TLDR: To Long Didn’t Read
The emerging $300 billion workforce travel market is seeing brands like Marriott and Hilton invest in extended stay options, while the hotel transaction industry is experiencing changes in operators due to rent arrears and slow developments. Egypt is focusing on medical tourism, while Accor's CEO suggests designing hotels for locals to diversify visitor groups. Externalities include rising producer prices in Germany, global competition for payment providers, and China's grand plan for Central Asia's development. Tips and tricks include a recent study on guest perception of online and self-checking in hotels.
1. Main Hospitality News
Core news related to the industry
Everyone wants in on the extended stay game.
'Long-Stay-Condos', 'Serviced Apartments' and 'Aparthotels' are the new asset classes covering the emerging $300 billion workforce travel market.
Brands like Marriott's 32nd and its 5 other extended stay brands, H3 by Hilton, Staybridge, and Limehome are some new directions in hospitality for the following reasons and more you can find here on Skift.
Work-life balance through digitalization. When working away from home, you want good internet, a desk, and a kitchen to make a snack.
Investment landscape. Construction and material prices have increased, and investors look to hedge their risk. By building apart-hotels, they can also lease them out long-term.
Hotels fill revenue gaps. Before, Sunday nights were empty. Now, staycations start on Sunday, and key companies look for long-stay options to gather their international teams for offsites.
Fewer transactions but many operator changes
The projections for the hotel transaction industry were mixed, some kept faith others were Grimm. (C&W) recorded a total hotel transaction volume of EUR 200 million in Germany. This was 56 per cent below the previous year's figure and around 70 per cent below the 10-year average. EY thinks the industry will be robust, read here.
The mood at IHIF Berlin last week clearly showed operators are changing due to rent arrears where owners have the chance to terminate the contract, some do. While transactions, especially developments are slow due to the market conditions. Some more info here in German.
Egypt focuses on Medical Tourism
In 2022, Egypt was 26th on the Medical Tourism Index. Leading are Canada, Singapore and Japan. But Egypt is determined to climb the ladder with favourable natural conditions such as a suitable climate, mineral water springs, sulfur water baths, mud, and hot sand.
Treatments and labour are still affordable. Many people choose Egypt for recovery and wellness, but also for hair transplants, bypass surgery or hip replacements. The Egyptian Government allows these medical tourism companies to offer health insurance plans that remain valid for the duration of the stay.
30% of the people in Egypt work in the tourism sector, they have skilled medical staff and are this way able to diversify their visitor group.
Get locals to visit your business (according to Accor CEO)
The CEO of Accor is at it again. During the latest IHIF convention in Berlin, he went into detail about how local guests (aka people from the area) are key in how several hotels have survived the pandemic. Local guests spend their money on deciding to visit (with a recommended revenue margin of 60%). This is an easy thing to say when you are fresh out of covid period, yet something that several travel businesses were effectively trying to fight off by diversifying their guest portfolio. One cannot predict the next crisis, but one can always rely on trying to not put your egg into one basket.
The Star Wars hotel is closing 😟
Sad news for some of us. The Star Wars hotel, operated by Disney is due to close as part of the general cost-cutting plan going ahead in the next few years. In simple terms, it was simply too expensive and thus too costly for the visitors. In economic turmoil, luxury for the middle class usually goes first.
2. Externalities
Econimics, finance, geopolitics. All have an impact on the hospitality sector.
Inflation is down, and costs for goods are up (or are they?)
Producer prices in Germany have risen, even though inflation has dropped. A peculiar trend that however is indicating once again that all things economics are not so simple. The working theory of the article is that cost increases in production are a result of delayed inflation effects. A trend that is widely observed across several countries, is however in the grand scheme of things still a downward trend. Meaning prices were at peak around December 2022, yet are now dropping. Hence, as a restaurant owner or hotel operator, one can likely wish for a continued downward trend in basic costs of business (likely).
Global payment providers are receiving competition
Struggling with payment providers taking their fees? Well, the good news a global competition for market leadership is coming or indeed already happening. With Chinese and Indian providers coming to the European and Western markets to compete. Perhaps a good piece of news that can decrease processing fees for the rest of us in the long run.
China is swooping up Russian territory of influence
President Xi Jinping of China has revealed his grand plan for Central Asia's development, and it's like a blockbuster movie! Get ready for "Xi and the Central Asian Adventure!" With flashy infrastructure and turbo-charged trade, China is taking on a region that used to be Russia's playground. While Russia is busy with its Ukrainian drama and the US is packing up from Afghanistan, China is swooping in with its charm offensive. They're offering alternative routes for fuel, food, and who knows what else! It's like a game of Monopoly, and China just bought all the best properties. Plus, they're promising tons of financing and grants, as if they're the Oprah of Central Asia. So buckle up, folks, because China is bringing the popcorn, the action, and a whole lot of yuan! Why should I care you ask? Depends if you want to live in a Chinese colony or not of course.
3. Academia
Scientific papers related to the topics above. For those who want to know for sure ;)
Why medical tourism?
Why do people embark on Medical tourism? A study is luckily available for us to take a closer look at. 1. Low costs, 2. Avoid Waiting lists, 3. The procedure is not available at the home country 4. Actual Tourism 5. Privacy. The list is ordered by priority in the eyes of the aforementioned tourists. For more details check out the study here.
4. Readables
Books, podcasts & the big stuff.
Want to know the tricks Apple, Facebook and TikTok use to make you use their platforms more? Here is a great book explaining just that - Hooked by Nir Eyal. Summary for those with little time available here.
Written by the same author, here (in our opinion) is the best book on how to fight procrastination, be more focused and actually do the things you want to do, without falling into 6 hours of Instagram checking. Summary here.
5. Tips & Tricks Tools & SaaS
Any new software you can use? Industry tricks you missed?
Experience Market and Status Quo
Experience market is a famous buzzword that we have looked into in the previous posts, however, what is there to know about it currently? A recent study by PhocusWire goes into detail.
Online Check-In and why now?
A recent study of guest perception and hotel owners on online & self-checking has recently been released here. Conclusion? More and more hotels are starting to offer such services. Hence, it is becoming an expected offer in the industry. Hence, while you likely won’t stand out anymore as a self-check-in hotel, you can still automate your operations, saves costs and guests will not be frighted of it.
#8 Medical Tourism, Sébastien Bazin Advice & Global Payment Systems