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“Less Worse”-Most People’s View of 2010

Monday, February 1st, 2010

Thanks to Jim Higley and HotelNewsNow.com for the excellent summary on where people think our industry is heading in 2010.

Blog: These conferences reveal some interesting trends
Posted by Jeff Higley at 12:00 AM

The best part of back-to-back conferences at the beginning of the year is they provide a gauge of what’s in store for the months ahead. It was no different last week as the Americas Lodging Investment Summit in San Diego and the Hotel Brokers International annual meeting in Las Vegas provided more than just a glimpse of what’s going on in the hotel industry:

  • “Less worse” is how most people are looking at 2010. It’s not going to be great, but it will be less worse than 2009.
  • Insurance companies such as Pacific Life are beginning to dip their toes into the hotel-lending space, and that’s a good sign there’s at least something positive starting to happen. Of course, these loans will mostly be for big-box hotels that at one time had a value of more than US$100 million. Therefore, we’re still waiting to hear of a mass of lenders interested in jumping in for properties previously valued at US$20 million to US$80 million.
  • Regional banks will start foreclosing on hotels this year as they will get pressure from FDIC regulators to shore up their books.
  • A number of companies, including HEI Hotels & Resorts and Richfield Hospitality, have money to lend to hotel owners who have troubled assets. The companies want to lend what essentially is mezzanine financing, but instead of having the money paid back, the companies want an ownership stake in the troubled asset.
  • In general, as long as hotel owners are meeting their operating expenses and can meet debt interest obligations and have a penny to pay the bank, they won’t receive too much chin music from the bank.
  • Any banks lending money are requiring 50 percent equity for the discussion to even get started.
  • There’s belief that the long-awaited increase of the Small Business Administration loan limit to US$5 million is around the corner. The increase has been talked about for more than a year. The limit currently is US$2 million. When it is increased, lenders such as PMC Commercial Trust (which hasn’t stopped giving SBA loans during the downturn) will find plenty of borrowers in line.
  • Regardless of the reason for gathering—a general session, a panel discussion, networking events or late-night rendezvous at the lobby bar—there is a firm belief that the industry has hit bottom. No one is sure if there’s going to be a W recovery—which will mean an increase then a decrease—but there’s a strong belief that the bottom has been reached in operating performance and transaction activity.
  • Most executives I talked with are budgeting for RevPAR to be between -6 percent and +3 percent. The more optimistic groups are convinced there will be a huge uptick in the industry following a tough first quarter. Those with a more pessimistic view think the comeback won’t start until late in the year.
  • One of the more interesting approaches to what the recovery might look like was presented by a couple of attendees who said they expect it to look like a square-root sign. That’s some ups and downs and then a long flat recovery. I tend to think it will have the look of a Nike swoosh—a steady gain in momentum beginning late in the third quarter of this year.
  • Hotels took a beating during request-for-proposals season as clients were looking to save money any way they could. A number of people told me they took the approach of, “Hey, we can make this cut now, but if we do this for clients, we won’t be here next year. So, for long-term considerations, don’t try to squeeze every cent out me for rates.” Most of the people said the clients were understanding. My question: When good times return, will we remember those clients when we’re raising rates?
  • In pre-ALIS polling, 38 percent of attendees said a turnaround will occur in the third quarter of this year, Jim Burba told attendees. Seventy-five percent said it will come sometime this year. What’s more encouraging is that 60 percent said their companies will grow this year.
  • The biggest worry for conference attendees clearly were the lack of debt and the lack of group business.
  • A stark statistic from Mark Lomanno’s Smith Travel Research presentation: On an average day, the hotel industry sells 215,000 fewer rooms (US$42 million in revenue) than it did 18 months ago.
  • Also from Lomanno: High-end hotels were affected by rate more than demand, and low-end hotels were affected more by demand than rate.
  • The quote that best sums up the transaction environment comes from Arthur De Haast of Jones Lang LaSalle Hotels: “There’s a lot of stress on the system, but not as much distress, and that’s what the buyer is looking for.”
  • It was no surprise when the 1,001-room Hilton Orland-Bonnet Creek and the 498-room Waldorf-Astoria Orlando took home the Development of the Year honors at ALIS. The US$550-million project developed by KUD International LLC and Brooksville Development Corporation was among the most impressive hotel projects that opened last year. … Other ALIS award winners included the US$44.24-million purchase of the iconic 322-room Windsor Court Hotel in New Orleans, Louisiana, as the winner of the Single Asset Transaction of the Year Award. The Berger Company and Crow Holdings paid about US$137,422 per room to Orient Express Hotels for the property. … Ron Danko, executive vice president of CBRE Hotels, won the Jack A. Shaffer Financial Advisor of the Year Award. … And Randy Smith, founder and CEO of STR, was awarded the Lifetime Achievement Award from the International Society of Hospitality Consultants at ALIS.
  • There is some sentiment that top assets in certain markets are ready to start pushing rate.
  • There is more demand than ever for a broker’s opinion of value—especially as more banks take back hotels. They’re looking for some consistent valuation, and it appears brokers can provide that stability for lenders looking to unload assets from their balance sheets.

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Billionaire-Owned Hotels and Resorts

Friday, January 1st, 2010

Forbes magazine (www.Forbes.com) published info about hotels and resorts owned by billionaires. Web sites make fun viewing:

Hedge fund billionaire Paul Tudor Jones bought 350,000 acres in Tanzania.His Singita Grumeti Reserves feature air-conditioned tents and other amenities to provide a luxury experience.

http://www.singita.com

William Cook restored French Lick Hotel & Casino in Indiana. It includes golf, 12 eating venues and the casino.

www.FrenchLick.com

Kuwait’s richest man, Nassar Al-Kharafi owns Port Ghalib Resort, close to Egypt’s pyramids. Three resorts in one. Great beach and scuba diving.

http://portghalib.orientory.com

Donald Trump’s Trump International overlooks Central Park.

http://www.trumpintl.com

New York’s Plaza Hotel is owned by Israeli titan Yitzhak Tshuva. It’s Central Park and Fifth Avenue location is premier.

http://www.fairmont.com/thePlaza

Topping the list of billionaire owned hotels is Steve Wynn’s Wynn Las Vegas. While staying there you can check out the cars at the Ferrari-Maseratie dealership, or the multi-million dollar art collection.

www.wynnlasvegas.com

Sheldon Adelson took his concept of the Venetian in Las Vegas to unparalleled heights with the Venetian Macau. It is the equivalent of 56 football fields and includes a 14,000 seat stadium.

http://www.venetianmacao.com/en/

Hasso Plattner, Germany’s richest man owns Fancourt Hotel and Country in South Africa. It offers 3 rated golf courses, 6 gourmet restaurants, and lush tropical wilderness garden.

http://www.fancourt.co.za/

Las Ventanas in Mexico is owned by Beanie Baby creator Ty Warner. It features 71 suites overlooking the Sea of Cortez.

http://www.lasventanas.com/en/

Ritz Carlton Chicago is owned by Chicago billionaire Neil Bluhm.

http://www.fourseasons.com/chicagorc/

The Carlton Hotel in St Moritz is owned by Swiss retail mogul Carl-Heinz Kipp. It is certainly one of the most prestigious ski resorts.

http://www.carlton-stmoritz.ch/de/17/carlton_hotel.aspx

Ready to plan your next vacation?

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Andrew Freeman & Co. presents hotel, restaurant trends for 2010

Tuesday, November 17th, 2009

Andrew Freeman’s Trends for 2010 are a must read. Excellent ideas for all types of business.

San Francisco, CA—November 16, 2009. Available exclusively to media today, Andrew Freeman & Co. (AF&Co.), a leading hospitality and restaurant consulting firm, is releasing their 2010 Trend Watch List. Tapping into the pulse of top restaurant and hotel trends to expect in the coming year.

The 2010 Trend Watch List was developed by AF&Co., from a combination of close industry observation, coast-to-coast travel, discussions with industry experts, meetings with hotel and restaurant clients, press contacts, conferences attended and media sources.

An industry veteran, prior to opening Andrew Freeman & Co., Andrew worked at legendary New York venues including Windows on the World, the Russian Tea Room and the Rainbow Room. Eventually Andrew left New York for San Francisco to become the Vice President of Public Relations and Strategic Partnerships for Kimpton Hotels and Restaurants. He spent ten years with Kimpton, launching over 40 hotels and restaurants as well as the global brand. While there Andrew was responsible for strategic development and execution of all public and media relations activities.

AF&Co.’s annual Trend List, now in its third year, has quickly become an industry standard in anticipating market demands and consumer feedback. Read on to review the complete list:

WHAT ARE THE TOP TRENDS FOR 2010 ACCORDING TO ANDREW FREEMAN?

Putting Off the Ritz – Keep it simple! Forgo the finery for now. Keep ambiance, service, and menu items simple and comfortable. Hotels can lose some of the in-room amenities; restaurants take a more casual approach with less white linen, simpler tableware and less decoration. Less is more, but choose wisely.

Examples: 400 thread count sheets are fine, and when it comes to relaxation, a good cotton robe goes a lot farther than a silk throw.

The Magic Touch – Hotels and restaurants operate touch-screen interfaces for check-in, placing orders end user-guided guest education. Everything is paid for with the swipe of a card. Reach out and touch someone.

Examples: Incentient electronic winelist at SD26 (New York, NY) and for in-room guest service in-face Ritz Carlton in Moscow; Virgin Air snackbar; Stanford Court Hotel touchscreen tourist maps (San Francisco, CA)

Guest Who’s Coming to Dinner – Create cache by offering guests something special and inviting. Celebrity yoga instructors, chefs, actors, singers, masseurs, bartenders and designers visit and do what they do well. Restaurants host Guest Chef Nights and visiting bartenders come in once a week or for a week at a time. Pop-up restaurant appearances expand outreach and help build support. Guest experts are great for sales and public relations.

Examples: The Tides Zihuatanejo’s Yoga Retreats with celebrity instructor Tom Morley (Zihuatanejo, Mexico); Tastemaker Dinners at étoile at Domaine Chandon (Yountville, CA)

Reality Bites – Bring reality TV to real life whether it is culinary showdowns in restaurants or behind the scenes glimpses into running an outlet in the hospitality business.

Examples: Sommelier Smackdown at Fifth Floor (San Francisco, CA); Deathmatch dinners (Portland, ME)

There Is Such a Thing as a Free Lunch– Bring in guests by giving out. Hotels offer added services at no charge. Restaurants drink up the profits by keeping guests on site and happily hydrated from beverage purchases.

Examples: River Terrace Inn offers guests complimentary DVD rentals, bikes and bottled water (Napa, CA); Palio D’Asti provides free pizza during happy hour (San Francisco, CA)

Everything Old is Indeed New Again – It’s the revival. Old-school ambiance rich with historical significance enrich hotels. While restaurants return to “classic” salad dressings and dips: blue cheese, green goddess, thousand island and louis dressing or pimento cheese and onion dip. Let’s go retro.

Examples: Hotel Shattuck Plaza (Berkeley, CA); Shrimp cocktail with green goddess dressing at PorterHouse New York (New York, NY)

Get Your Game On – The lobby as living room concept goes more casual and fun with pinball, pool tables, foosball or with theme nights like Movie Nights, Makeover Madness, “Dancing With the Stars” and “American Idol” viewing parties. Restaurant make dining fun with activity oriented events.

Examples: Pillar & Post (Niagra on the Lake, Ontario); “Golf & Grill” twilight golf games and dinners at Wente Vineyards (Livermore, CA)

Values Driven Incentives – Guests choose hotels and restaurants based on like-minded values. Hotels will donate a percentage of group business from group stays to the charity of choice, while building a strong relationship and being able to reach out to like minded businesses. Restaurants attract guests with conscious concerns seeking restaurants that reinforce their views.

Examples: Kimpton Hotels Shared Values Program; River Terrace Inn sponsors the Napa Valley Land Trust

HOTELS
The Discovery Channel – Guests are in search of experience vacations that allow them to get involved. Wise hotels bring the true taste to the table, or the farm. Farm stays, winery bootcamp programs, voluntourism, and cooking classes. Escape to an alternate reality.

Examples: Feather Down Farms (multiple locations, Europe); Stony Creek Farm (New York, NY), Liberty Hill Farm (Rochester, VT)

The Loyal Treatment – Guest loyalty programs give more out, more often, in efforts to boost business and keep a strong relationship.

Statistics: Loyalty is up 19% in a tough economy (Hospitality Technology)

I Heart Art –Say it with flowers and you’ll have to say it again and again. Art speaks volumes and doesn’t have to be replaced every week. It saves money, it can be a source of community involvement and it looks good. Art is smart.

Examples: Hotel Palomar, Art in Motion (multiple locations); rotating local art work at The Lodge at Sonoma (Sonoma, CA)

One Size Does Not Fit All – Small and quirky hotels offer a unique experience; often at a more budget friendly price. Loose the traditional hotel accoutrements and replace with an alternative vibe. Airstream trailers, unusual property conversions, small but funky is the rule.

Examples: Pod hotels, Micro Hotels, Hotel Airstream (Newport Beach, CA), hip/funky hostels.

Outside the Box - Open air or outdoor lobbies, independently situated bungalows or guest units set amongst landscaped areas. Outdoor massages and exercise programs. Urban adaptations feature mini-rooftop gardens. It’s the great, great outdoors.

Examples: Cottage Suites at The Lodge at Sonoma (Sonoma, CA), Bardessono (Yountville, CA), Apple Farm (Philo, CA)

The New F Words – Form. Function. Flair. Hotel guests demand fully functional work and relaxation spaces; from practical desks, focused lighting, adequate bathroom counter space, plenty of plugs and the latest tech equipment. Don’t let design be a detriment.

Examples: ergonomic chairs, spare desk-side outlets, wireless speaker phone, and in-room connection ports with USB outlets including direct connection capabilities to sync a laptop with the 32” flat screen TV at Wyndham Phoenix Hotel (Phoenix, AZ)

Let’s Get Really Personal – Show the love and appreciation with a completely personalized experience. Customization goes to the next level to create the at-home feeling. Design at every touch-point is being personalized.

Examples: Pre-loaded digital images of family photographs, customized playlists and magazine selections in every guestroom for return guests.

RESTAURANTS

Coming to America – International influences are ingrained. Sriracha (rooster sauce) is the new salsa, which replaced the old ketchup. Vietnamese Banh Mi is the new Ham & Swiss; and Middle Eastern spices and spreads go mainstream as pizza makes way for pide. Forget chicken noodle soup, it is pho; pho sure.

Examples: Short rib sliders with Sriracha aioli at E&O Trading Co. (San Francisco, Larkspur and San Jose, CA); Sourdough bread and lavash with feta walnut spread and Caspian tapenade at Zare at Fly Trap (San Francisco, CA)

This Is a Stick Up - Small foods on a stick. Skewers, satay, and yakitori; no ifs, ands or kebabs about it.

Examples: Satay at Pranna (New York, NY); Anticuchos at La Mar Cebicheria Peruana (multiple locations worldwide)

Use Your Noodle – Asian noodles including ramen, soba and pho; from basic broths to high-charged broths with barbecued meats and all sorts of additions.

Examples: Big Bowl (multiple locations, ILL, VA, MN)

Sandwich Smorgasbord – Enjoy a globally inspired buffet of sandwich style options including Scandinavian open faced, Indian Kati rolls, PLTs with pancetta or pork belly, international grilled cheeses and tricked out Mexican tortas bursting at the seams. There’s a reason why delicous begins with Deli.

Examples: The Sentinel (San Francisco, CA); Take a Bao (Century City, CA)

Love Shack Baby– Seafood shacks go upscale and mainstream, even in inland areas. Old favorites like oysters, fried clams, fish ‘n chips, lobster rolls, crab cakes and clam chowder, as well as fish tacos, clam bakes, lobster boils and all encompassing fish frys. We’re hooked.

Examples: Nettie’s Crab Shack (San Francisco, CA); Linda Bean’s Perfect Maine Lobster Roll (multiple locations, East Coast)

School of Fish – Pristine local organic produce is no longer enough, chefs and guests are casting their nets beyond small, local, sustainable and organic farming to demand sustainable seafood certified by the Monterey Bay Aquarium Seafood watch and other eco-conscious organizations. So long snapper; make way for mackerel.

Examples: Area 31 (Miami, FLA); Fish (Sausalito, CA)

Dinner Theatre – Interactive entrees, apps and desserts create an experience not just a dish. From simple tableside preparations, mix it yourself tartar, sauces added at the table, build your own sundaes and ingredients that pop in your mouth; dinner is the show. We’ll all work for food.

Example: Cote de boeuf pour deux served and sliced tableside at Grand Cafe Brasserie and Bar, (San Francisco, CA); at home dessert kits from Mi2Sweets (San Francisco, CA)

One Plate Wonders – The carte du jour is combined for speed, efficiency, cost-savings and fun. It’s a completely fresh take on the blue plate special.

Examples: TV dinner at FIVE (Berkeley, CA); Quadrifoglio at SD26 (New York, NY), Red plate special at Red Star Tavern and Roast House (Portland, OR)

Suit-Your-Size – One size doesn’t always fit all. Entrees available in small and large sizes lets guests tailor the experience to size. Call it the shrinking waste-line.

Examples: Perbacco (San Francisco, CA) and Poggio (Sausalito, CA) offer pastas in half and full sizes; Hobson’s Choice (Williamstown, MA) offers most entrees and the Mudd pie dessert in full and half sizes.

Downsizing – Small is now smaller. With smaller budgets and more flexible menus we’ll see the equivalent of cocktail hors d’oeuvres; something to nibble with your drink before (or in lieu of) a full meal. Mini tacos, snack sized empanadas, finger sandwiches, sliders, and riblets. Equally approachable for the waistline and wallet these are the new essential handheld devices.

Examples: Best-O-Burger (San Francisco, CA); “Three bites and a flight” three mini tacos and a flight of paired wines Carneros Bistro & Wine Bar (Sonoma, CA)

Paint My Plate – Restaurants and art galleries merge as restaurants with art galleries attached open and art galleries bring in chefs and food for artistic food-focused events.

Examples: 18 Reasons (San Francisco, CA); Mua (Oakland, CA)

Garden Tap – Sausages and suds under the open sky. Beer gardens with good grub are spreading like Teutonic plague.

Examples: Charlie’s Kitchen, (Cambridge, MA) Café Berlin, (Denver, CO)

Eat Street – It’s the food truck tweet-up, a mash-up of narrowly focused food purveyors clustered together and sharing a communal seating area. Consider it the new block party.

If You’re Happy and You Know it… – Extend happy hours; start early, go late and offer a second late night shift. How happy can you get?

Examples: Postrio happy hour 2:30pm – 6:30pm (San Francisco, CA), Grand Cafe Brasserie & Bar happy hour 4pm – 7pm (San Francisco, CA)

Hot Foods:
Eggs: deviled, pickled and deep fried
Sous vide fruit, jam packed fruit with jolly rancher intensity
Pasta: ramen, soba and spaghetti
Legs & feet
You silly rabbit
Cassoulet and crock pots
Fritters and croquettes
Ceviche (moving east), fried chicken (moving west)
Polenta and grits
More than just your token tofu

Cool Drinks
Iced tea is the new water
Retro sodas
Red, white or orange – natural wines
Hard ciders and cask aged beers
Dessert drinks and spiked shakes
All tapped in: wine on tap
Beer cocktails
Flower power: rosewater, crème de violette and hibiscus syrup
Foam art and branded drinks on cocktails and coffee
Bitter cocoa and coffee tinctures in cocktails

This article is from Nov 17, 2009 HotelWorld Network. To subscribe:

http://www.hotelworldnetwork.com/magazines/hotelworld-network-subscribe

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Determine the Data You Need to Protect

Friday, November 6th, 2009

Cyper security is tough to keep up with. David Meizlik is web data security expert. This article identifies the 5 questions to answer before determining what security is needed.

Protecting essential information such as intellectual property and customer data is critical for businesses of all sizes. Small businesses deal with many of the same regulatory compliance demands as large enterprises, such as HIPAA, PCI, SOX, and state laws governing the protection of individuals’ personally identifiable information—but with far fewer resources than their big business counterparts. Before beginning a data security strategy, businesses must first decide how important data security is in relation to other IT goals, and define exactly what types of data need to be protected.

First, determine how important data-loss prevention is in comparison to other security concerns by asking the following questions:

1. What regulations involving confidential data must we comply with?

2. Do we know where all copies of confidential data are stored?

3. How is sensitive information being used and shared inside and outside our organization?

4. How do our employees exchange critical data with business partners and customers—and are these channels secure?

5. What would happen to the sales, customers, and reputation of our business if a data breach occurred?

Second, define what data are deemed sensitive. Once data protection is deemed a priority, the second step is to define what exactly constitutes sensitive data for your business. The definition of sensitive data can vary greatly across industries and will not be the same for a local credit union as for a midsize retail chain. Sensitive data can include customer lists, company financial data, trade secrets, intellectual property, marketing plans, credit-card numbers, employees’ social security numbers and more. It’s critical to review all functional areas—including legal, finance, human resources, marketing, sales, and others—to determine what types of data are essential to each area of the business and need to be protected.

Only after businesses have taken these initial steps can they begin to set policies that will protect their sensitive data, yet not impede their business processes. Ultimately every organization, no matter its size, must protect the information that is essential to its business.

David Meizlik
Director of Web and Data Security
Websense
San Diego

Article from Nov. 5, 2009 AH&LA Smartbrief ahla@smartbrief.com

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Nagib’s Corner: Credit Crisis Continues To Affect U.S. Pipeline

Thursday, October 22nd, 2009

Hello Ladies and Gentlemen,

Nothing new here, just an update to statistics on forecasted opening, FYI. I have attached their earlier projections from July.

Key highlights:
1. Transaction volume in 2009 is expected to be just 25% of what it was at the peak in 2007, with selling prices down by 50%.
2. Pipeline guestroom totals are down 34% YoY and 11% QoQ
3. Approx 153K new rooms scheduled for 2009
4. Approx 112.6K new rooms scheduled for 2010
5. Approx 75K new rooms scheduled for 2011.
As we know, irrespective of what the statistics state, the real impact is if new supply enters into YOUR market. If that is so, declining rates mean little. If new supply in your market has been postponed or cancelled, then it has real meaning. No matter what the case, you have the advantage of forewarning in, whichever the case. That is the leverage to maximize.

Either way, new supply in your market requires a pro-active and aggressive response – a response that should start well in advance of the opening. You can mitigate some of this impact by a well planned and thoughtful series of steps that position you positively with your clients as well as strengthen the relationship you have with each of them. It does not have to be a devastating occurrence, merely a call to pro-active intervention.

Take care.
Nagib Lakhani
nagib@RevenueMaxConsulting.co
RevMax Hospitality Consulting Service
O: (425)677-7866 C: (425)445-7750 F: (866)508-7866

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What Candidates Want in Your Ads

Thursday, August 13th, 2009

All candidates want your ads to contain the following information. While it’s important for all, it’s imperative information when you are looking to hire candidates rated in the Top 1/3 in their job category.

We’ve said it for a long time. The best candidates are currently working. Employers need the candidates worse than the candidates need the new job. We would love to hear what you are doing to sell your company and jobs to candidates to encourage them to apply to your jobs.

Research, News and Information for Recruiting Professionals | August 10, 2009
Boomers and Gen Y’s, in Sync!
by David Earle
Sylvia Hewlett and two colleagues at the Center for Work-Life Policy in New York City have published new research on the attitudes and behaviors of Boomers and Gen Y’s. Her findings contradict the common assumption that these two groups approach employment very differently and must therefore be attracted with separate recruiting messages. Her conclusions dovetail neatly with research we published earlier this year in our Job Seeker Attitudes and Behaviors Report- Mastering Internet Recruiting.

Our Job Seeker research documented the importance of non-salary/benefit considerations to candidates considering your company. Hewlett’s new research, published in the current issue of the Harvard Business Review, reveals unexpected affinities between the candidate pools represented by Gen Y (roughly, ages 15-30) and Boomers (roughly, ages 45-63). Hewlett’s data show that although widely separated in life experience, these two groups share a group of common goals and attitudes that recruiters can capitalize on when trying to attract and retain them. Some of these are unexpected.
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Tom’s Take: Using Facebook to Drive Business

Wednesday, August 5th, 2009

I don’t know about you, but I don’t have a lot of time to spend researching all the social networking sites. I want to use them to drive business…now, not three years from now.

Following is one of the first articles I’ve seen that gave me specific ideas.

Excellent ideas on how hotels, restaurants, lounges, spas and recreational facilities, etc., can use Facebook to quickly, easily drive revenues without increasing costs.

Businesses turn to Facebook for word-of-mouth advertising
Updated 8/5/2009 11:33 AM
Bartender Beau Dieda, hanging with Michelle Hicks, helps drive traffic to Baja Sharkeez through Facebook. He lets 650 of his closest friends in on drink specials, discounts and events.
Enlarge image Enlarge By Jefferson Graham, USA TODAY
Bartender Beau Dieda, hanging with Michelle Hicks, helps drive traffic to Baja Sharkeez through Facebook. He lets 650 of his closest friends in on drink specials, discounts and events.
HERMOSA BEACH, Calif. — Bartender Beau Dieda does more than mix and serve drinks every night at popular nightspot Baja Sharkeez: He is also instructed to sign up friends and fans for his company’sFacebook page, as well as his own. Before he leaves the restaurant, he sends bulletins to his collective fan base inviting them back in for specials, discounts or events.

“It’s one of the best ways we can reach a vast audience,” he says. “After my shift, I can blast it to 650 friends in 30 seconds. I don’t have to go around to each person, or call them up.”

Facebook, with 250 million members, has gone beyond being just a place where you can alert friends about the music you’re listening to, who you’re dating or what movies you like. The social network’s expanded Pages feature lets businesses, organizations and public figures in on the action. They can create profiles that let them sign up fans, issue status updates and send messages. Businesses like Baja Sharkeez that cater to young people and big companies like Pizza Hut and Coca-Cola are finding it’s profitable to be your Facebook friend.

What also is enticing marketers: 120 million Facebook users log on at least once a day, and 30 million of them access Facebook on mobile devices. And those with major purchasing power — ages 35 and up — represent the fastest-growing demographic.

There are more than 100,000 small-business pages — 300,000 total business pages — on Facebook, says Tim Kendall, the company’s director of monetization.

Some large companies have attracted huge followings. Coca-Cola and Starbucks have over 3 million fans; Adidas shoes has 1.9 million. Pizza Hut is closing in on 1 million fans, whom it regularly updates about specials and new menu items.

“It makes us very relevant to the audience, and lets us communicate with them where they are, in a way that our website can’t do,” says Bernard Acoca, Pizza Hut’s senior director of digital marketing.

Sprinkles, a small chain of cupcake bakeries, is itching to get to 100,000 Facebook fans. Co-owner Charles Nelson started in April sending quizzes, free cupcake offers, contests and other enticements on Facebook to bring people in.

Back then he had 8,000 fans. Now he’s at 27,000 and is staging a contest to get to 100,000, offering free cupcakes and a trip to Beverly Hills to the winner.

“A website is you speaking out, but a Facebook page lets our customers come in and give their feedback,” he says. “It generates business, and it’s also a great community builder.”

Targeted advertising

In addition to a free profile page, Chicago-based T-shirt marketer Threadless uses Facebook’s advertising program. Advertisers can choose pay-per-click ads similar to Google’s auction-based ad program, bidding on words and paying when someone clicks on their ad, or traditional ads based on “impressions,” or the number of times an ad is presented.

Cam Balzer, director of marketing at Threadless, bids on words relating to video games, music and zombies. “This works phenomenally well,” says Balzer. “You can target your ad better on Facebook than anywhere else. I know my customers’ age, where they live, what their interests are, and only the people who fit my target see the ads.”

Facebook declined to disclose financial specifics, but Kendall says the local ad program is “ahead of expectations,” and the number of advertisers has tripled since 2008.

Marketers increasingly are gravitating to Facebook because they can advertise to a targeted audience, says Emily Riley, an analyst at Forrester Research. She says marketers can pick and choose consumers based on public information they share on their Facebook profiles, such as the city they live in, the college they attended, their group affiliations and their fan pages.

“You can literally find a book lover in New York who is a fan of Stephen King,” says Riley. “That is gold for a local book seller.”

To sign up (facebook.com/advertising), advertisers commit to spending a minimum of $5 per day. An ad campaign can be turned off and on with no monthly minimum. Kendall says businesses using the ad program successfully are those who depend upon word of mouth, like real estate agents and wedding photographers.

“Brides tell their friends they’re engaged, and wedding vendors can run ads specifically targeted to them,” he says.

Sharkeez doesn’t spend money on Facebook ads for its five Southern California restaurants. Jeffrey Tyler, director of marketing for Sharkeez, says Facebook attracts enough customers for free.

His restaurants — with 50 TV screens playing the latest sports, low-priced drinks and a young singles crowd — are usually busy, but Facebook has helped “tremendously” in the soft economy, he says.

Restaurant patron Amber Mather of Hermosa Beach came into Baja Sharkeez on a Thursday afternoon specifically because Tyler sent her an invitation with a 2-for-1 Happy Hour special. “You let your clientele know every day if something is going on — new deals, new specials. That’s how I know what’s happening at Baja Sharkeez,” she says.

Tyler agrees. “We can drive sales so much more. It’s probably the best thing that’s happened to us in the past 10 years.”

Contributing: Jon Swartz in San Francisco
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Nagib’s Corner: Hotel Industry posts record revenue in 2008, other metrics slide

Wednesday, June 24th, 2009

Some interesting key facts from the statistics below:

Full Service GOP:
·         2008: 34.3%
·         2007: 34.4%
o    Pretty good, all things considered!
Limited Service GOP:
·         2008: 51.2%
·         2007: 55.4%
o    A little worse than full service but pretty respectable, overall.
All things considered, this was not as bad as we may have anticipated. After all, 2007 was amongst the very best years the industry has had so the declines should not be considered precipitous or, as many of us felt, disastrous when viewed from the perspective of the entire year.

What did, however, contribute to the perception of ‘falling off the cliff’ was the following reality (from the article below):

The decrease in room revenue during the last four months of 2008 was US$1.7 billion when compared with the final four months of 2007. As a result, the total profit loss in the U.S. hotel industry in 2008 was US$2.0 billion, which illustrates that the room revenue loss post-Labor Day was essentially pure profit loss.

Hope this will help you reflect over the year with a more ‘perspective’ and less ‘depressive’ memory. More importantly, I hope your hotels did not experience results worse than those ‘averages’ listed above.

Take care

Nagib.

Hotel Industry posts record revenue in 2008, other metrics slide
Date: 2009-06-23

The U.S. hotel industry average daily rate reached a record high, ending 2008 at US$106.55, but Pre-Tax Income Profits for the year were down 7.9 percent to US$25.8 billion, according to STR’s Hotel Operating Statistics (HOST) Study.
According to the HOST Study, the hotel industry generated US$140.6 billion in room revenue, a 0.9-percent increase from 2007. However, the ongoing economic slowdown affected the hotel industry considerably. The decrease in room revenue during the last four months of 2008 was US$1.7 billion when compared with the final four months of 2007. As a result, the total profit loss in the U.S. hotel industry in 2008 was US$2.0 billion, which illustrates that the room revenue loss post-Labor Day was essentially pure profit loss. The Gross Operational Profit (GOP) percent as a percentage of revenue was 38.2 percent of the total revenue.

‘The hotel industry was hit hard by the decreases in leisure and business demand,’ said Mark Lomanno, president of STR. ‘Unfortunately we will be operating in an environment of declining demand and increasing room supply for a while, which will put additional pressures on room rates and profits. We just have to remember that this is a cyclical industry, and things are expected to get better towards the end of 2009. But, operators need to watch their cost structure and continue to maximize ADR where ever possible.’

The study included results from more than 5,800 hotels, the most participants ever to contribute to the HOST Study.

Other highlights of the HOST Study:

• Full-service hotels reported an average occupancy rate of 67.4 percent and ADR of US$164.31 in 2008, compared with 2007 when occupancy was 70.0 percent and ADR was US$166.69.

• Full-service hotels’ GOP in 2008 was 34.3 percent, compared with 34.4 percent in 2007. The GOP was equivalent to about US$21,972 per available room.

• The study showed the bigger the full-service hotel, the better the occupancy. Full-service hotels with more than 500 rooms reported an occupancy rate of 71.3 percent compared to hotels with under 150 rooms, which reported an occupancy rate of 63.5 percent.

• Among the limited-service hotels, the Middle Atlantic region had the highest occupancy rate (72.3 percent) and the highest ADR (US$147.50) among the geographic regions for the year.

• Limited-service hotels’ GOP in 2008 was 51.2 percent (compared with 55.4 percent in 2007), which amounts to US$12,842 per available room.

• Limited-service hotels’ Income from Fixed Charges (Gross Operating Profit after deducting franchise and management fees) was US$47.65 per occupied room night-up from US$84.15 in 2007. That represents US$11,406 per available room.

The HOST Study is the most extensive and definitive database on the U.S. hotel industry revenues and expenses. The study includes operating statements from more than 5,800 hotels. HOST contains information on hotel revenues and expenses, as well as presents information by department including rooms, food & beverage, marketing, utility costs, property and maintenance, administrative & general, and selected fixed charges. HOST is available in electronic, PDF or excel files, or printed versions. For more information and details about HOST e-mail ideas@smithtravelresearch.com.

About STR & STR Global
For more than 20 years, Smith Travel Research has been the recognized leader for lodging industry benchmarking and research. Smith Travel Research and STR Global offer monthly, weekly, and daily STAR benchmarking reports to more than 36,000 hotel clients, representing nearly 5 million rooms worldwide. STR is headquartered in Hendersonville, Tenn., and STR Global is based in London. For more information, visit www.smithtravelresearch.com or www.strglobal.com.

This article comes from Hotel News Resource
http://www.hotelnewsresource.com

The URL for this story is:
http://www.hotelnewsresource.com/article39541.html
Nagib Lakhani
RevMax Hospitality Consulting Services
O: (425)677-7866
C: (425)445-7750
F: (866)508-7866
nagib@RevenueMaxConsulting.com
4313 245th Avenue SE
Issaquah, WA 98029

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