In the rock and pop music industry, there are so-called “concert promoters” who spend their time getting people to go to live concerts. They sometimes stand at street corners or at the end of a concert handing out flyers.

In the classical music world, however, it’s known as marketing and promotions. No one goes around getting people to go to concerts. The posters, event listings, newspaper mentions, etc. should be sufficient. 

How do you get people to go to a classical music concert in someone’s private home?

If you advertise it in the local newspaper or tourist office, you might get too many or too few people. How can you, as the host, the performer, or the producer of a house concert ensure that you break-even, i.e. cover your costs and not turn away and disappoint those guests you have no seats for?

Capacity and revenue management is critical for small, private concert productions for they can make or break the cash flow. Capacity management means getting enough people to fill a space. Revenue management means getting enough income to cover the costs or make a profit.

In my previous blog entry on risk management in concert productions I mentioned the risks and uncertainties of this business. For a small operation, it’s a real risk of getting too few or too many unless you’re willing to bear a loss or a standing-room only situation.

For the next house concert on 13th December, I pushed for reservations by pre-payment. While this may give certainty and a peace of mind to capacity and revenue, it can also deter those who want the option of deciding late, even at the last minute.

The host, the musician, and I met last week (Thursday 26th November) and agreed on the theme: a Russian harpist introducing works of Russian composers in a setting reminiscent of 19th century Russian salon tea concerts.

We agreed to split up the tasks. The harpist would write the initial draft content in English using the template of the previous sold-out concert in our Monument House Concert Series. She would also get it translated into Dutch. I would edit the one page Word document and convert into a PDF with hyperlinks and load onto the website. The host, a well-travelled project manager who has previously worked in the hospitality sector, would then print and copy the flyers for distribution and posting.

Meanwhile, I’ve been actively e-mailing personal invitations to members of my Rotary Club, Webster University faculty and my former students, previous house concert guests, previous e-mail recipients who were unable to attend, my Facebook contacts, my relevant Linked-In Group members (i.e. those living in Utrecht with an interesting in such a local event), the University of Utrecht foreigner group, and other friends/contacts that I’d like to see again. [Compare this to the previous house concert.]

In terms of face-to-face invitations, I announced to my yoga class this morning:

“Ik wil julllie graag allemaal uitnodigen voor een herenhuis concert van een Russische harpiste. Het is volgende week zondag 13 december middag vanaf 16:30 in Lombok.“

[I would like to invite everyone to a house concert of a Russian harpist. It is next week Sunday 13th December afternoon from 16:30 in Lombok.]

I walked and knocked on the door of my Russian neighbour and asked if she would tell her Russian language students about this event.It then occurred to me that anyone interested in Russian culture would enjoy this concert, not just those interested in classical music in general. How would I find these people?

Already, about 10 people have prepaid and reserved for this concert on Sunday 13th December. We would like to get twice as many more but happy with just as many more.

For just 15 euros, you get an hour of a young Russian harpist playing the beautiful music of Russian composers, followed by mulled wine and other drinks, and an assortment of delicious cakes, breads, and pies… What more can you ask for a Sunday afternoon of cozy networking in a 100-year old house in the centre of the 2,000 year old city of Utrecht, Netherlands?

By the way, you also get to keep the custom-designed Monument House Glass Mug which holds your drinks (hot or cold).  They are worth 10 euros each. More of these mugs will be on sale at the concert on JP Coenstraat to support the concert series.

More details at http://www.pianoguitar.com/concerten/

The following are sites that I read on a regular basis.  Hopefully this will give you a good feel for my wide variety of completely unrelated interests.

I Will Teach You to Be Rich

Ramit Sethi started this blog a few years ago to educate the younger generation about personal finance.  I credit him with truly educating me about how to handle my money.  Ramit has the ability to explain the more difficult concepts of personal finance without sounding ridiculously pompous or boring.  He has also written a New York Times Bestseller of the same name, which I recommend to just about anyone who will listen (siblings, friends, the Chief Scientist at my company, guys I date, guys I don’t date, etc.)  Ramit also discusses entrepreneurship, negotiation, productivity, and time-management, among other things.  Even if you don’t want to buy the book, his blog is chock-full of useful posts.

Free Money Finance

I just started reading Free Money Finance recently.  FMF’s purpose is to “grow your net worth”.  He blogs about personal finance and managing your career, the latter of which I have been focusing a lot on lately.  FMF writes based on his own personal career experience.  He recently wrote about his own jobs through the years (summarized here) and what he learned from each of them.

CNET and Consumer Reports

I am a total research nerd and love finding out why one digital audio streaming system (or vacuum or AA battery) is better than another.  These sites help me make informed decisions on my purchases.

Mint.com

Mint is an online money management tool.  I link ALL of my accounts to it (credit cards, checking account, saving account, Roth IRA, 401k, etc. etc.) so that I can see a comprehensive view of my finances.  In my opinion it is much more intuitive than Quicken, and I highly recommend it.

Revenue Analytics

I had to put in a plug for the company that employs me.  We’ve got a fantastic group of people that help companies realize a 3-7% increase in revenue.  We also co-host a pricing and revenue management conference each year with Georgia Tech, where users from dozens of industries are present.  If you ever need some pricing or revenue management assistance, I’ve got the hookup.

Related to my post yesterday, the NY Times today has an article on retailers intentionally keeping stocking quantities low (NY Times, 11/19/09, Luxury Stores Trim Inventory and Discounts).  If the Brioni leather bomber jacket is what you need for that special someone this season, you better get to Saks fast because they have only 1 left – at a mere $5295! (And then you need to see a therapist to explore why you feel compelled to spend $5295 + taxes on an article of clothing which is not suitable for climbing Mt Everest or walking on the moon.)

The idea is simple – intentionally stock less than a “normal” amount so that you will not have too much inventory left over which needs to be discounted. Because if you have too much inventory left over, then customers may anticipate this and not plop down $5K to buy at the regular price, thereby certainly ensuring that you will have to discount.  Or, you are doing this to generate a sense of scarcity, and therefore desirability:

“What’s luxury retailing all about?” Mr Sadove said. “It’s about a scarcity of supply.”

Given that we are talking about ultra luxury products, I wonder if the scarcity argument holds water. If you are spending $5K on a jacket, then you better be sure that you will never see another person walking down 5th Avenue with that jacket on. But only people walking down 5th Avenue would be willing to spend that kind of money on a jacket (i.e., not everyone has the same probability of encountering another person with this jacket on). So unless that jacket is *unique*, it is not scarce enough.

Next, the standard approach to avoid markdowns with luxury goods is to not markdown! A $5K jacket probably has a very healthy margin (say $4,750), so if you have a few left over, then ship them back to the producer, take more time to sell them, or burn them. But whatever you do, don’t markdown the price! Having a few left over jackets that need to be sold in some other country with the label ripped out may be cheaper than stocking out when somebody wants to pay you an obscene amount (ok, I’ll stop harping about the ridiculousness of the price).

The article recognizes that the best approach is to start with a limited supply and then replenish only if necessary. This is feasible in some categories (contemporary apparel and women’s shoes) but not in others (European designers). Of course, this reminds us of Zara:

The graph above nicely illustrates the Zara strategy – start with a more reasonable price and a limited quantity, replenish if necessary, and don’t mark down all that much.  The net effect is that your total profit (light blue) can be higher.

And there is one key lesson from Zara that is missing in the discussion of Saks.  If Zara runs out of one item, they generally have another item available that is a close substitute. If you like a particular black bomber jacket at Zara, then you should buy it because (a) it will not be marked down and (b) if you wait then you will have to buy a different black jacket.  Either way, Zara gets the sale. In the NY Times article, they are suggesting that it can be better to simply stock out.  If you don’t have an adequate substitute, then that is really a costly strategy.  Being smart doesn’t mean you are willing to incur costs. Being smart is avoiding costs while maximizing revenue.

Die Online-Vertriebs- und Marketingkanäle haben  in den letzten Jahren dramatisch zugenommen. Die Vielfalt dieser Möglichkeiten stellt Hotels in Österreich vor neue Herausforderungen.

Die Marketing-Budgets der familiengeführten Hotels in Österreich sind im Vergleich zu anderen Branchen sehr gering. Diese Mittel werden überwiegend im absatz- und vertriebsorientierten Direktmarketing eingesetzt. Das Ziel ist die Generierung von Buchungen und Reservierungen zu gewinnorientiert, budgetierten Preisen.

Die Kosten schwanken je nach Online-Vertriebskanal und können mitunter bis zu 35 Prozent der Verkaufspreise betragen. Die nächste Grafik  zeigt die Online-Vertriebskosten diverser Kanäle für die USA. Da sich die Europäische Konzernhotellerie im Wesentlichen davon nicht unterscheidet, ist die Umlegung dieser Ergebnisse auf europäische Verhältnisse prinzipiell zulässig.

Vergleich der Vertriebskosten nach Buchungskanälen

Quelle: Foundation of the Hospitality Sales & Marketing Association International: Demystifying Distribution 2.0, 2008

Aus dieser Abbildung lässt sich erkennen, dass die Buchungen über die eigene Webseite und über Call-Centers am kostengünstigsten sind.

Um eine optimale Auslastung zu erreichen, behalten teurere Online-Vertriebskanäle weiterhin ihre Wertigkeit und müssen von den Hotels in Österreich auch genützt werden. Unter diesen Vorraussetzungen ist Revenue Management (Deckungsbeitragorientierte Auslastungssteuerung) als intelligente Off- & Online-Vertriebssteuerung, die je nach Nachfrage und erzielbaren Preisen die Vertriebskanäle steuert, zwingend erforderlich.

Das zunehmend unüberschaubare Reiseangebot in Österreich in allen (auch den klassischen) Kanälen überfordert den Konsumenten. Er sucht nach Orientierung in den neuen Informationsquellen.

Herstellerinformationen, Werbung, Ratgeber und Medien genießen grundsätzlich ein hohes Vertrauen. Bei der konkreten Entscheidung spielen TV, Radio und Zeitung jedoch nur noch eine geringe Rolle. Subjektive Berichte von Menschen, die konkrete Reise-Erfahrungen/Erlebnisse bereits gemacht haben, gewinnen an Bedeutung.

Online-Hotelbewertungsplattformen und Reise-Communities sind dabei jene Social Media Anwendungen, die subjektive Reiseberichte, Hotelbewertungen, Fotos, Videos und Reisetipps sammeln, archivieren und anderen Reiseinteressierten zeitlich unbeschränkt zur Verfügung stellen. Im Reiseinformationsprozess übernehmen sie eine Art Leuchtturmfunktion und beeinflussen die Reiseentscheidung.

Hotelbewertungen bieten dabei oftmals authentische Zusatzinformationen für den zukünftigen Gast, die über das Hausprospekt und den Webauftritt des Hotels hinausgehen. Die Vermutung liegt nahe, dass sich diese Reise-Kommunikationsräume für intelligentes Online-Marketing der  nutzen lassen. Die Erfolgslogik von Hotelbewertungen für das Hotelmarketing erfahren Sie in den nächsten Posts.

The Miami Herald reported on yesterday’s edition (October 23, 2009) that American Airlines increased round-trip flights by $10. According to the article, United Airlines and US Airways also increased their fares by the same amount.

Eventhough Rick Seaney, CEO of FareCompare.com is quoted saying that “airfare hikes that are matched this quickly by all network airlines rarely fail”, the principle of revenue management goes against airfare hikes working for all available fares. It is true that fare increases will work for the highest fares, but for the lowest fares, airline pricing will always come up with new discounted fares that will wipe out the increase. Additionally, low cost airlines like AirTran and Spirit Airlines haven’t match the fare increase, so legacy carriers like American, United and US Airways will be cought with higher fares on the routes that overlap with AirTran and Spirit.

I was reading an interview of Puneet Mahindroo who heads the Revenue Management & Distribution at Taj Hotels and he points out the Right Customer being the most critical to address.

Well, I agree to this (and more so considering that I have worked with the man and have been influenced a lot on the RM front) and more so it makes me recall the RM definition of how the Selling of the Right Product at the Right Time to the Right Customer got modified a bit and there came in the selling through the Right Distribution Channel as well.

The competitive pricing in our industry has over the years made us look back to not only our revenue streams but also on the expense side as well. And for three years with the Taj where I was managing RM at various positions, I preached on the original theory but at the same time realized the importance of the distribution platforms as well. The clear and definitive balance that acknowledges long-term and sustainable customer relationships, as he points out, is important to our business and equally important is the fact that the short term tactical rate optimization should not harm this balance. However, this is where I feel that we have a great task on our hands.

India is still going through its learning curve as far as the OTAs and E-Distribution Channels channels are concerned in the lodging domain. And the trends have been exciting and alarming at the same time. I remember, once Expedia representatives were giving us a presentation on their company and the stated that for every 3 people that come to their website, at least 1 calls up the hotel directly or books on hotel website for the booking. So it also acts as a search engine for various customers.

3 years hence, when I am part of a corporate profile and manage my own hotel bookings (unlike the other verticals in my company) within India and abroad, I have realized the importance of Expedia, Travelocity, Make My Trip and most importantly the one that I am hooked upon – Kayak!! And this is all when the company does enjoy special corporate rates with various hotel companies. But a little effort and I end up saving a considerable amount – either for my company or the client who is paying most of the times for my hotel stay.

So, going back to the Right Customer, I am not sure if this balance is as easy to maintain as it’s said. There is supposedly one strategy at the hotel level that drives revenues. This strategy is totally inclined towards the past year performance (usually numbers thrown by a PMS) OR the effort of the sales person to convince the unit to give a better rate on account of overall importance of the account.

Then while on the grind, the task for the RM gets into a different mould of striving to achieve budgets and maintaining the first position in the RevPar Premium City Set. And this is where the magic lies. The magic of getting into a tangent mode and there you have a new RM strategy which drives its’ own numbers and who cares about the Right Customer??

I wish the likes of Optims (Amadeus RMS) and Ideas will be able to account for the customer (company) profile, it’s loyalty to the unit hotel and/or hotel group and then throw up the numbers that it does while the Group Tool is used. And I am assuming this is being used and not that they are being used for taking out lovely graphs for the RM & Projection meetings on weekly basis. And if not, I think there is a lot required to be done at the shop floor level on training people and most importantly retaining them. You do not want to be training ground for the Alofts, Four Points, Hiltons, Dusit Thanis, Moevenpicks of the world to come over into your country and take over your most important asset – Employee apart from the Customer that they will take for sure as all are to eat from the same pie.

RM is both a Strategic and Tactical function. And Puneet did talk about this as well. There needs to be a 1-3-6-9-12 month strategy in place and within the current month, there can be a week to week and day to day detailing (Did someone say – God is in the Details!!). Some time back I was presenting a proposal to the owner, GM, DOS and RM of a leading Delhi hotel on a RM assignment considering that they are really lying low on the city set chart. The DOSM who had recently joined came into defensive and it was hard to convince him. My only question was what is the strategy to tap the Def Expo business for next year when you have an open rate of 8000 Rs available on the open channels and realizing that there is always a short supply of rooms in the city and the Def Expo participants usually book much in advance. The answer to that was simple that I could figure out– There is no Strategic Policy in place. And the result will be again for him and the team to see.

While we all will continue to talk and debate about so many things to be done on the RM front, I have rarely seen a concrete road map for this. With new kids on the block every 1 year, I am sure it does get difficult for the RM bosses as well to put their thoughts into action. How many of these new kids have even realized the importance of the hot seat they are in. One pricing decision can impact revenues to a great extent – Right or Wrong is anybody’s guess. One has to live in the future to be a leader but at the expense of not realizing the present, it can bounce back hard.

I wish the roots are strong enough for any organization to take care of the fruits that will hang over a period of time. And to strengthen the roots, you require good nourishment in the form of motivation and regular training. And I hope it’s’ done soon.

Monument House Concert Series, Utrecht Netherlands

I purposefully refrained from writing about anything else in the run up to the sold-out house concert of 3rd October 2009 which we organised and hosted for classical guitarist Derek Grippers. I wanted to document what was involved in producing such a concert so that I could refer to it the next time we get the urge to host another concert in our home.

As mentioned in my previous blog entry (part four), improving capacity management, revenue management, and audience development will reduce stress and anxiety before a concert.

We bought and borrowed extra folding chairs and hoped for last minute cancellations and no-shows to cope with capacity management. To ensure we met our costs and contributed sufficiently for the artist, we strived for maximum booking. Earlier (in part three) I mentioned the invitation process which is critical in audience development.

Monument House Concert Series Utrecht, Netherlands

On the day after the concert, we placed the chairs row by row and discovered we could fit 50 people comfortably, all with view of the performer who would sit in the corner near the front door. I’m writing this so that next time I won’t panic when the bookings reach and surpass that magic number 50. What a relief! We couldn’t have known this before we had moved the furniture. We couldn’t have moved the furniture earlier than the day before the concert, for we live in this very house.

Four people didn’t show up. I received an SMS from someone who fell ill from possible food poisoning from her husband’s cooking. The other couple had provided all the South African wines.

Bookcase in living room of Monument House Utrecht, Netherlands

It would have been a short, straight forward (i.e. simple) concert without the supporting acts, dinner, workshop, and masterclass beforehand. In many ways, these pre-concert events complicated the planning and logistics. Next time I would insist on a time schedule that gets followed to the minute, with plenty of breaks between each event and clarity of delineation of beginnings and ends.

I was trapped in the downstairs kitchen while the guitar master class osmosed into the workshop. Alone preparing the refreshments and dinner, I sent brain waves to the three ladies trapped in the upstairs kitchen. The guests for dinner with the artist arrived on time, but the workshop continued on.

So you see, hosting and producing a house concert is quite another matter. As mentioned in part one of this series, I enjoy attending house concerts. I love performing at house concerts. But I’ve yet to LOVE organising house concerts. I would dearly like to show others how to do it (hence this blog) so that they too can experience live music in their home.

Monument House Concert Series Utrecht, Netherlands

Many of you reading this are wondering — how did the concert go? Did people enjoy the music? What time did they leave? Did I miss anything? Should I have called on the day for last minute cancellations so that I could squeeze in?

I will save that for the next blog.

Weak dollar and New York lodging market
As posted in my previous post about dollar doom, the effect of US currency depreciations are showing up into the New York hotel manager’s reports. September the typical harbinger of the holiday shoppers is going to be an excellent month for the New York hotels.

We have noticed a palpable growth in demand in September for NYC leisure travel rooms. The travelers from euro zone have turned back to US again and May flower is docking in New York at right time. The ADR has seen about some where north of 10% growth from last month and is not lagging the year over year by too much for the city hotels. The outer borough hotels in Queens and Brooklyn are also holding very well in spite of triple the supply of the hotel rooms from last year.

The short term outlook is looking positive again. The predicted recovery for US lodging market by major data firms is early 2011. But hey! We all know New York is “last one in and first one out”. The numbers in August and September are pointing to a” v shape “recovery for New York lodging market. We all are exited again by prospect of recovery and the corporate travel will also catch up the trend very shortly. The feds New York region activity reports are encouraging for last few months .The revived economic activity with lot of infrastructure spending from government should add a lot to demand in the next quarter.

The revenue managers should tighten their level of discounting and take advantage of the current demand spike. The tourist city is finally back to life, streets a full with accents and shops are preparing for red tags for holidays. The biggest gainer of the current spike are budget hotels, the luxury segment has yet lot to see before the recovery. New York City lodging market recovery is also a leading indicator for the rest of the US hotel and lodging conditions improvement.

What shape will the recovery take?
“V “or “Square root” shape for New York Lodging?
If we peg the recovery of NYC lodging market to the fate of the dollar it will be more like a square root than a “V”. The short term signs are leading to a v notch reversal but the events on horizon are suggesting else. The dollar weakness may reverse it course if the current administration is successful in keeping the tab on budget deficit and do not grow it more than current CBC estimates. We all know that the interest rates are rising and dollar will get stronger if the deficit is under control. The current market has already priced in the forecasted deficit. The stronger dollar may again curb the demand of lodging rooms from overseas travelers. The effects of stimulus spending will also fade in about a year and we don’t see that adding any demand in 2011.

But for the short run we all are bulls.
.

Travelers all over the world place a significant amount of trust on the feedback of other travelers, websites, and community forms. Research shows that 1 in 5 traveler read up on guest reviews on the internet about their hotel experience before booking their stay. It is also interesting to note that 1 out of 10 web-savvy individuals will share their hotel experience after staying in the establishment. This revelation should give hotel revenue managers a clue about what they should do to improve their online reputation to improve yield management.

The purpose of this article today is to help you manage your online reputation better to increase hotel sales and boost profitability.

Monitor Reviews about Your Hotel

A number of hotel revenue management teams don’t place enough significance on online hotel reviews. Instead, they utilize various methods such as search engine optimization to make their internet presence felt. This is a big mistake on their part. While online promotion strategies are important, the critical part in any success on the internet is the positive review and approval of individual users, which in this case are the hotel guest.

For this reason, monitoring the reviews about your hotel will keep you up-to-date about traveler’s opinions. It will also give you an idea about what aspects you can improve on to increase hotel bookings. Answering complaints in a professional manner is also a sign that you take the business seriously.

Get the Team Involved

The service staff at the hotel should be aware of what’s going on. Trainings and seminars can be utilized to inform them about the impact of online reviews to the profitability of the hotel. It is important to realize that trying to manage everything as a one-man-team is all but impossible. Getting help from the hotel staff, from the marketing department to the revenue management department can help achieve goals faster and more effectively.

Back in the old days, the Last Room Availability (LRA) was mainly associated with hotel revenue management. However, it is becoming an important factor in the negotiations between online travel agents (OTA) and the hotel establishments. But before we proceed further, it might be a good idea to clarify certain things. First, the article is focused mainly on LTA, not availability parity or inventory.

The former is a function of “rate parity” so it ensures that all OTAs have the same opportunity to sell rooms because they are handling a certain level of inventory. LTA is unique because all rooms available on the hotel website must be available to the distribution partner as well. In addition, the details below are not intended to bash OTAs in any way.

Majority of hotel revenue managers do not have current LRA contracts with any OTA. Hotels that target various market segments, from brand-name hotels to independent properties in the US, Europe, and Asia-Pacific region are not bound by this agreement. An estimated 10 percent of hotel revenue management teams have contract with LRA in place. The firms that agree on this are mostly based in Europe and North America.

A lot of hoteliers revealed that LRA is now only starting to be considered. One concern is that hospitality firms usually provide contracted net-rate sales of around 30 percent or more below the published hotel rate. Ultimately, LRA has its pros and cons. It is important for hotel revenue managers to consider this option and determine in signing a contract would be good for the company or not.

It is important to remember that signing agreements with OTA tends to lock you in for five years. The fixed merchant rate is also not something hotels can easily get out of. Large OTAs are unlikely to give some ground. Yet, the recession may be a good time to consider LRA especially if you have previous concerns with your distribution partners and distributed room allocations.

So it has been awhile since I have updated our blog. Although I like to think of myself as a perfectionist that can accomplish anything in a work day when budget season comes I am in shambles. I’m working late (thank God hotels are 24 hours), eating crazy things (who knew that pumpkin kernels + peanut m&m’s + soda = most balanced meal of the day), and I still have to work in the family balance.

I guess maybe a little back story is in order here. My title is Director of Revenue Management. What would a Director of Revenue Management do on an ordinary day you ask? Let’s run through a non budget day.

7:30am: My SSBDA (Sales Systems Booking Database Administrator – jealous of that title?) Heather and I arrive at work to begin running reports that analyze how many rooms we picked up over the past 24 hours and begin strategizing how to encourage new business.

8:30am: Standup meeting with Sales to discuss sales leads.

9:00am: Breakfast of green tea & oatmeal with a splash of Twitter.

9:30am: Research, research, research – I spend an exhausting amount of time researching anything from Restaurants to Events to hotels. I think the best way to learn is to learn from experience – so I am open to being innovative – I might be researching an experience that isn’t directly connected with hotels but that same thought process could be useful in one of our focuses.

11:00am: Forecasting and Strategic process. Ever wanted to know how to predict the future? Here is a hint, no one knows… a good chunk of my day is spent forecasting, reforecasting, and then eventually reforecasting it again. Our hotel has 450 rooms; my job is every single day to try to sell all 450 rooms – rain or shine.

1:00pm: Lunch with Heather, Kara (Reservation Manager) and Tadd (Director of Finance) in our Cartouche cafeteria. Today consisted of Fried Shrimp, veggies, potatoes, and salad. – so full!

2:00pm: After lunch I have the best ideas and since I am a mixed brain (right and left) I can’t just stare down the numbers all day so I will take some time to explore Twitter, blogs, recent headlines from my newspaper back home…whatever it takes to spark some energy and get the ideas flowing.

2:30pm: Work on a project. I have a huge to-do-list. I’m one of those people that try to keep a list of what to do but if I look at it I get interested in only the bottom item, so I have set aside time to actually accomplish all of my duties. Hilton has fantastic tools and reports that allow me to be productive in my job so this time is usually spent updating or fetching new things.

4:00pm: Time to stretch! Great thing about working in a hotel is all of the different departments. I can jump over to see what is going on in the restaurant or go out to the lobby to talk to the Guest Service Agents. Each one of these folks has a unique perspective of our guests and that allows me to sell to their needs.

5:00pm: Recap of that day and preparing for tomorrow.

5:30pm: Go home! With a husband and a 4 yr old, eventually everyone goes to sleep. If I need more time with my work then I spend it when she is off in sleepy land – making everyone happy!

Interested in how the rest of the hotel works? This is your chance to have a back-of-the-house tour free of charge! Submit your thoughts via Twitter @HiltonOmaha, Hilton Omaha Facebook, comment on our blog or (whew, long list) email me brooke.ossenkop@hilton.com. I’ll be posting/answer questions on this Thursday – hurry up already!

Enjoy!
Brooke

Restaurant marketers can take tips from the methods other industries use to attract and retain customers.

By Margaret Littman, Contributing Editor — Chain Leader, 7/1/2009

When folks with Bluetooth-enabled telephones stroll New York’s Coney Island boardwalk, they have the option of getting more than just a hands-free phone call. Signage in parades, at concerts and on the T-shirts of roaming staffers entice people with promotional offers if they agree to receive an ad on the portable device in their hands.

 When they opt in, they get a full-fledged ad, not just a text message, through the Proximity Mobile Marketing network with a coupon or other offer from a business on or near the boardwalk.

“Consumers like to get media on their phones and show it to others,” says Alex Teplish, president of Proximity Blue, a mobile technology marketing firm. “This is not like a traditional coupon that gets lost. Once it is on your phone, you have it, and it does not take up [physical] space.”

Proximity Blue has worked with FX Networks to promote its Nip/Tuck TV series as well as businesses in other industries, and Teplish sees many ways chain restaurants can use the technology to increase both initial customer counts and ongoing dining frequency.

During the recent economic downtown some industries have been doing worse (like banking) than others (wanna go to the movies?). Regardless of where on the spectrum the restaurant industry sits, companies like Proximity Blue show that chains can learn from the ways other industries market their products. Whether it is fashion, pet retailing or hotels, much of what is being done to build ongoing loyalty is the type that will last, which is useful in any economy.

Attract, Sell, Repeat

“The mistake a lot of restaurants make is that they seem to feel, ‘Once we have them in the door, we do not have to market to them anymore,’” Teplish says.

Vanessa Horwell, chief visibility officer at ThinkInk, a Miami marketing and public relations firm, agrees. “You do not want to focus all your spending on people who will never come in the door. The idea is not to focus only on finding new customers, but keeping those who are already in your restaurant. Do more than present the bill, swipe the card and say ‘good-bye.’”

Horwell believes the restaurant industry has been too focused on price. She cites car-maker Acura, which created a network on the social-networking site Facebook for its TSX Connect. The effort helped build the TSX’s image and identity, and prospective customers got to interact with those who shared common interests. In a year where car companies are struggling, Acura created buzz without emphasizing low prices.

“I do not think it always needs to be about discounts,” Horwell says. “You do not want to give away your margin because once you get to a certain price point, it is hard to go back up.”

Money Is Not the Object

Horwell suggests restaurants think about ways to reward customers with something special that does not already have a specific price attached to it. One example would be an exclusive specialty cocktail, without a regular price tag. “That would incentivize people to come in without discounting the menu or brand value,” she adds. An e-mail or text message to customers when a limited-time menu item is about to be removed from the menu would be another possibility, she suggests.

Steve Pike, chief of Orlando, Fla.-based Pike Marketing, worked for Holiday Inn, one of the pioneers of loyalty-club marketing. He agrees that restaurants don’t make their rewards as enticing as other industries do. Instead of simply offering the tenth sandwich free after the purchase of nine, Pike suggests restaurant marketers think more broadly. A seafood chain, for example, could partner with an outdoor equipment supplier to offer fishing gear as a reward for repeat business.

Vicki Lynne Morgan, president of New Jersey-based Russmor Marketing Group, says the pet retailing industry has been particularly savvy at this kind of marketing with complementary businesses, such as pet food companies teaming up with a dog toy manufacturer.

The Interactive Eye

Many savvy companies are using technology as a tool to help them identify prospective customers and give them what they want. For these firms, Twitter, Facebook and mobile technologies are not the “it” strategies, but merely tools that allow companies to implement new tactics.

What consumers were doing five years ago on their computers they now do on the smart phones, Horwell says. In another five years, it will be another device, which is why marketing must be based in strategy, not media.

In addition to mobile devices, another of-the-moment medium is the electronic billboard. Casinos and amusement parks have used electronic billboards to help alert customers to long lines at specific attractions, says Andrea Waldin, vice president of marketing of Scala, which makes software for interactive digital signage.

A Smarter Menu Board

Waldin says chains can use the technology in industry-specific ways. The software can be programmed to make menu recommendations based on kitchen inventory. If a location is about to run out of french fries, for example, the digital signage can start promoting tater tots.

Chattanooga, Tenn.-based quick-service chain Krystal uses digital signage to maintain the ’50s style for which the brand is known, as well as market specific menu items to specific customers, Waldin says. Late night customers, for example, might see pictures of snack items, while lunch customers would get offers on combo meals.

Waldin believes the technology will only become more sophisticated. Customers may be able to give a billboard demographic details or a wish list, and in return get targeted marketing messages. She adds: “I think you are going to see a lot more interactivity in ads.”

Reprinted From: Hotel Business Review

By Jennifer Rodrigues, Visibility Specialist, ThinkInk PR

Let’s face it: the travel industry is in serious trouble. Almost all hotels, motels and resorts are experiencing a huge decline in demand – which can be attributed to many factors, but at the top of the list is the ongoing recession, which has drastically changed the hospitality business landscape in every corner of the globe.

Some markets have deteriorated more than others over the past two years; many properties just can’t compete on price or value, and have seen their target audience shrink too much, with not enough marketing or heads in beds to keep going. Some may find themselves in crowded competitive environments – the product of over-saturation during the boom years – and battling for every half-percent of market share. And others are stuck in the past, ignoring the growth of the online channel and only pricing their rates against their comp set. The comp set, or the Smith Travel Research Competitive Set analysis, is often used by hoteliers as the benchmark for their pricing or marketing strategy. But savvy hoteliers know that in today’s marketplace, the comp set is no longer a robust or thorough marketing or revenue management measure. With the rise of the online channel, consumers are able to compare all rates for all hotels within their choice of destination with immediacy that was unheard of just 5 years ago. More importantly, consumers will pick a hotel based only on its value offering – whether it’s a five star with a full spa or a three star with a pool – rather than a brand or the amenities that it offers. Hotels that successfully market outside their comp set can expand their potential customer base, avoid a ‘following’ marketing and pricing scheme, improve the reach of their brand by exploring new markets, and position themselves to better compete in this challenging environment.

Marketing outside the competitive set is not rocket science; any hotel can learn to do it.

Need some help? First, hoteliers need to stop thinking like hoteliers and brand managers and instead, think like marketers wearing their customers’ shoes. Then, by making small, incremental changes to the property’s existing marketing strategy, hoteliers can increase both their bookings and revenues.

Think outside your existing sales channels

Of course, before a hotel can identify what strategy to eliminate and which to change, it needs to undertake a critical analysis of which sales channels are most effective. Are OTAs the primary reservation vehicle for the hotel, or the Global Distribution System (GDS)? Is the property part of a chain, with a centralized reservation system and a unified marketing plan? Or, does the internal reservations department and the property website account for the majority of sales? Once these questions are answered and the strongest sales channels identified, a hotel can work on improving those that it has neglected. Often the strongest channels are consistent across the comp set, so by improving the weaker channels, a hotel can attract new customers and bring in revenue from outside that comp set. This strategy – seeking out commonalities in marketing and distribution and then focusing efforts on the other areas – is a great one to ensure that a property’s efforts are focused outside its comp set. The aims of competing hotels in the same market are inherently similar, after all; it is only by escaping the conventional wisdom propagated by comp sets that a property can truly differentiate itself. Hotels in a comp set target the same audience, operate in the same marketplace, share similar rate structures and service offerings and often share core values. The first step to marketing outside of this homogenous group is to stop thinking like a monolith, and start the process of reinventing the way the hotel presents itself to the public.

Discounts aren’t the answer

The quickest way to move beyond the comp set is to lower the room rates outside of the price range common to the comp set. Although this can be a seemingly “quick-fix” solution, this kind of discounting can be counterproductive over the long-term. Research shows that maintaining a slight price premium within your comp set can provide a consistent revPAR advantage, proving that discounting (and this applies to so many industries) is rarely an effective way of expanding market share. Yes, this may seem counterintuitive, particularly during a time of weakened demand, but occupancy is not the only metric that matters.

Think about it this way – after the economy and the travel market recovers, how will a hotel be able to increase its rates back up to “normal” without consumer backlash, brand devaluation and losing valuable customers in the process? So instead of occupancy, focus on making the most revenue from each room (revPAR). It’s been proven over and over, marketing outside of the comp set is the best way to increase revPAR over the long-term.

Value is the new luxe – Emphasize value, not luxury

After 9/11, the luxury and super-luxury hotel markets grew exponentially. In many popular destinations, this segment outpaced the growth of other segments, crowding the marketplace with a surplus of high-rate, high-luxury options that no one seemed to mind paying big bucks for. Today, the opposite is true; now that demand for these properties has softened, luxury operations are reinventing themselves in terms of value and relevancy, as this is the key driver for consumers today. And this too means going outside of the marketing tactics associated with its comp set. The good news is that travelers have not abandoned lodging altogether; they are simply seeking better value for their money. This is where luxury hotels have a great deal of opportunity to present their services and product offerings as value propositions, particularly if they lower their rate targets to levels attractive to traditional value-seeking consumers. Taking a leaf out of the airline industry and its evolution to find new revenue streams, the value of luxury amenities and service levels don’t go un-noticed by consumers, and by emphasizing these aspects a hotel can truly differentiate itself from its competition.

Budget properties must focus on convenience

Budget hotels face a completely different set of challenges than luxury properties. Budget comp sets tend to be very value-focused, relying too heavily on discounting and bargain pricing for individual budget properties to effectively differentiate themselves. If a hotel is to market outside of this comp set, it must find a factor that sets it apart from its competitors – besides price. Convenience is an excellent counterpoint to price segmentation. Still a value-add proposition, convenience (of location, ease of service, or amenities)is as important to consumers as price, and can position a budget brand to attract a less budget-conscious audience, thereby expanding its potential base. In a competitive set defined by price, an emphasis on convenience can really help a hotel reach far beyond its traditional market and start attracting share from other segments. Additionally, hoteliers can add more value to the already low-rates by offering complimentary bonuses for booking with their property over the competition. Free WiFi, free breakfast and discounts on local attractions are all value-adds that can really differentiate one budget hotel from another, endearing your brand to budget-conscious consumers even further.

Put your own website first

Many hotels seek to expand their reach by selling their inventory through online travel agencies (OTAs) like Orbitz or Hotels.com. While OTAs certainly are invaluable tools for distributing inventory, if they form the major part of a hotel’s marketing strategy, that hotel is giving up far too much control over its marketing – and ultimately, its bottom line. A hotel’s own website is its first and most important face to customers, and the most important marketing channel for disseminating messages and developing its brand. A hotel with a strong website and an emphasis on the online sales channel is far better positioned to implement marketing initiatives that differ substantially from their comp set. What’s more, a strong web presence helps make these changes happen quickly, so a hotel can react to changes in the marketplace (at least from a sales and marketing perspective) rapidly, and before its competitors do.

Times are a-changing; it’s time to look forward

In today’s economic environment, travelers are increasingly putting a premium on value – trends are showing consumers both snatching upscale bargains and trading down in service levels – so by engaging in strategies that differentiate a hotel from its immediate comp set, that property gets access to an entirely different segment of customers. Forward-thinking hoteliers are thinking outside their comp set to bring in more business in a slow market; will you be one of them?

Jennifer Rodrigues, Visibility Specialist with ThinkInk Communications, is a seasoned public relations professional with a passion for the hospitality industry, which is expressed in her newest venture – developing ThinkInk’s new travel division called TravelInk’d. At TravelInk’d, she is responsible for developing public relations and marketing strategies for clients in the travel and tourism, airline, lodging, cruise and meeting/event sectors. Jennifer’s work with several high-profile national and international accounts – including her public relations efforts on behalf of market leaders RevPar Guru, Bookt and Airsavings – has focused on crafting coherent messaging and creating wide-scale media exposure with the end result of creating new business opportunities and increasing revenues. Jennifer can be contacted at jrodrigues@thinkinkpr.com.

What do you think?  Is this the death of the traditional comp set or is it here to stay?  Share your thoughts, comments and be sure to vote in the poll.

Over the past few months I’ve been compiling ideas for a white paper on yield management for adventure travel.  A great pricing discussion at a recent ATTA event inspired me to put some of my thoughts in a blog post.

First, I should clarify what I mean by yield management.  Yield management (also referred to as revenue management or price optimization) is the act of manipulating prices in order to maximize revenue.  We can thank revenue management for the ubiquitous “last minute travel deal.”  Robert Crandall, former Chairman and CEO of American Airlines, has called yield management “the single most important technical development in transportation management since we entered deregulation.”

Even the high end operators are offering great deals.

Also, in the spirit of full disclosure I should clarify that my company Travari.com is in the business of marketing discounted adventure travel packages so it is clearly in my best interest if more companies start offering promotional packages.

The State of Adventure Travel?  On sale.

“What is the state of adventure travel in 2009?  It’s tempting to answer, ‘It’s all on sale.’” – Everett Potter

Last year I contacted a number of respected adventure travel companies to hear their thoughts on the idea of a ‘deals’ oriented site for the adventure travel industry.  One interesting response came from the CEO of a high-end tour operator and member of The Adventure Collection who said, “you’ll NEVER see a luxury adventure business like those in The Adventure Collection offering a discount – that just doesn’t fit with our brand.”

A lot has changed since that phone call.  Within the last two months I’ve seen at least half the Adventure Collection companies offering deals (and some are offering VERY deep discounts!) These are some of the smartest and most sophisticated operators in the business and they’ve decided that the benefits of yield management outweigh the costs.

Don’t just take my word for it.  Check out great blog posts from Everett Potter and Norie Quintos listing some unprecedented deals being offered by the adventure travel indsutry.

Yield management is about INCREASING revenues

Yield management is not just a recessionary tactic that will fade away when the economy recovers.  The current economic climate has provided tour operators with an incentive to develop more sophisticated pricing strategies which are resulting in increased revenue.

Even when the economy recovers why would an operator discontinue a strategy that has been shown to increase profits?  I’m sure we’ll see fewer discounts after the economy recovers but I’m betting (literally!) that discounting will stick around for good.

Pricing analogs.

Some have argued that because DeBeers Diamonds refuse to offer discounts tourism businesses should follow suit and stick to their pricing guns.  While I see the point of the analogy I think there are far better pricing analogs than DeBeers diamonds.  Here are some other industries that might be a better analog to tourism.

• The boutique and luxury hotel markets are a great comparison for adventure travel as they face similar brand management issues.  These markets are both offering great deals and I don’t think the deals are simply a response to a recession.  The fact that it is  possible to get a great deal on a night at the Four Seasons doesn’t necessarily cause me to think any less of them as a luxury brand.
• The Wine Industry is a fascinating example of “price as a signal of value.”  If a bottle of wine is priced at $4 I’ll assume it’s lousy wine but if it’s priced at $40 I’ll assume it’s great wine.  Truth is, I might not be able to tell the difference in a blind taste test.  If you were buying a bottle of wine you knew nothing about would you rather purchase the $10 bottle that is 20% off or the $8 bottle?  Price sends a signal to the consumer about what they should expect – just be sure your offering is a great value vis a vis your price.
• In some ways adventure travel is a consumer facing service business.  Adventure travel is often compared to health care but I don’t think that is a great example due information asymmetrys and the existence of insurance.  There are a number of other service businesses that are better example because they deal with a price-sensitive consumer.  It isn’t at all surprising to see discounts on accounting services, auto-maintenance, computer repair and catering.

Best practices in yield management.

All of the debate about yield management centers on the concept of brand erosion.  Companies say things like “offering discounts doesn’t fit with our brand” or “we don’t compete on price.”  These are valid points and I want to share a couple of ideas to help you maintain your brand and margins but still reap the increased revenue made possible by yield management.

• Don’t discount haphazardly. If a client wants a guaranteed spot on a popular trip during high season make sure they’re paying the full price.  Discounts are meant for seats that might be difficult for you to fill at full price.  This means avoiding the all too easy “10% off all trips on all dates” promotion.
• Don’t offer so many discounts that customers can game your system. If a customer is certain they can get a deal by gaming your system your full-price seats will be cannibalized by discounted seats.  Once again, save the discounts for specific spots.
• Help the customer understand your motivation to discount. Savvy travelers understand your motivation to offer discounts for early bookings, late bookings or off-season trips.  If you offer some insight into why you’re offering the discount the consumer won’t think of you as a ‘discount brand.’
• Avoid discounts specifically for returning customers or new customers. Repeat customers are a key part of your customer base – they shouldn’t need a discount to sway their decision.  Conversely, offering discounts to new customers could annoy repeat customers.

Good places to discount.

Here are some obvious places to offer discounts without cannibalizing your prime customers or hurting your brand:

• Shoulder season discounts. Most tourism businesses experience seasonal slowdowns.  Special promotions can be an easy way to fill trips during slower months
• Discount for early bookings or late bookings. If you can fill every seat on a trip with some creative last minute discounting you’ve likely provided a big boost to your bottom line.  Some companies also use early booking discounts to build momentum for a trip that is still several months away.
• Offer discounts for groups that are likely to be price sensitive. Consider offering special pricing for students or families.  These are groups that might not be able to afford your trip without a discount.
• Occasionally offer unexpected great deals. If you very occasionally offer trips at 30-50% off you’ll get significant buzz online and you’ll get customers constantly returning to your site to watch for the great deals.  Sometimes a big discount event can build a lot of momentum for other trips.

Additional Resources

Great article from Business Week about discounting.
A previous post from the adventure business blog.
A compelling and well written counterpoint to my thoughts - Why Discounting Won’t Work to Survive this Recession.

En el año 2001 el precio medio de venta de una habitación de un hotel en Madrid era de 180€. ¿Qué ha sucedido para que en febrero de 2009 el precio medio de los hoteles de Madrid haya bajado hasta 91€?

(Fuente elaboración propia e INE:Todos los precios actualizados a valores corrientes utilizando una tasa del 5%).

En el gráfico, se puede observar la evolución de los últimos años del porcentaje de ocupación de habitaciones, que se mantiene estable mientras que los precios medios actualizados bajan a la mitad.

Pero ¿qué ha pasado en la oferta hotelera?

El número de plazas ha aumentado en un 47%, la ocupación cae un 7% y el precio medio se reduce a la mitad. La siguiente pregunta es clara: ¿Qué ha pasado con los ingresos por habitaciones en los hoteles de Madrid?

Si multiplicamos las habitaciones disponibles por el % de ocupación y por el precio medio de cada año tenemos la respuesta (ingreso de los hoteles = gasto de los turistas):

En el gráfico, se observa que el volumen de ingresos de los hoteles (gasto de los turistas) se ha mantenido a lo largo de los últimos 8 años, pero el número de hoteles a repartir esos ingresos es mayor.

BAJADA DE LA RENTABILIDAD HOTELERA

En resumen, muchos más clientes alojados pero igual volumen de ingresos por alojamiento. Esto se ha repetido en el resto de España y es un factor clave en la bajada de la rentabilidad hotelera: aumento de habitaciones vacías y bajada de precios.

Uno de los factores que explican porqué el sector hotelero español ha llegado a esta situación tiene que ver con las políticas comerciales de imitación que se han generalizado, se han utilizado SIN PERSPECTIVA FINANCIERA, y con un carácter cortoplacista.

Tenemos varios ejemplos, uno de los más evidentes es el uso sesgado y en algunos casos distorsionado de las técnicas de Revenue o Yield Management, que origina:

• En épocas de estabilidad económica y financiera (año 2002 al año 2008), suponen una caída continuada en el precio medio. Son técnicas cortoplacistas y que no se pueden aplicar de igual forma a cada hotel (ya que los mecanismos de rentabilidad son distintos).

• En épocas de recesión económica (A partir del segundo semestre de 2008) suponen una caída en picado del precio medio.

Diversos estudios como el de la Universidad de Cornell afirman que la demanda hotelera es bastante inelástica al precio (no depende en gran medida del precio), y sabido es que el precio es el cuarto o quinto factor que maneja un cliente a la hora de decidir un hotel.

Las técnicas y herramientas de Revenue Management deberían tener una perspectiva financiera de aumento de valor preferiblemente basada en el ANÁLISIS DE RENTABILIDAD POR CLIENTE A MEDIO Y LARGO PLAZO.

Dollar Doom? The most obvious sign of weakness in US dollar being that British Pound rally against US Dollar Continues despite UK outlook downgrade by S&P. We have partially lost the notion that US being safe haven in tough time, thanks to abusive spending practices in Washington. The size of the US debt is swelling rapidly and the Federal Reserve balance sheet is already north of 2 trillion dollars around 4 times than 2004.Treasury secretary Timothy Geithner has expressed doubts over the AAA creditworthiness of US in future. All this and big government policies of the current administration will lead to sustained erosion over the next few years in the value of greenback, the USD.

What all these numbers means to hoteliers in US? What are the short term and long term effects of this historic shift on the future of the lodging industry? Can we protect our exposure to the ramifications? If yes How?

The short term effects of rapid weakness in USD will be beneficial. It will make United States an attractive travel destination for ever frugal international customer. A sustained weak dollar will transfer in higher occupancies all across the board. Cities like New York will entice more than ever number of international travelers. But numbers are not all; there is a flip side of this dollar doom too for hoteliers. Effects on hotel property values over medium and long term are not encouraging. Higher inflation will decrease the buying power of the dollar significantly.

Can we convert these high occupancy numbers to high profits?

Historically hospitality industry has been very reluctant to passing on inflationary or deflationary effects in the end costs. Our pricing models are not effective or fast enough to integrate in it the inflationary of deflationary effects. This weakness in pricing models exists because most of the expense side is composed of fixed cost like energy and utility. Those costs were not vulnerable to inflation until recent high demand growth of utilities and energy. Labor markets were relatively steady over last 25 years also. The future is different however with Card Check Bill on its way.

To convert the high occupancy numbers and earning in high profits, we must adjust the pricing linearly with inflation. In short and medium term it means increase in the pricing. Sounds crazy? Indeed but true. With excess supply of hotel rooms in market price increase is just a thought right now. This is the line of caution for hoteliers who indulge in to deeply discounted rate practices. There must be an eye on profitability not only price.

Another Option?

Eligible pros can use hedging against inflation to counter this risk. What to hedge? There are plenty of ways to play hedge but isn’t an easy game. Without getting deep into, on a short note I can advice keep in mind the following: scope, cost and size and the base line should be your revenues? I wish I can write a book on this for hoteliers.

Buying power of the dollar will also alter the value of the real estate fundamentally in the international context. A negative 25 % swing in USD can put even a fully paid property under water in international value context. And those 25% swings are not hypothetic anymore (See DXY ). Over the course of past year we have seen that in reality.

There is too much to balance, adaptive path it will be the winners course. In general the lodging business if held to basics will be a profitable entity in my optimist view. Please share your knowledge and expertise that will contribute to the field.

Indian democracy has finally given a clear mandate to its future path. It’s a matter of little significance who won. The message is sheer in the clarity of the mandate. A big modern and very adaptive economy “The Big Elephant “is on the path of progress with the great backing of the intelligent mass populace.

 India offers enormous opportunity to hospitality industry with its potent generation mixture. More than half of the Indian population is under 40 and a good part of it is very trend driven. The Indian consumer is highly trend oriented in comparison to others in the world. Diversity is a great characteristic of Indian society. Marketing themes for Indian consumer brands changes more often than a light bulb.

  The difference between the demand and supply of hotel rooms is very high during normal economic conditions. The new demand for hotel rooms has outnumbered a small supply by many times in cities like Mumbai, Delhi, Ahmadabad and Bangalore. Five year of near 8 % growth has open the doors for many to the world class goods and services. There has been a broad rise in awareness and flight to quality in the normal life for more than a billion minds. This all points to a multiyear trend in rise of the wealth among all classes. The positives for this nature of consumers are in a great favor of lifestyle hotel brands.

 The rise in the prowess of Indian Inc in the world is been a key to the rise of corporate travels. Just the demand for Corporate India has driven the current ADR and occupancy in Indian hotels to the roof. With the stable political picture and policy making the growth is ascertained in the size of corporate India in near future. Reserve Bank of India has been successful conservative but investment friendly outlook. We are looking at higher double digit growth in ADR and Occupancy.

  Domestic tourism will be a great driver for the growth of hospitality industry. A successful venture www.yatra.com  has become a household name with its exiting offering of vacation packages. Nature of this domestic trip has changed dramatically, and hotels have replaced Dharmashala and Guest Houses. In fact many of them are being converted to hotels. This sector will enjoy a prolonged robust grown and will be an engine of growth for the hotel industry. Makemytrip offers domestic and international air booking with hotel packages.IPL ( Indian Premier League ) cricket will also be a factor in future for hotel occupancy in host cities.

 The Indian consumer is more prone to experience novelty and there are too few hotel brands catering to this modern Indian lifestyle. Taj Hotels by Tata Group introduced Ginger Hotels targeting the biggest middle class in the world and it’s been a great success appealing to young generation. Lemon Tree Hotels are en exiting brand with vibrant colors. Opportunities are galore for US hotel brands to penetrate Indian hotel market with their proven reservation systems and guest loyalty programs. In the growth of the US hotel industry Indian immigrants are instrumental and will offer a unique entry to Indian market with their back home ties.

India with its traditional slogan “ATITHI DEVO BHAV” (guest is like god) welcomes the world to tap in the vast opportunities in hospitality industry.

A belated hello. 

For those of you who’ve been following our advance in Slovenia, things are going very well.  We have well over 30 Community Partners driving their visitors to Offers created by our 1,700+ advertisers. 

Thats the good news.  The curious news is that we have a surprising number of advertisers who succede in getting the CentrSource visitor to put up their hands and say ” I love this product, and this is how I’d like you to serve me!”, and then do NOTHING about it.  Kind of odd don’t you think?  Here we have a motivated consumer ASKING to be the advertiser’s customer, only to be met with thunderous silence.

When a consumer selects one of the Offer Actions created by YOU, we send you an automated email with a link that takes you to the CentrSource Advertiser Module>Offers>Responses for you to act on.  This email is generated every 24 hous if your Offer has elicited any responses.  Otherwise of course, you can check in real time the response activity on your account.

You can have a happy customer or a sad customer - YOU choose!

Having ‘got’ the consumer, it seems silly – and VERY inefficient – for both you and us that the consumer be let down by not responding in a timely manner to their request.  By the time they have generated their request, they  are ready to be your customer – you are the one with the power to act on their request and thereby convert them.Please check your ‘junk mail’ filters to ensure that these Offer Response Alerts are getting through – your customer has spoken, now you need to listen.  AND MAKE MONEY!

We have fallen off the cliff in all three major parameters of hospitality industry’s health , named as Occupancy , ADR , Rev Par. How that happened in a relatively short period of time ? Was there any one to catch us from this free fall? why not?

Historically the hotel industry has been relatively reluctant in adapting to new technology and new lifestyle innovations . There had been few efforts but unfortunately not coordinated well enough. We have seen our growth almost linearly proportional to the GDP in past decades . It has became very easy to predict the onset of the business cycles in the industry , yet we have failed to develop the industry which can lend cushions to ups and downs of the 21st century. How can we in the coming future make our industry self adjusting ? Can we decouple the severe ups and downs of the markets from our trajectory ?

We should at the core look for novel ideas that will bring flexibility to the industry by changing the dynamics of the growth. Lodging is still more a parasite of general growth . Its still is far from contributing to general growth rather than benefiting from it. Mind It ! It has an enormous potential to lead the train , it can be one of the engines of the growth.

What we are missing than? If we focus the midscale and budget segments growth in past couple of decades we will find our answers between the lines of decades. The above two segments are the most penetrating segments in lodging and covers a good chunk of the whole market. The past has been profitable as whole, to sustain the gains however a little has been done.

We are missing a system that kicks in automatically at the advent of the recession and depression cycles. Like the unemployment benefits we need to provide the customers a reason to spend . Weather it is through the guest loyalty program or another innovative system that will keep the rooms filled, even in the times like ongoing. In order to have this program in place and operating we need to expand the reach of the lodging to new horizon . More should be done to intertwine the real life activities and lodging. A symbiotic example is set by a suburban budget hotel that is at the heart of almost every program of community. These programs at the startups will be little expensive but they will in long run have a floor under the market and will pay off rich dividends .

We also need to bring in specific varieties in current brand mixture of market . This is needed more in franchise hotels. Currently average life of the existing brands is more than 25 years. Does that mean any thing? Certainly , people like to see new faces and defiantly not with plastic surgery.

We can also shift the cost from frequent renovations and other non productive marketing towards this cause which in turn will be a long term filler. With the inception of more lifestyle brands we are seeing the steps towards this direction. Lodging market in New York is the most flexible since they have their sources so diverse that they hardly converge with cycles of economy. There exist enough diversity in American life to tap in for all of us.

With the arrival few new lifestyle brands and programs we are seeing the first step in right direction and lets finish it before the next cycle.