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AI and Demographics
Week 18 - AI and job security, childcare shortages in Germany: impact on hospitality sector
TLDR: To Long Didn’t Read
Last week, IHG CEO Keith Barr announced his resignation, while Marriott acquired its 31st brand, City Express. A survey by HVS found that business travelers plan to increase travel, spend more, and extend their stays for leisure. Luxury brands like Bentley are offering curated travel experiences, and OTA providers like Expedia and Booking reported strong Q1 earnings, unlike the industry overall. The Economist suggests that AI will not replace most jobs, and Germany is experiencing a shortage of 380k daycare spots. A study found that hospitals make more money when patient experiences are better. Travel Media Group released a guide on responding to guest reviews, and The Economist published a guide to corporate rituals.
1. Main Hospitality News
Core news related to the industry
What does a CEO of the 4th biggest hotel chain do in 5 years?
Last week it was announced that the CEO of IHG is going to resign by June. A piece of news that frequents the weekly feed and to some might seem like another executive shift. No matter what you think, this man has managed the 4th biggest hotel chain since 2017 and has done much since then. To summarize his 5-year career at IHG and his footprint on the industry, here is a breakdown of everything he has implemented at the company and a 24 minute interview with him at a skift forum.
City Express: The Key to Marriott's Success in Mexico?
On that note, Marriot has acquired its 31st brand. Why would they do that you would ask? They already have 30. Simple. The hotel chain in question is called city express and comes from Mexico. A market in which, Marriott still has a lot of potential. While Hilton and IHG grew their own chains from scratch (Tru & Avid), Marriott bought one. Whether it is better to buy a local brand or grow your own depends, since Hilton and IHG did not invest much cash themselves and simply partnered with local developers. More on the merger here.
In-Person Conferences Preferred for Content Over Virtual Options
A survey of business event participants has recently been released by the leading hospitality consulting firm HVS. Some fascinating findings have arisen. The majority of participants are planning to increase their business travel, mostly related to exhibitions and of course due to sales. Reasons for attendance are number 1 Networking and 2 Content of the programs. Curiously enough conferences are a more attractive place to see that content than virtually. Finally, business travellers are planning to spend more and extend their stays for leisure purposes. Sure seems like corona time is finally subsiding.
Bentley Joins the Experience Economy with Luxury Travel Offerings
In the spirit of the “experience economy” where commodity products are no longer good enough for an average consumer and experiences are the way to go, several companies have turned to our industry to enhance their offering. This week Bentley joined the club by offering curated luxury travel experiences in partnership with cruise ships and restaurateurs. The goal is to convert new clients to buying Bentleys, but with a more enhanced experience that just a showcase of a car. A practice is similar to wineries (where a visit to the winery is offered) or Tesla where a factory floor visit with a dining experience is provided. The big question remains if the ROI of such experiences is worth it.
Record Nights Booked: A Positive Sign for the Hospitality Industry
Finally, this week a lot OTA providers have reported their earnings from Q1 and they are doing great. Expedia reports 20% Year on Year increase, while booking is showing record nights booked. Hence, while the big OTA channels have finally recovered from the covid dip, the entire market is still at around 90% prior to covid. A good sign for the average hotelier, nonetheless the question still stands if it will last.
Econimics, finance, geopolitics. All have an impact on the hospitality sector.
AI and Job Security: What the Data Really Tells Us
With all the talk of AI replacing our jobs and the new industrial AI revolution coming, the hype might be a little overblown, according to the latest article by the economist. Current estimation of efficiency gains that tools like ChatGPT can bring lies at around 7%. OpenAI itself has estimated that around 80% of the workforce can give 10% of their tasks to ChatGPT. Numbers that overall, are not that impressive. Looking at past economic changes like the industrial revolution, not any single innovation has revolutionized the economy. Not the railways, not the factory floors. It was a mix. Regardless of all the AI innovation, unemployment has steadily decreased since the 90s and will likely continue to do so. Therefore, your job is “probably” safe.
Childcare Shortages in Germany: A Symptom of a Collapsing Demographic Situation
Worried about the staffing crisis in Europe? Not enough staff to have a 24/7 reception? Well, you are not the only one! In Germany, there are an estimated 380 thousand daycare spots for children missing. Spots that are otherwise needed right now! The article goes into a long winning section coming from the left party in Germany about how there is not enough investment by the government, but is that where the problem really lies? Likely, nonetheless one cannot operate a staff-heavy business without the staff. Indeed a study by a union related to education in Germany is showing a record-high lack of staff, where even manager roles are hard to fill. Putting the ratio between children and educators at an unhealthy low amount. One of the many symptoms of a collapsing demographic situation in Western countries. Conclusion? Let's make sure children’s education is covered first before the receptionist can check you in. A job, by the way, that many will hesitate to give to AI any time soon.
Scientific papers related to the topics above. For those who want to know for sure ;)
Even in health-care better experiences generate more cash
With all the talk of experience economy being the future, does it actually impact the bottom line? Looking at one of the most standardized and crucial industries, health care, we found a study that looked at the experience of a patient and its correlation to profitability. Findings? Hospitals make more money if patient experiences are better. Even if hospitals can generate more cash through the experience paradigm than sure can other businesses.
Books, podcasts & the big stuff.
How do wine brands compete
With all the talk of staff shortages, M&As and AI job replacement we thought it would be good to read about something more soul-enriching. Hence, here is the book “Wine Wars 2” and a recent publication about the competition between wine brands.
5. Tips & Tricks Tools & SaaS
Any new software you can use? Industry tricks you missed?
How quickly should you respond to guest reviews? Here is a recently released guide by travel media that discussed just that.
Some of you might have heard that coronation happened last week. For this time in the 21st century or at all in many people’s lives. An important ritual that brought millions of people together and has a sort of meaning behind that is hard to capture tangibly, yet feels important to most people. What about corporate rituals? Do they exist? Yes! Are they important? Double yes! Hence, here is a guide about corporate rituals and what one needs to know about them. Long story short, make sure they actually bring value to people.
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