TLDR: Too Long Didn’t Read
This week highlights significant developments in the hospitality industry, including Hilton's adoption of AI for personalized experiences, Numa Group's $59 million funding for European expansion, and New York City's strict restrictions on Airbnb. Sleap.io introduces the first blockchain-powered hotel booking platform with cryptocurrency acceptance and NFTs. HVS presents a comprehensive report on US hospitality taxation, revealing average tax rates and top-contributing states. In externalities, the possibility of a US government shutdown and market concerns arise due to record-high bond yields. Academic research scrutinizes Airbnb's impact on Barcelona in 2016. Lastly, a recommended book, "The Book of Satoshi," explores blockchain and bitcoin. Plus, the article provides insights into seven key marketing channels for hotels, covering websites, email marketing, texting, online reviews, paid advertising, social media, and OTAs.
0. News snippets
Not important enough to expand on, but worth hearing about
Germany is number one in Refugee intake, 2023 current forecast lies at 1 million asylum applicants; STR ADR & occupancy performance with Italy & Greece recovering entirely from 2023 & China still underperforming; Whiskey can be a solid replacement for investing into stocks, with 300% ROI, a minimum 10 year investement period & even an entire whiskey index one can combine the love for whiskey and money making into one.
1. Main Hospitality News
Core news related to the industry
Hilton implements AI
Hilton is jumping on the AI train wagon and implementing a digital concierge with which you can likely book personalized experiences. The company isn’t promising the world with this new feature, since the plan is to expand it within the next 10-20 years, nonetheless, the potential is pretty big. As per CEO’s statements, the AI model will be able to access guest data available from all sorts of sources & customize communication for this specific guest. The main feature the CEO praised is the ability to react in moments to any complaints & therefore prevent delay-driven additional costs (like sorry treatments).
Numa raises 59M Dollars in series C round
Numa Group offers a hybrid model blending features of traditional hotels with the flexibility of short-term rentals, listing over 4,500 rooms and apartments in 28 European cities.
Numa secured $59 million in a Series C funding round led by Verlinvest, known for investing in companies like Oatly and Vita Coco. The funding will be used to support Numa's European expansion, with a goal to reach 15,000 rental units across Europe. Here in German and her in English.
Airbnb is restricted in NY
If you have missed the news, New York City has the joined line of many who have implemented serious restrictions on Airbnb in an attempt to lower housing prices for regular folk. Basically, hosts have to register their Airbnb with the city and a likely ban on renting out completely is a likely future implementation as well. Similar to that of Berlin & Barcelona. The CEO of Airbnb was “disappointed” and mentioned that ADRs are going to go up next year due to limited supply. Yet the NYC government is certain that tourism prices will be fine and no increase is likely coming. Funny, when the reason you ban Airbnb is to lower housing prices, yet you do not expect to rise in tourism ADR. Moving supply to one market to another surely should impact the dynamics of that very market. Except, of course, tourists do not vote for NYC government, yet locals who have to pay rent do.
First Blockchain-OTA
Sleap.io, a Swiss start-up, has launched the world's first hotel booking platform powered by blockchain technology, primarily targeting the cryptocurrency community. Positioned as the inaugural Blockchain Online Travel Agency (OTA), Sleap.io utilizes the Camino blockchain, created by Zurich-based start-up Chain-4-Travel. The platform connects users to a wide array of global hotels via traditional interfaces and plans to establish direct links with hotels and chains in the future. Sleap.io aims to substantially reduce transaction fees and commissions compared to traditional online travel agencies, thanks to cryptocurrency acceptance. It also uses non-fungible tokens (NFTs) for hotel bookings and employs wallet marketing to offer personalized deals while keeping user data anonymous. More here (in German).
Tax paid by state in US (by HVS)
HVS has provided an excellent report on how the industry is being taxed in the US. With the US complexity of various tax rates in each state, understanding the market average is rather complex. Nonetheless, if done, one can clearly see economic trends impacting the total tax paid, employment changes & top tax-paying states across the country. For starters, the average additional tax rate for tourism alone is 6,26%. With all the other taxes combined, you end up with an average of 14,21%. Pretty high, especially compared to Germany's 9 & likely 7% in the future. One of the most expensive areas is St. Louis, MO (25,15%) & the cheapest Fontana, CA (8%). Hence, if you want to open a hotel business and really do not want to pay taxes, the full list is available in the article. When it comes to total tax paid by the state, Hawaii is the highest contributor. In the cities list, NY is obviously number 1. Overall a very detailed report that we recommend to anyone who is interested in the US market and its performance (also over the last 5 years). Such a report for the EU would be highly appreciated HVS!
HVS summarizes Europe`s Hotel transactions ending Sept. 23
Blackstone, via its subsidiary Magma Pledgeco, acquires the Cascade Wellness Resort in Lagos, Portugal, with 164 rooms, for around €50 million.
Dalata Hotel Group to acquire the operating leasehold of the Hard Rock Hotel Amsterdam American from Zien Group, set to become Clayton Hotel Amsterdam American.
Extendam and Atalante Hotels jointly acquire the Novotel Mechelen Centrum (122 rooms) and ibis Namur (92 rooms) in Belgium.
Wirtgen Invest purchases a future 269-room Motel One in Munich from CONCRETE Capital, set to open in Q1 2025.
Swedish investor Stig Svedberg's company, Tvättbjörnen Fastigheter, acquires Best Western Hotel SöderH in Söderhamn, Sweden, from Oscar Properties, with plans for renovations and continued hotel operation. More details here.
Bed Bugs on French trains
Bed bugs in French trains and cinemas are now a thing. If you thought that bed bugs only show up in hotels and homes you were wrong. The media in France as well as social media have exploded with sightings of the little bugs and it has even caused the French government to vow to get rid of the bugs before the Olympics. I guess the locals are used to the little crawlers, hence no need to do it before then. Now if any of you have been “lucky” enough to get the bed bugs, and know how difficult it is to get rid of them, doing that on an entire country scale, will truly be a massive project to undertake.
2. Externalities
Economics, finance, geopolitics. All have an impact on the hospitality sector.
US Shutdown, again…
We have reported on this before and will likely again. The US government is likely to shut down again, due to not agreeing on the budget (disclaimer they did not). What are the disagreement topics you ask? Easy, the Republicans (a minority group) want to remove easy access to abortions, build the Mexican wall & you guessed it removes various forms of climate policies. A total sum of 120 million USD. A seemingly ridiculous set of reasons to shut down the government for, yet some of the most disputed political topics currently on the agenda. For starters the US government has shut down 27 times before, hence this is surely not the first time. The approximate loss for the GDP is 0.2 for each week of shutdown. Will it impact the stock market though? Nobody is quite sure, since looking at previous shutdowns the stock market has both collapsed and rallied, depending on the circumstance. On the other side of this, what are some of the things that will stop working, since they are considered non-essential? For example the National Parks. Closed gates, no entry allowed, no tickets sold. A minor loss compared to the 0.2 GDP loss, yet still quite annoying. Finally, data collection and analysis for the Federal Reserve is also considered non-essential, hence if the shutdown happens the Federal Reserve will not be able to make the decision to higher or lower the interest rates in November since there won’t be any data to make that decision.
The stock market is doing a flip
What is going on in the stock market? In short, bonds of various countries are record high, so the regular stock market with its 7-8% annual returns is slowly becoming less attractive than buying bonds. As a result, fear is apparently spreading across the stock markets, where a massive amount of investors might opt out of stocks and switch, causing a significant price drop for any company that isn’t boasting a 20%+ return on annual investment. On the other side of things, how are various ETFs doing? (stock options that combine top companies from several industries, basically representing the market as a whole). Leading ETF MSCI World (supposed to cover the whole world) is doing pretty well, except it is 70% US and 20% only 5 companies (Apple, Microsoft, Tesla etc.). Indeed diversification hasn’t really paid off this year. And the polar opposite ETF called FTSE Developed (EU stocks) is underperforming.
3. Academia
Scientific papers related to the topics above. For those who want to know for sure ;)
Airbnb? No Thanks. Barcelona 2016
While Airbnb was in many ways rejected by city authorities in NY this year, Barcelona did it back in 2016. This paper was one of the prerequisites that pushed public opinion over the board. In short, Airbnb made 3 claims as to why it was a net positive for the city and the paper questioned them. First, Airbnb locations are mostly outside hotel locations & as a result support underdeveloped neighborhoods (False, 70% of Airbnbs are in the main tourist locations). Second, Airbnb guests want to live like locals, and therefore support local businesses the same way. In this case, the paper argues that people who stay at Airbnb have different cultural backgrounds than the locals (i.e. more Germans stay in Airbnb than live in Barcelona) therefore it is “the same as locals”. Finally Airbnb states that locals get to subsidize their income by hosting, while the paper cannot verify this, it goes into comparing the demographics of Airbnb hosts & locals. Overall not a very academic paper which makes short cuts when data is not on their side, yet a good insight into the politics of Airbnb vs. city.
4. Readables
Books, podcasts & the big stuff.
About blockchain from the creator himself
In the spirit of blockchain, we wanted to recommend the book that explains Bitcoin & blockchain from the perspective of its creator “Satoshi”. A good way to understand the philosophy of blockchain and how it works.
5. Tips & Tricks Tools & SaaS
Any new software you can use? Industry tricks you missed?
7 Marketing channels for hotels
Here is a quick summary of 7 main marketing channels for hotels. If in doubt just look it up, the article also provides minor instructions on how to approach each. Your own website, Email marketing, Texting, Online Reviews, Paid and metasearch, OTAs & finally social media. Perhaps you can rate your own presence on each and calculate some sort of ROI.
#18 - Airbnb gets restricted (again), Hospitality Taxation & Hotel Transactions Q3