Hraba Hospitality Consulting

This is a really big question. I would love to see the industry really delve into this.  The transition from real world to online has been very fast, and a lot of the “infrastructure” is so much e-duct tape, putty, and last minute jury rigs – all of which should have meant to be temporary so that we can rebuild our online world of distribution based off tried and true methods, as they evolve.  I know our industry is never that pro-active, but maybe we have an opportunity to start learning from where we are losing the most money, and patch those leaks.

This Argophilia post by Phillip Butler starts the conversation: Who is the big bad wolf of hotel marketing?  Simply put, there isn’t just one –  OTA’s, Franchise Fees, Internet Marketing Fees, Booking Engine Fees.  This is one leaky ship.

Here is my response, but I am more interested in what all of you have to say?
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Great read. Thank you much. =)

I always thought of the OTA’s as something that filled the gap during the off line to online distribution evolution. They were a stopgap solution. They are now becoming unnecessary, and getting in the way of commerce because they are becoming obsolete, where they used to promote some level of commerce for our industry. Distribution has changed… and their role will phase out. It won’t be in the next 5, maybe 10…. but this will all change. I adore how people revile when you suggest the guy on top won’t be there forever.  The fact is, nothing is forever, and new paradigms unfold.

Another big bad wolf, on top of franchise fees? Ridiculous internet consulting firm charges by hourly consulting model.  Buuteeq is doing some good with simple pricing plans… it makes a lot more sense, and you aren’t nickel and dimed for the internet marketing group’s mistakes or on the job training.

Lastly…. commissions to booking engines. Including the franchise fees, as well… Engines like Synexis get promoted by franchise and flag brands, which then take a cut. It’s incredible how much money is lost to an engine that simply helps facilitate online booking. Eventually, the hotels will realize the money lost can be recouped quickly by building and designing a proprietary engine of your own, off a template, for the hotel to own, outright. That can save 20K – 100K+ a year.  I imagine a management group could justify the development fees to an owner group, based solely off the last 3 years of annual or commissionable fees that the property made to the booking engine company.

Would anyone have any idea how much it would cost for development of a competent template, and simple engine with solid UI – that includes a mobile component? Is that $100k or more?  I know… you can always spend more. =)

A very informal smattering of data and commentary about the complex debate (for owners) about whether to be a dog friendly property or not.  The below data is objective, and clearly indicates the benefits of adding a pet friendly policy to your hotel.  In fact, this is likely old news, as our whole industry has started “going to the dogs”.  But I compiled this, and thought it might be useful to some people in making their arguments.  There is a long list of subjective points that could be discussed for hours, as the topic of dogs is fiercely emotional and personal, both to pro and anti-dog people.  There are plenty of studies suggesting that dogs increase happiness, reduce stress, reduce depression, and prolong lifespans in human owners, including lower blood pressure and cholesterol - this, however, is not always enough to make a decision in the business world.  Unfortunately, GNP does not mean Gross National Happiness, and business often means bottom line.  Below are some ways to understand the impacts of dogs on the guest experience…..

I)  Thoughts from Paul Burditch, owner of an excellent Luxury Hospitality PR & Marketing company, Burditch Marketing Communications, in regards to hotels in San Francisco, and a decision *not* to allow dogs at a property:

Travelers who come from all over the world know San Francisco to be a dog paradise – it should be given certain treatment so that it is welcoming, & visibly warm & fuzzy feeling.  If dogs are not allowed, we will have a responsibility for a fair explanation of *why* we do not allow dogs, especially in light of the entire industry moving that direction.  Most San Francisco hotels allow dogs, and the national parks and Golden Gate National Recreation Area are one of the most popular places for dog walkers & dog fans in the city.  Dog owners who stay nearby will see many dogs on the trails, or at Crissy Field, and throughout the park system.  This might not only have negative PR implications, but it will be a negative impact on those that see dogs throughout the city, parks, and out our back door.  Almost all hotels in San Francisco allow dogs including the top boutique companies Joie de Vivre (ed note: kaput), Kimpton and luxury properties like Ritz Carlton, Four Seasons, St. Regis and others.  San Francisco is one of the most dog friendly cities in the country, with the parks being a perfect place for dogs and owners to enjoy. To not allow dogs is going against the bigger trend in dog policies here in San Francisco.  A no pet policy is antithetical to the prevailing opinion of most Americans and pet owners in the country today.  There are 78 million dogs in the U.S. and 39% of U.S. households own at least one dog. With the abundance of dogs throughout SF and the parks, a decision to disallow pets will have obvious negative PR implications.  At this point, it’s almost assumed that they are allowed, and “no” is never part of a good guest experience.

II)           FINANCIAL DATA:

At one unnamed property: “We’re at $24,475 in dog fees through October YTD.  It’s a one-time $75.00 fee (most fees are much less, but balanced against the full cost of dog sitter or kennel if guest were to leave them at home), regardless of length of stay.  The audit report only gives posting totals, so no way to track Room Night production.  I’d make an educated guess of 550 – 600 total Room Nights YTD.  The total doesn’t breakdown evenly when divided by $75 because we had a few in there we only charged $50 because their res was already OTB when we changed the fee and a few we charged $100 because they had more than 2 dogs. It is our opinion that these guests would have stayed elsewhere with their pets, and we would have lost the room nights.  This does not account for incremental revenues. [ed note: this is from a peer who doesn't know I am posting this. It's anonymous, but if ANYONE has ANY concern at all re: financial disclosure, I will take this down].

Incrememental revenues = selling branded or logo’d hotel merchandise to dog owners – whether homemade local treats or a rubber ball with your brand stamped on it.

III)          Articles, info, data:

a)    Tripadvisor Pet Travel report.

“In a TripAdvisor survey of more than 1,100 pet owners in the United States, nearly half said they plan to travel with their animal within the next 12 months.”

b)   Pet Friendly Travel  – via Bella Dog magazine, also talks about airline fee frustrations, and more:

The majority of pet owners surveyed (61 percent) said they travel more than 50 mi. (80 km.) with their pets at least once a year, with 38 percent of those pet owners stating that they travel as often as once a month with their pets.  Pet friendly travel still is almost exclusively for dogs, with over half of the pet owners (61 percent) saying that they choose to travel with their dogs (33 percent of pet owners travel with their cats).  (Source:  Bella Dog magazine)

c)    According to the U.S. Travel Association:  “Pets make great travel companions. Over 49 percent of U.S. adult leisure travelers consider their pet to be part of the family and 18 percent of U.S. adult leisure travelers usually take their pets with them when they travel. (Source: travelhorizons^TM, July 2009”)

d)   Forbes: pet friendly hotels were due to market forces demanding it -

Why the change of heart? Travelers with pets are a huge market, and one that is untapped at the luxury level. According to the Washington, D.C.-based Travel Industry Association of America, there are 62 million dog owners in the U.S., and 29 million of those hit the road with their dogs in tow. The latest American Express Leisure Travel survey, released in October 2003, found that 13% of its respondents described an ideal vacation as one that is “pet-friendly.”

e)    Hotels Dogs Travel (via HotelMarketing.com) -

The nation’s pet boarding industry has figured out it doesn’t take much persuasion to get pet owners, often guilty about dropping their dog or cat off at a kennel while they head off on vacation, to pay extra for pampering: In the last five years, spending on pet services including boarding and grooming has more than doubled to $2.5 billion, according to the American Pet Products Manufacturers Association in Greenwich, Conn.

f)     Hotels renting pooches to guests without dogs via Time.com

These days, the coziest hotel trend has nothing to do with plush mattresses or comfy slippers. It’s about catering to guests who had to leave their furry, feathered or finned family members at home. This spring the Fairmont in Sonoma, Calif., added a dog to its staff, a chocolate Labrador named Zeus who is tasked with such things as welcoming guests in the lobby and going on hikes with them — or what is referred to, in corporate jargon, as “interactive guest appreciation.” (I have seen this in many JDV hotels as well. This trend started after studies showed that petting a dog or having a pet around reduces stress and increases health)

g)    Fairmont’s doggy ambassador delights guests (same as above, but more info)

h)   “Top Dog Hotels” via USA Today (same Tripadvisor rankings from above, but a little more about the hotels and amenities)

i)     Recent press release for Bernardus in Carmel Valley via SF Gate PRWire (the fact that someone does a press release is typically because the new amenity has relative strength or equity to the brand and bottom line)

j)      Kimpton’s Argonaut with their “Howl-O-Ween” dog costume contest (something that drives room nights and community around Kimpton property)

k) 15% of people are allergic to dogs (not including the 30% of asthma sufferers who are allergic), while 40% of people own dogs. With stringent cleaning methods (or just normal ones), i have yet to hear of an allergic person with a problem inside a room, let alone ever knowing whether they had been place in a room previously occupied by a dog.  For those truly allergic, they usually mention it, and it’s never an issue to accommodate all those concerned.  What’s more, hotels have been dealing with chemical sensitivity and allergies to things like down, etc, for years.  One more thing won’t be a major impact or operational issue.

l) Dogs that travel with people are typically incredibly well behaved, and often better and more quiet than children.  We also know weight limits are not necessary, because a) most large breed owners don’t travel with their pets, and b) a chihuaha can do as much, if not more, damage as a larger breed.  But if that rare bark is a concern to owners, remember  that acoustics won’t be an issue – a crying baby is louder than a dog in most acoustic tests: http://www.controlnoise.com/storage/dBSoundproofingChart.pdf

IV)         Conclusion

We have seen a lot more conversation on an internal industry level and an external marketing level because it has become so much more popular in recent years.   Opening without a pet-friendly policy, only to allow it later, would create PR issues because it is difficult to recapture initial interest after telling people that you are not dog friendly.

Observing and mulling all the above data and information, it seems pretty obvious what the right choice is for your guests, and your hotel.  Any complications, of which there are few and it’s very rare, is what needs to be discussed further.  I have a couple dog policies I can share, if you need them…. but overall, we feel strongly that a pet friendly policy should be approved for any hotel looking to drive revenues and capture new markets.

Hope this helps guide the decision making process.

And here comes RoomKey… filling an empty space that the OTA’s have bungled.

Here’s an article on Room Key, the hotel brand search engine.

Upshot (summary via TNOOZ):

Choice Hotels International, Hilton Worldwide, Hyatt Hotels, InterContinental Hotels, Marriott International and Wyndham Hotel Group have combined to establish the joint venture under the leadership of CEO John Davis, founder of the Pegasus hotel distribution and technology service.”

And here is Barb Delollis from USA Today with a Facebook post that sparked some awesome conversation.

This is my commentary from that Facebook post (which, as it happens, is by far the most interesting post I have seen on Facebook in years, and no… not because of my response).

I am excited about Room Key for many reasons…. I hope the below is succinct but helpful in understanding why this is an exciting move forward…..

It’s not a better solution, but that’s okay. It’s a flawed solution that has monopolistic traction – and this entry from Room Key is simply the start of their traction. It’s like Google Plus vs Facebook….. just because Facebook has more traction doesn’t mean it’s a better option.

It’s all new tech, and layered diversification coupled with competition in the early decades of online travel distribution means that the booking process is exhausting and varied…. one site has not, and will not, *EVER* serve *every* single on of your needs.

If you can honestly say you book solely on one site, and one site alone… more power to you, and that’s a rare thing – a branded OTA travel consumer. Travelers that use OTA’s are deal shoppers, so the idea that they would use one site and stick with that due to loyalty is odd, when it’s myopic only to consider one site with the scores of other’s available. A real travel consumer isn’t going to stick to one OTA, and that process of shopping around has become somewhat of a liability…. and an exhausting one. In the last 5 years, the only thing that OTA’s have done is to train the smart revenue managers to yield such that the best available rate is *ALWAYS* directly on the brand website…. in this, you maintain as much rate integrity and control of inventory as possible. That being said, the gestapo like extortion and bullying from OTA’s like Expedia has backfired, and savvy travel consumers are starting to be trained that the best deal is ALWAYS on the hotel website. OTA’s know this, and they are losing consumers due to it.

Room Key is a brand new product that is put together by some of the biggest players in the hotel industry ( Hilton Hotels & Resorts, Wyndham Worldwide, Choice Hotels, Marriott Hotel, InterContinental, Hyatt Hotels as well as Pegasus), and it’s a new product that is *BRILLIANTLY* devised, the UI is quite easily the best online booking product that exists, currently (although KAYAK’s mobile app is stellar). It is filling a sorely needed gap in a crowded space – a simple, concise, uncluttered way to easily find hotel rates and book without the pain of being upsold on value ads and overwhelming options. The OTA’s like Expedia or Travelocity are dinosaurs, and this new option is filling the space that travelers are clamoring for.

I understand your comments about being a consumer, and wanting the simplest option – what you are forgetting is that OTA’s had a chance to offer the simplest options for booking, but have failed in an overarching attempt to increase revenues by destroying any functionality or user experience on their sites. This is all new technology, so the best travel experience hasn’t even been developed yet. Just because one of the OTA’s has a monopoly doesn’t mean it’s the best thing for the consumer. This is the first attempt at our hotel industry to create that experience.

Room Key is coming at the right time – it mimics Google in a light user interface that is concise, simple, and clean.

The other side of this is how Google will lay waste to the uneven and disjointed online travel world -

Google Search + Google Travel + Google Flight + Google Hotel + Google Plus (in searches) = dominance & sheer terror for the existing landscape of online distribution.

To celebrate Facebook’s Deals going live…. it’s time to comment on the coupon craze. And craze it is…. it’s captured our attention to no end.  Not being fully versed with the Facebook model (I will fence sit until I know more), I will say one thing about these coupon sites in relation to your hotel, restaurant, or brand: *DO NOT DO THEM*.

WHAAAAAAaaaaaaaaaaaaT did you say???

The power of Groupon’s success has surely been due to the happy consumers rambling on about the score they just made.  You can’t go anywhere and not see it.  The crisis of perception is that everyone is beside themselves with how “cool” coupon sites are, but only regard them from the perspective of being a consumer. Stop being selfish, and think about these poor businesses. Everyone seems to be in a mindless consumer mindset when they consider them, and especially when they sign on to participate in them; all the proselytizers are consumer advocates or discounters. I don’t know one thoughtful business person that finds them to be anything but frightening, even if deemed necessary (and in hospitality, they never are necessary). They can surely bring business into an operation with low to no overhead, huge margins, or zero variable operational costs…. but to businesses like hotels, it’s a losing proposition.  Please, check your giddiness at the door – and hope these coupon publishers are a fad, because if they are not we are in big trouble. Whether you scored a good deal on Living Social is moot, so put on your business acumen hat… and let’s explore!  This post is meant to be a simple, accessible cautionary tale to Hoteliers and the like.  I am not covering entirely new ground.  But, I rather have something for us to refer to than having to explain my dour skepticism to each person incredulous as to how I am “missing the biggest thing ever”.

In fact, I wouldn’t mind being known as that one guy that stopped the entire hospitality industry from participating in any form of online coupon site.  At least, realize the impacts.

Search “Is Groupon Killing” in Google, or simply click this link.

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Revelation!  I love it.

I don’t always have stuff hit me, but it hit me today.

So I hadn’t figured out why Tripadvisor’s Restaurant Reviews had recently, so vigorously, taken off.  For those of us in hospitality who are aware of our brands online, it was hard to miss.  It is vital to stay on top of all conversation, reviews, and mentions, and whether through Google Alerts, or a random internet search… you noticed restaurants began to get reviews on Tripadvisor. It’s not really a surprise, and it is a completely natural direction for a travel site like TA.  But, where there wasn’t even an option to review or add (more…)

Seriously…. where are our revenue managers?

I know, in these times, you cannot maintain total rate integrity without looking like an out of touch management group.  Others try to maintain their rates by laughing at their clients and just being rude, something so pompous and idiotic I need to quote it here.  CMO Scott Williams, from Morgans Hotel Group (on behalf of the Clift in SF) said it professional as can be:

““You can bury your head in the sand, discount your rooms, piss your brand away. But we are a luxury brand and we will act like a luxury brand. I’m going to look back at this recession and say ‘we didn’t just drop our pants.’

He has a way of making a point, doesn’t he?  It is a valid issue, no matter how garrish, classless, and totally out of touch he is.  (Even using that “L” word can get you in trouble.  The current “luxury” fiasco that has everyone up in arms, from groups to spas.)  Not everyone is maintaining rates with such bravado.  Choice Hotels seems to be doing a great job.

Whatever the case, the question is (more…)