In Newsletter #11: A vote for consolidation; Mobile messaging a must-have?; Millennials behind the Marriott-Starwood merger?
A note in support of consolidation
WebInTravel | The more travel consolidates, the more freedom for differentiation
Why it matters: We often hear concerns from our hoteliers about the increase in consolidation of the tech giants. “How can we compete with their size?” is a common question. The simple answer is to ask yourself what you are really competing with. They exist to build technology that consumers love (and thus will pay for). For the B2B space, their consumer is the hotel. Surely, you might think, the bigger a company the more it can afford to do research and build truly outstanding technology. The reality is often far from this, as corporate structure can be at odds with creative solution design and thus bleed talent from the industry. Look only to the insider grumblings about the Oracle purchase of Micros.
However, let us entertain a slightly different viewpoint. We love how Yeo Siew Hoon writes this article as a champion of freedom for differentiation as consolidation occurs. Ms. Hoon is referencing Airbnb in this case, but let’s think about this as it relates to hotel technology in a positive light for hoteliers. Entrepreneurs, by definition, are problem solvers. The bigger the problem, the greater the opportunity for really great entrepreneurs who seek the largest markets to build a solution for. If the hospitality market, one of the largest industries in the world, is actually unhappy then this is sure to attract the brightest minds to find solutions.... and if hospitality is truly at a tipping point of tech disruption, let us all seek and attract the brightest minds. Supporting the enablers in the space to continue to creatively build the future of hotel technology with you (and not against you) may be the best bet you could make in all this chaos.
Mobile messaging becoming a must-have?
Why it matters: In our industry, debates over whether your hotel needs a mobile app or should optimize for the mobile web often center on the pros and cons of a particular technology, rather than on the goals hoteliers want to accomplish with a mobile strategy.
It’s becoming increasingly clear that improved hotel-guest communication should be one of those goals hotels set to improve with mobile. The question then becomes how best to support this goal with technology. As we’ve written about before, mobile messaging is fast emerging as the communication tool of the moment, as Millennials - digital natives - bring their expectations of and behaviors around technology with them when they travel. Booking.com’s moves with Pulse underscore the growing necessity of guest-facing mobile messaging. In a world of real-time communication you have to ask yourself if emails are becoming old and obsolete forms of communicating with guests about their needs. Even today, Expedia Partner Central released their real time chat to go along with their real time feedback functionality.
Digging into the motivations behind the Marriott-Starwood merger
USA Today Travel | Millennial Tastes are Changing the Hotel Experience
Why it matters: Since news of Marriott’s $12.2 billion acquisition of Starwood Hotels & Resorts last month (which will make the combined company the largest hotelier in the world), there’s been much speculation about what motivated the merger. Many have attributed it to Marriott’s desire for scale, with the thinking scale could work as a bulwark against both the OTAs and the homeshare movement, as well as grant Marriott more bargaining power against loyalty programming affiliates like American Express. Less has been written about other possible motivations unrelated to scale, which is why veteran reporter Nancy Trejos’ recent piece in USA Today Travelappealed.
Ms. Trejos suggests Marriott’s bid for Starwood might be more about the changing demographics of travel and the corresponding rise of independent hotel brands than just a play for scale. Indeed, the Starwood hotel group includes many strong players in the lifestyle brand category, such as W Hotels and Aloft, which are known fordesign and technology features known to appeal to younger travelers. As we’vewritten about before, independents, which typically have more flexibility and agility when it comes to design and technology upgrades are well positioned to take advantage of this growing demographic (currently the largest generation in the U.S. and estimated to drive 50% of purchase decisions by 2018), and gaining strength because of it.
And news today of AccorHotels acquisition of FRHI Holdings Ltd, the parent company of the Fairmont, Raffles, and Swissotel brands, and a strong portfolio of independent hotel brands, suggests there’s legs to this idea.