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?

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.

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.

selling sales

Why are hotel sales teams so unsuccessful at selling their IT needs in to their own organizations? I've come across a seriously scarey number of hotel groups where sales people are still managing their daily activites, contacts and reporting via Excel and emails. And before someone says, 'why aren't they using the PMS?', that may be a reasonable solution at property level but it frequently leaves regional, national and international sales managers out in the cold. Which means that the team as a whole is not connected.

Part of the problem stems from a faulty but stubborn equation that's been embedded in the collective psyche of our industry for far too long: Technology = Operations. PMS? CRS? CIS? Pick whichever TLA you like, but the reality is that systems designed to manage the hotel operation (or the finance of course) attract all the attention and all the investment. The Sales team is left to scratch around 'making do' with either a bolt-on front end to the operating system or a stand-alone generic salesforce application that was designed to sell....well, just about anything but hotel rooms.

If a VP Sales is brave enough to embark on the road to a proper sales solution, watch how quickly the combined forces of IT, Operations and Finance hijack the show and turn a simple need - 'I'd like to create a more effective sales organization please' - into an enterprise-wide technology gorge-fest. The end result (should there be one at all) is a system that can calculate the VAT on a Venezuelan tour group but leaves our long-forgotten VP Sales wondering if regional sales bothered to call on IBM last week.

Call me old-fashioned, but is not sales the lifeblood of any hotel group? Yes it is. So give the team the tools to do the job!

tripadvisor will eat itself

The phrase 'victim of its own success' has surely never been so true as in the current fiasco surrounding TripAdvisor. Well,'victim' may not be quite the right word...just yet. It would be hard to class them as victims when they've just announced an astonishing 44% increase in quarterly revenue vs Q3 last year to $139m. Parent Expedia claims that the site is the first ever travel brand to reach 40m unique monthly visitors in a single month. Impressive. Except that the gentle winds of mutual discontent that for a long time have been ruffling the feathers of hotel proprietors on the one hand and TA & their users on the other, is developing into a full-blown hurricane.

Hotels for their part are claiming that what was once an occasional fake bad review from a disaffected employee or scurrilous neighbouring property is now turning into a series of highly coordinated campaigns of deliberate sabotage and an increasingly common expression of competitive activity. Reputation Management company, Kwikchex, has declared war on behalf of the industry and is reckoned to have 800 hotels and restaurants lined up ready to 'name and shame' the fake reviewers. Far from taking this threat on the chin, TA has struck out with equal measure, claiming that fake positive reviews, penned by hotel staff, family and friends (not to mention the likes of Kwikchex and their ilk) are deliberately misleading customers with glowing reports of 'attentive staff' and 'dinners to die for'.

One glorious example of such sharp practice has just been uncovered in rural Ireland. According to the Belfast Telegraph, the following email from an un-named manager at the Clare Inn was sent to his staff:

"We have come up with a plan for everyone on this email only to post a review about their stay at the Clare Inn," the email read. "You must do this from your HOME PC or internet cafe, do not use a Lynch PC or the IP address will be picked up. I'd rather you didn't discuss this with your team. This is not something we would normally endorse but the reviews of the Clare Inn at the moment leave us with no choice.Please do not use hotel language or else our plan will backfire."

..and of course it has backfired now that the story is all over the free world. TA is responding to these shenanigans by posting red warning labels on the profiles of hotels thought to be guilty of bigging themselves up. The battle lines are drawn.

All of this of course is an inevitable consequence of the enormous influence that TA now has in the hotel bookings market. When a hotel business can succeed or fail on the basis of TA reviews is it any surprise that reputations can be bought and sold like an eBay auction? Quite where this leaves the poor consumer is at this stage unclear.Stripping out the fake good reviews and the fake bad reviews from the genuine articles is becoming as hazardous as choosing a hotel in the pre TA era. But such is the wonder of the web that no doubt as TA and its detractors wrestle themselves to the floor another player will emerge from the wings as the real, authentic, unadulterated, neutral, trustworthy hotel review site... who's your money on?

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