Throughout our nearly 15 years of hotel Internet marketing experience, we have been consistently concerned about the increasing level of disparity between savvy Internet/Mobile marketers in hospitality and travel, and the Internet/Mobile Marketing-inept players in the industry.With the advent of social media in recent years, Web 2.0 technologies and the mobile Web, this disparity has accelerated dramatically.

On one side there are the extremely Web-savvy:

• Online travel agencies like Expedia, Travelocity, etc.
• Most major hotel brands’ e-commerce departments
• Airlines
• Some e-commerce departments at smaller and mid-size hotel and resort chains
• Some very bright individuals at the marketing departments of full service hotels, resorts and casinos

On the other side there is everybody else, which unfortunately means the majority of hospitality executives and sales and marketing professionals.
HeBS defines “Web Marketing Ineptitude” as the lack of hands-on experience in Internet marketing and all of its formats: website re-designs, SEO optimizations, search marketing, email marketing, strategic linking, banner advertising and online sponsorships, social media and Web 2.0 and more recently, mobile marketing. In addition, this ineptitude also indicates a lack of understanding of best practices and latest trends in the direct online channel.

In the 1990s, it was “normal” that only a few hospitality and travel marketers were proficient in the online channel.  Less than 3% of travel reservations in the U.S. were booked online back in 1999. In the 2000s (in 2001, online travel bookings reached 5.4% of all travel reservations in the U.S.), hospitality marketers and the major hotel brands began to pay closer attention to the Internet channel. In the years that followed, Internet travel adoption increased dramatically and in 2009 alone over 55% of all travel reservations in the U.S. will be online (45% of all hotel reservations) to the tune of a staggering $116.1 billion (eMarketer).

Yet, to our dismay, over the past 15 years the level of Internet marketing expertise in the hospitality industry has not kept up with this remarkable growth. On the contrary, we are witnessing whole new generations of hospitality executives and marketing professionals who are unfamiliar with Internet marketing in general as well as best practices and trends in the direct online channel.

This problem has been exacerbated by a) the social media and Web 2.0 phenomena, and b) mobile marketing. Both of these new marketing and distribution channels introduced an entirely new level of complexity and skill set requirements, as well as new best practices and trends.

• Social Media have changed how customers plan and purchase travel, how customers access information, and how customers perceive the credibility of information. How can hoteliers create/monitor/take advantage of the social media “chatter” around the hotel, target receptive audiences, and ultimately stimulate hotel website visits, interactions and bookings? What type of Web 2.0 and interactive features and functionality do you need on the hotel website?

• Mobile Web is expected to surpass the traditional Web within the next five years. The promise of “immediate, anywhere and anytime” Internet access, instant information and transaction capabilities, location-based services and personalization are some of the key factors for the “explosion” of the mobile Web. Hotel guests–past, current and potential–are increasingly becoming mobile-ready and hoteliers have to respond adequately to this growing demand for mobile services. This is the reason why hoteliers and travel marketers need to have robust mobile Web initiatives in place, including mobile brand websites, mobile apps, m-CRM and mobile marketing.

Why Is There a Growing Web Marketing Ineptitude in the Industry?

There are many reasons for this “Web Marketing Ineptitude” among the ranks, but here are some of the most important:

Franchised Properties:

• Many major brands control all Internet marketing initiatives at the corporate level, including property-level initiatives, thus depriving staff at the property from any meaningful experience in Internet marketing.

• We have seen a trend among small/mid-size chains to establish small but vital e‑commerce departments. In many cases, these companies outsource whatever online marketing they do to outside vendors. Here again, when outsourcing, they make a crucial mistake by not demanding professional development to be part of the Internet marketing vendor’s responsibilities. This results in Internet marketing expertise not being disseminated to the properties in the process.

Independent Hotels and Resorts:

• The biggest concentration of Internet marketing knowledge is at this level.

• Many big full-service hotels and resorts have some form of in-house Internet expertise. However, due to staff turnover and constantly decreasing budgets, these properties tend to have a very spotty Internet expertise retention rate.

• Smaller hotels and resorts are most vulnerable due to limited budgets and difficulties with hiring and retaining employees with expert knowledge.

Destination Marketing Organizations (DMOs) and Convention and Visitor Bureaus (CVBs):

• These organizations boast some of the brightest Internet marketing stars and some of the most inept marketers.

• In many cases among DMOs and CVBs, ignoring Internet marketing best practices is not even a matter of budget size, but a result of inertia and commitment to traditional advertising formats.

• The government or quasi -government nature of CVBs and tourism offices does not help with the hiring and retention of Internet expertise.

So What Is the Verdict?

HeBS believes there are different levels of Web Marketing Ineptitude in the industry regarding three important marketing media: Traditional Web, Social Media/Web 2.0 and Mobile Web. Here are our estimates of the ineptitude rates in each of these media:

Internet Marketing/Traditional Web

• Nearly 15 years of existence of the traditional Web

• Internet Marketing Ineptitude rate in hospitality:  65%

Web 2.0/Social Media Marketing

• Nearly 5 years of existence of social media

• Web 2.0/Social Media Marketing Ineptitude rate in hospitality:  90%

Mobile Marketing/Mobile Web

• Nearly 10 years of existence of Mobile Web but in reality, the Mobile Web in the U.S. exploded with the introduction of the first iPhone in June 2007.

• Mobile Marketing Ineptitude rate in hospitality:  97%

Conclusion

Hoteliers should strive to gain a crystal-clear understanding of what the best practices and latest trends are in hospitality Internet marketing: what works, what doesn’t, and why. Hoteliers should recognize that they do not have all the answers in-house and that there are thought leaders and other proven industry experts who can help them and their property stay competitive in these economic times, preserve and increase market share, and generate the highest website revenues and ROIs.

Hoteliers should take a hard look at how Best Industry Practices are being utilized by their corporate offices or major brands, as well as by the hotel’s Internet marketing vendors. Almost 15 years after the first online hotel booking, best practices have been established in practically every aspect of hotel Internet marketing. Hoteliers should not allow their Internet marketing vendors to “learn the business on the hotel’s dime.”

The prospect of professional development should become the main criterion when choosing an Internet marketing vendor.  Hoteliers should hire experts who are able and willing to teach the hotel and staff best practices and keep the hotel appraised of the latest direct online channel trends.

Hoteliers should work only with Internet marketing experts who can help them acquire new core competencies and adopt best industry practices in the direct online channel. 

They should provide crucial professional development as well as guide the hotel’s direct Internet marketing strategies, online brand building strategies, e-CRM, website re-design and SEO optimization, search and email marketing, social media and mobile marketing initiatives.

Measure 1: Linen/towel reuse programs

Linen reuse programs have emerged as one of the oldest and most popular forms of energy conservation measures since they directly result in cost savings on labour, water, energy and detergent use. This measure is an easy way to improve resource efficiency, and research suggests that 75% of guests who have the opportunity to participate in such programs, do (2). Furthermore, guests are more likely to reuse their towels when they know other guests are doing it, as the research shows that signs focussing on environmental benefits are less effective than signs that point out the level of participation of other guests. According to the AH&LA Report, 67% of establishments had a linen/towel reuse program in 2008, compared to 52% in 2004 (1). Analysis by price segment shows that 63% of economy hotels have adopted the program, while 76% of luxury hotels have (Figure 1). According to Figure 1b, larger hotels are more likely to implement this program than smaller establishments.

Figure 1a

Source: Smith Travel Research (2008)

Figure 1b

Source: Smith Travel Research (2008)

Measure 2: Liquid soap dispensers

Greenlodgingnews.com estimates that approximately ten billion shower amenity packaging pieces are thrown away annually by the world’s hotels (3). The installation of liquid soap dispensers is an eco-efficiency measure that saves 70% on waste production and reduces operational costs because cleaning staff do not have to replace amenities daily. According to the AH&LA Report, the use of liquid soap dispensers increased from 6% in 2004 to 22% in 2008 across surveyed hotels. Analysis by price segment shows that 15% of budget hotels, compared to 20% of luxury establishments, have installed liquid soap dispensers in their establishments (Figure 2a), while the size of a hotel seems to have no effect on the rate of installation (Figure 2b).

Figure 2a

Source: Smith Travel Research (2008)

Figure 2b

Source: Smith Travel Research (2008)

Measure 3: In-room energy management sensors

The UNEP estimates that the accommodation sector contributes 21% of all tourism-generated CO2 emissions globally (4). In addition, maintaining the heating, TV and lights in empty rooms can cost up to 20% of a hotel’s electricity budget. Many hotels have installed in-room energy monitoring systems in recent years in an effort to be eco-efficient. The manufacturers of some sensors report that the savings in energy costs due to monitors provide a return on investment within just one year. These monitoring systems function automatically and are time-savers for management staff, who do not have to manually adjust the controls in each room (5). Of course, energy use per-room can also be reduced if guests simply pay attention to switching things off themselves and if hotel managers book one floor at a time (6). This measure can help reduce energy consumption, especially during low occupancy periods. The AH&LA Report shows that, across the United States, 25% of establishments had in-room energy management sensors in 2008, compared to 15% in 2004 (1). By price segment, 38% of budget hotels had installed this tool, compared to 32% in the luxury segment (Figure 3a). In terms of hotel size, larger hotels appear to have installed sensors in greater numbers than smaller hotels have (Figure 3b).

Figure 3a

Source: Smith Travel Research (2008)

Figure 3b

Source: Smith Travel Research (2008)

Measure 4: Recycling programs

The implementation of recycling programs can be difficult since it depends on the availability of additional infrastructure and considerable logistics to deal with the waste collected (4). This is particularly true in remote and isolated areas. However, hotels are implementing recycling programs slowly, and trends suggest a general rise. According to the AH&LA Report, in 2008, 40% of establishments in the United States had recycling programs, compared to 32% in 2004 (1). A comparison according to price segment shows that only 21% of budget hotels recycle, compared to 56% of luxury establishments (Figure 4a). It seems that mid-sized hotels with 20 to 129 rooms are less likely to recycle when compared to smaller hotels and those with more than 130 rooms (Figure 4b).

Figure 4a

Source: Smith Travel Research (2008)

Figure 4b

Source: Smith Travel Research (2008)

Measure 5: Energy-efficient lighting

A lot of hotels have replaced their incandescent light fixtures, especially hallway lighting, with T5 and T8 fluorescent lamps. In many cases, government organizations provide incentives via subsidies and rebates to encourage this practice. According to the AH&LA Report (1), in 2008, 68% of all American hotels had energy-efficient lighting installed, and there were very few differences in implementation according to either price segment or room range (Figure 5a and b).

Figure 5a

Source: Smith Travel Research (2008)

Figure 5b

Source: Smith Travel Research (2008)

Measure 6: Water saving programs

The UNEP estimates that tourists typically use four times more water when travelling, compared to staying at home (4). Some fixtures such as efficient bathroom faucets and dual-flush toilets can help hotels reduce their water use between 20% and 40%. The number of products on the market to improve water efficiency is on the rise and the U.S. Environmental Protection Agency has a voluntary partnership program called WaterSense, which labels designated products and services that conserve water. The AH&LA Report shows that water saving programs had been implemented by 46% of surveyed establishments across the United States in 2008. According to price range, 64% of budget hotels had done so, compared to 50% of luxury hotels (Figure 6a). Analysis according to the size of the hotel shows no clear pattern in implementation; however, it seems that larger hotels are more active in saving water resources (Figure 6b).

Figure 6a

Source: Smith Travel Research (2008)

Figure 6b

Source: Smith Travel Research (2008)

Conclusions

Like any business, a hotel needs to respect its triple bottom line in order to stay competitive. While green programs offer significant cost savings, the guest response to these programs (impact on loyalty, price sensitivity) can also provide a significant market opportunity (7). According to the Market Metrix Hospitality Index Survey (8), overall, guests who rank a hotel’s green program highly are willing to pay at least 7% more for their room compared to other guests. These same guests also stay longer, are happier with their stay and are more likely to consider the loyalty program as “very important” in selecting a hotel. Hotels with highly ranked green programs also experience half as many guest-reported problems (according to the same survey).

Forbes listed the following as America’s greenest hotels for 2008 (9):

• Marriott New York City
• Wyland Waikiki, Hawaii
• Bison Quest Sanctuary and Spa, Montana
• Seaport Hotel Boston
• Hotel Triton (Kimpton), San Francisco
• Lookout Point Inn, Arkansas
• Banyan Resort, Key West Florida

Sources

(1) Smith Travel Research (2008) Lodging Survey. Lodging, Facilities, Trends 2008. Report prepared for the American Hotel and Lodging Association. Washington, DC, 245 p.

(2) Goldstein, N.J., Cialdini, R.B. and Griskevicius, V. (2008) “Room with a Viewpoint: Using Social Norms to Motivate Environmental Conservation in Hotels.” Journal of Consumer Research, Vol. 35, October.

(3) Greenlodging News (2008) “’Green’ Definitions Can Confuse Conscientious Amenity Purchasers.” www.greenlogingnews.com Last accessed 20 September 2008.

(4) United Nations Environment Programme, Sustainable Consumption & Production Branch (2008) Environmental Impacts of Tourism. www.unep.fr/scp/tourism/sustain/impacts/environmental/ Last accessed 20 September 2008.

(5) Butler, J. (2008) “The Compelling ’Hard Case’ for ’Green’ Hotel Development.” Cornell Hospitality Quarterly 49 (3) 234-244.

(6) Maycock, P. (2008) “Four easy ways to cut carbon and costs.” Hotel News Now. 28 August 2008. www.hotelnewsnow.com Last accessed 28 August 2008.

(7) Houdré, H. (2008) “Sustainable Hospitality: Sustainable Development in the Hotel Industry.” Industry Perspectives: A White Paper Series from Cornell University, School of Hotel Administration, The Center for Hospitality Research, No. 2.

(8) Barsky, J. (2008) Do customers really care about “green”? Market Metrix http://www.marketmetrix.com/ Last accessed 20 September 2008.

(9) Forbes Traveler (2008) “America’s Greenest Hotels 2008.” http://www.forbestraveler.com/resorts-hotels/green-hotels-us-2008-slide.html?partner=msnbc_greenhotels Last accessed 20 September 2008.

In any situation, eutrophication is influenced by the natural characteristics of a lake, as well as by the land uses around its watershed (8, 9). One result of eutrophication can be the excessive growth of phytoplankton and algae, as well as changes in species abundance and composition, biomass production and dissolved oxygen content. Once a lake becomes eutrophic, it can trigger the rapid growth of certain harmful algae types such as blue-green algae or cyanobacteria (10, 11). These algae are the most commonly known harmful algae in freshwater bodies. In Europe and North America, agricultural sources are generally the primary contributors to eutrophication, followed by sewage and industrial run-off (10, 12). Tourism and recreation can also contribute to eutrophication because the sector uses water and produces waste that often contains harmful chemicals (13).

Tourism and water

The average global tourist uses anywhere from 100 to 2000 litres per day (7), a figure that is several times higher than that of the average residential user. This is directly linked to the operation of tourism facilities, as well as use by visitors for regular activities such showers, swimming in pools, and so on. Water use is high for some activities in particular, such as when ski resorts produce artificial snow.

Tourism-related water consumption is also associated with chemical use, like synthetic fertilizers to maintain green spaces as well as detergents and soaps, all of which can be a significant source of pollution. Furthermore, besides their damaging physical impacts, water-based motorized activities also introduce various hydrocarbon compounds from fuels and anti-fouling paints (14). In Québec, for example, 307 golf courses contribute approximately 40 000 kilograms of active ingredients to ecosystems through fungicides, herbicides and insecticides (15). Sewage outflow from diffuse small-scale tourism and recreation facilities, especially around outfitter camps and resorts, can be a particularly significant source of bacteria and algae in freshwater systems in remote areas (16), although their contribution has not been quantified in Québec. Septic tanks around secondary homes lose up to 25% of their waste, which can seep into the soil and groundwater and, depending on the location, eventually enter a lake (5).

According to sustainable development objectives, the tourism sector needs to use water resources more efficiently and avoid the use of harmful substances that affect its quality (17). In turn, water resource availability and quality also affects tourism but few studies have provided any details quantifying how and where. In Florida, a study showed that algal blooms in coastal waters resulted in net reductions of 29% and 35% for the restaurant and lodging sectors respectively (18). The total net economic effect of diminished lake water quality in Québec has not yet been calculated.

Some solutions

Restoring a water environment is expensive and complex but several mitigation options exist. There are several examples of successful restoration projects in Québec involving collaborative work between the tourism industry, government and non-government organizations (19). Some of these projects have included riparian vegetation planting and the development of recreation activities and infrastructures around lakes. Other management actions, such as planting aquatic species to increase natural filtering mechanisms, may also be pertinent in some lakes because they enable the water to absorb additional nutrient loads (2).

One of the most effective ways is to prevent pollution, and this can be achieved by raising awareness via education. Various organizations recommend more efficient use of water and the elimination of toxic substances. Awareness programs in Québec such as the Charte des lacs (20) remain important tools. Regulation can also be effective. For example, the use of pesticides, herbicides and insecticides is regulated, although various land uses are affected differently. Since 2006, it is against the law to use pesticides on public lawns and green spaces, including semi-public areas and places managed by municipalities (6). Consequently, specific users in the tourism sector such as golf courses are now required to submit plans by 2009 for reducing their use of pesticides by an average 12.9%, fungicides by 9.4%, herbicides by 8.2% and insecticides by 7.4%. There do not appear to be any restrictions imposed on other sectors in tourism.

Time for action

The competition for freshwater resources will likely intensify in the future and climate change will also affect lakes in Canada (21). Some tourism businesses have reduced water use and/or switched from using toxic substances in their operations and replaced polluting products with biodegradable alternatives. However, the extent of change across the whole sector has not been determined. Currently in Québec, it is unclear how either tourism or recreational activities contribute to water quality problems compared to other land uses. It is also not clear how much lakes contribute to the economics of tourism in different regions. It is thus important to understand the relationship between water resources and tourism so that problem mitigation may involve all relevant industry stakeholders.

Sources:

1.    Klessing, L.L. (2001), “Lakes and Society: the Contribution of Lakes to Sustainable Societies,” Lakes and Reservoirs: Research and Management, vol. 6, p. 95-101.
2.    Jöbgen, A.M., A. Palm, and M. Melkonian (2004), “Phosphorus Removal from Eutrophic Lakes Using Periphyton on Submerged Artificial Substratal,” Hydrobiologia, vol. 528, p. 123-142.
3.    Babou, I. and P. Callot (2007), Les dilemmes du tourisme, Vuibert, Paris.
4.    World Resources Institute (2008), Water Resources and Freshwater Ecosystems [http://earthtrends.wri.org/features/index.php?theme=2]. Last accessed May 2, 2008.
5.    Hade, A. (2002), Nos lacs : les connaître pour mieux les protéger, Fides, Québec.
6.    Ministère du Développement durable, de l’Environnement et des Parcs (MDDEP) (2008a), Actions ministérielles en matière de pesticides [www.mddepp.gouv.qc.ca/pesticides/actions.htm]. Last accessed April 28, 2008.
7.    Gössling, S. (2006), “Tourism and Water,” in S. Gössling and C.M. Hall (eds.), Tourism and Global Environmental Change: Ecological, Social, Economic, and Political Interrelationships, Routledge, London, p. 180-194.
8.    Salmaso, N. (2000), “Factors Affecting the Seasonality and Distribution of Cyanobacteria and Chlorophytes: A Case Study from Large Lakes South of the Alps, with Special Reference to Lake Garda,” Hydrobiologia, vol. 438, p. 43-63.
9.    Davis, C. (2007), The Multiple Dimensions of Water Scarcity. EarthTrends. World Resources Institute.
10.    Cronberg, G. (1999), “Qualitative and Quantitative Investigations of Phytoplankton in Lake Ringsjön, Scania, Sweden,” Hydrobiologia, vol. 404, p. 27-40.
11.    Larkin, S.L. and C.M. Adams (2007), “Harmful Algal Blooms and Coastal Business: Economic Consequences in Florida,” Society and Natural Resources, vol. 20, p. 849-859.
12.    McGarrigle, M.L. and W.S.T. Champ (1999), “Keeping Pristine Lakes Clean: Loughs Conn and Mask, Western Ireland,” Hydrobiologia, vol. 395-396, p. 455-469.
13.    Bramwell, B. and G. Pomfret (2007), “Planning for Lake and Lake Shore Tourism: Complexity, Coordination and Adaptation,” International Journal of Tourism and Hospitality Research, vol. 18, no. 1, p. 43-66.
14.    Mosisch, T.D. and A.H. Arthington (2004), “Impacts of Recreational Power-boating on Freshwater Ecosystems,” in R. Buckley (ed.), Environmental Impacts of Ecotourism, Wallingford, CABI Publishing, p. 125-154.
15.    Lavardière, C, S. Dion, and S. Gauthier (2007), Bilan des plans des réductions des pesticides sur les terrains de golf au Québec, Rapport réalisé pour le ministère du Développement durable, de l’Environnement et des Parcs, Gouvernement du Québec.
16.    Lukavsky, J., A. Moravcova, L. Nedbalova, and O. Rauch (2006), “Phytobenthos and Water Quality in Mountain Streams in the Bohemian Forest Under the Influence of Recreational Activity,” Biologia, vol. 61 (Suppl. 20), p. S533-S542.
17.    United Nations Environment Programme, Division of Technology, Industry, and Economics, Sustainable Consumption & Production Branch : Resource Efficiency [http://www.unep.fr/scp/tourism/topics/resource/use.htm]. Last accessed May 2, 2008.
18.    Hoagland, P., D.M. Anderson, Y. Kaoru, and A.W. White (2002), “The Economic Effects of Harmful Algal Blooms in the United States: Estimates, Assessment Issues and Information Needs,” Estuaries, vol. 25, no. 4, p. 819-837.
19.    Tourisme Québec (2000), Guide de mise en valeur des plans d’eau du Québec à des fins récréotouristiques et de conservation du patrimoine, Groupe DBSF for Tourisme Québec.
20.    Ministère du Développement durable, de l’Environnement et des Parcs (MDDEP) (2008b), Charte des lacs [www.menv.gouv.qc.ca/eau/algues-bv/engagement/engagement.asp]. Last accessed May 2, 2008.
21.    Jones, B.E., D. Scott, and S. Gössling (2006), “Lakes and Streams,” in S. Gössling and C.M. Hall (eds.), Tourism and Global Environmental Change: Ecological, Social, Economic, and Political Interrelationships, Routledge, London, p. 67-94.

Green-Keys Eco-Rating Program

The Green Key Eco-Rating Program was launched in 1997 and it is administered by the Hotel Association of Canada (HAC). The number of green keys recognizes participating establishments and more keys mean more “green” measures implemented. Although any establishment can apply for the label, the program is still designed for large hotels. Participation is comprised of a self-administered on-line audit that consists of 140 questions across 5 categories of operation. Since 2007 the HAC performs random on-site audits.

At present about 600 properties are registered with the program across Canada (Table 1). The aim is to reach 1000 by the end of 2008, which would represent 30 to 40 % of all hotels in Canada with 50 rooms or more. In March 2008 Ontario and British Columbia had the most hotels participating in the program (Table 1) and most were part of a chain and had a 3 key rating (Figure 1). Hotels with a five key rating are considered to have the highest standards in environmental management and social responsibility throughout all areas of operations set at an international standard for sustainable hotel operations (refer to list at the end for examples).

Figure 1: Number of hotels with different key ratings across Canada

In Quebec labeled establishments are unevenly distributed on the basis of official tourist regions. Montreal has the highest number of establishments followed by Quebec and Montéregie, but some regions have no participants at all (figure 2).

Figure 2: Number of establishments participating in Green Key

Eco-rating programacross different tourism regions of Quebec.

Greenleaf Audubon

Audubon International’s eco-rating program is offered jointly with TerraChoice Environmental Marketing, Inc. and exists since 2000. Participating establishments are recognized by the number of green leaves (1 to 5) and more leaves imply more environmental measures implemented. Participants conduct a self-evaluation covering six key areas of operation that are analyzed by TerraChoice Environmental Services, who also direct the independent verification process and conduct random on-site spot checks of establishments.

Although any type of accommodation facility can join the program, in March 2008 only 44 were members in Canada and mainly in Manitoba, Nova Scotia and Ontario (Table 1). Most Canadian participating establishments had 3 leaves. The only two establishments in Quebec were in Montreal and each had two leaves. The low number of participants in a Canadian context is due to the popularity of the HAC’s green-key program although some hotels participate in both.

Réser-vert

In November 2007, l’Association des hôteliers du Québec with its private and public sector partners announced its own program to recognize establishments who have implemented sustainable development principles. Participating establishments receive the logo of Thuya occidentalis, whose different colors represent the 3 pillars of sustainable development. Similar to the other programs, this one also involves an initial self-assessment of 140 specific operations in 10 categories. Any, accommodation establishment is eligible to apply. Given the program’s recent creation, statistics are not yet available to show participation rate.

LEED

The most rigorous program for the built environment is LEED, administered by the Canadian Green Building Council. It is applicable to newly constructed and establishments in renovation and participants conduct an assessment of performance measures. Once registered, participants conduct an evaluation across various operational categories to obtain silver, gold and platinum certificates. In March 2008 there were six hotels registered in Canada, half of which were in Ontario (Table 1) and the highest-level of certification was gold.

Does the market care?

There is proof (at least suggested by large hotel chains) that being green means a good image, savings and net improvements of economic performance. As the market is starting to adjust to the “green revolution”, being green will continue being important. Most studies also suggest a rising demand for green accommodation although how this translates in real figures in different destinations is not yet ascertained. However, it appears that the eco-coconscious traveler is no longer satisfied by symbolic environmental efforts such as opting to reuse towels.

European reports indicate that corporate social responsibility will become an even more important factor for the meetings and events sector over the next years and this trend appears to be the same in North America. Based on the 2008 Hotel Association of Canada / Fleishman Hillard Travel International Travel Intention Survey, greenlodgingnews.com reported that 29 % of business travelers compared to 21% of leisure travelers were prepared to pay 5 % more for a more eco-friendly stay. The same study also showed that 52 % of all travelers surveyed sought hotels with strong green practices “occasionally” or “as much as possible” compared to 46 % who said “rarely or never”. Interestingly 91 % of all respondents were not familiar with Canada’s Green Key Eco-Rating program. When asked if their organization had a green travel policy 60 % said no, 8 % said yes and 32 % did not know.

In the meantime the hotel industry needs to do what makes business sense. An establishment that is weak on both values and commercial competence will mean bad business in the future. The snapshot of adherence to green certification programs suggests that small hotels are laggards in environmental responsibility given that most of the hotels labeled today belong to chains, even if in reality many small establishments are actually improving their sustainability performance. The challenge to translate environmentalism into profits may be much higher for them. Given that tourists are not yet green enough means time is in their favor. There might be other forces at play that will push them in the “green” direction such as the prediction that energy prices could be 70 % higher in some Canadian provinces and landfills fees over the next five years.

All hotels must change their practices to move towards sustainable operations and there are literally hundreds of resources to help with the process today, including many examples of good practice.

Best practice hotels according to labels mentioned in this analysis:

Siwash Lake Ranch

The Fairmont Chateau Lake Louise

Hospitality Inns & Suites, Lloydminster

Monterey Inn Resort & Conference Centre

Trout Point Lodge

Aurum Lodge

E’Terra Inn

Endnotes:

Participation costs in programs is variable. For members to an organization, the costs are as follows to the aforementioned programs:

Green Keys of Hotel Association of Canada: CAD 350 (+ GST) annually per property.

Audobon’s Green Leaf: CAD 500 (+ GST) plus $ 1/room, for establishments with less than 50 rooms and CAD 800 (+ GST) plus $ 1/room for establishments for those with more than 50 rooms.

Reser-vert: Hotel Association of Quebec: For members it CAD 150 to enter the program and subsequently the program costs CAD 350 (+GST) annually.

Leedership in Energy and Environmental Design: The cost of participation is dependent on the size of establishment. For a hotel with less than 500 m2 surface area in Quebec certification would be around CAD 4200 (+ tax) plus registration cost CAD 1000 + GST). For establishments that are in renovation the fee is about 50 % less, including registration fee.

Sources:

- Audubon Green Leaf Eco-rating Program: [http://www.terrachoice.ca/hotelwebsite/indexcanada.htm], last accessed March 30 2008.

- Buckley, R. (2002) Tourism Ecolabels. Annals of Tourism Research, 29(1) p.183-208.

- Canadian Green Building Council: [http://www.cagbc.org], last accessed March 30 2008.

- Corporation de l’industrie touristique du Québec (CITQ) (2008): [http://www.citq.info/nouvelles/statistiques.asp] last accessed March 30 2008.

- Font, X. and Harris, C. (2004) Rethinking Standards from Green to Sustainable. Annals of Tourism Research, 31(4) p.986-1007.

- Hasek, G. (2008 a) Leed Gold-Certified E’Terra Inn is Natural Fit for Niagara Reserve. Green Lodging News, 02-06-2008. [www.traveldailynews.com], last accessed March 30 2008.

- Hasek, G. (2008 b) Canada’s Hoteliers Gather to Explore Green Trends, Best Practices. Green Lodging News, 02-26-2008. [www.traveldailynews.com], last accessed March 30 2008.

- Hospitality and Sales Association International Summer 2007 edition. Resources for Resourceful Hospitality Firms. p. 28-30.

- Hotel Association of Canada: [http://www.hacgreenhotels.com/index.htm], last accessed March 30 2008.

- Hotel Association of Quebec: [http://www.hoteliers-quebec.org/fr/accueil.php], last accessed March 30 2008.

- McDonald-Gibson, C. (2008) Des hotels écolos tendent la main aux voyageurs. Agence France-Presse, le jeudi 3 avril 2008.

- Reiser, A. and Simmons, D. G. (2005) A Quasi-experimental Method for Testing the Effectiveness of Ecolabel Promotion. Journal of Sustainable Tourism, 13(6) p.590-616.

- Terra Choice Environmental Marketing (2008): [http://www.terrachoice.com], last accessed March 30 2008.

- Verikios, M. (2007) CSR Higher on the business agenda. Travel Daily News, 19-10-2007. [www.traveldailynews.com], last accessed 19 October, 2007.

- Verikios, M. (2008) Focus on environmental responsibility within meetings industry. Travel Daily News, 09-04-2008. [www.traveldailynews.com], last accessed April 10, 2008.

CouchSurfing is an online travel community of globally minded and socially conscious community of travellers. It “seeks to internationally network people and places, create educational exchanges, raise collective consciousness, spread tolerance and facilitate cultural understanding”. It is all about seeking authentic visitor experiences while staying at other couchsurfers’ homes at any destination. Although many couchsurfers may join the community to save money on accommodation, there are many benefits that accrue to both hosts and guests.

Couchsurfing in Practice

CouchSurfing is enabled by an interactive Web 2.0 Website that offers free membership to anyone, thereby facilitating social interactions amongst people. The profile page is a basic prerequisite for membership and it indicates the person’s intended level of interaction with the general couchsurfing community. This can include to “offer a couch” for sleeping or just “meet up for coffee or tea”. The profile page also shows a member’s involvement in the community over time and contains a friends list that states how a person knows others on the list. By clicking on someone’s profile page, it is possible to see whom he or she has hosted and when, where he or she has traveled and with whom they stayed at each location. Couchsurfing communities at any given destination organize a range of social activities such as parties and get-togethers where live interaction takes place between members who have not had prior personal contact via email or the community’s Website. When couchsurfers travel, they contact other members at their destination and request accommodation on their ‘couch’. The latter is a term used symbolically to represent any private space provided for an overnight stay in the home of a couchsurfer. The average length of stay is 2 to 3 nights per host and a visit of a week or more at the same destination is usually spent at different hosts. This may be alternated with hostels if no host is available.

CouchSurfing became publicly accessible in January 2004 and by January 2008 it counted over 400 000 members, making it the largest community of its kind in the world. Website statistics show that couchsurfers are predominantly from industrialized countries with Europe representing approximately half and North America around 30% (Figures 1 and 2). On a country basis, the United States of America accounts for about a quarter of all members worldwide. Couchsurfing is clearly a male-dominated activity, as females represent just under 40% of all members (Figure 3). Couchsurfers are also young: 70% fall in the 18-29 age group and the average member age is 26 (Figure 4).

CouchSurfing strives to build connections worldwide that create and strengthen (inter)cultural understanding because members seek deep intense experiences linked to discovery. Based on a survey of 3000 members, over half (56,21%) of all respondents are motivated to learn about themselves and the world around them (Figure 5) via meeting like-minded strangers at their destination.

Figure 1

Source: CouchSurfing, 2008.

Figure 2

Source : CouchSurfing, 2008.

Figure 3

Source : CouchSurfing, 2008.

Figure 4

Source : CouchSurfing, 2008.

Organization and Management

As an organization CouchSurfing provides its members with a series of practical tips to facilitate safe lodging and it also provides advice to members to build awareness about staying with members in the event of problems. Except for some technical staffers who maintain the Website, CouchSurfing is entirely run by volunteers where some members have particular responsibilities within the organizational structure of the community. There are around 700 ambassadors worldwide who organize gatherings and activities that attract both local and travelling couchsurfers. In Montreal, couchsurfers are known to organize larger meetings that coincide with international festivals and these gatherings vary in duration, location, size and member composition. After Paris, Montreal has the second largest local couchsurfing community in the world, although this position is presently rivaled by London.

As couchsurfers stay with other couchsurfers, they are excluded from official accommodation statistical counts, but nonetheless they are still important contributors to local economic activities. They visit tourist attractions, participate in a range of cultural activities and frequent bars and restaurants just like regular tourists. The biggest difference is that, with the help of their local hosts, they are likely to visit places off the official tourist map in their search for the authentic visitor experience. Thus, their economic contribution is likely to include the consumption of products and services outside the realm of the average visitor.

Figure 5

Source : Bialski, 2007.

The future

CouchSurfing is a product of modern tourism in the age of mobility and it regroups the Internet-minded and the globally networked. It is a form of tourism that moves travellers away from the simple consumption of traditional tourism spaces and it also changes people’s expectation of a memorable visitor experience. Although they may have similar travel patterns compared to regular tourists, couchsurfers are likely to be more responsible towards the host community and their local environment. Given that the majority of couchsurfers seek the authenticity of their destination by by building deep emotional connections to places through personal contacts, the role of the traditional tourism landscape becomes less important. This means that iconic tourist attractions and spaces become secondary and social interactions as primary, if not the core of the visitor experience. However, the very essence of seeking out ordinary private spaces and new local people at a destination means that any place on the planet can become a potential couchsurfing haven. Given the direction of global telecommunication patterns and the general expansion of the travel sector, communities like CouchSurfing will continue to exist and grow. Consequently, there may be an increase in spin-offs, resulting in smaller communities that are more specialized and suited to the needs of those users in search of yet a different experience.

This article was written with the collaboration of Joris Sprakel, a lawyer and CouchSurfing ambassador for the city of Amsterdam in the Netherlands.

Sources:

- Bialski, P. (2007). Intimate Tourism. Friendship in a state of mobility – the case of the online hospitality network. Master’s Thesis. Institute of Sociology. Department of Social Psychology. University of Warsaw, Poland. 85 pages.
- CouchSurfing (2008). Website: http://www.couchsurfing.com/ Last accessed January 23, 2008.
- Hospitality Club Website: http://www.hospitalityclub.org/ Last accessed January 23, 2008.
- Global Freeloaders Website: http://globalfreeloaders.com/ Last accessed January 23, 2008.
- Péloquin, C. (2007a). “Facebook, the new darling of Web 2.0,” Tourism Intelligence Network, UQAM, September 6, 2007.
- Péloquin, C. (2007b). “What is Facebook’s impact on the tourism industry?” Tourism Intelligence Network, UQAM, September 21, 2007.
- Servas International Website: http://joomla.servas.org/ Last accessed January 23, 2008.
- United Nations World Tourism Organization (2008). http://www.unwto.org/frameset/frame_sustainable.html Last accessed January 23, 2008.

LL Bean, an outdoor equipment and apparel company in the United States, displays this saying on its office walls: “A customer is not dependent on us, we are dependent on him.”

At Disneyland Resort Paris, there are no “customers,” but “guests.” In the service industry, especially the travel and leisure sector, the customer is indeed a guest.

This is why I would like to add a fifth P (People) to the 4Ps of the marketing mix (Product, Price, Place and Promotion), to cover customers and customer relationship management.

Knowing your customers is one key to successfully boosting sales because it enables you to:

• Suggest the right product or holiday package
• To the right customer
• At the right time

Quite often, the 20/80 rule is very accurate when analyzing a company’s clientele: 20% of the customers account for 80% of the business volume. Therefore, creating a customer database and becoming familiar with its features can definitely help improve sales and consequently your company’s profitability.

The database should enable you to extract customers or prospects so you can:

• Boost sales and profits
• ncrease the number of new customers, thanks to word-of-mouth from satisfied customers
• Encourage customer loyalty with new products and special offers
• Get your message to your customers at the right time, for example, when they are planning their next vacation or weekend getaway with friends

Find the appropriate information

One has to begin by opening drawers and looking at your business’ customer records. Files should be consulted chronologically, in the following order:

1. Marketing – Information Requests
2. Reservations
3. Reception – Front Desk
4. Leisure and Recreation – Classes
5. Dining: Meal Plan or Theme Supper
6. Customer Accounts
7. Customer Satisfaction Survey
8. Commercial Services – TO/Agencies & Groups/Seminars

Some of your company’s divisions deal directly with customers and have a lot of useful information (like the contact information obtained when the customer last booked a stay or requested information).

Is your site a family holiday destination? Information about your customers (adults, parents, children and grandchildren) can be useful when you are creating new products or packages, like spring holidays aimed at seniors or family getaways on long spring weekends.

Some campground operators specifically target families with children ages 12 and under, while others seek teens and young adults. If you know your customers well, you can target potential customers that resemble them.

It is estimated that your customer base erodes at an average annual rate of 10%. Therefore, your file of new contacts and prospects must be replenished regularly. Since your current customers are the best ambassadors of your product, you should seize the opportunity to ask them for their friends’ and relatives’ contact information.

Organize the customer database

The data gathered must be organized and recorded to suit its ultimate use. Some words of advice: keep it simple and functional.

Too much information becomes useless information. Not every piece of information is useful or workable, in any event, not at first. It is better to start out simply and then develop your database as your needs grow.

Set realistic goals when launching your customer database and share these goals with your associates. They will no doubt have comments and suggestions on how best to collect and use the information gathered.

Monitor two indicators

In addition to qualitative data like the customer’s name, contact information and, of course, email address, it is useful to monitor two other types of customer information:

• consumption history
• communication history

1. The consumption history includes information like:

• dates of stay
• duration of stay
• number of adults and children (and their ages)
• any reservations for rented accommodations – cabin, RV, bungalow, trailer
• special features of campsite location – near a lake, in the woods, a specific site
• several accommodations reserved with friends or relatives
• optional activities: classes or reserved activities like horseback riding, tennis, canoeing, kids’ club, etc.
• reserved dining options, such as a theme dinner
• specific services like a baby monitor
• outside products or services like a sound and light show being presented in the area

Of course, a consumption history will incorporate all information from prior years.

Experience shows that customers tend to spend the same amount of money at their vacation destination as they do on the rental. By monitoring your customers’ consumption during their stay, you can quantify the economic importance of each reservation and define profiles for targeting the most promising potential customers.

If you have more than one site, it would be useful to consolidate them when renewing contracts with third parties and travel professionals.

2. The communication history records the dates and messages sent to each customer. You can monitor and measure the effectiveness of your communications and promotional offers.

As always in a communication campaign, it is recommended that you test your promotion on a representative sampling of your target clientele. A well-organized customer database will make it easier to quantify and evaluate your communication activities. The communication history is necessary for building customer loyalty. It enables you to develop a lasting relationship with your customers by taking their preferences and shopping habits into account.

Remember, wooing back an old customer is one-fifth the price of finding a new one.

By combining these two approaches (consumption and communication histories), you can, with a little experience, extract information and group together the profiles of similar or closely matched customers.

• Once you define qualification criteria, you can use them to segment your database. Criteria like postal code, holiday period, family make-up, activities and purchasing method, either direct or indirect, will help you extract customers with similar characteristics.

For example, to tell your customers about a spring weekend promotion, you would extract all the addresses located less than three hours away by car. A four-day June package to explore the Loire Valley and learn about wine-tasting would be sent to customers who are able to travel at that time of year, like seniors.

Knowing your clientele is also necessary for properly positioning your product. In an increasingly competitive economy, it is vital that your market position and marketing goals be clearly stated.

The tools needed

There are many customer database management software programs available on the market. Select a customized tool that will enable you to format the customer database in accordance with your goals and uses. The ideal tool is one that you can develop as your needs progress and that functions with your office software programs (e.g. Excel, Word, Access).

Finally, you should be able to connect your customer database directly to your Website and operate it from the site.

With the Internet, you can communicate with each and every customer. Nowadays, it is indispensable to have a direct marketing tool for communicating and selling, because over 50% of all people search the Internet for information on their destination and holiday spot and 40% have used it to reserve travel products.

Should you operate more than one tourism business, building a customer database on your extranet site will make it even more efficient and functional. Some information can be centralized on it, or made available and useable for each department in your company.

Of course, access must be secure and adapted to each user’s responsibility level. The marketing department does not need the same data as the front desk or the person in charge of supplemental activities.

Customer databases are the property of a business and an important factor in its future success. Therefore, a responsible individual must be appointed to manage and coordinate the project with the input of the departments involved.

Use the database

Offering all customers the same benefits or discounts will only lower your profitability without guaranteeing an increase in sales. Often, this tactic simply leads to ongoing price-cutting. The only rule: any promotion or discount offered to a customer must always be justified and reflect the history of the customer’s relationship.

Analyze the reservations made and study your customers’ profiles to better understand their buying habits and then use this enhanced customer knowledge as part of your marketing efforts. You could improve business during slow periods or increase average revenue per customer.

You could launch a loyalty program that uses preferential treatment and specific extras to develop privileged customer relationships. Preferred customers will agree to receive communications from your company and send you valuable information about their preferences and future needs.

It is essential to involve your associates and increase their awareness. Without their daily input, your database will quickly become unworkable due to its incorrect, incomplete or simply out-of-date information.

A good database must be selective, exhaustive, nominative, up-to-date and accurate.

This trend is closely associated with another, dubbed “Work hard, play hard.” In fact, Benchmark notes that a bigger slice of meeting and convention budgets is being allocated to leisure and team building events. Though companies are still demanding more from their employees, they are also recognizing the need to balance this with fun activities like a round of golf, a spa visit, or even a cooking class. Microsoft, Westin, KLM, eBay and many other corporations are sending their employees to the kitchen.

A simple recipe for cooperation

Team building sessions can take a variety of forms, but they are often associated with physical activities, sometimes extreme in nature, that are not necessarily suitable for all employees. Golf, rafting, treasure hunts and role-playing are just some of the ways in which employees can accomplish something together outside the workplace. Unlike golf, which is appeals primarily to golfers, and rafting, which is too extreme for some people, cooking lessons are a simple, relatively inexpensive and highly accessible way to get people together. Furthermore, culinary activities focus more on cooperation than other, more competitive, activities do.

Delicious benefits

Like any organization, a cooking class follows a system: to succeed, participants must set deadlines, use limited resources, make decisions and cooperate. In the kitchen, individuals assigned different roles are put into groups to create a product, in this case, a meal. Participants share responsibilities and learn to appreciate the individual skills of each team member as they work towards a common goal: grilled lamb, sautéed mushrooms or a rich chocolate sauce!

Events can be customized to meet the goals and budget of each specific group. Another very popular option is to have the experience include an opportunity to work with a renowned chef.

Cooking is an enjoyable activity that everyone is capable of doing. In fact, one’s prowess in the kitchen is in no way related to one’s tasks in the workplace; roles are sometimes reversed, stereotypes fall by the wayside and a new group dynamic can emerge. Since the kitchen is a familiar environment and food is a universal language, people who cook together can become closer in a way that endures beyond the team building exercise itself.

The secret to success: Planning and consistency

• To be successful, a team building activity begins long before the session itself, which must be well planned. Ideally, a team of employees should be formed to organize the event.
• For maximum effect, the activity should be consistent with the company’s overall organization. In other words, its corporate culture, values and internal practices should underscore the team concept on an ongoing basis.
• Participation will be greater if the team building activity is organized around a business goal that all employees can contribute to.
• To take full advantage of the potential of team building, organizers must set real work goals, determine how the learning will be integrated into the workplace and decide what type of follow-up will be done, all before the activity even takes place. Doing so will lead to better planning.

A poorly planned team building activity can lead to negative consequences. This can happen if the event does not complement the company’s usual work environment. For example, if the company normally rewards individual efforts, an activity to build team spirit will likely have no impact and even strike employees as a waste of time. Similarly, if an event lacks follow-up or is not related to concrete, consistent actions in the workplace, it could well damage employee confidence, motivation and productivity.

Some examples

• CEO Chef is first and foremost a team building company. Following a short introduction and some safety tips, participants form teams and name a leader. Then the workshop leader presents the “culinary challenge.” Teams must prepare the food according to the instructions (which are often far from complete). The goal is team work, creativity and trusting others. After the cooking, the workshop leader leads a discussion about the lessons learned. CEO Chef comes to the convention or meeting site and brings all the equipment needed for the team building activity.
• Along the same lines, Recipe for Success has a very diverse menu: sushi, chili, chocolate, ice cream, and even ice sculptures! Other outfits are Hands on Gourmet and Parties that Cook.

Source: Hands On Gourmet

• Other companies like Gourmet Retreats in California and Tall Order in Vancouver specialize in a variety of culinary experiences, with team building being just one of their activities.
• The Bellagio Hotel in Las Vegas is currently building an enormous kitchen that will be used exclusively for classes and demonstrations as well as team building activities.
• The Institut du tourisme et d’hôtellerie du Québec (ITHQ) and the Académies Culinaire de Québec and de Montréal offer cooking classes to private groups and open their facilities to companies who wish to hold team building events.
• The Québec Resorts and Country Inns network offers culinary team building as one of the indoor activities available at its establishments.
• Montreal outfit La Cuisine de Lili Margot is a place where guests help make their own meal with the help of a chef. It is also available for team building activities.

Source: Tall Order

Take the plunge!

With its positive outcomes, accessibility and user-friendliness, culinary team building seems to be making a name for itself. Participants gain a better understanding of their team’s strengths and challenges, as well as insight into how to manage its dynamic. And, of course, the highlight is the delicious group meal that follows.

The phenomenon has even reached Quebec. However, while there are some exciting initiatives, it is not clear that the supply is ready to meet the demand of meeting and convention organizers. There is definitely room for an organization to develop such activities for conventioneers and business travellers in Quebec. Of course, though hotel owners cannot simply become group leaders of team building activities overnight, they can certainly open the doors of their kitchens and develop such events in partnership with specialized companies, organizational psychologists or other professionals.

Perhaps the idea should simmer for a while…

Sources:
- Healthfield, Susan M., “Keys to Team Building Success,” About.com: Human Resources.
- HotelOnline. “Benchmark Hospitality’s Top Meeting Trends for 2007,” March 6, 2007.
- Vallerand, Nathalie. “Drôle de team building!” Affaires Plus, December 2007.

Websites:
- www.recipeforsuccess.com
- www.handsongourmet.com
- www.partiesthatcook.com
- www.tallorder.ca/retreat-programs
- www.desmondgv.com/conference/team_cook
- www.academieculinaire.com
- www.reunionschampetres.com
- www.lilimargot.com

The decision-making process is complex, particularly when it comes to travel, because of the intangible nature of services that contribute to one’s experience. In addition, some aspects can support more uncertainty than others. For example, major decisions like the choice of destination, the length of the trip, the accommodations and the overall travel budget tend to be made in advance, while secondary decisions, like entertainment and meals, for example, are often finalized once at a destination. Although this concept is widely accepted, it has yet to be thoroughly studied and documented.

Understanding the decision-making process

A study in the International Journal of Tourism Research closely examines when certain decisions are made and what sources of information are used at destination. However, although the study comes up with some relevant findings, these must be taken with a grain of salt because the survey in question covered a very specific site, the international destination of central Florida. Obviously, the findings could be different for other destinations or other visitor samplings.

Lodging and transportation are clearly decisions made prior to departure (90% of the time). On the other hand, when it comes to eating and dining, decisions are most often made at destination (70%), when in transit or at more than one stage of the travel planning process. Entertainment and recreation decisions are made both before and during a trip, in equal proportions (Table 1).

Source: International Journal of Tourism Research, 2007

The influence of referral information sources at the destination

When it comes to decisions made at a destination, recommendations are the most frequently used sources of information (Table 2).

Referrals from friends and relatives are the primary reference for all types of decisions. The study does not specify the percentage of respondents travelling for the purpose of friends and relatives, with these individuals lumped into the leisure travel sampling (over 70% of respondents).

Travellers also consult visitor information centres, particularly when it comes to entertainment and recreation. Regardless of the type of service sought, visitors regularly ask hotel staff (a source named by one-quarter of respondents), but rarely restaurant staff. Finally, recommendations from local residents (other than tourism employees and friends and relatives) have a greater influence on entertainment, eating and dining decisions than they do on recreation.

More often than not, the category of “other” at-destination information sources refers to prior or personal experience and the Internet.

Source: International Journal of Tourism Research, 2007

Visitor characteristics affect the decision-making process

The study also provides information on the timing of decisions, according to visitor gender, trip purpose and origins.

• Women are more likely to plan their trip in advance, particularly when it comes to entertainment and recreation.
• As a whole, leisure travellers tend to make these same decisions prior to departure, unlike business travellers, who tend to make their entertainment and recreation decisions once at the destination.
• Domestic travellers are more likely than international travellers to decide on their entertainment options prior to departure.

Though these are just observations, they do suggest that organizations wishing to learn more about their customers’ decision-making process should pay attention to such indicators. For example, given that leisure travellers are more likely than business travellers to select their entertainment options before leaving home, companies trying to attract leisure travellers should therefore highlight fun activities in their advertising and on their Websites.

An overview of Montreal visitors

A 2003 study conducted by Tourisme Montréal and Convercité showed that 43% of visitors to the city had decided which activities they wanted to do before they left home. The other 57% waited until their arrival to decide what to do, or else decided completely on the spur of the moment. (See: Processus décisionnel des touristes à Montréal.) These numbers reinforce the notion that it is important to properly welcome and inform our visitors!

Two principles to retain and integrate into any marketing strategy

Clearly, travellers often make decisions about dining, entertainment and recreation once they have arrived at a destination. Therefore, employees in contact with visitors must be trained accordingly.

The study also highlights the important role played by local residents in a visitor’s decision-making process. Residents are seen as objective destination experts. More specifically, companies specializing in recreation, entertainment and dining can benefit from recommendations given by a destination’s local residents. By forming bonds with the community, these businesses increase their chances of successfully attracting travellers through viral marketing.

Prediction

With the advent of Web 2.0 and the widespread use of cell phones, travellers already enjoy real time access to referrals and recommendations, and this way of doing things is only going to get more popular. After all, given a choice between restaurants listed in a guide book and those rated highly by local residents, which one would you choose if you had all the information at the tip of your fingers?

Sources:
- DiPietro, Robin B., Youcheng Wang, Paul Rompf and Denver Severt. “At-destination visitor information search and venue decision strategies,” International Journal of Tourism Research, Vol. 9, Issue 3, pages 175-188, May 2007.
- Tourisme Montréal and Convercité. “Enquête sur le processus décisionnel des touristes à Montréal,” December 8, 2003.

An expanding service

Around the globe, an ever‑increasing number of places now offer wireless internet service (wi‑fi). According to an ABI Research study, the number of wi‑fi hotspots worldwide will grow by over 25% in 2007, for a total of 179,500 of those areas so beloved by laptop owners. About 72% of them are found in North America and Europe, but the Asia‑Pacific area is showing rapid growth in that respect.

It’s not just the offer; the interest on the part of internet users is also rapidly expanding. In addition to the burgeoning number of internet subscribers there is an astonishing growth in wireless use, as people become more and more used to going online to check the internet and e‑mail.

The trend reaches accommodation

The hotel industry is well positioned to make the advantages of wireless internet available to its clientele. There are currently 46,000 wireless hotspots in various kinds of accommodation establishments. This amenity confers an obvious competitive advantage that many large hotel chains are eager to acquire. Some operators also use wireless networks for their internal communication.

Two recent surveys conducted in January 2007 by YPB&R shed some interesting light on the relative importance of wireless internet service in hotel rooms. The first survey was conducted on 304 leisure travellers, while the second focussed on the same number of business travellers. Both samplings surveyed American travellers who had travelled over 120 km from their home and spent at least one night in commercial accommodation.

Internet in the room

Clearly, the internet is becoming an essential service and, increasingly, clients expect it to be offered free of charge. Business travellers more or less demand high‑speed wireless internet access in their hotel room (Figure 1). Over 39% of business travellers surveyed said that this free service is extremely important, and 46% of leisure travellers said it was very important (see ratings in columns 4 and 5). The stated importance of this service to travellers decreases significantly as soon as there is a cost attached to it.

Since an increasing number of travellers use laptops, customers obviously prefer wireless internet service. However, both clientele segments still displayed significant levels of interest in having wired connections in their rooms (Figure 2). However, it is to be expected clients will increasingly prefer wireless access.

When questioned about the importance to them of knowing that an accommodation establishment had a public space with high‑speed internet access, almost half (49%) of the business travellers surveyed (compared to 36% of leisure travellers; see Figure 3) felt this amenity was very important as long as it was provided free of charge. Travellers who are prepared to pay for this type of service are in the minority.

As soon as a cost is attached to internet access it becomes clear just how much travellers expect to receive it for free (Figures 4 and 5). Interestingly enough, 9% of leisure travellers not only refuse to pay for high‑speed internet but would quite simply stay elsewhere where the service is provided for free. Almost one quarter (23%) of business travellers feel the same way.

The majority, or 58%, of leisure travellers have less definite opinions: although they do not necessarily want to pay for internet access they would not change establishments in order to get it for free. However, 37% of business travellers would. Regardless of the type of travel, one out of five feels that $5 a day or less is an acceptable amount to pay for this type of service. Only 2% of tourists and 7% of business people would pay $10 or more.

There is one final factor that only affects business travellers, and that is the availability of Internet access in conference rooms. Roughly 44% feel that high‑speed wireless service is very important when it is provided for free, compared to 24% who still think it is important even if there is a charge for that service.

As the number of wi‑fi hotspots grows they will become an increasingly large part of consumers’ everyday life. In fact, a number of cities are working toward turning some of their neighbourhoods into wi‑fi areas, with either paid or free access. For instance, in September 2006, Toronto’s financial district went wireless. Industry players, particularly hotel owners, need to adapt to this trend because clients are becoming ever‑more demanding in that respect.

It begins by chronicling the emigration of hotel assets from American ownership to foreign investors in the 1980s and their subsequent repatriation starting in the mid-1990s. Second, it examines how the management focus of large international hotel groups has shifted from a real estate orientation to an emphasis on brand management. Finally, the article explains how this business reorientation resulted from the increasingly shorter planning horizons of global investors.

The Great American Sell-off

Recent reports in the press speculate that InterContinental Hotels Group (IHG) will be the target of a US$ 11.2 billion takeover bid in the coming months. The stratospheric price tag stuns even seasoned industry analysts who have followed hotel mergers & acquisitions for decades. IHG has an impressive portfolio of internationally recognized brands – InterContinental, Holiday Inn, Crowne Plaza and Indigo among others. The company is well diversified in terms of market segments and global coverage. Nonetheless, IHG’s 60% increase in share price from August 2006 to January 2007 raises numerous issues concerning market speculation, quality of management and company financial fundamentals. Industry analysts predict an American REIT (Real Estate Investment Trust) or private equity group will make an unsolicited offer of 1500p for outstanding IHG shares during the first half of this year. Such an offer would represent an 80% premium over the August share price (840p) on the London Stock Exchange.

An IHG takeover would be significant for reasons in addition to the lofty price. The two most frequently cited contenders are US investment firms – Barry Sternlicht’s Starwood Capital and the Blackstone Group, a private equity firm with extensive hotel assets. The acquisition of IHG by American investors would bring the international hotel industry full circle, reestablishing North American dominance in the global lodging sector.

The American withdrawal from international hotel markets began in 1981 when Pan American Airways sold its InterContinental division to Grand Metropolitan, a British food and hotel group. The sale sparked a prolonged sell-off of North American hotel companies to foreign investors. Most notably, Holiday Inn, the world’s largest hotel company at the time, was sold to England’s Bass Brewing Company in 1987.

The InterContinental sale sparked another trend that would radically transform the travel industry over the coming years. Airlines began to shed their hotel assets to focus on core transportation activities. Within a period of a few months in 1987, Chicago-based United Airlines sold its Hilton International, Westin and Camino Real hotel subsidiaries to British and Japanese investors. In the following years, all of the world’s major airlines liquidated their lodging divisions. Travel industry executives came to reject the conventional wisdom that airlines and hotels, operated by the same company, were strategically complimentary business units.

Asian investors were particularly eager to acquire American hotel groups. Hong Kong-based New World Development purchased the Ramada International, Renaissance and Stouffer’s hotel companies. Regal, another Hong Kong group, acquired Richfield, one of North America’s largest management companies with a vast portfolio of hotels flying Sheraton, Hilton, Choice and Holiday Inn flags, among others. Dubai’s Kingdom Hotel Investments went on a Canadian shopping spree, picking up Delta and CP Hotels, as well as taking significant positions in Four Seasons and Fairmont.

While Asians were focusing on the luxury segment, French investors turned their attention to the US budget sector. With its purchases of Motel Six and Red Roof Inns, Groupe Accor acquired more than 1000 lodging establishments in the US and Canada.

As one hotel company after another was sold to foreigners, North American investors were accused of an obsessive focus on short-term profits. Analysts claimed that Asian and European investors with longer planning horizons would reap handsome returns further down the road. American impatience, it was argued, was allowing foreign investors to purchase the crown jewels of the global hotel industry at prices that were likely to appreciate at supernormal rates of growth.

Coming Home

Just as the American sell-off appeared to have reached the tipping point, a curious thing happened. In 1994, a group led by little-known Starwood Capital and Goldman Sachs purchased Westin from the Japanese Aoki group, returning the company to US ownership. While Aoki had liquidated some non-strategic assets, the $537 million selling price was approximately a third of what the Japanese had paid United Airlines for the company in 1988. Analysts claimed the Westin takeover was an opportunistic acquisition that did not portend a trend in hotel asset repatriation. It did not take long, however, to prove them wrong.

In 1997, Marriott purchased Renaissance, Ramada International and New World Hotels from their Hong Kong-based proprietors. More recently, Hilton Corporation bought Hilton International, its British based namesake, for $5.7 billion. The Hilton acquisition reunited the company 42 years after the international division had been spun off to Trans World Airlines and nearly 20 years after it moved its headquarters to the UK.

American investors are not known for tiptoeing into business markets any more discreetly than the US Army tiptoed into Baghdad. Such was case with their return to international hotel investment. Not satisfied with merely reclaiming “American” hotel companies, US investors went on a shopping binge, acquiring a vast array of international lodging firms. Sheraton purchased CIGA, the Rome-based company that maintained a virtual monopoly on Italy’s upscale hotel market. The Carlson Companies, parent of Radisson Hotels, purchased Regent International, the Hong Kong-based hotel group that had established Asia’s reputation for luxury hotel keeping. Starwood picked up Le Meridien Hotels, a chain founded by Air France and sold to British interests in 1994. Starwood also acquired Hotels du Louvre, Europe’s 2^nd largest hotel company which included the upscale Concorde brand.

Shorter Investment Planning Horizons

Have American capital markets given up short-term investing to concentrate on long-term asset appreciation? Nothing could be further from reality. The return of US dominance to hotel equity markets manifests the economic globalization of international investment activity in general. Investors of all nationalities are calculating risk and return for increasingly shorter planning horizons. In uncertain times, why would Hong Kong investors wait several years for investment returns when the Shanghai Composite Index was up 122% in 2006? Bourses in Peru, Vietnam and Venezuela appreciated at168%, 144% and 156% respectively last year. In the interconnected and interdependent world of the 21st century, investors from Albania to Zambia are using the same investment criteria to identify the most lucrative opportunities in global markets. Calculations no longer focus on the net present value of expected cash flow for decades to come. The key is to assess appreciation of asset values (real estate or management contracts) next year or even next month.

The Hotel Washington in the US capital provides an illustrative case study of this trend. Gal-Tex, which owned the hotel for 65 years, sold it to Westbrook Partners for $120 million in the spring of 2006. Barely six months later, Westbrook turned the property over to Istithmar Hotels for $150 million, reaping more than $1 million profit for each week it had owned the hotel.

The Savoy Group in London provides an even more astonishing example of such rapid-fire turnover of trophy assets. The Savoy Hotel and its three sister properties with a total of 772 rooms were purchased by the Irish investment group Quinlan Private in May 2004 for $1.36 billion. The 226-room Savoy Hotel was valued at approximately $380 million at the time of sale. Within a few months, Quinlan sold the Savoy to Kingdom Hotel Investments for a reported price of $475 million. Measured by the $1.8 million per room price tag, the sale represents one of the highest prices ever paid for a hotel. While Quinlan had been widely criticized for overpaying for the Savoy Group, the acquisition provided a $95 million profit on the sale of just one hotel that it owned for less than a year.

From Real Estate to Brand Management

The plethora of hotel transactions also manifests the value of non-tangible assets in the hotel industry. As lodging companies divest of real estate, the value of management contracts, franchise agreements and internationally recognized brands has become increasingly easier to assess. When Hutchinson Whampoa, the proprietor of the Hong Kong Hilton, demolished the hotel in 1995 to build a commercial office complex, it was obliged to pay Hilton $125 million to buyout the remaining 20 years of its management contract. In a bizarre paradox, the sum was not being paid to manage the hotel but rather to not manage the hotel. In testament to the potential value of a management contract, Hilton made clear that it did not want a payment of $125 million. The company preferred a continuation of the management contract. In the end, Hilton was legally obligated to vacate the premises and accept the settlement. The case illustrates, however, the radical changes that have turned the hotel sector upside down.

The growth of franchising has further altered the basic structure of the industry. While franchising of lodging establishments was pioneered by Holiday Inn’s standardized motels in the 1960s, only recently have upscale international groups been willing to permit owners to manage their hotels under a prestigious corporate banner. Almost all of the major international hotel companies now engage in franchising as a capital-free vehicle for rapidly growing their brands. The Carlson Companies have taken the concept to the extreme, having sold all of their hotels and given up most management contracts. The group now focuses almost exclusively on franchising its Regent, Radisson, Park Plaza and other hotel brands.

As hotel franchisers and management companies put increasing emphasis on international product recognition, brand management is becoming the critical skill for competitive advantage. This revolution has been manifested in recent years by the selection of brand management professionals (rather than hoteliers) to head the world’s largest lodging companies. Ian Carter, President of Black & Decker EMEA was appointed Chief Executive of Hilton International in 2005. When Hilton Corporation acquired the company the following year, Carter was the only top executive retained by the parent company, where he now serves as Chief Executive Officer for international operations.

Andrew Cosslett, President of Cadbury Schweppes EMEA, was named head of InterContinental Hotels about the same time Carter joined Hilton. The following year, the logic for hiring an executive from the confectionary industry to head a hotel company was explained in a CNBC broadcast. Interviewer Ross Westgate asked Cosslett, “Because you manage hotels now rather than own them – you’ve sold a lot of the assets off, so is it now brand management – is that essentially what you do?” The new chief executive replied, “That’s really our focus.”

When Starwood Hotels founder Barry Sternlicht decided to step down as Chief Executive Officer, none of the short-listed candidates to replace him were from the hotel industry. Steven Heyer, President of Coca-Cola was eventually recruited to assume the CEO position at Starwood, primarily for his branding prowess. Shortly thereafter, Starwood recruited Javier Benito, President of Coke’s US retail division to serve as the company’s Executive Vice President.

While peddling Coca-Cola in supermarkets may appear greatly removed from selling St. Regis suites on the web, the success of both depends on the effectiveness of brand management. The fact that executives with no hotel experience are increasingly recruited to manage the world’s largest lodging companies has significant implications for hoteliers, investors and educators. If branding skills are the most important qualifications for heading a global hotel company, what is the future of the industry? Where is the value in a hotel company?

Traditional hotel executives may scoff at such trends but stockholders are euphoric. The recent 60% rise in IHG share price has persuaded investors that hotel companies need a new breed of leader to maximize return on investment. If the IHG takeover bid is successful, providing stockholders an 80% share appreciation in less than a year, it will be difficult to argue with them.

Conclusions

The increasing divergence of hotel ownership (real estate), operations (management) and marketing (brand distribution) will intensify in the coming years. “Hotel management” will refer only to those activities that directly impact above-GOP (Gross Operation Profits) controllable expenses. Private equity funds, REITs and institutional investors are dominating the hotel real estate markets. Franchisers are achieving competitive advantage in sales and distribution. Increasingly, companies once considered at the core of the lodging industry are getting out of the hotel business and into the business of hotels.