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).
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.
Stanford’s Lindred Greer has published an interesting new study which seeks to answer one of the great leadership selection queries: Will an organization achieve peak performance with a highly competent leader or one with the strongest leadership qualities?
From the Harvard Business Review, the short answer is that the leader's competency – perhaps above other factors – has the greater impact on the success of the team.
In one group of teams, influence was aligned with competence: the person who knew the most about the task to be done led the team. These groups performed best.
A second group of teams shared power – they were relatively non-hierarchical. This group did not perform as well as the first, but they did outperform our third group of teams — hierarchical teams with a randomly chosen leader.
We replicated these findings in the field, by the way. We studied 49 teams at a publicly held Dutch company; the teams were auditing finances in search of tax evasion and fraud. If the team leader didn’t have a deep, technical understanding of tax fraud, he or she led the team badly astray.
This is simple to understand in more everyday examples. Would you prefer an airplane captain with vast experience or one who effortlessly rallies others to the cause? Of course we want someone who can fly the plane expertly. And that is Greer's greater point: depth of experience and expertise allows highly competent leaders to make difficult decisions and mentor others to success.
So… easy, right? Not so fast. Studies show organizations demonstrate a bias towards high leadership dynamic over high skill in selection, even when similar selection has led to failure.
In the end, executives must remember to hire for purpose. If we strive to build highly successful teams that achieve difficult goals, then the leadership for these teams must be exceptionally skilled.
Simply stated: competency matters.
As I've discussed many times before, I'm confident that innovation is the key to sustained success in business. It cannot be simple coincidence that the top companies in the world are also the most innovative companies in the world. As a leader, you must create a culture of restless renewal that drives innovation and change in your organization.
Why do I say innovation and change? Because innovation – the creative process of re-evaluating ideas – is not enough to deliver success. If leaders don't take the next step and test opportunities to evolve, then innovation is meaningless.
The pages of corporate failures are littered with stories of innovation that didn't deliver change.
For example, did you know that now defunct KODAK invented the digital camera… in 1975? In fact, nearly every digital camera and smartphone in existence today relies on some form of KODAK's patent for digital cameras. But rather than pursue a ground-breaking innovation, KODAK management passed on a segment-shattering change and stuck to film. While the company was innovative, the leadership lacked the vision to embrace change.
In my Twitter feed, I've collected a few more stories of continuous innovation this week, under the hashtag #restlessrenewal:
How Nick Saban's process would change your business
A nice look behind the scenes at how Alabama Crimson Tide coach Nick Saban's drive to lead innovation for his team helped build a the most elite organization in college football today (But still… #GoNoles!)
Chick-fil-A is making an unprecedented move to hook millennial moms
Chick-fil-A's commitment to innovation extends to every guest touchpoint, even the drive-thru
This Is How The Patriots Dynasty Was Built
A great example of how innovation – and restless renewal – drove the Patriots to become a modern NFL dynasty
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.
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.
If you consider the number of problems that can befall hotel customers during a stay, it can be a bit overwhelming.
Broken remote controls. Plumbing problems. Noise from adjoining guestrooms. Incorrect orders from room service. Room key issues. HVAC issues. Kids running in the halls. Not enough chairs at the pool. Slow service in restaurants. Incorrect room type at check-in.
And the list goes on and on.
Studies show that product problems account for nearly sixty percent of all guest complaints.
But there is one problem – over and above all others – that causes not only dissatisfaction, but a complete break in a hotel customer's trust.
What could negatively impact hotel customer loyalty so greatly? According to data-analysis firm Market Metrix, .
Service problems, on the other hand, make up a much smaller portion of reported problems, but have a much more dramatic impact on guest loyalty. Just look at staff-related problems in the table below. They are only 4.7% of reported problems. But staff problems punch way above their weight causing loyalty to plummet by over 26 points when they do occur.
On the other hand, the nearly 60% of hotel customer complaints COMBINED only account for a 12% drop in hotel customer loyalty.
This study begs the question: With such a large number of guest product complaints, how much time is your hotel spending to fix staff problems?
Television remotes can be replaced, but a disengaged hotel customer may be lost forever.
Here's a great quote about leadership and managing priorities at work and at home that inspires me from noted author and leadership guru Jon Gordon:
You can follow Jon on Twitter here: @JonGordon11
Ryan Estis posts a great blog on the value of sales positioning and how the role of the sales professional has changed in the last ten years, including this slide on the difference between the sales rep and the sales expert.
I'll give you two shots on who wins more business, but I bet you'll get it on the first guess.
More from Ryan Estis here.
The new year brings opportunities for introspection and resolutions. For me, that means trying to live the words of the Holstee Manifesto.
This is your life. Do what you love, and do it often. If you don’t like something, change it. If you don’t like your job, quit. If you don’t have enough time, stop watching TV. If you are looking for the love of your life, stop, they will be waiting for you when you start doing things you love. Stop over analyzing, life is simple. All emotions are beautiful. When you eat, appreciate every last bite. Open your mind, arms and heart to new things and people, we are united in our differences. Ask the next person you see what their passion is, and share your inspiring dream with them. Travel often; getting lost will help you find yourself. Some opportunities only come once, seize them. Life is about the people you meet, and the things you create with them. So go out and start creating. Life is short. Live your dream and share your passion.
Here's to a wonderful new year!