Le Portee - Hospitality News
Le Portee - Weekly Hospitality News
#11 - VR vs Hospitality, Expedia vs Booking & more

#11 - VR vs Hospitality, Expedia vs Booking & more

Week 23 - Is reach with hospitality news of all kind and some interesting new studies outside the sector that will impact hospitality sector nonetheless.

TLDR: To Long Didn’t Read

The Fintech in Hospitality newsletter for Week 23 reports on the death of the brand in hospitality, the release of the new Apple AR headset, and the possibility of Expedia catching up with Booking.com. Other news includes China's slow recovery in tourism, mandatory registration for political lobbying organizations in Germany, and the potential for more tourists in the Middle East due to the Abraham Accords. The newsletter also includes tips for increasing profitability and improving the guest journey in the hospitality sector.

0. News snippets

Not significant enough to expand on, but worth hearing about

The US agreed on a new debt plan, which means more treasury bills will be released than ever before; Berlusconi died, and Italian politics is likely to shift; Kyiv has started the counter-offensive, will it end the war? Nobody knows; One of the first damage trials has started against the BioNTech vaccine, more to come?

1. Main Hospitality News

Core news related to the industry

Death of brand as we know it

A pretty interesting opinion piece has been released about what it means to have a distinctive brand in hospitality. In short, 2 ways, personality & hybrid brands. Personality brands are designed to attract specific groups of people with one single goal. Make the service concept for them to relate to, allowing higher ADRs and stronger brand recognition. 2nd are hybrid brands. Concepts like “The Student Hotel” (now known as The Social Hub). Not only offering heads in beds, a coworking space, an F&B concept, and so on. Basically diversifying your offering inside the building to cover the needs of a multitude of groups. But most importantly to advertise it as such. As the author put it “everyday product” to cover the needs of its guests 365 days a year. For a more detailed read go here.

Next big hype, Vision Pro, for hospitality too?

You might have heard of the new revolutionary Apple AR headset being released (release trailer here). Arguably the best VR/AR headset released so far. If any headset will change the computing industry, it is this one, but what about hospitality? Well apparently no, at least not yet. Why? Neck pains and discomfort in wearing them. At least according to the article!

Expedia is catching up with booking.com

Depending on where you live you will likely use booking or Expedia as your main OTA. As well as several subbrands that do not call themselves either, but belong to them. Up until recently, booking.com was by far the more profitable OTA. This might change. Why? Booking wasn’t previously as present in the US, where commissions on air travel are lower. Booking previously gained market share through lower commissions (both might adjust their commission % and equalize). Finally, while Expedia has been cutting its costs, booking is planning to expand to the US (which means higher investment costs). One can certainly poke some holes in the argumentation, nonetheless, it is still worth considering. End result, Expedia will likely reach a 23% profit margin by 2025 & Booking’s EBITDA might decrease.

China is still not recovered (apparently)

While domestic tourism has almost fully recovered, foreign tourism not so much. April 2023 the volume was 25% of 2019 levels. The flight capacity as well is forecasted to grow by EOY to 80% and only 50% this summer. Might be time to look for other markets? (Source)

Germany forced lobbyists to register

The German government has forced mandatory registration of any political lobbying organizations that spend money of pushing their agenda politically, including our wonderful sector. Relatively speaking to insurance, hospitality is like a small lemonade stand vs a food factory. But fear now, there are quite a few organizations spending money elsewhere, like data analysis, marketing etc. An interesting data pool that shows what might be impacting German politics. (Source in German, translate using deepl.com)

2. Externalities

Econimics, finance, geopolitics. All have an impact on the hospitality sector.

Peace in the Middle East, more tourists for investors

Abraham accords, ever heard of them? It's the first agreement of its kind (for a long while), uniting 3 countries: Israel, United Arab Emirates & Bahrain. An agreement, that will likely bring countries of the middle east together that were previously sworn enemies. What does it mean for our sector? Peace → More trade → More tourists → More money! Lucky for you HVS, a leading hospitality consulting firm has released a report on the exact opportunities this accord might bring. Download the full report here.

Is employee loyalty, a thing of the past?

An interesting array of studies combined by the economist delves into loyalty in 2023. In short, loyalty is dying or at least needs to be revisited by society as a whole. In short, loyalty at a workplace is not emotional (like for a family member) it is transactional. This makes it very difficult for people & companies to fool themselves into believing something else. If loyalty is built it becomes irrational like patriotism or even a cult. Hence, loyalty to companies, studies showed, isn’t beneficial for the whole society, since people are less willing to release damaging information

3. Academia

Scientific papers related to the topics above. For those who want to know for sure ;)

Does Tech actually decrease employment in hospitality?

With all the tech of self-check-in & automation in the industry what is the actual net effect on employment? Will the sector need more or less staff in the future? According to this recent study from China (that reviewed over 30 regions across the country), due to the increase in quality of “product” (hotel services) offered employment quantity is indeed going up, while due to the tech progress, it is going down as well. As a result, both trends are equaling each other. Creating an interesting new question in the end, who will win?

4. Readables

Books, podcasts & the big stuff.

In the spirit of this year’s biggest trend, ChatGPT and AI we thought to recommend the “Scary Smart” book. Written by one of the world’s leading AI specialists, it wants of the dangers that might come if AI development is not done right. As always here is a quick summary of the book for those with limited time.

5. Tips & Tricks Tools & SaaS

Any new software you can use? Industry tricks you missed?

How does one increase profitability? A recent article calling for “total” profitability goes into 6 strategies on how to do that. Diversify incomes, target guests with higher total guest value, actually run a channel strategy, promote loyalty with guests, and look at costs and not only revenue. More in detail here.

Heard of the guest journey? Great. Apparently, there is a big weak spot in the hospitality sector when it comes to guest journeys. It is, of course, payments! Want to learn more, check out the link. Keep in mind the article is interviewing the head of payments in hospitality for Adyen an actual payment provider (bias might be present).

Le Portee - Hospitality News
Le Portee - Weekly Hospitality News
A weekly podcast summarizing the relevant news from the service sector. Everything from industry drama to geopolitics. Backed up with academic research for those times when big statements are questionable. Listen once a week and be fully updated on the industry!