Week 9 - Consumer Spending Intentions, Hospitality Kids Book, Outbound Travel Surges!
Week 9 - Consumer Spending Intentions, Hospitality Kids Book, Outbound Travel Surges!
Cabana Vanlife startup fails, interview with founder available!
TLDR: Too Long Didn’t Read
A children's book series launched by the European Travel Commission and the University of Surrey aims to inspire careers in tourism among 5 to 11-year-olds, addressing industry staffing shortages 📚🌍👧👦, while HalalTrip pivots to cater to the next generation of Muslim travelers 🕌✈️. Lessons from Cabana's failed startup highlight challenges in the travel industry 💼🚫, and third-party management companies adapt to owners' needs 🏨💼. Outbound travel surges in 2023, with Spain reclaiming its position as the most-visited destination 🇪🇸🌍, and H World International unveils rebranding and expansion plans 🌐🚀. Tripadvisor discontinues its Plus program 🛑🌐, and airfare prices experience a significant drop post-COVID-19 ✈️💰.
In externalities, Deloitte explores American spending habits amidst inflation concerns 💵📊, Landwirtschaftliche Rentenbank adjusts loan terms amid rising interest rates 💰📈, and economists caution about Germany's growth amid budgetary concerns 🇩🇪💼. German real estate prices plummet 📉🏠, and European stocks soar to record highs, sparking debate among investors 📈💼.
Academia delves into the feasibility of solar-powered food trucks in India ☀️🚚, and Yvonne Heß recommends "The Big Five for Life" by John Strelecky for life goals 📚🎯. Green innovations in eco-friendly hotels, such as Populus and Hotel Westland, are transforming the hospitality industry 🌿🏨.
0. News snippets
Not important enough to expand on, but worth hearing about
AHLA starts a collective pledge to get the overlooked populations a 100 thousand hours of work | Geopolitics and demographics expert sheds light on the future of travel
0.5 Follow up
Where we follow up on news from previous weeks
New Children’s book released to inspiring kids?
The European Travel Commission and the University of Surrey have launched a children's book series to highlight careers in tourism. Aimed at 5 to 11-year-olds, the initiative seeks to address the industry's staffing shortages by showcasing the diverse skills and rewarding experiences tourism jobs offer. Through engaging stories and characters, these books aim to foster an early appreciation for the sector, presenting it as a viable and fulfilling career path. For more details, visit the original article. Minimum wage and extreme working hours are not part of the stories though.
Religious tourism: HalalTrip's Visionary Leap
In the spirit of religious travel, another concept has showed up. HalalTrip, under the visionary leadership of Fazal Nahardeen, makes a strategic pivot towards catering to the next generation of Muslim travellers. By entrusting the B2C domain to the youthful vigor of Raudha Zaini, the platform is set to redefine the halal travel experience. Embracing a digital-first approach, HalalTrip seeks to capture the burgeoning market of independent, tech-savvy Muslim tourists, emphasizing the untapped potential within the B2C sphere. For more details, visit the original article.
1. Main Hospitality News
Core news related to the industry
Lessons from a failed startup
Cabana's journey from inception to its wind down offers insightful lessons on the challenges of pioneering in the travel industry. Scott Kubly, the founder, reflects on the crucial decisions around venture capital, execution strategies, and the harsh realities of supply chain disruptions. Cabana's ambition to revolutionize mobile hotel experiences basically happened at the wrong place at the wrong time. COVID initially broke the supply chains, and hence couldn’t be produced. In 2022 after revamping 800 pre-orders took place, but the interest rates went up and the company couldn't finance itself anymore. But behind it all were “execution errors”. For more insights, visit the original article.
Third-Party Management Companies: Adapting to Owners' Needs
Recent years have seen significant consolidation among third-party management companies, with notable acquisitions such as Aimbridge Hospitality’s acquisition of Prism Hotels & Resorts, Raines’ purchase of HP Hotels, and First Hospitality’s acquisition of HostMark Hospitality Group.
These companies offer advantages like economies of scale, access to specialized talent, and accelerated entry into franchise agreements, making them valuable partners for property owners.
With hotel companies introducing new conversion brands, third-party management firms have opportunities to assist in converting independent properties. Their expertise and resources position them favorably in this evolving landscape. More here.
IPK World Travel Monitor: Key Outbound Travel Trends in 2023
Outbound travel surged in 2023, with notable double-digit growth across regions compared to the previous year. For instance, Asia saw a staggering 140% increase, while Europe, North America, and Latin America also experienced significant rises. Spain reclaimed its position as the most-visited destination globally, followed by the USA. Dubai received the highest satisfaction rating, according to the Destination Performance Index (DPI), indicating its popularity among travelers.Vacation trips dominated the market, constituting three-quarters of global outbound trips. Sun and beach destinations, along with city breaks, emerged as top choices, reflecting a return to pre-pandemic travel preferences. Despite rising travel expenses, air travel remained the preferred mode of transport for international travel. More here.
H World International Unveils Rebranding and Expansion Plans
Deutsche Hospitality, now rebranded as H World International, aims to bolster its global presence beyond China. Brands previously under Deutsche Hospitality, such as Steigenberger Hotels & Resorts, Jaz in the City, and IntercityHotel, are now part of the H World International portfolio.
Oliver Bonke, along with the existing executive team, leads the transition as CEO of H World International. A joint venture with Conduit House in Asia marks the beginning of H World International's expansion efforts in the Asia Pacific region. Recent agreements include signings for properties like the Montien Surawong Bangkok, Maxx Huay Yai Villa in Pattaya, and Steigenberger Resort Byoum Lakeside in Egypt, among others. Full article here.
Tripadvisor Plus: An Experiment Concludes
After over three years, Tripadvisor is discontinuing its Plus program, for those who have never heard of it, the “Plus” aimed at offering subscription-based discounts and perks to travellers. Despite efforts to attract more large hotel chains by shifting to a cash-back model, the initiative didn't meet expectations. CEO Matt Goldberg hinted at refocusing on free membership benefits to engage consumers more effectively. In a nutshell, people weren’t ready to pay for discounts (at least on TripAdvisor). For more details, visit the original article.
Skyward Trends: The Fall in Airfare Costs
The airfare landscape is undergoing a notable change, with prices experiencing a significant drop, a trend largely attributed to the adjustments post-COVID-19 and an increase in flight schedules. According to the American Express Global Business Travel Air Monitor 2024 report, certain international routes could see price reductions up to 12%. This decrease in airfare prices is further fueled by the entry of budget airlines into the market, challenging traditional carriers and pushing prices down. For more insights, visit the original article.
2. Externalities
Econimics, finance, geopolitics. All have an impact on the hospitality sector.
Navigating Financial Waters: A Peek into American Spending Habits
In a recent exploration by Deloitte, the spotlight is cast on American spending habits amidst persisting inflation concerns. Despite a slight decrease in apprehension from 83% in summer 2022 to about 70% now, the majority remain wary about the rising costs of daily essentials. Deloitte's U.S. financial well-being index stands nearly unchanged since last year, suggesting a stagnation in financial optimism. This insight hints at a broader narrative: Americans' spending intentions have yet to bounce back to pre-inflation levels, possibly due to a lack of improvement in financial well-being. Holidays on the budget? Unlikely.
Rising Interest Rates for Subsidized Loans: Landwirtschaftliche Rentenbank Adjusts Terms
Landwirtschaftliche Rentenbank continues to adapt its loan conditions, responding to the ongoing surge in interest rates. Effective from February 29, 2024, borrowers will face revised terms as the institution makes further adjustments to its program loans. For instance, the interest rate for subsidized loans aimed at young farmers in the most favorable price category (A) has risen to 3.80% for a ten-year term and lock-in period, up from the previous 3.65%. Stay informed about these changes, especially if you are considering subsidized loan options, as Landwirtschaftliche Rentenbank navigates the evolving financial landscape. More in German here.
Economists Warn: Germany's Growth at Risk Amid Budgetary Concerns
Following the Berlin government coalition's agreement to plug a €17 billion budget hole, economists caution that investments may suffer as a consequence. Concerns arise about the adequacy of future investments in critical areas such as infrastructure, digitalization, and decarbonization, with doubts lingering over the government's ability to allocate sufficient funds.
Economic forecasts vary, with some institutions predicting a potential second consecutive decline in GDP for 2024, while others remain cautiously optimistic about growth prospects despite ongoing challenges. Detailed article her.
German Real Estate Prices Plummet
German residential property prices experienced their sharpest drop in at least 60 years in 2023, with condominiums down 8.9%, single-family houses 11.3%, and multi-family houses 20.1%.
While prices stabilized in some major cities, including Berlin and Hamburg, others like Cologne and Stuttgart saw significant declines. This variability suggests a potential turning point in the market. Experts suggest the beginning of a potential stabilization in property prices, possibly aided by anticipated interest rate cuts stimulating demand in the real estate market. Observing the coming quarters will provide clarity on whether this trend continues. More on DER SPIEGEL.
European Markets: Confidence vs. Caution
European stocks are soaring, reaching record highs and igniting a debate among investors: is it a time for confidence or caution? With the Euro Stoxx 600 Index marking consistent gains, the optimism in European markets contrasts with the cautious stance advised by some experts due to economic uncertainties. This scenario presents a dual path for investors—leveraging the momentum or safeguarding against potential economic shifts. On one hand, there is stagnant growth in the EU, on the other, manufacturing is still low. Overall, future is unknown. For more insights, visit the original article.
3. Academia
Scientific papers related to the topics above. For those who want to know for sure ;)
Solar power food trucks in India. Feasible?
On the topic of sustainability in hospitality! A lot of talk and not a lot of action if often seen in the papers we see or with the companies who proclaim to be sustainable. Well how about a study from India looking into solar powered vehicles for remote hospitality and F&B concepts and their feasibility in the real life? No problem, here you go!
4. Readables
Books, podcasts & the big stuff.
Life goals at its finest
Recommendation by our guest Yvonne Heß, an absolute pro from the world of financing & loans. “The Big Five for Life” by John Strelecky. A great take on how to find your major goals in life and pursue them and them alone!
5. Tips & Tricks Tools & SaaS
Any new software you can use? Industry tricks you missed?
Green Innovations: eco-friendly hotels!
The hospitality industry is witnessing a transformative wave of sustainability with hotels like Populus and Hotel Westland leading the charge. These establishments are redefining eco-friendly practices through innovative design and construction techniques. Populus aims to become the country's first carbon-positive hotel with a design inspired by the native Aspen tree (Austria already has several(, highlighting the use of recycled materials and a significant commitment to reforestation. Similarly, Hotel Westland in Seattle's RailSpur micro-district showcases biophilic design and a palette that mirrors the Pacific Northwest's natural beauty, emphasizing a harmonious blend with the environment. If anything at all these properties are surely great at marketing!