South Africa and the World Cup challenge

South Africa is expecting thousands of visitors this summer as 64 FIFA World Cup football matches take place in ten venues around the country.

Is the lodging industry up to the challenge? What about the level of service-mindedness the country will need to demonstrate, if such an intense hospitality-oriented event is to truly succeed?

We asked these questions to three people who are definitely "in the know":

• Mmatšatši Marobe, CEO of the Tourism Business Council of South Africa (TBCSA)
• Ewan Cameron, Managing Director of the African Sun hotel group

and

• Michèle de Witt, of Horwath HTL's Cape Town office

Their comments make for some very interesting reading!

Dubai: Is the party over?

Philippe Doizelet of Horwath HTL examines the likelihood that Dubai can keep up the frenetic pace of hotel construction that it was known for during the past few years.

Lifestyle hotels: not just a buzzword

In this article, John Russell of NYLO Hotels says:

Travelers are tired of cookie-cutter hotels.
They want something that’s beautifully designed and unique
with all the comforts of home. Lifestyle hotels put the fun back
in travel, and they do it at nightly rates that greatly appeal to
today’s cost-conscious travelers. I see continued growth for the
segment with a lot of exciting new designs and rich lifestyle
amenities that make luxury affordable. Lifestyle hotels will
become the next generation hotel of choice.

What do you think? The article's author, Fran Kiradjian, founder of the Boutique & Lifestyle Lodging Association, stands 100% by this claim and offers lots of evidence, including the launch of three boutique brands this year alone.

Hot new market opportunity!

That got your attention, eh?

The hot new opportunity is this: medical tourism. Undoubtedly on the rise (especially in a handful of key countries), and undoubtedly creating a new and different profile of traveler, with special hospitality needs.

In this thorough and very convincing article, Renée-Marie Stephano, President of the US-based Medical Tourism Association, offers a detailed look at the trends and opportunities as they are currently developing.

A heart valve replacement costs about $170,000 in the USA, but only $13,500 in Singapore. Surely disparities like this are going to create a huge demand for less expensive treatment in faraway places (maybe even encouraged by the insurance companies and/or governments who are footing the bill). If this kind of travel becomes widespread, a big opportunity emerges for hotels to provide an environment for convalescence, but also a place where the patients' families can be looked after.

A fascinating article!

How hotel companies can successfully court capital in 2010

Byron Carlock is the President & CEO of CNL Lifestyle Company, LLC, a firm which bases its hotel and real estate development investment decisions on carefully researched consumer lifestyle trends. In this article, he ponders the role of relationships in overcoming the current slowdown in investment.

A question to investors and operators out there: Does "skin in the game" make a difference to you? What other ways can an investment partner demonstrate its commitment to the deal? Have you seen any particularly innovative ways for this good faith to be proven?

Some sobering thoughts on hotel pricing trends

When it comes to setting room rates, hotels are in the process of losing control, says Roman Peskin in this important article from the Hotel Yearbook 2010.

He explains how guests (and even previous guests) are gaining in influence. This is a sobering read for all marketing managers!

Niches = riches

Social media have utterly changed the way marketers communicate with customers - and maybe more importantly, how customers communicate with each other.

Julie Keyser-Squires, CEO of Softscribe Inc. in Atlanta, has written a fascinating how-to article for the Hotel Yearbook, in which she not only posits that social media will reach "a tipping point of credibility and use in the hotel industry" this year, but also lists a couple dozen examples of digital excellence in the hospitality field, such as Fairmont's guest community and the Peabody Duck Facebook fan page, among many others.

I think her article is a great primer for anyone wanting to figure out a way to get started down the digital path. Read the whole thing!

The New Normal

In this article, "The New Normal in 2010", Jan Freitag of Smith Travel Research describes five trends he is expecting to play out this year in the US hotel market.

Here's a preview, with Jan hinting at each of the five key factors he sees as critical in 2010 in terms of a conventional slogan ("Common wisdom") and alas, a new slogan that represents the "new normal" for the new year:

1. RevPAR recovery
Common wisdom: Fine through '09
The new normal: Back in heaven in 2011

2. Easing supply pipeline
Common wisdom: If you build it, they will come
The new normal: Ice Age in the debt markets

3. Contraction in the middle
Common wisdom: Puttin' on the Ritz
The new normal: New frugality

4. Group rates vs. transient rates
Common wisdom: Group ADR less than transient ADR
The new normal: Group ADR greater than transient ADR

5. The new value deinition
Common wisdom: It's a seller's market
The new normal: 365 days of sales

Intrigued? Click here to read the analysis behind the slogans.

Are hoteliers saints?

Here's a quote from an article by Rohit Talwar and Glenn Withiam at the Cornell Hotel School:

Perhaps the key message in a recent study that we conducted among hotel industry executives and managers is that they are ready to move ahead. In this Internet-based survey of over 1,200 hotel executives from across the world, the issues they cited most frequently related to:

• improving profits through increasing revenues and cost controls;
• improving sustainability (also known as green operations); and
• building better relationships with guests, especially by improving service.

I know it's just one guy (me) against twelve hundred hoteliers, but does it strike anyone as odd that "improving sustainability" - going green - would rank so high among a hotelier's concerns, even as business is tanking? Haven't we seen in other surveys that as the economy has weakened, environmental issues take a back seat to other, more pressing concerns - such as economic survival? In this one, for example, conducted in January 2010, "global warming" came in dead last - behind 20 other priorities!

Admittedly, this Pew Research study was a poll of the general public, not targeting only hoteliers or even businessmen in general, but nevertheless, I think it is strange that if "green-ness" has tumbled in importance to 21st on a list of 21 issues causing concern for the man on the street, it would still be considered a high priority for hoteliers.

Are hoteliers really so saintly? Or do they see a business rationale behind going green that others perhaps don't? Or maybe the question is simply: Are they telling the truth?

Hotel property markets - rebounding?

This article in the 2010 edition of the Yearbook, written by consultant Allen Toman, sets out four key expectations for this year:

1. A continued low-level of activity for single-asset, “market” transactions. Sellers will remain reluctant to sell at current values based on distressed levels of income and given the downward pressure on capitalization rates. Buyers will focus on other opportunities, including distressed assets, discounted debt, and other asset classes.

2. Smaller ownership companies will explore either privatizing, merging or selling. This will be driven, in large part, by the debt level on properties and the timing of debt maturity. Those with high levels of maturing debt will be unlikely to replace that debt without substantially increasing their equity contribution.

3. Small and large ownership companies will explore issuing new shares or taking on financial partners in order to raise the capital necessary both to continue operations and to meet the higher levels of equity that banks will require.

4. The larger ownership companies will closely watch to see how the initial property company IPOs fare. If the equity markets continue to recover, expect a rash of public offerings involving property portfolios. Also, expect a number of existing public companies to explore using their shares as capital to acquire distressed hotels and hotel companies.


Do you agree with these scenarios?

California's hotel market - boom or bust?

Chip Conley is the founder and CEO of Joie de Vivre Hotels (often just called JDV), California's largest boutique hotel collection.

Closely dependent on the state's economic health, how will JDV fare now that California has hit on hard times?

Chip's article in The Hotel Yearbook is surprisingly upbeat. (Then again, maybe that's not very surprising...) Among other points he makes, he believes that in the current recesson, if consumers are staying a little closer to home, "I'd rather be a California hotelier than a Hawaii hotelier." Makes sense to me!

What do you think? Any California hoteliers out there who care to comment? How (and when) do you see the recovery coming about?

How will things get better (and when)?

To kick off our series of discussions, I'd like to begin with an article written by Sir David Michels, the former CEO of Hilton Group PLC and now a board member at both Jumeirah and Strategic Hotels and Resorts.

I've seen Sir David speak at industry gatherings on eight or nine occasions and I have always been impressed by his lucid overview of the issues facing the business, and his wry sense of humor as well.

Given his high-level perspective, I asked Sir David to tell Hotel Yearbook readers how he thought the economic recovery would unfold, and specifically how the recovery would take shape in the hotel industry, stage by stage.

His article is available online here.

Two things strike me about his stance. First, he believes there is pent-up demand for travel and we will start to see people travelling again in the 2nd quarter of 2010. Hotels will therefore be busier than in 2009 - but because rates won't have recovered yet, they won't be as profitable.

He also writes that "a large number" of hotels will change hands between about April and July.

Do you agree with these views?

Welcome!

Welcome to this new interactive blog, dedicated to the content of the Hotel Yearbook 2010. I'm your host and moderator, Woody Wade. I am the creator of the Hotel Yearbook and have been its editor/publisher these last four years, i.e. for all four of the editions that have been published so far, beginning with the publication's "maiden voyage" in late 2006, The Hotel Yearbook 2007.

In all, some 180 articles have been published, covering such topics as:

• the outlook for the hotel industry in the USA, UK, Germany, Russia, China and about 40 other countries;
• the trends affecting how various segments of the hotel industry will develop, from luxury resorts to timeshare and extended stay;
• the expectations of a host of experts on the economy itself, capital market developments and the impact on hotel acquisitions; and
• new management ideas and tools that will affect the way hotels and hotel companies perform.

So there's a lot of meat we can chew on! Here's how I foresee this blog working:

There are about 70 articles in this year's edition, examining the hotel industry's outlook for 2010 from nearly as many different facets and perspectives. All of the articles were written by very knowledgeable contributors expressly selected because of their experience and expertise in the subject area. For example, the CEO's of about 20 hotel companies around the world participated this year. Despite the wide range of specific topics, what all these articles have in common is that the authors all address this question:

"What should we be expecting

in the hotel industry in 2010?"

My idea in starting this blog is to give readers of the Yearbook, and anyone else who is interested in the future of the hotel industry, the chance to comment on these articles. Do you agree with the author? What do you find particularly insightful or different (or perhaps impractical or wrong-headed) about his or her take on the near-term outlook for the business? What have you got to add - another perspective, an interesting story, a link to another site with a complementary point of view - that can help us all understand the subject better?

Occasionally, we'll also take a look at other issues and trends affecting the hotel industry not necessarily covered in the current edition of the Yearbook. If I find an interesting article, I'll link to it here.

And that's it, really. My hope is that these discussions will be valuable for everybody involved. I will do my best to persuade the authors to participate as well, although I can't promise that that will always be possible. However, whether they take an active part in the discussion thread or not, I will make sure that the authors receive the feedback generated here.

So without further ado, let's give this a whirl! I look forward to your comments.