Briefing: Trust issues hold back the Sharing Economy

New research shows that the Sharing Economy in the UK is being held back because of a lack of trust and understanding. A survey by Trust Pilot found that 29% of people have previously avoided using a sharing economy platform because of a lack of clarity on who would hold responsibility when something goes wrong. The survey also found that 42% of people would usually wait until a friend or family member has used a sharing economy scheme before using it themselves.

In these videos our experts discuss the impact of the sharing economy in hospitality:

A separate survey by Veridu also found similar results.  The survey states that ‘A lack of understanding of the Sharing Economy in the UK is impacting growth with 41% of respondents citing this as a reason for not participating.’ Other reasons given for avoiding participation were unwillingness to share possessions with strangers (41%), concerns for personal safety (34%), and worries that possessions would be damaged (29%).

Some Sharing Economy business have grown faster than others, and Airbnb is a clear success story, although it still has hurdles to overcome. Trust Pilot’s survey found that 58% of respondents had used property rental sharing economy services (e.g. Airbnb) whereas only 28% of people has used private car loan services or car sharing schemes (e.g. Zipcar).

With word of mouth remaining such a strong driver of growth, trust is sure to keep growing over time and emerging Sharing Economy business will continue to present competition to more traditional business.

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Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: Convenience now key to customer loyalty

According to research from J.D. Power, 41% of loyalty members chose a program that was most convenient for the locations they travel to. The report also found that satisfaction with loyalty programs is highest among Gen Y members. However, in a separate survey Software Advice found that only 14% of Gen Y (18-34 year olds) participate in a hotel loyalty program. The industry is now finding new ways to define and encourage loyalty.

In these videos experts discuss how loyalty fits it into hospitality today:

Digital disruption has meant that loyalty is now lacking across many industries, not just hospitality. According to Accenture we now live in a “switching economy” that accounts for an estimated $6.2 trillion in revenue opportunity for providers across 17 key markets today.

Loyalty programs are still popular where the purchase is part of everyday routine i.e grocery shopping. Rewards that can be used routinely are also more popular. According to an Excentus consumer survey 37% of consumers prefer fuel saving rewards. Whereas only 17% prefer Airline miles and 14% prefer hotel points.

Staff communication is still driving much of loyalty participation in hotels. The J.D. Power 2015 Hotel Loyalty/Rewards Program Satisfaction Report found that 41% of members learned of their rewards program from a hotel employee during check-in/check-out.

Software Advice’s survey found that 51% of millennials who do participate in loyalty programs use their rewards on free or discounted stays. 51% said they would find a loyalty app useful, although 49% of respondents say they prefer to learn about their loyalty points via email.

The Switchfly Hotel Reward Payback Survey conducted by IdeaWorksCompany looked at “rewards payback”, reward value returned for every dollar spent on hotel rates. It looked at Starwood SPG, IHG Rewards, Hilton Hhonors and Marriott Rewards and found that Marriott Rewards had the highest average rewards payback at 9.4%. Value did vary depending on location and dates of the stay, and the highest payback result found in the survey was 24% for a stay in Hilton Beijing in February.

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Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: New entrants keep industry in flux

Last year Amazon entered and left the hotel booking sphere in a matter of months. The hospitality industry is in flux with new players of all kinds entering the hospitality industry at different angles.

Google has also made several ventures into hospitality with its now defunct hotel finder page, and more recently added hotel booking function on Google Maps.

When companies from outside the industry enter hospitality, this brings new challenges and opportunities. In these videos hospitality experts share their reactions to new entrants:

In April 2015 Amazon opened its amazon.com/destinations page, on which customers could browse and book accommodation form a variety of brands. However, this service was stopped just six months layer on 13 October 2015. No reason was given but a message was placed on the website and booking that had already been made where honoured. This was not the only change in Amazon’s business last year, in December Amazon Local also stopped its daily deals.

Google has made several ventures into hospitality with its hotel finder, and Google Hotel Ads through which hospitality companies can buy ad space that appears globally on google.com and Google Maps, wherever customers look for hotels.

A search for a hotel on Google Maps brings up a list of hotel and price estimates, in the side bar and on the map. An extra search bar allows the user to select holiday dates and then click through to a hotel site to complete the booking.

With these frequent changes, and more sure to come from big digital players, the industry must continue to keep its eyes open and be ready to adapt.

Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: OTAs vs hotels in the rate debate

Rate parity agreements, which have allowed OTAs to match any low price openly offered on hotel sites, have recently been a sore point between OTAs and hoteliers.

This year, regulators across Europe have been scrutinizing these clauses. In July, France passed a law banning rate parity. Before this in January, a German Court upheld a 2013 decision to stop an OTA using a ‘best price’ clause.

This briefing offers a variety of perspectives on the OTA/hotel relationship:

Regulators who have been looking at these agreements include the Competition and Markets Authority in the UK, as well as Competition Authorities in France, Italy and Sweden.

In 2013 in Germany the OTA Hotel Reservation Service was stopped from applying a rate parity clause on the grounds that it restricted competition and did not benefit the consumer.

One way hotels have been able to get round these clauses is by offering discount to loyalty members. Ibis hotels is currently advertising that its website prices are 5% cheaper than anywhere else, but reading the small print, this is only if you have a membership card.

The British Hospitality Association has supported the decisions in France and Germany and has encouraged the UK government to follow suit.

They have argued that rate parity is unfair because, according to BHA, when an OTA matches a low room rate it is also taking up to 35% of the rate as commission. The organisation say agreements between hotels and OTA’s are, “too costly and one sided at this point.”

This Summer Expedia and Booking.com both announced pan-European changes to their agreements with hotel partners.

These agreements can work both ways, and stop OTAs offering reduced rates, and can also apply to other distribution partners such as high street travel agents.

There is still debate as to how much the removal of rate parity clauses will ultimately affect the enormous power of the OTAs.

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Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: Good data management brings insight and development

Our reliance on digital technology means that data is building at an increasing rate. According to IBM we currently create 2.5 quintillion bytes of data everyday and 90% of the data in the world today has been created in the last two years alone.

Much of this data is irrelevant but where businesses are identifying the correct data sources and taking the time to analyse them they are finding value. Hospitality business should also think about making accurate data available to guests and clients.

In this briefing four hospitality experts discuss data management and analysis:

Many disruptive businesses have digital and data front and center of their strategy.

In hospitality Airbnb employs ‘data scientists’ to analyse things like the likelihood of a host accepting requests from potential guests. This analysis can help them increase the amount of successful matches.

In other industries, companies like Uber have invested in clever data analysis to be able to make predictions about its customers’ behaviours outside of the cab.

Established hospitality brands are also investing in digital and data. In October last year Accor announced plans for its digital transformation, which involves a €225 million investment plan and focus on two ‘pillars,’ IT infrastructure and data management.

Much of the data used and produced today is on mobile devices. According to Accenture ‘50 billion devices will produce actionable data by 2020’.

Research by Ericsson found that mobile data traffic increased by 55% from 2014 to 2015.

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Video clips produced by yBC for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: OTA giants are eating up the industry

According to a report from IBISWorld, online travel agents are expected to account for 51% of the UK travel industry’s total revenue in 2015. This has risen from just 10% a decade ago. Online travel agents are now powerful entities in the hospitality world and are growing and consolidating. Industry leader Expedia has announced the acquisition of two travel agents in as many months.

In these videos, hospitality experts discuss how the OTAs have gained such power and what this means for hoteliers. Includes comment from Expedia’s Christopher Michau:

A Report by Euromonitor International ‘Online Travel Intermediaries: A Fast Changing Competitive Landscape’ found that on-line travel intermediaries grew 8% CAGR over the 2008-2013 period. This reflects activity both from OTA’s and online booking platforms owned by hotel brands. But in an industry where online booking is growing so rapidly in popularity, the OTAs more specialist expertise gives them an advantage, as discussed by Brian Reeves above.

The Euromonitor Report also states that: ‘The online travel agency sector is seeing increasing consolidation, with Expedia and Priceline emerging as its dominant players.’

For 2014, gross bookings for Expedia Inc increased by 28% from 2013 and revenue increased 21%. Currently Expedia Inc includes (among others); Expedia.com, Hotels.com, trivago (a metasearch website), and Travelocity. The last of these, Travelocity, was acquired in January 2015 for $280 million. This month Expedia has also announced an agreement to acquire Orbitz Worldwide, which comprises of a travel technology solutions company and travel planning sites such as cheaptickets.com.

The Priceline group had $39.2 billion gross bookings in 2013. The Connecticut, USA, based group owns and operates Booking.com which takes over 750,000 room nights reservations a day.

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Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: Hotels struggle to follow trend for personalisation

Companies using personalised marketing have experienced an average uplift in sales of 19% according to research. Personal customer service has always been key in hospitality; ‘A warm and sincere greeting using the guest’s name’ is step one of the Ritz Carlton’s three steps to service. With the increase in data that is being collected from guests, hotels should be able to recognise guests from previous stays and personalise service towards them, but it is not easy. Figures from UNWTO show that there were 1087 million international tourists in 2013 and 6 billion domestic tourists worldwide. With so many different faces passing through the doors it is hard for hoteliers to distinguish individual customer profiles as our experts discuss in this week’s briefing:

Many hotel brands have loyalty programs, which can help them keep a profile of each guest but even within this there are many people to keep track of. Hilton HHonors is Hilton Worldwide’s loyalty programme, which has 42 million members. IHG has 161 million guests nights per annum and its reward club has 82.4 million members globally.

Research shows that 78% of consumers feel that personalised marketing content leads to a deeper relationship with a brand. Personalisation is also used in online retail. 60% of consumers prefer it when online store remembers their contact details and purchase information. In a survey by Oracle 54% of retail consumers said personalisation was important. With customer service becoming more personalised across the board this will continue to be a challenge for hospitality to figure out.

If you’ve been sent to this page and you’re not yet on the circulation list to receive these regular briefings and you would like to sign up, you can do see here. It’s free.

Video clips produced by ybc.hpgcms.wpengine.com for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

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