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. =)
Tags: booking engines, commissions, franchise, franchise fees, Hospitality Marketing, hotel, hotel management, hotel marketing, internet marketing, marketing, OTA, OTA's
The Story of Hotel Coffee.
This is something I have done in the past – talking about the history of hotel systems and amenities, and where we are today. It’s likely horribly self indulgent, as well as terribly boring…. but coffe is such an afterthought, in so many situations, it deserves, at least, it’s own post.
We can start with my background in coffee: I drink it. I drink quite a lot of it. I quite enjoy it. I have a burr grinder. The burr grinder changed my coffee life. As counter-intuitive as it is, I now understand why artisan roasters refuse to sell ground beans. ”But the market is there for it”, my simplistic free market capitalist economy mindset cajoles my caffeine addled nerves… but self respecting roasters know their bean isn’t honored by letting it die a slow and lonely death as a tired ground in a depressing bag.
So… this is where we engage my hospitality mind, and wrestle with my pragmatic operations side, vs. my guest experience and brand equity side.
My last installment about the history of hotel minutia rambled on about hotel telephony: from PBX to modern software in place of hardware, and how it went from revenue stream to bungled system, all the way to how it exists today – a glorified in-house intercom (which marketers try to dress up with LCD screens, ad nauseum). The story of coffee, however, might not be as interesting… especially to those tech & social fans who follow me (other than the giddy, amped ones who just placed another order for more caffeine related products from think geek). To those fans – hopefully my rollicking, coffee fueled post will be the little bouncing ball over the karaoke lyrics. Have fun.
A friend recently asked me about an in-room answer to coffee, which then resulted in an animated sigh from my end. Since May of 2008, I have opened 2 hotels, renovated a third, and am about to open a 3rd within the month. Even in that short time, coffee has gone through a renaissance as well as a confusing array of options and concepts for servicing a guest just how they like to be serviced, each morning. With sleepy eyes, & bumping into things…. flavored water is better than nothing.
So… here’s the story, history, and hopefully…. we will eventually get to the bottom of this stained mug that runneth over. You are going to ask for an answer, and it’s going to be an honest one…. and probably not the one you want. Unless you enjoy cold sweats and operational nightmares. I am a big coffee drinker, and our culture of coffee here in San Francisco beats Portlandia into the dust. This recent Forum on NPR talks coffee culture in San Francisco with Four Barrel, Blue Bottle, and Ritual Roasters. Frankly… some of how they do business, and how they position this “luxury coffee” trend is a bit vain, a little silly, with various levels of congenial pretentiousness (and jovial self-awareness)…. and the troubling and humbling part is that they are, absolutely, right.
However – they are right when it comes to their business of coffee, *but* are they right as they silently judge how hotels manage their coffee program, which is often a secondary operational priority?
Here’s what people in hotels think…. which includes people who care, and don’t care, about coffee:
a) Coffee grounds suck. Whether a french press or drip machine, having those used grounds are a dirty, gritty nightmare – for both guests, and more importantly, room attendants. Machines overflow when unattended, and even when helpfully disposed of by a guest, there’s a treasure trail of grounds from the minibar to trash can. You have to figure out how to grind on property without it snowing electro-static sprinkles all over your kitchen – then figure out how to control grounds in room; which invariably includes an imperfect receptacle to store the grounds, and an imperfect method of gauging the age of those grounds. Housekeepers are not always keen on watching coffee grounds. It’s not unlike watching cement dry, day to day. I hate to be the bearer of bad news, but coffee hasn’t been an industry conversation to any great extent…. and those hotels that offer grounds in room? You might want to ask for a new container, because I am sure, as I am hesitant to tell you, those are not fresh. Uppity luxury ownership made their property level ops suffer grounds, mainly because owners had never dealt with actual work like changing a bed or cleaning a shower…. or actually having to deal with a mess. Prop level in-room open-ground coffee usually got (secretly) changed at property level by the hotel manager. At times, grounds live on, in the room…. due to some GM so tired & broken from battling ownership, he doesn’t even deal with it… and just let’s housekeeping or middle management cope/deal with it. ”It’s an operations problem”. It sure is.
b) so the industry got wise a few decades ago – and we went to hermetically sealed filter mesh-pods. People don’t even like the word “hermetically”. It sounds weird. It’s like when we had the strips on the toilet that said “Sanitized for your protection“. These hermetically sealed filter mesh-pods are supplied by some company that buys cheap beans, that were stored in a large warehouse for far too long, pre-ground months ahead of time, shipped in huge boxes across the country, only to sit in a warm and dank basement storage room. By the time the water hits even the best of beans, they are dead, awful, and really bad, and possibly depressed (the latter is open to debate) – they taste like cardboard and intone the warehouse air the beans sat in for months. They were, however, the penultimate, glorious, operational solution. They also pushed coffee further into the realm of red headed step child in hotels…. a necessary evil that was available as an amenity to guests, while being something that NO ONE wanted to talk about…. that is, neither hotel operations nor guests ever wanted to talk about the coffee. These filter pods never worked, and no one ever liked it. It tasted like sock water… but as I said earlier, murky hot water is better than nothing when you just need to wake up. The problem is that those coffee packets were so bad, people were waking up because of burnt tongues rather than a jolt of caffeine.
c) Of course, that is if the machine can actually heat up the water. That is something else we didn’t want to talk about, operationally – those 4 cup brewers. Notoriously unreliable in that oh-so-perfect way that they work just enough for you to *not* get calls about them not working. It’s not so much a machine to brew coffee as much as a machine to slightly frustrate you and eventually produce a flavorless warmish liquid. What’s more…. don’t look in the water reservoir. If you do, just pray those are mineral deposits.. and if they aren’t mineral deposits, or some mold, maybe it’s that it was part of a methamphetamine factory, once or twice. This disgusting reality, and fact, actually spurred some hoteliers to banish coffee from the rooms, and provide locally roasted, fresh ground coffee in a public area throughout the hotel… a thoughtful, respectable amenity that pisses guests off to no end. In fact, many enjoy the accessibility of the good lobby coffee, and even respect the enviornmentally forward method of distributing it (less packaging, less waste, bulk production, etc)…. but many guests *still* favor lukewarm coffee flavored water with powdered grey “creamium” to start their day, even if they silently grumble to themselves just how bad it is. So – hoteliers that took out in-room machines started looking for new options in-room, and those dealing with bad machines quickly cornered the capital needed to join in on a new trend – transformer-like bricks of plastic that confuse guests prior to spitting out coffee like water.
d) These behemoth bricks of plastic are better known by their brand name – Keurig. There are other machines, like Nespresso, who produce espresso like water that, really, is not *too* far from the real thing – but their pricing generally value engineers them as a viable option from your OSE budget. Keurigs are a funny thing. I *LOVE* hearing, in regards to these monster dispensers, “It taste so much like coffee”, or “It’s not too bad”. If it’s good coffee, you generally don’ t need to say it “tastes like coffee” if it actually tastes like coffee, because it tastes like coffee. You only need to say it tastes like coffee, if, in reality, it tastes nothing like or is nearly identifiable to coffee. It is just like you say “it’s not too bad” when it’s *honestly* bad, but you are trying not to hurt anyone’s feelings. In reality, the stuff is just a different form of sock water, aka coffee lite. It’s not good, and it’s weird… because it looks and smells like coffee but it only resembles it and is, actually, quite unlike coffee, at all. That pretentious claptrap aside, I have other, more valid, points…. now from the operator side of my mind. We got hooked into this craze…. we replaced an entire hotel with these machines. Just because I know and enjoy good coffee does *not* mean that it is every guest’s main priority, such that ancient grounds in a teensy foil cup, placed in a vending machine style dispenser, might be completely acceptable (even as we coffee snobs guffaw at the philistines). So my operator experience, and advice, about Keurig’s, and why you should *really* think twice about using them? I know they seem ubiquitous at this point, but guests do not understand Keurigs. At all. They break them – constantly. I know it seems simple, but they destroy them time and time again. It’s sadly hilarious, you know? Our guests are probably above average in intelligence, too…. A guest can be a wonderful, bright, intuitive person, while guests can be panicky mobs of idiots that smish smash things when they get confused…. especially if they haven’t had any AM java.
So… here we are. Sitting amongst a pile of options ill equipped to make everyone happy. Let’s revisit our choices, then…
1) You can use those hermetically sealed filter-pods that will never, ever EVER be good… not ever…. it means you don’t give a damn about coffee, nor your guest’s needs, and you really just want to be able to say you have the amenity, while delivering an in-room sadness. I mean this from the bottom of my heart, but Starbucks “VIA” packets are an exceptional invention, and are a far cry better than those traditional in room packets. No.. really. Like Keurigs, this shouldn’t really be an option anymore.
2) Starbucks VIA packets? They’re not cheap, and if you overstock, they would walk more than in-room coffee packets because they actually exceed traditional hotel coffee in flavor. That’s an expensive operating cost, but it might wash when you consider labor, drip machines, etc. It’s odd to be saying it, as it’s one of those things you say “It tastes like coffee”, but if you haven’t tried them, it might be the acceptable, simple, answer for both guest and operational needs. I am somewhat surprised I haven’t seen these more often in hotel settings…. and wonder aloud if Starbucks has considered partnering with hotels. They’re in enough lobbies that they could saunter over to the desk and start a profitable revenue stream a-growin’!
3) Onward towards future innovation? Innovation as an option, frankly, I can’t comprehend – as it’s not my “field”. I can’t imagine a pocket sized burr grinder that could grind beans into a drip or press system that would deliver the coffee and fully dispose of the grounds in a simple manner – completely self contained and easy to clean. Actually, I just said it, so I *can* imagine it. If I can imagine it, why hasn’t someone else? Get to it coffee people!
So…
What do we do? Have another cup, and plan another meeting about it? In the end… (Oh my gosh is it really the end????)
Is the answer – really – to suck it up, operationally, and supply a coffee program to the guest that provides fresh grounds in your guest rooms? That’s even a challenge for the coffee royalty, because they, likely, would prefer to see a guest grind beans themselves, so the coffee is as fresh as possible, and as least “dead” as it can be. The fact is, we can’t grind in room… I could easily imagine a hallway of beans going off at 6.30am, like a symphony of metal teeth eschewing their users sleepiness, while aggravating others. But maybe we can settle on this being the right operational decision…. back-of-house grinding, with a housekeeping based coffee delivery and clean up program. That is, if coffee *really* is part of your program.
But…. (waiiiiit for it)……
In my mind, everything is part of the program, story, brand, and message. Whatever crappy marketing terms you want to drool out there…. everything says something about your hotel and your brand. Whether it’s a poorly fitting uniform, or a lousy shampoo amenity…. every single point in a hotel is an opportunity to *really* reach the guest, and make a difference in their stay, their day, and maybe their lives (you know the moment a guest finds a new brand they love, having experienced it at your property – we have guests buy beds, soaps, etc).
I was speaking to a kindly gent from Four Barrel, and he said something astute: He had looked at other hotels, but could tell coffee wasn’t part of the focus. It was an afterthought. They didn’t want to be part of that sort of program. Coffee is *not* an afterthought to those who roast and serve it, and certainly not to those who enjoy it.
Those afterthoughts are some of the most impacting moments in the guest experience. How a glass tumler or piece of silverware feels in the hand, or how a light shines in through the window into sleeping eyes, or ** just how bad that morning coffee was **. I admit, as a coffee drinker, I have stayed in some fine resorts & hotels – and if that coffee packet is bad in the morning, it’s a big topic of conversation in our party, throughout the day, often overriding the other positives that should dominate our stay, and memory. Those “touchpoints” that some hoteliers, and ground to the nub operators, think of as minutia, can actually be overriding aspects that dominate a stay. For those who have designed and built hotels, this is *SO MUCH EASIER SAID THAN DONE* – but everything needs to be thought out, and everything should come down to the guest experience, which will hopefully override operational necessity. If you sacrifice guest experience for operational efficiency, that’s not being anything but lazy. That is not what hospitality is about.
I *was* the guy that would have had to deal with the pain of being a property that allows open coffee grounds in rooms….. but I am quickly coming to terms with the fact that it’s the right thing to do, and the right way to do it. In this, you might be able to partner with a local roaster that can be part of your hotel’s story, and anchor you firmly in the community, creating a stronger neighborhood with deeper ties… part of a larger story than just your hotel.
Then, hell… stamp your logo on their coffee, and sell it to your guests, as well. Maybe that revenue can make up the additional operating costs involved with the mess.
You’re lucky I only had 3 cups today. Here’s to the finest of roasts, and hoping to see them in the finest of hotels. Happy sipping, and good luck figuring this out. What do you do? Do you have a program you would like to share, or an idea that might work? Let me hear it!
Tags: 4-cup, coffee, coffee makers, coffee pods, forum, four barrel, hotel coffee, hotel marketing, hotelmarketing, in-room, keurig, local coffee, local roasters, local roasting, marketing, nespresso, npr, starbucks
What does it all mean? (that link is a funny Youtube clip, as a palette cleanser).
Depending on how this one goes, I think this is my second to last or last post *ever* haranguing on, or thinking this deeply about, Facebook. Blue in the Face makes one look crazy, especially if no one is listening… and beyond the simple fact that I may be wrong, and happily eat humble crow as I become more aware….. I do see some meaningful interaction on Facebook. It takes some time, and for me it took *opening* my network. This concept of a “closed” network seems bizarre to me, and it limited real, meaningful interaction, the likes of which I remember from IRC or topical boards.
You have seen me talk about this in regards to Hospitality Brand’s respective Facebook Pages, and the lack of real interaction… even when they are done well. When it comes down to it, there are some problems with the way Facebook Pages work. This post is, to some degree, a slapdash missive of a rebuttal to this post about the Top Ten Facebook Brand Pages. There are 100′s of those (more…)
Tags: brand community, brand management, brand marketing, chris brogan, communications, engagement, facebook, facebook pages, geeks are sexy, hospitality, hotel brand management, hotel marketing, interaction, jarod lanier, jones soda, lost the plot, new york times, off grid, oreo, oreo cookie, pages, redbull, semantic web, social crash, social marketing, Social Media, social networking, twilight, unplug, unplugging, wilbur hot springs