TLDR: Too Long Didn’t Read
In hospitality news, Airbnb is causing a housing bubble and correction in the US market, while Amex reports increased spending among Gen Z and millennials. In externalities, global warming is worsening due to more than just CO2 emissions, and inflation remains a concern. Academia highlights the poor quality of research into information technology's impact on the industry. Finally, a report on EU travel, trends and tips for OTAs surviving the pandemic and diversifying revenue streams are shared.
0. News snippets
Not important enough to expand on, but worth hearing about
Limehome (leading self-reception hotel concept) has opened up 1000 new units, a total of 4.5k so far in 2023, the new goal of 5.5k by EOY; Israel’s protests are taking place due to the supreme court losing power and more rights going to the parliament, the law, however, has already been implemented; Twitter is no longer Twitter, it is now “x: Spanish elections are showing mixed results, no party can take the lead, conglomeration is upcoming; Germany’s leading political parties have tried to adopt a few views of the “far right” AfD, but apparently, people tend to believe the source material more than the copy cat.
1. Main Hospitality News
Core news related to the industry
Airbnb causes housing mini bubble, correction in progress
Airbnb is an endless source of money and wealth. Do you want to retire? No problem just buy an apartment in a nice area and rent it out short term. Well, unfortunately as per free market rules, where there is opportunity, there is usually a queue of people waiting to claim it. In a recent case in several counties across the US, the housing market initially was booming mostly related to Airbnb purchases, yet now the reverse has happened. High competition, lower ADR, more legal limitations & the next thing you know there is a frenzy to sell real estate. Hence, folks next time you think this is profitable at this moment, consider you are not the only one.
AMEX spending is up, especially amongst the younger generations
Amex has reported on their travel-associated spending for the Q2, so far. It has obviously grown, in fact by 14%. Interestingly enough an additional growth in new AMEX users was also seen. Specifically amongst Gen Z & millennials (60% of total growth). Their spending also increased on average by 21% and not the 14% representative total user pool. A trend a lot of media has reported on for a while, finally coming to fruition.
How easy is it to steal at Hotels?
In Germany, a person got a sentence of 5 years in prison for 17 different hotel heists. How did he steal? I just asked the 5-star hotel staff convincingly to open “his” room as he has forgotten something. Closed the door behind him and took
In Germany, a person received a sentence of 5 years in prison for committing 17 different hotel heists. How did he steal? He simply asked the 5-star hotel staff convincingly to open "his" room as he had forgotten something, closed the door behind him, and took what he wanted. This serves as a small reminder to put your important belongings into a safe when travelling. Red in German here.
Get rid of registration requirements in Hotels
Nancy Faeser (SPD) proposed abolishing the registration requirement for German citizens in hotels. The idea aims to reduce bureaucracy in the hospitality sector.
The Federal Ministry of Justice supports Faeser's proposal, welcoming moves towards bureaucratic simplification by the government. The Hotel Association of Germany (IHA) and the German Tourism Association (DTV) support the initiative, but some challenges remain, particularly regarding the treatment of foreign guests and the potential impact on tourism and local regulations. Article here.
Fast and loose tweet about AirBnB Revenue Collapse
Nick Gerli tweeted about an alleged "Airbnb Revenue Collapse" using data he sourced from AllTheRooms, but it was later revealed that he had manipulated the data to show dramatic drops in revenue for certain metro areas. The misleading claims caused investor concerns and led to a slew of news articles and social media posts, potentially impacting Airbnb's reputation and raising unwarranted doubts about the company's financial health. However, other data analyses from different sources, like Key Data and AirDNA, showed more modest declines in Airbnb host revenue compared to Gerli's claims. More on Skift.
STR occupancy digest
Weekly statistics digest by STR has been released for the US market. Apex occupancy has been reached, now the trend is only downwards. Shoulder days (Sunday & Thursday) have decreased funny enough (counter to Accor’s CEO appraisal for a long-term positive shoulder day trend). Global occupancy levels have finally reached pre-pandemic, meaning 3rd world has finally caught up (since Western economies have recovered in Q1). Future Q4 looks good and is in accordance with pre-pandemic levels.
2. Externalities
Econimics, finance, geopolitics. All have an impact on the hospitality sector.
Global warming is getting worse, and its because of CO2
You might have heard record temperatures across the globe. Yet again! In fact, this year is the hottest since proper global temperature recordings have started. Is it all greenhouse gases or is it more? This article provides an interesting insight into how there is a whole lot more going on than just CO2 emissions. For one the bell curve of extreme weather has now moved a few deviations above, likely making the extreme more common. A volcanic eruption of Mount Pinatubo. While CO2 wise is not too bad, the sulphuric dioxide released is so high it is reflecting the sun's rays back into space. Additionally, ice caps starting to melt is adding additional trapped methane into the atmosphere making the whole situation even more complicated. Given the article comes from the economist and not a crazy left-leaning blog, it truly makes one thing what is coming next,
Inflation down, crisis over?
As the title implies, not really. While monetary inflation has dropped, CPI is still way above usual margins (energy & food 4.8% etc.). The labour market has not seen major layoffs, just fewer open positions (likely related to the demographic crisis), but nobody is quite certain if the surplus of open positions will last another few quarters with less money on the table. Finally, while the US is at 3% inflation, others are still experiencing a high %, while others haven’t even started paying attention (aka Japan). So overall, the honest answer seems, fuck if I know.
3. Academia
Scientific papers related to the topics above. For those who want to know for sure ;)
Research into information tech is of poor quality, a research paper says.
In the spirit of science, a recent paper enlightens its readers of the poor quality of papers that try to research information technology (internet, APIs, tech, etc.) and its actual impact on the industry. Siting lack of rigour & relevance to 2023. A great paper, we would argue, since indicating issues in one's source of truth is often the hardest thing one can do.
4. Readables
Books, podcasts & the big stuff.
EU heavy-duty report on travel trends
On the topic of statistics, a huge statistics report on EU travellers has been released detailing where people want to go and why. Full on 45 pages on valuable insight for all thinks EU tourists. In case you want to avoid reading misquoted clickbait, this report comes highly recommended!
5. Tips & Tricks Tools & SaaS
Any new software you can use? Industry tricks you missed?
How to survive during a pandemic as an OTA (China case)
How to survive guide for OTAs during Pandemic. A case study of Chinese OTAs making it through the Corona period with one of the world's harshest quarantines. In case you are interested check it out here.
More creative ways to diversify from room revenue
Jumping on a topic of creative revenue diversification from hotel guests a few weeks ago. Lucky for us HVS has put together a few more examples this week. Amongst these, HVS shows examples of hourly rentals, pool revenue from reservations (via QR codes) and so on. For more tips here.
#13 - Airbnb housing bubble, STR statistics insights, Inflation down & more