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Where Beyoncé stayed for the Super Bowl: Newsletter #17

Where Beyoncé stayed for the Super Bowl: Newsletter #17

Where Beyoncé stayed for the Super Bowl: Newsletter #17 February 10, 2016


In Newsletter #17: Where Beyoncé stayed for the Super Bowl


Apologies - I know we keep talking about Airbnb. Primarily because everyone else is, but also because it comes up in every meeting I sit in. Everyone is worried, so the piece below should simplify it. Airbnb is a threat. A huge one. Look at Beyoncé’s Instagram… she stayed in an Airbnb during the Super Bowl! (Still shocked about the Denver shutout). This should be a warning. 5 years ago this R&B queen would likely be paying one of the most expensive hotel bills in the country that weekend.  All of that $ was lost to Airbnb.

So how can we respond? Step 1: lower your cost base. Airbnb has no fixed costs and if history tells us anything, then the pattern of disruption usually comes from new marketplaces that are created with worse economics forcing the new market to lower operational costs and steal market share on price. This is exactly what they have done. As this flows upstream hotels need to lower costs through automation. However, it is not just a cost war. Step 2: winning lifetime customers is just as important so a few pieces below can shed some tactics on this.

It's nice to be home in London, 

- Alex Shashou


Where Beyonce stayed for the Super Bowl



Who runs the world?

Skift | Measuring Airbnb's Real Threat to U.S. Hotels Using Industry Metrics

Why it matters: Much ink has been spilled speculating about the impact of Airbnb on the hotel industry, but now for the first time we’re starting to see real numbers.

We’ll admit we were surprised to see that the ADR of $148.42 for Airbnb rooms sits above that of hotels at $119.11. Now, not many of our readers are selling or staying in rooms at this low pricing tier, so clearly seeing data in your category will be more useful. But what Airbnb's ADR does suggest on a whole is that the home share giant can attract the higher end of the market, and speaking with a few GMs of our partner hotels in NYC about this, I was surprised to hear that they are indeed noticing a change. Long term clients from Europe who used to call for a room are now on occasion opting for Airbnb. Skift does a nice job here of aggregating some of the data, particularly as it relates to Airbnb's highest revenue city, New York, but you can purchase data on your own market from CBRE at $295 per city if you want to take that deeper dive.  


Lessons from the Special K loyalty program

eMarketer | Loyalty is an Emotion, Not a Transaction  

Why it matters: Repeat business (customer lifetime value) is so important to a hotel’s livelihood. Yet loyalty programs today often lack relevance and value. We understand the concept of loyalty has changed and it is harder to create an effective loyalty program, but that doesn’t make it an unworthy pursuit.

One way of making a program more relevant is to get to know your guests as well as possible. Get to know their on-stay preferences, as well as their larger context. The article suggested borrowing from companies like Google, Amazon and Zappos for inspiration, but are there other cross-industry examples to help refresh your understanding of your guest’s expectations? 

As Mark Taylor points out, consumer expectations have been changed by these aformentionedcompanies that lead with experiences. Most consumers today determine value by its immediate potential impact instead of its long-term benefits. It is more impactful to create a positive experience today than it is to provide discounts in the future. So with that in mind, what are some quick and easy changes you can make for your most loyal guests to give them immediate gratification? Free breakfast, a bottle of champagne with a promissory note of more to come with every direct booking? If you want loyalty, like most things in life, you (and not your guests) must earn it.  


Making every stay a 5-star experience.  

Hospitality Net | What Can Reviews of the World's Top Hotel Teach You?

Hotel Interactive | Learning from Economy Hotels in Five Steps

Why it matters: This week, we came across two articles that drew from the opposite spectrum of the hotel landscape to suggest ways hoteliers can improve their business based on actual user reviews. While most of the learnings from the economy hotels mostly focused on small tactical changes that together can improve a guest’s overall experience, some of the insights gleaned from the Umaid Bhawan Palace in Jodhpur, India, Tripadvisor’s 2016 Hotel of the Year, were more high level in their application.

From the very basic (“offer complimentary coffee and breakfast”), to the more complex (setting “reasonable expectations” that can be consistently exceeded), most of recommendations are about elevating the guest’s experience. Because most of the changes are either free or inexpensive, it could be worthwhile to pick a few from each category and test whether or not they make a difference. Conversely, you might also consider trying all of them from one category and seeing how it impacts your hotel’s performance. Either way, should you decide to try any of these suggestions, we would love to know how it impacts your business.    .