Will Superhosts Kill AirBNB's Brand?

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.

The Travel Agency of Tomorrow

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?

Bill Marriott's Twelve Rules of Success

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.

The Five Profiles of Chinese International Travelers

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.

Top Travel Trends for 2016

This week, TripAdvisor released their annual list of top travel trends for 2016 (PDF). Hidden in the results are a few very interesting details that not only apply to 2016, but hint at travel trends that may have a longer tail for both hotels, airlines, and OTAs.
2016 Travel Trends

Top Travel Trends for 2016

Trend #1 – Seeking new experiences

Globally, 69% of travelers plan to try something new in 2016, including cruises (20%) and adventure travel (15%). A key travel trend in the data is that 17% will try solo travel for the first time in 2016. It will be key for hoteliers to anticipate the unique needs of solo travelers and catering to this emerging trend.

Trend #2 – Spending more because it’s “worth it”

One in three travelers plan to spend more in 2016 than they did in 2015, with nearly half (49%) of respondents doing so “because I or my family deserve it.” To capture these increased revenues, hotels must differentiate themselves with travel packages that focus on unique experiences, such as the "romantic kidnapping" and picnic at Namale Resort.

Trend #3 – Choosing destinations based on culture, special offers

Travel trends continue to point to the importance of targeted online marketing to focus buyers on your destination, with 21% choosing a destination because a hotel had a special offer or package. One in five global travelers have picked a destination because they saw it featured on television. In 2016, turn your marketing and social media team loose to create visibility for those key items that make your market a "must see."

Trend #4 – Staying cool and connected

While free wi-fi continues to be a critical buy factor for most travelers (46%), many travelers relate that they require "super-fast" wireless internet access (26%); 11% are willing to pay a premium to get the speed they need to stream movies and connect in high-definition.

Trend #5 – Rising room rates (and optimism)

Industry analysts and hoteliers are confident that 2016 will bring higher rates, with 47% of global hoteliers initiating rate increases. This travel trend should lead to capital improvements and enhancements for many in the industry. Despite these reinvestments, 65% of hoteliers expect profits to increase next year, as 2016 should give the industry a new baseline for both ADR and profitability.

Trend #6 – Managing reputations online

Given that TripAdvisor initiated the survey, it's not surprising to see reviews carrying a focus in 2016. I was surprised, however, to see only 59% of hoteliers planning to invest more in online reputation management in 2016. I anticipated this number to be much higher and see this as a travel trend that will go higher in future years. There is simply too much at stake for service providers to not actively manage these channels.

Hospitality Hot Reads: iPhone 6, Net RevPAR and ProPAR

Here's what I'm reading this week to stay aware of emerging trends and opportunities:

Travel Weekly Consumer Trends 2014: Explosion in Mobile Bookings
With the launch of the new iPhone 6 by Apple this week, larger phones and "phablets" will continue to gain mobile share. The larger interface is a great canvas for hospitality sites and apps, which rely on rich media and large photos. Phablets have just 6% of the market share but 11% of the app usage, meaning owners of these devices are heavily device dependent and actively engaged.

Measuring Acquisition Cost alongside RevPAR
As focus shifts from gross revenue to net profit, acquisition cost per room night has come under more scrutiny. Is it acceptable to measure total RevPAR, or should hoteliers focus more closely on net RevPAR and ProPAR (Profit per available room)? This is a very intriguing topic and one conversation that most revenue managers are not fully prepared to have with their ownership.

Sea Change
A detailed discussion of new benchmarks for hoteliers, including ProPAR, ProPOR (profit per occupied room), Net RevPAR, Net RevPOR, and COA (cost of acquisition). This article, along with the previous piece, represent a strategic shift in revenue management. Great read.

TripAdvisor insights on Hotel Guest Engagement

TripAdvisor has compiled a study of guest engagement and found several key factors that drive hotel guest engagement on the review site.

Among the key findings, management responses to TripAdvisor reviews can drive bookings on the site by more than 20% Click to Tweet. Specifically, hotels that responded to guest reviews were 21% more likely to receive a booking via TripAdvisor than hotels that did not respond to reviews. And properties that respond to over 50 percent of their reviews further increase their likelihood of receiving a booking inquiry by 24 percent over those that did not respond.

In addition to creating guest engagement, management responses to reviews seems to have a "halo" effect of higher review ratings. Hotels that regularly responded to reviews from guests have consistently higher reviews as well. From the study:

0% response rate = 3.81 average review rating
5%-40% response rate = 4.04 average review rating
40% – 65% = 4.05 average review rating
65%+ response rate = 4.15 average review rating.

Additionally, hotels with photo displayed on the TripAdvisor site saw a 138 percent increase in guest engagement vs. properties without photos. And for those hotels with more than 1000 photos, the guest engagement factor is a 203 percent increase over those with no photos.

As past studies have shown, the impact of guest reviews on both hotel ADR and RevPAR are significant, so any increase in reviews represents a very meaningful impact for hoteliers and management companies.

In a release, TripAdvisor for Business President Marc Charron tied guest engagement directly to management/owner engagement on the website. "Looking at the results of this study, a clear theme emerges: the more engaged the business owner, the more interested the traveler," said Marc Charron, President, TripAdvisor for Business. "It’s no secret that traveler want to see pictures and read reviews of a property before making their booking decision. What’s really key is the upward trend in average review ratings, traveler engagement levels and booking inquiries on the site, the more frequently a hotel owner responds to reviews. Taking part in the conversation and demonstrating that the owner cares about feedback has a very real and measurable effect on converting a traveler from a casual browser into a potential guest."

How to Structure a Contract for a Hotel Group Buyout

Last month I participated in a LinkedIn group discussion with a meeting planner who was seeking advice on how to structure a contract for a hotel group buyout. Like any hospitality contract question, there isn't a "default" answer for group buyouts. The most important element for both meeting planners and hoteliers is to approach the event as a partnership, with a mutually beneficial contract and good pre-event communication.

Based on the strong feedback I have received from my answer, I've taken the liberty of sharing the question and my response in context on how to structure a hotel contract for a group venue buyout.

Group Meeting Planner:
Hi! I am in the process of negotiating a contract for a "virtual" venue buy out for a staff retreat. I say "virtual" because we'll take 100% of sleeping rooms and all meeting space for our program but the outlets (restaurant, marina, etc) will remain open and available to outside guests.

Any tips/advice/clauses that I should include? I obviously want to protect the sleeping rooms, meeting space and full use of the resort for our use. However I also don't want to get stuck with unused rooms/space if for some unforeseen reason our group size is reduced.

Thanks!

My Response:
In my experience, a buyout is very much a partnership arrangement with your venue and no two events are exactly alike.

In your specific example, you are looking to ensure full exclusivity – rooms, space, facilities – and mitigate all of your risk at the same time. I see these as competing priorities and it may be necessary for you to evaluate the importance of each.

It may also be beneficial to understand that the venue is taking on risk as well. In allocating the totality of their facility to you, they "risk" the opportunity to sell to other groups/guests at a higher rate. They also "risk" lost revenues if your group size is reduced.

If exclusivity is most important to your group, it is absolutely reasonable to expect that the venue will ask you to fully guarantee all of your rooms and your banquet minimum, both with no attrition allowance. This should ensure full use of the facilities without interruption from other guests and ensure the expected revenues to the venue. (WIN-WIN)

If it is more important to mitigate risk from reduced group size, then I suggest working with the venue to establish a reasonable attrition allowance that permits the hotel to resell your unused rooms/space. The venue will mitigate its risk through resell and there would likely be other guests in the facility, but you will not be "stuck" if your attendance falls. (WIN-WIN)

A third alternative may be a bit of a blend. If the event takes place further out, perhaps the two parties would mutually review the anticipated usage and make adjustments to the room block/space hold based on reasonable assumptions. If the group is reasonably expected to be smaller, you could return some of the rooms/space without liability and allow the hotel to resell them. However, if your numbers are on target, you could ensure your full exclusivity. (WIN-WIN)

Again, the most important component of a buyout is partnership. Be confident that you have selected a true partner and you will ensure your mutual success.

How Guest Targeting is shifting the OTA landscape

For years, Expedia, Orbitz, and Travelocity have been entrenched OTA players in a static hospitality landscape. With back-end connectivity to the GDS, these OTA giants represented a simple, at-home entry point for many travelers. Over time, aggressive marketing and rate parity have established OTAs as a reliable retail outlet for hotels, airlines, and rental cars.

But in the past 18 months, a seismic shift has begun to change the landscape for the online travel agencies. Foreshadowed by Google's 2010 acquisition of ITA Software, the rise of "big-data" represents the greatest challenge to OTAs in more than a decade Click to Tweet and is beginning to change the landscape for many of the largest online travel agencies.

Armed with data on preferences, interests and even search histories, big-data providers like Facebook and Google have built platforms by which hoteliers can offer highly targeted packages and promotions to small groups of retail travelers. The result looks to net higher conversions at a lower cost of sale for hoteliers, all while delivering a more satisfying retail experience for guests.

This shifting landscape could bring the eventual downfall of the parity-based model for OTAs. Just this week, Expedia CEO Dara Khosrowshahi confirmed to CNBC's "Squawk Box" show that Expedia is looking for ways to shift its offering to hoteliers away from parity towards a guest-targeting model. (Note: Khosrowshahi's comments about Expedia's future model begin at 2:20 into the video.)

In my opinion, the biggest challenge OTAs face in delivering a targeted guest model is the access to a larger guest dataset. While Expedia, Travelocity, and Orbitz capture travel search data, the legacy OTAs lack access to broader preferences that are game-changers for the big-data companies. OTAs will likely need to purchase guest data directly from their new competitors, Facebook and Google, Click to Tweet which will drive down profit and make the challenge even more pressing.

I believe that the pressure to build a more profitable, guest-targeted model may drive OTA consolidation. It's also quite possible that we will see the larger OTAs pursue big-data through acquisition of social media properties such as Pinterest or Gogobot.

Does this mean that Expedia, Travelocity, and Orbitz are about to fold up shop? Not at all. Although consolidation within OTAs is possible, the likely path for OTAs will be less emphasis on non-targeted results through the GDS and more focus on generating guest-targeted offerings at a higher margin.

Five Fresh Hospitality Reads for the Week

This week, as many begin to focus on budget planning and creating strategic plans, I'm reading more about how the hospitality industry continues to evolve in the social media era. Here are five fresh hospitality reads:

The Future of Travel: Eight Things You Need to Know | Marketing Magazine
Great piece on the critical importance of innovation in the hospitality industry.

STUDY: 44% of Luxury Guests Choose Hotels through Word of Mouth
You know it. I know it. And yet… it continues to be overlooked. For all that you are doing through sales, marketing and PR, the most critical component of hospitality remains guest service.

How Luxury Hotels Mine Social Data in the name of Comfort
Great reminder that (a) there is so much information available online about each of us and (b) some hoteliers are using that public data about their guests. I think there's a lesson in this piece about the importance of balancing hospitality/privacy.

Airlines testing new ways to Board Planes
All aboard (faster!) Also… 100 times YES!

How TripAdvisor wants to own the Travel Cycle
TripAdvisor has evolved from a review site to an efficient booking engine. Now the TripAdvisor teams wants to be the provider of choice for local area information and concierge service. I will be interested to see if crowdsourced hospitality data can ever truly scale.

Another clear indicator of how important it is to know your audience and to continue to refine your message to each guest.

For more hospitality trendspotting, follow me on Twitter.