Positive Data For Hotel Industry Unveiled At AAHOA Conference

Steady As She Goes

Tuesday, April 18, 2017

Dennis Nessler

Mark Woodworth, CBRE Hotels | Estis Green, Kalibri Labs

Mark Woodworth, CBRE Hotels | Estis Green, Kalibri Labs

Some positive news was offered to hoteliers at last week’s annual AAHOA Conference in the form of a continued positive growth forecast for the foreseeable future as well as the apparent progress of branded hotels in getting consumers to book direct.

Mark Woodworth, senior managing director, CBRE Hotels, offered an economic update on the U.S. hotel industry, while Cindy Estis Green, co-founder/CEO, Kalibri Labs, detailed for the first time the results of a recent survey that shed some light on how hoteliers are faring in comparison to the OTAs.
 

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Hotel Revenue Managers Say They Want a Revolution

Hotel Revenue Managers Say They Want a Revolution

Change has not come as fast as a 2010 survey had predicted. This study offers a few reasons why, but misses a big one: The industry is in desperate need of loud champions of new techniques and strategies.

— Sean O'Neill

A survey of 381 hotel revenue managers worldwide by Cornell University finds a surging interest in seeing the biggest possible picture of what’s happening at their properties transactionally.

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HB Exclusive: Loyalty Contribution Reaches All-Time High

HB Exclusive: Loyalty Contribution Reaches All-Time High

NATIONAL REPORT—Hotel bookings from loyalty program members continue to increase across all chainscales—further reinforcing the value proposition for these programs, according to new data from the Demystifying the Digital Marketplace study of more than 25,000 hotels in North America by Kalibri Labs.

Certain customer segments, such as business travel and government, have always been strong on loyalty programs but the proportion of room nights booked by loyalty members is now at an all-time high, far surpassing the traditional contribution strength of those two segments.

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Hotel Yearbook 2017

The Hotel Yearbook 2017–Digital Marketing features editorial contributions from 35 opinion leaders around the world on the ways hotel companies will be using digital marketing techniques in the years ahead. Considering the huge impact that online marketing can have on a hotel company’s bookings, The Hotel Yearbook 2017–Digital Marketing is a must read for marketing decision makers throughout the entire industry.

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20 years of OTAs: How they changed the hotel industry

20 Years Of OTAs: How They Changed The Hotel Industry

The emergence in the past 20 years of online travel agencies as a distribution partner has had a profound effect on the hotel industry. That relationship continues to grow and change. 

The emergence in the past 20 years of online travel agencies as a distribution partner has had a profound effect on the hotel industry. That relationship continues to grow and change. 

GLOBAL REPORT—In October 1996, Microsoft quietly launched a product that would forever change the way consumers research, plan and book travel, including hotel stays. The effect on the hotel industry of the founding of that first online travel agency, then called Microsoft Expedia Travel Services, has been both profound and often changing.

“While I would include other intermediaries like Google and TripAdvisor, it’s true the emergence of the OTAs has been one of the most significant things to happen in the hotel industry in the past 20 years,” said Mark Lomanno, partner and senior advisor with Kalibri Labs. “It has completely changed our business model.”

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Demystifying The Digital Marketplace: The Dynamic Distribution Landscape

DEMYSTIFYING THE DIGITAL MARKETPLACE: THE DYNAMIC DISTRIBUTION LANDSCAPE

The digital marketplace has undergone a significant amount of change in the intervening years since Distribution Channel Analysis: A Guide for Hotels was published in 2012. What follows below is an excerpt from the follow-up to that book, Demystifying the Digital Marketplace: Spotlight on the Hospitality Industry co-authored by Cindy Estis Green and Mark Lomanno. 

In 2015 U.S. hotels paid approximately $25 billion in overall customer acquisition costs on guest paid revenue of $145.4 billion. This guest paid revenue grew year over year, from $135.5 billion in 2014 to $145.4 billion in 2015. Guest paid revenue represents the revenue a guest actually paid for a hotel room including any commissions that were retained at the point of booking by a net/merchant intermediary or wholesaler.

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OTAs Hitting Hotel Owners Where It Hurts: Real Estate Values

OTAs Hitting Hotel Owners Where It Hurts: Real Estate Values

According to the report, entitled: Demystifying the Digital Marketplace“the revenue retained by US hotels after paying all customer acquisition costs declined by almost .4% or $600 million… That $600M in additional cost would have contributed directly to net operating income. Using an 8% capitalization rate (which most investors require), these additional acquisition costs of $600 million reduced the asset value of the overall hotel industry by at least $7.5 billion.”

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Marketing Strategies for a Competitive Advantage in 2017

Marketing Strategies for a Competitive Advantage in 2017

According to Geoffrey Moore in his book Living on the Fault Line: Managing for Shareholder Value in the Age of the Internet, stock price is a measure of future potential based on present competitive advantage. Competitive advantage consists of two components, GAP and CAP. The first, GAP, is the distance between your hotel offerings and your nearest competitors or the competitive advantage gap. The second is CAP, the competitive advantage period, that is the projected period a company can maintain its differentiated position. In other words if a hotel company has superior products and significant barriers to entry, it has both a competitive gap (product differentiation) and a competitive cap (time lag for competitor entry).

When developing a cohesive marketing strategy, both CAP and GAP should be incorporated to achieve success for sustained periods. With that in mind, here are some guiding principles to help you achieve a competitive advantage in your market.

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Strategies for winning the direct booking wars

 

Strategies for winning the direct booking wars

It's been a busy year on the "book direct" front. Hotels of all sizes are facing off against established and emerging online travel agencies (OTAs) and meta sites. At the same time, lines are blurring, with OTAs continuing to expand their business services for hotels and the industry moving towards 'meta metasearch' (for another post). But generally, hotels are testing a wide range of strategies to win back share from OTAs, which take costly commission rates ranging from 10 to 30 percent.

The direct booking wars

With much press, earlier this year, many brands launched massive ad campaigns in conjunction with "book direct" discounts to loyalty members. Hilton was the first to launch such a campaign back in mid-February ("Stop Clicking Around"), with many other brands following suit. And internationally, the European umbrella organization for hotels, restaurants and cafes called Hotrec began a similar campaign.

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The rise of metasearch and its effect on hotel distribution

The rise of metasearch and its effect on hotel distribution

The next big thing in hotel distribution might be metasearch, says Cindy Estis Green, CEO and co-founder of Kalibri Labs. While metasearch has been a factor in hotel distribution for a while, it might soon become a dominant player in the market.

“It surprises me that there isn’t more of a focus on the rise of metasearch,” she says. “It’s not that the online travel agencies aren’t dominant and very strong in the marketplace, but this is what is coming, and it is coming fast and furious.”

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HDC: Hoteliers, OTAs battle in distribution debate

HDC: Hoteliers, OTAs battle in distribution debate

NASHVILLE, Tennessee—The conversation that concluded the first day at the Hotel Data Conference was always civil, but there was a tinge of feistiness when the topic turned to the topic of online travel agencies.

Panelists participated in mock-debate style during the “Red, white and brew debate: Dissecting distribution decisions and dilemmas” session, and the two hoteliers on stage— Bharat Patel, chairman and CEO of Sun Development & Management Corporation; and Doug Browne, president of Peabody Hotels & Resorts—were asked to specify their distribution booking mix and cost. Both executives hedged on exact figures, but agreed their companies paid too much to the OTAs.

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Owning the digital conversation to maximize revenue growth

Owning the digital conversation to maximize revenue growth

There’s no question that the never-ending changes in technology continually shift the way consumers interact with hotels. New and emerging digital, mobile and social travel options are drawing consumers’ attention, and hotels are determining how to best connect with those consumers on these emerging distribution channels. Determining what digital resources to invest in—or where to cut back—is a daily challenge

Today’s consumer visits seven to 10 websites before purchasing a hotel reservation: a clear indication that there is a large variety of online options available for hotels’ marketing budgets. Using the power of data to best understand how to maximize channel investments to drive new and recurring business while controlling customer acquisition costs may seem like an endless battle, but demystifying the digital marketplace just got a little bit easier.

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Onefinestay CEO Interview: ‘The Full-Service Hotel Is Dead’

Onefinestay CEO Interview: ‘The Full-Service Hotel Is Dead’

Whether or not you agree with Marsh’s take on some established tenets of the hospitality business, his progressive, disruptive viewpoints are worth more than just a look.

— Deanna Ting

Onefinestay, the London-based alternative accommodations provider that specializes in high-end homestays, is on a roll lately. Fresh off its $168 million acquisition by AccorHotels, the seven-year-old company has major plans for growth, recently opening in Rome and planning to expand further in Europe, the Americas, and Asia-Pacific .

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Why continuing the fight against OTAs may be a foolish proposition

Why continuing the fight against OTAs may be a foolish proposition

How much are you spending to acquire new business? 

It’s an interesting question, but one that didn’t really have a precise answer until now. Strange, too. On one hand, the hotel industry seems pretty sophisticated, but then again there are many indications it’s not at all.

Such as "Hotel Hell." Watching that show, it’s obvious no one in the lodging business knows what they are doing. I mean that has to be fact since reality television would never ever never distort the truth for the sake of a shameless ratings grab. I could never imagine a for-profit television network obfuscating the truth. Right?

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HB ON THE SCENE: Revenue Strategy Summit Evaluates Acquisition Costs

HB ON THE SCENE: Revenue Strategy Summit Evaluates Acquisition Costs

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WASHINGTON, DC - At this year’s Revenue Strategy Summit, held here at the Renaissance Washington, DC Downtown, Cindy Estis Green, CEO and cofounder of Kalibri Labs, gave attendees a sneak peak at the first part of Demystifying the Digital Marketplace, the follow up to 2012’s Distribution Channel Analysis. Part one will be released later this month.

“We’ve collected data from about 25,000 hotels,” said Green, noting that number will be closer to 35,000 by the end of the year. “That represents about three million rooms in the U.S. market. That’s quickly being expanded to Canada and Europe and will expand to Latin America and Asia over time.” Noting this data represents between five and 10 billion transactions, she added, “We collect the raw transactions and then we normalize them so everyone is categorized into the same channels, same segments, across the industry, so we can benchmark it accurately.” 

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Hotels and online travel sites battle on discounts

Hotels and online travel sites battle on discounts

Online travel agencies like Expedia, Travelocity and Priceline have grown in influence in recent years. For some consumers, they're a key way to discover hotels, and they can help hotels out by removing the burden of managing reservation systems and marketing.

"They do a great job at marketing. Everyone sees the commercials," said Robert Mandelbaum of CBRE Hotels' Americas Research. 

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Dealing With Disruptors Revenue Strategy Summit Discusses Ways For Hoteliers To Improve Profitability

Dealing With Disruptors Revenue Strategy Summit Discusses Ways For Hoteliers To Improve Profitability

The potential impact of the so-called disruptors—such as OTAs, online home rental companies and metasearch sites—on profitability in the lodging industry was the prevailing theme of the fourth annual Revenue Strategy Summit, which took place yesterday at the Renaissance Washington, DC Downtown Hotel. 

The event played host to nearly 300 hospitality executives and included a number of educational sessions, as well as statistical data. For example, Cindy Estis Green, co-founder and CEO, Kalibri Labs, LLC, noted that in 2015 the OTAs claimed some 15 percent of hotel distribution, a sharp increase from 2010 when that number was closer to 11 percent. 

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New York City hotels take revenue hit, as OTAs and Airbnb grow

New York City Hotels Take Revenue Hit, As OTAs And Airbnb Grow

At today’s Revenue Strategy Summit in Washington, DC, data was shared on how hotels in North America are being affected by the cost of third-party distribution and the rise of Airbnb and the non-traditional accommodation sector. While national data was covered, the data from a particular famous market — New York City — was intriguing.

Kalibri Labs, a data analytics firm, looked at New York City hotels from 2011-2015, to see what the change was in channel mix, plus overall performance on a net basis. One of the most notable changes was that online travel agency (OTA) volume spiked almost 70% between 2011 and 2015. 

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New thinking about distribution challenges

New thinking about distribution challenges

As different players, including hotel brands and OTAs, try to stay abreast of distribution trends, speakers on a recent panel said the key to success is knowing your goals.

Distribution is a constant challenge for hoteliers, who are constantly trying to manage yield in the most profitable way possible.

Speakers at a panel at the NYU International Hospitality Industry Investment Conference offered tips on how to take advantage of some of the latest ways of thinking about distribution, and to maximize the sea of channels available today.

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