Great marketing insights : Be your own brand & stop targeting buckets https://t.co/aaNex6f98B
— Kevin Donahue (@mrkevindonahue) April 26, 2017
New data from the Bureau of Economic Analysis shows consumer spending on hotels and lodging is booming.
From 2011 to January 2017, consumer spending on lodging has increased 41.8%, outpacing other sectors. The food-and-beverage sector came in second, growing 31.2% for the same time period.
With the US economy nearly full-employment and consumer debt levels down, a potential uptick in wages would likely extend this boom trend for hotels well into 2018.
The cardinal rule still applies (Marketshare, Marketshare, Marketshare!) but – given the increases in F&B spend – savvy marketers should be keenly focused on less broad metrics as well, including F&B marketshare, RevPAS and ProPOR (Profit per Available Room).
AirBNB has been regarded as the great disrupter in the hospitality sector, but a new study shows that – for all the hype – AirBNB is not taking marketshare away from hotels.
The study, compiled by Smith Travel Research using AirBNB source data, offers critical insights into the true market penetration for the room-sharing service.
Among the key findings:
- AirBNB has 2.3 million listings, far more than the world's largest hotel company, Marriott (1.1 million). However, much of AirBNB's inventory is available only in peak-season, not year-round.
- Airbnb has higher peak-season occupancy because its users skew more heavily to leisure. Hotels have much higher year-round occupancy due to the diverse nature of their business (leisure, business, and group).
- The markets with the highest hotel occupancy also have AirBNB's top occupancies. A deeper analysis shows that AirBNB is capturing excess demand, not shifting share.
- Even on highest compression nights (hotel occupancy >95%) hotels are growing compression ADR faster than ever – at 35% in 2015 – with ADRs far exceeding those of AirBNB.
Jan Freitag, senior VP of lodging insights for STR, said that hoteliers are not at significant risk to lose share to AirBNB.
“I think the overall message is that the U.S. hotels industry continues to break demand records,” said Freitag. “We are selling more rooms than ever before on an annualized basis. In 2014, we had a demand record. We had another demand record in 2015. We expect in 2016 we will also top the number of rooms sold. Room demand has been higher than it has ever been.”
AirBNB has quietly launched a back-end page for hosts to turn over the management of their listing to superhosts. This new feature gives individual hosts the ability to outsource the management of their listing to a broker, of sorts, who handles guest transactions and pricing.
The Superhost market makes sense. I'm sure there are many AirBNB hosts (and potential hosts) who would prefer to have someone else handling the transactional minutiae of hosting. For AirBNB, superhosts could deliver a greater inventory and open access in large metro markets by lowering the barrier to entry for new hosts.
However, I can't help but think that superhosts may kill AirBNB's brand. After all, the "secret sauce" for AirBNB has been the direct relationship between guests and hosts. A superhosts isn't going to greet a guest and introduce them to an unknown taqueria, after all. If AirBNB removes that connectivity and endorses greater separation between host and guest, the next step is likely to be commoditization.
It will be interesting to watch this trend over the next few quarters for any hint of guest backlash, especially in gateway cities.
This week I spent time with the industry's top luxury travel agencies at Virtuoso TravelWeek in Las Vegas. Based on these interactions and the increased demand for travel agents, I've been giving some thought to what the travel agency of tomorrow may look like.
Years ago, the local travel agency was a brick-and-mortar office on Main Street with sunny and exotic destination posters adorning the walls.
As the age of online travel grew and travelers adopted a D-I-Y approach, travel agencies disappeared from Main Street in search of lower costs in high-rise buildings or work-from-home arrangements. What will the travel agency of tomorrow look like?
Instead of being simply a transactional office, retail travel agencies will return to Main Street as experiential spaces for luxury consumers.
Given the growing demand for curated travel experiences, I believe the travel agency of tomorrow will look much like the agency of yesteryear. Instead of being simply a transactional office, retail travel agencies will return to Main Street as experiential spaces for luxury consumers. Gone are the destination posters of yesteryear in favor of a refined, relaxed environment to enjoy coffee or wine with friends. Curated presentations – some travel related, some not – hosted at the agency become "nights out" for like-minded neighbors who view the agency as expert not just in travel, but in luxury experiences. The travel agency becomes a familiar hang-out for locals to learn, share stories, and laugh together. In short, the travel agency of tomorrow is an experiential hybrid: part wine bar, part concierge lounge, and part expert showcase.
For travel agency owners, the upside to this new agency format may include new revenue streams such as wine sales and event space rental… not to mention increased foot traffic and travel sales. Besides, what goes better with travel stories than a great glass of wine?
"Traveling—it leaves you speechless, then turns you into a storyteller." – Ibn Battuta
I mentioned on Twitter that I keep a copy of Mr. Bill Marriott's TWELVE RULES OF SUCCESS in my office. I think it is outstanding advice from one of our industry's most successful leaders.
1. Continually challenge your team to do better.
2. Take good care of your employees, and they'll take good care of your customers, and the customers will come back.
3. Celebrate your people's success, not your own.
4. Know what your're good at and mine those competencies for all your're worth.
5. Do it and do it now. Err on the side of taking action.
6. Communicate. Listen to your customers, associates, and competitors.
7. See and be seen. Get out of you office, walk around, make yourself visible and accessible.
8. Success is in the details.
9. It's more important to hire people with the right qualities than with specific experience.
10. Customer needs may vary, but their bias for quality never does.
11. Eliminate the cause of a mistake. Don't just clean it up.
12. View every problem as an opportunity to grow.
Hotels.com has completed its fifth annual survey of Chinese travelers and – among other insights – developed the five profiles of Chinese who plan to travel internationally in the coming year. While the resutls show that 92% of Chinese travelers plan to increase or maintain their travel spending in the coming year, the survey also five profiles of Chinese international travelers:
Five Profiles of Chinese International Travelers Revealed
To help the industry cope with these more independent and diverse travelers, the Chinese International Travel Monitor 2016 reveals five travel personas that Chinese travelers fall into.
1. Detailed explorers (25%): Born in the 60s and 70s, they are innovative and optimistic, like to learn and explore and to plan their trips down to the last detail.
2. Cautious connectors (25%): Also born in the 60s and 70s. They come from lower-tier cities and responsible family people and travel to bond with loved ones. They prefer safe, family-friendly hotels.
3. Experience seekers (17%): Tend to be born in the 80s and 90s and be from top-tier cities. They like stylish hotels and professional advice on local cultural activities. They travel to enrich their experience, being independent and ambitious.
4. Indulgers (12%): Most likely born in the 80s, they travel to indulge themselves and to demonstrate their power. They tend to stay at higher-star hotels and go on adventurous local tours.
5. Basic pleasure seekers (21%): Millennials born in the 90s. Unlike other groups, more of them are women than men. They are aesthetically minded and travel for non-material enjoyment, seeking value-for-money accommodation.
Chinese millennials spent 27 percent of their income on travel, according to survey data – the highest proportion among all Chinese travellers. The hoteliers’ survey showed that the number of Chinese millennial guests (aged under 35) increased 12 percent, slightly more than the median increase of total Chinese guests (11 percent). This trend reflects the growing demand – and opportunity – for hospitality internationally.
Google has just launched what may be the future of mobile travel search tools: Google Destinations. Brilliantly, Google has integrated the power of their hotel, airline, and destination search into a single, mobile-friendly travel planning platform.
The completely immersive experience is simple for travelers to navigate and – ironically for a search company – intended to eliminate the need for multiple searches. As the user navigates, the search results auto-update. One simply scrolls and Google Destinations handles all the heavy lifting.
It's difficult to imagine Google designing the "search" out of search, but one look at Google Destinations makes it easy to see how this could easily become the future of travel search. To test Google Destinations, enter a destination and add the word "vacation" (e.g. "Florida Vacation")… and Google Destinations does the rest.