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Smart Start Hotel Executive Report: A New Type of Benchmark
By Roger Lopez, Performance Analyst, Gomez
It was announced earlier this year that Netscape, a pioneer of the World Wide Web, would no longer be supported as of February 1st 2008. Back in the mid 90s, Netscape was the dominant Internet browser, the popular choice of 90% of web users. Today, this once-prevalent browser is now barely used by 0.6% of web users. Fast forward to Internet Explorer (IE), which until the last year or so, enjoyed similar 'exclusivity' as Netscape did in the 90s. This got me thinking about browsers and websites and how some organizations still create their websites solely for viewing in IE. However, the days of IE being THE browser of choice have come and gone. Today there are many more browsers being used to access the Internet, including mobile browsers too.
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In Hindsight 2007 Looks Great!
By Robert Mandelbaum, Director of Research Information Services, PKF Consulting Hospitality Research
As we struggle through declining occupancy and below average ADR growth in 2008, the U.S. lodging industry looks back fondly at 2007. Throughout last year, hoteliers groused about slower RevPAR growth and single-digit gains in profits. By the time we finish 2008, the 7.2 percent bottom-line growth achieved in 2007 will seem like nirvana.
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Factors of Ukrainian Hotel Business Development
By Nikolay Mayger, CEO, Mayger Consulting Company
Ukrainian hospitality business is at the stage of its development and with every year becomes one of the most dynamically developing and profitable fields of the country’s economy. Undoubtedly, it became possible on the basis of total political, economic, social, demographic, geographical, ecological, etc., factors. String of pronounced facts indicates about it.
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Liquidity and Risk – 'The Party’s Over'
By Scott Smith, MAI, Vice President, PKF Consulting – Atlanta
The second quater 2008 Hotel Horizons forecast of PKF-HR called for U.S. hotel RevPAR to increase just 1.5 percent in 2008. This pace of RevPAR growth is below the long-term average of this performance indicator. Declining economic fundamentals, fueled by the turmoil in the capital markets, portend a much weaker domestic economy for the months ahead.
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Select Financial Performance
By Robert Mandelbaum, Director of Research Information Services, PKF Consulting Hospitality Research and Steven Nicholas CHA
The great investment return that the limited-service segment can provide is probably the worst kept secret in the hospitality business. Gone are the days that any hospitality professional will say, “No one will stay at a hotel without all the bells and whistles of a full-service hotel.” Industry segmentation nomenclature has always been somewhat vague, but over the last few years it has become downright muddy. We have gone from limited-, to select-, to focused-, to the next TBD variation. However, today, most industry participants use the term select-service to define properties that offer either no, or a limited degree, of food and beverage (F&B) service. Typically, these properties are priced in the middle to upper-middle tiers within their respective markets.
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Let Them Eat Cake: The Growing Contribution of Hotel Food and Beverage to the Bottom Line
By Gregory J. Miller, Consultant, PKF Consulting
Over the past decade, the food and beverage department (F&B) at hotels has transitioned significantly. Hotels with restaurants continue to improve their F&B operations, from expanding menus to creating unique offerings for guests. On the other end of the spectrum, hotels without restaurants primarily focus on maximizing profit in the rooms department. However, it is not surprising that one of the fastest-growing segments of hotels under development is "select-service;" hotels that fall in the middle between full-service and limited-service operations, with one two-to three-meal-a-day restaurant. Hotel companies are aware that food and beverage operations are not just revenue generators, but increasingly important to the bottom line.
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Smart Start Hotel Executive Report: The Last Mile and Beyond
By Roger Lopez, Benchmark Analyst, Gomez
If you have read my previous articles, or seen the Gomez: Hotel Room Search Benchmark, you will be familiar with the three metrics we use to measure website performance: Availability (Success Rate), Response Time and Consistency. Together these three metrics give us an idea of how a website is performing. These measurements are taken from Gomez’s global network of Internet Backbone nodes, featuring Tier 1 data centers with big servers and thick pipes out to the Internet.
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Getting Back to the Basics: The Hotelier’s Internet Marketing Action Plan for a Difficult Economy
By Max Starkov, President/CEO & Jason Price, EVP, Hospitality eBusiness Strategies
The slowing economy is affecting the hospitality industry in a number of negative ways: commercial bank credit is extremely tight, energy and food prices are on the rise, leisure travel consumers are staying home, and companies are re-assessing their corporate travel budgets. Smith Travel Research reports that year-to-date (January-April 2008) occupancy rates in North America fell by 1.9%; in Europe by 0.7% and in Asia Pacific by 3.1%, compared to the same period a year ago. What should hoteliers do in an unstable and uncertain economic environment? What are the strategies that would help alleviate the adverse impact of negative growth in occupancy? What action plan should hoteliers follow at this time? What should hoteliers do to survive and succeed right now?
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The Checks in the Mail
By Kevin F. Reilly, Attorney, PKF Witt Mares
Congress can act when the economy begins to slow down and recession begins to raise its ugly head. The crisis in the housing market, the volatility in the stock market and dramatic drop in consumer confidence in the economy forced Congress to do something. Congress, in an overwhelmingly bipartisan manner passed a $151.7 billion economic stimulus package to provide a short term boost to the economy. Even this was not easy as the Senate tried to add a number of additional provisions that neither the House nor the President would have accepted.
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Trends in the Ukraine Hotel Business
By Nikolay Mayger, CEO, Mayger Consulting Company
Ukrainian hotel business remains one of the most underdeveloped segments of the real estate market. Hotel infrastructure does not satisfy the demand for hotel services neither in quantity nor in quality. Most hotels were built 30-40 years ago and since then have not been renovated and mismatch international standards. In spite of this fact, hotels' profitability improves. According to the data of Statistic State Committee, from January to December 2007, the volume of realized services have increased significantly by 24% and has come to 2016, 4 million UAH. (For 2006, the volume of services was 1521.1 mln. UAH). The market of qualitative commercial real estate projects has been taking shape since early 2000s.
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Going Green for Guests, Environment, and Brand
By Lawrence Hefler, Principal, BrandShares International
This is the year of the green consumer. Green has become a mainstream issue driving millions of consumers to find out how they can live a more eco-friendly existence or a “lifestyle of health and sustainability” now popularly known as LOHAS. “Eco” has led to a new wave of consumer marketing in a grasp for green market share. In the hospitality world the implications of green for consumers include: eco-travel, eco- hotels, green buildings, eco- friendly interior design, and hybrid vehicles. This trend has gained significant momentum in the lodging and hospitality industry where more hotels are going green (or at least saying they are) and offering eco-friendly options. In an industry with a proliferation of brands and choices, green appears to be competitive hot button for 2008.
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Hotel Waterpark Resorts: Construction Report 2008
By Jeff Coy, JLC Hospitality Consulting and Bill Haralson, William L. Haralson & Associates
33 Hotel Waterparks Opened in 2007, 55 Scheduled for 2008
During 2007, thirty-three (33) hotels with indoor waterparks opened, including new additions and expansion projects, bringing the total to 169 hotels with 28,888 rooms and 4,132,469 square feet of indoor waterpark space. The room supply at waterpark hotels grew 20.9% in 2007 compared to room supply growth of 1.4% at ordinary hotels. Eighty-three (83) new hotel waterpark additions and expansion projects are under construction or expected to break ground during 2008. A total of 55 hotel indoor waterparks with 14,615 rooms and 2,287,840 square feet of waterpark are expected to open by year end 2008. Another 33 properties already are scheduled to break ground in 2008 with opening dates in 2009 and 2010.
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Hotel Waterpark Resorts Construction Report 2006
By Mr. Jeff Coy & Bill Haralson, Hotel Waterpark Resort Research & Consulting
Hotels with indoor waterparks will grow to a forecast of 144 by year end 2006, up 33% from 108 in 2005. Meanwhile, ordinary hotels add less than 1.0% growth to the overall hotel industry room supply. Seventy-three (73) new hotel waterpark additions and expansion projects are under construction or will break ground during 2006. Thirteen have already opened during the first half of the year. A total of 36 hotel indoor waterparks with 6,004 rooms and 1,095,440 square feet of waterpark are expected to open before year end 2006. Another 37 are under construction and scheduled to open in 2007.
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17 Predictions On Future Resort Development
By Mr. Jeff Coy & Bill Haralson, Hotel Waterpark Resort Research & Consulting
Increasingly, hotels are being integrated into mixed-used developments and planned unit developments that include restaurants, nightclubs, retail shopping, movie theaters, fitness centers, health spas, recreation, sports and entertainment centers --- such as casinos, climbing walls, arcades, amusement parks, indoor waterparks and family entertainment centers. Hotel developers are no longer content with locating near these demand generators; they are integrating these attractions and entertainment components into the overall design of new hotel projects. Result is, more and more hotels are looking like resorts. As we start Year 2005, here is our forecast on the future of resort development.
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Profitable Spas: Be On-Trend Rather Than Trendy
By Judith L. Singer, Ed.D., ISHC, President & Co-Owner Health Fitness Dynamics
As someone who has made a career out of researching, planning, marketing and providing management advisory services for the spa industry, I have seen the “good, bad and the ugly” in terms of facilities, treatment menus, service standards, staffing schedule, compensation programs, marketing messages, financial statements, etc. As I look ahead, there are many challenges and opportunities for the spa industry. In this article, I am presenting some ideas that might help you prepare for the future. Keep in mind that the future is tomorrow, so if any of the ideas make sense, think about how you can use them now.
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Boutique Hotels: Good For The Good Times
By Robert Mandelbaum, Director of Research Information Services, PKF Consulting Hospitality Research
Boutique hotels have been all the rage in the lodging industry. Developers want to build them. Guests want to stay in them. Travel writers want to wax on about their virtues. But, are boutique hotels popular with their owners? How has boutique hotel financial performance stacked up to industry-wide benchmarks as the lodging industry has progressed through the ups and downs of the recent business cycle? To answer these questions, PKF Hospitality Research (PKF-HR) has analyzed the revenues, expenses, and profits from a group of boutique hotels that provided their year-end financial statements to PKF-HR for the firm’s annual Trends in the Hotel Industry survey.
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Dim All the Lights! - U.S. Hoteliers Control Utility Costs
By Robert Mandelbaum, Director of Research Information Services, PKF Consulting Hospitality Research and Aaron Walls
PKF Hospitality Research (PKF-HR) estimates that U.S. hotel revenues will increase an estimated 5.8 percent in 2007, and grow another 5.3 percent in 2008. Both projections exceed the long-term average annual growth rate of 4.5 percent. Further, revenue growth will be heavily weighted toward growth in room rates relative to occupancy.
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Smart Start Hotel Executive Report: Persistent Connections
By Roger Lopez, Benchmark Analyst, Gomez
This month we’ll cover another topic that, while a touch technical, should be of interest since it can greatly improve the performance of your website by reducing response times, meaning your website pages load faster. Websites, as you know, are made up of a variety of ‘parts’ such as images, JavaScript files and the like. Each one of this ‘parts’ is known as an object. Each object has to make its way from your organization’s web server to your customer’s web browser in order for the page to be displayed. How these objects get from server to browser can greatly influence the time it takes for the page to display on your customer’s computer. The objects can be sent one by one as was done in the early days of the internet. But a more efficient approach is to send several objects together.
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The Hotel Investment Bandwagon: Will You Still Love Me Tomorrow?!?
By Lori Raleigh, Executive Director, ISHC. Title by Carole King
I recently returned from “California Dreamin” (Mamas & Papas) and the 2008 Americas Lodging Investment Summit (congratulations to the BHN team and the AH&LA on another excellent conference!). And I couldn’t help reflecting on “What a Difference a ‘Year” Makes”. (Dinah Washington) Following are a few thoughts to share ...
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Hotel Operators Massage More Profits from Spa Operations
By Robert Mandelbaum, Director of Research Information Services, PKF Consulting Hospitality Research and Gabrielle Lerner
To aid hotel owners and operators during the spa investment decision process, as well as assist spa department managers benchmark their operations, PKF Hospitality Research (PKF-HR) has analyzed the 2006 financial performance of hotel spa departments. The sample was divided into two categories; resorts and urban hotels. The data comes from PKF-HR’s Trends in the Hotel Industry database. It should be noted that our analysis did not include statistics from day spas or destination spas.
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MEETING PLANNERS: Resigned To A Seller’s Market
By Robert Mandelbaum, Director of Research Information Services, PKF Consulting Hospitality Research
Given the strength of the U.S. lodging market, it is no surprise that meeting planners appear to have accepted the fact that is it a seller’s market. Meeting planners have not abandoned their efforts to control their budgets. However, rising room rates, attrition clauses, and second-tier cities are no longer the "hot button" issues they once were.
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The Big Green Paint Job
By Naseem Javed, Founder, ABC Namebank International
Suddenly, away from the hundreds of available colors, there is a rush all over the world to paint almost everything green; green paint, green ribbons, green wrappings and green fabrics becoming the top choice, causing shortages of the material, while green logos, green billboards and almost politically-correct green ties and attires are becoming the most fashionable and trendy statements. Just like a year-round St. Patrick's Day; the big green dress party has started. As if this process will provide that green-mask, creating the appearance of a fighter, presence of a leader, out fixing the global environment. Oh Really?
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2008 Top Restaurant and Hotel Trends To Watch
By Andrew Freeman, President, Andrew Freeman & Company
Top trends for restaurants and bars range from artisan salt selections to Izakaya bar menus; chefs growing their own gardens, and cupcakes moving from kids plates to adult menus. Top hotel trends include the rise of smallish boho-chic hotels, to the introduction of interesting "get frisky" packages for feline pets. Today, the modern diner and traveler expect a more personalized and fun approach to their experiences from the bar to the hotel suite. Savvy guests are up on all of the trends and expect to be wowed. They desire unique and one of a kind offerings. Now more than ever, guests make their choices based on great word-of-mouth and social networking online buzz.
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Extended Competition Leads to Extended Recovery
By Robert Mandelbaum, Director of Research Information Services, PKF Consulting Hospitality Research
An analysis of supply change within the extended-stay lodging segment certainly illustrates the appeal of this property type among hotel developers. According to Smith Travel Research, the overall industry has averaged annual changes in supply of 0.9 percent from 2000 to 2006, while the number of new extended-stay rooms has been growing at a 5.1 percent annual pace.
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The Hefler Report: Consumer Trends That Will Impact Luxury Fractional Ownership in 2008
By Lawrence Hefler, Principal, BrandShares International
What do private jets, mega yachts, classic cars, helicopters, racehorses, fine art, a vineyard, a whiskey distillery, and an ostrich purse all have in common? If your first thought was "Gee, that’s a luxury I wish I could own," (except for maybe the purse) you are actually quite close. For many affluent consumers, these luxuries can’t be wholly owned but they sure can be fractionally owned. If you are reading this, you are probably already familiar with the rapidly evolving trend of asset–sharing or luxury fractional ownership. While it’s a consumer trend unto itself, there are several macro consumer trends that will have challenging and rewarding implications for the shared luxury ownership industry in the coming year.
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Asia Pacific: Hotel Investors Remain Bullish
By David Gibson, CEO Asia Pacific, Jones Lang LaSalle Hotels
The global credit markets shakeout has had little impact on sentiment for hotel investment in Asia Pacific with total hotel transaction volume increasing by 90.2% over 2006 to reach US$11.6 billion to date during 2007. Jones Lang LaSalle Hotels’ recently released Hotel Investor Sentiment Survey ("HISS") highlights investors’ ongoing enthusiasm for the hotel sector in both Australia and throughout Asia Pacific.
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The Re-emergence of Japanese Overseas Hotel Investment: Will it happen?
By David Gibson, CEO Asia Pacific, Jones Lang LaSalle Hotels, and Tom Sawayanagi, Managing Director Japan, Jones Lang LaSalle Hotels.
The sheer weight of capital in Japan suggests that international hotel investment beckons. Jones Lang LaSalle Hotels’ recently released FocusOn research highlights that while it may not be possible to identify a single catalyst, momentum is building and, once the switch is tripped, there will be a domino effect across sectors, geographies and investor types.
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Smart Start Hotel Executive Report: Efficiency
By Roger Lopez, Benchmark Analyst, Gomez
Last month we discussed how the number of files that a site is made up of can impact their website’s response time. This month, we’ll look at efficiency. Efficiency is basically how fast a website can send data back to the web browser. In an effort to keep this example simple, we will assume that anything between the hotel’s web server and the client’s browser is in the internet "cloud" … and we won’t go into what happens there. The general rule for optimal efficiency is: the more bytes that can be sent per second, the better, meaning the user has to wait less.
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Update: Franchise in Hotel Industry of Ukraine
By Nikolay Mayger, CEO, Mayger Consulting Company
There is paradoxical market situation currently in Ukraine. Demand for hotel services is much higher than the market can offer by all the indexes and forecasts. The hotel realty market in the Ukraine shows extremely low supply rate along with a deficit of good quality rooms together with high booking rates.
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We Don't Have to Sell Anymore?
By Robert Mandelbaum, Director of Research Information Services, PKF Consulting Hospitality Research and Viet Vo
As the industry enters what is projected to be an extended period of moderate, yet sustained growth for the next few years, expect to see the investment in unit-level marketing expenditures start to level off. Historically, marketing expenses grow at a greater pace than total revenue during recessionary periods and the following years of recovery. Industry owners and operators realize the need to "spend money in order to make money."
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The Accuracy of Hotel Budgets: Hoteliers Underestimate 2006 Unit-Level Costs
By Robert Mandelbaum, Director of Research Information Services, PKF Consulting Hospitality Research
After two consecutive years of double-digit profit gains in 2004 and 2005, U.S. hotel managers expected they would be able to achieve yet another year of extraordinary growth on the bottom-line. When preparing their budgets for 2006, the 400 hotel managers in our sample estimated that a 9.2 percent gain in total revenue would translate into a 21.3 percent surge in profitability.
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The Haunted America
By Naseem Javed, Founder, ABC Namebank International
Countries are like little homes; they house a nation, hold ideologies and provide shelter and comfort to its people in hopes that the occupant will nurture better ideas for themselves and further flourish humanity. Such are primary desires and goals of most countries on this small planet. America is no exception. For decades, billions of people around the world slept at night on empty stomachs amidst dreadful circumstances, often dreaming of the freedoms and liberties of America, which they likened to a great land, a paradise and a final destination point.
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Development Prospects: Mini-hotels in the Ukraine hotel industry
By Nikolay Mayger, CEO, Mayger Consulting Company
Looking at the situation in major cities of Ukraine guests of mini-hotels can be divided into two classes: business-costumers and tourist-costumers. According to the data of State Frontier Service of Ukraine 9.5 million foreign tourists have visited Ukraine in the first quarter of 2007. That is 27% (or 2 million people) more than in the same period of 2006.
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Trends in the Ukraine Hotel Industry
By Nikolay Mayger, CEO, Mayger Consulting Company
In the Ukraine, the hotel sector still stays one of the most promising branches of the country economics. Positive dynamics of development of this sector is conditioned, firstly, by the rapid growth of the Ukrainian services industry. In 2006 Ukrainian services industry enterprises realized services to the amount of 103,8 billion UAH, which is 12,3% higher than the same index in 2005. The average amount of the realized services in Ukraine at one worker of the branch was 59 000 UAH. The highest amounts of the realized services were recorded in Kyiv (134 200 UAH), Odessa region (76 400 UAH) and Crimea Autonomous Republic (51 900 UAH). Development of the hotel industry is also directly influenced by positive dynamics in the tourist sector. In 2006 Ukraine was visited by 18,9 million foreigners. This figure shows that the entering tourist flow increased 7%, as compared with 2005. Despite such favourable conditions the indices of development of the Ukrainian hotel sector may be characterized as quite contradictory.
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Factors of Hotel Business Development in Ukraine
By Nikolay Mayger, CEO, Mayger Consulting Company
The national measures of Ukrainian economy create a picture of stable economic development. According to official statistics the growth of GDP for the period from January to April, 2007 in comparison with the same period of past year is 7,9%. Grows steadily the part of service sector in GDP, it is 38%. The positive dynamics of enumerated indexes tells on the sphere of hotel services. In 2006 the volume of realization of services, afforded by hotels and other places for short-period residence in the Ukraine, was 2 milliard 47 mil grv. (in market prices), that is 35% higher than in 2005.
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Outlook of the Hotel Networks Development in the Ukraine
By Nikolay Mayger, CEO, Mayger Consulting Company
Hotel services sector is presently one of the most dynamically developing in Ukrainian economics. Unsatisfied demand on various hotel services gives excellent opportunities to independent hotel networks - they can enter the Ukrainian market successfully and thus implement the strategy of strengthening their influence in the hotel sector. Some peculiarities of certain market sectors make it impossible to provide single evaluation of the market trends – in order to make such an evaluation, it is necessary to analyze the state of every single sector of hotel services in particular. The list of potential participants of the Ukrainian "hospitability industry" market depends on quality of such analysis carried out by hotel business representatives. At present one may observe a strong tendency of foreign hotel networks filling in Ukrainian market niches. Will this tendency stay relevant in the future? Are there any possibilities for the Ukrainian national hotel networks development?
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Hotel Business in Ukraine: Chances and Challenges
By Nikolay Mayger, CEO, Mayger Consulting Company
The hotel industry is the one of the most attractive markets in Ukraine to make an investment in. Having survived the acute crisis of the nineties caused by structural, political and economic changes in the country’s economy the industry is currently characterized by a high level of business activity. Unsurprisingly the current situation in the hotel business market is highly interesting for potential investors: ever-increasing demand is accompanied by supply deficit. The inflow of tourists increases by 15-20% every year according to the promotion of new style Ukraine in the world as well as its accentuated European devotion. The occupation rate of hotels is unbelievable, e.g. Radisson SAS, a 4-star hotel in Kiev built in autumn 2005, has exceeded all expectations bringing its occupation rate to 82% within the first weeks following its inauguration. However, the general average level of utilized capacity of the hotel sector in the country is relatively low – 31% in Ukraine and 56% in Kiev. These contradictory data give grounds for assuming that the hotel business sector in Ukraine is far from being transparent and has to be thoroughly studied and analysed.
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Franchising Opportunities in Ukraine
By Nikolay Mayger, CEO, Mayger Consulting Company
There is only one active Ukrainian Hotel Management Company and several International ones in the Ukrainian hotel sphere. The current situation clearly shows that usage of franchising opportunities in the development of hotel business in Ukraine means entering market with low number of competitors and is highly attractive. The following characters of the hotel sphere give well thought out ground for choosing franchising opportunities: unfulfilled demand of the Ukrainian hotel sphere on one side and ebsence of organized booking centers that give ability to book a room at hotel at any place in Ukraine, on the other.
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Strategy for Hotel Investment in Ukraine
By Nikolay Mayger, CEO, Mayger Consulting Company
There are no doubts that hotel sphere of Ukraine is highly attractive. But only the investment based on reliable state of the market information, reliable market forecast, well thought-out plan and correctly chosen strategy for investment will have the highest efficiency. Today any company which considers investing in business in Ukraine considers the high-profitability and other bonuses of the swiftly growing Ukrainian economy on one hand and possible risks on the other. It is obvious that risk is the hardest factor to estimate for foreign investor.
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Hotel Business in Ukraine: Trends and Prospects
By Nikolay Mayger, CEO, Mayger Consulting Company
The hotel business is one of the most promising and successful business areas in Ukraine. Orientation toward European service standards and vigorous transition to such standards make up the distinctive feature of this sector. Similarly to any other economic activities, the hotel business aims at increasing its income and looks for tools and efficient ways to achieve the desired financial results. Last year Ukraine became much more popular with tourists and holiday makers. According to official statistics, the number of visitors to Ukraine in the first half of 2005 grew by 16% compared to a similar period of 2004. The amount of foreign tourists who visited Ukraine during the mentioned period of 2005 reached 6.6 million – same as during the whole 2000.
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Prospects for the Development of the Mini Hotel in the Ukraine
By Nikolay Mayger, CEO, Mayger Consulting Company
It’s interesting that the term ‘mini-hotel’ itself is mostly used in the former Soviet Union countries. In the West this hotel category is usually known as ‘inns’,‘boarding houses’ or ‘pensions’. Today there are several hotel operators specializing particularly in such hotels. As a rule they are small hotels with different names and different owners but possessing some of the features relating them to this category, for example Small Luxury Hotels of the World (brand that resulted from amalgamation of the Prestige Hotels Europe and the Small Luxury Hotels & Resorts of North America), Elegant Small Hotels (USA), ‘Microtel Inns’ (USA), ‘The Leading Small Hotels of the World’ (USA).
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Ukraine's Hotel Investment Potential
By Nikolay Mayger, CEO, Mayger Consulting Company
Due to its geographical location and climate Ukraine enjoys good chances to turn into one of the largest tourist centres of Europe. The latest political events in the Orange Revolution country as well as the Eurovision-2005 Music Competition turned Ukraine into the attraction for many holiday makers. The amount of tourists visiting Ukraine considerably increased last year. According to official statistics, the number of visitors to Ukraine in the first half of 2005 grew by 16% compared to a similar period of 2004. The amount of foreign tourists who visited Ukraine during the mentioned period of 2005 reached 6,6 million – same as during the whole 2000. Increasing of the number of tourists would always result in increasing the demand for hotel services.
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The Prospects of Hotel Franchising in Ukraine
By Nikolay Mayger, CEO, Mayger Consulting Company
The tourism industry in Ukraine demonstrates the fast rates of growth for an extended period of time. For the last 5 years industry growth has come to 12-15%; growth of internal tourism has made 5%, the number of foreign tourists has increased by 19% in 2003 and by 10% in 2004. The profits that tourist companies generate increase (due to increase of purchasing power of domestic population and increased number of foreign tourists), as well as the number of services those tourists companies are ready to provide.
Such a positive tendency certainly leads to an increase in demand for the hotel services. However, the analysis shows that the Ukrainian hotel industry reacts to the changes of market conditions too slowly. A growing demand is satisfied basically with so-called "private sector" (grant apartments and houses on lease) especially during the peak periods, whereas the hotels services remains poorly demanded. It is possible to single out two main reasons for this low demand.
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Smart Start Hotel Executive Report: What Makes up a Website?
By Roger Lopez, Benchmark Analyst, Gomez
While reviewing the response time, consistency and success rate for each of the benchmarked sites, I realized how complex websites have become. Gone are the days where your site gave people basic information about your company, i.e. contact information, directions to your location, company history, etc. Those sites were, for the most part, made up of a single HTML file and maybe a Cascading Style Sheet (CSS) to make it look nice. Now websites have all sorts of bells and whistles that do all kinds of fancy things like interactive mapping, dynamic calendars and live inventory checks. But what effect does all this ‘stuff’ have on the site’s performance?
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The Golden Keys of E-Commerce
By Naseem Javed, Founder, ABC Namebank International
Today, in order to have a commanding presence with universal access on e-commerce, domain names must act like very special golden keys as without it, the entire exercise of Internet-centric commerce becomes almost useless. Super-success in cyber-branding lies in the sophisticated creation, development and ownership of these powerful and magical keys, so that they may open an undiscovered universe of billions of unknown customers around the world. Without this power and access, what's the point of being in the race for leadership and image positioning? It only takes a minute to establish if one is holding that magical key or just toying with a rusty screwdriver.
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Franchising & Novou-Consumerism in Middle East
By Naseem Javed, Founder, ABC Namebank International
Two things; firstly among all of the great business concepts of the last few decades the franchise model has always surfaced to the very top. Secondly, over the next decade the introduction of hundreds of fresh, locally nurtured franchise concepts emerging within Dubai and the Gulf States will set the stage for a great revolution of nouvo-consumerism. So what are the four key factors driving this movement?
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Why Are Developing Countries Losing The Five Star Status Race?
By Naseem Javed, Founder, ABC Namebank International
The race for the global image repositioning is getting fiercely competitive as more and more countries are improving their softer image, claiming the right to produce good quality exportable brands for the international markets. Poised and confident, they want to play the marketing game on a global scale. The West, in the meanwhile has almost abandoned manufacturing, ignoring research development and creating vacuums, which have resulted in global shifts, which have been moving rapidly towards Asia and other regions. As this tectonic shift continues, it will have opened doors among the highly entrepreneurial companies of emerging regions to capture new image positioning opportunities and, as they enter the game that was formerly reserved for select Western countries.
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Once Again, Revenue Gains Overcome Expense Growth
By Robert Mandelbaum, Director of Research Information Services, PKF Consulting Hospitality Research
A familiar pattern repeated itself in 2006 – strong gains in hotel revenues surpassed significant expense growth, which resulted in double-digit increases in unit level hotel profits. In 2006, the average hotel manager in our Trends in the Hotel Industry survey achieved a 13.3 percent gain in operating profits , the third consecutive year of bottom-line increases in excess of ten percent. Favorable supply / demand conditions allowed these operators to enjoy an 8.2 percent jump in revenues for the year. However, management continued to struggle with burgeoning costs. Hotel operating expenses grew 6.3 percent in 2006, the third consecutive year of expense growth nearly twice the pace of inflation.
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Smart Start Hotel Executive Report: Trending
By Roger Lopez, Benchmark Analyst, Gomez
Up to this point we’ve been writing about the month to month results and the changes experienced by the sites monitored in the benchmark. This month we will focus on trending. Much like the benchmark gives perspective on how sites are doing compared to the industry, trending gives perspective on how a site has performed over an extended period of time. Going back a year to July 2006 we will compare the benchmark average with this month’s top performer, Radisson; the bottom of the chart, Hotel-Guides; and two special cases, Hyatt and MGM Mirage.
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Is E-Voting the Next Wonder of the World?
By Naseem Javed, Founder, ABC Namebank International
The last century has gone through various mediums and mass communications cycles, such as the old print society, where printed word was considered final, followed by the radio, TV and internet society, and has now entered the global cyber-branding society using hyper-mass-communication methods such as E-voting. This phase of justifying the decision of complex issues based on untraceable electronic pulses raises some serious questions, as most of the global population is oblivious to the inner intricacies of such global networking systems and highly programmed devices, just as they were during the workings of last century's newspaper barons.
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More Plastic, Less Doubt
By Robert Mandelbaum & Alvin Minsk, PKF Consulting Hospitality Research
Like other industries, lodging operations often extend credit to customers in order to gain their business. For hotels, permission to pay after services have been provided is most often granted to large groups and preferred corporate accounts. For transient guests and non-preferred groups and companies, credit must be established up front either by paying a cash deposit or using a credit card. The decision to extend credit to a group or corporate account is based on several factors. To be considered for credit, the account must either generate a significant amount of room nights or dollars of revenue. Secondly, the group or company needs to pass the scrutiny of a financial background check. Ultimately, it is a subjective decision. Hotel management needs to weigh the risk associated with collecting the account receivable versus potential profits earned.
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Smart Start Hotel Executive Report: Aggregator Performance Should Matter to You
By Roger Lopez, Benchmark Analyst, Gomez
This month we will take a look at the aggregator sites that are part of the benchmark. The reason we decided to put a focus on aggregators this month is because they play an important part on expectations for your sites performance. Users normally shop around and will more than likely start at the aggregator sites and then move on to the individual hotel sites. So it is fair to say that the performance of your site will be compared to the performance of the aggregator sites the user visits.
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Hotels Respond to Recent Rate Debate, More Blue Sky Ahead
By Troy Craig, Executive Vice President, Jones Lang LaSalle Hotels
Hotel owners have been quick to recognise the fact that room rates in Australia are low by international standards, however according to Jones Lang LaSalle Hotels’ Digest research, RevPAR (Revenue per Available Room) levels around Australia are at their highest level on record boosted by strong occupancies. Demand growth remains strong, hence occupancy levels and room rates around Australia have reached all time highs and show clear signs of continued improvement. New development will continue to be constrained as the expensive cost of land and construction often render it unviable.
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Hilton Buyout Continues Trend
With Sean P. Smith, Senior Analyst, Zacks Equity Research
With the bombshell that Hilton Hotels was going to be acquired by private equity giant Blackstone last week, we wanted to get a few words with Zacks senior hotel industry analyst Sean P. Smith. He described what he was seeing in his current industry outlook. Can you start off by giving us a couple of the details surrounding the Hilton buyout?
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Islamic Hotel Branding & Muslim Hospitality
By Naseem Javed, Founder, ABC Namebank International
There is a sudden realization among key developers in Dubai and Middle Eastern countries that hotels and hospitality in Arabia can easily absorb a huge number of properties and tour destinations purely based on Islamic culture. These new brands will deliver all the traditional values and customs to accommodate familiar authentic experiences for Muslims traveling alone or with their families. These new brands will address how Muslim needs are met and how they want to be treated.
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Smart Start Hotel Executive Report: What makes Radisson and Marriot be on top?
By Roger Lopez, Benchmark Analyst, Gomez
In this overview, we will break down and compare the two sites with the best performance for the month of May, Marriott and Radisson, with the bottom two, Hyatt and Hotel-Guides. The topic is similar to last month’s article, which looked at the steps in a hotel sites’ business process transaction, but will focus more on individual pages and look at aspects such as page weight and response time. A quick review of the methodology tells us that the business process is to go to the site, find a room and see the rates. The total transaction time is the sum of all the steps in the business process. You can read the full methodology here.
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OPERATIONS MANAGEMENT: The Future of Hotel Profitability
By Robert Mandelbaum & Steven Nicholas CHA, PKF Consulting Hospitality Research
In the past two decades, hotel managers have made money differently than other businesses. Lodging is an industry that has benefited from its ability to increase prices to offset sharp gains in operating expenses. This contrasts the typical U.S. business model of increases in productivity and modest price increases. Looking towards the future, we are starting to observe two trends that could affect the growth of hotel revenues. The hotel construction pipeline is at an all-time high, and more projects are starting to move from the planning stages to actual construction. In addition, we are beginning to hear some rate resistance among meeting planners and corporate travel executives. Combined, these factors could mitigate the strong pace of revenue growth that U.S. hotels have enjoyed the past few years.
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Australian Hotel Investment Off to Flying Start
By Mike Batchelor, Managing Director Australasia, Jones Lang LaSalle Hotels
According to Jones Lang LaSalle Hotels, hotel investment activity in Australia has increased by 69% during the first six months of 2007 when compared to the same period last year. The firm’s research indicates that hotel transactions worth $682 million have taken place to date this year, compared with $404 million last year. Several large deals are currently under negotiation around Australia however hotel owners are also enjoying some of the best trading conditions experienced, with many eager to hold on to their assets.
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Local Expertise Fosters Globalization in Travel Management: Key Learning at GlobalStar Forum
By Peter Klebanow, Worldwide Chairman, GlobalStar Travel Management
On May 2, 2007 GlobalStar Travel Management, a long-term equity partnership comprised of the world’s foremost independent travel management firms, held its third annual conference and Industry Forum. This year’s event was held in Las Vegas, the setting of GlobalStar’s first worldwide conference and forum. Nearly 120 travel leaders from around the world came to this year’s forum to discuss globalization from various perspectives – travel managers, travel technology suppliers and international travel leaders from global markets, including Asia-Pacific, Europe, India and Latin America.
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Who Really Owns Your Brand?
By Naseem Javed, Founder, ABC Namebank International
You may think that you have an absolute, 100% ownership for your brand, yet if your name identity is shared with hundreds of others, then you clearly lack 100% ownership. What's the point of brand-building if you are simply brand-sharing? Global icons like Sony, Rolex or PlayStation are completely unique around the world, there is no dispute concerning who owns these brands whatsoever. So why is it so difficult for your brands to achieve this global respect and position?
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Lame Ducks Were Active
By Kevin F. Reilly, Attorney, PKF Witt Mares
By the time this article is published, Congress will have been in session for a little more than 100 days. A number of changes can be expected with the Democrats taking control. They had a number of pet projects they wanted to address during this period. It is expected that a flurry of bills, the low-hanging fruit, will be enacted to show that the Congress can be effective. Most of the bills garnered Republican support although, ironically, the Republicans complained about being kept out of the negotiations on a number of them. However, it is the 109th Congress that was very busy passing tax legislation at the last minute that will impact the hospitality industry.
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Smart Start Hotel Executive Report: Improving Response Time
By Roger Lopez, Benchmark Analyst, Gomez
Availability for the month of April saw great overall improvement with the lowest availability score coming in at 97.90%. Gomez considers an availability score of 98% and above as excellent. Response times, however, did not see an improvement. With 15 out of the 25 sites having response time scores in the double digits, this is a good time to take a closer look at response times, what affects them and ideas on how they might be improved.
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Record International Arrivals Should Put Heads on Beds
By David Gibson, CEO Asia Pacific, Jones Lang LaSalle Hotels
According to the most recently released Australian Bureau of Statistics (ABS) international visitor arrivals data, Australia recorded the largest inflow of international visitors on record during March 2007. Jones Lang LaSalle Hotels says the country’s hotels are well placed to reap the rewards of these buoyant conditions. With the exception of the month of December, which is the best performing month every year, March 2007 international arrivals to Australia reached the highest level ever recorded – increasing by 48,000 visitors or 10.1%. In fact, arrivals are up 4.6% over the same three month period in 2006, surpassing the previous all time high for the first quarter. Growth was exceptionally strong from Asian and European countries.
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Jumeirah's Talise: Is a 'spa' a spa? Or is it a 'venue for lifestyle change?'
By Anni Hood, Group Director of Spa, Jumeirah
What was referred to as spa evolution during recent years is now a revolution. Consumer demand is greater and stronger. Does the term "spa" – healing through water- still capture what this industry is about? Ask a cross section of people to describe a spa and you will get a vastly different range of answers. Within our revolutionary market where the key drivers are not pampering and relaxation anymore but moreover, improved health, reduced stress levels, alternative therapies, mind-body, depth, meaning and results – integral health is at the forefront.
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Smart Start Hotel Executive Report: You might be fast, but are you consistent?
By Roger Lopez, Benchmark Analyst, Gomez
March is now behind us and with it the bulk of spring vacationers booking travel online. Last month our focus was on availability and we talked about how poor availability could affect your business. The focus this month will be consistency and how it too can affect your bottom line. A look at the consistency results for Harrah’s, Expedia and Radisson will help paint the picture. As you have probably seen on our monthly charts one of the metrics we report on is consistency. The basic idea is that the lower the number the more consistent your web site is. The consistency score will increase with variations in response time, the more variations the higher the consistency score. You can visit our methodology for a full definition of how we calculate consistency.
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Hotel Developers Baulk at High Costs
By David Gibson, CEO Asia Pacific, Jones Lang LaSalle Hotels
The high price of land and spiralling construction costs have kept developers out of the hotel market in recent years. Across Australia, the number of hotel rooms under construction has decreased to the lowest level since Jones Lang LaSalle Hotels commenced the National Hotel Development Register in 2003. New hotel room supply is now expected to increase on average by 1.4% per annum to 2010, based on projects currently under construction or deemed likely to proceed.
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How Predictable is Performance?
By Robert Mandelbaum and Jack Corgel, PKF Hospitality Research
Investors need to evaluate the level of risk they want to take with the return they will receive. If the reward significantly outweighs the risk, then an opportunity might exist. To measure relative risk within the lodging industry, we analyzed the stability of total revenue and net operating income (NOI) data from 450 properties that participated each year from 1995 through 2005 in our Trends in the Hotel Industry survey. The survey sample was divided into six chain scale categories as defined by Smith Travel Research: economy, midscale without food and beverage, midscale with food and beverage, upscale, upper-upscale, and luxury. For the purposes of this analysis, NOI is defined as income before deductions for capital reserve, rent, interest, income taxes, depreciation, and amortization.
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Hoteliers Should Look to the Skies
By David Gibson, CEO Asia Pacific, Jones Lang LaSalle Hotels
Just as improved connectivity and increased air capacity can provide a growth injection to hotel trading, so the cessation or reduction in air services can leave the hotel industry in tatters. According to Jones Lang LaSalle Hotels’ research, FocusOn Aviation: Shaping Investment in Asia Pacific, events occurring over the last few years have not only highlighted this but also begs the question – what are hotel investors doing about it? The key issue for the hotel industry across the Asia Pacific will be managing and maximising the benefits from the expected boom in air seat availability. Increasingly, airplanes are the means to get the guests to your door, so why not plan ahead to leverage off this trend?
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Perth Top Hotel Performer of the Year, Sydney Lags
By Max Cooper, Senior Vice President, Jones Lang LaSalle Hotels
A combination of record occupancy levels and higher hotel room rates has seen hotel revenues increase by 8.0% during 2006 across Australia. According to Jones Lang LaSalle Hotels, hoteliers in Perth have been quick to capitalise on an increasingly affluent market whereas in Sydney, operators continue to strive for stronger rate growth in a competitive environment. The newly released Australian Bureau of Statistics (ABS) accommodation data indicates that d | | | | |
