theWorks - the Nexus Blog

a plea for much less transparency

I've always been a strong advocate for more transparency in the hotel industry. Typically in our part of the business that would involve pricing transparency or a higher level of visibility into the performance of sales teams. I never imagined that the concept would extend quite so far as a higher level of visibility into guests' bathroom activities. Trendy open-plan bathrooms seem to be growing in popularity (with designers at least) at an alarming rate.

My first experience of this phenomenon was about 5 years ago on one of my frequent trips to Frankfurt. Checking in to my room at the Premium Innside I discovered that the wash basin had been grafted on to the mini bar and the shower was a see-through Tardis that had mysteriously materialised in the middle of the room. Having a passing familiarity with German late-night TV, I assumed the design to be simply another manifestation of Teutonic voyeurism. But no, it seems the Innside was at the forefront of an international trend.

Now it's one thing to wander about in a transparent box as a solo business traveller, but imagine inviting your adult daughter along for a little bonding time, only to discover upon arrival at your hotel that the trip will be a bit more 'show and tell' than you anticipated. That's exactly what happened to a lady called Anika Chapin, who accompanied her father on a recent trip to Toronto, and was greeted upon checking-in with the unpleasant surprise that their hotel suite was distinctly lacking in the privacy department.

"I guess it could be sort of mysterious and sexy in the right circumstances, but it's definitely only awkward when you're sharing the room with your dad," Ms. Chapin, a 26-year-old assistant Broadway director, said. (New York Times)

Quite. Dispensing with dividing walls that set apart private bathroom space may provide for some provocative images, but apart from the fleeting intimation of the occasional sexy romp, some travellers are having a hard time imagining why this shift has even taken place. While designers throw around the philosophy that bathrooms are "shared living spaces" and call for the public to embrace communal bathroom experiences, most commentators remain dubious. Even boutique hotel specialist Juliet Kinsman, when asked if she thinks open-plan bathrooms will become industry standard, seemed unconvinced:

"Well you're asking an arbiter of sexy hotels, and will it ever be sexy to watch someone go to the loo? I hope that will remain very niche." (The Guardian)

Or as one Guardian newspaper reader commented in a slightly more colourful fashion:

"Yes darling you just recline on the bed over there while I gaze into your eyes lovingly and take a huge, noisy...."

You can fill in the blanks.

It's unlikely that even envelope-pushing boutique hotels will be able to convince the majority of their guests that open-plan bathrooms should become standard. Because although poet Robert Frost eloquently highlighted the desire for unity in saying that there's "something in us that does not love a wall, that wants it down," I seriously doubt that he was sitting on the pan when he said it.

google mayhem?

Travel analysis sites like Tnooz predicted in 2011 that the advent of Google Hotel Finder would revolutionize hotel marketing and distribution, changing every dynamic from accommodation searches to booking costs and from rate parity to preferred booking channels. This may have seemed a bit premature, given that the site hadn't yet worked out its kinks or been pronounced even moderately successful at that point. But now two years later, seeing Google Hotel Finder being reviewed as "one of the sexiest tools a traveler has these days," while acknowledging the complicated situation that the popularity of the site creates for hotels, the 2011 predictions don't seem too far off the mark.

But as for the predicted "mayhem in the industry"...? Hardly. At least, there are no signs yet of an apocalypse. The advent of any new product by 'Big G' always elicits a whole gamut of emotions in the fevered breasts of industry players and analysts, from anguished hand-wringing to breathless excitement. For those new to hotel distribution, it must seem like a death knell of the never-send-to-know-for-whom-the-bell-tolls variety. But hotels have been at the mercy of intermediaries since the invention of the call centre and while Google may present a giant challenge because of its giant scale, the nature of the challenge at least is familiar: control access to the market and you gain some level of control over the product. The mega bucks being expended by OTAs, meta search engines and - of course - the big hotel chains is testament to that.

Of course, as with any departure from the known, there were those who were - and still are - predicting the end of hotel booking as we know it. Fair enough. But who's to say that booking "as we know it" is somehow the pinnacle of the industry and not in need of the next big shakeup that innovation throws down the pipeline? Change brings conflict, yes. But niceness, neat edges, and order don't drive innovation. Conflict does. So perhaps a bit of mayhem in the industry is, in fact, in order.

Who knows what dreams may come when we have shuffled off this mortal coil of predictability for the bold adventure of change?

lead from the front

One of my favourite soapbox speeches is to bemoan the last-in-line status of Sales departments when it comes to being properly equipped with the technology to do the job. In Dickensian terms, the poor Sales Director is Oliver, timidly raising a hand in budget meetings: "Please Sir, may I have some more.... laptops?" But maybe I'm being a little unfair on the organization. All too often these requests are ill-considered, badly presented and not justified in terms of return on investment. Maybe what we really need is for Sales Directors to change up and become more effective Sales Leaders. Let's face it, sales effectiveness is of foundational importance for any corporation but in the driven and constantly fluctuating arena of hotel sales, the only thing less effective than an absent Sales Director is having one that lacks leadership, vision and the basic business nous to convince an often sceptical corporate hierarchy on the value of what they and their team actually produce.

So, if you're responsible for Sales at your hotel or hotel group, evaluate these core principles and their current application to your sales team. If one or more are missing, chances are you need to look closely at your own role. The time invested will be more than repaid in the improved numbers of your team and the improved credibility of your cause.

1) Cast a Vision: It's crucial that the Sales Director has a clear idea of the overall sales goals of the organization, and the specific activities required to achieve them. Without these the team will be blind. The clearer the expectations, the more on target the results. Hold regular meetings with your team and communicate intentionally with staff members who are struggling to grasp the principles or execution of the sales plan.

2) Set Achievable Goals: No one likes feeling defeated before they've begun. Walk the line between motivation and discouragement by creating achievable goals that can be adapted to new situations if called for. On the other hand, make sure that individual sales managers do not jeopardize the organizational goal through poor negotiating. I have seen Corporate agreements signed off at average rates well below the requirements of the business plan with the result that the annual sales target is torpedoed before the new budget year even begins.

3) Provide Motivation: The very nature of sales is competitive. Provide motivation for hard work in the form of bonuses and incentives. Make sure everyone is focused on a common goal to create team unity rather than competition between individuals.

4) Insist on Accountability: A wise man once said "You can't manage what you can't measure". It's all too easy to lose track of your teams' sales target commitments made at the beginning of the season. Make sure you have a system in place to continuously monitor performance, including variance to plan and analytics as to cause.

The more rigour you can apply to the sales process, the more credibility points you will attract when pitching new investment ideas to the bosses. Time to step up!

life on mars

You may remember a TV series broadcast a few years ago called Life On Mars. It told the story of a modern day detective who, after a life-threatening incident, found himself propelled back into a police force of the politically incorrect 1970s, complete with chauvanistic boss, Audi Quattro and platform shoes. I experienced my own Life On Mars moment a few days ago when I saw the following headline in one of the online newsletters: "GDS Quest For Hotel Dominance Faces Obstacles". I blinked hard and looked again at the date... no, it definitely said March 2013.

In our closeted world of hotel distribution we're very fond of telling ourselves that everything is changing so fast. It's a claim made with just a hint of smugness...aren't we amazing for managing to keep up with these strange new trends! But the truth is we treat new challenges like foreign cuisine - OK for an occasional night out, but they can never replace those comfort food discussions: the future of the GDS and the role of travel agents, the perfect way to describe an A1K and the best way to avoid paying Expedia. These familiar topics have been circling around for so many years that the debate resembles a hospitality version of Groundhog Day.

Last week prior to ITB, Nexus and Trust hosted our annual Consultant's Day. This event has become a real fixture in the calendar, bringing together as it does a couple of dozen strategic thinkers and experienced advisors from across our industry for a day of presentations and discussion on where we're headed and who are the key players that will change our world. It may or may not surprise you to learn that no one mentioned the GDS. Or travel agents. We did talk about Expedia, but only in the context of how when the OTAs have finished cleaning our clocks, it will be the merchandising experts like Amazon that take the next swing. Amazon is a great example of a company that managed to separate fundamental truths from temporary solutions: people may always want to buy books, but you can redefine the bookshop. If we don't figure out the hospitality equivalent for ourselves then we can be sure that someone else will do it for us.

so farewell then, Utell

The news broke earlier this month that Pegasus Solutions had 'evolved' its Utell services into something called Pegasus Connect, an unlovely corporate euphemism to describe the death and interment of a once-illustrious travel industry name. I'm sure for the new regime at Pegasus the realignment of its products and brands makes perfect sense, but for me as a member of the Utell alumni it was a bit like hearing that a much loved elderly relative had been quietly offed and buried in an unmarked grave.

To be fair, this elderly relative had been on life support for many years. As head of the Americas for Utell back in 2000 when Pegasus bought the REZsolutions (Anasazi/Utell) organization, I remember being handed a set of newly designed Utell logos that shrieked Pegasus; the traditional blues replaced with the Pegs red and black, the 'by Pegasus' tag dwarfing the Utell name. A backlash initially brought some moderation to these changes but resistance was ultimately futile. Over the next few years, apart from a brief flourish under Peter Fitzgerald, Utell diminished in status from company to product offering to legacy name.

Back in the last century it was all so different. Utell gave me my first chance in the hotel industry in what proved to be the company's heyday of the '80s and '90s. It was an incredibly dynamic environment and I owe everything I know about the principles of hotel & travel distribution to the likes of Webley, Franks, Perry, Ball, Blaseby, Hope, Holdsworth, Gorga and Misunas. I started in the Reservations department booking hotels on freesale from availability charts printed on microfiche, but it was the automation of the industry that was the making of Utell. Exponential growth came from some very astute moves to place 6500 hotels on systems such as Travicom, START and SMART, the forerunners of the GDS. At the time no other company could offer so many hotels worldwide and travel agents were quick to take advantage.

Where and when did it all go wrong? Theories abound and some border on the libellous. My own theory is that the very factors that created the platform for Utell's meteoric growth also sowed the seeds of its demise. 6500 hotels in one system began to look paltry in the face of 40 or 50 thousand in a GDS or OTA. Barriers to entry for hotel connectivity services plummeted and suddenly the distribution marketplace was awash with reps offering cheap online access. Utell held fast for a long time, but it wasn't to be.

It is widely assumed that Utell is an acronym but it isn't. Henry Utell was an Austrian travel writer who emigrated to the US in 1927. Whenever his new countrymen were travelling to Europe they would ask for Henry's advice on where they should stay. Recognising a business opportunity, Henry founded his eponymous representation company 3 years later.

Henry died in 1990 and according to his obituary in the New York Times he had no immediate survivors. I might take issue with that last point. Old Henry has hundreds of survivors like me and the many others whom I was privileged to work alongside. You will find them everywhere, liberally scattered across the worldwide map of hotel distribution, sales and marketing; many of them in positions of authority and influence, guiding the development of the next generation of hotel technology services. Here's to all of you - you know who you are. And thanks. It was good while it lasted.

london's burning

The BBC's satirical Olympics sitcom , Twenty Twelve, recently ran an episode that featured the Royal Family looking for ways to hang the Diamond Jubilee on the coat tails of the Olympic Games in a bid to boost the profile of the Queen's celebrations. The hapless Olympic PR team came up with the memorably awful phrase 'Jubilympics' as a means of bridging the gap between the two festivals.

While Jubilympics may be confined to the realms of comedy fiction, back in the real world London's hotels have captured the spirit of 'memorably awful' by ensuring that the capital's hotel rates remain eye-wateringly high for the entire Jubilympic period. Room rates at double, triple, quadruple the normal price are naturally provoking a backlash of negative opinion. But now - how predictable - come the stories of a demand slump during the Games. JacTravel is reporting bookings to be as much as 30% down on the same period last year as visitors avoid London and Locog, the Olympic organisers, release thousands of rooms back on to the market, adding to what is already a glut of unsold inventory.

We've been through this cycle of unrealised profiteering so many times that I begin to despair that anyone in the industry can find a sensible, revenue management centred approach to pricing that sees through the demand hype, anticipates mass room block releases, is perceived as 'fair' by the market, and maximises RevPar for the whole season, not just during an event.

Hotels always need to be reminded that there are alternatives. During the 2010 World Cup in South Africa it was reported that visitors saved money by staying in hostels and on camp sites. Last weekend the Queen and millions of her subjects watched 1,000 boats sail down the Thames in the pouring rain. It only needs one enterprising soul to sign them up as floating rooms...now there's a Jubilympic idea.

strange weather

Three years ago we all held our breath as 2009 opened for business and waited for the ground to open up and send the travel industry hurtling into the abyss. And obligingly, it did. Having crawled tenaciously back out of the hole through the continuing uncertainty of 2010 and 2011 many of us had the same sense of impending doom as 2012 opened its eyes for the first time. Surely the financial market chainsaw that has been threatening to bring large countries crashing down like giant redwoods would finally start wreaking havoc in our secluded woodland of travellers and guests?

And then suddenly....nothing happened. I know it's early days but the signs are encouraging. The latest stats published by Pegasus and Travelclick suggest that the upward trend of recent months - in both corporate and leisure sectors - will continue for the foreseeable future. It is indeed strange weather; more like a tornado picking off specific vulnerable targets (whither Thomas Cook?) than the 2009 hurricane that demolished everyone's houses. And let's have a quiet moment remembering one of those tornado victims from outside our industry. Farewell then, Kodak. Not so much the victim of recession as the relentless juggernaut of evolving technology. Digital did for them. Ironically, the digital camera market is now itself under severe pressure as people switch to using their inbuilt smartphone cameras.

So whether the threat is recession, sovereign debt, geo-political upheaval, terrorism, technological revolution or plain old competitive activity, let's hope and pray we all ride the inevitable stormy seas with our sails intact. Happy 2012!

a tale of two cities

There is London and there is London Docklands. The former is the most vibrant, cosmopolitan, influential capital city in the world. The latter is a barren, God-forsaken wasteland where real life has had both the real and the life sucked out of it. Even the DLR trains seem depressed, shuffling around the network reluctantly and unreliably while their Jubilee Line cousins speed in and gratefully back out into the Metropolis. I contemplate this contrast every November when the World Travel Market rolls round again. As a Brit, there's always a feeling of local's embarrassment when accompanying the world's travel community as it negotiates the tortuous daily commute from comfortable West End hotel room, through Checkpoint Canary, to the gulag of Custom House. As many have commented, what hope for the Olympics?

Somehow the WTM itself - once a proud citizen of SW5 - has taken on the character of its surroundings. Arriving at Excel for registration last Monday morning, we weary travellers were (as usual) forced to descend an outdoor iron staircase into the bowels of this giant grey shed, then to endure a long walk along concrete corridors, through an underground car park, only to be faced with an endless line of fellow prisoners waiting to be strip searched and showered before being issued a pass. OK, I made up that last bit. But it was a really long line and there were only 3 people on the registration desk (sponsored by Greece perhaps?).

Once inside the halls, I headed directly for the Global Village where once upon a time the world's hotel groups gathered. Sadly these days it's more Village than Global. Most of the big chains have gone and their footprint has been gobbled up by OTAs, bed banks and channel management companies. Still, the silver lining of any WTM is in the silver hair of increasingly aged, long-standing industry friends and colleagues. WTM, for now, remains one of the best networking events in Europe. It's just a pity that even us Brits have to travel to another country to attend it.

we've got you covered

Back in the good old days a hotel could abuse its clientele with relative impunity; anything from rubbery chicken in the restaurant to a rude receptionist, even the death or dismemberment of a guest could be swept under the (filthy) carpet with barely a ripple of interest to anyone beyond the unfortunate victim. These days, it only takes one unsightly pubic hair in the shower of an otherwise spotless bathroom to send the world wide web into a frenzy of uploaded images, self-righteous pronouncements about 'appalling hygiene standards' and tales of infants too traumatized to take a bath. Result? Plunging TripAdvisor ratings and plunging revenue as potential guests head for hair-free alternative accommodation.

The only remedy available for the hotel is to explore the new dark art of Reputation Management. So, for example, publish statistics from an independent research company demonstrating that 99.99% of the hotel's showers show no traces of pubic presence, or send the housekeeping team for 'Pubic Hair Recognition' training and post their certificates online to prove it. Hopefully some creative CRM will steer the ship back to profitability.

The only remedy until now that is...

...because an enterprising insurance company has just launched a policy called Hotel Reputation Protection Policy 2.0. The policy will cover losses of up to $35m caused by adverse publicity, including both lost business (measured by RevPar Index) and the cost of crisis management consultants. What a marvellous concept! But why stop there? There's no end of risk to running a hotel and all sorts of good reasons for not achieving RevPar targets. This could be a very lucrative seam to mine for insurance companies, so here's a few ideas to get the ball rolling..

1. Owners Expectations cover. Having installed flat screen TVs in all rooms, your owner now expects ADR to increase by a minimum 50%, an assumption based on the entirely reasonable commercial proposition that he wants his money back quickly and someone has to pay for it. The policy will cover the difference between real world RevPar and LaLa Land RevPar.

2. Bad Sales Team cover. Everyone knows that good sales people are worth their weight in gold and desperately difficult to find and retain. So why waste your time? Go ahead and employ the laziest, dimmest dreamer of them all who doesn't know her BARs from her elbow and let her fill the hotel with Groupons. We'll cover the difference in average rate between what was sold and what would have been sold had you employed the right person in the first place.

3. Unfair Competition cover. Results would be so much better if it wasn't for the fact that your comp set is comprised of higher quality hotels in more convenient locations that have been more recently refurbished. Not only will we cover you for the RevPar you would be achieving if those properties didn't exist, we'll also provide Competitive Impairment, a customized service that involves placing our own undercover operatives into your neighbours' properties and sabotaging their service levels. For example, our maids carry a secret stash of pubic hairs...

american airlines, sabre and a box of LPs

In a small cupboard at the top of my house lies a hidden treasure trove of extraordinary worth. Before anyone decides to look me up for a quick break-in, the worth is not monetary but personal. And the treasure is not pirate gold (though some is definitely pirated) but plastic. Vinyl LPs. About 500 hundred of them, lovingly kept, filed in alphabetical order. Over the past few years I've observed with wry satisfaction as this ancient but wonderful format has started appearing once again on the shelves of music stores, the medium of choice for young musicians seeking a warm authentic sound.

I mention this only because if old farts like me wait long enough, everything comes round again - fashion, music, travel systems....yes, I did write 'travel systems'. The ongoing dispute between American Airlines and Sabre (and Expedia and Orbitz, and...and...) may be new news but the underlying arguments are as old as my LPs. The latest falling-out is based on the first principles of distribution: 1)control your channels and 2)drive down cost. American wants to sell its seats and services 'direct to market' in its own unique, revenue-enhancing way; optimal presentation of the product and packaged ancillary services, all without the inconvenience of paying Sabre and its (in their minds) greedy GDS & OTA brothers a hefty fee for a decidedly sub-optimal presentation. On the other hand, GDSs & OTAs argue that not having the ability to present a full range of options to the consumer in a standard format will only lead to frustration and lost business.

So what to do? Well, I have an idea. Let's develop a technology that enables users to book travel by using a single portal into multiple supplier systems. I even have a name for it - a multi-access system. We could call it...errr... Travicom. Or SMART or START or DMars. If those names mean nothing to you then you'll just have to imagine that there really was a world before GDSs. A world where the travel community used dumb terminals to access the databases of airlines, hotel groups and car rental companies.

Are we returning to a new form of the old world? Much will depend on whether the GDSs get their act together and provide a platform that meets the changing demands of suppliers...at an acceptable cost. If they don't...well, you know what they say, 'what goes around comes around'... and that's on the record.

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