Tuesday, March 31, 2015

The PMS...Meh

A little tongue-in-cheek, yes, but the hotel Property Management System (PMS) is an essential, but changing component in the hotel operations landscape.  The hard lines that defined traditional PMSs as well as Central Reservation Systems (CRSs) are blurring as the above property movement takes hold and service oriented architectures become standard.


A New Role

The system that once did check-in, check-out, room assignments, inventory audits, and folio aggregation is moving above property and will become “functionality” within a shared compute platform.  The new role of the on premise system will be the orchestrator of client-focused services as well as a major feed into the Customer Relationship Management (CRM) system.

Location based and mobile device driven services that encourage guest interaction will be the new role of on property systems.  


Today’s PMS Systems

There is no question the future of PMS systems is to exist above property.  Integration with CRSs will eventually evolve into a common architecture.  Whether current PMS companies build CRS level functionality or vice versa, there will be a consolidation in this space over the next 5 years.  From an historical perspective, PMS systems have served a much needed purpose for on property operations.  These can now be accomplished in a simple, cheaper, and more robust way above property.  It is a change or die proposition, one that will be triggered by the evolution of new CRS/DRS systems like Above Property’s DRS.


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Friday, March 27, 2015

Hospitality News For The Week Of 3/27/15

STR: US hotel results for week ending 21 March

Continuing to show growth over the same period last year, the U.S. hotel industry notched higher numbers again for the week of 15-21 March 2015. Industry wide occupancy was up by 3.2 percent, reaching 69.3 percent. Average daily rate rose by 6.6 percent to end the period at $122.46. Revenue per available room gained 10.0 percent, ending the week at $84.89. Full Story Here:


Luxury market faces a drought as affluents choose conscious consumption, rather than conspicuous brands.

According to a new study published by Unity Marketing, affluent Americans are retaining some of the frugality they practiced during the recession, despite the reality of the U.S. economic recovery in the post-recession period. The survey is called Marketing in New Luxury Style in 2015: What Affluents Buy, How They Spend, Where They Shop & How They Feel about their Wealth & Finances. The survey of 1,200 high-income consumers indicated a lower level of affluent consumer confidence, in what Unity Marketing calls, ‘luxury drought’. Full Story Here:


Millennials bring change to hotel industry

In an effort to earn the patronage of millennials, hotels are transforming the industry for all travelers. Millennials are generating change in the form of hip, boutique hotels featuring smaller rooms loaded with high tech amenities. Lounges are becoming places for social interaction, while connecting to Wi-Fi. These changes are in turn influencing travelers from other age groups who are now looking for these amenities themselves. Full Story Here:


Responsive reigns in hotel mobile Web design

For hotels that are attempting to open up their website’s functionality to users of all platforms, responsive web design has clearly become the best choice for hotel websites. However, larger hotel chains may better benefit from adaptive designs because of their content-rich websites featuring large images and large amounts of information that may be compromised on a responsive website. Despite this, responsive design appears to be the new standard. Full Story Here:


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Friday, March 13, 2015

Hospitality News For The Week Of 3/13/15

Update: Hoteliers Readying For Wearable Tech

This week Apple unveiled its long-awaited Apple Watch, announcing the arrival of wearable tech. In anticipation of this development, a number of hotel chains have been working in advance on how their brands will interface with the new technology. Accor has created an iOS app specifically for the watch. Marriott International announced they will become the first global hotel company to accept payments from guests via Apple Pay. Starwood Hotels & Resorts Worldwide has worked closely in-house with Apple on their integration of the Apple Watch. Full Story Here:



More U.S. Travelers Planning Trips In 2015 Despite Rising Hotel Rates, According To Survey

TripAdvisor released the results of an extensive study of the world’s travel markets called the TripBarometer1. The report on the “Global Travel Economy” is based off the world’s largest accommodation and traveler survey, containing over 44,000 responses globally. The report states 95 percent of U.S. travelers are planning a trip domestically in 2015. Additionally, the survey reports 67 percent of U.S. travelers plan on taking an international trip for pleasure in the coming year. Full Story Here:



Strong Dollar Boosts U.S.-Owned European Hotels

U.S. hotel companies which were capable of investing in the European market in the recession, are reaping the benefits of that expansion in the recovery. With the euro rapidly losing value against the dollar, U.S. hotel companies are capitalizing in a market traditionally controlled by independents. U.S. -owned hotels are now uniquely positioned to fully leverage the coming boom in U.S. travel to Europe. Full Story Here:



US Hotel Occupancy Up 0.5% To 64.5% Week Ending March 7TH - 2015

As the month of March began, US hotels continued posting positive results as compared to the same time of year previously. Average daily rate saw an increase of 2.0 percent, rising to $116.74. Ending the week at $75.27 meant a 2.5 percent increase in revenue per available room over the same time last year. Full Story Here:


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Tuesday, March 10, 2015

A Disturbance in the Force: When the Demand Side Becomes the Supplier

For those familiar with the hotel distribution landscape, the picture has been set since the beginning of THISCO (The Hotel Industry Switch Company) in December 1988.  Suppliers or Hotels made their rooms available to Travel Agents via the GDSs and OTAs emerged as well as the Internet took hold.  


The Landscape Evolves

Over the past 28 years, THISCO transitioned into Pegasus, Wizcom, the other industry switch, eventually was acquired by Pegasus in 2007, direct connects emerged, OTAs grew and then consolidated, meta-searches grew and consolidated, channel managers emerged and Google sells Ad placements.  There has been evolution and consolidation, but all within the boundaries of the Demand side and the Supply side.


The Demand side making moves

In 2014, Priceline bought Hotel Ninjas and Buuteeq.  A head scratcher for many as an OTA bought Supply side services companies, thus a disturbance in the Force.  Regardless of the success or failures of these acquisitions, the lines are blurring and value propositions for Hoteliers are changing.  As Expedia consolidates players like Travelocity and Orbitz, power channels are also emerging.


What if

What if a Demand side entity offered to manage and sell/distribute 75% of a hotel’s inventory?  Would a hotel leave a Brand or would an Independent uncouple from a representation company?  Or does the Brand still provide the value proposition that drove the initial decision to join that particular Brand?  A disturbance in the Force is clearly being felt, we will watch if the Supply side decides to Strike Back.

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Friday, March 6, 2015

Hospitality News For The Week Of 3/6/15

Average U.S. Hotel Prices Increased By Five Percent in 2014

The U.S. hotel market has a bright outlook, according to the biannual Hotels.com Hotel Price Index (HPI). While global hotels saw a three percent price increase, U.S. hotels experienced a more solid five percent increase. The report cites improving U.S. consumer confidence, combined with lower gas prices for the better performance of U.S. hotels. Full Story Here:


New U.S. Hotel Openings Are Not Expected To Peak Until 2018-2019

A report released by Lodging Econometrics states that new hotel supply growth has been slow and sluggish in recent years due the lingering effects of the Great Recession. According to the report; 412, 488, and 557 new hotels were added for the years 2012 through 2014 respectively. The trend is showing improvement the projection of 726 new hotels for 2015 and 797 for 2016. The expectation is for growth to attain a peak around 2018-2019. Full Story Here:


Hot Off The Press: Credit Card Breach At Mandarin Oriental 

A reported credit card breach was confirmed today by the upscale hotel chain, Mandarin Oriental Hotel Group. As first reported by financial industry sources, and confirmed by the chain, some point-of-sale systems were comprised through the utilization of malware, which stole customer card information. Banking industry sources have stated the breach accorded just prior to Christmas 2014 and included locations in Boston, New York, Las Vegas, Miami, and Washington D.C. Full Story Here:


Extended-Stay Outlook Bright In US

In a report issued by STR and published in their Hotel News Now outlet, the extended stay market in the U.S. achieved solid performance results across the last several years. Across the years 2012 through 2014, all major indicators have shown steady improvement. In 2014 the best results were attained for the niche hotel market when occupancy was 74.8 percent, Average Daily Rate was $59.29, and Revenue Per Room Available was $44.34. Full Story Here:


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Wednesday, March 4, 2015

The Future Of Hotel RMO

From its tentative beginnings in the hospitality industry over twenty years ago, revenue management for hotels has always been about data. This data provides the information necessary for hotel managers to make informed decisions regarding their room rate structure, at any given time. Time is of course, another crucial piece in the hotel rate decision making process, along with information regarding the individual hotel guest.


Taken down to its most basic levels, these are the components, which make up the revenue management optimization equation. Effectively compiling and analyzing large amounts of data against complicated formulas to extract the maximum rate possible for a given customer, on any given day, requires both speed and scalability. Traditional hotel revenue management software, in the form of the first generation systems, and on into the second generation systems have provided the answers to the equation for hoteliers. These solutions, while each groundbreaking at their introduction, are becoming inefficient due to the inability to react to changing market conditions inside a 24-hour period.


What is needed by the hospitality industry is a revenue management optimization tool designed for the ever-changing challenges of the 21st century. One that provides big data; gathered, delivered, and analyzed in real time. A solution that offers hospitality revenue managers the information needed to offer hotel inventory at the optimal rate possible at any given moment. The advanced always-on multi-cloud global travel solution, which we at Above Property offer, arms hoteliers with the timely delivered, big data answers they require to effectively leverage their available property.


Above Property has built a highly innovative solution to the revenue management optimization equation. As a component of the Above Property Travel Solution set, our Inline Revenue Management module adjusts pricing and availability to allow for revenue optimization completely in real-time. The Above Property solution can handle transactions at lightning speed and is completely scalable, allowing for as many adjustments as desired. The adjustments to pricing and availability are all based on occupancy, seasonal trends, forecast, weather, booking pace, and competitive data that are all processed in real-time with every transaction.


The Above Property Travel Solution set features the fastest, most reliable, and easiest to use DRS on the planet. And is also both modular and compatible with all existing Property Management Systems and Central Reservation Systems.



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Monday, March 2, 2015

U.S. Online Travel 2015 - Hotels - Part 2

The Struggle Between OTA’s And Hotel Brand Websites


Hotel brands and chains have pushed back and made a concerted effort, during the last few years, to take back some of the inventory distribution lost to online travel agents. However, OTA’s continue to surpass the hotel website and grow at a faster rate. This fact was affirmed in the recently released Fourteenth Edition of the Phocuswright U.S. Online Travel Overview. OTA’s have enjoyed double digit growth rates in recent years, as opposed to single digit rates for brand sites.

The actual percentage of hotel distribution sold by OTA’s is 16 percent, but as stated growing. The OTA’s comprised 47 percent of the industry’s sales in 2013, with the hotel brands themselves making up the majority at 53 percent. Phocuswright’s expectation was for a one percent gain by OTA’s during 2014, reaching 48 percent. Despite the gains by OTA’s, Phocuswright predicts that the total share of online bookings will remain relatively unchanged through 2016. This due to the ongoing efforts of hotel chains to effectively manage their online booking channels and better leverage their own website booking funnels.

Phocuswright predicts gains by hotel websites in sales will reach $10 billion from 2012 to 2015. As hotels make improvements to their websites, telephone customers will migrate over to become website users, producing many of the gains. Also among the methods utilized by hotels to lure travelers away from OTA’s and incentivize them to continue to book directly with the brand, is the hotel loyalty program. Advertising is also a major investment in the efforts made by hoteliers to instill brand awareness and customer loyalty through the hotel website. Phocuswright states that in 2013 hotel advertising spending surpassed $1.8 billion.

Hotels do have the advantage in keeping the loyalty of customers. They are gained by room upgrades, restaurant discounts, or a bottle of wine waiting for them in their room, are examples of ways for hotels to build brand loyalty by making guests aware of how much the hotel appreciates their continued patronage. Another way is to simply provide a level of customer service which stands the property apart from other hotels. Hotel post-booking services, such as mobile concierge and virtual check-in are popular services with hotel guests. 

Hotels are in a love-hate struggle with online travel agencies, but still need them to bring in guests. OTA’s are advantageous for hoteliers for gaining new customers who are only looking for the best price. It is entirely in the hotel’s hands to convert them into satisfied and loyal guests, delighted enough to return again.  


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