TLDR: Too Long Didn’t Read
In the news snippets, Putin suggests peace talks and Niger experiences another coup. In hospitality news, U.S. Senators criticize tech giants like Google for anti-competitive practices, Sonder launches its first hotel collection, Hopper faces challenges but may maintain market position, Disney's CEO returns to focus on cost-cutting and cartoons, and Chinese tourists show rising interest in visiting the West again. Hotel development costs are slowing down after previous increases. In externalities, China's economy is uncertain, and Italy regrets joining China's BRI project. Academia discusses China/Russia tourism relationships. In Tips & Tricks, Bob W is a rising self-automated hospitality chain.
0. News snippets
Not important enough to expand on, but worth hearing about
Putin says peace talks are a possibility; Another coup in Africa joins the line of 4 coups within the last 2 years, this time Niger? Why did it happen? “Unclear”.
1. Main Hospitality News
Core news related to the industry
Tech Giants Accused of Obstructing Travel Competition
U.S. Senators Lindsey Graham and Elizabeth Warren have criticized Google, along with other tech giants like Amazon and Apple, for allegedly engaging in anticompetitive practices that "suppress competition." The Senators specifically point out Google's search engine bias towards its own travel products, such as Google Hotels and Google Flights, which they claim give the company an unfair advantage over competitors in the travel industry.
The Senators are sponsors of the Digital Consumer Protection Commission Act, which proposes creating an independent regulator to oversee major tech companies and address issues related to online harm, free speech, competition, privacy, and national security. Read more on Skift.
From Apartment Service to Hotels
Sonder Holdings Inc. has launched its first hotel collection called "Powered by Sonder," which includes 23 uniquely designed boutique hotels in 13 markets. These hotels are operated by Sonder, so newly the offering includes SPA and F&B services in combination with app-enabled modern services. Is this a way of improving their financial situation? Read the full article on Wall Street online.
Hm… Hopper has allegedly anti-consumer bends too.
Expedia accused Hopper of having anti-consumer fintech products. However, Hopper is still offering its major fee-based features, such as price freeze, flight cancellation, and disruption guarantee. CapitalOne Travel, a major investor and distribution partner for Hopper, has not commented on the impact of Expedia's withdrawal. Hopper runs promotions and explores new social media strategies, such as the Hopper Content Creator beta, which lets users upload travel-related content for rewards or vouchers. Industry experts suggest Hopper may weather the split with Expedia and maintain its position in the market. The exit from the partnership raises questions about the viability of B2B distribution partnerships with competitors, possibly influenced by Hopper's travel partnership with Uber. Expedia is not expected to feel a material impact from the end of the partnership, as it didn't file a notice with the U.S. Securities and Exchange Commission. Yahoo has more details.
Disney come back!
Disney CEO from 2020 is coming back and the focus this time is cost cutting & focusing on what Disney does best, which is cartoons & experiences. Stock market media is optimistic about the change. Combined with Disney’s successful approach to automation the dropping stock price is expected to come back. This is seen in things like the “MagicBand”, a simple magnetic band that allows repeat guests to check in, pay and open any doors they should be allowed to and a few more modern hotel tools, that allow to automate the boring stuff and capture the “magical moments” well. Given the failure of Disney's latest movies & poor profitability of the streaming service, reinventing the wheel might be necessary. Disney already had similar moments in 2008 when both the parks & film content weren’t doing so well. Exciting to see how the ultimate hospitality experience provider will survive.
Are the Chinese coming?
What happened to the Chinese tourist boom? A topic we have seen come up several times in the last few months, mostly with the conclusion that it won’t happen yet, but just “wait for it”. A recent study of Chinese travellers has shown rising interest in visiting the West again. Prior we saw rising interest in travelling across Asia-Pacific & locally. This is apparently changing now. Combined with higher spending on services vs products due to the economy developing (a natural trend that makes people want more experiences than products the richer they get) a comeback is expected any moment now! Not in the US of course, due to geopolitical tensions that can be seen in the day-to-day thinking of regular folk.
Hotel Development costs are following the rest of the economy
HVS released insightful survey results outlining hotel development costs in 2023. While we previously have seen increased costs due to an unlucky combination of factors during the last 3 years. Cheap loans, high investment, breakdown of supply chains & labour shortages. Cost increases have finally started to slow down. Causes are to be examined elsewhere, nonetheless, a full breakdown of cost-per-room by development type can be seen here.
2. Externalities
Econimics, finance, geopolitics. All have an impact on the hospitality sector.
China’s economy and how is it?
China, China China. This is what the news expressed this week. A variety of different statistics were put together by the economist this week, to indicate whether the Chinese economy is in trouble. This a long-standing question that worries everyone everywhere at all times, since such high dependence has been built between the West and China. Conclusion? While the state says they are doing great, the public feels like things are “going down” while the state statisticians are reporting good numbers. The actions of the state itself (an more explicit indicator of what the government thinks) show are not extreme. Meaning no fiscal plans were released to support a “crumbling” economy. That data itself shows mixed results. Consumer prices have not risen (likely due to purchase power still being pretty low), GDP growth is below expected, unemployment is relatively low, and so on. This leaves us, regular folk, guessing (as always)
Italy wants to leave the China fan club
On the other side of things, Italy is regretting having joined China's BRI project. Belt and Road Initiative was designed to build a silk road 2.0. Trading route infrastructure allows next-level import/export traffic between any willing participants. China would finance infrastructure projects and the country benefits from new trading routes. Italy has nonetheless discovered the results were mostly beneficial for China. Imports from China to Italy growing, but not the other way around. And now it wants to leave.
3. Academia
Scientific papers related to the topics above. For those who want to know for sure ;)
A study into China/Russia tourism relationships has been recently published here. Outlining how such a “partnership” results for both countries. You are outlining typical tourists that China sent to Sankt-Petersburg and how this behaviour has been connected with the overall economic state of both China & Russia. You guessed it right, big groups, mostly women, are saving money and focusing on shopping. At least that is what Sankt-Petersburg has mostly experienced.
4. Readables
Books, podcasts & the big stuff.
In the midst of mixed news and uncertainty, we thought to recommend something different. Emotional health is an important topic ignored by many. How is it though to go to a psychotherapist? “Maybe you should talk to some” provides a pretty insight into what conversations with a therapist are like coming from real examples. Check it out here.
5. Tips & Tricks Tools & SaaS
Any new software you can use? Industry tricks you missed?
Bob W founder and what is pushing a new chain forward?
A rising new hotel chain Bob W is one of the leading new players in the self-automated hospitality experience. A recent interview with one of the co-founders provides a pretty good insight into how such a chain is started, operated & where it is leading! In a nutshell, a self-driven, tech stack, with a high NPS score of 80+ is the main focus, for more read here. Such interviews are obviously not confessions of all secrets such founders possess, nonetheless show pretty well what they think matters in the eyes of potential investors ;)
#14 - New hotel chains rise, Chinese tourists finally coming & more