Week 49 - Start-ups go bust, record travel numbers, Pantone chooses colour of the year
Week 49 - Start-ups go bust, record travel numbers, Pantone chooses colour of the year
Airbnb Charity, Choice Hotels & Wyndham in competition now, More bankruptcies coming, Google overtakes ChatGPT?
TLDR: Too Long Didn’t Read
In recent updates, the extended-stay lodging market sees increased demand due to infrastructure spending, sparking competition between Choice Hotels and Wyndham 🏨🏗️💼. LA withdraws plans to compel hotels to host homeless individuals 🏨❌🏠. Airbnb's charity stays program has accommodated over 224 thousand guests since 2020 🏡🤝. Navan, formerly TripActions, restructures its workforce with 145 layoffs 💼🔄. HVS recaps the global hotel industry in 2023 🌐🏨, and Pantone names "Peach Fuzz" the colour of 2024 🍑🎨. Google introduces its AI system Gemini 🤖💻. In academia, a study explores the impact of "illegitimate tasks" on hotel employees 📚🏨, and a founder of Hotels.com shares insights 🏨🔍. The text also covers responding to guest reviews ✉️👥, involving employees in hotel tech 💻👩💻, and reducing CO2 emissions in travel 🌍🚗✈️.
0. News snippets
Not important enough to expand on, but worth hearing about
IATA reported that in 2024 the airline sector will present a full recovery from COVID, but cargo may not. | Notre Dame, one of the most famous tourist attractions in the world is due to reopen next year after a full restoration | EU is planning to unite all data in one glorious dynamic way across the entire region, to give your opinion on how it should be done, reply to their survey here.
0.5 Follow up
Where we follow up on news from previous weeks
Choice and Wyndham Vie for Construction Travel Boom in Extended-Stay Market
The Biden administration's infrastructure spending has fueled a surge in construction labourers on the road, intensifying the competition between Choice Hotels and Wyndham for increased business from construction workers. Extended-stay lodging bookings for the construction industry have seen a 120% increase in the two years through November, with the infrastructure bill expected to generate 50 to 100 million room nights over the next decade. Choice Hotels, experiencing significant growth in revenue per available room in regions with infrastructure projects, faces competition from Wyndham in the extended-stay market, with both companies vying for a share of the booming demand driven by construction-related travel. Will Choice still buy Wyndham? We will see. More here.
Homeless people in hotels (LA)
In our podcast episode 22, we talked about how LA was trying to force hotels to host homeless people next to regular guests. The ballot has been taken off and will no longer be voted for. Leaving the homeless problem of LA, which is the worst in the entire US, to be resolved differently.
Airbnb charity report
Airbnb has a charity organisation that together with its hosts provides free stays for people in need (as we have seen before), for example during the refugee crisis in Ukraine or a hurricane in the US. Airbnb has recently posted a report on all the happenings in that area. Since 2020 they have hosted over 224 thousand guests for 1.45 million nights. 76 thousand hosts have opted to participate in the program. The way it works is hosts opt-in, host for free or for a discount and pay no service fees to Airbnb. On top of that Airbnb still provides insurance for damages. If you project the numbers on the total amount of stays & hosts, the charity stays are below single-digit % from the total amount of nights sold but still are a unique offering that many other OTAs do not even offer.
1. Main Hospitality News
Core news related to the industry
Startup Navan Restructures Workforce by Laying off 145 People
Navan, previously known as TripActions is an all-in-one travel, corporate card, and expense management solution. It has laid off 145 employees (5% of its staff) as part of a restructuring effort to enhance operational efficiencies. Despite the layoffs, Navan has recorded strong growth, securing $150 million in debt and $154 million in equity, raising its valuation to $9.2 billion. The company, originally focused on travel expense management, expanded into overall spend management and has seen significant revenue growth, with plans for a potential IPO in April 2024. More here.
HVS closes 2023 with a report
HVS has closed the year 2023 with a summary report for each region and a forecast for 2024. In short, as you might remember from previous weeks, hotel purchases have decreased as well as development, while guest stays have steadily increased across all regions (except Africa). One can see the difference each region is, due it its politics, history & regulations. For a detailed breakdown check out the full article. Forecasts for 2024 are different for each region. The US for example is expected to see an increase in hotels going bust or being sold on the market (due to loans maturing for a % adjustment), while India for example is expected to grow in several sectors like medical tourism, religious and spiritual tourism and even business travel.
Selina Secures $20 Million Lifeline from Osprey Investments After 99% Stock Value Plunge
Osprey Investments provides a $20 million investment lifeline to hospitality company Selina, aiming for a total investment of up to $68 million. If the agreement is finalized, Osprey will become the controlling owner of Selina, leaving the founders with only a few per cent of the company. Selina, facing financial challenges and a 99% stock value decline, has aggressively cut costs, laid off employees, and faced potential delisting from Nasdaq if its share price stays below one dollar by March 6, 2024. More info here.
Aman´s new Hotel Brand “Janu” opens its first property in Tokyo
Aman Group introduces its new brand, Janu, with the opening of Janu Tokyo in March 2024, located in Tokyo's Azabudai Hills development. Designed by acclaimed hospitality designer Jean-Michel Gathy, the flagship property features 122 rooms, private balconies, and a blend of Asian and European aesthetics. Janu Tokyo boasts high-end amenities, including eight restaurants, a large wellness centre, and a signature Janu suite with residential-inspired spaces, offering a unique luxury experience. Nightly rates start from $944. More about the opening here.
Google is catching up with ChatGPT
You might have heard that Google has recently released its own AI system called Gemini, which is supposedly even better than ChatGPT. Well, Skift had a chance to test it by trying to look for flight recommendations, restaurants, itineraries etc. Results were pretty good, however from our personal experience with ChatGPT nothing extraordinary. Nonetheless, this means Google has caught up and hopefully more competition will benefit the rest of us when it comes to building chatbots for your hotel or simply organizing trips with the help of your personal AI assistant.
2. Externalities
Econimics, finance, geopolitics. All have an impact on the hospitality sector.
The colour of 2024 is “Peach Fuzz”
You might have heard how the fashion industry and design have a colour of the year that they try to push on their innocent customers to purchase new stuff every year. Pantone, a major colour standards firm has announced their version of that in 2024. “Peach Fuzz”. This means several hotel developments in 2024 will have a lot of peach in them. It reminds us of the 1960s colours that can be seen in a variety of establishments needing refurbishment. Well apparently no longer, since all you had to do is wait for the colour to come back in 60 years.
UN resolution not passed
UN tried to enact a resolution for an immediate cease-fire in Gaza. The only country to veto it was the US out of 13 countries. Depending on which side of the conflict you are (if at all), you will find this news outrageous. How can the US be the only one vetoing such an important resolution? How can all the countries, except 1 not understand our need to destroy Hamas once and for all? Who is right? We are a hospitality newsletter, don’t ask us.
Woke war in US schools
Have you heard of the culture war? Where people with different ideological backgrounds are trying to push their views onto various systems like education, politics etc. A school edition of this war is currently going on in schools across the US where “woke” practices are being fought by the “anti-woke” mum associations. Resulting in teachers being fired for things they have done deemed as anti-whatever by current elected teacher boards. Why can't the US just elect an authoritarian leader who decides for everyone what kids get taught and average citizens do not have to worry about it anymore? Any countries in mind?
3. Academia
Scientific papers related to the topics above. For those who want to know for sure ;)
The vicious cycle of illegitimate tasks
This time around a study looked at how the presence of “illegitimate tasks” in hotels is making employees less flexible in the workplace. In other words, if you make your staff do work they do not see as part of their job, they will become less and less flexible. A vicious cycle in a way. Remedy? The need for growth in one's career & skillset counteracts this. Hence, fostering a desire for excellence ought to help keep the team going. Or perhaps set expectations correctly when hiring and promoting employees.
4. Readables
Books, podcasts & the big stuff.
Founder of hotels.com interview
Hotels.com is another OTA on the market that was sold to Booking in late 2021. A full interview with the founder is available here. He talks about his new business the TFN and how it all started. A unique take from a founder who has started and sold several hospitality businesses and is still going!
5. Tips & Tricks Tools & SaaS
Any new software you can use? Industry tricks you missed?
How to respond to guest reviews?
How do you do it? A tricky question that many have different answers for. Here is an article breaking down how to reply to negative & positive reviews. The Dos and Don’ts, etc. Check out the full article here.
How to involve employees with your new hotel tech?
With all the talk of needing to implement tech into your business to stay ahead, what has perhaps been missing is a guide on how to implement your team into the process of using this tech. Until now of course. A hotelier guidebook has been released here. You would need to fill out your contact data and boom the report is at your email doorstep. In short, the report urges you to involve the team at the very beginning, helping find the right tech issues that can perhaps be automated and together with the people who do service decide which tools to implement and how. NOT by finding tools you like and than being surprised that your team doesn’t need them.
Offsetting CO2 for guests
How can guests offset their CO2, well stay in hostels of course? Hostelworld, a leading OTA in the hostel sector has released a little step-by-step guide on how to reduce your emissions while travelling. Great marketing material to print out on several A4 sheets of paper, laminate and distribute across your establishments!