theWorks - the Nexus Blog

grand rapids, michigan the plane (a Northwest puddle-jumper) left the gate 2 hours late from Detroit for the short flight to Omaha. Having left home in the UK at around 5am that morning I wasn't best pleased at the delay but at least we were now on our way. We taxied out to the end of the runway.We waited half an hour.We turned round and went back to the gate. Mechanical problems. Everyone off. Replacement equipment supplied an hour later. We boarded. We took off. 20 minutes in, announcement: "Warning lights are on... we have to land in Grand Rapids, Michigan". Where? We landed and stopped abruptly on the runway as fire trucks swooped in to look for smoke. There was none. But the plane could not be cleared for take off. We disembarked at the terminal and waited for more replacement equipment. Ever been to Grand Rapids? It has a an airport and a bowling alley. But no replacement equipment. By this time, darkness had descended on Michigan. We all lined up while the nice ladies from Northwest, Grand Rapids, re-booked us one by one and handed out hotel vouchers. That took another hour and it was 11pm when I finally rolled up at the Holiday Inn. I think. Hard to remember because I was only there for 5 hours before heading back to the airport for my American flight to... Chicago.I arrived in Omaha at 10am, 16 hours late.

So thanks, Northwest. After 20 years in the business, that was definitely the most frustrating journey I have ever experienced. And apologies to all citizens of Grand Rapids, Michigan. I'm sure it's a lovely place to raise a family.

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?

yet another story about banks

One of the most 'interesting' projects of the past few months has been attempting to open a new Nexus bank account in the UK. I won't bore you with the details, or name names, but let's just say that bureaucracy is alive and well even in these turbulent times. You would think the banks would be grateful for every penny they can lay their hands on, wouldn't you? But no, sadly it seems that banks are subject to the same stringent, overbearing checks that plague airport security operations - harrassing the vast majority to guard against the potential threat of a tiny minority. At least in the case of airport security they can claim lives are at stake.

Anyway, after a lengthy catalogue of frustrating meetings & phone calls, unanswered emails, more phone calls, lost paperwork and weekly additions to the 'required information' list, we now finally have the new account open. And now I'm not sure whether it's safe to put our money in it. So the Nexus millions remain hidden under a mattress at a secret London address. (That last bit isn't true...yet...).

me and Barack

Back in Denver to meet with our ace IT guys. I was feeling very smug having found a really cheap flight...then had the smile wiped from my face when forced to pay $200/night for a Super 8. Apparently a nice young man called Mr Obama was also in town with a few friends and hotel rooms were at a premium. The only super thing about the Super 8 was its location about 300 yards from our office. Oh, and free internet (the Americans are way ahead of the rest of the world in providing this essential amenity at no cost).

It is always a pleasure to spend time with the Nexus Developers. Having described what I believe customers are looking for from our system there's usually about 60 seconds of 'you must be crazy' looks and raised eyebrows. This is followed by another 60 seconds of cautious 'well, maybe if we tried it this way...', then a full 30 minutes of heated debate and furious scribbling on the whiteboard - most of which goes way over my head. Then - Voila! - problem solved. After 20 years in this industry I still struggle with how techies can estimate that one project will take 3 weeks while another apparently similar task is despatched over the time it takes to drink a cup of coffee. It's all about power I reckon. Either way, it all adds up to more great things in the pipeline for Nexus clients.

Barack will have to wait a little longer to find out if his Denver meeting has been as successful as mine...

silly season starts..

Under starter's orders...and...we're off! Rate season 2009 is very definitely under way with the first of the big corporate bids - IBM - already closed. For Nexus, this is the 'silly season'. While most of the world (certainly most of Europe) heads for the beach, this is our busiest time of the year. Finalising Consortia programs in the system, sending test files, implementing and training new clients, re-training existing clients...This year is especially demanding with the 'go live' for clients of our new HotelworX sales force system. Fortunately we have IT guys that have been eating, breathing and living Nexus for the past 10 years. We're in safe hands, so take a bow Mark, Paul and Luis...then take a break. But not just yet!

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?

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