ABOUT: OPTIMISM | PESSIMISM | REALISM
An attempt to answer 3 Intriguing Questions
by Frank M. PfallerReflections on my contribution to the discourse
with thanks to Sam Weston, Marketing Manager of 80DAYS, Prof. Dr. Willy Legrand of International University of Applied Sciences and Amanda Frasier, President Ratings at Forbes Travel Guild
The topic for the opening keynote panel at the Annual ICHRIE Conference, August 2022 in Washington D.C. was:
Improving the Image of the Hospitality Brand
Moderator: Prof. Dr. Sheryl Kline, Deputy Dean of Alfred Lerner College of Business and Economics and Aramark Chaired Professor in the Department of Hospitality Business Management in the Alfred Lerner College of Business and Economics at the University of Delaware (UD).
Panel Members:
Mitchell Platt, Chairman, Club Management Association of America (CMAA)
Don Welsh, President & CEO, Destinations International, Whashington D.C.
Rob Gifford, President, National Restaurant Association Educational Foundation, Washington D.C.
Frank M. Pfaller, Founder President of HoteliersGuild and President & CEO of CHC - CoutureHospitalityConcept
1st
Starting with a quote from Winston Churchill:
"A pessimist sees a difficulty in every opportunity; an optimist sees an opportunity in every difficulty!"
Obviously, the pandemic & post pandemic era has produced both, losers and winners. Some hotels & brands have benefitted from the digital nomad-ness fuelled by covid; those guests with purchasing power able to escape the urban space into luxurious, remote (away from covid!) but connected at the same time; luxury villas and serviced residences, e.g. AirBnB, but many hotels have indeed suffered and were very negatively impacted
As an example for “optimism”: quite a few of our luxury hotels and brands around the world opened up rooms for COVID-19 front-line workers, first responders and overflow hospital patients who were exposed to the virus - and have thus gained image in retrospect.
A pessimist, aka some marketing & PR experts, actually would have proclaimed this wonderful gesture as potentially dangerous for the brand’s image - as we know today, the opposite was thankfully the case.
In preparation for this speech, it’s been really interesting and some of our expert members, e.g. Amanda Frasier, the new FORBES president, rating and other member partners - operators and marketing experts weighed in and we agreed that
…on the positive side the pandemic - and let’s also not forget the present geopolitical situation! - has allowed the industry to reevaluate itself both for internal set up and external experience for the guests. Ours has always been a harder industry to work in as far as flexibility to balance work and life - the hours are unconventional for most. However, this is a great time now to look ahead and ensure the industry remains an attractive place to work and have a career - and let me add here, especially for our female colleagues - our HoteliersGuild LeadingHôtelières Chapter addressed this problem with an eye opening industry report together with EHL - available on our website link: https:// www.hoteliersguild.com/news/a-must-read-report-described-as-groundbreakingand-eye-opening - and I’ll come back to this topic later.
Question: How has our industry’s image and specifically your segment of the industry been most impacted by the pandemic?
Here's a look at some of the challenges and opportunities for luxury hotels dealing with a rather hostile global economic climate.
Luxury hotels, not only in Europe, are still heavily dependent on the national market segment due to the situation created by the pandemic and the chaotic air travel situation. Even though the pandemic has weakened significantly, luxury hotels will have to earn the trust of guests again, including loyal returning guests. And looking ahead to autumn and winter, our guests will again increasingly demand very clear information about the measures we are taking.
As we know, in urban hotels spas and wellness have never been an important revenue for luxury hotels, but over the past year and beyond, especially leisure destinations luxury resorts saw a steep decline in wellness service, as spas and wellness spaces posed major contamination threats. In preparation for the winter season, it would therefore be worth considering a “spa&beauty" “mini-boutique" in the rooms with in-room spa products - from bath oils and salts, shower oils, moisturisers, collagen mask, hair masks, anti-ageing cream for him and her, special gels to relieve inflammation of the legs, aromatherapy for the room and bathroom (natural), special spray pillows (organic / natural). All products are payable after use.
Consumers will show different habits & expectations and especially discerning luxury travellers will pay more attention to the location of the hotel when it comes to overcrowded places, size of bathrooms and restaurant capacity, in-room dining facilities and hygienic security measures.
Some opportune thoughts, especially with regard to further possible restrictions - or simply because it is convenient to do so: Couldn’t luxury breakfast buffets be replaced by innovative in-room dining experiences?
Top luxury suites can be turned into the most exclusive fine dining experience by the Chef with different cuisine themes ...or ‘sell’ them longer term as pop-up spaces to luxury fashion or watch brands...and of course let's winterise our top outdoor spot e.g. as Oyster Bar! All with the aim of creating opportunities to keep our guests in the house, to provide them with more exclusive offers and to generate additional income. True luxury has always been at the forefront of innovation. It should not depend on the desires or needs of "consumers", nor should it be limited by the traditional concept of utility and competitiveness, with the risk of stifling creativity. Luxury brands are pioneers, not followers! And sustainable luxury is more innovative than ever! So let's gear up for the new normal!
Travellers asked themselves if long-haul-trips and stays in luxury hotels are really necessary - RESPONSIBLE TRAVEL!
Luxury hospitality severely declined, by 55% to 65% at current exchange rates. The Bain Luxury Study 2020 Luxury Goods Worldwide Market Study outlines the pandemic’s drastic impact on the industry and points to a path to recovery
The market was significantly impacted by lockdown measures, with occupancy rates decreasing by over 30 percentage points globally. In select countries, hotels fulfilled a “medical” function to host people in quarantine. Luxury hotels, which will have to win back their clientele when global travel resumes, experimented with alternative forms of stay (e.g., “work-from-hotel”) to stay relevant. Trusted brands played a meaningful role as quality assurance in light of safety-related concerns.
High-end food and fine dining declined by 15% to 17% at current exchange rates, with significant differences in performance across segments: Fine dining was strongly impacted by closures and tourism contraction; conversely, high-end food captured a rising share of consumption, albeit not sufficiently to offset the impact on the entire segment. Fine dining experimented with innovative ways to keep in touch with their customers (e.g., “cook-at-home” kits).
Sales of fine wines and spirits decreased by 10% to 13% on average at current exchange rates. In wines, the segment of super-high-end brands proved more resilient than entryto-luxury due to its stronger connection with personal gratification and collection. The sparkling segment was overly impacted due to its strong link with celebratory occasions. Spirits were more resilient than wines due to a historically higher weight of at-home consumption (to avoid the “drink-and-drive” issue). Gin remained on-trend, and tapped into new geographies (such as Africa) through the rise of local craft brands. Sophistication remains a critical trend, as customers prefer quality over quantity in wines, cocktails and spirits.
In general, order intakes slowed down due to the global economic uncertainty, yet at a lower rate than other luxury segments, with customers willing to secure an “intimate” luxury experience for the coming years.
Most luxury experiences (including luxury hospitality, cruises and fine dining) were disproportionately impacted (–56% at current exchange rates) and should be last to recover given their dependence on tourist flows. Experience-based goods (including fine art, luxury cars, private jets and yachts, fine wines and spirits, and gourmet food) resisted better, declining by only 10% at current exchange rates. They should recover rapidly from the 2020 shock due to positive consumption dynamics across most
categories.
Research reveals impacts on hotel brands used for COVID quarantine by University of Queensland
A University of Queensland study has looked into what people think about hotel brands that were used as quarantine facilities, and the findings show a big difference in hotels that volunteered for quarantine, versus those that were directed to by government.
Led by Dr Monica Chien, Associate Professor Sarah Kelly and Dr Wen Mao from UQ's Business School, the study, which involved 447 Australian travelers, investigated people's perceptions of COVID quarantine hotels and the potential for stigma by being associated with the pandemic.
"Since the onset of COVID-19, hotels around the world, from 3-star to 5-star luxury resorts, have been used to isolate travelers," Dr Chien said.
"While some might assume that being a COVID quarantine facility could create a certain stigma for a hotel brand, our study found that hotels that put up their hand to provide quarantine services were seen as 'good corporate citizens'.
"Meanwhile, hotels that were directed by government to become a quarantine facility received less favorable brand ratings."
Dr Chien said there were many reasons why hotels could have been hesitant to host quarantining travelers, including concerns about enduring negative perceptions, reluctance of employees, or fears of losing their brand prestige.
Associate Professor Kelly added that "hotels are concerned about factors that may stigmatize their brands, such as management of staff, treatment of travelers in isolation, negative comments on social media and the risks of spreading of the virus within the hotel."
"Because the pandemic generates a shared sense of threat for people, stigma can be further entrenched when a quarantine hotel's operations change."
Associate Professor Kelly said the study's finding could help with post-pandemic recovery of the hospitality industry.
"Hotels that signed up voluntarily for quarantine could emphasize the 'greater good' of their contribution during the pandemic while toning down the possible stigma effects.
"Meanwhile, hotels that did not volunteer don't need to fear - our study found that engaging in a good cause, such as a donation to charity, could foster positive brand evaluations."
The Biggest Trends in Luxury Hospitality Revealed by Trivago
“Guests will become more and more demanding.”
Rahim B. Kanani: “Just as luxury operators today are continually trying to differentiate themselves in a very competitive industry, this will continue well into the future. Guests will become more and more demanding for a personalized, exclusive and emotional experience, and luxury hotels will continue to invest in building out guest profiles to ensure those demands are met. But this can go too far: documenting likes and dislikes is more art than science. Ordering a vodka martini at the hotel bar or asking to learn about new Japanese restaurants doesn’t necessarily indicate a preference for either.”
“True preferences are confirmed by multiple encounters, requests and specificities. In other words, while technology can help document each instance, it will still be up to discerning hotel staff — trained to listen, observe and converse — to decide exactly how best to interact with guests, and this will never change.”
“Sustainability is emerging as one of the most important trends of the industry.”
“Another important trend is that far-off travel has become a way to disconnect, reflect, make better life choices and bring more balance to life. As Graham Ledger, Managing Director of Singita Serengeti in South Africa and Zimbabwe explained, ‘Guests are not simply looking to sustain their own health. They are also looking to immerse themselves in new cultures and create meaningful memories, including leaving the location a little better than they found it.’”
“Indeed, this is tied to the intersection of luxury and wellness tourism more generally, as sustainability is emerging as one of the most important trends of the industry. More and more, guests will be choosing their hotels based on their social and environmental impact, and will prefer companies that have embedded eco-friendly practices into their operations.”
“Nothing can replace kind, thoughtful human interaction.”
“The third insight to cut across my many conversations about the role of technology was that while some new digital tools and services could genuinely enhance the guest experience, nothing can replace kind, thoughtful human interaction.”
As to some of the Image Winners:
secluded islands/luxury villas or serviced residences and mountain lodges e.g. SONEVA, AMAN/tented luxury camps in Africa, e.g. GreatPlains/RedCarnationHotels and
• Focus Will Be on Less-Developed Areas
Globally, tourism experts predict that post-COVID-19 travelers will crave authentic experiences that highlight culture and nature - e.g. tented luxury camps, mountain lodges etc. in remote destinations or luxury private homes or villas, including AirB’B offers!
And as to some of the Image Losers:
Inner-city hotels and especially convention hotels and Wellness Spa hotels - by the way again in big trouble now in Europe due to exorbitant energy prices!!! and then of course hotels in destinations that were in total lock-down, e.g. Bali, Singapore etc.:
Which brand or industry segment image has become the most difficult or challenging (to fix) since the pandemic?
• Corporate travel continues to be a challenge for most, although there seems to be conflicting opinion within the industry on the level of recovery we can expect. Some suggest 80-90% of pre-pandemic levels are all we can EVER hope to achieve due to behavioural changes within the corporate world whereas others are suggesting that we should expect to exceed 2019 levels and even by the end of 2023. Other factors may also affect recovery of this segment – for example the metaverse’s impact upon corporate travel (albeit most likely this is 2-5 years out) –will corporates feel the need to travel if they can hold a virtual meeting? Will PA’s and corporate travel planners simply preview venues virtually? Will hybrid events become the norm – with both in person and virtual attendees?
It all has to do with brand value proposition which also means understanding what consumers are looking for, what one offers and what the market offers – sustainability will probably play a role here)
• Recent studies (e.g. Booking.com) suggest that 81% of travellers rate sustainable travel as important to them. I think that focusing on the emerging sustainability initiatives within hospitality and travel (which can often be perceived negatively in this regard due to the carbon etc. required to travel) would certainly help improve the industry’s image. One good example is WTTC’s “Hotel Sustainability Basics”
which launched in April 2022. More about that here https://action.wttc.org/hotelsustainability-basics
• And perhaps not necessarily related to the pandemic per se, but certainly another opportunity for hospitality to be an industry front-runner is in how we handle guest/ customer data moving forward. There have been a number of high-profile missteps by some rather large brands (e.g. Marriott) so consumer confidence in what a brand does with their first party data is low. The removal of third party cookie data and shift to a ‘first party future’ represents an opportunity for hoteliers (and other industry’s too of course) to use this data more responsibly … to add value to the guest experience rather.
• after initial shockwaves luxury villas boom whereas there were high losses for hotels 55%-65%
• High-end food & fine dining declined by 15-17% with boom for “cook-athome” kits
• Who's most vulnerable to COVID-19's impact on tourism?
• Impact depended on dependancy of countries’ GDP on tourism/ vulnerability e.g. Mexico 15.%; Spain 14.3%; Italy 13%; China 11%; Australia 10.8%; Germany 90%; UK 9%; USA 8.6%; France 8.5%…
• In correlation, the hotel industry experienced a similar fate. The late 2020 state can be best explained by two words: High Vacancy. Many hotels were closed, mostly on the luxury end. While the economy class fares a bit better, the industry was at hold. There are multiple recovery scenarios, but the most realistic one predicts that 2023 will be the year of a proper recovery.
• “intimate” luxury experience is in high demand
• Ultra-high-net-worth individuals are expected to show sustained demand in the years ahead
• Most luxury experiences (including luxury hospitality, cruises and fine dining) were disproportionately impacted (–56% at current exchange rates) and should be last to recover given their dependence on tourist flows.
• The most extensive sustainable travel research from Booking.com to date highlights increasing desire to make more mindful and conscious choices across the entire travel experience
● 81% of travellers confirm that sustainable travel is important to them, with 50% saying that recent news about climate change has influenced them to make more sustainable travel choices
At HoteliersGuild we have a global platform and a voice through our membership of some of the truly brightest minds, and I actually founded our Academy of Hospitality Arts during
the pandemic, already with a view towards the post-pandemic era and it’s requirements, as on the consumer side, the mindset has changed. Guests want to feel safe while traveling, they prefer the contactless check-ins and check-outs, with a big emphasis on hygiene. Rather than staying in hotels, people are choosing to stay in luxury private homes, isolated environments and have a big focus on remote locations. While vacations are not going away, the way we travel has changed dramatically.
Of course there remains a lot of unknowns and the long-lasting image impact of the pandemic upon travel patterns can be predicted, but not truly known.The hope is, of course, that we maintain course for a ‘New Normal’, or even better.
However, I feel quite comfortable to predict with a clear conscience that sustainability and a more experiential hospitality offering will become one of the most important trends in the industry. Those who are embracing sustainability & emotional experience are likely to be perceived positively.
2nd Question:
other industries too.
Let’s be realistic!
Both the pandemic and the current geopolitical situation as well as the prevailing economic uncertainties combined with the dramatic exodus of workers in our industry are the main reasons for the status quo. However, this also creates opportunities for positive change. As William Arthur Ward, an often quoted writer of inspirational maxims already said:
What are the TWO strategies that your industry segment can do to create a positive image of our industry? We can learn from
“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails."
We had a good discussion about DEI if you plan to use this as one of your two strategies, please provide concrete examples that work to create a more diverse, inclusive environment.
1. I know from our pre-conference meetings that we all agreed that workforce development and diversity, equity & inclusion are the keys.
And I am so proud to tell here you that our HoteliersGuild initiatives count with the support of some of the sharpest minds, again from a wonderful mixture of academia and practitioner members. I ENCOURAGE YOU TO READ OUR STUDY WITH EHL ON “DRIVING FLEXIBLE WORKING STRUCTURES IN HOTELS” in collaboration with EHL which addresses topics e.g. employees freedom to organise themselves; work flexibility that benefits both, employees & hotels as it increases innovative capabilities, company resilience and employee wellbeing.
The research was headed by our LeadingHôtelières chapter co-chairlady Prof. Dr. Sowon Kim of ELH and supported by 80 HG member hoteliers and 800 of their employees!
We strongly believe that improved gender equality at executive level is the key to our industry's future and we are committed to driving positive change through demonstrating academic research, building sponsorship and like-minded networks, transforming design and development strategies, and engaging communication.
2. Hospitality has always been and will always remain about selling a dreams and creating lasting experiences and memories. This is why truly successful hotels and brands must focus on their brand stories!
So:
Firstly: Create a strong narrative for your brand based e.g. on Sustainable Experiential Luxury - TECHNOLOGY! DIVERSITY & FLEXIBILITY
Secondly: Deliver Hospitality and Personalised Service Excellence
Let’s ask ourselves what we are actually delivering: Service or Hospitality? While Service is action-orientated, Caring Hospitality is universal!
And that’s totally in line with another reaffirmation I got from my many conversations about the role of another hot topic, technology! While some new digital tools and
services could genuinely enhance the guest experience, nothing can replace the kind, thoughtful and natural human interaction of our employees whom I always prefer to call ‘colleagues’ .
My personal understanding of today’s LUXURY for UPMARKET BRANDS is an exhilarating cocktail, a mix of EMOTIONS & EXPERIENTIAL HOSPITALITY, SUSTAINABILITY AND EXCELLENCE and HIGHLY PERSONALISED GUEST SERVICES.
A (realistic) RECOVERY OUTLOOK: (provided
In the 6th report in the Cutting Through The Noise series, we share key insight, trends and strategies to better understand and attract today’s traveller.
Our last report, in April this year, discussed what might influence the return of travel in 2021. Just 3 months later, we’re delighted to see upwardly moving trends and momentum building, not to mention (cautiously) smiling hoteliers.
However, we are not welcoming the same guests of old. The pandemic continues to impact the needs and wants of today’s traveller.
Within this report, we analyse the data from over 600 hotels, courtesy of our sister company, Hotel Benchmark, alongside key insight from Google, STR, BVA BDRC, Expedia, TripAdvisor and a number of other sources. The aim is to establish how hoteliers can both market to and accommodate the ever-evolving needs and wants of guests in 2021.
SENTIMENTS & TRENDS INTERNATIONAL IMPROVES
In our last report we showcased Google data that suggested international travel was looking unlikely in 2021. Key markets like the USA appeared unwilling (or unable) to travel abroad with just 11% planning a trip within the next 9 months.
Today, new data from suggests that American confidence in international travel is building, albeit slowly. This is especially true for Millennials and Gen Z age groups.
However, their primary focus remains on domestic travel for the next quarter. The older demographics (Gen X and Boomers) remain less confident at this stage, even for domestic travel.
Continue to focus your marketing efforts on those in-market to travel to you, but ensure you plan international campaigns so you can react quickly to markets reopening and capture demand.
by our strategic partners at 80DAYS and BENCHMARK)CITY PROPERTIES HAVE REASON TO BE OPTIMISTIC
The challenges that the pandemic has brought city properties have been welldocumented. However, there are some early signs that recovery is gathering pace for urban properties too.
A ‘major city’ (36%) was second only to ‘beach resort’ (45%) in a recent Expedia survey, when respondents were asked ‘where are you considering travel in the next 18 months?’. This, coupled with a recent TripAdvisor survey that showed the desire to visit cities is far greater among those who are fully vaccinated, gives clear indication of a desire to return to city travel.
Where are you considering travel in the next 18 months?
Meanwhile, data from Hotel Benchmark shows that UK city hotels observed strong growth in June, fuelled by the May half- term holidays and the wider easing of restrictions on May 17th. Average website traffic was up 413% YoY, with transactions up 664%. Contrast this with rural hotel performance in the UK; up 205% and 178% respectively, albeit from a higher base point.
European city hotels remain a little behind in their recovery; average website sessions were 41% behind those of UK cities during June, with revenue 10% lower.
Where are you considering travel in the next 18 months?
Beach Resort: 45% Major City 36% Rural Area 25% Mountain 23%
A NEW NORMAL
Of course there remains a lot of unknowns and the long-lasting impact of the pandemic upon travel patterns can be predicted, but not truly known.
Our friends at Google ran a study into future purchase intent in Q4, 2020 to evaluate consumer attitudes based upon two hypothetical scenarios; a ‘New Normal’ and a ‘Recurring Nightmare’. Respondents were asked whether they’d be less, the same, or more likely to travel in both scenarios.
The results have just been published and show a clear desire to travel under a ‘New Normal’ with 67% of travellers being as likely, or more likely, to book travel. Alas, this figure drops significantly to 38% assuming a ‘Recurring Nightmare’ scenario emerges.
The hope is, of course, that we maintain course for a ‘New Normal’, or better.
CONCLUSION
Momentum is building but there’s a long road ahead. Some analysts predict that we won’t see a return to pre-pandemic levels of travel before 2023 at the earliest. But how can you attract today’s traveller?
Be more cat - remain agile and ready to pounce. Plan for multiple scenarios to capitalise on markets as they reopen. As the UK has shown, demand can move quickly and your marketing must keep pace.
Continue to focus on domestic travel – but widen the net and expand your geographic targeting for leisure business to those within a 4-6 hour drive. Look at how you might attract local corporate business too; regional meetings, conferences etc.
Think of everything – anticipate your guests needs and how they may have changed as a result of the pandemic. Flexcations, furry friends, families; offer convenience and wellthought out experiences. Make their stay worth the journey.
Keep communicating – especially with those who have booked. Cancellations are rife, so keep reminding your guests why they should (or did) book! This could be their first holiday in quite some time – keep them excited! Inspire them with fantastic photography, curated local experiences and stories of what awaits.
• Capitalise on demand, but be careful not to anger your regular bookers who may not be expecting rates to have increased substantially. Even consider closed-group offers so that they can return later at a rate more familiar to them, or at least with some added value perks. This could even help start to get some long-lead business on the books. Above all else, keep your offering flexible.
• Start thinking about Q4 – while we may be preaching to the converted, we know that it’s very easy to get caught marketing-in-the-moment. Start to give some thought on how to generate demand for Q4. What campaigns and offers would entice bookers this far out?
3rd Question: The importance of joint industry and academic mentorship and scholarship programs for students
One of my favourite topics!
The argument is probably that the industry must reinvent itself when it comes down to dealing with people – and I mean employees in this case; or the other way around, perhaps a new generation will revolutionize the way hospitality is conducted. Thankfully we see this already with quite a few new hospitality concepts which we support via:
• YoungHôtelières Insights where we publish articles with excellent ideas from top students of our partner institutes & universities - view them on our website.
• Feedback and results from our YoungHôtelières Intern & Mentors Program where we offer Joint internships in member properties with the respective GM becoming a comentor + weekly jour fixe virtual meetings of 45-60 min
• Volunteer requests from EHL etc. for remote and/or on-site training with our international marketing/sales & PR agency partners Lobster/80DAYS etc.
• Our interns have the opportunity to take part as observers in our monthly Academy meetings, write agendas & minutes of meetings; produce digest summaries of academic papers under the supervision of the respective authoring professor;
• They get outstanding networking opportunities via HG with a direct line to some of our GM’s
• And then of course our SIRIUS ACADEMY AWARD curated by Preferred Hotels + next year LUX*Collective, where Lindsey Ueberroth has granted a scholarship worth E 30K for an underprivileged female student from a black or ethnic minority group at EHL, IPB or at another reputed hotel school, which will be matched or hopefully surpassed by multiple generous donations from our members.
I must say that looking back over the past 2 years fills me with pride and humility, gratitude and satisfaction. I believe that our wildest dreams and expectations have been exceeded with this amazing collaboration between academia and practitioners.
Allow me to close by quoting Lindsey Ueberroth, CEO of PHG and co-founder of the HoteliersGuild Academy of Hospitality Arts and LeadingHôtelièrs Chapter who says:
“The HoteliersGuild Academy of Hospitality Arts and the LeadingHoteliers chapter was launched by an esteemed group of executives who share a commitment to accelerate gender equality in the hospitality industry and elevate more women into leadership roles. The collective expertise of our members is incredibly powerful, and we look forward to creating further momentum on a global scale by using the findings of our first year’s work to create and provide education, mentorship, and training in the areas that will have the most success in moving progress forward.I am proud to join together with fellow industry colleagues in championing this crucial cause and very excited to see what we can achieve in the years ahead."
