theWorks - the Nexus Blog

holes

Cast your eye across the British cultural landscape at the moment and you'll find one dominant theme - holes. They're everywhere. There are holes in the road. Quite a lot of them actually.. around 1.5 million, which is 50% up on last year in the aftermath of a Siberian Winter. The government is so concerned about the potential impact (literally) on the electorate that they've announced a £100m pay out to help councils fill them up again. Of course, that's £100m they don't really have because there's another big hole in the public finances. This debt hole is heading rapidly toward £1.6 trillion and means that next year British taxpayers will spend more on debt interest than on Defence.

And then there's the Lenny Henry hole. For those unfamiliar with Lenny, he's a Brit comedian who also happens to be the face of Premier Inns. The latest Premier ad campaign involves Lenny smashing a hole in a hotel room door with an axe, a la Jack Nicholson in The Shining, sticking his head through and shouting 'Here's Lenny'. This parody supposedly demonstrates the ill-effects of sleep deprivation caused by a bad night in a lousy hotel. Unfortunately for Premier, it's also demonstrated the ill-effects of broadcasting an axe-wielding Lenny Henry on daytime TV. Terror-stricken young children have reportedly been sent running and screaming for Mummy, leading the Advertising Standards Authority to ban poor Lenny from all children's programming.

I have some sympathy with Premier.. and Lenny. Let's face it, we've all had moments when we've wanted to smash a hole in a hotel door. Typically it's the door of the room next to us when 'nocturnal sounds' of one sort or another inhibit the serious business of falling asleep. Maybe Premier should consider a sequel with Lenny as the Terminator crashing through the walls from one room to another, ruthlessly taking out anyone shouting, moaning or talking on the phone too loudly, or with the TV on full volume at three in the morning. I'd buy into that. And with that kind of message Premier would soon monopolise the business traveller market. But I guess that's a hole other story...

lessons from a small plant

Forgive me, but I'm coming over all Wordsworthian. Looking out from my office I see a blanket of white snow and ice covering the lawn and flower beds. But thrusting forth from the frozen ground is a flash of green...it's a daffodil! OK, it's not at the 'fluttering and dancing in the breeze' phase, but still - a daffodil in December?

Now if this was a half decent blog I'd write some heart warming stuff about green shoots of spring in the depths of Winter being a metaphor for early signs of life appearing in the barren wastelands of the hotel industry. But I have a hunch that the next overnight frost will kill the daffodil stone dead (not to mention the metaphor). No, the lesson I would prefer to draw from this touching floral phenomenon is the importance of resilience. We press on, not because of some fantasy that Spring will arrive tomorrow, but because that's what we're wired to do. And because we know that even if business does not come bounding back in January, it will eventually as surely as Spring follows Winter.

May we all have a happy and peaceful Christmas and New Year...and a firm hope for 2010 born of resilience.

Here endeth the first lesson...

expedient expedia

I've been following the Choice/ Expedia dispute with some interest. Should we applaud Choice's CEO, Steve Joyce, for taking a courageous stance against loss of control of his hotels' rates and inventory? Or sympathise with the laudably pragmatic views of one Choice franchisee who is quoted as saying "I am an independent business person who will likely not survive this loss in sales I will experience while the big boys are having a pissing contest." Well, maybe we have to do both. No one wants to lose business, but then again no hotel should have to accept business at any price. The short term loss of being withdrawn from the site is going to hurt, but the longer-term damage of accepting adverse terms would be even greater.

In a past life I've been through this scenario myself with Expedia. They play hard ball in hard times because they can... and generally they do deliver. But if one supplier has complete control over your sell price down to last room, then where do you find rate parity? In a handbasket, on its way to hell.

The word Expedia is invented but obviously has its roots in 'expedient'. The OED defines expedient as 'convenient and practical although possibly improper or immoral'. That's one Branding company that really fulfilled the brief....

what's in a name?

I see that Hilton has announced a 'new' name...it's... errr....Hilton. I wonder how many late-into-the-night-sessions-with-Corp-ID-consultants it took before they came up with the 'Worldwide' suffix? To be fair, I suppose with one of the most recognised brands in the world (hotels or otherwise) there's only so many variations you can consider without compromising on brand values. (And I do like the new logo, even if it does look like a novel way of arranging a twin-bedded room).

When Utell and Anasazi merged to form REZsolutions back in '98, a journalist asked Anasazi founder Tom Castleberry how long it had taken to come up with the new name."Not long enough" was his succinct response. I'm tempted to offer the same reply when it comes to Nexus. I come across people all the time who think they've heard of us when in fact they have in mind an entirely different Nexus. Us Nexus's offer the world everything from business information to medical services, building alarms and, of course, hotel sales management systems.

This week I added another one to the list. A client sent us an important document via UPS, but unfortunately they addressed it wrongly. Rather than checking back with the client as to the correct address, UPS in its infinite wisdom decided to google an alternative Nexus location (at least I assume this was their methodology based on the outcome). It took a few days to finally ascertain that the document had been delivered to a Docklands-based company called Nexus Range. Of course I went to the website to look for a contact number and - wow - what an interesting organization! I like to think that our own product portfolio is exciting and appealing but I have to concede that the Nexus Range leaves us in a distant second place. I would blush to tell you more so if you're curious do your own UPS-style googling. I can't see any obvious marketing tie-ins between our two Nexus's, but I might just nick their tag line...

Nexus - guaranteed to hit the spot for everyone

berlin spring

For many folk in the hotel community, Berlin has only 4 reference points: An airport (Tegel, home of the most officious security people in Europe. I don't count Schoenefeld as it's halfway to Dresden); an exhibition centre (Messe Berlin, home of ITB); a hotel (could be any - you only spend 3 hours a night there anyway) and a bar (Marlene's). Berlin has only one temperature: bloody freezing (ref ITB, March). This was certainly my experience until about a year ago. That's when Nexus held its first EMEA client forum in Berlin. In May. What a revelation! Stripped of its winter gloom, the German capital really comes to life - from the many bars along the newly developed riverfront to the wonderful Tiergarten the city is a really pleasant place to hang out. And freed from the restrictive social demands of the trade show, there's time to explore some of the more out-of-the-way locations. Last year we took an evening trip along the river, this year we were down in the bunkers below the city. And my insider tip for a good night out - Clarchen's Ballhaus. Take your Tango shoes...

strange times

Five things that happened this week that may be a sign of the times... or may be a sign that some things in business never change

1. An article in Ehotelier, written by a US lawyer, stated: 'With people beginning to look at the German mark as the replacement for the dollar, we have to wonder a bit about our direction." Not the only thing we have to wonder about mate....

2. An email to an industry colleague resulted in an out-of-office reply that read 'I will be away from my office indefinitely'. Is that a very long business trip or a really subtle way of saying bye bye?

3. A recruitment consultant accepted a 60% reduction in fees without any resistance at all

4. When I complained about delays to the customer support rep of a leading high street bank, he told me candidly 'yeah, the service here is awful'

5. I've been trying for over a week to sign a contract with a state-owned company which would bring them thousands of £££s per year. No one returns calls.

happy new year?

Seems to me like we spent the last 6 months of 2008 talking about how awful it was going to be in 2009. Was a year ever welcomed in with such grim resignation? Well at least it's now under way and we can stop speculating and start doing. I have to confess I like Q1. New year, new financial year, new opportunities. A new budget as well - even if no one dare spend any of it. And a new Winter to experience. The Nexus year is kicking off with a team meeting in Denver. My flight is via Minneapolis so no doubt arrival and departure times (and possibly destinations) will bear only a passing resemblance to the official schedule. Still, never mind - I'd much rather be out there dealing with it than sitting here worrying about it.

May your 2009 be much better than you feared it might be!

sales & revenue in a cold climate

Somebody always makes money is a recession don't they? As we stand on the brink of uncertainty- with the prospect of roomnights & rates heading south for the winter with the swallows - there has never been a better time to be in the Revenue Management business. Whether it's selling systems, seminars, books or just good advice, there's suddenly an abundance of folk out there desperate to show hotels how to squeeze every last cent from a diminishing number of impoverished clients. And good luck to them I say. Anyone that contributes to making our industry a little more savvy in matters of business should be encouraged. The trouble with revenue management in many hotels is that it's left to the Revenue Managers (or, Reservations Managers... or Reservations Managers masquerading as Revenue Managers...). To twist the old maxim that 'everyone's in sales', we should recognise that every sales person is 'in revenue'...and if they're not, the best revenue management strategy in the industry will collapse at point of sale. So before splashing out on the latest RM webinar, or creating complex stay-pattern algorythms in excel, hotels companies could do worse than getting the property sales teams to focus on a few basics...

* Find new business. Yes I know it's obvious, but the best way to manage revenue is to make more revenue. Draw a big circle on the map around every hotel and find every single business within a mile radius. Call on all of them, however unlikely. Set up a 'war room' and manage the whole exercise with military ruthlessness. It's amazing what you can unearth...

* Treat online channels as if they represent real clients (tip: they do). Directors of Sales seem to have a blind spot when it comes to GDS and internet channels. Like men in a big shopping mall, they get intimidated and overwhelmed by the alien environment. If you can't shake its hand and sign a contract, it's not real sales is it? Best leave it to the res department, or better still, point the finger at the international & regional sales teams when the roomnights don't roll in. If this is your DoS, sit them down in front of a computer and make them view the hotel as a travel agent or guest. How is the hotel presented in each system? Are the major USPs clear? Visuals good? Availability open? At the right rate? Are there any other channels that could be driving business? Has anyone looked at the latest Hotelligence report (that's the one that's currently propping the door open)?

* Don't substitute bad business for worse. What happens when a corporate client wants a rate 5% below the one you've offered? Do you sign or decline? What if it's 10%? Or 15%?? At some point the Corporate Sales Manager decides the business is 'too cheap' and walks away. Next year rolls around, and on DD/MM the room that would have been occupied at $150 (room only) by Chris Corporate is now accommodating Tommy Tourist at $80 BB...or worse still, lying empty. Too many sales decisions are based more on segment than sense.

* Treat Opportunity Cost like a genuine Cost of Sale. 'We're paying too much commission!' comes the cry from the FC. Panic sets in and the spotlight falls on the (usually high-rated) transient business and MICE groups. PCO plus DMC or Travel Agent equals 20-25% commission, and as those segments grow the cost per reservation line looks distinctly unhealthy, prompting calls for clampdowns and renegs. Meanwhile, in a quiet corner of the reservations department, a steady stream of online net rates flows into the property. Rates that have been marked up by 50 or 60%, the difference pocketed by the online provider. No commission. No cost of reservation. No problem?

armadillos and accountants in Austin

Just returned from the HITEC show in Austin, Texas. First time for me in Austin. Seems like a decent enough place and the locals I met only had good things to say about living there. Mind you, any city with a campus of 90,000 or so students should have plenty going on. My usually quiet jog before breakfast was anything but...I've never seen so many other people out running at 7am before. To continue the sporting theme, Tuesday night was armadillo racing night. The biggest challenge with armadillo racing is getting the creatures to stay put at the start line. The trick is to grab them by the tail with one hand and then push down on the back of the neck with the other so their feet can't move. We employed similar tactics next day at the show with hoteliers passing by the booth. Worked a treat. It's only when you survey the massed ranks of supplier exhibits at HITEC that you really appreciate the overwhelming number of technology products & services available to hotels today. It's a pity that so many hotel groups only choose to send their IT and Finance directors to the show because smart, creative technology solutions are frankly wasted on techies and bean counters. Operations, Revenue, Sales, Marketing and Distribution folks would walk away with their heads buzzing with innovative new ideas for improving performance and guest experience. And besides that, who wants to watch an accountant wrestling with an armadillo? Then again....

the top of the cycle?

In Lisbon for HEDNA a couple of weeks ago at my old Corinthia hotel. I'm told the property, and Lisbon generally, are having a good year. The mood at the meeting among the industry was pretty good overall too, but you can't help but feel that the party won't last much longer - maybe Asia being an exception. The rule of thumb for the hotel industry is that we move in 6-7 year cycles. I remember helping to open a hotel in Budapest in the dead winter of early 2002 and wondering how on earth we were going to fill 400 rooms (we didn't). Since that point we've all been making hay while the sun shines, but too many economic indicators are swinging down and travel is always one of the first casualties of a tight corporate budget. Of course, as ever, the supply of new rooms will continue way beyond the peak of demand so we can expect heavy pressure on room rates in the coming months. It may not hit us hard in 2008 for 2009 rates, but I'm sure 12 months from now the 2010 negotiations will be a different story. And what prospect then for hotels to impose dynamic pricing?