December 15, 2006
Report: Nonstop Growth For Online Travel
Apparently, the sky is the limit.
According to a new report from JupiterResearch, "US Travel Forecast: 2006-2011," online travel revenues will reach $128 billion in the US in 2011 – 38% of all travel revenue for that year. "Online travel revenue will continue to grow strongly from $85 billion in 2006," said Jupiter analyst Diane Clarkson. "Factors that will spur online spending are greater consumer wallet share, increasingly sophisticated products available online and improved online compliance in business travel."
For comparison, eMarketer's estimate of this year's US online travel sales is somewhat more conservative at $77.7 million. comScore Networks put first-half 2006 online travel sales at $34.7 million, a year-over-year increase of 14.7%. While the exact figures may not match, all the sources agree that online travel sales are continuing to fly higher.
Speaking of flying, looking at airline travel sales alone, Jupiter asserts that higher fares and an increase in the number of people flying are driving total air revenues to $138 billion in 2006, with $49 billion spent online, and forecasts that that figure will grow to $72 billion in 2011.
Hotels are also seeing – and will continue to see – a shift to online sales as more travelers migrate from making reservations by phone to online, particularly the hotels' own Web sites.
A New Era Rises For Meetings Industry But Industry Leaders Still Remain Cautious
At the recent EIBTM, The Global Meetings & Incentives Exhibition in Barcelona, a major new industry report, commissioned by the World Tourism Organization (UNWTO), ICCA, Meeting Professionals International (MPI) and Reed Travel Exhibitions (RTE) strongly recommends adopting a form of Tourism Satellite Accounting to measure the economic global importance of the meetings industry.
The proposals, reports TravelDailyNews, which already have the backing of leading association councils, are set to take the meetings industry into a new era of official recognition, international prestige and general acceptance as a mainstream fiscal driver.
The report ‘Measuring the Economic Importance of the Meetings Industry. Developing a Tourism Satellite Account Extension’ is the fruition of three years of work by the four partners. The report was written in association with the Sustainable Tourism CRC at Victoria University, Melbourne, Australia. However, the partners warn the proposals will not be implemented without overwhelming support and political goodwill worldwide.
It can only be achieved with the modification of the existing Tourism Satellite Account (TSA) and the co-operation of governments and government agencies to collect industry data in an agreed standard method that meets strict international statistical requirements.
ANA To Sell Hotels, Buy Planes
All Nippon Airways Co. plans to sell 13 domestic hotels to drum up money for new aircraft and other investments ahead of expansion at Haneda and Narita airports, says ehotelier.
The company aims to conduct tenders later this month at the earliest, inviting bids from real-estate companies and investment funds, the sources added. It expects to make more than 100 billion yen from the sales, which will include land.
The 13 directly run hotels to go on the block include ANA Hotel Tokyo and ANA Hotel Osaka. The airline's hotel operations posted an operating profit of 4.6 billion yen on sales of 66.3 billion yen in the year ended March. New flight slots are scheduled to be added at Haneda and Narita in 2009 and 2010, respectively.
IHG ANA Hotels Group Japan LLC, a joint venture between ANA and Britain's InterContinental Hotels Group PLC, operates 30 ANA-brand and other affiliated hotels in Japan, as well as two hotels abroad. The new company took over hotel operations from ANA Hotels & Resorts Co. on December 1.
Foreign Tourists Stay Longer In Australia And Spend More
International visitors to Australia are staying longer and spending more, which was positive news for the tourism industry, the Australian Tourism Export Council said today. ATEC Managing Director Matthew Hingerty, was commenting on today's release of Tourism Research Australia's latest International Visitor Survey figures, which revealed a 12% increase in visitor nights and expenditure for the year ended September 2006.
"International visitors stayed 149.4 million nights in Australia and spent an average $2665 each while in the country in the year to September 30 2006 – up 12% on the previous year," Mr Hingerty said, according to ehotelier. "Overall, international visitors contributed $18.9 billion to our economy, making tourism one of Australia's most important exports."
Mr Hingerty said the figures were good news, particularly in light of actual visitor numbers, which remained static at just over five million for the year – about the same as for the corresponding period in 2005. "It is important to not just look at actual numbers as increases in volume without a corresponding increase in profits is not a sustainable outcome for the industry," he said.
Survey: Gay & Lesbian Tourism Profile 2006
Key findings from Community Marketing Inc.'s “11th Annual LGBT Travel Survey,” have been compiled into a summary profile of over 7,500 self-identified gay and lesbian consumers who belong to gay mailing lists, subscribe to gay publications, visit gay websites, etc., making it the largest LGBT tourism survey in history. It offers valuable insights about consumers who may be reached through dedicated marketing initiatives.
Among its findings about gay and lesbian travel trends:
· Gay and lesbian travelers took a median of five overnight trips in the last twelve months, comprised of two leisure, two personal and one business trip. 23% of respondents took more than five leisure trips, 23% took more than five personal trips, and 19% took more than five business trips.
· Respondents who traveled last year spent an average of 29 nights away from home (average six nights per trip).
· 76% of respondents said that they were more likely to choose to travel to destinations that are known for being gay-friendly.
· Leisure travel should see a gain in spending over the next year, as 40% indicate they will increase spending on leisure travel, versus only 11% that expect to reduce spending.
· 84% took at least one flight in the last year, and the median respondent took six flights.
· 92% of lesbians and gay men purchased an airline ticket on the Internet last year.
· Respondents spent a median of 15 nights in a hotel during the last year.
· 44% said that having internet service available was important to their choice of a hotel. It was their #1 motivator.
· 67% rented a car at least once in the last year.
· 18% took a cruise in the last year.
Virgin Blue Gets Approval For US Flights
Virgin Blue plans to launch a long-haul international airline on US routes have been given a green light by the airline’s board as Australia’s second biggest carrier yesterday upgraded its net profit forecast by 40% to more than $158 million. Virgin said the revised forecast followed an improvement in market conditions and the airline’s performance as the result of initiatives launched last year says The Australian.
The airline said it would now begin a planning and implementation phase of its plan to fly wide-body aircraft to the US and possibly some Asian destinations.
”Subject to conditions such as regulatory approval, the granting of adequate bilateral access and the conclusion of aircraft negotiations, the airline expects to launch international long-haul operations by late 2008,” it said.
Virgin’s moves to push ahead with its US plans will come as a blow to Singapore Airlines, which had hoped to capitalize on a takeover of Qantas by private equity firms to push its own aspirations to fly on the lucrative US route.
Hilton Hotels Gives Outlook For 2009
Hilton Hotels Corp. on Wednesday gave its full-year earnings forecast for 2009. The company expects a profit of about $2 per share in 2009 assuming a 9% compounded annual growth rate in revenue per available room, or RevPAR. If the compounded annual growth rate in RevPAR is 7%, net income is seen at about $1.70 per share.
According to MSN.money Hilton also said it expects to add about 120,000 rooms globally between 2007 and 2009. The hotel operator maintained its 2007 management/franchise fee growth rate in the 15% range, with pro forma comparable worldwide owned hotel RevPAR still seen increasing about 7 - 9%.
Hawaii Tourism Authority Sees Visitor Spending Uptrend In 2007
Hawaii Tourism Authority executive are still honing their official expectations for 2007 reports Pacific Business News. But generally they see a sequel to 2006: flat arrivals, higher spending.
That's how 2006 is turning out compared to the record year that was 2005. "I think we're going to be pretty close to dead level with last year," said CEO Rex Johnson. "We're having a great, great year."
Level arrivals with higher spending is actually preferable to higher arrivals, according to Frank Haas, marketing vice president for the authority. "We're trying to find visitors that want to come and do more things," Haas said.
New research at the authority confirms that a lot of the extra spending has gone straight to hotels, leaving tourism marketers looking for ways to ensure that visitors also support visitor attractions, tours and retail. What has been a great time for hoteliers may not have been as good for some companies that serve visitors in other ways. These other companies include smaller businesses that are more likely to be locally owned.
"We have a visitor expenditure report that we do. We just got the final reports for 2005 and we're looking at where things are for 2006," Johnson said. "The hotels have been driving a lot of the expenditures with increased rates. When you don't have as much money in your pocket because you spend more for hotel bills, you may have less to spend on attractions or other activities."
Custom Playlists Define The Hotel Brand
These days, generic looped playlists are becoming a thing of the past for most hotels says Hotel & Motel Management. Bob Finigan, v.p., product and marketing for Muzak in Fort Mill, S.C., said his company calls the customization process audio imaging.
"Think of it this way: A person is a brand. Your clothes, your hair, your way of walking, talking—all of those elements are unique to you," he said. "It's the same with a business. Each has a brand all its own. Muzak translates that image into an experience through the music."
For example, if we recommend our program 'Aura' to a spa, we'd first play them an eight-song experience that captures the essence of that program," he said. "The client can then tell us that the program is a perfect fit, or we can look at others to find the right one." Finigan said music is such a part of culture that it can make or break loyalty.
Clayton Burton, v.p., sales and marketing for Applied Media Technologies Corp., said its SiriusBusiness product has diverse programming. A full-time program director in New York creates an ever-changing lineup.
One trend gaining popularity is the hotel-branded CD available on-site in the gift shop or even as a guest amenity. Universal Music Special Markets, a Santa Monica, Calif.-based unit of Universal Music Group, has been creating custom CDs for the hotel industry for more than five years. Kathy Hale, senior v.p., said it's an easy way to extend brand identity.
Following US Airways’ Bid For Delta, More Merger Mania At 30,000 Feet…
· Continental And United In Deal Talks
United Airlines and Continental Airlines have been holding talks on a potential merger, a combination that would create the biggest domestic airline, with a combined value of $9 billion, people involved in the negotiations said last night.
According to The New York Times, the talks, apparently initiated by United, recently picked up pace after US Airways’ bid last month to buy Delta Air Lines for about $8 billion, these people said.US Airways’ proposal, promising $1.65 billion a year in savings by joining with Delta, has helped add urgency to carriers’ interests in merging.
Large airlines like United, the second-largest domestic carrier, and Continental, the fifth-largest, have spent recent years lowering their costs to become more competitive with low-cost carriers and with each other. None of them want to be at a cost disadvantage to rivals. A United spokeswoman, Jean Medina, and a Continental spokesman, David Messing, declined to comment.
· Midwest Rebuffs Bid By Airtran
Midwest Air, a low-cost carrier that flies out of Milwaukee's Mitchell International Airport, said "no, thanks" to a merger offer from AirTran Holdings the Chicago Sun-Times reports.
But AirTran is not taking "no" for an answer, and made its offer public Wednesday in the hope of convincing Midwest shareholders that the $11.25 per share deal -- a 37% premium over the 30-day average share price -- is too good to let go.
"This is a very, very strong strategic combination that will create a national, low-cost, high-quality airline coast to coast," said Joe Leonard, CEO of Orlando, Fla.-based AirTran, in an investor call. "Both companies will be better and stronger than the entities standing alone."
AirTran flies primarily out of Atlanta, though it has been building a presence at Midway. Buying Midwest would strengthen AirTran's Midwest operations.
· Northwest Moves To Hire Adviser
Northwest Airlines Corp. asked a bankruptcy judge for permission to hire boutique investment-banking and restructuring adviser Evercore Partners Inc. to help the airline evaluate and possibly implement a merger, acquisition or other business combination says The Wall Street Journal.
The carrier, which has been in federal bankruptcy-court protection for the past 15 months and hopes to emerge in the first half of next year, currently contemplates coming out of Chapter 11 as a stand-alone company, according to the terms of the Evercore engagement letter to Northwest Chief Executive Doug Steenland. With court approval, the firm would help Northwest evaluate "strategic alternatives" that might be available in light of potential consolidation in the airline industry.
Singapore Tourism Boosted By Eid
Tourism figures released by Singapore Tourism Board have shown that the country welcomed a record number of visitors for October 2006, with numbers boosted by Muslim travelers looking to participate in Hari Raya celebrations – the Islamic festival that coincides with the Eid Al Fitr holiday.
Registering 15% growth over the same period for 2005, the majority of Singapore's 857,000 visitors arrived in the latter half of the month, indicating a strong interest in Hari Raya, with total amount of visitor days estimated to have reached 2.9 million – an increase of 15.4% in comparison to the same period last year.
Visitor numbers from the Middle East saw a substantial growth of over 40% in October 2006, compared to the same period in 2005 says Hotel Travel News. 'The Hari Raya festival is always a major attraction, particularly for Muslim visitors as Singapore celebrates the end of the Holy Month of Ramadan and the beginning of the Eid holiday,' said Ke-Wei Peh, Area Director for MEA Region, Singapore Tourism Board.
Internet Video Audience To Number 157 Million By 2010
More people than ever are watching more online video more frequently. But despite the surge in viewers and available content, the medium is still nascent. A number of issues must be settled in order for the advertising market to develop, according to eMarketer's report, "Internet Video Audience."
eMarketer estimates that over one-third of the US population will view video on the Internet at least once per month on average during 2006. By 2010, the US Internet video audience will have grown 45.8% to 157 million, up from 107.7 million this year.
For all the clips playing, online video advertising currently comprises just 2.6% ($410 million) of total Internet advertising spending ($16.4 billion) this year. Video still has a long way to go. Clips are still fuzzy or halting online. Also, because there is no search engine for video, users can't navigate to videos advertisers might be sponsoring.
A closer look the video-viewing audience shows male users outnumber female users. But the average video seeker is far more likely to be in heading toward middle age rather than heading for his first job. Video is still very important for young Internet users, though, especially when it comes to user-generated content, says David Hallerman, eMarketer senior analyst and author of the report.
"With the advent of improved video quality and robust video search that offers a 21st century version of the 'TV Guide,' marketers will find a fair degree of receptivity to online video ads" says Mr. Hallerman. "Even today, much of the audience is responsive, such as the 31% of respondents to an Online Publishers Association survey who checked out a Web site after viewing an Internet video ad."
Massage In Aisle 7: Whole Foods Opens Spa
Whole Foods Market wants grocery shopping at its natural supermarket chain to be associated with relaxation. It's testing the waters with an unusual spa-within-a-food store concept reports Marketing Daily.
Refresh – The Everyday Spa at Whole Foods Market opened last week in a store in Dallas, where the company is headquartered. The prototype is serving as a test bed for consumer acceptance of spas within grocery stores, before any rollout.
Looking to create a tranquil environment within the giant-sized suburban Whole Foods Market, the Refresh spa is enclosed with a soundproof lounge complete with fountains, several treatment rooms, and a private balcony where lunch is served.
The 4,500 square foot Dallas trial spa, like other stand-alone spas, offers a mélange of face and body treatments such as massages and facials, and has wellness consultants and nutritionists available by appointment for consultations. Also contained within the spa is a shop that sells treatment products, cosmetics, jewelry, shoes and organic, natural-fiber clothing.
Take The Hotel Room Home
Kimberly Chang, a partner at Acquire d’arte, an art consulting company with offices in Santa Monica, Calif., and Manhattan, had arrived in New York from Los Angeles, but her luggage did not. Desperate as she prepared for dinner that evening with important clients, she noticed a brochure in her room at the W Hotel in Union Square offering for sale almost anything she saw in the hotel, plus items like women’s apparel. She called the concierge, and within minutes several dresses were sent to her room from the hotel’s retail shop in Times Square.
She bought a dress for $320 – matching underwear came free – and “all the other girlie accessories I needed,” she said. “It turned out to be the easiest shopping I’ve ever done in New York.” Now she uses the service to buy gifts for clients, and she plans to do her Christmas shopping at the store’s online site.
Hotels sell a lot more than sleep these days. Moving well beyond the terry cloth robes, minibar items and overpriced jewelry for sale in the lobby shops, they have become miniature malls, putting a price tag on nearly whatever you see, hear, taste, touch and smell during your stay. You can even buy more of the amenities you find in the bathroom.
This trend “makes great sense for both the seller and the buyer,” said Alan J. Fuerstman, founder and chief executive of Montage Hotels and Resorts. “The guest takes home an emotional reminder of a memorable stay and the hotel plants a marketing seed where he or she lives, literally.” His luxury property in Laguna Beach, Calif., has sold $1.5 million worth of merchandise since opening in 2003. “People now even ask how they can buy our particular shade of wall paint,” he said.
On The Road Again, And It'll Cost More In '07
Since business travel began to emerge in 2004 from its post-9/11 slump, the cost of keeping road warriors on the move has been going up sharply. That trend is likely to continue in 2007 says USA Today.
According to the recently issued annual American Express Global Business Travel Forecast, the cost of the average domestic business trip is expected to rise 4.5%, or $46, in 2007. And the total cost of the average international business trip is expected to rise 4.6%, or $180, says the report, which looks at the three big spending categories: planes, cars and hotels. "Keeping executives on the road while holding budgets in check will be a challenge for organizations in 2007," says American Express Vice President Mike Streit.
For the fifth consecutive year, strong business travel demand will drive hotel prices higher in 2007. Average daily rates in the USA could rise by as much as 8% over this year in upscale and luxury hotels, American Express predicts. Increases at midprice hotels are expected to be more moderate, ranging from 3% to 6%.
What other forecasters see for next year:
· Atlanta-based PKF Hospitality Research also sees a rate increase for 2007, up 4.9% from this year. But that growth rate would be lower than the 8.3% increase in 2006 and the 8% increase in 2005. Demand isn't suddenly drying up, PKF's Mark Woodworth says. "But customers are saying, 'I just can't afford to keep paying that much.' "
· Smith Travel Research in Henderson, Tenn., estimates average room rates will be $103 in 2007, up from $97 in 2006 and $91 in 2005.
YouTube Might Just Be The Best Thing That Ever Happened To Old Media
Ever since Google paid $1.65 billion for YouTube in October, plenty of pundits – from Mark Cuban to yours truly – have been waiting for the other shoe to drop. After all, the hugely popular video service is stuffed with clips that users have uploaded with complete disregard for copyright reports CNN.
This could get ugly, skeptics surmised. Rumors swirled that Google created a $500 million YouTube legal defense fund. Media titans, including Time Warner CEO Dick Parsons, were heard huffing and puffing. In early November, Google disclosed that it had already been sued – and the media world gasped.
But a funny thing happened on the way to the courthouse. Nothing. YouTube has not only held the threats at bay, but also shown it can be a revenue boon for old media.
The strongest evidence: An experimental "brand channel" YouTube launched in mid-October for CBS in the hopes that it would become the model for other old media partnerships. The press mostly ignored the deal's announcement at the time, most likely because it fell on the same day that Google bought YouTube.
It's worth circling back now. As part of the deal, CBS agreed to offer free video clips for downloading. In return, the media company gets to sniff around YouTube for any content bearing its copyright. CBS can then choose between removing the offending clips or getting a cut of the revenue YouTube generates from any advertising linked to the clip.
The result? By Thanksgiving, CBS had uploaded 300 clips that caught the attention of nearly 30 million pairs of eyeballs. More than 35,000 consumers have subscribed to the free channel. More importantly, the shows that CBS was pushing online suddenly became bigger hits on regular old television too.
Take David Letterman. The late-night talk show host gained an extra 200,000 viewers shortly after his YouTube debut. Craig Ferguson, host of The Late Late Show, saw his audience increase by 7% - all in a little over a month.
Given that the month was November, a "sweeps" month in which audience ratings determine how much a network charges for ads until May, YouTube gave CBS an early holiday gift. CBS, with a strong overall lineup, finished the month as the most watched network among all age groups and tied for second in the most coveted demographic, 18 to 49 year-olds.
Survey: Brits More Likely To Take Time Off At Christmas
Time off between Christmas and New Year is now an established break for many in the UK, a new survey shows. The poll by online travel community TripAdvisor of more than 1,600 travelers found that 43% of Britons would be taking a break of more than a week over the festive season.
According to TravelMole this was ahead of Americans (21%), French (33%), Italians (36%) and German travelers (40%). Eight percent of respondents said that except public holidays, they will not take any time off during the holidays.
Thirty-six percent of respondents will travel for the holidays, up two% over last year. Twenty-eight per cent intend to travel for New Year, up 4% over last year.
New York City was selected by travelers as the top holiday season destination, followed by Las Vegas and London.
PATA Forecasts Sustained Growth To 2009
Asia Pacific is expected to set another record this year, with aggregate international visitor arrivals (IVAs) expected to approach 340 million by the end of 2006 -- assuming no major crises rock traveler confidence until then.
"More good news is that IVA growth is predicted to continue over the next three years until 2009," said PATA Director-Strategic Intelligence Centre (SIC) Mr John Koldowski. "However, it is likely to be at a far more moderate rate than in the recent past."
The SIC is now working with noted econometricians Professor Lindsay Turner (Victoria University) and Professor Stephen Witt (Hong Kong Polytechnic University) on Asia Pacific travel forecasts until 2009. The professors are in Bangkok updating forecasts by origin-destination pairs for the years 2007, 2008 and 2009, which form the basis of the next edition of PATA's best-selling Asia Pacific Tourism Forecasts report.
Airbus A380 Said To Be Safe To Fly
Reuters reports that the world's largest airliner, the Airbus A380 superjumbo, was declared Tuesday safe to fly commercial services, capping six years of development marred by delays in deliveries to airlines. The European Aviation Safety Agency (EASA) and U.S. Federal Aviation Administration (FAA) gave their approval in a ceremony at the European planemaker's Toulouse headquarters.
"It's a great day for aviation.... The size of this aircraft is indicative of just how big dreams can be," FAA Administrator Marion Blakey said, shortly before the transatlantic safety agencies handed over "type certificates" for the plane.
With its brand-new paperwork, the 555-seat, double-decker aircraft comes of age as a mammoth addition to the world's airliner fleet despite production delays hampering deliveries. The discovery of wiring installation problems in Europe's biggest industrial project plunged Airbus parent EADS into financial and management turmoil over the summer, slicing a quarter off the Franco-German aerospace group's market value.
Online Travel Agencies Set Sights On Asian Markets
Online travel agencies like Expedia Inc. and Travelocity are expanding their global reach and have set their sights on Asian markets as economic growth and an increase in Internet use bolster online travel bookings.
Until recently, reports Yahoo News Asia, a substantial presence in Asia was a distant goal for online travel agencies. But now that the top travel companies are entrenched in the United States and Europe, the next frontier – Asia – is becoming a priority.
On Tuesday, Expedia, the No. 1 U.S. online travel agency, launched a Japanese version of its popular travel site. The new offering, which is the first attempt at a branded site in Asia by one of the top four U.S. travel agencies, allows users to make hotel reservations.
"It certainly is a market that's going to take some focus and some investment," said Barney Harford, president of Expedia Asia Pacific, noting that Japan is the world's second largest travel market.
American Upgrades First-Class Cabins
Few routes are as important to American Airlines as the one that shuttles high-paying business travelers between New York and Los Angeles. Those are the kind of passengers who value service over price, and American doesn't want them to think that the nation's largest airline has slipped behind the competition on that score.
American is fighting back with upgraded first-class cabins that include flat-screen televisions and personal entertainment devices offering movies, TV, music and video games says The Washington Post.
As a bonus, replacing bulky analog tape systems and cathode-ray-tube monitors will free up enough room to add a first-class seat in some planes.
Report: Teens And Media – A Full-Time Job
According to a study released this week, Americans aged 13 to 18 spend more than 72 hours a week using electronic media – defined as the Internet, cell phones, television, music and video games. Because teens are known for multitasking, their usage of devices can overlap says CNET.
So much technology makes teens feel they are playing a starring role in their own reality TV show, said Jim Taylor, vice chairman of the Harrison Group, which conducted the 2006 Teen Trend study. "This generation is unique," Taylor said. "Teen life has become a theatrical, self-directed media production."
The Harrison Group, whose 2006 Teen Trends study was sponsored by VNU Business Media, surveyed 1,000 Americans aged 13 to 18 on their thoughts and habits, to extrapolate trends for the estimated 25.2 million teens in the United States. This is the third year of the study.
The study estimates that despite their age, teens have great purchasing power, thanks to money coming in from part-time jobs and parents. Teenagers spend about $195 billion annually on clothes, eating out, cars, movies and cell phones, according to the report.
Royal Orchid In Hotel Tie Up With Ramada
India's Royal Orchid Hotels Ltd. has signed an agreement with Ramada Worldwide to manage and develop hotels under the Ramada brand in India, Dow Jones has reported.
As part of the agreement, Royal Orchid is planning to open at least 10 four-star hotels in India under the Ramada brand, the report quoted Royal Orchid Chairman Chender Baljee as saying.
"We are proposing to invest INR5 billion over the next three to four years to open hotels in all those places where Royal Orchid is present now and in some newer locations," Baljee said.
Study: Upper Scale Room Rates Rising Fastest
Higher-tier hotel rates worldwide have increased at a much faster rate than those in budget sectors, and major cities around the world continue to show double-digit growth in room rates, according to a hotel survey released today by HRG and reported by BusinessTravelNews.
The survey, based on industry figures and booking and rate data mined from HRG U.K. clients during the first nine months of this year, showed that room rates increased proportionally to the star rating of the hotel. Five-star property rates were up 15.2% over 2005, compared with a 4.8% increase for budget properties.
"The budget sector has witnessed aggressive expansion with a resulting increase in rooms available and competitive pricing policies designed to maintain marketshare and secure new customers," Margaret Bowler, HRG U.K.'s general manager of hotel relations, said in the survey.
Regionally, Asia/Pacific showed the highest increase in room rates, up by almost 20%, because of rapid growth in India, Singapore, Hong Kong and Tokyo, according to the survey. Eastern Europe also showed a strong growth rate of 18%.
The survey noted the 10 most expensive cities as far as hotel rates. Moscow had the top position with an average rate of – 219.19 per night, as business travel to the city is increasing while the city has a shortage of quality hotels for corporate travelers. New York City was second, with an average rate of – 178.94 per night, followed by Paris, Milan, Hong Kong, London, Dubai, Stockholm, Geneva and Rome.
It was Mumbai, however, that showed the highest growth, a 46% increase in room rates, according to the survey. Moscow and Singapore followed with growth rates of 29%. Two U.S. cities were in the growth – rate top 10: New York at 17% and Houston at 15%.
Content Key To Capturing Guest Attention
At this week’s Hotel Electronic Distribution Network Association (HEDNA) conference, the chatter wasn’t all about the distribution channel computer programming. Much discussion also centered on appealing to the changing nature of how travel buyers choose to make their leisure and business travel purchases says Hotel Interactive.
These days it’s not just about mastering distribution channels when it comes to selling room nights. Now, it’s also paramount to make sure that the content contained on each channel is tailored specifically to each channel in order to cut through the clutter and resonate with your potential guests.
Content is king, experts agree, and those that do not create winning content will not only see their own hotels suffer, but they could sully their brand’s overall reputation as well.
“Content has to be compelling. “You must have all the things that hook the guest into buying that hotel,” said Andrew Assante, VP National Accounts with Expedia Partner Services Group, told conference attendees during a panel discussion.
New Cruise Ships Will Have Waterslides And Ice-Skating Rings
Ten new ships will make their maiden voyages for nine different cruise lines next year. Some design highlights, as reported by TravelMole:
· Each of the public rooms of the 110,000-ton Carnival Freedom will take on a different historic theme, from ancient Babylon to Art Nouveau, from 18th-century France to the disco scene of the 70's. On deck, guests of all ages will be entertained by the 214-foot waterslide and the Carnival Seaside Theater, showing movies, sports events and concerts on a 270 square foot LED screen.
· The Emerald Princess, newest of the so-called Grand-class ships, will feature an array of new casual dining options and entertainment possibilities, including a 300-square-foot "Movies Under the Stars" screen.
· The Royal Princess – originally the Renaissance R8 – will return to sea with more than a quarter of the ship's 355 cabins sporting balconies. Because of its smaller size, the vessel will be able to visit unusual ports of calls in exotic destinations.
· Royal Caribbean's Liberty of the Seas will be the largest cruise ship ever built. She will feature an ice-skating rink, rock-climbing wall, onboard wave generator for surfing and hot tubs that extend over the ocean. There will be shopping opportunities in the Royal Promenade, ship-wide Wi Fi capabilities, and even a Ben & Jerry's ice cream shop.
Marriott Online Reservations Swell
Some travel sites have been struggling to keep traffic as more travelers opt to do business directly with hotel and airline Web sites. Marriott is among the companies seeing growth from that trend says an article in the Washington Business Journal.
The Bethesda, Maryland-based hotel chain says its Marriott.com Web site will set a record with nearly $4 billion in online hotel bookings this year. That is double what Marriott's Web site was booking two years ago and represents about 20% of the company's total hotel-level gross bookings.
The company is also adapting its Web site to leisure travelers, who tend to have more flexibility in their travel plans than do business travelers. New additions include tools to search not just by city, but by general regions, nearby attractions or specific hotel amenities.
Last month, Expedia, the world's biggest online travel agency, said third-quarter profits fell 28% as more customers book directly with hotels and airlines.
Advocacy And Experiential Marketing
"Advocacy counts more and costs less than awareness." Like many things I've read in the Harvard Business Review (it comes from an article by Erich Joachimsthaler and David Aaker), says Liz Bigham of Jack Morton, this quote has stuck with me. In this case it's because I am a believer that turning people into active promoters of your product or brand-not just making them aware, but inspiring them-is the ultimate goal of marketing.
So how do you engage audiences so that they'll not just to be individual supporters-but also actively tell others about you? At the very least, you can find out what makes them talk-and give them something to talk about.
Jack Morton Worldwide's 2006 Experiential Marketing Study confirms that engaging people through experiential marketing is an effective means of generating word of mouth advocacy. In fact, responses by the 1,625 people surveyed in the US, UK, China and Australia demonstrated that live experiences are the #1 medium most likely to generate word of mouth.
According to the survey, 85% of respondents say that participating in experiential marketing would cause them to talk about a product or brand. 38% of respondents single out being engaged in a live experience as "most likely to lead you to tell others about products/brands," over and above the Internet, TV, magazines, mail, radio and, ironically, hearing from someone they know.
The strong connection between word of mouth advocacy and experiential marketing holds true across demographics and geographies.
Key Trends For The UK Hotel Industry In 2007
The following report on the UK hotel industry is from an article by Marvin Rust, Global Managing Partner, Hospitality of Deloitte.
2006 has been a great year for the UK hotel industry with double-digit revPAR growth across the capital and healthy increases in the regions. Looking ahead to 2007, I expect this strong performance to continue. For London, I am confident that 2007 for most hoteliers will mark another year of good revPAR growth – underpinned by a reasonable outlook for the Euro zone. As in 2006, hoteliers at the top end of the market will be wearing the biggest smiles.
The picture is somewhat different in the regions, but with 2006 proving more robust than our previous estimates due to the strengthening UK economy, I expect further positive growth in 2007. The performance of the regional UK hotel industry is primarily influenced by domestic economic conditions. However, with the UK economy widely expected to exceed Gordon Brown’s forecasts, I anticipate further revPAR growth driven by improvements in average room rate which we expect to reach £50.
The increasing emphasis on the hotel brand and the continuous development of hotel products will be a key focus for the UK hotel industry in 2007. As increased competition means most gateway cities are reaching saturation point, brand, long held as the most important value driver in consumer business, is receiving the industry’s full attention. The changes in customer lifestyle, demanding experiential stay, will mean that brand choice, as opposed to location choice will lead the way in the future.
In the constant battle to differentiate themselves from the competition, I expect hotel groups to continue to seek out major fashion houses to help them build their brands. Currently no branded chains are really competing in this space in the regional UK market other than Malmaison and Hotel Du Vin. Rezidor SAS has made movements to develop and operate a lifestyle hotel brand through a partnership with Italian fashion house Missoni with a hotel set to open in Edinburgh in 2008.
One of the most talked about brands set to make their debut on the UK hotel scene in 2007 is YOTEL. Drawing its inspiration from British Airways first class and Japanese capsule hotels, YOTEL is hoping to revolutionise business travel when it opens its first hotels in Spring 2007 - inside Terminal 4 at Heathrow and South Terminal at Gatwick. In addition, not to be out done, it would not surprise me if easyHotel which by the close of 2006 will have three hotels in the capital, will start to roll out its brand to regional UK locations in 2007.
Ritz-Carlton, Hillwood In India Hotel Deals-Report
According to Reuters, the Ritz-Carlton Hotel Co. has tied up with India's Nitesh Estates for a chain of premium hotels in India. The first Ritz-Carlton hotel will be in Bangalore, the newspaper said, quoting a senior official at the Indian developer as saying the two companies were in "serious discussions".
Indian Hotels Co. Ltd.'s Taj Hotels in November bought The Ritz-Carlton Boston hotel, the longest continuously operated Ritz-Carlton hotel in the United States, for $170 million. The hotel will be renamed Taj Boston.
U.S.-based developer Hillwood Corp. is also entering India in a joint venture with the founders of Asian Hotels Ltd. for a chain of Clarion brand hotels, the Economic Times said, quoting a senior official of the venture. The venture, in which Hillwood would hold nearly a quarter, would invest about 4.5 billion rupees ($100 million) over five years to develop properties in big Indian cities, the paper said.
O'Hare Program Lets Passengers Mail Or Store Banned Items
Officials at O'Hare International Airport are offering passengers an alternative to tossing out precious perfumes and other liquids banned on carry-on bags. In a 60-day pilot program that started Monday, passengers can either mail the items or have them sent for storage to the Hilton Chicago O'Hare Airport.
Officials hope the new system will placate passengers who in the past have had to part with expensive prohibited items such as makeup, colognes and knives says USA Today. "It's a useful option when a person gets irate or doesn't understand the rules," said Scott Stern, a supervisor at a security checkpoint in Terminal 1.
The program, Mail Safe Express, calls for security officers to escort interested passengers to touch-screen kiosks where they can arrange to have their items mailed to an address or sent to the hotel via a bubble-wrap envelope. It costs $9.99 to have the items shipped to the Hilton.
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