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ITB World Travel Trends Report: European Travel Industry Cautiously Optimistic in the Wake of Massive Losses

Preliminary travel statistics for 2009: shorter trips that are closer to home and saving money the priorities - more and more last-minute bookings - decline highest in UK and Russia In the calendar year following the worldwide economic and financial crisis the international travel industry has experienced a serious decline, but nonetheless has survived this period in better shape than was expected in the spring of 2009.

With eight per cent less arrivals, in the first eight months of this year the losses experienced by the European travel industry were by comparison the highest. According to the ITB World Travel Trends Report, commissioned by the world's leading travel trade show and compiled by the consultancy IPK International, during this period the number of outbound trips undertaken by Europeans went down by seven per cent, who also spent 15 per cent less on their travels. Long-haul travel fell by twelve per cent, short-haul trips by only six per cent.

Europeans are also less willing to make a firm decision regarding their travel intentions in 2010 than they were a year ago. More than two-thirds (68 per cent) of those polled in October 2009 said they would travel at least as often as they did in 2009, however in the same period last year the figure was 80 per cent.

The findings of the ITB World Travel Trends Report are based on the assessments of 60 tourism experts from 30 countries, on a special IPK International trend analysis undertaken in leading source markets, and on core data supplied by the World Travel Monitor(R), recognised as the largest ongoing survey of global travel behaviour in some 60 source countries. The researchers found that among the most important European markets travel activity had declined strongest in the UK (minus 15 per cent), Russia (minus twelve per cent) and in Sweden (minus ten per cent). Germans undertook five per cent less trips abroad. Austria was the only nation to report gains, with travel activity up by two per cent over 2008.

The ITB World Travel Trends Report noted that this year the travel industry was particularly hard hit by the effects of consumer insecurity. According to the researchers there was a record number of last-minute bookings in 2009. Thus, compared with the same period in 2008, in the first eight months of this year the number of people booking their holiday one week before travelling rose by 18 per cent. By contrast, the number of reservations made in the period from one week to one month before the start of a trip fell by five per cent. Bookings made from one month to three months before travelling went down by 13 per cent, and for three months and more by twelve per cent.

Dr. Martin Buck, Director Competence Center Travel & Logistics, Messe Berlin: 'For holiday destinations, airlines, hotels, tour operators and travel agencies, travellers are becoming an increasingly indeterminable factor. Together with demographic shifts, changing lifestyles and technological progress, the recession is changing travel behaviour. Holidaymakers are not showing their hand and last-minute bookings are at a record high. With the economic situation as it is there are huge challenges awaiting the travel industry.'

From 15 December 2009 the ITB World Travel Trends Report 2009/2010 can be downloaded free of charge from www.itb-berlin.com/media centre/publications.

Meeting Planners Struggle to Control Costs

Meeting planners are faced with the same economic challenges confronting hotels today - booking 'effective' events at the least possible costs - and as a result are 'flexing' their negotiating leverage and aggressively seeking room rate concessions, according to a recent meeting planner survey conducted by PKF Hospitality Research and Conventions South Magazine. The Top Five criteria for selecting a meeting site were room prices, available meeting space, willingness to negotiate, service standards, and the price of meeting space. Interestingly, 'green certified venues' finished next to last in order of importance. Planners indicated that the biggest cuts were in banquet menus and off-site events.

The survey was conducted this fall with 100 planners participating. Topics included: quantity of meetings projected for 2010, attendance, technology, budgets, and destination and facility selection.

Some good news on future bookings and attendance: Randy Smith uses the term 'less bad is the new good' when presenting Smith Travel Research's hotel industry projections for 2010. That would appear to be the case with meeting planner projections regarding the number of future events and the overall attendance on events to be booked next year. Only one out of four planned fewer meetings and exhibits in 2009. Most expect no change in 2010.

Attendance at meetings and exhibits 'surpassed' expectations in '09, a clear sign that '09 expectations were understandably low. Slightly more than half of the planners surveyed indicated the economy had affected their venue and destination selection. Heavily discounted room rates and other meeting costs at first tier cities have contributed to planners not opting to book secondary and tertiary cities.

So, what does all this mean to hotels and hotel sales professionals?

• Be prepared to negotiate big time because planners will be primed to do so as well

• Make sure you don't 'give away the store'

• Think 'added value' and 'bundling' of attractive options such as breakfast, $25 - $50 credits for F&B and merchandise, early check-in, guest room upgrades, stocked fridge, free Internet/Wi-Fi

• Make concessions based on your getting something in return, for example:

• Greater share of all of the client's total hotel-related business

• Client commits to booking smaller meetings with guest rooms booked throughout 2010 and 2011

• Tiered pricing, e.g., higher priced rooms/suites for CEOs, COOs, CFOs, lower priced rooms for the qualifiers, attendees, suppliers, and staff

• Make certain that your function space has been cleared so client can book the rooms best qualified to fit clients' program content and goals

My colleague Bruce Goodwin, President of Goodwin & Associates Hospitality Consulting, Inc., San Diego, CA, reports that meeting and event planners and decision makers are now demanding double and triple guest-loyalty reward points in negotiations with various hotels and resorts. Goodwin, whose consulting practice keeps him busy in Mexico, Central and South America, points out that these planner demands are not subject to any accountability or taxation and that in most parts of the world they would be regarded as bribes.

How the branded properties respond to these new demands during negotiations has to be of great interest to independent hotels and resorts, most of which would be at considerable disadvantage having no comparable loyalty programs with which to compete. I will be addressing more on this issue in my January article.

Hotel News Now's Associate News Editor Patrick Mayock's recent column ('In tough times, maintain or bolster your sales staff'), reminded me of some of the feedback I received from an article I wrote earlier this year on why now is not the time to cut back on sales and marketing budgets.

I commented back in February that never in all of my 45 years in the business have I seen so much anxiety among hoteliers, owners, and asset managers. Not without cause, hotels across the nation have taken draconian steps to deal with the current economic crisis including layoffs, reduced hours, department consolidation, hiring, management salary and bonus freezes, 401K contribution reductions, closing underperforming F&B outlets, and suspension or elimination of existing services and amenities.

Unfortunately, sales and marketing operations and budgets are feeling the knife as well. Significantly curtailed are marketing activities touching every element including electronic and print advertising, P.R., travel and trade shows, Fam-trips, and even outside personal sales calls.

Hotel sales and marketing should be the very last area for cuts and downsizing. Operators that choose to do so risk facing even greater challenges when the market turns - - and we all know that day will come. Those operators that adopt a policy of 'hunker down' and 'we're going to sit this one out' may be very disappointed after the economic recovery to find how badly their property has slipped.

A regional sales manager responded to my piece: 'As I am sitting here tonight about to go into a meeting tomorrow where I will likely hear how sales will be cut, your article could not have been more timely. When will the industry learn?'

An assistant G.M. - Rooms wrote: 'I just read your article and I strongly believe that now is the time to increase your presence in the market.'

A prominent executive recruiter wrote: 'David, right on regarding your article and comments. I've been saying that same thing for many years - - hotels over- react to market conditions by cutting 'sales'. That is just plain crazy. If anything, (we should) add to the sales effort. This is no time for hotels to cut back in sales and marketing, but far too many hotels do just that. Crazy! I'm receiving a dozen resumes daily from recently laid off sales and marketing managers. Who makes the decisions to cut back any revenue generating position and sales? Let those guys (the ones that make those decisions) go first!'

And here is what a very successful, retired professional salesman wrote: 'David, very up to date. During recessions businesses have typically cut back on the traditional things and kept on their same business model. I have always felt that was wrong. I think the right thing is to examine every aspect of the business process and begin anew. Sometimes it is called zero based budgeting. It is also called thinking outside the box. It is a perfect time for personnel evaluation and new training. Find the right people that can take you to the next level and train them in the process.'

(C) Copyright 2009

David M. Brudney, ISHC, is a veteran hospitality sales and marketing professional concluding his fourth decade of service to the hospitality industry. Brudney advises lodging owners, lenders, asset managers and operators on hotel sales and marketing 'best practices' and conducts reviews of hospitality (as well as other industry) sales and marketing operations throughout the U.S. and overseas. The principal of David Brudney & Associates of Carlsbad, CA, a sales and marketing consulting firm specializing in the hospitality industry since 1979, Brudney is a frequent lecturer, instructor and speaker. He is a charter member of International Society of Hospitality Consultants. Previously, Brudney held hospitality sales and marketing positions with Hyatt, Westin and Marriott.

Contact:
David M. Brudney, ISHC, Principal
David Brudney & Associates
Carlsbad, CA USA
Phone: 760-476-0830 Fax: 760-476-0860
david@davidbrudney.com
www.DavidBrudney.com
www.ishc.com

Demand for hospitality staff shows sharp rise

Demand for both permanent and temporary catering staff has risen sharply on a year ago, a new study into the labour market has found.

The Recruitment and Employment Confederation's (REC) final REC/KPMG report on jobs in 2009 showed that demand for permanent hotel and catering staff rose in November, scoring 52.5, where a reading of 50 indicates no change on the previous month. The score for the same month a year ago stood at just 29.2, indicating a sharp contraction in demand for permanent staff.

Meanwhile, demand for temporary and contract staff in the sector also increased in November 2009. The score for the sector stood at 53.3 for the period, compared to just 34.5 in November 2008.

Kevin Green, chief executive of the REC, said: “This is very positive news, November figures show the fastest rise in permanent jobs for 28 months.  Employers in nearly all sectors are lifting recruitment freezes and starting to hire again.

“Despite the positive signs, the Government needs to do more – particularly to help the one million 18- to 24-year-olds out of work in the UK. This week’s white paper on jobs must include specific measures aimed at encouraging employers to take on young people.”

First Hospitality Group announces distressed hotel program

Rosemont, IL—In response to the rising numbers of defaulted hotel properties nationwide, Rosemont, Ill.-based First Hospitality Group, Inc. (FHG) has expanded its third party management services to include a comprehensive distressed hotel division to enable smooth, effective and efficient takeovers. FHG President Robert Habeeb made the announcement.

In place for only a few short months, the program has already achieved great success, having facilitated the effective transition of three distressed assets.

The first was a struggling Hotel & Conference Center in Gurnee, Illinois. FHG was appointed receiver and has developed a plan to quickly improve performance and prepare the property for sale. The second, an underperforming Residence Inn in Grand Rapids, Michigan, was purchased by FHG as part of cooperative agreement with the borrower and bank.  The third, which involved a management takeover of the high-volume restaurant, Fuego Mexican Grill in Arlington Heights, Illinois, is in the midst of an operational reconfiguration by FHG that will improve operating performance.

These three examples demonstrate the diversity of FHG's experience and the company's results-focused approach to dealing with distressed assets, a formula that that has generated tremendous interest from a growing number of lenders and servicers.

With more than 5% of U.S. hotels currently in default and a predicted 20% by this time next year, FHG's distressed hotel program was designed to address the needs of the growing lender population struggling with the management of repossessed hotel properties, as well as those companies struggling to make payments on the properties. These assets present a host of unforeseen and unexpected challenges for those unfamiliar with the hotel management process, including liquor licenses, bonding, insurance, inventories, personnel, and franchise agreements. FHG's program provides step-by-step assistance with a team of experienced industry professionals to guide the process from takeover to sale.

"We saw a real need within the industry for a partner to assist with the many questions and difficulties faced with during hotel takeovers," said Habeeb. "We created this program to leverage our comprehensive understanding of the entire process and to be just that, a partner from start to finish. We provide all-inclusive management of distressed properties with an efficient and effective program that garners results."

Service industry awards celebrates Chester's biggest talents

BARTENDERS, chefs and bar managers were among those praised at a glittering service industry awards ceremony last week.

At the ninth Celebrating the Achievement of Talented Staff Awards (CATS), at Tatton Park top performers across Chester and Cheshire’s travel, tourism, leisure, retail, education, training and hospitality sectors were awarded for their outstanding achievements.

The Apprentice star Ruth Badger was welcomed as guest speaker to the event, which awarded 11 people from across the industry.

Among them was Cheshire’s first-ever cocktail bartender of the year, Farzad Dashti, of Bar Lounge in Chester, who was chosen as one of the eleven outstanding winners in this year’s awards.

Bar Lounge manager Jason Bligh praised Farzad for his passion and drive.

He said: “He has such commitment, not only to Bar Lounge but also to the world of mixology. He’s a pleasure to watch!”

The CATS awards event was organised by tourism board Visit Chester and Cheshire, provided a showcase for the industry’s top performers and their employers.

Jamie Bridgett Carden Park Hotel, Golf Resort and Spa won the accolade for most up and coming chef while Stephen Wundke of the Restaurant Association of Chester and Cheshire received the exceptional contribution to the visitor economy award.

Pat Bowring of Duttons Wine Bar in Chester was amazed to be presented with the commitment to industry award.

“I thought I was just going out for a meal with the Duttons’ team," she said. I had no idea there’s be any question of an award, especially in a category with so many well-known and important people.

"I was just in shock and still am - how I got on to the stage for the award I’ll never know.”

There was a double celebration at the Alvanley Arms with James Fosbrook winning the award for Individual excellence in customer service, and Sue Bouch taking the highly skilled front of house award."

Nick Rushforth of West Cheshire College was voted most promising trainee in the visitor economy.

College principal Sara Mogel said she hoped Nick would continue to go from strength to strength.

The most outstanding manager award went to Peter Gregory at Chester Crowne Plaza Hotel and another Cheshire hotel, Carden Park Hotel, Golf Resort and Spa celebrated the success of employee Jamie Bridgett winning the Cheshire’s most up and coming chef award.

Visit Chester and Cheshire’s Emma Clarke congratulated the winners.

She said: “The commitment, skill and style they have shown exemplify the standards that need to prevail across the visitor economy if we are to reach our goal of encouraging more people to visit more often, stay longer and spend more.

"These are the approaches that will set us apart from our competitors.”

By Laura Jones