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Week 7 - Hospitality on the rise, yet is it going to last?
Revenues are rising, new OTAs opening up, innovation in the tech world about to impact the whole sector? Great right? Well maybe not. All in this week's news summary!
1. Main Hospitality News
Core news related to the industry
Japan is planning to attract more guests. Another destination management plan. Mostly through marketing & convincing guests to visit more than Tokyo (Link). Good news for hotels in the B & C tier cities and generally a learning for others. Watch out for your own local tourism office. Sometimes it can bring value, especially when given government support.
Is your business in europe? Are you worried for the upcoming crisis? Well according to the latest survey europeans are indeed planning to slash costs, but not those for travel. Good news, yet if one deep dives into the survey, only around 54-59% of people are planning to spend the same amount of money they did in 2022. Clickbait titles, always factually correct.
US is hiring like crazy, including the the service sector. In fact the industry is seeing the highest employement growth amongst all industries. Yet, the sub sector of accomodation is still struggling to find another 10% of employees. The article goes into reasons like visas & other (link), we think its something much more long term (more on that in externalities)
With more hiring comes more revenue. Hilton has reported 2022 profits and it has reached 2019 levels. Where is your Ebitda at the moment? (Link) Hilton is expacting a 5% growth in 2023. Does that connect with general economic trends? (more on that in externalities)
New chain in town, and it calls itself the tesla of hospitality. True or not? More on that here. A fully self-receptioned apart hotel chain “Numa”. You might have heard of their recent round B of 45 mil. USD. Well now you get to read an interview with their founder Christian Geiser.
Have you heard of ChatGPT? Good! Can it be the new guest service team? Working day and night responding to your requests? Surely! But it can also turn into it it’s own travel agent. Imagine asking a search bar: “what is truly the best hotel for a family within my budget”. More on this here. Apparently google is getting nervous. (link)
Econimics, finance, geopolitics. All have impact on the hospitality sector. This part summarizes those.
2023 due for an economic recovery? Well according to the man from the movie “The Big Short” who forecasted the 2008 crisis, inflation has only started and he is forecasting a very tough 2023 (link). For us in the industry this generally means higher ADR, but it also means increasing costs.
We are all struggling to find new colleagues. People are applying less? Is it the visas (as mentioned above)? Unfortunetly, something more sinister is happening. A demographic collapse across most developed countries. Too many old, too little newborns. According to Peter Zeihan, Europe is due for a breakdown in the next decade and there isn’t much one can do (Link). Learning? Make sure your future business investements are focused on digitalization and automation, because soon enough there will be no one left to do it manually.
Hoping that the ukraine war is due to finish? Well unfortunetly not. Russia has found new ways of sourcing military parts and sanctions have only forced Russia to adapt, not stop Link. On top of that a mass mobilization is due to spill over ukraine this summer. So if you were expacting russian tourist to show up again, or the price of flour to drop (mostly sourced in Russia) than that is unlikely. Hence, diversification is key. Finding new suppliers, new guests all from parts of the world less impacted by the crisis.
What is happening with our neighbouring industries? Everyone on the rise? Well Uber & Lyft sure are. Crisis or not they have reported record high revenue numbers and forecast to see further 20-25% growth. (link)
Was your hotel highly dependent on those countless chinese guests flooding the dinner area? Fear no longer. The corona gate is open and chinese consumers are planning to spend 20% more on travel than in 2019. Link
Scientific papers are being published everyday. Including the hosptility sector.
A few new papers have recently come out with some valuable academic insight. Blaming corona on having staff shortages? New study shows it was only a catalyst, not a cause. Hospitality jobs were often associated with making ends meet, the new gig economy has provided a better alternative and made it more flexible. So people are choosing uber over being a waiter (Link).
Struggling to convice guests to do your online check-in? Well according to this paper you are the problem. A survey study has shown that companies with a “technology acceptance strategy” are showing much higher adaptation of tech innovations. It is not enough to send a guest a check-in link, one still has to convice them to use it. Given this weeks news on demographic collapse, we should definetly try a little harder here.
Books, podcasts & the big stuff.
Have you read all the hospitality books already? Well fear not, there is a new one and its pretty damn good. (Book). Cannot be bothered to read it all, luckely there is a 2 minute summary here and here.
5. Tips & Tricks Tools & SaaS
Any new software you can use? Industry tricks you missed? All of that summarized below once a week.
Revenue management. You have surely heard of it. Still not convinced that you should invest your time in managing your yield? Well this report should change your mind fairly quickly. Scared of graphs? No problem… that’s why we are here. In a nutshell the least a hotel can do is watch out for its own prices across different platfoms. If you sell less and or for the same price as on OTAs, you are 43% more likely to convert direct visitors to your site (or loose them if you don’t). So please take care of this and do not fall into the OTA trap again. How? Well the report explains that too!
Another survey has come out, looking at current guest sentiment trends of this winter. Interesting learnings? Well, for one google reviews account for 25% of guest traffic, don’t only focus on Tripadvisor, google is definetly becoming a leading opinion database and ignoring it is no longer an option. More of the report here.
Planning to transfer guest data from one PMS to another? Apparently it isn’t as easy as just a csv import/export. GDPR topics to watch out for. Data quality decision to make, so not to flood your future PMS and so on. Otherwise here is a little guide to help out. Link
Want to join another OTA? Well Trivago is planning to add direct booking option for its visitors. Any commission they plan to take? Not known yet. Nonetheless, would it be worse than booking? Unlikely. Make sure you don’t miss the trivago train. (Link)
Did your guests complain about coffee a lot? Well there is a very simple solution to it here. Simply change the bean. More appropriate to your coffee machine and your countries preference.
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