilize your current database to advocate on your behalf in social — where everyone is looking to their network for validity.  4. Link your data. 

Recognizing loyalty members for social participation also enables marketers to link guest activity across programs, connecting the dots between social handles, email and rewards accounts. This gives a more holistic view of guest activities and a truer sense of their brand value. Populating this data into your CRM also gives you a richer view of what motivates and delights those customers who spend the majority of their travel money with your brand.

Bringing together your social media marketing and loyalty program creates a virtuous cycle where you can learn more about guests, enabling you to further tailor offers and create even greater loyalty moving forward. Furthermore, as social media consumers see posts from your most influential audience — happy, loyal customers — they will be more likely to take action as well, from giving your brand a try all the way up to joining the program themselves.

Around the world, hoteliers are seeing the benefits of online advertising as they increasingly drive bookings through property websites. As a result, they are ramping up the marketing spend in that area, according to survey results by market intelligence provider TravelClick.

Two-thirds of the global hoteliers polled (66%) are now spending on Facebook advertising, and almost one-quarter (23%) have increased their Facebook ad budget for 2014. Some hoteliers are slow to spend on Facebook advertising because it is currently seen more as a brand awareness tactic than a direct-booking tactic. Online marketing spend is a growing trend with three-quarters of the surveyed hoteliers (76%) focusing on metasearch, and within that a third are increasing that spend for this year (32%). Similarly, more than four in every five hoteliers polled (84%) invests in ad words with one in three (32%) increasing that spend for 2014.

When asked which social media channels drive the most bookings to their property websites, the overwhelming leader was TripAdvisor with more than three-quarters (78%) of respondents singling out the travel review site. Both Facebook and Google+ were also named as sites that drive bookings with 11% of hoteliers selecting each of those social networks. Hoteliers should consider TripAdvisor as a key social media platform to strengthen their brand as this channel is now becoming fully integrated into the social media marketing mix.

Business and recreational travelers demand safe and secure hotel accommodations and responsive and friendly customer service. How can hoteliers ensure that their property provides as secure an environment as possible, while maintaining friendly customer service?

Maintain security minded customer service – Front desk staff and valets are trained to embody a customer first, customer service model. While maintaining friendly, responsive interactions with customers is crucial, it is also important to vigilantly follow all security protocols. What happens when a nicely dressed man asks the valet for his car or stored bags? As a matter of course, does the valet validate the request against identification, room card or ticket, or do they take the man at his word that that the Gucci luggage and Mercedes Benz are indeed his own? Does the front desk require identification when providing replacement access cards to those who have misplaced or lost their cards?

Keycard access review – With a few pieces of hardware and minor programming, it is possible for a criminal to gain undetectable entree to millions of key card protected hotel rooms. Hoteliers should remind all guests of the security safeguards they offer and remind guests to use their lock bars and chains and dead bolts when retiring for the evening. Room safes or securing valuables at the front desk should also be recommended if available.

Establish evergreen background screening protocol – Background screening should be an evergreen process. Re-screening employees annually can help hoteliers maintain the high level of quality staff they desire.

Control after hours access – For maximum safety, posting security personnel at front entrance and other access points is vital. Also ensure that your up-to-date closed circuit system is tracking all of the hotel’s public areas, including the parking lot, gym, restaurants, loading dock, etc.

Assess location and local crime statistics – CAP Index is recognized as the authoritative leader in quantifying the overall likelihood of crime or loss affecting a location’s safety, operational goals, or profitability. This knowledge is power and can lay the groundwork for your hotel’s safety and security plan.

Security officers that welcome and protect – Hotels must foster an inviting atmosphere for guests while ensuring safety and security. Presenting security personnel in a customer service role with officers dressed in upscale business clothing rather than traditional police or military style uniform, makes for a more accessible presence.

Bolster public/private initiatives – Establishing public-private programs that further police and security cooperation in the protection of people and property helps to enhance safety and security. When private security works in partnership with law enforcement to respond to these issues, police officers have more time to focus on solving crimes and enforcing the law.

Maintain emergency response plan and team – The collaboration between law enforcement and private security needs to extend beyond on-the-spot information sharing. Proactive security efforts and emergency planning initiatives should also involve everyone with a vested interest in safety and security. Existing plans should be reviewed annually, and evacuation and response drills, as well as and other training sessions should include those external groups as well. Involving everyone in planning and training will allow plans to be as situational as possible, and also help ensure a more efficient implementation if the worst case scenario does occur.

Part of emergency response and event management plans require the ability to ramp up staff at a moment’s notice. Ensuring that your security team is ready and available when you need them can pay enormous dividends in minimizing the real world impact of a crisis to your brand, staff and guests.

Commitment to ongoing training – Security professionals require continual quality training if they are to be as responsive and knowledgeable as possible. Given that security personnel are placed in the front line of an hotelier’s security force, it is vital that they have all the latest tools needed to handle emergency and crisis situations. Security professionals should be able to access training in a way that benefits their lifestyle whether it is online or classroom training.

Contributed by Bob Chartier, V.P. AlliedBarton Security Services

Initiating change means getting started, turning pressures for change into change initiatives, and taking first steps to move change forward. Research shows that six competencies define the extent to which change professionals initiate change:

1)       Ensure that key leaders are aligned around major change initiatives

2)       Help people understand why change is important (i.e. create a sense of urgency)

3)       Identify and overcome sources of resistance to change

4)       Help set the direction of change with clear outcomes

5)       Build commitment of key people to support change efforts

6)       Articulate key decisions / actions that must happen for change to make progress

How should one implement and bring about changes in one’s workplace or company? Some say the top-down approach is good while others feel that the bottom-up approach is best.

However,according to the contingency school, the choice of an appropriate strategy and the implementation diagnosis consist of assessing eight independent variables or factors in the organizations.

1. Available time (short / long)
2. Clarity of the need for change (clear to all / clear to few)
3. Organization size (small / large)
4. Effects of existing controls and incentives (encourage initiative / encourage focus)
5. Organizational concentration of relevant knowledge (concentrated at top / concentrated at bottom)
6. Expectations of people regarding involvement in implementation (none / extensive)
7. Potential resistance (small / great)
8. Total power base of change agent (great / small)

Thus, for example, if there is very little time variable, the crisis or need for change is clear to all, if it is a small organization and so on, then the appropriate change strategy is top-down, directive and fast; while if clarity for need to change is not apparent and the organization size is relatively large, then the appropriate change strategy would needs be bottom – up.

IHG recently surveyed more than 7,000 international travelers and found during the last 12 months, guests from emerging markets are traveling more than those in developed markets and have the highest expectations for hotels to deliver personalized experiences. Other findings from the report include:

• Travelers think global hotel brands do a better job than local hotel brands in several areas including safety and consistency.
• For the majority of travelers the biggest benefit personalization delivers is increased comfort during their hotel stay — 59% of travelers said their hotel stay will be significantly more comfortable.
• 62% of Millennials said being able to access personal content such as movies or music would motivate them to return to a hotel compared to 55% of travelers of all ages.
• 72% of travelers over 65 said a hotel that made it easy to make healthy food and beverage choices would motivate them to return, compared to 61% of Millennials.

After speaking with customers and analyzing the more than 40,000 meetings hosted at Marriott’s hotels yearly, seven purposes for meetings emerged: Celebrate, Decide, Educate, Ideate, Network, Produce and Promote.

Rather than focusing just on dates, rates and room layouts, Meetings Imagined hones in on the specific purpose of the meeting to create and design a more engaging experience. While others may focus on just meeting logistics, Marriott is reimagining the experience for the next generation with its innovative concept that infuses a more sophisticated approach based on objectives and outcomes