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Corporate Governance: Why Independent Audit Committees Matter

EHL ·15 May 2018
Since 2000, the audit committee has been put forward as an effective mechanism to limit fraudulent financial reporting. Following financial scandals such as Enron and WorldCom, the US Congress issued the Sarbanes-Oxley Act (SOX) in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.Sarbanes-Oxley requires publicly traded companies to have:the CEO and CFO certifying the financial statements;an effective internal control system put in place and maintained;an audit committee in charge of the oversight of the financial reporting process and of the engagement of the external auditor. The audit committee must be wholly composed of independent members sitting on the board of directors.In Europe, the audit committee's composition rule is different. The European Commission (EC) mandated in 2006 that each 'public-interest entity' should have an audit committee with at least one independent member. In 2014, the EC amended this regulation by mandating companies should be at least 50 percent comprised of independent members.In a recent article in the Journal of Accounting Literature, we examine whether the percentage of independent members sitting on audit committees, in different institutional settings, has an impact on the credibility of earnings.For this study, we examined a large sample of 7,656 earnings announcements by 1,420 listed companies in 15 European countries during the period 2006-2014.To measure the strength of the institutional setting, we used an index developed by Brown et al. (2014), which - in our view - is able to explain differences in earnings management across countries.We also used the World Bank's Governance Indicators to control for potential limitations of the index.Our key findings were as follows:Stock market reaction to earnings announcements is greater when firms have more independent members sitting on the audit committee;The percentage of independent members sitting on the audit committee very significantly affects investors' reaction in countries with weaker legal protection of shareholders' interests (i.e. weak institutional setting), but not in the case of stronger legal protection.Thus, our results suggest that the institutional setting does have an impact on the effectiveness of the audit committee. In weak institutional contexts, managers have more incentives to distort financial information to acquire private benefits, and investors may therefore rely on the independence of the audit committee to assess the credibility of earnings.Overall, by highlighting the impact of the institutional context on the independence of the audit committee, our results are particularly interesting for European regulators. They should also be interesting for boards of directors, which are in charge of the oversight of the financial reporting.As for the hospitality industry in Europe, we would encourage boards of listed hotel firms to opt for fully independent audit committees.Access the full study:Audit committees' independence and the information content of earnings announcements in Western Europe. Journal of Accounting Literature. Poretti, C., Schatt, A., & Bruynseels, L. (2018).

What's the Value of Hotel Loyalty Programs?

EHL ·14 May 2018
At the recent Young Hoteliers Summit staged at EHL, loyalty programs came under the spotlight during a panel session focusing on the luxury sector.Dorchester Collection is one of a number of upmarket brands which do not offer loyalty programs to guests. Instead, they offer loyalty programs to travel agents.I don't believe too much in loyalty, to be honest," said Chief Operating Officer Francois Delahaye. A guest might go to a certain hotel in one city with his wife, go somewhere else with his mother, and then take his children to another destination. Very rich people ... want to say, what's new in London? They need to have experiences. So the loyalty isn't there anymore. Giving them points to make sure they'll come back, is a way of insulting them."I don't want to insult my guests," Delahaye said. "I want to make sure we do everything (in terms of) the experience in our restaurants and bars, to make sure that, when they go to another place, they'll remember how good it was at Dorchester Collection."A student delegate queried his view, saying Delahaye had shaken her world as she had previously worked for the Marriott group.Delahaye didn't pull any punches. Guests may be loyal to your brand when traveling on business, he said, but when they go on vacation "they abuse the system.""They want to be in a suite but don't want to pay for it and they abuse the system because your investors (put their money) into those beautiful junior suites and they need to have a return. We're in a commercial business, we need to give to our owners the returns they deserve."Jurgen Amerstorfer, the GM of the Edition London, which is one of the Marriott's 30 brands, came to the defence of loyalty programs.He said he could understand Delahaye's position, agreeing that investors are seeking returns. However, he said, hotels do get reimbursed if points are used by guests.Because the hotel is charged for any points you accumulate, there's a fund - a 'pot', if you wish - and the hotel where the guest stays and uses the points, gets reimbursed. Real freebies, unfortunately, even in the world of hospitality, are not happening. So that's the bad news maybe.In separate interviews with Hospitality Insights on the sidelines of the Young Hoteliers Summit, the two senior executives elaborated further."All the airlines went on the (loyalty) route and it cost them a fortune," said Delahaye. "I don't see how we can be so arrogant to think our guests will be purchased, attracted by points. What they're looking for is recognition, some present they need, but not points.""That's good for the corporate market, it's perfect for them, but for us, I don't think so ... For our clients, we have so much respect for them that we don't want to have the arrogance of treating them like corporate people."Ammerstorfer also feels strongly about the issue: "It's an opportunity for us, as a hotel chain, to say thank you." Hotels, he pointed out, can also gain from loyalty programs through data mining. "The more data we have about you, the more we can really talk to you in a relevant way. And any company that doesn't do this and utilize the information they have, is losing out."So should your hotel offer a loyalty program or not?We asked Michael Levie, Chief Operations Officer at citizenM Hotels, for his views on whether loyalty programs are worth having. "They're a necessity for the brands because they're the only people they know and those are the only people they communicate with. That's their only lifeline left. All the other table silver(ware) has gone."Younger generations are more interested in recognition than points, Levie said. "I don't believe in frequent stay programs because basically it's legalized bribing. The real point hunters are out there but they're a dying breed."The 9th edition of the Young Hoteliers Summit was held at Ecole hoteliere de Lausanne March 12-14, 2018. Francois Delahaye of Dorchester Collection and Jurgen Amerstorfer of Edition took part in a panel discussion on 'Redefining Luxury in the age of the Millennial'. Michael Levie of citizenM gave a keynote speech at the conference.

How Much of a Threat to Hotels is Airbnb?

EHL ·11 May 2018
In our recent publication in the International Journal of Hospitality Management, we examined how Airbnb supply, price, and perceived quality affect the sales performance of incumbent hotels in the San Francisco market. In particular, we explored the impact of the development of Airbnb supply and users' satisfaction on hotel sales patterns, and whether different hotel segments have been affected by Airbnb's entry.Our methodologyIn conducting this research, we estimated a series of mixed models on data collected from 101 hotels in San Francisco neighborhoods. Our sample totaled 1,111 observations. In this analysis, we measured the trend of change in hotel sales performance as Airbnb developed its supply in the city.Our EHL partner, STR, anonymized data for the 101 hotels for the period December 2013 to February 2016. Hotels in the sample ranged from economy to luxury. We included in our study hotels' total revenues, total supply, number of rooms, years since opening, and renovation, as well as brand information. We also analyzed the impact of rates and customer satisfaction (a proxy for perceived benefits) on the pattern of RevPAR (revenue per available room).Our findingsOur analyses revealed that:Total Airbnb volume does not impact RevPar. Total Airbnb listings (i.e., total inventory) do not impact the growth trajectory of hotel RevPAR, which confirms the argument that Airbnb's offering a supplementary service. These results are also consistent with a 2017 report on the Airbnb effect in Boston, and with an STR 2017 study of 13 global markets.However,The average price of an Airbnb offer can have an impact on RevPAR. And that impact varies across different segments of the industry. Airbnb property prices had a positive effect on hotel RevPAR: the higher the price of the rentals posted on the platform, the higher the RevPAR of the hotels.Also,The increase in the quality of the Airbnb service has a direct adverse impact on hotel performance. The higher the average satisfaction score of an Airbnb property, the lower the RevPAR for the hotels in the sample. More specifically, every increase in the review score of an Airbnb property had a negative impact of -$25.54 on hotel RevPAR for hotels in the sample. Finally,This last effect varies across segments. Airbnb rental prices had an effect on hotels' RevPAR in the luxury segment, with an increase in RevPAR of $0.651 for every dollar increase in the average rental price of the Airbnb units.In conclusion:Not just a supplement: The study reveals that Airbnb's listings/offers do not merely supplement the lodging market, but rather show substitute characteristics in their long-term effects on hotel sales' patterns.Customers make comparisons : The effect of Airbnb on hotels sales is intricate, and appears to be based on customers' dynamic comparison of the price and value offered by the two products. The research results imply that guests do consider both products when booking rooms and compare the benefits of each through user reviews.Signs of disruption : The results provide empirical evidence that Airbnb will disrupt the hotel business, and that the more Airbnb users are satisfied with their experience, the more likely it is that demand for hotel rooms will decrease. Hotel managers therefore need to be aware of the level of service and price offered by Airbnb and other sharing platforms in their market. Airbnb offers in their locality can no longer be ignored and should be considered when developing revenue management strategies.Airbnb is slowly disrupting the lodging industry, going beyond the supplemental role claimed by its founders. The impact of the sharing economy is not related so much to the volume of the offers on the platform but rather on the pricing and price-to-value proposition as perceived by guests.Access the full study:Airbnb's effect on hotel sales growth, International Journal of Hospitality Management. Blal, I., Singal, M., & Tempal, J. (2018)

Accor Challenges EHL to Create F&B Concepts for New Luxury Hotels

EHL ·10 May 2018
In February 2018, Mr. Amir Nahai, CEO Food and Beverage for AccorHotels, put down a challenge for Ecole hoteliere de Lausanne (EHL) students: create an innovative future food and beverage experience for two of Accor's new luxury properties.As part of Dr. Marc Stierand's Creating the Food Service of the Future course at EHL, five teams of students competed to develop creative food and beverage concepts for Accor properties that will be opening in Paris and London. Mr. Nahai set the stage with Accor's Food and Beverage strategy and challenged the teams to create highly memorable F&B experience in the properties.Two teams focused on the Paris property, which will be the SO! Hotel located on the Champs-Elysees.One team developed a concept around the avant-garde, as Paris was at the forefront of the French movement. The team recommended a more experimental experience including a food lab, a bubble waffles restaurant and a 'No' bar concept - a space where drinks are available but it's not a real bar.The second team introduced a solution based on contrasts, for example, a black and white visual theme, or several sensory experiences in which the guests become part of the contrast and experience.The other three teams generated concepts for the London property, which will be a Raffles hotel in the former Old War Office building.One team's theme centered on the Thames River - with all its deep history and connection to London - by weaving the river theme throughout the hotel's food and beverage experience.A second team created a concept based on United People, United Cultures, which played on the rich, positive, multicultural traditions in the United Kingdom.The third, and winning team's theme was based on Timelessness: think classics like Chanel couture, a vintage Aston Martin car, or a fine Armani suit. They also played off the idea of Timelessness in terms of losing sense of time, or being so engrossed in your experience at the hotel that you forget about time altogether.Throughout the course, students worked to debate, develop and refine their concepts. An interim presentation to a team of judges served as a midway checkpoint on progress and methodology. Final Hollywood-style, multimedia presentations were delivered at the end of March for final judging, including with Mr. Nahai.Mr. Nahai was very impressed with the thought, energy and dedication the EHL teams exhibited while working on the challenge. He remarked:I was very interested in watching their thought processes to see how the students think critically to develop concepts and solve real business challenges. The multicultural makeup of the teams also led to richer and more dynamic solutions.EHL was excited to take on this creative project in close collaboration with AccorHotels, which includes among others the Raffles, Fairmont, Banyan Tree, Sofitel brands.

The Impact of Terror on Europe's Hotels

EHL ·10 May 2018
How have hotel markets in Europe reacted to terror attacks over the past three years? Tragically, Europe has endured multiple terrorist attacks in recent years. In the past 12 months alone, we've seen a shift in the way terror affects hotel performance, and this article will delve into how several markets reacted following attacks. (All figures are 12-month moving averages, indexed to the month prior to the terror attack unless otherwise stated.)We'll start by looking at France, which has endured several attacks over the past three years, most notably in Paris and Nice.The attacks at the Bataclan and across Paris on that horrific night in November 2015 had an immediate impact on hotel performance. This further exacerbated the declines that hotels had already been experiencing following the Charlie Hebdo attacks in January of the same year. Last November, RevPAR in Paris remained a full 11 percent lower than it was in October 2015.The Bastille Day attack in Nice in July 2016, which claimed 86 innocent lives, again caused RevPAR declines, although to a lesser extent than in Paris. Hotels in Nice took 14 months to recover from the attack and are now achieving a RevPAR higher than the month prior to the attack.In March 2016, Brussels hotels were already suffering due to the aforementioned atrocities in France. Then terror struck at Brussels Airport and Maalbeek metro station.Eleven months after these attacks, RevPAR had fallen 19 percent to 62.37 euros.Last November, RevPAR was still 7 percent lower than it was before the attacks.There were five separate terror attacks in Istanbul in 2016, along with the nightclub shooting on the first day of 2017. The city was also the center of a coup d'etat attempt in July 2016 and, for the purpose of analysis, performance has been indexed from that point.Istanbul has suffered the steepest RevPAR declines in Europe due to terrorism.By February 2017, RevPAR was down 27 percent at TRY144.87. Recovery has been rapid from this point, however, and RevPAR has since increased to TRY183.55.Attacks in 2017Since December 2016, when one of Berlin's Christmas markets was attacked, London (on two occasions), Manchester, and Barcelona have suffered terrorist atrocities. The impact on hotel performance, however, has been markedly different from those previously seen in Paris, Brussels, Nice and Istanbul.Only Manchester has seen a decline in RevPAR - by 1 percent - and this was driven solely by supply growth, up 4.8 per cent January-November 2017.Meanwhile, RevPAR increased in Berlin (+3%), London (+1%) and Barcelona (+3%) since each of their attacks.This is particularly impressive in London, as supply increased by 1.5 percent in the six months since the March attack.In Barcelona, however, the Catalan independence declaration sparked significant declines, with RevPAR down 12.5 percent in October.While it can be argued that the sophistication, or lack thereof, of a terror attack can have a bearing on visits to a city, there does appear to be a shift in traveler attitudes to cities that have been affected by terror. Travelers appear to have become more stoic in the face of terror and have accepted that, sadly, this is a danger that we face in our day-to-day lives, both now and for the foreseeable future.This article was originally published in STR's Global Hotel Study, a comprehensive overview of the hospitality industry covering over 100 markets worldwide.Global Hotel Study: 2017STR's Global Hotel Study gives an unprecedented, worldwide view of the hospitality industry. With detailed insights for more than 100 global markets, the report explores the highs, the lows, and the factors tipping the scale in each direction. Beyond the numbers, the greatest value of this report is that it ties together on-the-ground industry knowledge from STR experts located across 15 countries.For more information, click here.

Much Ado About Millennials and Hospitality

EHL ·10 May 2018
Go to a hospitality conference or forum these days and the topic of millennials is likely to crop up, and more so at the Young Hoteliers Summit staged recently at Ecole hoteliere de Lausanne. At the heart of the issue is a fundamental question for hoteliers.Should you be thinking of changing your offering substantially to cater for this digitally-savvy generation in their early 20s to mid-30s, and, if so, what are they looking for? Are luxury hotels too stuffy and will they need to have a major re-think?In retail, leading designer labels such as Gucci are going all-out to woo these customers, even though they risk losing some of their well-heeled, more mature consumers in the process.At the YHS, senior executives from Four Seasons, Dorchester Collection, Belmond and Edition discussed the issue at length in a panel session entitled Redefining Luxury in the age of the Millennial.At the start of the session, David Samson (AEHL, 2011), an Associate Director at Deloitte and an industry specialist in its Travel, Hospitality and Leisure (THL) advisory practice in London, set the scene.It's a hugely attractive market, two billion millennials globally, 60 percent of them living in Asia, with more than 400 million in India alone."They now have the highest spending power," Samson said, adding they are now the largest group of corporate travelers in absolute terms.But he cautioned: "They are notoriously disloyal and like to try new things," booking last-minute via online travel agents or OTAs. "They prioritize experiences over the hotel component of a trip and deeply care about meaningfulness and shared values of the companies they engage with."Although none of the panelists could be called a millennial, several did feel they shared at least some of their traits."People make the millennials sound like they come from a different planet, that they're not human beings," said Rami Sayess, Regional Vice President and General Manager with Four Seasons Hotels and Resorts."I really think it's about the mindset they represent and how they influence other generations. There are a lot of millennial wannabes.""From a behavioral perspective I think I'm a millennial myself," said Jurgen Ammerstorfer, General Manager of Edition London, as he feels he's 'super-curious.'Ammerstorfer told Hospitality Insights on the sidelines of the event that hotels "can't be, and shouldn't be, something for everybody. You should be everything for a small group and really cater to the needs of this particular group." Traditional, luxury hotels are 'more predictable' in their offerings, he said, whereas Edition's "focus is to tap into the experiential part of their stay."Edition is one of the Marriott's stable of 30 brands but its designer differentiation stems from Ian Schrager, the 'godfather' of nightclubs, discos and boutique hotels. "When the guests walk in (to the hotel), it's like "wow, this is awesome, fantastic. The music, the smell, the food. They interact with people and see people around them that they can relate to," Ammerstorfer said.Francois Delahaye, Chief Operating Officer of Dorchester Collection, which boasts hotels such as the Plaza Athenee and Le Meurice in Paris, says the group is focusing on creating trendy bars and introducing the latest technology."It's not a challenge for us," Delahaye told Hospitality Insights. "We have iconic hotels in iconic cities but we want to (attract) all the generations."The Dochester Collection is aiming to win over the hearts of the sons and daughters of the existing clientele. Delahaye muses that perhaps the 10-year old girl using the Athenee's ice-skating rink will come back to the hotel one day for her honeymoon. Innovation "will become tradition afterwards and then we will need again to reinvent ourselves. So modernity within the tradition is part of life."The Belmond group is also aiming to win over the hearts of the sons and daughters of their well-heeled clientele.Klaus Kabelitz, who will effectively have 'a white sheet of paper' when he opens the Belmond Cadogan Hotel in London as General Manager later this year, cites the example of the Belmond El Encanto in Santa Barbara, California.Everyone in Los Angeles thought that's for my grandparents," he recalls. But through highlighting a glitzy wedding on social media, they were able to change perceptions. So it's just changing the tone of your marketing, branding to say 'you know, you should come and try (the hotel).Le Meurice in Paris is also trying to change perceptions.It hired a young pastry chef, Cedric Grolet, who has become something of a celebrity with some 880,000 followers on Instagram.We're hiring millennials to help bring us innovation and 'seduce' the new generation, said Delahaye of the Dorchester Collection. So we're surrounding ourselves with, and welcoming, millennials in order to evolve.The Four Seasons group, which set up a design studio a few years ago to explore how its guestrooms should evolve, has engaged a consultancy to map out its strategy to attract millennials.It has formed a partnership with CGK, the Center for Generational Kinetics in the US, to find out what millennials are looking for and how the hotel chain can best cater for them.CGK had already been involved in auditing their social media channels and online presence "and they understood the Four Seasons culture which was critical for us," said Sayess.Each of its hotels will have internal and external review teams, "because then millennials of New York may be looking for something different from a millennial in the Maldives. The objective is to eventually come up with a playbook for every single hotel and resort," Sayess said.And there's the rub. There may be some two billion millennials around the globe, but as a group they are very diverse.Millennials in the emerging markets will have different behavioral and spending patterns to those in more affluent cities such as New York and London."We need to totally re-think how we approach this generation, how we facilitate their journey with us," Edition's Ammerstorfer said. Patience is no longer a virtue as speed and convenience have become all important. "I suppose we need to find a way of working around this. Some companies have done this very well already, while some others need to learn."

Wine in a keg? There's more to it than meets the eye

EHL · 9 May 2018
LAUSANNE, Switzerland -- In a collaboration between CG Industry, the IFV (The French Wine and Vine Institute), the School of Oenology and Viticulture of Changins, Bibarium, the Cantons of Vaud, Geneva and Neuchatel, and the Ecole hoteliere de Lausanne (EHL), the Ecofass-Vin wine in a keg solution is being studied and tested for the European market.Ecofass-Vin is wine on tap, thanks to a keg. The keg preserves the taste and quality of the wine while also providing a more ecological approach. One barrel of 20 liters replaces 30 glass bottles of wine, requires less space to store, and saves on recycling of corks, labels and wine boxes - which translates to a lower carbon footprint overall.Several famous winemakers (for example, Stephane Gros) and producer cooperatives (such as the Cave de Geneve) already trust the wine in a keg solution. Clients confirm they are saving money, with fewer partially consumed bottles and less corked wine. Using the kegs also saves on storage space and requires less handling by servers.For consumers, the wine in a keg solution offers the ability to sample wines and learn about different varieties without having to order an entire bottle of wine. They also value the less expensive alternative to bottles, the opportunity for better food and wine pairings, and the eco-friendly approach.In France, EHL research has noted that many consumers have already expressed a preference for wine by the glass. EHL will conduct further research among consumers who might resist the absence of service and presentation rituals of bottled wine to better understand any barriers.The market potential for the kegged wine product is substantial. In the US, the system has been adopted by more than 4,700 establishments, and conditions in Russia and Italy are favorable for wine in a keg and draught consumption. Closer to home, in the Romandie region, 14 establishments have adopted wine in a keg, and about half of the restaurants and beverage providers of the Romandie favor the solution, according to research from EHL.

Exploring Niche Markets in Hospitality: Seizing Untapped Opportunities

EHL · 9 May 2018
Yet, some interesting players have taken a different approach by going after niche markets.For example, , the General Manager of Intercontinental Davos, believes that "going after niche markets is not only a trend, it is the future itself." Fuglister encourages hoteliers to be on the lookout constantly for fast-changing patterns and to differentiate trends from fads. "Determining a niche market strategy will be fundamental for the success for any profit-oriented company", he said.In November 2017, Airbnb bought travel business start-up Accomable, which targets disabled travellers. As a result, Airbnb now offers 21 filters for guests seeking accessible travel accommodation. That's another example of reaching out to a niche market.'It's the future itself'Daniel Fuglister, the General Manager of Intercontinental Davos, believes that "going after niche markets is not only a trend, it is the future itself." Fuglister encourages hoteliers to be on the lookout constantly for fast-changing patterns and to differentiate trends from fads. "Determining a niche market strategy will be fundamental for the success for any profit-oriented company", he said.Fuglister was taking part in a panel session on untapped opportunities in niche markets at the Young Hoteliers Summit staged in mid-March at Ecole hoteliere de Lausanne.Mathew Nixon, who handles business and operations transformation at Dorchester Collection, told the panel session about the hotel group's approach to 'lean' niche markets.We categorize niche markets in the sense they could be royalty, they could be fashion, art, entertainment. They could be anyone of those items and we've actually been operating our business based on that for a long time.For instance, 45 Park Lane, a boutique London hotel, had "put a stake in (the ground) and said we're going to be the hotel that's going to be all around art. And when you walk into that hotel it's almost like an art gallery. So it's very boutique, very specialized and really targeting (niche markets) in saying we have sophisticated tastes, if you're a traveler who wants to come here, we will show what sophistication looks like." The hotel changes the art work on a quarterly basis "to keep it fresh and engaging," and is currently showcasing young, emerging talent from London."We think that's a perfect example of a niche market that we've gone after. Our challenge is to defend that because if we talk about competition today and about the speed of change, we've got to be leading. Guests come to us because they want to validate their status or place in the world and so they come through our doors expecting to be taken somewhere. And we've got to be very focused and very committed on where we do that."He gave the example of the Dorchester Collection's Plaza Athenee in Paris which is 'all about haute couture'. "You get that feeling when you walk through the door - the way you're greeted by a lovely lady in a fabulous red dress on avenue Montaigne which is the best shopping in Paris. They've put a stake in the ground that says we're about this, this is a niche business - fashion - but we're going to be for a certain crowd which appreciates fashion."Can a niche market ever enjoy the business volume of a mass market?Disneyland Resort Hotels, together with Disneyland Parks, aim to provide magical experiences for Disney fans, their target market. Yves Wencker, Director of Lodging at Disneyland Paris, stated that in the past 23 years, his theme park has attracted some 320 million visitors - hardly a 'niche' as such - especially as the park has seven hotels with 6,000 bedrooms.You're choosing the destination first. It's all about the storytelling. You want to have either a very premium location so you would decide to stay in a five star property or you want to enjoy the richness of a different franchise ... This is the DNA of Disney. We are into storytelling, we're into the magic.Disneyland Paris then serves as an example of how you can target a specific market but actually achieve mass market volumes. Certainly, this success is due in large part to the huge numbers of Disney fans around the world, with only seven Disneyland Parks around the world serving this fan base.Furthermore, not only is Disney celebrating Mickey Mouse's 90th birthday this year ("everybody has been touched by that magic"), but Disney is also growing several other movie-related franchises such as Pixar, Star Wars, and Marvel."All these franchises allow us to pursue new niches, new market segmentations where you will be able to experience what you're looking for, regardless of your age, throughout the year. And I think that's where the future lies. What will be your storytelling? Regardless of the hotel brand, it's about defining the segment, the storytelling, and the experience."Can an independent hotel create its own niche market?Adam Rowledge, the General Manager of Georgian House Hotel in central London outlined his hotel's experience in attracting and serving a niche market.Georgian House Hotel offers seven wizard chambers, with the majority of its guests travelling from nearby Victoria Coach Station to go on the Warner Bros. studio tour - the Making of Harry Potter. Video credits Business Insider UK Georgian House Hotel serves 'wizard breakfasts' for guests staying in the wizard chambers, and offers wizard cocktail-making experiences. Nor is Georgian House Hotel limiting itself to wizard fans, as it is also attempting to reach other niche markets through F&B experiences such as a 'pop-up' cheese afternoon tea, upcycled meal experiences, etc.Christopher Cox, the Regional Director for Central & Eastern Europe at Preferred Hotels & Resorts, highlighted the hotel owner's perspective in terms of niche markets. Guests can search for different travel 'experiences', he said, whether it skiing, beach holidays, family vacations, or heritage hotels, and each of these experiences can represent a niche market.Preferred Hotels & Resorts has four 'collections': Legend, Lux, Lifestyle, and Connect. Individual properties within those collections, Cox said, reflect the right experience and help hoteliers reach the right niche markets.We are a soft brand and we would never position ourselves as a niche company. However if you look at our hotels, obviously we have a lot of niche properties and destinations. And owners (choose) Preferred because they ... want to keep independent and keep control of their hotels.Fans. An untapped opportunity?Legions of Disney fans are the main target market of its seven theme parks. Georgian House Hotel attracts wizard fans. Dorchester Collection connects with lovers of art, fashion, and entertainment. Similarly, nhow Hotels targets professional and amateur musicians. Established hotel brands such as Intercontinental and Preferred Hotels & Resorts offer an array of properties aimed at different niche markets.By targeting a niche market, hotels can adapt their services and products to better serve customers and maybe face less competition, while achieving greater profitability.How can a hotel start tapping niche markets? A recent example is Airbnb staging a competition to win a night's stay at Lego House. By working with the toy company, Airbnb has been able to reach Lego's fan base. Hoteliers can start by hosting hobby fans, whether it be fans of Lego, sports, food, movies, or music. Over time, the hotel will identify specific groups of fans most aligned to its DNA and, in time, turn them into its own fans.

Restaurant Revenue Management Practices: Altering Customer Perceptions

EHL · 8 May 2018
Based on our research, we found that the majority of revenue management practices in the restaurant business are perceived as unfair (see Table 1). Customers though seem to accept price variations between lunch and dinner, as well as cancellations due to late arrivals.The practice which is perceived to be most unfair is the policy based on time spent at the table. Customers seem to completely reject this practice and most of the other practices.Table 1Our findings also showed that the perceived fairness of practices related to lunch/dinner, weekend/weekday and time of day price variations does influence whether customers intend to return to the restaurant in the future.The booking policy of a restaurant also has an impact on customer patronage intention. However, table management and control duration policies do not impact customer patronage intention, even if these practices are perceived unfair.Figure 1As it has taken some time for revenue management practices to become acceptable in the hotel industry, it might take more time for such policies to become acceptable to customers in the restaurant industry. At present it seems they are not yet ready for these practices.Restaurant managers, who want to apply revenue management practices, should be aware of the above findings and seek to 'educate' their clients about the advantages of such practices for themselves. This must be the priority for the company before applying these practices.Restaurateurs should communicate to clients the benefits of these practices via their employees. Indeed, when we talk about service companies, employees who are dealing with customers face-to-face are effectively our best channel of communication. So what are the specific benefits for customers? For example, price variations based on the date of booking can be very useful for clients.Nevertheless, it is the responsibility of the restaurant to make sure that this kind of practice is well understood by clients to create positive word-of-mouth.Another important issue is the profile of restaurant customers.Indeed, we discovered that young people accept better practices related to booking policy and table management than older people. The reason for that stems from the fact that they are more aware of such practices and try to keep a rein on their spending. So, they can see financial benefits for themselves from these practices.Restaurants wanting to adopt revenue management practices should also take into account the profiles of their clients.The bottom line is: applying these practices can only work if they create value for your customers, even before creating value for your restaurant.Access the full study:Are customers ready to accept revenue management practices in the restaurant industry. International Journal of Quality & Reliability Management. Reza Etemad-Sajadi (2018)
Article by Stuart Pallister

How Critical are Millennials for Hotel Brands? [VIDEO]

EHL · 8 May 2018
The topic of millennials and hospitality was featured in a panel session during the 9th Young Hoteliers Summit at Ecole hoteliere de Lausanne.How critical are the millennials for hotel brands? Andreas Scriven - Head of Hospitality & Leisure, Deloitte.When it comes to millennials, it's about the way of doing things which may be linked to service but they're just faster. Things happen faster. Brands keep on coming again and again, so saying that millennials are different is completely wrong.However, they're born with a smartphone in their hands, so they don't have time for bullsh*t.What hotels need to realise is about speed and convenience, more so than putting yellow floors in the lobby and having house music. You see so many of those new concepts that look good in 3D rendering but the fundamental behind it, the skeleton, is still the old hospitality. So I think as long as hotels view the service flow and process the same way and they just change the make-up, they won't get millennials.Youri Sawerschel - Founder and brand strategist, Creative Supply.We are currently transitioning, introducing online check-in and check-out. This frees up capacity for other services. We've just introduced a Whatsapp service so you can contact the concierge or guest relations manager and say, hey I need another towel or I'm in the city.By doing these, you can add more services that are appreciated, more personal services that will again create more positive memories.Jessica Emde - Brand manager, nhow Hotels.It's connecting with local experiences. It's about connectivity, creating connectivity (through messages shared on a screen in the lobby, etc.)And I don't think it's a young thing because even I enjoyed it and I'm not a millennial. But I'm a millennial at heart.Navneet Bali - Chairman, Meininger Hotels.If you look at lifestyle hotels like Ace or Hoxton in London, you walk into the lobby and there are people that look like a community but they're all on their computers, on their headphones and they're not talking to each other on a human level at all. So is that actually connecting?Andreas Scriven - Head of Hospitality & Leisure, Deloitte.At Meininger you'll find everybody is texting or Facebooking or whatever. But at the same time they want to connect. They want to really meet people as well. So it's a question of balancing both.Navneet Bali - Chairman, Meininger Hotels.We shouldn't focus on one generation. Millennials are important but so too are the baby boomers. Of course, it's important that you focus more on who you want to give your products to and then build on them.The millennials want things now and not only in terms of services. There will be other generations, so we shouldn't focus on one. It's never good to have one shot. Never.Alessandro Redaelli - VP, operations, Paramount Hotels and Resorts.
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2018 Hospitality Industry Outlook - Let the Good Times Roll... for Now

EHL · 1 May 2018
The International Hotel Investment Forum held in March (IHIF2018) presents an opportunity to sit back and take stock of where the industry is heading. As Hospitality Insights reported a year ago, the economic outlook at the time was cautious, but the pace of structural change in the industry was accelerating. This year, there was plenty of optimism despite some 'clouds on the horizon' in terms of the economy.There is an absolute wall of money looking at the hotel sector at the moment,said Keith Lindsay, Managing Director EMEA with CBRE Hotels, at the start of a panel discussion on investor's intentions in 2018 and beyond."2017 was a bit of a frenzy and with all the capital formation that's happening at the moment, it's quite likely there'll be a repeat of that (in 2018)." CBRE's Hotels Investor Sentiment survey sees 37 percent of investors looking for capital growth this year, compared to 24 percent a year ago.According to Alexi Khajavi, Managing Director EMEA and Chair of Hospitality and Travel at Questex, which stages the IHIF, there's plenty of positivity right now in the marketplace. "We've been in the longest cycle in the history of the industry," he told Hospitality Insights. So since roughly 2009 it's been quite a good cycle. I think everyone was looking over their shoulder, wondering when the party would end but the fundamentals are good."Russell Kett, Chairman of HVS London, said in an interview with Hospitality Insights on the sidelines of the Young Hoteliers Summit at EHL a week later that there is a 'greater understanding' of the asset class now and hotel investors are seeking 'good deals' in the sector."What they're looking for in the hotel industry is the opportunity to make good money and use that investment to get a stronger foothold in the sector. No longer is it the poor relation of real estate but an asset class in its own right.""I think there are a few more years left in (the industry cycle) and I look for signs and can't see any. Yes, there will always be shocks ... but for the most part, the industry is on a firm footing. I don't feel any declines coming our way."Kett moderated a panel discussion at the Young Hoteliers Summit on 'The Changing Dynamics of Hotel Ownership.' At the start of the session, he stated that in Berlin last year, everyone was thinking the industry wasn't doing 'too well' but the year finished strongly after 'a bit of a sluggish start', helped by the return of North American investors.During the YHS panel session, Marc Socker, Managing Director of investment management firm Invesco, said he'd never seen so much interest in the sector. "Importantly, hotels have a yield premium."So why are institutional investors interested now?"First and foremost, hotels is a growth sector," Socker said. "You can look at supply-demand fundamentals in Europe; demand is growing quicker than supply in most markets. Some of the biggest challenges European economies have are how do we cope with the influx of tourists coming into the market?"Socker pointed out only four percent of Chinese nationals currently have passports and five percent of Indians. "Every increase of one percent (in those populations with passports) leads to tens of millions of new travelers coming into the European market."Kett also regards this as a major opportunity. He told Hospitality Insights: "You only have to move the needle a little bit and anybody who's worried about demand growth need have no worries at all. And that's only two countries in the world. One of the staggering facts is that 90 percent of Americans also don't have passports. They have a lot on their own doorstep they can enjoy, but it's still a fraction of the total population that has traveled outside their shores.""There is a myth out there that hotels are this volatile asset class with very fluctuating income," Socker said, adding that, according to benchmark data, hotels outperform the all property index. In addition, the sector shows 'very little volatility' and was the only commercial asset class that "didn't go negative in terms of total return during the crisis.""So there are lots of reasons why hotels are interesting out there. They just have to be understood. It's a specialist class after all."Private equity, asset management and financial services firm Blackstone is also investing in the hotel sector, particularly resorts.Abhishek Agarwal, Managing Director of Real Estate, told the Berlin forum that Blackstone's investments were "underpinned by our belief in the fundamentals in the sector, especially if you look at the demand-supply side. There seems to be an imbalance."Spain is a major focus. Last year it saw a nine percent increase year on year in international visitors to 82 million, making it the second most visited country after France. "That's huge and good for the leisure business," Agarwal said.Given this backdrop of positivity, what's then the view of hoteliers?Michael Levie, Chief Operations Officer of citizenM Hotels, told the YHS in a keynote speech that the industry is at an all-time high.People are really looking to us. There's a lot of money available. For the first time, we're getting a seat at the table. So we're awfully excited. There's always been money, it was just never interested in our industry."What can we do with it? It will, for a short period, shows us quite a (number) of transactions. In the long run it will filter out a lot, because the minute the industry starts to shift a little in an economic downturn - and let's say the best of breed survives and others have a more difficult time - you will see a big shake-down again. So I think it will be a short-lived cycle."The boom days may be here - for now. However, further consolidation may be on the cards."It's not about optimism, it's about realism," Levie said. "As an industry, we don't offer great differentiated products. As an industry, we're not consistent in our products. As an industry, we don't produce brands." You can see 'incredible returns,' in other investment classes, he said.We've just never done that as an industry. So we're a cork afloat on the ocean and just because we're on top of the wave ... we shouldn't get too excited because it's a (long) way down again.

HITEC Amsterdam 2018: Why I Will Definitely Be Back

EHL ·27 April 2018
While I prepared for the conference, I read up on the latest technological innovations, and on startups trying to overthrow OTAs. I read about revenue management and machine learning. Stepping off the plane in Amsterdam, I was confident I had done my homework and was ready to keep up with all the technical conversations I was going to have.Things didn't exactly go as I had planned.After attending the E20X pitch competition, going to dinner with a dozen CIOs and CFOs, and covering a panel discussion on AI and voice recognition, I realized I was not at a geeky tech conference. I was at an international gathering of highly skilled professionals, versed in a myriad of disciplines that directly or indirectly add value to the hospitality industry. This was a place where the common denominators were passion for service, love for human interactions and a genuine openness to the world.It wasn't about tech. It never has been. It was about people.Hospitality is the ultimate people business. This statement is not only valid because hotels have to satisfy their guests. Many of the exhibitors of HITEC Amsterdam expressed concern for the well-being of hotel staff, the environment and the economic welfare of the populations at the destinations. No one was competing. Burgeoning entrepreneurs, young graduates and seasoned businessmen all coalesced with a single wish: to raise the bar of how technology can better serve the hospitality industry.Although I feel women are somewhat underrepresented in the industry, I am hopeful as I see this trend decreasing when we look at the new generation of hospitality managers. For instance, Ecole hoteliere de Lausanne's student base has a slight female majority, and we will definitely see more and more of them taking leading roles in the many exciting changes to come. This was perfectly illustrated by KITRO -- the food waste company that uses AI, created by two female EHL graduates, and ultimately won the Judge's Choice Award at the E20X pitch competition.I will be looking back at the three days I've spent quite fondly. I have met so many interesting people, each with their own past, interests and aspirations and each one has helped me gain insight into the future of hospitality.As long as this spirit lives on, I will be coming back to HITEC in Europe.Sherif Mamdouh is the external communications manager at Ecole hoteliere de Lausanne (EHL) and an official guest blogger for HITEC Amsterdam 2018, which took place 11-13 April 2018 at the RAI Amsterdam Convention Centre in Amsterdam, The Netherlands.

Ecole hoteliere de Lausanne (EHL) Wins Best Employer Ranking

EHL ·26 April 2018
LAUSANNE, Switzerland -- Ecole hoteliere de Lausanne (EHL) wins the title of Best Employer in French-speaking Switzerland in the category of medium-sized companies in the annual ranking of the magazine Bilan published this week.Offering a dynamic and pleasant work environment on the campus north of Lausanne, the 464 employees of 33 nationalities benefit, among other things, from home-office opportunities, seven weeks of vacation, access to sport facilities and up to three free meals a day.Reacting to the announcement, CEO of the EHL Group, Mr Rochat said "the quality of the work environment is one of the priorities set for the EHL management. It is important for us to be able to attract and retain the best talent to continue to provide the best training to our students, and maintain our leadership position in teaching Hospitality Management. We work on a number of fronts, whether in process transparency, gender equity, or the recognition of successes achieved within the institution, for example, sabbatical leave or the research award handed out each year within the faculty."Chief HR Officer, Pascal Gauthier adds: "As a university of applied sciences, the training and individual development of our employees is obviously important to us. We invest in continuing education at all levels of the organization. This is a very attractive benefit for our employees in an increasingly competitive job market.""We also strive to increase opportunities for our staff to communicate with management, through employee committees, expanded communication channels, satisfaction surveys and dedicated project groups. This principle of openness makes it possible to raise messages and new proposals in order to apply continuous improvement internally." Mr Rochat continues: "It's a great joy for us to receive this distinction on the occasion of our 125th anniversary, it shows us that we are on the right track."Ecole hoteliere de Lausanne (EHL) is an ambassador for traditional Swiss hospitality and has been a pioneer in hospitality education since 1893. It has created and inspired a unique professional community of over 25,000 hospitality managers, united by the values and the legacy of EHL.EHL is a leading university that provides learning solutions for enthusiastic, talented and ambitious students from 119 different countries. With undergraduate, graduate and certificate programs, EHL offers its students a range of on-campus and online education opportunities at different stages of their professional journey.EHL is regularly recognized as the best hotel management school in the world with the highest graduate employment rates in the industry. EHL is a member of EHL Holding SA, a Group dedicated to hospitality management education.

AI and Voice Recognition Explored at HITEC Amsterdam

EHL ·24 April 2018
I have had the pleasure of a front row seat at a very special panel discussion. The hospitality industry's top tech executives got together at HITEC Amsterdam today to discuss artificial intelligence (AI) and voice recognition. The challenge: to make sense of all of the changes happening in information technology and articulate value-adding solutions for the hospitality industry. How do we turn a land of confusion into a land of opportunity? The panelists had a few secrets to share.The panelists:Jorge Carmona, co-founder, VeovoxGwendolyn Graman, global proposition lead conversational commerce, CapgeminiKees Jacobs, digital proposition lead, CapgeminiHampus Ljunggren, head of strategy, Travel AppealFrank Reeves, co-founder and CEO, AvvioThe Moderator:Ian Millar, senior lecturer, Ecole hoteliere de Lausanne (EHL)Each panelist, through his own experience and colorful storytelling, perfectly exemplified the tremendous potential for an enhanced overall customer journey through technological innovation.Exploring future usages of these promising, yet still untapped, technologies is something that entices a growing number of companies. The required investment (time, training, expenditure) remains however, a major roadblock in the quick adoption of the many tools, products and services being developed.Communication is changing, expectations are changing too, and immediacy has become expected of anyone under the age of 35. If you have a question, you want an answer NOW. If you need room service to bring a toothbrush up to your room, an unanswered call by reception will kill your customer satisfaction.From a conversational point of view, chat bots offer the possibility to cater to this (slightly capricious) expectation that everything must be delivered at the very moment we have an enquiry. Voice recognition is said to greatly enhance the in-room experience. But let's put all the technical stuff to the side for a moment...One of the most interesting ideas, on which all the panelists seemed to agree, was that you can have all the tech in the world, but if you don't reach your customer at an emotional level, you won't make a difference. This statement takes on a whole new dimension when it is made by people who make a living from interacting with emotionless machines."Rational drivers are still too predominant. Emotional drivers need to be further explored and leveraged," said panelist Kees Jacobs of Capgemini. Only then will innovations such as voice recognition make an impact. And when it happens, it will definitely be disruptive.Who cares if we can control our room with our voice, you ask? Well... humans are lazy (yes, you too). Convenience and ease of use have been the root of much of the world's innovation -- ever since that one guy got tired of pulling on raw meat with his teeth, and decided to smash a rock and use its cutting edge (see what I did there?) to cut through those annoying nerves.It's not only about using voice commands for single actions, such as "switch on TV." Yes, you could probably spend fewer calories just pressing the little red button on the remote. Where it gets interesting is when several actions can be initiated by a single voice command. Imagine the command: "computer, I will go and cook now." The oven turns on, the kitchen lights turn on and your favorite cooking music starts playing on the speaker located in the kitchen.Frank Reeves, whose company Avvio uses AI to offer a unique booking journey, agreed and explained that when it comes to booking engines, they all "serve up same experience to everyone." AI effectively allows a company to individually and proactively engage the user, personalize the experience and incorporate said emotional triggers. This is done, he says, by building up users' digital footprints.Overdependence on OTAs can be upset by using AI to directly reach customers with that missing emotional element. It often equates to basically having an online brochure that offers the same experience to a 21-year-old American spring-breaker and a 76-year-old Turkish grandmother. Why cross-sell car rental services to someone who doesn't have a driver's license, for instance? Good use of technology allows you to make the journey more relevant, more engaging. Show your customers you know them and you've thought of how to make their experience unique.Jorge Carmona's voice recognition company Veovox also recognizes the emotional implications of a seamless voice command experience. Preliminary feedback has shown a tenfold decrease in customer complaints. This is not only good for the sake of increasing customer satisfaction. Getting back to the psychology of it all, we can see that bad voice recognition increases frustration. Frustration raises anxiety, and anxiety is a big deterrent when it comes to spending. So bye-bye to cross-selling and up-selling. Gwendolyn Graman of Capgemini echoed this strong customer-centricity as well. "Focus on the customer. IoT and conversational interfaces must be used to better understand the customer's wishes and offer concrete assistance," she said.It turns out AI and machine learning isn't only good to "stalk" your customers. It's also good for "self-stalking." Hampus Ljunggren, head of strategy for Travel Appeal explained how he uses big data to help hotels adapt to risks and opportunities almost in real-time by "scrapping all available public data relevant to the hotel and its surroundings, identifying patterns and making them actionable through daily recommendations to the hotels." This can help with things such as pricing, cultural specificities of certain guests, or any other touchpoint where a potential improvement has been identified."Voice is also an interesting way to identify someone. Recognizing the speaker offers the possibility of tailoring the answers given by the voice recognition device.None of the panelists seemed too worried about data privacy issues and agreed that people have become used to sharing their personal information, especially younger generations. In fact, millennials expect to have their personal data used to improve their experience. The underlying tacit agreement is therefore, "I give you my personal info, and you make my life easier."AI could create a far better, overall human experience. As a hotelier, if you know what flight your guest is arriving on, send him a WhatsApp message asking if he would like an early check-in (we all hate those 15:00 check-ins!) or if he would rather book a massage while he waits for his room to become available.Exceeding the customer's expectation is when you really start tapping into the emotional side of things. And it's a win-win: you gain legitimacy for cross-selling or up-selling, and the customer is proactively provided with solutions to problems he didn't even know had a solution.Sherif Mamdouh is the external communications manager at Ecole hoteliere de Lausanne (EHL) and an official guest blogger for HITEC Amsterdam 2018, which took place 11-13 April 2018 at the RAI Amsterdam Convention Centre in Amsterdam, The Netherlands.

The Art of Pitching: Is it Overrated - or Essential?

EHL ·18 April 2018
Pitching... that thing we force notoriously introverted geeks to do for funding. The main idea is that an entrepreneur -- unless his name is Elon Musk or Tony Stark -- has limited resources and needs the financial support of pockets that are substantially deeper than his own.If you, as an aspiring business leader, want potential partners and investors to buy into your idea, you need to sell it in a concise, explicit and exciting way to a floor of overconfident, seen-it-all financiers who might not know much about the technical complexities of that next big idea you're certain to have found.The idea that a unilateral monologue, performed onstage by an individual who has little to no public speaking experience, would make or break a startup sounds sub-optimal at best. Being a poor public speaker or salesman doesn't necessarily mean you will be unsuccessful as a businessman, leader or creator. Is it not possible, after all, to have an absolutely incredible idea that is just too complicated to be presented in two, four or even eight minutes?Today, pitching is an integral part of the entrepreneurial ecosystem and an inevitable hurdle on the road to financial sustainability. However some people call it out for being an overrated exercise.Derek Lidow, author of "Startup Leadership" said, "The problem is that pitching is a waste of time, and teaching this as a primary skill of entrepreneurship is misleading and sets the wrong priorities for aspiring business leaders."He goes on to say that "there is no evidence that people who give the best pitches have materially better chances of business success than any other entrepreneur with the same motivations, traits and skills presenting the same idea."This pitch mania can give way to a critical analysis where form trumps substance, and becomes a distraction from the core competencies of the entrepreneur who has all but lost sight of his own priorities. Basically, pitching can be a dream killer.So why do we still pitch?Surely, there must be a better way for VCs to spot startups with potential, right?Well... not really. Pitching is a MUST, and no other process allows you to gather your thoughts, distill them into a crystal clear proposition, and give an opportunity for potential investors to size you up. So, dear entrepreneurs: Rejoice! Your efforts, your endless rehearsals and those nightmares you've been having where you realize mid-presentation that you forgot to put on pants will not have been in vain.First of all, the only way for the world to become aware of that awesome idea you have will be for you to go out there and put on your storytelling hat. And it turns out, there are people who make a living out of listening to these stories and who even give you a whole lot of money if they like what they hear. However, angel investors, VCs or PE firms are on tight schedules and have an ever-increasing amount of people to listen to -- so yes, you need to make your mark when you do get a few minutes of show-and-tell.Dr. Margarita Cruz, a strategy professor who teaches an entrepreneurship class at Ecole hoteliere de Lausanne (EHL) said it best when she explained in a recent interview that "even if entrepreneurs have really good ideas and business orientation, they need to stand out to be able to attract resources."Carson Booth, a technology startup consultant and former Starwood senior vice president of global property technology, explains the exercise of pitching as necessary because it "hones a founder's or their marketer's ability to succinctly define their product, market and approach." "It's a bit like knowing within a few seconds whether you'll like a song or not," he added."The goal should be to distill the idea down to what interests the audience and elicit a desire for more information." - Carson Booth.Booth, who says pitching is indeed an essential part of the business creation process, also makes a point about the choice of the speaker being an important indicator of the founder's leadership skills. After all, the job of a CEO is to know who within his team is most suitable for each task."Sometimes there is no one else than the founder to go on stage, and that's OK, but they need to work extra hard. However, they should remember the audience is on their side and rooting for them," he said.Openness to constructive criticism and a generally positive demeanor will go a long way to gain their favors.EHL's Dr. Cruz also points out the fact that preparing for the pitch isn't only relevant for external audiences. "Learning to pitch their business idea helps entrepreneurs highlight their value proposition and prioritize the most relevant parts of their idea." This process will efficiently work to ensure the plausibility of the project."Being able to pitch without having a sound idea, or without testing that idea in advance, does not really work. From that point of view, I think pitching complements the entrepreneurial process," she added.It also turns out, apart from the obvious reasons to attend pitch competitions, like meeting investors or networking, pitching serves many other purposes such as probing your future consumers, getting a healthy dose of motivation from the buzzing corridors of the convention center, or witnessing other great performances that can truly inspire you.Finally, if we spend our time complaining about pitching being "form over substance," we need to be reminded that this is, in many ways, how consumers react to products. This is basically the concept of brand value, and it will be a major determinant of your success in business -- so we might as well get attuned to it as early as possible, and even enjoy it while we're at it!Initially posted on HFTP Connect on April 10, 2018.HITEC Amsterdam 2018 featured its successful pitch competition E20X, where 11 innovative hospitality technology startups presented their breakthrough business concepts to an expert judges panel and a roomful of industry professional spectators. EHL Alumna Anastasia Hofmann and Naomi MacKenzie from Kitro Waste Management won the 2018 Judge's Choice Award.

What do Young Hoteliers Look for in Their Career?

EHL ·28 March 2018
In the new era of asset light strategies, the acquisition and retention of young talent is becoming a strategic function for global hospitality companies. Winning companies should embrace new talent strategies to outperform their competitors in their respective markets, and better prepare for upcoming challenges from disruptive hospitality companies.For the 9th year in a row, the Young Hoteliers Summit Employer Rankings Report explores career path motivations and workplace characteristics young professionals view as the most important. This year, 1766 completed the survey from 95 nationalities across 198 schools.Key takeaways:Career Path AnalysisMore than ever, intrinsic motivation is key for motivating young graduates to work in a specific company. Development and learning opportunities, company culture and work life balanceare key factors graduate consider when choosing a job. Hotel companies should seriously consider these factors to attract and retain talent.There is also a general increase in interest for traditional hospitality in the past 3 years. This is very promising for a relatively slow changing industry. Hotel companies should benefit as much as possible from this new motivation and continue widely promoting the industry to continue this positive momentum.Hotel companies should also consider other industries with similar traits as hospitality (banking, events, and luxury and fashion) as competitors to attract talent. Highlighting the core values of hospitality (relationships, teamwork, service) would set hotel companies apart from the other industries.Communication & HR PracticesIn order to reach and attract new talent, hospitality companies should provide opportunities to have direct contact with the company environment by offering personal experiences within the company. Additionally, young graduates place greater value and trust on information or experiences provided by peers. Nowadays, brand and work environment reputations are co-constructed with your potential employees.To further enhance young graduates' interest to work for a particular company, hospitality brands could offer potential employees greater insights into their products and company culture.It is imperative to provide opportunities for young graduates to experience company's competitive advantages in terms of working environments.Hospitality companies should also aim to highlight their internal culture and job offering on company websites and presentations.RetentionAs mentioned by KPMG (2017), young millennials need to perceive the overall purpose of their work in order to truly commit themselves. Hospitality companies should focus on delivering their employee value proposition in order to reach high retention rates of new graduates. Clear career development and learning opportunities should be presented to the new graduates even during the recruitment process.When considering turnover of employees that have been working for over a year at the company, fair monetary compensation as well as an adequate work life balance, should also be taken into consideration.Brand AwarenessThe top 10 preferred brands in the Luxury & Upper Upscale segment were fairly similar to the past two years. On the other hand, the results of the top 10 brands present in the Upscale & Upper Midscale segment are more varied. This is a possible signal to greater uncertainty or lack of knowledge of these particular brands. Therefore, greater brand exposure is necessary for Upscale & Upper Midscale brands. Lower scale brands should seize this opportunity to become more visible in the job market and recruit a larger share of young graduateDownload the full report nowAbout Young Hoteliers Summit and the RankingsA student-led initiative, the Young Hoteliers Summit (YHS) gathers each year representatives from approx 40 international hotel schools at the EHL campus for 3 days of conferences and networking.The YHS Rankings are an integral component towards achieving the mission of YHS, which is to improve opportunities for young talent by putting global hotel companies in the spotlight. Since 2010, hospitality students worldwide have been asked to give their perception of hotel companies in terms of employers and recruiter

RESEARCH SUMMARY - The Swiss Tourist Satisfaction and Happiness Index

EHL ·27 March 2018
Switzerland has traditionally been one of the world's best tourist destinations largely because of its service excellence in tourism. Yet the success of the tourism industry also depends on continuously delivering high-quality travel experience to tourists.The Swiss Tourist Satisfaction and Happiness Index has been developed to provide accurate measurement of tourist satisfaction for the Swiss tourism industry.So what factors should be taken into consideration when assessing tourist satisfaction? Download the summary of the study here:

Brand Building: a More Cost-Effective Way to Raise Your Company's Profile?

EHL ·26 March 2018
When Arnaud Bertrand and Junjun Chen finished their studies at Ecole hoteliere de Lausanne in 2008 they went on to set up HouseTrip, an alternative accommodation start-up which would compete head-to-head with Airbnb and other online travel agencies.Initially the couple had just a laptop, an internet connection and an idea. They went literally from zero to annual revenues of 100 million dollars within just five years or so. Junjun takes up the story. "We were still in school, doing our second internships. We were in London and wanted to go to Scotland but we were students so didn't want to spend too much money. So we wanted to rent an apartment in a nice, traditional Scottish house. We did find one through craigslist but the logistics part was very painful because we needed to contact the owner by phone and arrange payment by bank transfer. So it was just really painful."They had - by chance - stumbled upon a gap in the market and wondered why it was that although online travel agencies like Expedia and Booking.com focused on hotel bookings, no one was providing similar services for holiday homes. "We said, 'look, no one has done it. Let's do it ourselves.'"That was easier said than done. The first major challenge they faced was how to raise funding, based on little more than an idea. "(We had) no track record and no work experience because we had just studied at EHL," says Arnaud. As it turned out, some of their EHL classmates were 'crazy enough' to invest in the new venture and helped to get the project off the ground.That initial funding helped but Arnaud and Junjun would need to go on to raise substantial funds from venture capital, some seventy million dollars over several years. Part of the problem they faced was in marketing the start-up. They would raise millions but would end up spending massive amounts too, pumping money into keyword marketing."Most of [the money] went on marketing and hiring," says Arnaud. "We had a fairly large team, north of 200 people by the time we sold the company (to TripAdvisor for an undisclosed figure in 2015)."And their biggest mistake? "I would say probably using Google or paid marketing as our main acquisition channel," says Junjun. "Basically it works and we became addicted to it. And then at one point we couldn't get rid of it.""The best marketing is free marketing," adds Arnaud, whether that's word of mouth or getting media coverage. That means engaging with journalists and trying to concentrate on public relations rather than spend huge amounts of money on digital marketing, which proved to be a losing prospect.But to get the right word of mouth, you need to make sure you have a great product. "No one is going to speak about a so-so experience."Eventually, after several years of scaling up the company, Arnaud and Junjun chose to exit their venture rather than aim for an initial public offering or IPO. (HouseTrip is now one of 20 travel media brands belonging to TripAdvisor). "I don't have any regrets", says Arnaud. "We sold at the right time.""You don't have so much strategy as you have dreams. Of course you dream of the best possible exit from your company but you have to be realistic and opportunistic as well."Now they've set up a new virtual reality dating company, LovInVR, and plan to learn from their mistakes by focusing on building the brand rather than spending millions on performance marketing.Arnaud says that, after selling the company, he wrote a 600-page book, more for himself than for possible publication, on the lessons learnt, "especially all the mistakes we made which were many.""We created an internet start-up that, 10 years down the line, is still alive, that's already success ... It's actually why being an entrepreneur is so fascinating because you get to learn so much from what you're doing."HotelTonight: An integrated approachAnother tech firm which is focusing on brand building to get its message across is HotelTonight, which has just celebrated its seventh anniversary.HotelTonight VP, Amir Segall, came to Ecole hoteliere de Lausanne recently to speak to students about the company which aims to offer clients the best deals for last-minute hotel bookings via its mobile app.Segall told Hospitality Insights that brand building is critical for the company. Brand awareness, he says, is its biggest opportunity - and challenge."We feel we have a really good product and have mastered the customer experience. So it's really about growing that brand awareness, letting more people know about this great product, this great service you can use, and the way we're dealing with that is that we have an array of marketing initiatives, starting from online marketing, focusing on mobile and trying to stand out and differentiate the way that we speak about our brand."In addition to PR activities, HotelTonight has formed strategic partnerships with the likes of Chelsea Football Club in London and Madison Square Garden (home to the Knicks and Rangers) in New York. For fans of these sports teams there's an obvious connection as they'll be looking for hotel accommodation when going to away matches, but there's also a brand relationship. "(This) is a very good way for us to associate ourselves with brands that have more awareness than we do and really create strong trust with customers."The partnerships are part and parcel of HotelTonight's branding and marketing mix, which also includes online and customer relationship management (CRM) activities. "We feel that you have to have a really integrated marketing approach so we want customers to see us in different places and this way we believe we're creating trust." The company has recently released HT Perks, which the company regards as a 'modern, innovative take on the traditional loyalty programs provided by legacy desktop OTAs (online travel agencies).'An IPO might be an option in the future but for now HotelTonight is focusing on its core business. "It's about becoming kind of the most prime way to book a hotel last minute and we like to think of ourselves as a mobile OTA. So we want people to be thinking about us, to be repeatedly using us as the mobile option. And so that's also what we focus on.""So right now we're very much focused on mobile, continuing to build the business, growing the business, expanding in the markets where we operate. And that's the thing that we're focused on right now."Learning from experienceHouseTrip co-founders Arnaud Bertrand and his wife Junjun Chen are also focusing on their new business, LovINVR, determined that they won't make the same mistakes this time around. "I'd say we're less naive about it," says Arnaud, adding that they believe virtual reality will be the next big thing in the digital sphere. "Dating in virtual reality completely makes sense for us. So we think the potential is absolutely enormous.""I think we're a tiny bit wiser after the HouseTrip experience, so we're trying not to repeat the mistakes that we made at HouseTrip. But I'm sure we'll make plenty of new ones." That means a more cautious, organic approach to growing the company and building brand awareness, rather any sort of dependence on pumping millions of marketing dollars into online advertising.In a presentation at EHL last year, Arnaud advised would-be entrepreneurs not to push for growth in revenue, but rather to focus on creating 'a great product that people love', even if it takes several years."My mistake at HouseTrip was to choose not to develop a brand but to go for so-called performance marketing, so to spend a lot of money on Google, buying keywords on Google and so on and I continued to do so because it worked. We were, at one stage, spending north of 40 or even 60 million dollars a year with Google."While the company was earning 70 to 80 million dollars, that still made sense. But once competitors with deep pockets began bidding for keywords, and potential customers began going directly to Airbnb and other companies than use Google search, the cost of keyword advertising became a major issue as traffic fell."It's a bit technical but that situation led us a stage where we were paying 60 million to Google still, but instead of getting 90 million, we were getting 50 million back. So we were losing money and that's a bad situation to be in.""So my recommendation would be, instead of (using) performance marketing where you don't grow your brand, try instead to go the harder way, grow your brand. It's harder, it's a lot more work, you need to spend all day calling journalists, involving your community, to develop positive word of mouth and so on ... but it's a great investment because those people will come for free and they will spread the word if your service is good.""So I would recommend you spend zero money on marketing and that's what I'm going to do with LovInVR."Dr Maggie Chen Meng-Mei, associate professor of marketing at EHL, writes:A strong brand focuses on providing a better solution than competitors can offer. Through the delivery of its unique value proposition, a brand grows its fan base and benefits from the word of mouth of passionate advocates. These statements remain true, even with all the emerging digital marketing tactics.The challenges of branding are never about using the newest digital tactics, but cleverly leveraging owned, paid, and earned channels to reach, convert, and retain customers. In the digital world, the traditional media and promotional mix (promotion, advertising, public relations, personal selling) still work.Instead of bidding for keywords, focus on finding customers who may need your solutions, as shown in the partnership between HotelTonight and Chelsea Football Club. Be present - or better still, top of mind - when customers discover they have a problem. An effective solution may convert a first-time user into a repeat customer or even an advocate.As for the new approach taken by LovInVR, which is relentlessly executing its value proposition, it will organically build its own fan base, and eventually become a powerful brand.

Protecting the Hotel Brand by Providing 'Reliable' Information

EHL ·23 March 2018
Elle Darby may not be a household name but this video blogger does have influence in social media circles with some 87,000 YouTube subscribers and 76,000 Instagram followers. According to media reports - some 114 articles in all across 20 countries -- she contacted the Charleville Lodge Hotel in Dublin, offering the owner exposure on her social media channels in exchange of a free stay for her and her boyfriend over the Valentine's Day weekend. The hotel owner declined, posting his reply online and publicly banning all social media influencers from his hotel.This provoked a series of back-and-forth messages between the two parties on social media. As a result, Elle Darby lost some of her followers, while the hotel has been criticized by other bloggers for his generalized attack on social media.For us, the episode raises concerns about transparency with regard to bloggers and the way they operate in relation to the hospitality industry, as it highlights the role of information and its sources.By definition, the industry is characterized by what economists call asymmetric information. Often, when services are involved, customers cannot know beforehand what the quality of the service itself will be. How can you predict with any accuracy the level of service on offer?Hospitality relies on signals and these can come from a range of sources such as professionals (for example, the number of stars attributed to a hotel) but also from previous customers that have already stayed at the hotel and provided their feedback and observations via the likes of Tripadvisor, Booking.com or Expedia.Nowadays, bloggers have the power to control, in part, or at least influence some of those signals via their social media accounts. Generally speaking, in terms of the economy, if the sources of information are biased, this could lead to market failure and a reduction in social welfare. In plain English, unreliable information could lead customers towards making the wrong decision.In Elle Darby's case, she was seeking a personal advantage in exchange for posting 'unreliable' information on her social media channels. This is a typical case demonstrating tension between private benefit (Elle Darby wanting a free stay at the hotel) and the social interest (in terms of consumers wanting to choose a hotel on the basis of reliable information). In fact, Darby had implicitly offered positive feedback on her social media channels even before verifying the quality of the Charleville Lodge, which, according to its own website, has been described as 'palatial' but is not Buckingham Palace and so guests should not expect 7-star service.Another hotel may have decided to play along with the social media influencer and she may indeed have provided positive feedback for the hotel in exchange for a free stay over the Valentine's Day weekend, encouraging paying customers to go there.The takeaway from the incident and media storm is this: sometimes more is less. The huge amount of information out there online is making it increasingly difficult for all of us who get our news and information from social media channels to verify the sources of that information. The challenge now facing hoteliers is to develop their brands and build on the reputations of their hotels to ensure their messages cut through all the noise.
Article by David Gabriele

The Evolution of the Booking Journey

EHL ·22 March 2018
We've all done it...We've all stayed at a beautiful hotel, visited an amazing destination, or eaten delicious food at a first-class restaurant. We've also taken great pleasure in telling our friends and family about our experiences. That is to say, we have become influencers or trusted brand ambassadors.hConversely, we've also asked for, and received, recommendations from our friends and family, and acted upon these recommendations. In other words, we have been influenced by people we regard as trusted influencers.This, as we know, is word-of-mouth, however it is offline and unscalable.Every hospitality business seeks this positive feedback as it enables them to grow organically.Nowadays, word-of-mouth is digital via social media and scalable, giving hoteliers a huge opportunity to showcase their properties in an authentic way and reach hundreds of thousands of potential customers via their mobiles.InterContinental Hotels Group stated recently that "mobile will account for 40 percent of online travel sales by 2020". According to McKinsey, one in every four consumers also uses social media to make purchasing decisions.What we're seeing is the evolution of three key pillars. Firstly, consumer behavior related to the purchase journey. Secondly, the way consumers interact with hospitality businesses through mobiles and, thirdly, customer loyalty dynamics. Hoteliers must now sit up and take note, or ignore this at their peril.If we take the issue of loyalty, some hotels are under the illusion that loyalty starts when the customer checks in. This is no longer the case, given the changing dynamics of the three pillars mentioned above. By using digital influencers, hoteliers have the opportunity to build loyalty before guests even come to stay. You can do this because the images shared by influencers evoke emotion and desire, so at the point when the potential customer starts looking for a hotel, your property should be the first they go to.The key takeaway is simple. Hoteliers can begin building loyalty even when guests are planning their next trip and so can potentially negate the influence of the competition before the booking stage.So, what exactly is a travel influencer?Travel influencers are highly engaged, trusted individuals, who travel around the world showcasing their adventures and experiences via social media. This includes promoting the properties they stay in and where they eat.Their posts normally tag the property's social media accounts (the most important for hotels now being Instagram), so their followers can easily find your hotel's page, which would include direct links to your property's website.Why is Instagram the most important platform for hoteliers?Instagram is the fastest-growing social media platform to date, with over 800 million active monthly users and it's growing by 100 million new users every six months.Some 60 percent of online adults have an Instagram account. Around 32 percent of teenagers consider Instagram to be their most important social media network. These are our future customers.These statistics speak for themselves. However, there is one in particular that is most compelling, and stands above all others. That is, how many of those 800 million users use Instagram in their purchasing journeys. In March 2017, more than 120 million Instagram users visited a website, got directions, called, emailed, or sent a direct message to learn about a product or service.Leisure travel purchase decisions are based on emotion. Beautiful images evoke emotion and the human brain processes them 60,000 times faster than text.Benefits to hotelsConsumers are looking to have everything at their fingertips and, as we all know, online travel agencies or OTAs have capitalized on this. Now a potential customer is just a few clicks away from making a booking via an app.It's another room sold, but the OTAs take 15-20 percent in commission and that affects the hotel's bottom line.The loss in revenue doesn't stop there as it is very difficult for the reception team then to upsell and cross-sell, reducing potential revenue still further.Our clients tell us that a direct booking increases profitability by 18 percent on average, hence the need to by-pass the OTAs.That said, OTAs are here to stay. However that doesn't mean hoteliers can't use consumer behavior and technology to their own advantage. By building online relationships with potential customers through the use of influencers and then keeping those prospective customers engaged can pay dividends.We must stress though, it is enormously important to communicate regularly with your new followers to maintain loyalty and maximize return on investment (ROI). By doing this, hotels can enjoy the benefit of the long-tail effect. This means that as long as the prospective customer keeps following the hotel's social media and online accounts, the hotel can market to them indefinitely for free.In terms of timescale, this is a marathon, not a sprint. So consistent engagement with the most relevant influencers in order to embrace the power of recall marketing is fundamental.This is what the Marriott's former Vice President of Global Creative and Content Marketing, David Beebe, has to say on the subject. "Influencer Marketing is here to stay and it should play a central role in your strategy to win the hearts, minds, and wallets of consumers."
Article by Stuart Pallister

IHIF 2018 - Global CEOs Panel: Growing Brands to Capture Market Share

EHL ·21 March 2018
Five CEOs, some 90 brands with more on the way, and an estimated combined worth of hundreds of billions of dollars. Five leading hoteliers from Accor, IHG, Hilton, Wyndham and Choice, were on stage together in Berlin for a panel discussion entitled 'Evolution of the Brands' at the recent International Hotel Investment Forum.During the panel session, Chairman and CEO of AccorHotels Sebastien Bazin put the financial worth represented by the five speakers at some 600-700 billion US dollars. Accor alone, he said, has 4,300 hotels worth well over 100 billion US dollars. "Put Marriott on the panel," he said, "and you're talking one trillion US dollars being put at work, only behind our brands."Owners are mainly interested in mitigating downside risk and return on investment, he said. As for brands, they want traffic and a brand which will resist downcycles. "He wants a 'big brother' to help him in downturns, he wants to make sure you can put more money at work because he knows you and trusts you.""So the first thing we have to do is listen," Bazin said, "because owners have different expectations. They don't have the same interest rate environment. They don't have the same experience of risk."He gave the example of Dubai owners who cancelled a contract after four years even though Accor had "done a hell of job delivering on every metric that we thought was valuable for the owners." However, the owners actually wanted travelers from the Gulf region rather than Europe, as the hotel was in their mall and were more likely to spend money there.More and more brands and sub-brands are coming on to the market. Accor itself has two dozen - half created, half acquired - even though just four years ago Bazin had thought brands were irrelevant."I was dead wrong. I thought at the time brands could matter less. And it's actually the opposite happening. Brands have enormous value, more so than I believed - (and they're) strengthening.""It's actually a shortcut in a very crowded market. Brands matter. You talk to the OTAs (online travel agencies) ... (and they) will tell you as well that the conversion factor is twice (as big) for branded hotels than non-branded because it matters to customers. They recognize this, they feel more comfortable, they know what to expect.""Whether you have too many brands doesn't matter. Make sure you differentiate the experience, the values, the promise between each of the brands because they have to be different."The CEOs spoke of their brands as friends or children - and about how they need to be protected. Trendy brands may be 'sexy' and 'appealing' for a while, but somebody more trendy may come along in a few years. "Make sure you don't ever kill your brand," said Bazin. "Just protect it, because what the client wants is purity."Credits: IHIF 2018Hilton has added five brands over the past seven years to the nine it had as it looks for gaps in the market. It launched Tru a year ago to attract younger customers. "So it's not surprising to me that Tru is off like a rocket ship," said Hilton President and CEO Christopher Nassetta. "We've done 500 deals. We've got 20 open, we're going to open 50 this year, we'll open 100 next year and continue ramping."Nassetta also spoke of the need for consistency. Hilton has 180,000 team members, with another 200,000 in franchised properties. "And here's the thing: our customers really don't know which is which .... When I go to a property I don't care whether it's our people (or) a franchise." "We've really worked hard as an organization to unify everybody around a purpose, a common set of goals and what we stand for, because ultimately that's what the customers demand. In the end they want a distinctive experience. If our franchisee fails us, they fail the whole system."Keith Barr, CEO of IHG, told the session that his group would be launching a conversion brand later this year and would soon be announcing the acquisition of a luxury brand to sit above InterContinental which, he said, is already the largest luxury brand globally with 200 hotels and around 60 in the pipeline. However, some owners want a "price point above InterContinental with a different customer experience." The new luxury brand "is going to be something small that has a great customer proposition and heritage," Barr said, which "we can incubate, grow and scale up over time.""We grow our business by having owners spend billions of dollars every single year building hotels, getting behind our brands. And we have to be good stewards of those brands over their lifetime."You have to bring owners "into the tent," he said, adding that they set up an advisory committee when launching avid hotels last September. They have so far signed 75 hotels. "It will be the next Holiday Inn Express for us because it plays to our core ... so it makes sense for us to build that organically." But in the luxury segment it makes more sense to go out and find a 'great, small company' to acquire."You can't live in a vacuum and assume we know everything. I think the companies that succeed the best, really engage with their owners deeply and talk about the brands.""Just really leaning in heavily, that's how you keep your brands great," Barr said. "And you can't become too arrogant."Wyndham Hotel Group, which has 21 brands and claims to be the largest player in the economy segment in the US, is now looking increasingly to the mid-scale and upper mid-scale space. In January, Wyndham announced the acquisition of mid-scale hotel group La Quinta for 1.95 billion dollars in cash."A brand is only as good as its weakest links," said Wyndham's President and CEO Geoff Ballotti, "so the focus on quality is critical. But for the owners in the room, if we're not adding market share, if we're not growing that top line, then we're not doing our job." Scale matters, he said, adding that it's an "easy bet" that while the five CEOs represent 90 brands this year, this time next year they will be in triple digits.Credits: IHIF 2018Patrick Pacious, President and CEO of Choice Hotels International, cautioned that if chains continue to grow brands - perhaps reaching as many as 30 or 40 - "you turn yourself into an OTA and there's no differentiation for the customer or developer. So there is some saturation point."Brands should evolve, he said. "You have to take care of the brand equity for the owners and guests ... There's a way to take your brand and continue to make it relevant."Choice bought a brand last month in the extended stay space in the US. With some 240 hotels and cash return for owners, Choice believes it can scale the brand to "triple in size."Choice also regards itself as a technology company. "We've always looked at the world a little bit differently.""We don't operate hotels," said Pacious. Asset-light for some two decades, the "personal interaction with the guest is primarily done by our franchisees," he said."Accor is not and never should be a technology company," said Chairman and CEO Sebastien Bazin. "I'm moving away from it because we're never going to be good at it because you have vast numbers of new economy digital players who are far better, far faster, more equipped (with) more talent and financial resources." But, he pointed out, whereas the tech companies know "everything about you, inside out, they're missing one link, which is the last mile - they've never seen you." "I hope Accor will never be an IT company because it's just not what I want to do."The CEOs of AccorHotels, Choice Hotels International, Hilton. IHG and Wyndham Hotel Group took part in a panel discussion at IHIF in Berlin on March 6, 2018.

'Brexit Effect' Waning for UK Hotels

EHL ·21 March 2018
Hotels in the UK recorded strong performance increases in 2017, although growth levels started receding in the final months of the year, according to data from STR.United Kingdom, 2017 vs. 2016Occupancy: +0.5% to 77.4%ADR: +3.6% to GBP92.32RevPAR: +4.1% to GBP71.49The UK's year-end performance figures were mainly the result of a record-breaking first half, as STR reported in August. Following the results of the June 2016 referendum to leave the European Union, the British pound was devalued considerably against the dollar and the euro. In the short term, this proved to be very positive for UK hoteliers, as the favorable exchange rate attracted an influx of international tourists, and provided a boost in domestic tourism as traveling to other countries became less affordable for UK residents.Performance figures for the final months of 2017 showed that the "Brexit effect" appears to be waning, as the pound continues to climb back in value. While occupancy levels decreased slightly for seven straight months to end the year, ADR (average daily rates) grew year over year in each month of 2017.London hotels posted a 4.1% increase in ADR for the year, with relatively flat occupancy that was heavily affected by strong, continued supply growth. The UK capital also showed resilience in the wake of multiple terror attacks in 2017, with minimal impact on hotel performance following each incident.
Article by David Samson

The Future Business Model of Hospitality Brands

EHL ·21 March 2018
The fundamentals for the hospitality industry all point to growth. According to the UN's World Tourism Organization (UNWTO), international tourist arrivals are projected to increase by more than 3 percent a year to reach 1.8 billion by 2030, whilst the World Travel & Tourism Council (WTTC) predicts that the hospitality industry will grow in value on average by 3.9 percent a year over the next 10 years to $11.5 trillion - just slightly less than China's entire economy today.At the same time, the industry is feeling nervous as the hospitality landscape undergoes a period of significant change. The entrance of tech-platforms like Airbnb, the dominance of online travel agencies such as Priceline.com and Expedia in the distribution chain, and major consolidation - as seen with Starwood and Fairmont Raffles Hotels International (FRHI) - are all having a profound impact on traditional hotel brands and their business models.So what will be the next stage in the evolution of hotel brands?While most hotel brands are facing similar challenges and opportunities, there does not seem to be a single approach to dealing with these new dynamics and the big players are all responding differently.For example Marriott is going for scale with the acquisition of Starwood and is forming alliances with strategic partners like Alibaba;Accor is hedging its bets by acquiring hospitality-tech start-ups and platforms;Hilton is making specific investments into their own technological capabilities;and IHG has invested heavily in the lifestyle space and has now the highest number of rooms in this segment.The evolution of hotel companies - from owner-operator to brandsThis is not the first time that the industry has been forced to adapt to a rapidly-changing industry landscape - there have been fundamental changes before and the most successful brands have succeeded in adapting to them.The future business model is a direct result of these changes over the last decades as hotel companies have moved from an asset-heavy model to consumer brands.It started when hotel companies went public in the late 1970s and early 1980s, and subsequently evolved from the original business model of being exclusive owner-operators towards becoming more asset-light.What followed is a continuing separation of the hotel model into real estate, operations, distribution, and brands with distinct organizations specializing in each element. In simple terms, this left global hotel brands that are focused, in mature markets, almost solely on brand equity and loyalty programs, with access to millions of customers and their respective data.As a result of this shift, hotel brands' income profiles have changed significantly. In an effort to develop alternative revenue streams and capitalize on the value of brand equity, some hotel brands have expanded into branded residences like Four Seasons and Mandarin Oriental. However, this is a market with limited reach as most branded residences are firmly positioned in the luxury space. Beyond branded residences, however, there lies a potential to target a much broader market by expanding into everyday services and experiences.The experience economy - growth vehicle for hotel brandsThe concept of the experience economy describes the transition from a product- and service-driven economy to an experiential one. Figures from Barclays and other economic research centers point to 2001 as the tipping point when consumers started to buy fewer products and consume more services. Eventually, the combination of advances in technology with the changing values of consumers led to the success of social media and sharing networks as commercial platforms.The initial success of Airbnb was underpinned by the desire of a growing share of travelers to have experiences and share a sense of community with like-minded people. Since then, the company has announced its ambitions to become a global travel company and has started to offer travel experiences in selected cities. However, Airbnb and similar platforms offering experiences are limited as they do not control the actual delivery of the experience. Customers are also faced with a large number of uncurated offerings and the choice can be overwhelming.This provides an opportunity for traditional hotel brands to leverage their existing brand equity to offer a range of more focused services and experiences that go beyond hotel stays. Brands can capitalize on their knowledge of their customers and experience in service delivery to open up new revenue streams from a variety of sources and collect royalties through new collaborations.Wherever a service and design element are key to the experience delivery, hospitality brands have a great opportunity to add and improve on the existing product. In turn, this allows hospitality brands to create significantly more customer touchpoints with their target markets and collect more insights to help them create an ecosystem of services that could leverage off each other. For the hotel brands, this can create a stickiness for their customers, drive value rather than benefit-driven loyalty, and a far more universal brand presence beyond hotel stays.After detaching themselves from physical hotel assets, the time seems right for hotel brands to capitalize on their brand equity and find opportunities beyond traditional hotel stays to become universal travel and service brands. Perhaps customers can soon commission Four Seasons interior design services, hire a Relais & Chateau chef, receive recommendations from a Hoxton community manager, and check into a Marriott-branded medical facility.

IHIF RECAP - Global CEOs Panel: Growing Brands to Capture Market Share

Ecole hoteliere de Lausanne (EHL)·20 March 2018
Five CEOs, some 90 brands with more on the way, and an estimated combined worth of hundreds of billions of dollars. Five leading hoteliers from Accor, IHG, Hilton, Wyndham and Choice, were on stage together in Berlin for a panel discussion entitled ‘Evolution of the Brands’ at the recent International Hotel Investment Forum.

The Future Business Model of Hospitality Brands

Ecole hoteliere de Lausanne (EHL)·20 March 2018
The fundamentals for the hospitality industry all point to growth. According to the UN’s World Tourism Organization (UNWTO), international tourist arrivals are projected to increase by more than 3 percent a year to reach 1.8 billion by 2030, whilst the World Travel & Tourism Council (WTTC) predicts that the hospitality industry will grow in value on average by 3.9 percent a year over the next 10 years to $11.5 trillion – just slightly less than China’s entire economy today.

EHL still 1 st Hospitality Management School outside of US

EHL · 8 March 2018
LAUSANNE, Switzerland -- Ecole hoteliere de Lausanne (EHL) has been ranked 2nd globally, and 1st outside of the US in the 2018 QS World University ranking for Hospitality &Leisure Management Universities.Once more, QS rankings confirm Switzerland's central role in shaping the hospitality industry, and EHL'sposition as the flagship institution.EHL Group CEO Michel Rochat reacted to the news by saying that "continuous recognition as the top hospitality university, outside the US, is an important indicator that we are doing things the right way". "As we celebrate our 125th anniversary, we celebrate a unique heritage, and have managed to stay on top by continuously renewing ourselves and embracing change. Our mission is to perpetuate this spirit in everything we do", he added.EHL's focus on the future of hospitality and the future of education remains the driving force behind every thought, every action and every investment. With unique research projects underway, the creation of an Innovation Hub and expansion into South-East Asia in the coming months, EHL will continue to shed light on a fascinating industry and provide it with the best trained talents for many years to come.

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