Asian Hospitality Industry Energized

Traveling in Asia last month just prior to the arrival of Chinese New Year, I was again reminded just how dynamic the hospitality industry is in Asia. From the number of hotel brands opening new properties in Kuala Lumpur to the transformation of Singapore as a result of integrated resorts to Hong Kong, new restaurant concepts seem to open daily, and hospitality executives are continually reinventing and reenergizing to stay ahead of the curve. Much of this energy, of course, is driven by major property companies that all seem to have hotel subsidiaries. 

Flexibility is the key to the success. Market forces change, but the industry in Asia is adaptable. For example, China is experiencing a rapid slowdown in government entertaining, which has been drastically curtailed by the new government. Concurrently, visitor numbers are down, and hoteliers are realizing that while China remains a massive market, a business mix is essential.  

Looking ahead, the South China Morning Post reported in January that Hong Kong could receive 70 million tourists annually within three years and 100 million within a decade, mostly from the mainland. Tourism experts in the region said more hotels should be encouraged, especially in rural areas. 

I am not seeing much in jaw-dropping new sales and marketing concepts. The focus seems to be on tried and tested methods. Advertising is a combination of digital and print (yes, they still believe in the power of print in Asia) and, in some cases, regional and European television. Manpower is perhaps the biggest issue — finding qualified staff, training, retention and consistencies of delivery are of utmost necessity. 

However, I am energized by the region and its movement toward development or expansion, renovation and restoration, and the motivation to experiment and try new concepts. The professionalism and willingness to serve are apparent, whether it is the doorman at a major hotel in Manila or a check-in agent at the airport. Tourism and hospitality has its act together in this region, and anticipating guests’ needs seems to be second nature. We should all study best practices from Asia. Welcome to the year of the Horse. 

Is the Mega Trade Show Dead?

Last fall at the World Travel Market I spent several days conducting meetings, making new connections and absorbing all the interactions around me. After taking stock of my own experience and mulling over my observations, a huge question came to mind — are governments spending too much money on a formula that might no longer work?

Let me be clear — I believe in the power and impact of trade shows. For as tech-focused as we are now in a Twitter world where mobile devices are never far from our fingertips, face-to-face meetings are a crucial part of conducting business. Building relationships is at the core of an effective marketing strategy, and they yield a great return on investment (even though sometimes the return takes a while to receive). It was this emphasis on face-to-face relationship building that prompted me to consider the question about government spending and the trade-show formula.

I saw massive stands by countries (Spain, Turkey and several Middle East countries were particular standouts to me) with a compelling visual presence, but it seemed that few hotel companies had their own stands. The hotels joined their country stands, which created larger destination branding. The stands were a showcase for the destination experience. What was clear to me (and equally troubling) was that people manned their stands and waited for delegates to visit them — without an appointment. Or, there were stands left unattended, which basically conveys to delegates, “My destination is worth passing by.”

To me, this strategy didn’t make sense. Decades ago when I started in this business, hoteliers and tourism officials waited at their stands for people to visit, but today, our world and the travel industry are completely different. Today, you must make advance appointments in order to really maximize your investment. A program of structured, timed meetings (whether you set them yourself or attend a show that is shaped by an appointment process) is more substantive and yields stronger business, and thereby offers the greatest benefits. The best trade-show experience isn’t about people picking up brochures and business cards as they robotically go between the aisles. It should be about conversations and experiences (preferably personalized ones). Furthermore, trade shows should be manned by people who intimately know the product at hand and are serious about doing business — not people more interested in exploring the dynamic city in which the trade show is located.

People could pass your stand all show long, and they might think, “I need to stop there,” but never do because they are on their way to pre-scheduled meetings. So, I think it’s not so much a question of whether or not the trade show is dead — it truly can be a great showcase of travel experiences and travel selling. What should be gone, though, are strategies that simply don’t work.


What do you think?

Read my Hotelsmag.com blog here.

Predicting Luxury Travel Trends for 2014

Visionary Marketing for Luxury Brands Predicting Luxury Travel Trends for 2014 Affluent Survey: A survey by the American Affluence Research Center Once again, Strategic Vision has sponsored the American Affluence Research Center’s (AARC) Affluent Market Tracking Study, a survey of the wealthiest 10% of households determined by the Federal Reserve Board based on net worth. I continue to advocate the importance of this kind of research and data collection for industry leaders to gain insights and implement effective marketing strategy in the luxury travel arena. The survey is based on a self-administered questionnaire mailed to a randomly selected national sample of 4,500 households expected to meet the minimum net worth requirement of $800,000. Following a weighting of respondents, the participants have an average residence value of $1.3 million, an average household income of $295,000, and an average net worth of $3.1 million. Read on for their valuable insights… Booking Leisure Travel -- Online Travel Agencies (OTAs) or Traditional Travel Advisors? Survey results I found noteworthy: In this flourishing digital culture, we all know that leisure travelers increasingly use their computers and mobile devices to book travel. While the growth of OTAs is undeniable, the number of those surveyed who continue to work with travel advisors or make a direct call to a branded entity (airline or hotel) still outweighs use of OTAs when combined. Travelers Explore OTAs Of those responding to the question, “Have you ever used an OTA to book leisure travel?” -- 69% said yes. Still, a significant 31% of all respondents said they had never used an OTA. Forty percent of affluent consumers who said they booked leisure travel through an OTA had logged on in the prior three months, and 37% had booked digitally within the last year. Expedia was the OTA most respondents used (40%), with Orbitz coming in second and Travelocity a close third, each with about 23%. Fifty-six percent of those using OTAs were under age 50, and 78% who said they navigated online specified they shopped through a single OTA. Opportunity for Travel Advisor Growth The research found that a remarkable 66% of those surveyed rely on an advisor or reach out to a major brand when booking leisure travel, the ability for affluent travelers to make a direct connection is still an appealing influencer. When asked if they had employed a traditional travel agency to book leisure travel in the past year, 23% of respondents said they had. And 20% of those surveyed said a traditional travel agency was the choice they used most often for booking travel. Forty-three percent answered that they book directly by calling airlines or hotels or using their websites. Of those who book in this way, 30% were under age 50. As a young travel advisor recently told me, “There is so much information out there through OTAs and online resources, the agent becomes the editor/navigator for the client.” Are Hotel Loyalty Programs Important to You? Marketing and branding strategies necessarily adjust with the changing times and consumer habits. In this mobile-driven and online booking climate, a significant number of affluent travelers trend toward brand loyalty in the hotel category. In the American Affluence survey, 63% of those responding said that hotel loyalty programs are either very or somewhat important. Of total respondents, 52% said they were members of Marriott Rewards, 45% joined Hilton Honors, and 32% belonged to Starwood’s program. Overall, the responses of high net worth consumers to survey questions regarding leisure travel booking offer encouraging numbers and promising opportunities for travel advisors to expand their client base as affluent travelers seek a connection and strong brand direction. In Closing Cautious Optimism Looking Forward As 2014 begins and consumers look ahead, a few interesting findings of the AARC survey are worth considering: • The affluent seem to have a slightly better outlook for the economy and their personal wealth than the general public. Almost a third expect their net worth to be higher in March 2014. • The new research reveals a significant 7 point improvement among those surveyed who said they planned to defer or reduce expenditures in the coming 12 months. Only 37% said they would cut back this year as opposed to 44% of affluent respondents in Spring 2013 -- a forecasting of positive spending trends as we enter 2014. • Of 17 product categories tracked in the AARC survey -- such as fine jewelry, major home appliances and designer clothing-- only one, domestic vacation travel, is in positive territory; eight are in the neutral range and eight are in negative territory suggesting a decline in spending. • An encouraging mood and spending plans of the affluent may be carrying through the new year with the stock market hitting record highs on Christmas Eve -- 2014 is a year to watch. As always, I welcome your feedback. Let's keep the conversation going.

Reimagine, Resonate and Reboot

As we approach the last quarter of the year, three words come to my mind with respect to luxury travel marketing today – “reimagine,” “resonate” and “reboot.”  Why? 

• Savvy marketers should be brave enough to know when it’s time to reimagine their brands in order to sustain the life of that brand.
•  To be effective marketers, our efforts must resonate with our target audience. They can’t just resonate with us – they have to be meaningful and impactful to our customers
• If we embrace the ideas of reimagining and resonating – along with new technology – we will likely enjoy a successful reboot, which is often a necessity in the lifecycle of a brand. Think of it as “revival of the fittest.” 

Reimagine & Reinvent

As luxury travel executives, we intimately know our brands – their essence, their defining aspects – but that doesn’t mean our brands are as distinct in the marketplace for affluent consumers and valued travel advisors. That’s why clarity of brands is crucial – showcasing an identity that is distinctive and rich in personality is the difference between being remembered and getting lost in the clutter.

For clarity, you need to understand your brand – and not be fearful of reassessing how consumers and travel partners perceive your brand. Keep your messaging fresh and on-point.  In the luxury space, we shouldn’t try to be all things to all people – it is about being the right thing to the right people.  This principle of “reimagine and reinvent,” as I like to call it, is driving luxury travel brands to create stronger corporate identities and strengthen their messaging.

Today’s emphasis is on exhibiting a razor sharp focus to target the right people.  Luxury travel companies are spending more money on new print advertising campaigns as well as putting money into digital and video/film because of their impact. Who is doing this? Look at Rosewood Hotels & Resorts (they just launched a new “Sense of Place” brand campaign), Shangri-La Hotels & Resorts (they are conceiving new television ads), Peninsula Hotels (the company is working on new creative and a focus on video) and Taj Hotels (they will shortly unveil a new campaign). Full disclosure – Rosewood and Shangri-La are clients.

What's Happening With Today's Traveler? - Fees & Social Media

Last time I wrote, I shared insights about popular/less popular destinations and travel trends of today’s affluent consumer based on a survey Strategic Vision conducted with approximately 50 travel advisors at the owner or manager level. We learned that Italy was one of the most popular destinations for bookings in the last six months, Southeast Asia and the U.S. are trending up destinations, Hawaii and villa rentals in Italy and France continue to grow in popularity for family travel (a burgeoning trend in itself), and much more. We also heard from numerous agencies that are experiencing different trends than those surveyed, so I’d like to thank those who shared their feedback.

Keeping the dialogue going, here I review survey results on the subjects of ancillary fees and social media. 

EXPLAINING FEES

We’ve been concerned about fees and wanted to follow the conversation.  Respondents overwhelmingly believed in clearly outlining all fees to their clients – whether ancillary fees from hotels and airlines or service charges from travel agencies – so there are no surprises.  One respondent said their agency has a spreadsheet with all ancillary expenses clearly defined, and that travel counselors “are trained to explain each fee along the way.”  Respondents noted that fees are a “sign of the times” and “part of today’s landscape,” and one commented that “it is a way of life but there are ways around it.”

While the fees are not necessarily a “major issue questioned by luxury clients” because most are “used to them” and not “price-sensitive,” clients do demand more transparency so as to understand exactly what they are paying. This desire for transparency goes beyond fees – clients are continuing to require a cost breakdown for all the elements of their trip.

In terms of agency fees, they cover “time, research and expertise” for “customized services beyond the travel components,” and clients tend to be “amiable” if they understand what the charges are for.

What's Happening With Today's Traveler? A Six-Month Review...

It is half way through the year, which I find is a good time to reflect on the state of luxury travel and to recalibrate our strategic efforts based on the reality of bookings and trends of the past six months. As luxury travel marketers and advisors, it is vital for us to remain on the pulse of the latest news and trends so I surveyed approximately 50 advisors at the owner or manager level who graciously shared some enlightening feedback about today’s affluent consumer.

Read on for their valuable insights…

MOST POPULAR DESTINATIONS
What destinations have been the most popular for affluent clients the past six months?

Accordingly to our survey, 70 percent of respondents named Italy as one of the most popular destinations for bookings in the past six months. Whether it’s the amazing cuisine, gorgeous art, or rich culture and history, Italy has broad appeal – and as one respondent stated, consumers have a “constant love affair with Italy.”

There is a wonderful cultural diversity in Europe – where “clients never seem to tire” of the continent. Respondents repeatedly mentioned France and Spain as well as London, where last summer’s Olympics and the upcoming Royal Baby seemed to have raised the city’s profile. Croatia was also listed for its undiscovered appeal. One agency said that a key with Europe is crafting “wow” moments in classic European capitals, which speaks to the continued desire for the treasured experiential and enriching aspects of travel. One respondent did warn, though, that Europe’s popularity could decrease “if air stays at such high levels even for coach.”

South America – particularly Peru, Colombia and Brazil – ranked high for its “perceived value,” “variety,” and because it is “interesting and luxurious.”

Survey Says...

I have always advocated the importance of research in order to effectively set a marketing strategy – when you’re equipped with knowledge, you’ve secured a degree of power that makes you a savvy strategist. In the effort to build on our wealth of information, Strategic Vision sponsored American Affluence Research Center’s Spring 2013 Affluent Market Tracking Study, a survey of the wealthiest 10% of U.S. households based on net worth.

The survey is based on self-administered questionnaires mailed to a randomly selected national sample of 4,500 men and women in households with specific income and assets ownership and a minimum net worth requirement of $800,000. Following a weighting of the respondents, the participants in this survey have an average net worth of $3.1 million and an average primary residence value of $1.2 million.

Some results were rather surprising...

What Magazines Do Affluents Read?
Marketing requires a constant examination of the luxury consumers’ interests, opinions and product preferences – including what publications comprise the affluent library. When asked what leisure magazines they read most on a regular basis (from a choice of 11 high-end titles), survey respondents indicated Travel + Leisure as their top choice (22%), followed by WSJ Magazine (19%), T: The New York Times Style Magazine (15%) and Departures (13%), which is distributed to American Express Centurion and Platinum Card holders.