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Week 37 - B2B sector likely not to recover (for now), destinations getting into influencer marketing, Blockchain & Kayak.
TLDR: Too Long Didn’t Read
In the hospitality sector, experts discuss the impact of technology on staff, B2B travel struggles to recover fully, Kayak ventures into blockchain-based business travel, Morocco's tourism faces uncertainty after an earthquake, and HVS summarizes the 2023 industry challenges. An Italian town offers free stays to digital nomads for content creation. In external factors, the Ukraine conflict persists, and global interest rates remain unpredictable. Academic research analyzes TripAdvisor reviews for destination management. A recommended book recounts a global cycling journey. Tips include strategies for direct bookings and noise monitoring for cost savings, while F&B tech transformation emphasizes embracing technology and data-driven decisions.
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0. News snippets
It is not important enough to expand on, but it is worth hearing about
With a delay of one year, UNWTO reported on investment growth in hospitality from 2021 to 2022, we wonder why…? | UNESCO wanted to add Venice to its list of endangered sites, but Venice said no thanks! | FIFA Women’s World Cup has impacted Sydney’s hotel industry and created peak performance across the sector, good news for hospitality & good news for women’s football! | Mexico might have presented “alien mummies”, however likely not.
1. Main Hospitality News
Core news related to the industry
Tech pros comment on people's replacement
In a recent hospitality get-together, a group of questions were asked in regards to tech replacing staff. Lucky for us several industry specialists and known entrepreneurs were recorded answering how the tech stack will impact employees and guests when replacing people. The answers mostly come from companies that are part of that tech sector, hence a little bias might be involved. Nonetheless, interesting to listen to what is coming. If you feel convinced and want to fire 50% of your staff (or likely just add more tech, due to staff shortages), a recap of tech transformation in F&B is available in Tips & Tricks below.
B2B travel is back?
We talked about business travel beginning of this year. A lot of forecasting was involved in foreseeing how the B2B travel sector will come back (like B2C already did). However, did it? Several airline carriers report that it is still below 2019 levels and see this sector as smaller for the upcoming future. Mostly, of course, due to current data not coming back. Their reasoning, beyond corporate travel being lower, is high airline fares & lower capacity of airlines. All in effect symptoms of a wider problem.
Kayak now offers a B2B blockchain-based travel app
During all this Kayak has decided to partner with Blockskye and develop their business travel tool which companies can use to book and pay for their trips. All use blockchain. Why blockchain? To avoid credit card fees and pay directly to whichever carrier. So while the market is getting smaller for some, for others there are always opportunities.
Is Morocco closed for business?
Morocco recently survived an earthquake and as the tradition goes, the most impacted is tourism. Locals worry that a comeback of the industry might not happen. While other economic sectors are nearly absent in that area, the whole future of the region seems even worse. A good point to address when governments promote the growth of this sector and an earthquake can take it all down in 1 day.
2023 “crisis” summary by HVS
HVS recently summarized the entire 2023 “crisis” putting all the unknowns that make it hard to predict the future on display. In short, the lodging industry's recovery over the past year has been characterized by resilience in the face of challenges such as inflation, an active Federal Reserve, and persistent recession concerns. Robust leisure and "bleisure" demand, along with a resurgence in group demand, have played pivotal roles in sustaining growth. However, recent trends indicate a softening in leisure demand due to increased international travel options and evolving domestic market dynamics. Notable events like Taylor Swift's Eras tour and a rebound in group demand have contributed positively. Uncertainties surround the changing landscape of office utilization and its impact on business travel. Despite rising capital costs and limited debt availability, high-quality deals within the hospitality sector remain attractive in the current inflationary environment. The industry is poised for continued transformation, though the path ahead remains uncertain. In other words, Inflation, rising costs, more international travel, fewer office spaces less b2b travel & not much investment in the market.
A destination offers free stay to attract visitors
We often touch on the theme of how various destinations attract guests and this week around we found a truly unique way that we haven’t seen anywhere else. A town in Italy called Ollolai is offering free stays for up to 3 months for digital nomads. Great isn’t it? The catch is by the end of your stay you have to produce some piece of content about the location. Video, essay, etc. Truly a unique way to create a buzz about your town or in other words influencer marketing yet on the entire destination scale.
Econimics, finance, geopolitics. All have an impact on the hospitality sector.
The war in Ukraine is still on…
What about the war in Ukraine? Is that over soon? Well not really. In short, Ukraine is trying to capture back territory and thus gain strategic advantage. Did it as of now? No. However, the story gets really complicated when diving in deeper. Like a business case study, except with millions of lives on the line, there are core issues that are being debated, that are the likely reason for the slow advancement of the Ukrainian military. Ukraine's apparent lack of 21st-century warfare skills is due to a lack of training from the West. Too much oversight control from higher-ups limits the flexibility of troops on the ground. Finally, Ukraine’s “unwillingness” to put more troops on the line at the cost of higher losses, yet quicker advances isn’t helping either. Indeed all the points above are mentioned by several media sources and if looked at as a McDonald’s expansion in Eastern Europe, might sound very reasonable, yet in the prism of a country-wide invasion, somehow become more difficult to stand behind.
How are the bank rates doing?
Care about the interest rates and how they will likely develop in the coming months? Lucky you, ING does a weekly status quo on likely upcoming changes. This week around the US no increases, the UK will likely have another spike, Sweden too & of course Norway (wouldn’t want to forget them). Why? Each country has its own reasons (i.e. Norway is struggling with higher oil prices). This only highlights how truly impossible it is to predict future trends, even just a few weeks ahead.
Scientific papers related to the topics above. For those who want to know for sure ;)
What analysis of 34 thousand reviews gets you?!
On the topic of destination management. A recent study of 34 thousand TripAdvisor reviews for 99 hotels in Warsaw has presented 6 positive topics guests mentioned 2 negative. A study, which in itself might be a little generic, yet when applied to specific hotels can help identify the topics that would help any establishment stand out across an entire sea of competitors. In this case, guests mostly had a negative experience with noise at night & booking/check-in. If you are from Warsaw, more detailed results are available under the link above.
Books, podcasts & the big stuff.
Cycling around the globe for 43t miles
A more relaxed recommendation this week. A book by Charlie Walker called “Through Sand & Snow” depicts the real-life journey of its author with a bicycle through the entire planet. A pretty good get-away book highlighting other forms of travel, that we normal people might not be as used to. No 10-minute summary of this, since that defeats the purpose of reading it at all.
5. Tips & Tricks Tools & SaaS
Any new software you can use? Industry tricks you missed?
Direct bookings are indeed essential. Something we have all heard and strive towards, unless of course travel agencies are your best friend. To make it even more exciting, here is a list of 6 ways to encourage direct bookings, as per expert opinion. Optimize for mobile bookings, Ensure website UX is friendly, do outbound calls, personalize your email marketing, use UGC, and utilize guest loyalty. Simple really.
Noise monitoring = cost saving?
Most of the tips & tricks that we find online come from sponsored posts of companies who try to offer their new way of cutting costs or increasing business, while “hiding” under the disguise of travel experts trying to help fellow professionals. And quite frankly that is okay, as long as you know the article is sponsored and might have a few facts twisted. This week we found a pretty neat tool advertising the ability for you to cut your costs, by monitoring noise in hotel rooms. The arguments are few in the article, yet proactive prevention (if you have staff of course), might be cheaper than waiting for the guests to complain!
F&B in Tech
F&B tech transformation is broken down in the article here. To sum up, here are 5 takeaways from the article. Embrace technology, since it can help with staff shortages. Move to the cloud for cost savings. Implement guest-facing apps. Empower your employees by giving them the tools to do their jobs quicker and more efficiently. Finally, collect data from all the tools you implemented and make data-driven decisions.
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