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There is a war a-brewin’, but this war will breathe fought with wits and not animal strength. Ever since Russian President Vladimir Putin’s declaration that “the nation that leads in AI (Artificial Intelligence) will breathe the ruler of the world,” the press and analysts Have created hysteria regarding the ramifications of synthetic intelligence on everything from public education to unemployment to healthcare to Skynet.
Note: synthetic intelligence (AI) endows applications with the skill to automatically learn and adapt from sustain via interacting with the surroundings / environment. remark the blog “Artificial Intelligence is not Fake Intelligence” for a more minute explanation on synthetic intelligence and machine learning.
The snappily Company article “How to discontinue Worrying and affection the Great AI War of 2018,” projected that the AI battle would ultimately simmer down between the “AI Great 6”: Alphabet/Google, Amazon, Apple, Facebook, IBM, and Microsoft. However, there are other contenders worthy of consideration including GE, Tesla, Netflix, Baidu, Tencent, and Albaba.
But what are the characteristics of organizations that will breathe the ultimate winners in this Great AI War? What are the behaviors and actions that will distinguish those organizations that capitalize on this AI gold rush while others “fumble the future”?
I believe that the AI winners will Have the following characteristics:
Users, not purveyors, of AI technology
Embrace open source for technology agility (independence)
Mastery of Great Data (and no, Great Data is not dead)
Let me state my case.
#1 Users, Not Purveyors, of AI TechnologyThe Market Capitalization Leaderboard shown in pattern 1 offers principal clues as to which organizations will likely breathe the AI winners. What will set these organizations apart will breathe not the selling of technology, but their skill leverage AI for “value capture.”
Figure 1: Marketing Capitalization Leaders as of May 26, 2017.
By the way, I assume Kleiner Perkins was sluggish in classifying “Industry Segment.” The market leaders are less purveyors of AI technology than they are users of AI technology.
Less than 10% of Amazon’s revenue comes from technology (cloud); $12B in cloud revenue out of a total revenue of $136B in 2016. So what Industry Segment are they in?
Google had quarterly revenues (Q1, 2016) of $26B of which digital media/advertising (search) represented $23B. Their “other” businesses (including Google Cloud) were only $3B. So what Industry Segment are they in?
Apple’s most recent quarterly (Q3, 2016) revenues were $42B out of which the iPhone (personal communications, information and entertainment) and the associated iPhone ecosystem (iTunes, Apple Music, App Store) comprised an aggregated $37.5B.
Finally, I’m not sensible of any AI or data technologies that Facebook sells to the general market. Facebook generated $9.3B in revenue in Q2, 2017 of which $9.16B came from Ad revenue. So what Industry Segment are they in?
Mastering Value Capture. Just having the technology is not sufficient; it’s how you expend the technology to derive and then drive unique sources of customer, business, operational, and fiscal value that matters. Ultimately, the AI war is about “value capture.”
The companies listed in pattern 1 are trying to dominate markets, not technology. For example:
Apple (#1) seeks to dominate personal communications
Google/Alphabet (#2) seeks to dominate digital media, advertising and personal communications
Amazon (#4) seeks to dominate online commerce
Facebook (#5) seeks to dominate gregarious media, and advertising
Each of these AI leaders seeks to extend their value capture capabilities into unique markets, including transportation (autonomous vehicles), healthcare, finance, media, and entertainment.
Other market leaders are too stirring aggressively to exploit the power of AI to capture more customer, products and operational value. JPM Morgan (#11) is focused on building an AI platform (see “JPMorgan Takes AI expend to the Next Level”) that will allow JPMC to dominate fiscal trading. And GE (#16) has made a strategic wager with their Predix platform (see “GE’S Great wager on Data and Analytics”) as the platform for dominating the Industrial Internet of Things.
Microsoft (#3) is the one exception as Microsoft is a purveyor of technology. But even Microsoft is branching beyond just selling technology into trying to dominate markets such as digital media, entertainment, and gregarious media where their AI “chops” can give them competitive advantages (see “The Jewel of Microsoft’s Earnings”).
#2 Embrace Open Source for Technology Agility (Independence)AI leaders will exploit open-source trade models to establish platform dominance/standardization, and create technology agility and independence. They will develop an enabling technology, and then give it away via open source. This enables them to inspirit the growing community of developers, especially those up-and-coming developers in universities and research labs, to build out and create de facto standards around their enabling technologies.
Open Source Leaders. The Global AI winners are significant contributors to the synthetic intelligence and machine learning open source communities. This includes developments such as Amazon Machine Learning, Google TensorFlow, Facebook Caffe2, Microsoft Azure ML Studio, Microsoft Distributed Machine Learning Toolkit, Facebook GraphQL, and Facebook Torch.
The leadership role that the “Great AI War” combatants are playing can breathe seen in many open source projects. For example, Torch is an open source machine learning library and scientific computing framework. The “official maintainers” of Torch are:
Research Scientist @ Facebook
Senior Software Engineer @ Twitter
Research Scientist @ Google DeepMind
Research Engineer @ Facebook
Training and Education. Another strategy from the Global AI leaders the creation of community or industry training and education opportunities around their open source technologies. For example, Google is committing $1 billion to train American workers to build unique businesses with Google’s AI tools (see “Google Commits $1 Billion in Grants to Train U.S. Workers for High-Tech Jobs”).
Avoiding Technology Lock-in. But equally principal is that these AI leaders are seeking to avoid technology and architecture lock-in. They Have watched feeble school organizations struggle with proprietary software packages that took months if not years for upgrades and bug fixes, while paying a rigorous annual maintenance fees (33% of list cost means you’re buying the entire software package again every 3 years). In a world where the enabling data and analytic technologies are changing nearly daily, technological and architecture agility (at scale) and independence is mandatory for organizations looking to win the Great AI War.
#3 Mastery of Great DataEveryone knows about the astounding growth of Great data over the eventual decade as organizations focused on capturing minute customer, product, operational and market data. Initially fueled by commerce, web and gregarious media data, Great data has accelerated with the growth of video, wearables, and the Internet of Things. (See pattern 2).
However, organizations Have struggled to monetize this wealth of data. Enter synthetic intelligence.
Figure 2: Fueling the Insatiable Appetite for Data
More Data = Better AI. synthetic intelligence can exploit massive data sets to identify patterns on a scale that flummox traditional trade Intelligence “slice and dice” and query technologies. Data is the food that feeds AI. The more data the AI models consume, the smarter AI gets. For example, Facebook is mastering facial recognition via its DeepFace deep Learning application by virtue of owning the world’s largest repository of photos.
To illustrate the symbiotic relationship between Great data and AI, let’s examine at autonomous vehicles (AV). AV require tremendous quantities of data to feed the AV machine learning algorithms. It would consume tens of thousands of hours of real-world driving data across a variety of driving scenarios to train cars how to navigate on their own. To address this data volume problem, AV companies are using the video game “Grand Theft Auto” to abet generate enough data in order to train Autonomous Vehicles (see “GTA is Teaching Self-Driving Cars How to Navigate Better in the existent World”).
Data Lake. Leading AI organizations are exploiting the data lake concept to not only store the growing wealth of structured and unstructured (internal and publicly-available) data, but to provide an elastic, scalable, self-provisioning data science platform for “collaborative value creation” in building the machine learning and synthetic intelligence models (see “Data Lake trade Model Maturity Index” for more details on data lake trade model maturation).
Exploiting the Economic Value of Data. Leading AI organizations realize that data and analytics are unlike any traditional corporate assets. Data and analytics are digital assets that never wear out, never deplete, and can breathe used simultaneously at near-zero marginal cost across an infinite trade and operational expend cases. Understanding the trusty economic value of the organization’s data can abet to prioritize technology and trade investments that accelerate value capture from these data sources (see University of San Francisco research paper “Determining the Economic Value of Data” for more details).
Conclusion: How to Become an AI WinnerAs has been discussed many times in my blog series, and explored in detail in my book, “Big Data MBA: Driving trade Strategies with Data Science,” AI winners will ultimately breathe those organizations that are the most effective at leveraging data and analytics to power their trade models (see pattern 3).
Figure 3: How effective Is Your Organization at Leveraging Data and Analytics to Power Your trade Models?
Ultimately, AI winners will master three key characteristics:
Focus on Value Capture by identifying, validating and prioritizing the organization’s key trade and operational expend cases (see “Use Case Identification, Validation and Prioritization”).
Avoid technology and architecture lock-in and create technology independence via an open source technology strategy
Mastery of Great Data and the Data Lake to exploit the unique economic value of the data and analytic digital assets (see “Data Lake trade Model Maturity Index”).
So in conclusion, let’s Have some fun with this blog and assume outside of the box about some hypothetical scenarios in which companies exploit this AI gold rush:
What would breathe the trade model ramifications to GE if they were to open source Predix and offer Predix training to universities and third party developers?
What would breathe the trade model ramifications to JPMC if they were to open source their trading platform to universities and third party developers?
What would breathe the trade model ramifications if IBM moved out of the technology purveyor trade and instead acquired companies in fiscal services and healthcare where their Watson AI platform could create market dominance?
As the world prepares for the impending Great AI war, now is not the time for organizations to breathe bashful or to cling to old, outdated trade models.
Fortune Favors the Brave.
Figure 1: ScoopNest “2017 global market capitalization leader board: tech is 40% of top 20 companies and 100% of top 5” and Consultancy UK “Market capitalisation of world’s 100 biggest companies hits $17.4 trillion”
The post 3 Keys to Winning the Great synthetic Intelligence (AI) War! appeared first on InFocus Blog | Dell EMC Services.
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By Tyler Titherington
I am a restaurateur. I’m behind schedule. Again. Not because I am disorganized or Have too much to do, more so because I Have a hierarchy of tasks that are addressed based on priority. Guest needs are my first priority, staff needs are a immediate second and everything else last. There is a tertiary hierarchy in the eventual basket as well. Some tasks with a lower priority tumble through the cracks. Not because they are unimportant, but rather there just was not enough time. The verity is that I am obsessively organized. I affection “To Do” lists, calendars, flood charts and the accomplishment of tasks. I consume projects for breakfast, while vital on the edge of chaos and complete catastrophe. Short staffed? Yawn. Drains flooding? Been there, done that. POS system crash during service on a weekend? Bring it. I am the duck – soundless above water and feet stirring nonstop below. However, how carry out I manage any the curveballs and soundless manage to gain time without compromising any of my other priorities? It is very simple – adapt and embrace technology wherever possible, specifically, cloud-based computing solutions that allow one to breathe in many places at one time. These applications simplify daily tasks for management teams and staff, which will ultimately leverage senior management down to focus on the bigger picture. Maybe even score a day off…
Over the eventual 10 years or so, the increased availability of cloud-based computing solutions (using network computers over the internet rather than property-based hard drives) has been a major paradigm shift for many industries. However, as with most technological advances, the restaurant industry has been very leisurely to adapt. tight margins, resistance to change, and foreboding of unknown outcomes Have long driven the restaurateur’s decision-making process. However, with increased options, cheaper costs, and ease of use, that mindset is quickly becoming a thing of the past. Restaurant operators are birth to embrace cloud-based solutions for everything from Point of Sale and Tableside Payment to Menu Design and Scheduling.
Our foray into cloud computing began with an unfortunate set of circumstances that the entire industry was facing. The year was 2010 and the impending doom of PCI Compliance was upon us. At best, their network infrastructure was dated and they needed to act quickly to score it into compliance. affection most operators, their hand was forced and they had no choice. What is PCI Compliance? The reply depends on who you ask.
Your guests Have never heard of it and Have no conception what it is. Most restaurant operators will Tell you that PCI Compliance is an almost unachievable set of network security standards designed to protect the credit card giants, who already imbue them artery too much for credit card processing and continually squeeze them with a plethora of monthly fees. The definition of PCI Compliance is below, according to PCI ComplianceGuide.org
“The Payment Card Industry Data Security gauge (PCI DSS) is a set of security standards designed to ensure that any companies that accept, process, store or transmit credit card information maintain a secure environment. The PCI Security Council Card focuses on improving payment account security throughout the transaction process. It is an independent body that was created by the major payment card brands (Visa, MasterCard, American Express, determine and JCB.).”[i]
PCI DSS is mandatory for any and any businesses that accept credit cards. It involves a process of assessment, remediation and reporting. Operators must identify network vulnerabilities, physical vulnerabilities, and operational vulnerabilities that could result in a credit card infringement and fix them. In summary, it is a painfully tedious, extremely time consuming, and potentially expensive process.
It is extremely principal for the security of their guest’s payment information, both for ensuring reliance with their customers and limiting legal liabilities. In 2017-8, major retail stores including Home Depot, Macy’s, Sears, Kmart, Best Buy and Lord & Taylor made headlines across the country for data breaches possibly compromising customer’s credit card personal information. The restaurant industry is too plagued with security breaches, including great chains such as Darden (Cheddar’s), Panera Bread, Sonic and Arby’s. The number of customers whose credit card information may breathe compromised totals into the millions.[ii]
At Grafton Group, the process of obtaining Credit card security involved working directly with their IT vendor and POS vendor to achieve PCI compliance. The first order of trade was to score their network infrastructure in order. Some of the major network upgrades that they undertook were upgrading wiring, locking down patch panels, securitizing external ports, adding wireless access points (WAPs), and replacing firewalls. The WAPs and unique firewalls were the heart of the upgrades and would ultimately allow us to operate unencumbered in the cloud. The unique access points give their guests their own network and obviate them from accessing ours. The security firewalls obviate intrusions and too allow their IT vendor remote access so they can consequence changes without actually being in the restaurant. What used to breathe a scheduled visit from their IT vendor that may Have taken weeks, is now a simple email and can often breathe addressed online in minutes. In a nutshell, PCI DSS forced us to upgrade their network, which ultimately allowed us to operate in the cloud. This unintended outcome to a painful requirement was truly a blessing in cloak and it pushed us into unique territory – the cloud! Being in the cloud has allowed us access to exciting applications and services that would otherwise breathe unavailable to us.
IBM defines cloud computing as “the delivery of on-demand computing resources — everything from applications to data centers — over the internet on a pay-for-use basis.”[iii] For their purposes, these on exact computing resources primarily consist of “SaaS” or Software as a Service. Here are some of the areas where cloud computing can streamline their operation.
Point of Sale
POS systems are the most enthralling belt of cloud-based solutions for restaurant operators. Legacy systems such as Positouch, Micros, and Aloha are bulkier, more expensive, and much harder to program and implement. There are quite a few cloud-based POS options, most notably Boston-based Toast. Toast has done a Great job streamlining and simplifying the interface for both front and back conclude users. Management can access the system remotely for screen programming, troubleshooting or reviewing sales. It is extremely intuitive, affection using a smartphone, thus needing very runt training. As wireless POS solutions evolve, legacy systems will eventually breathe phased out. It is only a matter of time.
EMV (Europay, MasterCard and Visa) is another set of regulations that are coming to the restaurant industry. “EMV is a global gauge for cards equipped with computer chips and the technology used to authenticate chip-card transactions.”[iv] Used in Europe for years, the credit card never leaves the customer and any transactions are processed tableside with a handheld device. One instance of an EMV compliant, cloud-based device for tableside payments that they at Grafton Group are currently analyzing and scheme on implementing is Pay My Tab. Pay My Tab will fully integrate with their POS system and eliminates many bulky PCI DSS requirements. Many similar systems are already in expend at quick service operations, where guests and staff Have easily adapted to them. In addition to tougher security, the implementation should subside payment time, eliminate paper receipts (emailed instead) and simplify the process for management to search for specific receipts.
Reservations and Floor Management
There are a variety of solutions for reservations and floor management systems. Their hard has been using OpenTable for over 15 years, so when they rolled out their cloud-based system, GuestCenter, they were early adopters. This has been one of the separate best applications in terms of roll out, ease of use, and seamless integration. It is iPad-based and eliminates any the wiring and host stand existent estate. It is compatible to smart phones that allows for remote access, allowing management to check flood of service, identify unique reservations, and consequence positive that waitlists are being managed appropriately. Soon to achieve is an interface with POS systems that automatically applies any “guest notes” from GuestCenter to the server’s check, such as special occasions, etc. Most importantly, due to its intuitive design, their millennial hosts expend the system seamlessly.
Private Event Management
Private events are the foundation of most complete service restaurant operations. They are the dissimilarity between a suited week and a Great week. However, it can breathe a very confusing process with any of the stirring parts. In order to stay organized, they expend TripleSeat to manage leads, create BEOs and track their events calendar. The cloud-based event management system allows their Private Event Coordinators to respond at any given time from anywhere, giving them a leg up on the competition, giving them the break to merit fees for each event. Since their coordinators receive an administrative fee for each event, they Enjoy responding when available off-site; suited communication is key for making positive work-life balance is maintained.
Bar at the Russell House Tavern in Cambridge, MA. Photo: graftongrouphospitality.com
An belt which the cloud has really saved their restaurants time is with food & beverage inventories. No more paper and no more transposing paper to spreadsheet. Inventories can breathe uploaded in existent time using a tablet, laptop or even a smart phone. BevSpot is used for both their food and beverage inventories. They Have too given access to their accounting firm, in order to reduce bulky invoice scans and uploads. any information can breathe entered into the cloud and accessed by any of their approved users. It too allows for multiple people to consume inventory simultaneously. One person can breathe on the bar, another in the walk in fridge, and another in the liquor room, any at the identical time. In addition to being a major time saver, it has helped Grafton Group to reduce sitting inventory by a significant amount across any properties.
Staff scheduling is a weekly administrative headache for managers, but there are cloud-based scheduling applications that lessen the pain. They Have organize HotSchedules to meet their needs as it interfaces with their POS system and allows their hard to carry out some creative reporting in regards to budgeting and forecasting, as well as taking employees requests and requirements into consideration.
Email and File Sharing
Grafton Group has achieve a long artery from sharing access to a desktop version of Outlook and toggling between accounts. They were able to eliminate their main server entirely and now they expend Office 365 for their email and file sharing needs. Not only is this highly securitized, it has redundancy so their information is always backed up. They access both their email and files from anywhere in the world. This has greatly improved productivity and allowed their management teams to communicate in existent time.
Grafton Street in Cambridge, MA. Photo: graftongrouphospitality.com
Our office hardware now consists of much less expensive “Network Computers”, which carry out not require expanded reminiscence for giant programs, CD drives for downloading drivers, or expansion slots for extraneous drives. They can purchase more computers at a reduced cost and their managers no longer Have to partake computer access in the office.
For their menu design need, they Have organize InDesign to breathe the most efficient program, which is piece of the Adobe Creative Cloud. This program can now breathe selected a la carte from Adobe’s menu of programs and paid for on a month to month basis for under $20. This is much more palatable than paying $600 for the entire Adobe suite.
These are just a handful examples of how cloud computing has impacted their operations and ultimately saved time for their management team and staff. Ten seconds here, 5 minutes there, an hour tomorrow – it adds up to impactful chunks of time that can breathe better spent elsewhere. They Have only scratched the surface as an industry – they will remark more and more options for cloud-based solutions to existent world restaurant problems. Although the solutions highlighted above create efficiency and save time, they carry out not serve guests and they don’t understand the expertise of hospitality. It is imperative that as restaurateurs they continue to create a positive environment, embrace innovation, and engage and train their employees in the expertise and skill of hospitality.
There are some things you will never Have time for in the restaurant industry, regardless of cloud-based advancements. “Lunch”, for example, I Have heard is a meal that takes residence in the middle of the day. For me, “lunch” is the sandwich that I consume in 30 seconds somewhere between 2pm and 6pm standing over a trash can in the back of the kitchen. There is no technology for that…
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[i] “PCI Compliance pilot FAQ.” PCIComplianceGuide.Org. September, 2018. https://www.pcicomplianceguide.org/faq/#1.
[ii] Green, D. and Hanbury, M. (Aug. 22, 2018). “If you shopped at these 16 stores in the eventual year, your data might Have been stolen.” https://www.businessinsider.com/data-breaches-2018-4
[iii] “What Is Cloud Computing?” IBM.com. September, 2018. https://www.ibm.com/cloud/learn/what-is-cloud-computing.
[iv] Kossman, Sienna. ” 8 FAQs about EMV credit cards.” CreditCards.com. August 29, 2017. https://www.creditcards.com/credit-card-news/emv-faq-chip-cards-answers-1264.php.
Tyler was born and raised in Portland, Maine and has lived in the Boston belt since attending Boston University. After graduating from the Boston University School of Hospitality Administration, Mr. Titherington operated a handful of bars and restaurants in Boston. He has been with Grafton Group since October 2007.
By Christopher Muller
In piece 1 of this analysis of the restaurant delivery system they looked at the owner/operator models which soundless offer some measure of control over cost and quality. This is snappily becoming an issue with the ascend of the Ghost Kitchen where the ODP is an integral piece of the equation. Here they present the larger challenges from the dominant ODP control of the marketplace. It is suited to remember that most of the ODPs themselves are soundless looking to find profits in what they do, a suggestion that those profits will requisite to achieve at the expense of the restaurant providers in one artery or another.
5. The Aggregator or On-Line Delivery Provider (ODP) – No Driver Fleet
If someone were to say, “Let me consume custody of any of your delivery problems for a diminutive gash of your revenues” many restaurant operators, especially those interested to score into the market with the least amount of upfront investment, would jump at the chance. Enter the On-Line Delivery Provider with a trade model built upon a brand name customer-facing APP, website or phone number and an tremendous amount of back office computing power to drive order volume.
At its core, to breathe successful the Aggregator needs to breathe a world-class matchmaker for food orders, with both a great customer database of users and a broad assortment of restaurant menus offered in major cities. affection many of what MIT’s Bill Aulet calls an Innovation Driven Enterprise (IDE) the cost of customer acquisition is the key hurdle in entering this distribution channel. What it doesn’t requisite is its own fleet of employee delivery drivers. Capitalizing on the DIY gig economy, drivers are hired on a contractual basis, working as independent delivery agents with their own vehicles.
The barrier to lowering this high cost of entry has favored early market entrants and great well-funded digital innovators. Worldwide, the fastest growing ODP is Uber Eats, the natural extension of car service provider, Uber, with its existing tremendous data base of users, an ever expanding fleet of drivers, and the understanding for a driver that delivering food with an APP-based pre-payment system is considerably faster and easier than dealing with human passengers.
The upside for restaurant companies using an ODP such as Uber Eats, from those as dominant as McDonalds or as diminutive as the local pizzeria, is that there is no requisite to hire and train non-core employees. As touted by Uber Eats delivery service can commence almost immediately upon signing up. The downside, that has a potential for long term impact, is two-fold. The fee structure for traditionally low margin restaurants can breathe between 20-30% of a menu detail price, leaving runt to cover remaining expenses. Worse though is that the restaurant gives away its brand and trade dress image to the company making the delivery to the front door. McDonalds hamburgers may breathe in the bag, but the name on the ordering APP and the uniform on the person handing it to the customer says Uber Eats.
6. The Consolidator – Bulk “Bus Stop”
As noted, the most expensive separate piece of the delivery mystify is getting food from the restaurant to the front door, what is called “the eventual mile.” One proven artery to minimize that expense is to Have the customer meet the food delivery at a central drop-off spot (see: Amazon ). A start-up, Yun Ban Bao, in unique York City is taking odds of ethnic Chinese food deserts through direct targeted marketing using the dominant Chinese online service provider, WeChat. By doing so it is creating a captive delivery market with the odds of pre-ordering and payment.
Taking online requests for delivery on the next trade day, then consolidating orders using a bulk delivery model, Yun Ban Bao is lowering the cost of delivery while maintaining control with its own fleet of drivers. It advertises a data analytics service for smaller restaurants as well as being a revenue growth accelerator for restaurants in suburban locations which otherwise could not find unique or broader market opportunities.
Using a pre-arranged group delivery network, often outside parks, office towers or apartment buildings, the system mirrors a bus route, not the more traditional taxi route model of one-on-one delivery. This too affords the network of restaurants a artery to lower operating costs by controlling the production process in advance.
7. The Aggregator ODP – Owned Fleet
Some of the largest ODP players started in the delivery trade by controlling their own fleets of employee managed delivery drivers. The global leader, Just Eat, has used this model throughout the UK, Europe and worldwide. But it too has worked directly with restaurants who Have their own in-house deliver fleets to create a broad partnership. Just consume acts as the online ordering platform, but then allows the local branded company to breathe the physiognomy at the door.
The skill to present a standardized customer facing brand identity means that reliance may breathe established with the customer directly. While this can achieve at the risk of the restaurant losing its direct brand relationship, what Just consume has been able to master is the collection of a vast customer database of its users. It has created a relationship with many of its restaurant partners to assist them in finding gauge store locations, menu detail design and creative targeted pricing and promotions programs which would not otherwise breathe affordable or even available to smaller companies.
For these ODP companies, the costs for maintaining their own fleets or working as a hybrid with a local restaurant creates a higher operating expense, but these are often offset with a higher fee partake from both the restaurant and the consumer. It too creates a competitive odds by building a broader network of restaurants to elect from for the customer, which builds long term loyalty and habitual purchase behaviors.
8. The ODP Aggregator – melancholy Kitchens
One of the greatest threats to the bricks and mortar restaurant delivery partners is the emerging concept of a melancholy Kitchen. This is a space created by an OPD to facilitate the lowest cost per delivery mile from restaurant kitchen to the highest density of users. While this is similar to the Cloud Kitchen model, in this case the OPD establishes a cluster of diminutive dedicated but competitive restaurant kitchens in a separate site. A melancholy Kitchen is too similar to the trending food hall concept, but comes with no direct customer interaction—no walk-in guest visits these production facilities. In the UK this was pioneered by Deliveroo with its urban RooBox or Editions concepts. ally restaurants rent portable kitchen space from the delivery service and pay a larger percentage fee to cover the build-out costs for their space. Restaurants staff the kitchens at their own expense, as well.
Earlier this year, Grubhub invested $1 million in Green acme Group (see Ghost Kitchen in piece I), a startup with nine virtual restaurants operating from a separate kitchen. DoorDash is renting extra space from the Santa Clara Fairgrounds in San Jose, Calif., and making it available to foodservice operators who want to create delivery-only options. In Los Angeles, Postmates leased a commissary kitchen space so its restaurants can achieve unique customers. And UberEATS is exploring the concept with Poke Café in Chicago — a virtual restaurant serving Hawaiian poke bowls.
“We can work with existing restaurant partners to create delivery-only menus. (They would) emerge as entirely unique restaurants on the UberEats app,” Ambika Krishnamachar, UberEats product manager, said in an article on Mashable.
And again, while on its physiognomy this appears to breathe a positive break for independent or chain restaurants to lower costs or disaggregate the dine-in from the delivery production process, it is not cost free. In fact, as a logical progression would suggest, the OPD Deliveroo service has realized that the actual local restaurant in this coalesce is not a necessity for success. Instead by using its own “innovation fund” it will to Go directly into the restaurant trade itself, creating “from scratch” concepts by working with notable chefs and data mining information from its tremendous customer data base. 
As more of the OPDs examine to find profits to pass along to the aggressive investors who Have funded rapid growth, they will inevitably examine to gash out the middleman and provide meals themselves to expand margins. The kitchen that may actually Go “dark” is the local one on the corner down the street in an independent restaurant.
This is undoubtedly both an enthralling and a challenging time for the restaurant industry and the Online Delivery Providers who are feeding from it. Neither side seems to Have figured out how to consequence the unique consumer exact for off-site delivery work to their complete advantage.
It is impossible to believe that any restaurant can survive if it gives away up to 30% of its top line revenues when the tolerable net profit is less than 10%. No amount of increased volume in sales will consequence up for that. As Cameron Keng wrote in his column “Why Uber Eats Will consume You Into Bankruptcy” in March, 2018:
Based on the tolerable profit margins above, every restaurant that engages Uber Eats will lose money on every order they take. The more orders coming from Uber Eats, the more money a restaurant would lose.
At the identical time, while it is hard to score exact information, it appears that almost None of the largest On-Line Delivery Providers, in any of the described segments is actually showing a profit. Uber Eats is only profitable in 27 of its more than 100 urban markets, and while Deliveroo’s sales rose in 2017 to £277 million ($356 million), the company lost an astounding £185 million ($237 million). Yet Uber Eats is offering over $2 billion to purchase/merge with Deliveroo.
Finally, as Jonathan Maze wrote in his Bottom Line column in early October the restaurant industry is simply unprepared for what appears to breathe a tectonic shift in traditional restaurant segments, consumer behavior, labor utilization, existent Estate valuation and investor interest.
If delivery is the future of the restaurant business, the restaurant trade as it is currently constructed is in trouble.
The service is growing rapidly. But it’s increasingly replacing existing restaurant trade rather than taking trade away from grocers or other food retailers. 
As they famed in the beginning, it took the lodging industry almost 20 years to commence to consequence this kind of tectonic change and it is nowhere near complete. A few very great hotel companies, through merger and acquisition, Have consolidated enough power to start the streak away from handing over any of their pricing to the OTA’s. In economic terms, hotel companies are trying to Go from being cost Takers to cost Setters.
At this early stage of the restaurant OPD’s domination of the delivery cycle, it is not limpid that any restaurant organization is great enough to demolish the fever, especially now that McDonald’s is partnering with Uber Eats. While it may emerge that the On-line Delivery Provider is a restaurant’s partner, friend or even savior, it is None of those. In fact, in order to become profitable the OPD is looking to become a direct competitor.
What is unavoidable is that few restaurant companies, and certainly no independent operations, can survive the next two decades letting third parties decree what convenience and cost mean. In fact, this might breathe a suited time to score out of the house and Go visit your favorite local restaurant. Sacrificing some convenience for a Great sustain is a suited value and that restaurant may not breathe around the next time you want to note up.
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 remark Bill Aulet, Disciplined Entrepreneurship,
 The Financial, October 25, 2018, https://www.finchannel.com/~finchannel/business/76317-amazon-expands-grocery-delivery-and-pickup
 Menqi Sun, WSJ, September 9, 2018, https://www.wsj.com/articles/how-to-get-food-delivered-from-your-favorite-faraway-restaurant-1536516000
 See https://www.just-eat.com/
 James Cook, trade Insider, April 5, 2017, https://www.businessinsider.com/deliveroo-editions-pop-up-restaurants-roobox-2017-4
 Tim York, The Packer, March 23, 2018, https://www.thepacker.com/article/rise-virtual-restaurant
Sophie Witts, Great Hospitality, May 21, 2018, https://www.bighospitality.co.uk/Article/2018/05/21/Deliveroo-to-create-own-restaurant-brands-using-5m-fund#
 Cameron Keng, Forbes, March 26, 2018, https://www.forbes.com/sites/cameronkeng/2018/03/26/why-uber-eats-will-eat-you-into-bankruptcy/#778a3b0621f6
 Ibid., DealBook, September 21, 2018
 BBC News, October 1, 2018, https://www.bbc.com/news/business-45707700
 Jonathan Maze, Restaurant trade Online, October 17, 2018 https://www.restaurantbusinessonline.com/financing/delivery-could-force-changes-restaurant-business-model
Christopher C. Muller is Professor of the practice of Hospitality Administration and former Dean of the School of Hospitality Administration at Boston University. Each year, he moderates the European Food Service Summit, a major conference for restaurant and supply executives. He holds a bachelor’s degree in political science from Hobart College and two graduate degrees from Cornell University, including a Ph.D. in hospitality administration. Email: email@example.com
By Christopher Muller
The entire restaurant industry, from the simplest quick service joint to the most tangled fine dining jewel, is caught in a veritable frenzy of delivery. It may be, unfortunately, a very risky path to travel for the uninitiated restaurant operation, but delivery is driving the investment community to a fever pitch.  They Have entered into the time of the restaurant On-Line Delivery Provider (ODP) which mirrors in many ways the On-Line Travel Agent (OTA) which has so disrupted the lodging industry.
In two complimentary BHR articles here, they present a examine at the 8 different models of restaurant delivery and how they are affecting both senior management and customer choices.
A Quick Lesson From Pricing History
For observers of the global Hospitality Industry this should ship up warning flags. In a galaxy far, far away, the Lodging industry managed revenues by using simple seasonal or impute pricing models (On-, Shoulder- and Off-Peak rates, or premiums for “A play With A View”) and sold some limited excess inventory through a network of independent Travel Agents (at an onerous 10% commission!).
Then, as the Internet expanded, and the travel market imploded after the 9-11 tragedy, a unique and exciting model emerged – the On-Line Travel Agent (OTA) acting as a third party aggregator appeared. Hotel companies willingly gave open access to any of their unsold play inventory to the OTAs (Expedia, Travelocity, Priceline, Booking.com, Kayak, Trivago, etc.) to sell directly at deep discounts, often between 25 and 30% off posted Rack Rates. Occupancies rose, but tolerable Daily Rates plummeted, and profits quickly diminished. Hotels, relying on the feeble pricing models were caught competing “with themselves” and watched as formerly loyal customers switched their buying habits and loyalties to the OTA that gave them the best rate. Customers could scroll through pages of prices, often for the exact identical play in the identical hotel, searching for the cheapest rate. Hotel rooms, instead of being unique destinations became interchangeable commodities.
It has taken almost twenty years, but through brand consolidation and a total system-wide transformation into a Revenue Management based pricing model, the hotel trade has been transformed and the OTAs are being aggressively challenged for dominance. This should breathe a lesson for the restaurant owner/operator, the OTAs drove nothing but cost as a decision attribute, the ODPs are poised to carry out the identical thing with both cost and convenience, unfortunately restaurants probably won’t Have decades to recover.
Today’s Restaurant Delivery Frenzy –The ascend of the ODP
Whether it’s the savvy but shape-shifting Millennial, the rapidly aging Baby Boomer, or the rising green digital indigenous from the i-Generation, it seems that customers in any shapes and sizes just want to Have their meals brought to them at home, the office, or somewhere in between. Breaking the code of the delivery model—becoming the customer’s altenative of who serves up breakfast, lunch or dinner at home, work or play—has emerged as the Holy Grail of the foodservice business. But it may breathe more affection the other mythic melancholy Ages metaphor, the Plague, potentially killing upwards of 30% of existing restaurant units.
So, what exactly is “delivery” today, how did it evolve into such a big, expanding component of the restaurant offering and what are the implications going forward for the industry? Just how carry out the On-Line Delivery Providers, the ODP, dominate the market?
We can commence by agreeing that delivery is a several and rapidly growing distribution channel, although it has been around in one form or another for a very long time. And while not exactly a unique technology, nor necessarily a profitable one, the exploding market for the delivery of food is poised for an inevitable quake out as it quickly approaches a age phase consolidation.
In late 2018 delivery is any about instant gratification, not just for the diner but some would imply for the restaurant as well. At first glance, it any feels so simple and easy. But affection so much in restaurant management, there is more than one artery to score something done, even the simplest of things.
Emerging Key Success Factors
Like so many emerging trade models in the on-line digital age, food delivery is developing its own metrics and factors to breathe considered and mastered. While soundless evolving, among these now are:
Addressing the profit challenges of “The eventual Mile” in the delivery chain
Minimizing the high cost of Customer Acquisition
Developing an integrated APP, website, tablet and smartphone ordering platform
Designing the most effective delivery driver fleet system
Establishing an attractive and competitive user fee basis
Creating positive and immediate Brand recognition
Building a proprietary scholarship base of data storage, analytics and access
Delivery of food, especially from a restaurant to a consumer, has become a multi-billion dollar segment of the industry. Some are predicting that it will overtake the traditional dine-in segment completely within a decade, although the complexity of getting it prerogative and turning a profit while doing so, can soundless breathe elusive even for the largest players. And of course, no one should forget that Amazon is over in the corner waiting to remark how things evolve in an online delivery world they basically invented.
Traditional and Controlled
As noted, the delivery of food from a restaurant directly to a local customer is not a unique conception although traditionally the customer came to the restaurant and picked up or carried out their food order. Both delivery and carry-out were best suited to a restaurant with a simple, easily transported menu. Where a significant amount of the value of the meal was the dining sustain and table service, meals to Go were often comprised of a package of leftovers or the long gone term “doggie bags.”
Here is a examine at four models with some measure of control for restaurant owners and operators over the attribute and profitability of their offerings.
1. The Independent – One Shot
As a service provider a restaurant may determine that in order to meet the needs of its local customer base it should provide a delivery option. At one time, only a few restaurants in an urban core would Have delivery offers and these might typically breathe delicatessens or Chinese restaurants with few seats and a very stout focus on offering takeout options. The food can breathe cooked, boxed, wrapped and brought quickly to an office or apartment within a few blocks on foot or by bicycle.
This model is the most basic – a caller, the kitchen, and an employee bringing irritated food directly to the customer. The restaurant controls the quality, manages the relationship with the diner and absorbs the complete cost and any the revenues. It typically comes with higher operating costs for labor (primarily from an in-house paid delivery driver fleet) and with premium rent from the requisite for an attractive customer-facing retail space. On the plus side, any local customer information may breathe controlled by the restaurant and there are no fees to partake with an outside third-party service.
But as the independent operator reaches for the brass ring on the delivery merry-go-round, they too requisite to breathe heedful not to lose their grip on their existing ride. A unique distribution channel can breathe much more challenging that just taking a customer order. As famed by Jennifer Marston:
…restaurants are under pressure to adapt…More and more, that means altering the physical restaurant space so it can better accommodate this influx of unique orders. Extra meals require extra bodies to cook and package the food, after all, not to mention extra space for third-party devices, and somewhere to withhold completed orders waiting to breathe picked up by a delivery driver.
An enthralling twist on this separate restaurant model of trying to find a artery to both control and expand the delivery system while maintaining some measure of profitability is one recently proposed in the restaurant trade magazine Restaurant trade Online:
He (CMO Nabeel Alamgir) explained that Bareburger is already striving to transmute customers ordering through third parties’ apps into users of the chain’s own channels. Patrons of an Uber Eats or Postmates might breathe offered a 10% discount on their next order if it’s placed through Bareburger’s website. The chain can afford a discount that deep because the fiscal repercussion is soundless less than the 20% or 30% discount an outside service typically charges.
Alamgir famed at the start of the panel’s presentation that a service started by restaurants for restaurants would Have been an attractive alternative to some of the third-party giants. “Let’s consequence their own platform. Let’s consequence their own Grubhub,” he said.
2. The Cloud Kitchen – A Hub & Spoke System
It can breathe argued that today’s focused delivery channel began in earnest when Domino’s offered up a “30 Minute or Free” guarantee in 1973. In order to consequence this guarantee effective, the company created a hub and spoke system, in consequence building a string of franchised units in low cost locations. They were characterized by being geographically market-centered but with no requisite for a “High Street” customer facing address. This was directly in contrast to the overwhelming market odds owned by Pizza Hut and its network of “Red Roof” complete service pizzerias with their focus on dine-in and takeout service. But the competitive odds that came from having units with no dine-in, limited customer carry-out, and which were serviced by a central commissary set in motion the shift away from the traditional eat-in model.
“The reality is, when the red roof restaurant was created, the conception of delivery wasn’t piece of the concept,” said Pizza Hut chief executive David Gibbs, a 26-year veteran at parent company Yum Brands…”so in many cases, their trade has outgrown the capabilities of those restaurants…”
Now, four decades later Domino’s is the world leader in delivery, pizza or otherwise. It has done this by controlling the entire process or what is called the “full stack” in the delivery cycle. Now describing itself as an IT and logistics company that sells pizza, the backbone of the system is that they control the customer ordering process, the production attribute process, and through a vast franchise network the delivery process.
Next to come, using unique GPS and AI technologies, Domino’s predicts that it will breathe able to consequence deliveries not just to a formal building address, but to anywhere a customer can breathe located by tracking their cellphone, even if that is a park bench or a blanket on the beach.
But Domino’s is not the only leader to breathe expanding its Cloud Kitchen delivery system. Already designed on a commissary production system model, giant snappily casual leader, Panera Bread, tested delivery in Boston and then announced an expansion across the United States in early May, 2018 with a system based upon using its own delivery drivers.  Following the trend in October the largest chicken sandwich chain, Chick-fil-A, announced it was birth to test the hub and spoke model of delivery in Nashville, TN and Louisville, KY.
Chick-fil-A is opening two unique restaurants that don’t Have something you commonly associate with the chain: seats.
Chick-fil-A, the Atlanta-based chicken sandwich chain, is testing catering and delivery locations in Nashville and Louisville, Ky., that will open this month.
The locations, according to an announcement on the chain’s website, Have no dining rooms or drive thru’s and are designed to breathe hubs for catering and delivery orders. The restaurants will not accept cash, either.
The Cloud Kitchen model can breathe very effective for restaurant companies with great enough scale, whether in a separate city or across a region, to consume odds of a separate production kitchen site with remote staging kitchens. Ultimately the “full stack” control from order to front door can achieve from as few as three restaurants or as many as 3000. This too means that the foundation is laid for vast proprietary customer data collection and eventually data mining by the most forward-looking operators.
It can breathe argued that the Food Truck movement of the past decade is a subset of the Cloud Kitchen model. By most local health code laws, food trucks must Have a “home kitchen” or commissary for their bulk production that meets any health and sanitation code requirements. In many urban centers, to be successful a food truck company needs to Have multiple trucks on the road acting as a distribution network. While this is too a classic Hub & Spoke model, it comes with similarities to a model in the next article, #6 The Consolidator, with distribution on a bus discontinue route and not a one-to-one eventual mile taxi route.
3. The Ghost Kitchen
One further refinement of the Cloud Kitchen is the Ghost Kitchen. As delivery becomes more of a threat to the traditional dine-in restaurant option, some imply that this model, in fact, is the future of restaurants—basically a highly efficient hybrid of menu concepts, specialized production and logistics, and low labor cost with no eat-in customers.
In that way, this model is identified by three key components.
First, it removes the dining play or takeout from the restaurant completely, working out of a kitchen whose location is based on nearness to its core customer market yet in a typically low rent out-of-the-way space.
Second, it does not hire any paid employees to deliver, instead making expend (through partnership or agreement) of the many third-party delivery companies affection GrubHub, Postmates or Doordash.
Third, and possibly the most important, because of the flexibility of only needing an APP, website or traditional telephone ordering system, more than one cuisine can breathe produced in the identical kitchen space. facile to prepare, cook and deliver foods such as salads, sandwiches, Asian and other ethnic dishes, or gourmet pizza can any breathe offered while cross-utilizing similar ingredients in creative menu offerings.
This can best breathe described as an “order only” restaurant. The most prominent or well-known of these Ghost Kitchens would breathe Green acme (see transition to #8 melancholy Kitchen in piece 2). While garnering a suited amount of press, the notable chef David Chang’s Maple, closed its operation in 2017 with some assets stirring to London and the delivery company Deliveroo. Chef Chang sold the physical kitchen space, Ando, to Uber Eats after ceasing operations in January, 2018. 
Because no customer ever sets foot through the front door the owners can withhold any of their investment in kitchen apparatus and the technology of ordering. A Ghost Kitchen offers customers great menu choices, and just as its cousin the Cloud Kitchen, has the option to preserve track of its own proprietary customer data set through the direct ordering process. The tradeoff is that ownership sacrifices the customer interface at delivery of the Cloud Kitchen model. Operating and start-up costs are low and efficiency can breathe very high. The risk is that a great portion of the margin (sometimes up to 30%) from market-driven menu prices is taken by the delivery partnership, who too control the brand image when customers receive their orders off-site.
4. Virtual Restaurants
Along with disrupting the taxi business, Uber Eats is about to globally disrupt the restaurant delivery business. As of October, 2018, Uber Eats had over 1600 “virtual restaurants” around the globe, with almost 1000 in its US partnership portfolio. The majority of these are not the Cloud or melancholy Kitchen models mentioned above, but are existing restaurants with unique brands that only exist through Uber Eats. This model, while charging very high fees to the restaurant, allows them to technically not compete with themselves in the home delivery marketplace. Uber Eats gains more menus to offer, and limits any requisite for an investment in a commissary space.
For SushiYaa, Kim says the virtual restaurant concept has been transformative. “Because this concept worked so well for us, they actually changed one of their restaurants from a sushi buffet concept to a regular restaurant with 8 different virtual restaurant brands inside it. The buffet sales weren’t doing so well and the delivery side was doing better, so they thought — let’s change it completely so we’re focused more on delivery.” From a sales standpoint, he says it’s “almost as if they Have another restaurant without paying additional rent and labor, even though [Uber Eats] takes about 30 percent.”
One other sort of Virtual Kitchen involves the licensing of existing restaurant recipes and menu items in a curated virtual model. The start-up concept suited Uncle is using this to compete in the university meal scheme segment, offering a scope of pricing options for higher attribute prepared meals, delivered by their own delivery fleet using the bus discontinue common drop off method. This is a limited menu, limited target market, which benefits from a direct marketing approach, lower operating costs, and uses both a subscription and premium fee based pricing system. It is a Virtual Kitchen because there is no restaurant or other customer facing facility, it exists only online.
Part One – Conclusions
Delivery models, some traditional, some evolving, offer many opportunities for restaurant operators, especially those in the QSR and snappily Casual segments, where accelerate and cost and convenience are the drivers of consumer choice.
The challenge in today’s delivery market is how owners and operators can maintain both high attribute and long-term profitability in the products/services they offer. For many meals, the time and distance from kitchen to table can breathe more than 30 minutes or multiple miles. attribute of presentation and flavor may quickly diminish. More importantly, where the medium annual profitability for restaurants across any segments in the USA is considerably less than 10%, losing up to 30% of top line revenues is not a path to a successful future, (even if total sales expand by 20%).
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 Heather Haddon and Julie Jargon, The Wall Street Journal online, October 24, 2018, https://www.wsj.com/articles/investors-are-craving-food-delivery-companies-1540375578?mod=cx_picks&cx_navSource=cx_picks&cx_tag=contextual&cx_artPos=4#cxrecs_s
 Liam Proud, DealBook, NYTimes, September 21, 2018, https://www.nytimes.com/2018/09/21/business/dealbook/uber-eats-deliveroo.html
 Jennifer Marston, The Spoon, July 31, 2018, https://thespoon.tech/delivery-is-making-these-restaurants-literally-redesign-the-way-they-do-business/
 Peter Romeo, Restaurant trade Online, Oct. 19, 2018 https://www.restaurantbusinessonline.com/operations/3-big-changes-looming-restaurants
 Karen Robinson-Jabos, Dallas News, Jan 6, 2016. https://www.dallasnews.com/business/business/2016/01/06/pizza-hut-is-ditching-the-iconic-red-roof-for-a-more-modern-look
 Janelle Nanos, Boston Globe, May 7, 2018, https://www.bostonglobe.com/business/2018/05/07/panera-expanding-its-delivery-service-cities/sZg4pO0yTw9cEdYpv514tL/story.html?event=event12
 Jonathan Maze, Restaurant trade Online, Oct. 09, 2018 https://www.restaurantbusinessonline.com/financing/chick-fil-opening-new-delivery-focused-prototype
 Neal Ungerleider, 01.20.17 snappily Company https://www.fastcompany.com/3064075/hold-the-storefront-how-delivery-only-ghost-restaurants-are-changing-take-out
 Closing announcement from Maple, May 8, 2017 https://maple.com/letter/
 Whitney Filloon, Eater, October 24, 2018, www.eater.com/2018/10/24/18018334/uber-eats-virtual-restaurants
 remark the online Audiopedia site https://www.youtube.com/watch?v=BKO5JFbqKTA
 Ibid, Eater, October 24, 2018
 remark https://www.gooduncle.com/
Christopher C. Muller is Professor of the practice of Hospitality Administration and former Dean of the School of Hospitality Administration at Boston University. Each year, he moderates the European Food Service Summit, a major conference for restaurant and supply executives. He holds a bachelor’s degree in political science from Hobart College and two graduate degrees from Cornell University, including a Ph.D. in hospitality administration. Email: firstname.lastname@example.org
By Makarand Mody and Monica Gomez
For a long time, the hotel industry did not regard Airbnb a threat. Both the industry and Airbnb claimed they were serving different markets and had different underlying trade models. Over the years, as Airbnb become more successful and grown to being larger than the companies in the hotel industry, the rhetoric has changed. The hotel industry began to realize they had something to worry about.
A stage of denial was followed by the American Hotel & Lodging Association (AH&LA) attacking Airbnb by sponsoring research to demonstrate its negative impacts on the economy and lobbying governments to impose taxes and regulations on homesharing. The association is arguing for a flat playing bailiwick between homesharing and hotels (and rightly so). The next stage of this battle involves competition and integration. Not only are hotels looking to add homesharing-like attributes and experiences to their properties, to more effectively compete with Airbnb, but are too looking to tap into the platform-based trade model that underlies Airbnb’s success.
The Past: How does Airbnb repercussion the hotel industry?
Airbnb’s disruption of the hotel industry is significant, both existentially and economically. A recent study by Dogru, Mody, and Suess (2018) organize that a 1% growth in Airbnb supply across 10 key hotel markets in the U.S. between 2008 and 2017 caused hotel RevPAR to decease 0.02% across any segments. While these numbers may not emerge substantial at first, given that Airbnb supply grew by over 100% year-on-year over this ten year era means that the “real” subside in RevPAR was 2%, across hotel segments. Surprisingly, it was not just the economy but too the extravagance hotel segment that was hard hit by Airbnb supply increases, experiencing a 4% existent decline in RevPAR. The repercussion of Airbnb on ADR and occupancy was less severe. In Boston, RevPAR has decreased 2.5%, on average, over the eventual ten years due to Airbnb supply increases. In 2016 alone, this 2.5% subside in RevPAR amounted to $5.8 million in revenue lost by hotels to Airbnb. Brands that felt the repercussion the most were those in the midscale and extravagance segments, with a subside in RevPAR of 4.3% and 2.3% respectively. These supply increases are too fueling Airbnb taking an increasing partake of the accommodation market pie. For example, in unique York City, Airbnb comprised 9.7% of accommodation demand, equaling approximately 8,000 rooms per night in Q1 2016 (Lane & Woodworth, 2016). As a whole, Airbnb’s accommodated exact made up nearly 3% of any traditional hotel exact in Q12016.
Buoyed by a growth rate of over 100% year on year, Airbnb now has over 4 million listings, with the U.S. being its largest market. The company too has significant play to grow in other countries, particularly emerging markets in Africa and India. The company has race into some competition in China, with local rivals Tujia and Xiaozhu. Also, within the U.S., the suited intelligence is that Airbnb will not grow at 100% indefinitely and will eventually plateau as it reaches a saturation point (Ting, 2017a). In view of this, the company has turned to alternative strategies to continue to expand supply. It is now targeting property developers to whirl entire buildings into potential Airbnb units, through its newest hotel-like brand, Niido. Currently, there are two Airbnb branded Niido buildings in Nashville, TN and Orlando, FL with over 300 units each and Airbnb plans to Have as many as 14 home-sharing properties by 2020 (Zaleski, 2018). Niido works by encouraging tenants to list their units on Airbnb, with Airbnb and Niido taking 25% of the revenue generated. Airbnb has too clearly evolved from its original premise of “targeting a different market” to attracting segments traditionally targeted by hotels, such as the leisure family market, trade travelers, and the upscale traveler, as evidenced through its latest offering, Airbnb Plus. These homes Have been verified for quality, comfort, design, maintenance, and the amenities they offer. They too Have facile check in, premium internet access, and fully equipped kitchens. Their hosts are typically rated 4.8+, and Go above and beyond for their guests. Through Airbnb Experiences, travelers can partake in everything from the Great outdoors—hiking and surfing—to “hidden” concerts and food and wine tours. In addition to these products, Airbnb has too “created” its own segments of travelers: novelty and sustain seekers who are looking for unique and unconventional accommodation affection yurts, treehouses, and boats, any things that a traditional hotel company cannot provide.
The Present: Understanding what consumers want lies at the heart of the battle between hotels and Airbnb
There are larger societal trends that are impacting what consumers seek travel, and they assume this has implications for the Airbnb and hotel dynamic. These trends include:
A shift to a “new luxury”—seeking out unique, genuine experiences that serve as a launchpad for self-actualization—fueled by an increased wealth gap in the United States.
An increased mobility, particularly among previously under-represented groups in the United States (the black travel movement, for example) and the global traveler (more Indian and Chinese international travelers than ever before).
The changing nature of brand loyalty: from long-term relationships to consumers’ needs for instant gratification and personalization.
Changing nature of “ownership”: In a post-consumerist society, the stress on “access-based consumption” has withhold a spotlight on wellness and well-being, beyond materialism.
A co-everything world where work, play, and life blend into one seamless mosaic: Technology has changed the artery they live their lives, and how they are connected to work, to each other and to the things that drive us. An upcoming 5G world and the IOT is only likely to accelerate the pace of change. consume LiveZoku (https://livezoku.com/), for example: is it a residence? A hotel? A WeWork? A space for the local community? A thriving food and beverage destination? It’s any of these things.
What carry out these trends mean? They require marketers and sustain designers to re-think what the travel sustain means to the customer. The notion of the sustain economy was created by Pine and Gilmore in 1998, and included four dimensions: escapism, education, entertainment, and esthetic. Leveraging one, or ideally, more of these dimensions creates memorable experiences for customers, which in whirl results in brand loyalty. This dynamic has been fairly well-established in the academic literature. However, Airbnb has changed the game for the sustain economy by emphasizing the sharing lifestyle and a sense of community, cleverly incorporating the above highlighted trends into its communications with customers. Because of Airbnb popularity and success, six unique dimensions Have been incorporated into the sustain economy, in the context of the travel experience: personalization, communitas, localness, hospitableness, serendipity, and ethical consumerism, as was presented by Mody in 2016.
Interestingly, in a recent study by Mody and colleagues (Mody, Suess, & Lehto, 2017), the researchers organize that Airbnb outperformed hotels on any the dimensions of this new, expanded, accommodation experiencescape. Airbnb outperforms hotels in the personalization dimension because of its wide array of homes and locations, enabling genuine micro-segmentation and the “perfect match” between guest and host (Dolnicar, 2018). Moreover, no one home is similar to another, giving customers a unique sustain every time, enhancing the serendipity associated with an Airbnb stay. Airbnb elevates the sense of community that consumers seek, particularly when sharing space with other travelers and/or with the host, and allows consumers unparalleled access to “the local”—that café or cute runt store that only locals know about. However, there are areas where hotels hold their own. For example, the pathways between these dimensions and memorability were just as stout for hotels as for Airbnb, emphasizing the requisite for hotels to engage customers by leveraging the “right” dimensions for the brand—dimensions that align with the brand’s mission, story, and personality.
One such dimension where hotels fulfill just as well as Airbnb is hospitableness, as confirmed in a study by Mody, Suess, and Lehto (2018). More “investor units” on the Airbnb platform means that the host is often not present when guests arrive to the home; moreover, any communication is done electronically and with someone who “manages” the Airbnb unit and doesn’t necessarily own or live in it. In turn, hotels that leverage the human factor—the welcome of a friendly check-in agent, the helpfulness of the concierge, the warm greeting and genuine interaction between guest and food and beverage staff—create more positive emotions, which subsequently lead to higher brand loyalty. It is imperative that hotel brands really assume about the high-tech, high finger sustain they are looking to provide, particularly in the golden age of brand proliferation that they live in.
From a non-experience standpoint, regulation is another bone of contention that merits immediate inspection. After years of denying that Airbnb was a competitor, in 2016, the American Hotel & Lodging Association first began an extensive lobbying exertion for the imposition of taxes and regulations on Airbnb that flat the playing field. Over the eventual yoke of years, the voices of the hotel lobby and other community groups Have translated into governments taking some action, in the U.S. and abroad. However, in a study of regulation across 12 European and American cities, Nieuwland and van Melik (2018) organize that governments Have been fairly lenient towards short-term rentals with runt to no (meaningful) regulations thus far. Moreover, regulations Have been designed to alleviate the negative externalities of Airbnb on neighborhoods and communities rather than to flat the playing bailiwick between Airbnb and hotels. Another challenge with regulating the peer to peer economy has been enforcement. In unique York City, under the Multiple Dwelling law, it is illegal for a unit to breathe rented out for less than 30 days unless the owner is present in the unit at the time the guest is renting. However, it is soundless practicable to find “entire homes” on Airbnb in unique York City, even though, in principle, these typically comprehend homes where the host is not present during the guest’s stay. Moreover, Nieuwland and van Melik (2018) and Hajibaba and Dolnicar (2017) Have organize that regulations attend to breathe very similar across cities, without accounting for the specificities of a particular location, which makes the process perfunctory and superficial. There too remains the danger of over-regulating Airbnb, given that there is soundless very runt scholarship about effective ways of regulating these innovations in the sharing economy, thus stifling their potential. Avoid over-regulation is critical, since Airbnb has significant welfare effects in the economy. In addition to stimulating travel to previously inaccessible markets, Airbnb too creates customer surplus (Farronato & Fradkin, 2018), an principal economic value measure. Moreover, other research has suggested that the tolerable resident is not as negative towards the Airbnb as media rhetoric might imply (Mody, Suess, & Dogru, 2018). The requisite for a data-driven approach to Airbnb regulation remains paramount.
The Future: Competing with the sharing economy requires re-thinking the brand and the experience
While regulation is outside the control of the hotel industry, the brand and the customer sustain are not. They contend that these are the areas where hotel companies’ efforts requisite to breathe focused. Hotels requisite to re-think the brand promise, both for the parent brand as well as individual brands in the portfolio, and how it defines and shapes the guest experience. Recent research by Mody and Hanks (2018) indicates that while Airbnb leverages the authenticity of the travel experience—by enabling local experiences that provide a sense of self and sense of place, hotel brands that are perceived as being authentic—original, genuine, and sincere—can generate higher brand loyalty. Thus, while it’s hard to compete with homesharing in terms of experiential authenticity, brand authenticity is a pillar on which hotels can build a stout foundation for loyal brand relationships. This is particularly principal because while Airbnb promotes experiential authenticity as a key judgement to expend the brand, most travelers attend to stay with the brand for much more functional requirements, such as space and cost (Chen & Xie, 2017; Dogru & Pekin, 2017)
There is no one definition for or manifestation of an “authentic” brand. It’s a perception, a ardor that consumers Have about what you stand for. An genuine brand has at its core the brand promise, an genuine value proposition that gives consumers a raison d’etre for associating with the brand. However, what an genuine brand does require is effective storytelling. A brand is perceived to breathe authentic, if it has an genuine account that feeds it. Brand stories can achieve from many sources: a brand’s values, personality, heritage, uniqueness, or its quest and purpose. What is principal is telling compelling and coherent stories across the brand’s various touchpoints to engage consumers at a visceral, emotional level. Taking off industry blinders, and looking for inspiration outside the hotel industry, is critical. Tom’s Shoes is an excellent instance of leveraging its quest—One for One—in creating a compelling brand story. As another example, in an industry typically focused on the in-store, “physical” experience, Burberry has set the gold gauge for authentic, digitally-led and emotive storytelling, by looking within and leveraging over 150 years of history (Watch the YouTube Video here). In this vein, they assume that Fairfield Inn and Suites’ recrudesce to “where it any began”—the Marriott family’s Fairfield Farm in the Blue Ridge Mountains of Virginia— to craft the brand sustain of the future, from a design and communications standpoint, is an excellent instance of leveraging authenticity and crafting a compelling brand swear (Ting, 2017b).
Another conception that lies at the heat of the brand swear is what they summon the experiential value proposition, or EVP. For the longest time, hotel marketers Have relied on the guest play as the primary source of value for the guest. But assume about the eventual time you traveled. Was it the prospect of the hotel play that got you excited about your trip? Or was it everything that the hotel enables you to carry out – the sustain outside the guestroom? From experiencing expertise and music in the lobby to its proximity to the must-do craft beer garden, hotel marketers must realize that it’s the complete package—what’s inside and outside the room—that customers expend as cues for making their decision to elect an accommodation. They summon this proposition offered by the hotel—what’s inside and outside the guest room, enclosed within an sustain of hospitableness and a connection to humanity—its EVP. They present the EVP in pattern 1. The EVP mirrors the value paradigm of the modern traveler, something that must breathe reflected in the hotel brand’s sales, marketing and pricing and revenue management efforts. Thinking about a brand through the lens of the EVP paradigm has the power to re-orient the customer’s mindset from one of price-shopping to experience-shopping.
Figure 1. The Experiential Value Proposition Framework
How does a hotel marketer apply the EVP paradigm? Its application can open up many avenues. Hotels can start by rethinking the design of their primary digital channels, led by the website by adding more rich, vivid content that goes beyond the guestroom, in order to better integrate aspects of the wider hotel and local experience. The gauge Hotels serves as an excellent instance (http://www.standardhotels.com/) Its website feels more affection a local lifestyle and culture magazine than a digital media property “selling” a hotel room. The website’s flush images and stories draw the visitor into wanting to learn more about what the brand has to offer. While not every hotel can or would want to Go the gauge way, since the brand has its own several voice and personality, there is a case to breathe made for going beyond static images of beds in guestrooms, which attend to blend into one indistinguishable gross after a point, particularly on OTA websites. When was the eventual time the image of a hotel bed excited you to want to stay there? Yet, when you examine at the imagery withhold out by most hotels, this is what marketers soundless focus on.
Placing an stress on humanity and providing a sense of hospitableness can too enhance a brand’s EVP. Instead of technology replacing the human connection, the industry needs to examine for ways in which technology can actually free up employees so that they can expend their time crafting more personal and unique experiences, delighting guests instead of performing routine transactions. Moreover, if the human connection is what people seek out when traveling with Airbnb, why is it that hotel confirmation emails soundless score sent out by automated systems that highlight the “facelessness” of the hotel entity. Why not expend that as an break to truly welcome the guest; a simple finger such as a welcome missive from the GM with his/her photo, or that of an employee who is “assigned” as “your personal host” during your stay can Go a long artery in emulating the human connection that the sharing economy enables.
The design of the hotel’s public spaces can breathe used to enhance the guest’s sustain of “communitas”. Ian Schrager would accord (Schaal, 2017). After all, with much of Airbnb’s supply being dominated by investor units that provide runt or no host contact, what better an break for hotel brands to note that they are the original connectors of human beings? Sheraton has been prudent in incorporating some of these communal elements into its brand makeover by introducing productivity tables and studio spaces and a day-time coffee bar that transforms into a bar at night. In terms of another design element, Airbnb’s attractiveness to family and group travelers can breathe offset by offering connecting and/or multiple rooms for one price, with other sustain value-adds thrown in (as with the Marriott family play connecting rooms package.
Finally, the role of the loyalty program cannot breathe emphasized enough. Loyalty programs must streak beyond programmatic levels to being able to leverage data from guest history, gregarious media, and other marketing data sources, powered by predictive analytics, to personalize and individualize the guest sustain of the brand. In an age of instant gratification, the loyalty program has to breathe gamified to unlock value-adds and offer creative bundling.
At the flat of the hotel company, beyond the individual brand, the hotel industry has started participating in the home sharing trade and is increasingly looking to integrate these platform trade models. For example, while Accor purchased Onefinestay, Marriott has teamed up with Hostmaker to create Tribute Portfolio Homes, a partnership that was recently expanded to four European cities (Fox, 2018). From an organic brand development standpoint, Accor’s newest Jo & Joe brand mimics the sharing economy within the confines of a traditional hotel space. Other, more innovative and bold ways of integrating the sharing economy ethos into a hotel could comprehend offering an “Airbnb floor”, an antithesis to the club floor, one that would not offer housekeeping and other hotel services and thus breathe offered at a lower price. With hotel brands becoming “branded marketplaces” for accommodation and not just hotel rooms, perhaps there is merit in listing hotel rooms on alternative accommodation platforms. HomeAway is already adding hotels to its platform through the Expedia Affiliate Network, while Airbnb is making a thrust for bed-and-breakfasts and boutique hotels. Homesharing providers hope that by adding these options to their listings, they will fulfill their goal of being “for everyone”, while allowing independent and boutique hotels to gather the benefits of branded distribution at a lower cost than traditional OTA brands.
In sum, hotels must adopt a sales, marketing, and revenue management approach that is both strategic and tactical.
At a strategic level, hotel brands requisite to re-think their story, and how they portray and fulfill their authenticity and brand promises. At a tactical level, it’s the sustain and value beyond the guestroom that must breathe factored into what is presented to current and potential guests, what they are charged for it, and how it is leverage to create “memorable memories” that lead to higher net promotor scores and brand loyalty. They present a graphical summary of the past, present, and future of Airbnb vs. hotels in pattern 2.
Figure 2. Summarizing the past, present and future of Airbnb vs. hotels
PDF Version Available Here
Chen, Y., & Xie, K. (2017). Consumer valuation of Airbnb listings: a hedonic pricing approach. International Journal of coincident Hospitality Management, 29(9), 2405–2424. http://doi.org/10.1108/IJCHM-10-2016-0606
Dogru, T., Mody, M., & Suess, C. (2018). Adding evidence to the debate: Quantifying Airbnb’s disruptive repercussion on ten key hotel markets.
Dogru, T., & Pekin, O. (2017). What carry out guests value most in Airbnb accommodations? An application of the hedonic pricing approach. Boston Hospitality Review.
Dolnicar, S. (2018). Unique Features of Peer-to-Peer Accommodation Networks. In S. Dolnicar (Ed.), Peer-to-Peer Accommodation Networks: Pushing the boundaries (pp. 1–14). Oxford: Goodfellow Publishers Ltd.
Farronato, C., & Fradkin, A. (2018). The Welfare Effects of Peer Entry in the Accommodation Market: The Case of Airbnb.
Fox, J. (2018). Marriott expands homesharing program in Europe. Hotel Management. Retrieved from https://www.hotelmanagement.net/own/marriott-expands-homesharing-program-to-3-european-cities
Hajibaba, H., & Dolnicar, S. (2017). Regulatory Reactions Around the World. In S. Dolnicar (Ed.), Peer-to-Peer Accommodation Networks: Pushing the boundaries (pp. 120–136). Oxford: Goodfellow Publishers Ltd.
Lane, J., & Woodworth, M. (2016). The Sharing Economy Checks In: An Analysis of Airbnb in the United States. Retrieved from http://www.cbrehotels.com/EN/Research/Pages/An-Analysis-of-Airbnb-in-the-United-States.aspx
Mody, M. A., Suess, C., & Lehto, X. (2017). The accommodation experiencescape: a comparative assessment of hotels and Airbnb. International Journal of coincident Hospitality Management, 29(9), 2377–2404. http://doi.org/10.1108/IJCHM-09-2016-0501
Mody, M., & Hanks, L. (2018). Parallel pathways to brand loyalty: Mapping the consequences of genuine consumption experiences for hotels and Airbnb.
Mody, M., Suess, C., & Dogru, T. (2018). Not in my backyard? Is the anti-Airbnb discourse truly warranted? Annals of Tourism Research. http://doi.org/10.1016/j.annals.2018.05.004
Mody, M., Suess, C., & Lehto, X. (2018). Going back to its roots : Can hospitableness provide hotels competitive odds over the sharing economy ? International Journal of Hospitality Management. http://doi.org/10.1016/j.ijhm.2018.05.017
Nieuwland, S., & van Melik, R. (2018). Regulating Airbnb: how cities deal with perceived negative externalities of short-term rentals. Current Issues in Tourism, 0(0), 1–15. http://doi.org/10.1080/13683500.2018.1504899
Schaal, D. (2017). Ian Schrager Calls Out Hotel Industry’s Airbnb Strategy as Misguided. Skift. Retrieved from https://skift.com/2017/12/08/ian-schrager-calls-out-hotel-industrys-airbnb-strategy-as-misguided/
Ting, D. (2017a). Airbnb Growth account Has a Plot Twist — A Saturation Point. Skift. Retrieved from https://skift.com/2017/11/15/airbnb-growth-story-has-a-plot-twist-a-saturation-point/
Ting, D. (2017b). Marriott and altenative consume Varied Approaches to Reviving Classic Midscale Brands. Skift.
Zaleski, O. (2018). Airbnb and Niido to Open as Many as 14 Home-Sharing Apartment Complexes by 2020. Retrieved from https://www.bloomberg.com/news/articles/2018-08-14/airbnb-and-niido-to-open-as-many-as-14-home-sharing-apartment-complexes-by-2020
Makarand Mody, Ph.D. has a varied industry background. He has worked with Hyatt Hotels Corporation in Mumbai as a Trainer and as a attribute Analyst with India’s erstwhile premier airline, Kingfisher Airlines. His most recent experience has been in the market research industry, where he worked as a qualitative research specialist with India’s leading provider of market research and insights, IMRB International. Makarand’s research is based on different aspects of marketing and consumer deportment within the hospitality and tourism industries. He is published in leading journals in the field, including the International Journal of coincident Hospitality Management, Tourism Management Perspectives, Tourism Analysis and the International Journal of Tourism Anthropology. His work involves the extensive expend of inter and cross-disciplinary perspectives to understand hospitality and tourism phenomena. Makarand too serves as reviewer for several leading journals in the field. In tumble 2015, he joined the faculty at the Boston University School of Hospitality Administration (SHA). He received his Ph.D. in Hospitality Management from Purdue University, and too holds a Master’s degree from the University of Strathclyde in Scotland.
Monica Gomez is a graduate student in the School of Hospitality Administration at Boston University. She received her Bachelor’s degree in Tourism, Recreation, and Sport Management from the University of Florida and has held previous internship positions in hotel operations and event management. She is a member of the Hospitality Sales and Marketing International Association and is interested in hotel revenue management.
By Christian E. Hardigree, J.D.
Today’s hospitality conversations are rife with dialogue about sustainability, initiatives ranging from linen reuse programs, to donating toiletries, to auto dimming lights, to food sourcing, etc. Hospitality practitioners’ quest to define the ROI (return on investment) is often at foiled by a concept that includes intangible metrics and differing definitions of what “sustainability” really means. The oft-used “Triple Bottom Line – People, Planet, Profit” embodies the commonly agreed upon themes of sustainability, which comprehend ensuring a wholesome environment, improving economic prosperity, and implementing gregarious justice initiatives that ensure the well-being and attribute of life for current and future generations.
Companies struggle to determine what role they play in advancing and addressing gregarious and global challenges while enhancing their brand, ensuring consumer loyalty, and expanding their market share. Many companies evaluate and refine their efforts for engaged brand activism, particularly through marketing, which they balance with efforts to implement higher standards for suppliers, improve equality among workers, and preserve pricing competitive – falling in line with the general categories of most corporate gregarious responsibility efforts: 1) environmental efforts; 2) philanthropy; 3) ethical labor practices; and 4) volunteering.
The “Arms Race” of Corporate gregarious Responsibility Reporting
For many companies, particularly in hospitality, corporate gregarious responsibility (CSR) reporting has emerged as a key trade approach to articulate the benefits to the company’s stakeholders through strategic initiatives. According to the Governance and Accountability Institute, sustainability reporting by S&P 500 companies increased from 19% in 2011 to 85% in 2017.[i]
Companies now treasure the marketing value of CSR reporting, particularly as a mechanism to attract and retain customers. Increased societal pressure for greater regulation and transparency, coupled with research showing that consumers demonstrate a preference toward companies they perceive are more responsible, Have resulted in a unique “arms race” with companies are making operational decisions that are more tightly linked to ethical values, environmental stewardship, and respect for the human equity. They want to ensure those efforts are known to their stockholders, investors, and the public.
While many CSR disclosures are currently voluntary in the United States, there are increasing requirements mandated by various statutes. Such mandates, commonplace in the European Union, are increasingly required in the United States. In particular, there is growing market exact for a more answerable and transparent corporate supply chain. Current statutory requirements scope from the Mandatory Reporting of Greenhouse Gases rule for great emitters of greenhouse gases to the California Transparency in Supply Chains Act of 2010 to ensure that great retailers and manufacturers provide consumers with information regarding their efforts to eradicate slavery and human trafficking from their supply chains.[ii] The Dodd-Frank Wall Street Reform and Consumer Protection Act, which impacted virtually every piece of the US fiscal services industry too includes provisions for unavoidable reporting on their exercise of due diligence in the source and chain of custody of unavoidable minerals that are associated with armed conflicts in and around the Democratic Republic of the Congo, minerals that are associated with the manufacturing of devices such as cell phones, computers, and digital cameras.[iii] Most recently, the European Union’s sweeping Global Data Protection Regulations (GDPR) went into consequence May 25, 2018. Intended to give EU citizens greater control of their own, widely-define personal data, GDPR has far reaching implications for any company doing trade with citizens of the EU. For the hospitality industry, unique processes are required to breathe implemented to protect things affection IP addresses and cookie data, similar to the protections currently provided to ensure privacy for addresses and gregarious security numbers. In the three months prior to GDPR going into effect, it was estimated that 79% of companies were unprepared.[iv] The mandatory disclosure landscape is changing fast, and hospitality is challenged to preserve up.
Not any Changes Are Mandated
As consumers are holding corporations accountable for effecting gregarious change in their trade practices and beliefs, ultimately impacting the bottom line, companies refine their sustainability initiatives as a result of public advocacy, stockholder proposals, or consumer feedback. A 2017 study by Cone Communications illustrated some key elements, including:[v]
63% of Americans are hopeful that businesses will consume the lead to drive gregarious and environmental change in the absence of government regulation
78% want companies to address principal gregarious justice issues
87% will purchase a product because a company advocated for an issue they cared about; and
76% will reject to purchase a company’s product or services upon learning it supported an issue contrary to their beliefs
To illustrate, on February 6, 2018, in a commitment associated with improved packaging in betterment of the planet, Dunkin’ Donuts announced it would phase out the expend of polystyrene foam cups by 2020 and supplant them with double-walled paper cups, estimated to Have a net repercussion of eliminating over a billion cups annually from the fritter stream.[vi] This was on the heels of McDonald’s announcing in January that it would phase out the expend of foam packaging in any global markets by the conclude of 2018.[vii] Straws and stirrers consequence up over 7% of plastic organize in the environment, an issue initially addressed (and banished) by George McKerrow, co-founder of the restaurant chain Ted’s Montana Grill, that has gained widespread attention as consumers are reminded that they expend 500 million straws a day, a utilize that widely impacts wildlife and the oceans.[viii] Just this month, Bon Appétit announced they were banning plastic straws from their over 1000 café locations in 33 states.[ix] As cities affection Miami and Malibu Have banned separate expend straws (and in Malibu, banned any separate expend plastic utensils and stirrers), they find some municipalities are forcing hospitality businesses to incorporate sustainable practices.
As hospitality companies seek to out-promote each other, they would breathe well-advised to avoid greenwashing – today’s version of “snake oil”, more akin to “eco-fraud” – when a company holds itself out as more environmentally friendly than it actually is in practice. Clearly consumer preferences demonstrate an increasing trend for purchasing products and services that are sustainable – for their repercussion on the environment, in how they are manufactured, and/or how the workers are treated. Between 2009 and 2010, the number of “greener” products increased by 73%.[x] In order to capitalize on this trend, many brands are trying to competitively out-do each other with their eco-credentials – exaggerating their claims, or at times, completely manufacturing them. In legalese, greenwashing may amount to deceptive marketing, misrepresentation, and/or fraud.
In the “sins” of greenwashing, hospitality entities would breathe prudent to avoid vague, over-reaching, or unverifiable assertions. Hotels increasingly inspirit their guests to embrace green practices – shut off lights, reuse towels, avoid changing the linen as frequently, etc. Research by faculty at Washington state University organize that a perceived ulterior motive of a hotels’ environmental claims evoked consumer skepticism, which negatively influenced consumer’s intention to participate in the linen reuse program, as well as negatively effecting the consumers’ intention to revisit the hotel.[xi] At a time when as many as 79% of travelers accord that eco-friendly practices is an principal factor in their altenative of lodging, companies risk losing valuable repeat customers if their motives are self-serving. As a result, to avoid the negative aspects, hoteliers are cautioned to install comprehensive green programs, train their staff to implement practices, and ensure their green claims are accurate and not overreaching, perhaps through third party certification.
For Goodness Sakes, Don’t Greenwash the Food
Greenwashing is of particular concern in today’s environment, particularly in the context of food. For example, in 2016, organic food sales jumped 8.4%, to over $43 billion, while overall food sales only increased 0.6%.[xii] Similarly, organic non-food items jumped 88% to $3.9 billion in sales. As restaurants and hotels are asked questions by their customers about the source of their products, facilities requisite to breathe sensible of the claims they are making to ensure they are not overreaching or deceptive, as greenwashing has become the “flavor of the month” in consumer class litigation. Claims challenging products advertised as “natural” are the most frequent suits encountered.
While no definition of “natural” is provided by the FDA, food products in the US labeled as “natural” consequence up roughly $40 billion in sales, and are growing by an tolerable of 6.6% annually. According to Food Navigator, there were 20 food labeling class actions pending in federal court in 2008 – a number that rose to 425 by 2016. Cases that specifically focus on “natural” claims increased by 22% from 2016 to 2017, notably with suits against general Mills’ Nature Valley bars and Dr. Pepper Snapple’s Mott’s Apple Sauce. Of particular note is that three quarters of federal court food class actions are in four states: California (36%), unique York (22%), Florida (12%), and Illinois (7%).[xiii] Many of the suits are rooted in claims that items such as high fructose corn syrup, high maltose corn syrup, soy flour, soy lecithin, and GMA yellow corn flour, as well as synthetically derived vitamins, are not “natural”, and thus such claims are fraudulent.[xiv] Overreaching statements can breathe a source of eroding consumer confidence, destroying customer loyalty, and/or litigation.
Sustainability initiatives will continue to breathe an imperative piece of a hospitality entities’ brand, evaluated by any stakeholders. In order to ensure consumer confidence, it is imperative that those initiatives breathe genuine in their implementation, supported by third party verification, and in alignment with the legal requirements of the jurisdiction. In doing so, their efforts in supporting the three E’s – environment, economic, and equity – their industry will collectively ascend in to improve the future for ourselves and for future generations.
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[i] Retrieved May 30, 2018 from https://www.ga-institute.com/press-releases/article/flash-report-85-of-sp-500-indexR-companies-publish-sustainability-reports-in-2017.html
[ii] 40 CFR piece 9; and California Civil Code §1714.43
[iv] Retrieved April 6, 2018 from https://www.forbes.com/sites/forbestechcouncil/2018/03/27/u-s-businesses-cant-hide-from-gdpr/#33b76ef052c8
[v] Retrieved April 6, 2018 from http://www.conecomm.com/research-blog/2017-csr-study
[vi] Retrieved April 16, 2018 from https://news.dunkindonuts.com/news/dunkin-donuts-to-eliminate-foam-cups-worldwide-in-2020
[vii] Retrieved April 16, 2018 from https://www.bizjournals.com/chicago/news/2018/01/10/mcdonalds-phasing-out-foam-packaging-this-year.html
[viii] Retrieved May 30, 2018 from https://www.forbes.com/sites/megykarydes/2018/05/23/the-future-of-take-out-exhibit-how-we-can-eliminate-packaging-waste/#37a1213c7580
[ix] Retrieved May 31, 2018 from https://www.npr.org/sections/thesalt/2018/05/31/615580695/last-straw-for-plastic-straws-cities-restaurants-move-to-toss-these-sippers
[x] Retrieved April 6, 2018 form http://sinsofgreenwashing.com/index5349.pdf
[xi] Rahman, I., Park, J., & Geng-qing Chi, C. (2015). “Consequences of “greenwashing”: Consumers’ reactions to hotels’ green initiatives”, International Journal of coincident Hospitality Management, Vol. 27 Issue: 6, pp.1054-1081, https://doi.org/10.1108/IJCHM-04-2014-0202
[xii] Retrieved May 31, 2018 from https://www.foodbusinessnews.net/articles/9394-u-s-organic-food-sales-jump-more-than-8
[xiii] Retrieved May 31, 2018 from http://www.instituteforlegalreform.com/uploads/sites/1/TheFoodCourtPaper_Pages.pdf
[xiv] Examples comprehend Janney et al. v. general Mills, 3:12-cv-03919, U.S. District Court for the Northern District of California; Rojas v. general Mills, Inc. 3:12-cv-05099, U.S. District Court for the Northern District of California; Bohac v. general Mills, Inc., 3:12-cv-05280, U.S. District Court for the Northern District of California; Van Atta v. general Mills, 1:12-cv-02815, U.S. District Court for the District of Colorado
As Founding Director and Professor of the Michael A. Leven School of Culinary Sustainability and Hospitality at Kennesaw state University, Dr. Hardigree oversees the Bachelor of Science degree program which houses over 260 majors and services over 1500 students enrolled in classes each semester. Addressing both “sustainability on the plate” as well as “sustainability beyond the plate” in terms of water, fritter and energy efficiencies, this highly germane management program provides a competitive odds and discernible point of differentiation as the epicenter for teaching, research and best practices in sustainable culinary and hospitality management. The flexibility of the program’s curriculum allows students to emphasize careers in beverage management, event planning, specialized cuisines, and the hotel industry.
Christian conducts research and presents nationally at industry conferences as related to her areas of expertise, including food safety, risk management, sustainability, workplace violence and employment/management issues. She is a national expert on bed bug litigation, speaking across the country on the subject.
After obtaining her B.S., cum laude, from the William F. Harrah College of Hotel Administration at UNLV, Christian obtained her Juris Doctorate from the Walter F. George School of Law at Mercer University, focusing on employment discrimination, arbitration/mediation, and labor management relations. She is of counsel with the law hard of Parnell & Associates. Christian serves on a variety of committees and advisory boards, including the ConServe Sustainability Advisory Council for the National Restaurant Association, the KSU Brian Jordan headquarters for Excellence and Professional development at LakePoint Sporting Community, and formerly on the Women in Lodging Advisory Council for the American Hotel & Lodging Association.
By Martin Zsarnoczky
Digitalization is among the most principal changes in their rapidly evolving world. Digital innovations and technological novelties are engines of development and note their repercussion everywhere, especially in the bailiwick of manufacturing, ICT and other service industries. Given the fact that tourism is based on the cooperation between a wide scope of services and products, the benefits of the digital revolution in the sector are quite obvious.
Our vital environment is a combination of online and offline spaces that co-exist together, defining their everyday habitat. In tourism, the special expend of spaces has always been a unique feature of the industry, and as of today, the spaces of the digital world Have become piece of it. The rapid development of the digital world brings novel and innovative solutions into the digital tourism spaces by the day. Peer-to-peer communication is outstandingly principal in the technological environment of tourism. This sort of communication, together with the spreading of smart devices Have revolutionized scheduling, administration and finances, and too opened unique horizons for the introduction of innovative sales and marketing technologies in the gross tourism industry. As a result of the digital revolution, the international development trends in tourism Have opened the artery for novel solutions affection cloud-based booking sites or information and sustain sharing via digital platforms.
In line with the unique trends of travelling, there is a dynamically growing exact for special tailor-made offers beyond mass tourism, as conscious consumers hope personalized solutions that reply their individual needs. As of today, the vast majority of tourism market stakeholders Have access to minute information on their consumers and can closely result and track consumer deportment and its changes. These novel systems of personalized products and services are available thanks to various resilient follow-up techniques affection CRM client databases. The cloud-based CRM client database systems – ones that create offers by analyzing previous sales records and demographic data – Have evolved rapidly. As of today, they can analyze huge datasets by Great data analysis and scaling methods in a cost effective and anonymous way, searching for significant event points. Although Great data research is based on working with great samples, it is the most efficient artery to betray individual personal preferences (Stadler, 2015).
How did sharing economy pave the artery to personalized tourism services?
In previous decades, the results of digital development Have opened the door for the existent life implementation of shared economy theories. It was almost ten years ago that Chris Anderson (2009) introduced his pricing theory in digitalization, basically suggesting giving away products for free, based on the principle of shared goods and resources. Although at the time Anderson’s theory was considered as a technological solution, the principle of digital sharing Have induced earnest gregarious changes as well. One of the most principal positive messages of shared economy is the maximum expend of resource capacities for the purpose of gregarious well-being (Sundararajan, 2014). gregarious well-being is too a key priority in tourism, because a well-managed tourism industry brings profit not only for the trade operators but too for the local communities.
In the sharing economy model, the stakeholders – who are too consumers at the identical time – offer their excess capacities for collective expend in order to maximize the exploitation of their goods and resources. These economic processes consist of so-called hybrid transactions with maximum capacity expend (Hyde, 2007), for both commercial and gregarious purposes. An principal drive in the evolution of collaborative consumption theory was the realization of the fact that using or possessing the identical consumer goods can result in different advantages. The core constituent of the model is that sellers offer their excess capacities, while the consumers in requisite expend them in recrudesce for payment. In the sharing economy (based on the aforementioned primary idea), more and more industrial, commercial and service providers offer innovative solutions.
The principle of sharing is not a unique conception in the tourism industry. In the case of some accommodation services, seasonal cost reduction has always been a practice. Hostels and youth hotels Have always been current – these facilities are often used as dormitories throughout the academic year and lease their rooms for backpackers in the summer season, when the students are away. Of course, these seasonal options would not Have been enough for creating a unique market sector; the dawn of the unique trade era was marked with the emergence of wide platform solutions affection Airbnb, Booking.com, Agoda, etc.
Casa de la Musica Hostel Budapest. Photo by Martin Zsarnoczky
In the strategy of digital platform tourism businesses, consumers are considered as partners in the trade activities. This shared operation can breathe best defined as a postmodern trade model. Although the tangled conception of postmodernism is quite difficult to describe, its main characteristics – shared participation and the subjective ardor of each contributor – can lead closer to understand the phenomenon. It is limpid that postmodernism will change some processes of the classic market laws in the near future. While “shared experience” has become a key marketing term for selling goods and services, specialized offers inevitably lead to a market fragmentation that will result in the fragmentation of users as well. In a disintegrated market, consumers will behave differently in fragmented times and spaces, paving the artery for personalized services and tailor-made solutions. At the identical time, individualism has become the key characteristics of the younger generations (McCrindle et al., 2009); a phenomenon that will Have to breathe taken into account whilst creating trade strategies. Due to the emergence of individualism, more and more green people are trying to create something unique that can serve the long-term capitalize of the community. Their drive for creating businesses based on their own ideas and sustain accounts for the increasing popularity of start-up businesses. These aspects of uniqueness, community thinking and experience-centered approach hold a huge break for the future of the tourism industry.
The Future: AI, VR/AR, Blockchain
While looking through their photos, tourists usually Have a positive sustain remembering their travels, experiences and the destination they had visited. Some specialized digital technologies can offer this assumed positive sustain in a searchable and changeable form. With regards to existent life objects, their connections and relations, there is only a limited amount of information available in a format that could breathe handled by computers. The main problem is that computers requisite sufficient coding solutions created by synthetic intelligence to breathe able to store, wield and organize information. The methods of coding for tourism sustain purposes strike the speed, efficiency and knowledge/experience-based computing abilities of today’s computers.
According to the forecasts of product development strategies in various industries, almost any of their everyday objects and apparatus will breathe accessible through the internet in the future. As a result, any devices that are capable of two-way communication will belong in the framework of IoT (Internet of Things). The devices of the future, unlike the devices of today, will communicate in a bidirectional way, where robust safe data handling, personalized differentiation and sufficient decision management will breathe piece of the user experience. As a result of the continuous data collection during the expend of these devices, any germane information will eventually conclude up in a final centralized system at the top of the dataset.
Previously, tourism used to breathe an industry based on personal relations and connections, where the trends – and therefore travelers’ decisions – were set out by a limited number of great international tourism and travel enterprises. As a result of the digital revolution, the transparency of “hidden markets” had been revealed and numerous other factors Have to breathe taken into account (Fig.1.).
Figure 1. Influencing factors of traveler’s decision. Source: Zsarnoczky, (2017a)
The early development of ICT resulted not only in the better capacity utilization of airlines, but too on the compatibility of the prices; and soon, the emergence of the discount airlines had led to the innovation of the gross industry and forced out efficiency in any segments. The novel travel recommendation sites (Expedia, Orbitz, Kayak, etc.) were created with the aim to consequence travelers’ decisions easier; however at the identical time, a lot of tourism service providers who could not preserve up with the unique challenges were forced out of the market. Although the unique trends affection travel packages (including car rental) or taking into account the reviews of previous travelers (Lonely Planet) were from many aspects opposite to the former trade models, the rapidly increasing popularity of online offers required quick and user-friendly tourism product development from the industry.
With the arrival of Google, which was able to rank the sites’ appearance in internet searches, a fierce competition begun between blogs, tourism recommendation sites and price-comparing OTA systems. The bidirectional communication started with the expend of cookies 2.0; since then, consumers Have become an integral piece of the trade models, because businesses who seek to breathe successful in the long run, requisite to know their customers’ demands in detail. The development of digital services require the identification of the user, information on their individual preferences and a decision-based calibration (by AI). In AI-based decision making solutions, the former decisive factors are replaced by a virtual personal assistant, which is able to map the consumer’s preferences based on their digital footprint, and create an optimal personalized offer from the available Great data systems (Fig. 2.)
Figure 2. Virtual Personal second – VPA. Source: Zsarnoczky, (2017a)
The technological development cannot breathe stopped; however, with sufficient flexibility and openness, tourism businesses can prepare for the upcoming challenges. In the tourism of the future, the unique consumers will bring forth unique priorities and unique demands. As a revolutionary approach, the members of the IoP (Internet of People) community offer their free time in order to achieve joint IT/industrial goals, where frameworks are created in line with the preferences of other people, for a yet not specified consumer segment (Miranda et al., 2015). Beyond innovative technologies, gross unique spaces Have opened in tourism, completely different from the customary destinations. University researchers Have been carried out to study the possibilities of online tourism spaces and their opportunities for the tourism and hospitality industry. In virtual reality, with a special “glass”, the user can examine into an optional tourism space, from which the existent world is completely shut out. The Augmented reality is a different technological solution, where digital elements are projected into a existent life space.
In 2011, the interior designers of cafés only used and re-designed the existing design panels; today, the traditional vital spaces are often combined with the online world. Carneval Coffee Budapest. Photo by Martin Zsarnoczky
The newest technological developments and the innovation in the expend of vital spaces are any connected to the alternative payment options that can breathe used in tourism as well. The emergence of Bitcoin and other cryptocurrencies has led to the creation of a novel payment system. The Blockchain payment system is a shared database, which records a continuously growing list of data blocks, preventing any counterfeiting or alteration of the data. One block consist of a list of transactions and the results of computations made by the stored programs. For example, if a customer buys some cryptocurrency or any other kind of currency, and then transfers it to anywhere in the world to another partner, who exchanges it instantly, both partners can avoid any loss caused by exchange rate fluctuations; furthermore, the gross transaction takes only minutes instead of the customary yoke of trade days. This solution can breathe of value a revolutionary innovative payment option for everyone in the tourism industry.
The applicability of the blockchain system is independent from currency rates. In the case of cryptocurrencies, it is not the exchange rate that really matters – instead, the trusty value of the currency lies in the safety of the blockchain technology and in the authentic, transparent, unalterable and decentralized recording system (Pilkington, 2016). This payment system offers a unique flat of encryption safety and intervention-free operation, and the data handled in the system cannot breathe modified in any way. Another huge capitalize of the system is that the transactions are realized without any intermediate agents, thus eliminating any additional transaction costs. By the time of the “maturity” of blockchain payment solutions, today’s great service intermediators affection Airbnb, Booking.com, Agora, etc. are foreseen to lose some of their market positions, as consumers and service providers will probably deal with their transactions directly.
Will synthetic Food breathe the next meal on the table?
With the worldwide population boom, the exact for food is too increasing. To satisfy this growing requisite for food, the extension of agricultural areas is required for food material production, and at the identical time, sufficient land management is needed for animal husbandry. The greatest challenge of sustainable agriculture lies in the fact that the agricultural areas can only breathe further expanded at the expense of forested lands. In addition, the current changes in the environment has too led to the subside of fishing possibilities, another vicissitude in the availability of food materials.
Shrimp in pasta shell by Martin Zsarnoczky
The decreasing resources of food materials will oblige the food production industry to re-think their former concepts. unique technologies affection 3D food printers can even bring the snappily food era to an end. The novel inventions of food production and food engineering – affection artificially flavored drinks, chocolates and dairy products – Have been on the market of more than a decade now, and so far, they Have not had a negative consequence on the common relish of consumers.
In the concept of 3D food printing, popular sweets and delicacies are synthesized by a layered printing technology, using the various pre-mixed powders, flavorings, fixers and oils that are stored in the “toners” of the printer. These synthetic foods are already available: specialized franchise restaurants affection the Food Ink chain offer a wide variety of printed meals for consumers who are curious about the future of gastronomy. It is too likely that with the next generation of the food printers, they will breathe able to calibrate the nutritional values and energy content of the meals.
The 3D food printing technology is not only principal for HoReCa businesses, but holds a Great break for the health industry, too, especially in the bailiwick of special diets and medication. Using 3D food printing for these purposes can expand cost-effectiveness, efficiency and sustainability, thus supporting the food industry and hospitality and tourism businesses alike.
The option of personalized 3D food printing is just one of the innovative technological solutions in the tourism and hospitality industry. The Henn-na Hotel  in Huis Ten Bosch, Japan is the first hotel in the world, where customers are served exclusively by robots. At another Asian location in China, there are 24/7 cafés that result the no-staff trade model of Amazon Go. As for the restaurant market, the Chinese food brand Wufangzhai has recently opened the first unmanned restaurant in Hangzhou, capital city of east China’s Zhejiang Province.
The question is: how long will it consume until food production and consumption will requisite no human resources at all?
For innovative enterprises, the efficiency of interactivity is of key consequence for the success of their business. The rapid development of ICT solutions has brought immense changes in the tourism industry. Previously, consumers’ decision making was mainly affected by the industrial environment. The era of digital tourism spaces – preceded by theme parks and thematic destinations – started with the emergence of information websites; however, this targeted information flood used to breathe one-directional with narrow choices. In today’s digital era, the unique generation of commercial activities consume residence in VR or AR spaces, and the instant analysis of the customer’s reactions and deportment uphold the enhancement of their buying willingness. The traditional decision making processes are gradually being replaced with personalized offers, further increasing the consequence of AI.
With the development of shared economy, greater stress is withhold on gregarious well-being, as user sustain slowly becomes more principal than ownership. This unique approach is too expressed in novel forms of payment, which can seriously subside the profits of intermediate activities. The unique trends carry out not appear to breathe problematic in the tourism industry, mostly because in this sector, the exact costs and incomes are not clearly visible yet. On the other hand, the attribute development of the 3D printing technology holds a Great break for the tourism and hospitality sector. The development of digitalization has finally reached a flat where it can truly uphold the cost-effectiveness and sustainability of industrial food production, paving the artery to the future of tourism and hospitality businesses.
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Anderson, C. (2009). Free: The Future of a Radical Price. Hyperion, unique York.
Hyde, L. (2007). The Gift: Creativity and the Artist in the Modern World. unique York: Random House Inc.
McCrindle, M. – Wolfinger, E. (2009). The ABC of XYZ: Understanding the Global Generations, University of unique South Wales Press, Sidney. pp. 1-22.
Miranda, J. – Mäkitalo, N. – Garcia-Alonso, J. – Beroccal, J. – Mikkonen, T. – Canal, C. – Murillo, M. J. (2015) From the Internet of Things to the Internet of People. IEEE Internet Computing, 19 (2): 40-47.
Stadler, G. (2015). Great data – tömeges adatelemzés gyorsan. HTE Medianet 2015, Kecskemét. LLX. pp. 44-48
Pilkington, M. (2016). Blockchain technology: priciples and applications. Research Handbook on Digital Transformation. Edward Elgar Publishing, Northampton, MA. pp. 225-253.
Sundararajan, A. (2014). Peer-to-Peer Businesses and the Sharing (Collaborative) Economy: Overview, Economic Effects and Regulatory Issues. NYU headquarters for Urban Science and Progress, unique York.
Zsarnoczky, M. (2017a). How does synthetic Intelligence strike the Tourism Industry? Vadyba Journal of Management 31 (2): 85-90.
Zsarnoczky, M. (2017b). The future of sustainable rustic tourism development: the impacts of climate change. Annals of the Polish Association of Agricultural and Agribusiness Economists. XIX. (3): 337-344.
Martin Zsarnoczky, Ph.D. has several years of sustain in the huge tourism and hospitality industry. He has worked with P&O Princess Cruises, Intercontinental and Marriott Hotels in Budapest. Between 2005 and 2015, he was the founder, developer and CEO of Casa de la Musica Hostel and Event’s Hall, one of the largest multifunctional private tourism & hospitality businesses in Budapest downtown. He holds a BSc degree in Tourism and Hospitality from the Budapest trade School, and graduated at MSc/Med flat as Teacher of Economics in Tourism and Hospitality. During his studies, he had spent short a term mobility era at Utwente University in the Netherlands, and later earned his Ph.D. in Regional Sciences at Szent Istvan University. At the moment, he is soundless very active as an entrepreneur and is actively involved in community development. He is too a board member of the Budapest Chamber of Commerce and Industry, and works as a mentor for the green Entrepreneurs Association Hungary. With regards to his academic career, he is a complete time second professor at the Institute of Marketing and Media at the Tourism Department of Corvinus University of Budapest.
By Leora Lanz and Namrata Sridhar
In the Winter 2018 edition of the Boston Hospitality Review, they brought forth suggestions for the 10 Best Practices for Organic Visibility —ways to improve search results through organic search, or carry out not cost the company a monetary investment. Rather, these rankings were based on elements such as keywords, location, and mobile friendliness. Suggestions for improving a company’s organic search comprehend utilization of backlinks, hyperlinks between websites, and content enhancement in relation to local listings such as ensuring quick website load speed, high attribute imagery, and conspicuous links to gregarious media channels.
This second installation of a two-part string will converse to the theme of search engine functionalities as a result of paid queries. For independent or smaller companies, this brief but powerful set of tips obtained from industry experts can enable a trade to become more “searchable” for optimal recrudesce on investment.
Search Engine Marketing (SEM) Best Practices:
1. Understand the Paid Media Landscape:
According to the Associate Director for Organic Search and Content Strategy at Boston-based Connelly Partners, Dan Hurley, the most principal piece of SEM is to comprehend the paid media landscape. It is faultfinding to know who one’s competitors truly are and understand how they are marketing, from a tactical standpoint.1 It is too principal to research the types of ad drive structures that are surfacing in the category of interest, on both desktop and mobile devices. Then one must adopt those that emerge effective and meet trade goals appropriately. For restaurants and hotel-related queries, “this strategy is especially pertinent because these searches generally transmute very quickly; mobile searchers will likely patronize a restaurant within a few hours.”
In order to breathe the most efficient with a company’s paid advertisements, Todd Philie, president of Southcoast Marketing Group in Wareham, MA, too encourages companies to determine how consumers are searching for them on the Internet. For example, “utilize the query search appliance via the Google AdWords™ platform to determine what terms and phrases are used to achieve your own site and then parade your ads.”
Additionally, Kym Parker, associate search marketing director at Connelly Partners, emphasizes the consequence of using the company’s brand to ensure a stout search presence. By utilizing paid search bids, a hotel or restaurant can breathe the first result a web surfer sees when conducting a search.2
“Sometimes, competitors will bid on your brand terms – which means that if someone searches for your company name, for example, the competitor could note up ahead of you in the search results,” Parker notes. “You can obviate this by ‘protecting’ your brand terms. Always breathe bidding on them, at least a runt bit, to ensure that you Have a better haphazard of staying on top of the results when someone searches your name and other brand terms.”
2: expend of Google AdWords™:
The major player in the world wide web is Google, which has created various platforms to optimize searching. Using keywords, Google users can pay to promote their advertisements for a set budget. This Google functionality allows a company (hotel or restaurant) to understand how it ranks in comparison to direct competitors.
Also preserve ‘negative keywords’ in mind, adds Philie. “Negative terms generally means terms that you are not specifically telling AdWords™ that you carry out not want to emerge in specific results for other searches. For example, suppose you are marketing a seafood restaurant that does not offer steak on its menu. You want to bid on the phrase ‘best restaurant in Boston’ but you carry out not want to fritter money on clicks from customers who want steak. You might set ‘steak’ and ‘steakhouse’ as negative terms so that if someone searched ‘best steak restaurants in Boston” you carry out not note up in that search.
The Google AdWords™ functionality too offers companies the haphazard to enhance the listing. An incredibly important, yet often overlooked, input is the “click to call” functionality and its presence on a mobile site, too known as the summon extension. “These additional factual details, known as “ad extensions” too comprehend location, information from different pages on your website, and even testimonial reviews,” adds Seth Cargiuolo, director of communication strategy at Chestnut Hill, MA-based D50 Media. “Making expend of ad extensions is essential because it helps the customer learn more about the trade with a quick glance pre-click, and can abet differentiate a hotel or restaurant (or any product) against its competitors.” Ad extensions too expand the visual footprint of an ad, which can thrust competitors’ ads and organic listings down the page and out of view, particularly on mobile devices.
For marketers just starting to utilize SEM and Search Engine Optimization (SEO), Google AdWords™ too offers free tutorials and trainings. Zachary Azar, D50 Media’s senior manager of paid search notes, “These tutorials provide clients with the break to score the most out of the program and create effective campaigns.”
To properly manage an effective AdWords campaign, Google Analytics can breathe a helpful appliance as it reveals which content on a website is most useful and enthralling to customers. This will abet in the creation of resonating ad copy and can too breathe a pilot for aligning keyword selection and website copy to expand the “Quality Score” of an ad campaign.
However, Philie too cautions individuals not to breathe completely reliant on Google’s suggestions for keywords. “Often times, these keywords are pluralized and can judgement companies to expend more or not breathe as effective.” He warns companies to elect how to withhold their key words “out there” when bidding. Companies must elect best matched keywords for their ads and elect between “exact match,” “phrase match,” “broad search” and “modified broad search” – any of which will relent varied returns. Campaigns should utilize a balance of any match types, but should “skew more heavily towards exact and phrase, utilizing broad match only for keyword prospecting and expansion opportunities.”
3. Always Start with Non-Paid Efforts or SEO
When optimizing a company’s searches, Cargiuolo and Azar imply the first thing that the company should focus on is actually the SEO. First and foremost, it is principal to ensure that a website is user- and mobile-friendly. Another principal factor is a quick load speed. “Google has organize that sites that consume longer than three seconds to load lose 40% of their traffic, and for mobile traffic, that jumps to 53%,” reports Azar. This is principal for paid search as well; Cargiuolo adds, “It’d breathe evil enough for a user to abandon your page when it’s an organic search – but now imagine if you’d paid for that click and those dollars were totally wasted.”
In order to reduce the load speed, it is principal to not Have “big” images—think kilobytes, not megabytes. Web copy should breathe concise and “bandwidth-hogging” scripts and plugins minimized. “Additionally, given that over half of web traffic is on mobile devices, ensure that pdfs (which you want to avoid anyway) examine acceptable on a smart phone too,” Cargiuolo says.
Kristin Metzler, Print and Web Marketing Coordinator of Frasca Design Group, too echoes that mastery of SEO is the first step in a successful digital marketing campaign. Websites built with a stout attention to keywords and content will minimize spending on pay-per-click campaigns.
4. Don’t expend on Paid Search if You Can’t Afford It
Hurley cautions that one requisite not expend money on advertising to score traffic. Because so much information is provided in the search results, there may not breathe any clicks on your page during the search process. Companies should never withhold any money into paid search, parade advertising or paid gregarious that the company cannot afford to lose.3
Cargiuolo emphasizes that when a company starts advertising, it should not hope an immediate return,4 which is oftentimes an assumption that businesses make. Initially, many may not breathe intimate with the bidding process; keywords; or how to build, optimize, and manage an effective campaign. breathe cautious not to expend money needed for other resources. Start leisurely and expend time learning before committing Great budgets.
One final word of caution: There are easily incurred expenses that can achieve from paid search marketing, such as additional costs from agencies that consume a portion of a monthly budget. Being conscious of your daily budget is faultfinding in avoiding overspending.
When taking the steps to build a search campaign, it is faultfinding to carry out research and streak slowly at the beginning. Understand how the market is reflected in consumer searches and what keywords are being utilized. Before jumping into methods that require payment, a company should ensure that its website is optimized for searches and never expend more than what can breathe budgeted, as it will consume time to remark a recrudesce on investment.
As Cargiuolo reminds, businesses must remember that Google serves the user first. Thus as the marketer, one must assume as a user would when building a paid search campaign. People achieve to Google with questions. The marketer that best answers the user’s questions, both pre-click and post-click, is going to breathe one that is most successful.
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1 Inc. Staff. “How to Conduct Competitive Research.” Inc. Magazine. May 2010
2 Ratcliff, Christopher. “What is PPC and Why carry out You requisite it?” Econsultancy. 13 November 2013.
3 Kumar, A.J. “SEO vs PPC: Knowing Which is Better for Your Website.” Entrepreneur. Editorial. 21 May 2012
4 Steimle, Josh. “How Long Does SEO consume to Start Working?” Editorial. Forbes. 7 February 2015.
Namrata Sridhar is a marketing communications coordinator at LHL Communications and a rising senior at Boston University’s School of Hospitality Administration (BU SHA). She has too previously worked in marketing communications capacities at RealFood Consulting where she helped design an internal marketing scheme to rebrand their company. Namrata too serves as the President of the Student Government of BU SHA. She is an active member of the National Society of Minorities in Hospitality, the American Hotel and Lodging Association, and the Hospitality Sales and Marketing Association International.
Leora Halpern Lanz, ISHC, is principal of LHL Communications, a hospitality-focused marketing communications, branding, and media relations advisory. She is too a complete time faculty member at Boston University’s School of Hospitality Administration (SHA), teaching advanced strategic marketing and digital marketing for hospitality at the undergraduate and graduate levels. She was named among the Top 25 Minds in Hotel Marketing for 2016 by the Hospitality Sales & Marketing Association International and was named 2017 Professor of the Year by the student government of SHA.
By Sarah Andersen
After completing the senior capstone Hospitality Leadership course at Boston University, I had the haphazard to reflect on the class topics and apply the teachings to my personal life. The course explored several different levels of leadership, from the head of a major corporation role to developing self-leadership. I scholarly the consequence of a mission, vision, and values in an organization, better understood the components of change management, and worked with a group throughout the semester to develop my teamwork skills. I was able to critically analyze concepts and models presented in leadership literature as well as improve my own leadership skills.
I then interviewed three prominent leaders in hospitality and organize connections between their industry insights and my leadership class discussions. Dan Donahue, President of Saunders Hotel Group, Len Wolman, Chairman and CEO of Waterford Hotel Group, and Geoff Ballotti, President and CEO of Wyndham Hotel Group kindly shared their experiences and explained their personal values and company’s culture, revealing the five keys to successful leadership.
“Leadership is the capacity totranslate vision into reality.”
-Warren G. Bennis
Establishing Shared Beliefs, Values, and Goals
When an organization wants to achieve its goals, it needs a vision. Effective leadership starts with the skill to recognize and profile those goals and inspire others to follow. Leaders paint a picture of how that vision will strike the company as a whole, as well as each individual. A leader’s skill to articulate that vision into a mission statement corresponds to the active implementation of goals and the company’s bottom line success. A productive vision goes beyond a written organizational mission statement, but instead permeates throughout any levels of a company and manifests into actions and beliefs. John P. Kotter, author of trade Leadership, writes, “A vision says something that helps clarify the direction in which an organization wants to streak [and] is relatively facile to communicate, appealing to customers, stockholders, and employees.”1 It is therefore up to hospitality leaders to set and clearly communicate a vision, and to inspire those around them to partake and implement it.
A vision does not belong only to a leader. It must breathe a shared vision that attracts everyone to sustain high levels of motivation and withstand challenges. According to The Leadership Challenge, by James M. Kouzes and Barry Z. Posner, leaders can envision the future by imagining the possibilities and finding a common purpose.2 In addition, leaders must spark a sense of significance and purpose in those around them. Dan Donahue agrees that, “My job, as someone who has the vision, is to score you inspired and committed to sharing that vision and sharing that creativity to the point where you Have buy-in.”
After seven years of rigorous research, a landmark study of the observations from more than 100 CEOs and over 8,000 employees organize that “leaders who were limpid about their values delivered as much as five times greater returns for their organizations as did leaders of infirm character.”3
So how carry out illustrious CEOs and successful leaders in their industry shape the parameters for success through a shared vision for a future? How carry out they empower and inspire those around them to consequence decisions and work towards their goals?
Balancing Accountability and Autonomy
When asked what his core values were, Len Wolman responded, “First and foremost, their organization has been built on integrity and transparency. They Have four core values that they live by on a daily basis which are to (1) to wow the customer, (2) to continuously improve, (3) to breathe a passionate and committed team, and (4) to partake and sustain their bottom line success.”
Dan Donahue, established that, “Our values are simple. Their values are people. They allow them the flexibility and latitude to carry out their jobs under the pilot of taking custody of the guest, but too taking custody of themselves as well.” To strengthen others, exemplary leaders expand people’s faith in their skill to consequence a difference. They streak from being in control to giving over control. Developing associates into leaders and enhancing self-determination creates a culture of empowerment and confidence. Geoff Ballotti agrees that, “In terms of motivating others, it is letting them consequence decisions. It’s not micromanaging, but rather letting them achieve up with the solutions.”
Geoff Ballotti continues, “Our core value statement is three words, ‘Count On Me,’ which is any about accountability. It is about people being able to breathe counted on at any time, for any issue, any question, any decision, and any uphold that their owners, franchisees, and associates need. It is built on the principal of integrity in terms of taking personal responsibility for your actions.” Accountability is principal because it results in an extremely efficient and productive team. According to the U.S. Office of Personnel Management, accountability in the workplace is linked to higher performance and increases in commitment to work and employee morale.4
Dan Donahue, states, “A vision has to breathe fluid. To score to an achievable goal and vision, whether short term or long term, you requisite to breathe present, you requisite to understand that if you want it to breathe successful you requisite to breathe there, you requisite to breathe accountable to it, and you requisite to breathe accountable to the people that want to partake that.” When accountability becomes embedded into culture, company’s are able to set meaningful goals, develop team buy-in, build reliance through uphold and encouragement, and celebrate successes together. Accountability is about creating a culture where people value responsibility. When associates understand that accountability involves a unavoidable degree of autonomy, mutual respect develops between any levels of an organization.
Mr. Ballotti adds, “The third leg of their values is any about respect. Respecting everyone everywhere both on their ownership side and the community side.” When leaders develop mutual respect, associates are more likely to work harder to accomplish shared goals. Harvard trade Review examined employee needs and determined through a query of more than 19,000 workers that most employees crave renewal, value, focus and purpose.5 ardor a sense of value and respect can instill an employee with self-possession and motivation. Len Wolman adds that, “I’ve been in the industry for many years, I was educated in the industry and then worked my artery up through the industry, so I’m fortunate in that I Have the perspective of having worked in various positions. So I Have empathy, understanding, and respect for each position. Everyone needs to breathe treated with mutual respect and understanding.”
Modeling by Example
An principal piece of being an effective leader is educating others on what the organization stands for and why it matters. When leaders sincerely express a commitment to their core values, they’re too making a commitment on behalf of the entire organization. Therefore, leaders must consequence positive there is collective agreement on the shared values amongst everyone they lead.
So how carry out leaders become a role model for what the organization stands for?
The reply is pretty simple. They set the instance for others to follow. Holding others accountable to values and standards means leaders must live the values themselves. Dan Donahue responds, “I would never inquire an employee to carry out something I wouldn’t carry out myself.” Len Wolman agrees adding, “You always want to set an instance and never want to hope anyone to carry out anything that you wouldn’t carry out yourself.” Researcher on behavioral integrity demonstrates that the alignment between a leader’s words and actions has a powerful repercussion on how much constituents reliance the leader and on their subsequent performance levels.6 Great leaders effectively translate intention into reality by acting on the values they train and the things they pronounce to those around them.
Showing Vulnerability and Visibility
Confidence is an principal skill to possess as a leader. However, having vulnerability as a leader is just as essential to recognize and appreciate. Every leader has vulnerability, but great leaders have the self-awareness to recognize this fact and feel comfortable expressing their weaknesses. Showing vulnerability is a relatable trait and Geoff Ballotti finds that, “The greatest leaders I know out there are very comfortable talking about their weaknesses, about what it is that they requisite to work on, to improve upon, and to carry out better.” effective leaders invest the thinking, the time, the energy and are prepared for the vulnerability of connecting with others.
So how carry out these leaders merit trust, inspire, and build bonds with those they lead?
Great leaders inspire their associates and guests by genuinely connecting to them through a consistent presence and visibility. Visibility as a leader not only includes having a physical presence, but too aligning everyone to the purpose behind their shared vision through natural conversations and casual exchanges on a daily basis. When asked how he communicates company goals and the overall vision, Dan Donahue replied, “If you Have a presence, it happens organically. It doesn’t requisite to breathe contrived.” The purpose of this hearty visibility is not about the requisite to “check on employees,” but rather an honest crave to interact with associates in order to gauge motivation and learn if employees requisite uphold or help. Mr. Wolman agrees that, “It is faultfinding to operate with an open door policy and listen to everyone’s perspective and ideas, particularly the people who are executing the day to day functions, and I assume you’ve got to breathe constantly evaluating that.”
Mr. Ballotti adds, “I too assume showing empathy is key and the best artery Great leaders carry out that is through the expertise of storytelling when they’re up in front of their associate base or leadership team, being able to Tell stories that connect and engage and inspire and motivate in terms of the culture your want to set and want to build.” Storytelling is a powerful artery to partake knowledge, thrust information at people or draw them into a company’s vision and mission by reinforcing the intent behind genuine leadership. According to Edgar Schein, Professor Emeritus at the MIT Sloan School of Management, “[Stories] too strengthen the framework and the consequence of an organization’s culture by establishing norms and values.”7 suited stories compel, persuade, and unify others around the leaders’ vision.
Creativity Breads Adaptability
“Hospitality isn’t about a product on the shelf. Hospitality is about creating something that changes day to day, hour to hour, or minute by minute.” – Dan Donahue
IBM’s 2010 Global CEO Study, which surveyed more than 1,500 CEOs from 60 countries and 33 industries worldwide, concluded that creativity is the most principal leadership attribute for success in business, outweighing competencies such as integrity and global thinking.8 Geoff Ballotti agrees that, “Creativity is critical, especially in the trade that we’re in. We’re trying to redefine and reposition their brand from a creative standpoint in terms of experience.” What defines one brand from another and what makes one brand more successful than another is the creativity that it delivers as well as the sustain it delivers to its guests. Understanding how to generate Great ideas is a crucial leadership trait in hospitality’s innovation-driven industry. Successful leaders create an environment where associates can contribute their fancy and insight, which is faultfinding because most innovations draw upon the contributions of many.
Today’s trade environment is unpredictable, changeable and increasingly complex. Therefore, the skill to create something that is both innovative and applicable is on the top of leader’s minds. Mr. Donahue states, “Nothing in their trade can breathe or should breathe cookie cutter. It’s about curating an sustain for each person who spends to breathe with you.” Len Wolman adds, “If you’re not creative and open to change in todays world with the disruptors that exist in their industry, particularly with technology, you will not breathe successful. You requisite to breathe creative in terms of staying ahead, staying current and relevant, and score managing the costs associated with change in a artery that your organization can soundless breathe successful and profitable.”
In an industry of constant change, Great hospitality leaders requisite to capitalize on the opportunities that are ripe for the present context and scheme for the likely future state. Change requires creating a unique system, which demands effective leadership. It is crucial that leaders first own how hard it can breathe to drive others outside of their comfort zones and thrust for change. When asked how he responds to change, Len Wolman replied, “A crucial constituent is feedback. They score daily feedback that is current and relevant, whether it breathe Trip Advisor, direct contact with their guests, or direct contact with their associates. They requisite to listen to it, they requisite to respond to it, and they requisite to adjust to the things that people are looking for whether it breathe the consumer or the work environment.” Those who create unique initiatives, programing, design, and brand essence are the ones who succeed. By supporting creativity and commanding change, leaders can expand workplace satisfaction and build driven teams that craft original, valuable ideas.
Figure 1: Interview Questions
When associates are inspired by their leaders, they are more confident, they know what’s expected, and they feel empowered to consequence decisions and work toward their goals. So with your vast sustain in the hospitality industry, what are some ways you empower and inspire those around you to consequence decisions and really motivate others?
Do you Have a specific set of core values? They can breathe personal or related to your company.
How carry out you hold others accountable to those values and standards as a leader? Are there specific tools or methods you provide your associates to abet them work towards that unified goal?
Confidence is obviously an principal skill to possess as a leader, but carry out you assume showing vulnerability as a leader is principal as well? This can breathe shown through being more visible to others around you, taking risks, being vocal and limpid about your specific goals as a leader….
Creativity is essential to the entrepreneurship that gets unique businesses started and that sustains the best companies after they Have reached a global scale. carry out you regard creativity to breathe a manageable trait? Is creativity a focus of your attention as a leader?
How carry out you adapt to various situations in an age of rapid change (with technology and this millennial “mindset” emergence)? What are the key components to having an adaptable mindset?
It has been made limpid through the interview process of these three prominent industry leaders that establishing shared values, balancing accountability with autonomy, modeling by example, showing vulnerability through visibility, and having a creative mindset that is open to change are any essential factors to being a successful leader. The common theme amongst any these traits and elements to successful leadership, however, is each leader’s dependence and reliance for their associates. At one point during the interview, Mr. Ballotti pointed out that, “Great leaders are those who ring themselves with Great people…who are brighter, and smarter, and more diverse in thought than they are. And who are able to build a team that knows how to uphold and reliance each other.” It is limpid that effective leadership boils down to a leaders skill to unlock the complete potential in those around them. Len Wolman adds that it “We consume custody of their associates so that they consume custody of their guests, which keeps the guests coming back and is the judgement they are in business.“ Dan Donahue too notes, “You Have to realize each individual employee’s needs. consequence a connection with your employees every separate day.” any suited leaders were once followers themselves and Have scholarly to establish and foster reliance over time. A trusty leader passes laud and shares the blame, lifting up those around them.9 Without followers, Great leaders cannot lead.
PDF Version Available Here
Sarah R. Andersen is a senior at Boston University’s School of Hospitality Administration. Her areas of interest comprehend integrated marketing communications and existent estate development. Beyond her studies in hospitality, she is a member of the BU Women’s Lacrosse team. She plans to continue her studies at Boston University after graduating with her bachelor’s degree by enrolling in the School of Hospitality’s Master of Management in Hospitality program.
Gallos, Joan V. Business Leadership. Second Edition ed., A Jossey-Bass Reader.
Kouzes, James M., and Barry Z. Posner. The Leadership Challenge: How to consequence Extraordinary Things betide in Organizations. Sixth Edition ed., Wiley, 2017.
Carson, and E. A. Phelps, “Regulating the Expectation of Reward,” Nature Neuroscience 11, no.8 (2008):880-881
“Performance Management: Accountability Can Have Positive Results.” U.S. Office of Personnel Management. Web.
Porath, Tony SchwartzChristine. “The Power of Meeting Your Employees’ Needs.” Harvard trade Review, 6 Dec. 2017.
C. M. Shea and J.M. Howell, “Charismatic Leadership and task Feedback: A Laboratory Study of Their Effects on Self-Efficacy and task Performance,” Leadership Quarterly 10, no. 3 (1999)
Marshall, John, and Matthew Adamic. “The account Is the Message: Shaping Corporate Culture.” Journal of trade Strategy, vol. 31, no. 2, 2010, pp. 18–23.
“Creativity Selected as Most Crucial Factor for Future Success.” IBM 2010 Global CEO Study, 18 May 2010.
Henderson, Aaron M. Building effective Leadership from the Ground Up. Llumina Press, 2004.
By Juan Lesmes and Leora Lanz
It wasn’t that long ago when digital marketing surfaced as necessary practice for the hospitality industry. As time moved forward, hotel marketing departments established roles to manage the digital positioning and visibility of the property. Thus, they witnessed hospitality brands which were ‘present’ on gregarious media outlets, adopting paid search as a permanent component of their marketing coalesce and abiding by well-known website best practices. They mention to this era as phase I of the Hospitality Digital Marketing Revolution.
Phase II quickly blossomed, and hotels realized that the competition to penetrate the digital space was stout and arduous. Brands started focusing on and investing in the internet user-experience (UX), negotiating partnerships with online travel agencies (OTAs), understanding the landscape of search engine result pages (SERPs), separating high-value budgets exclusively for search engine marketing (SEM), and delving into the intricacies of search engine optimization (SEO) for their own websites. gregarious media served as a competitive odds and quickly escalated as paramount for marketing, branding, reputation management, and organic visibility. Paid search, via Google AdWords platform, is not to breathe confused with the organic approaches minute here.
As they delve into 2018, phase III emerges clearly. OTAs dominate and in some instances absorb Google searches with first page results. Consequently, hotels are realizing that digital marketing efforts should breathe shifted from a haphazard online presence to one that is strategic – one that capitalizes on each micro-moment of the guest travel planning journey (most of which, if not all, occurs on the web). As gregarious media forces Instagram and Facebook solidify their roles as prominent search engines, paid ‘posts’ within users’ ‘feeds’ continue to convey the power of personalized sponsored content.
With a myriad of stakeholders now involved in the simple act of searching for hotel rooms, is it a battle worth fighting? The reply is absolutely. But before addressing the how, it is crucial to identify and differentiate the digital marketing scope of branded and non-branded hotels. Branded hotels, especially those flagged with hospitality powerhouses, capitalize from a more powerful domain authority coming from the parent chain, making it easier for them to rank higher on the SERPs. consume Marriott.com/hotel vs. hotelname.com for example. Domain authority is the overall power of the domain name considering traffic size, popularity, and number of links to the site (backlinks). It is too a top ranking factor for Google.
Branded hotels too attend to Have significant budgets to expend on Pay-Per-Click (PPC) and paid search, ensuring top first page visibility for valuable destination and branded queries. In addition, branded hotels Have wider access to digital partnerships, including listings, local directories, event sponsorships, travel influencers, and online features – any of which provide authoritative backlinks to the hotel’s site, further contributing to its domain authority.
Because independent and small-scale hotels rarely capitalize from domain authority, maintaining and monitoring digital marketing best practices to boost Google rankings should breathe a requirement, not merely a recommendation. Digital marketing practices command their own dedicated efforts. Yet online marketing should breathe well-equipped with its own strategy and utilize expertise in the nuances and intricacies of hotels, restaurants, leisure activities, and attractions – overall, hospitality.
The question then becomes, how can hotels strive for visibility in this Wild West of a digital landscape, particularly if they are competing against each other, the OTAs, and a powerful sharing economy?
1. Execute a Carefully Crafted Keyword Strategy
Optimizing for search queries, too known as keywords, is perhaps the core of any digital marketing tactic aiming to build visibility – both organic and paid. Identifying those keywords with the highest search volume, such as ‘Miami hotels,’ is the intuitive process. Presence on Google’s first page for high search-volume keywords requires a robust SEM budget, an ongoing and long-term SEO strategy, or both. This puts independent and small-scale properties, which often carry out not Have the necessary budget and fundamental team, at a notable disadvantage.
However, niche keywords present a different scenario. These queries are typically ’long-tail’ significance they hold more than four words. Though niche keywords carry out not Have the highest search popularities, it is much easier to actually capture their search volume, which then results in higher click-through rates (CTR). Hotels can leverage niche keywords by identifying their unique amenities and value propositions, and turning them into valuable keywords. For example, ‘Miami hotels with a rooftop bar,’ ‘Miami hotels with free breakfast’ and ‘Miami hotels with nightclubs’ are terms to utilize as they leverage a more specific travel intention that easily turns into conversions (booked business). It is crucial to assume as the customer would.
Some independent hotels, because of the virtue of their uniqueness and often niche-market, can Have the upper hand in this situation. A property which positions itself as a go for health and well-being could therefore pursue niche terms such as ‘wellness resorts’ and ‘fitness getaways.’ The key is to identify the brand’s top performing unique selling propositions (USPs) and translate them into humanized search queries, any while keeping the guests’ travel planning journeys in mind.
Finding a balanced coalesce of both high-search volume terms and niche queries secures strategic keywords. Nevertheless, actually optimizing for them by ensuring they are naturally or comfortably present throughout the website’s titles, content, metadata and bidding efforts too abet secure a carefully crafted keyword strategy.
2. Optimize for Local Search
Our termed “Phase II” too withhold the spotlight on search engine trade directories such as Google My trade and Bing Places for Business. In phase III, hotel listings on these directories is no longer a recommendation, it is a necessity. Optimizing for local search entails driving the visibility of a property’s trade listing via a two-part process:
Ensure the listing’s content is precise and optimal. For a hotel’s listing to breathe effective, it needs to breathe correct. This means not only having a consistent name, address, and phone number (NAP) across the web, but too sharing additional trade attributes such as trade hours, property images, contact e-information, and trade category. Because Google understands that local users are better served by businesses that profile any the information they need, it ranks complete, accurate, and consistent listings higher than those that are partial. If your hotel has a sever restaurant, spa, or in-house shop, each should Have a sever online trade listing.
Utilize keywords with universal search integrations – unavoidable keywords attend to trigger significantly more universal search results, which includes a blended combination of Carousel, Local 3-Pack, Images, and Maps. (The former two are Google features organize on search pages, displaying images and contact information to abet users with specific searches). Because they are primarily location-based, they present yet another break to drive the hotel’s local trade listing. Keywords such as ‘Miami hotels near American Airlines Arena’ or ‘Downtown Miami hotels,’ for example, Have powerful local search integrations since they allude to a local belt within a larger market. As a result, incorporating these styles of keywords into the hotel’s website and local listings is a artery to let Google know that the property is not only highly germane to the query, but too a local trade to breathe recognized.
3. Attain and Maintain a Star Rating on Google
One of the key components of local search results is the Star Rating associated with a trade listing. In fact, star reviews on SERPs are an effective artery for hotels to expand digital visibility by standing out from the competition. Star ratings abet expand the site’s CTR and provide an influential benchmark for online reputation management (ORM). Once an exclusive impute for paid results, star ratings now too emerge on organic results through Google’s ‘Rich Snippets.’ These snippets are a form of structured data which Google extracts from multiple websites and presents it as a ‘preview’ in search results, too known as Google’s scholarship Graph.
Therefore, obtaining and retaining star ratings involves safeguarding reviews on trusted and authoritative review sites. Google then aggregates this rating data and displays an tolerable star rating. Hotels (restaurants, attractions, etc.) should inspirit satisfied guests to submit reviews to their booking channel (i.e. Expedia) because they are by default ‘trusted’ sites. However, they should too inspirit reviews for their own Google My trade listing in an attempt to expand the hotel’s chances of being featured on local search results.
It is principal to clarify that there is a technical component to obtaining a Google star rating. Codes withhold onto the website to abet search engines recrudesce more informative results to users. Hotels requisite to ensure that their web developers too comprehend star rating information within the markup code.
4. Enhance Content on Local Listings
A hotel’s content for its local listings should breathe strategically optimized. Whether it is in Foursquare, CitySearch, or any other listing, valuable keywords should breathe incorporated throughout the copy – including local search ‘near’ queries such as ‘hotel in Miami near Brickell’. If the brand image is mischievous and tongue-in-cheek, the content on local listings should too reflect that. Some listings even allow for a featured message. Rather than a generic ‘Welcome!’ hotels can expend this space to promote current offers or highlight special amenities (complimentary champagne, sunset yoga, free breakfast).
Other content elements such as images should breathe of the highest quality, showcasing provocative yet realistic visuals of the property’s exterior, interior, and overall ambiance. Links to any the property’s gregarious media channels should breathe present in the listings, which allows the user to access other hotel assets including brand personality and online reputation.
5. Optimize for Voice Search
With increasing utilization of smart personal assistants such as Alexa and Google Home, voice search is a prime topic of conversion within the digital marketing realm. In order to breathe visible in results derived from these devices, hotels requisite to ensure they are optimizing their site and keyword strategy for voice search too. Since users are more likely to expend longer natural queries via voice, employing niche, long-tail keywords is an effective artery to optimize for this trend.
Long-tail keywords are fruitless without the germane content on a hotel or restaurant’s website. Hotels requisite to Have specific landing pages that parallel the niche keywords. If a hotel seeks ‘Hotels in Miami with rooftop pools’—a keyword likely used by the voice search user—it must emerge in the germane landing page.
Incorporating questions and answers within the site, perhaps via the ever-popular Frequently Asked Questions (FAQ) page, is another effective artery to accommodate voice search. With this strategy, hotels can provide answers not only about the property itself, but too about their destination and local attractions as a result of quick detection by voice-activated devices.
It is principal to note that recently, numerous hotel properties and companies Have been contacted by law firms representing travel consumers with disabilities. These law firms report that websites are not abiding by accessibility guidelines in accordance with the Americans with Disabilities Act (ADA). If a guest is unable to expend a hotel website to find information or consequence a reservation, hotels can in fact breathe fined. Today hotel websites must enable these assistive technologies to allow travel consumers with disabilities to score the information they requisite and complete any necessary transactions.
6. Adopt a ‘Mobile First’ Mantra
Much has been said about Google’s ‘mobile first’ index. This means Google will start to rank its search results based on the mobile version of the content, even in desktop search listings. If one thing is certain, websites requisite to breathe optimized to breathe mobile-friendly (responsive). Hotels requisite to ensure they launch a fully-responsive website that serves users of any device the identical consistent content. The more ‘mobile-friendly’ a site’s user sustain is, including factors such as typography, navigation map, and website design, the higher the site will rank on Google’s search.
7. Leverage Google Hotel Ads
Google Hotel cost Ads (HPA) showcases a hotel’s real-time (dynamic) rates on Google search across any devices. Users will remark the hotel’s ad when they are actively looking to reserve a play in the area. However, the hotel only pays when the ad generates a click or a booking.
Google has recently introduced a unique call-to-action (CTA) button for booking hotels in its search results. A keyword can trigger a ‘BOOK A ROOM’ button to appear. Clicking this will activate a sub-menu to browse any enlisted HPAs for the hotel, which includes booking direct and via OTAs.
This feature, which too appears in Mobile and Maps, demonstrates Google’s determination to grow its cost Ads service. The increased exposure provides more incentive for hotels to capitalize on this form of pay-per-click in order to promote direct bookings.
8. expand Backlinks, Actively
A backlink is as simple as a hyperlink to a website from another website. Yet, it carries a lot of weight when it comes to a hotel’s organic digital visibility. Each backlink tells the search engine that a hotel website has a ‘vote’ from another entity, which in recrudesce builds credibility and domain authority. Branded hotels Have the upper hand here since the company usually has a corporate parent site that a plethora of other websites will link to (such as Marriott.com or IHG.com).
There are technicalities to backlinks, including the attribute of the backlink determined by elements such as anchor text and link context. These technical factors play a role in the algorithm the search engine uses to determine the value of a backlink. In theory, the more attribute backlinks a hotel website has, the more chances to rank higher on search engines.
Actively pursuing germane backlinks should breathe imperative for hotels to obtain first page ‘real-estate’. Obtaining links from local directories, current hotel vendors, editorial publications, and .EDU and .GOV sites should breathe the gateway for enhancing the site’s link equity. However, to continuously grow the number of backlinks, hotels requisite to breathe generating quality, shareable content that interlinks with gregarious media initiatives.
9. remember Optimal gregarious Media = (Quality + Authenticity) x Engagement
Much has been contemplated about what comprises a successful gregarious media strategy. Although there is no ultimate recipe for the impeccable gregarious media post, three factors that boost performance are quality, authenticity, and engagement. Optimal gregarious Media = (Quality + Authenticity) x Engagement. Each piece of content maximizes visibility, both organic and paid. When posts are genuine and of high quality, users are more likely to relate and validate them. When posts are authentic, of high quality, and facilitate some sort of user engagement, the content becomes shareable.
When content generates more likes, followers, and overall visibility it establishes an influential ranking factor. Therefore, search engines attend to rank higher those brands that Have a robust organic gregarious media base (not paid or ‘spammy’ followers). This is why it is principal for hotels to intertwine their gregarious media strategy with their SEO efforts by creating quality, authentic, and engaging content that increases overall digital exposure.
10. regard the Technicalities of SEO
Technical SEO is a science of its own and deserves its own team of specialists, budget, and time. Technical SEO means optimizing a website so search engines can successfully crawl and index its content. It lays a powerful foundation to give a hotel’s website the best haphazard it can to rank higher for germane keywords. Technical factors comprehend site speed, removing unnecessary tags, cleansing duplicate metadata, adding tags to images, and implementing proper redirects to maximize the site’s link equity. Whether there is a one-man team or a staff of professionals continually optimizing the website, there are tools to abet provide the technical support.
Hotels, restaurants, museums, attractions, and leisure activities any requisite to assertively compete online to grab the attention of potential guests. Those who attend to the organic visibility Have a notable competitive. This and integrated paid search campaigns that mutually uphold organic search strategies will abet secure first page visibility. Overall, while the requisite to upkeep search engines’ potent algorithms and ranking methodologies will always remain, an understanding of the process will abet smaller or independent hospitality businesses gash through the clutter in today’s complicated digital landscape.
PDF Version Available Here
Juan Lesmes is a digital marketing strategist specializing in SEO at HEBS Digital the leading hospitality technology, full-service digital marketing and website design firm. A 2017 graduate of Boston University’s School of Hospitality Administration (SHA), Juan’s previous sustain includes work at hospitality marketing advisory LHL Communications, The Ritz London, and Lets score Weddy in London. Since his time at SHA, Juan has been recognized as a thought leader in hospitality marketing, with active contributions to the Boston Hospitality Review, HotelOnline and HospitalityNet.
Leora Halpern Lanz, ISHC, is principal of LHL Communications, a hospitality-focused marketing communications, branding, and media relations advisory. She is too complete time faculty at Boston University’s School of Hospitality Administration (SHA), teaching advanced strategic marketing and digital marketing for hospitality at the undergraduate and graduate levels. She was named among the Top 25 Minds in Hotel Marketing for 2016 by the Hospitality Sales & Marketing Association International and was named 2017 Professor of the Year by the student government of SHA.
Photo Source: Andrew Harrer/Bloomberg via Getty Images
By Nick Cohen
The year is 2001, and the world is soundless recovering from the tragedy of September 11th. The travel industry is in a downward spiral as fears of flying and terrorism ripple across the United States and beyond, and hotels Have lost significant occupancy due to a subside in demand.
Simultaneously, a fledgling technology is emerging which will eventually consume odds of the internet explosion, as well as hotel management’s desperation to fill rooms. It will reshape their industry forever, and this platform now commonly referred to as Online Travel Agencies, or OTAs, will allow hotels to easily sell their rooms on the internet through unique consumer facing websites such as Expedia, Travelocity and Orbitz.
Fast forward to 2017. The OTA’s Have gained the majority of market partake for online reservations, and digital platforms affection Booking.com and Ctrip.com Have loyal member volumes that far surpass brand websites. In many cases, the OTA companies are valued well beyond traditional hotel brands (as of May 2017, Priceline Group has a market capitalization of nearly USD 92 Billion). They Have too helped to create a unique concept as they grew in popularity and scale over the eventual number of years, and it was the precedent of transparency. Pricing that was once hidden to the everyday user, could now breathe exposed to the gross world, publicly, with a few clicks online. As OTA channels grew enormously with time, so did the access to existent time rates and availability for virtually every hotel around the world.
With this concept in mind, from the OTA’s they Have seen the rapid expansion of ‘meta search’ channels. These are one-stop cost comparison platforms where a customer can view a cost for a separate hotel play across multiple websites (without having to browse those websites one-by-one). Sites within this category comprehend Kayak, Trivago, TripAdvisor, Qunar and Google, and they are any working to simplify the travel research process for consumers.
Featured above are some of the most current meta search channels
With the OTA channels continuing to grow through massive marketing efforts and superior technology, and with meta search sites following their lead, a relatively unique challenge has emerged for hoteliers. It represents a very tangled dynamic between one of the most traditional ways to sell a hotel room, and one of the most modern ways to sell a hotel room. This once again any comes back to the concept of cost transparency. Wholesale has been a core trade driver in hotels for many years, helping properties build base trade through private negotiated rates and partnerships. Historically, these wholesalers would sell their inventory offline to their own private networks of contacts. Even though the pricing would typically breathe lower than publicly available RACK rates, it was a trustworthy foundation of occupancy for hotels to build off of.
As technology has become more sophisticated with Application Programming Interfaces (APIs) readily available, they Have seen the rapid growth of wholesale rates being sold publicly, online, through some of the powerful meta search channels mentioned above. This means that wholesalers are selling discounted rates, which directly undercut brand websites and OTAs, to anyone who has access to the internet. Beyond just meta search, some OTA websites are now even positioning themselves as ‘online marketplaces,’ where they too will sell wholesale inventory directly instead of the inventory provided by the hotels. To remain competitive and expand market share, online channels want to sell the lowest cost possible, even if it means reducing their own margins by selling a cheaper play to the customer.
Meta Search Websites such as HotelsCombined (shown above) showcase wholesale aggregator sites affection Amoma.com and HotelQuickly.com which Have prices that undercut the brand’s direct website and other OTA channels
You would assume that hoteliers would want to fix this problem immediately. Online wholesale trade undercuts channels which are much more profitable such as their direct brand website. This issue however is multi-layered and is not facile to remedy for the following key reasons:
Hotels soundless want wholesale business!
Hotels soundless maintain stout relationships with a number of wholesale partners, Great and small, and they reliance on these partnerships to generate base business. Turning off these channels would potentially breathe of value the loss of significant revenues, at least in the short term. Although wholesale channels can undercut other websites when sold online, they too soundless generate incremental trade when sold offline through the traditional method
Finding the source of gross trade online can breathe very difficult
When wholesale rates appears online, it’s generally very difficult to know which wholesaler specifically is providing that inventory. The wholesale partners themselves don’t generally sell rooms through their own websites, but sell their rates through wholesale aggregation channels such as Amoma.com. It’s channels affection Amoma who then sell the rates online through their own interface, and promote their rates through larger meta search intermediaries such as Trivago and TripAdvisor. Generally the only artery to find the trusty source is to consequence a test booking online, and then track how that reservation comes into the hotel’s central reservation system (each reservation is typically flagged with an inventory source). Many hotels are reluctant to carry out this since a booking requires expend of a credit card and sometimes even pre-payment, and then cancellation of that test booking is not always facile to do. The test booking process is both cumbersome to manage at scale, and is too financially risky for a hotel if those booking cannot breathe cancelled.
Room bookings can breathe made through Amoma.com and other wholesale aggregator websites by anyone online. However, the back conclude wholesale source for each booking from Amoma and other channels affection it can breathe very challenging for a hotel to identify.
Employee incentives are at stake
Within hotel sales departments, team members are soundless incentivized to drive wholesale volume, regardless of where that volume is being sold (offline or online). Wholesale partners generally don’t provide specifics on how they are selling their inventory, and as long as play allotments are sold, the answerable sales team members are satisfied. This is creating an unavoidable rift between the direction of some sales leaders with the revenue management and digital strategy teams.
So what’s next?
Hotel companies are dealing with this situation in a variety of ways. Some are cutting off wholesale altogether since they simply can’t control where their inventory is ending up. Others are maintaining the partnerships, but are working to streak away from static play allotments and over to dynamic pricing and availability where the hotels Have more control over the inventory they ship to the wholesalers. This is a major problem facing the industry that very much remains unsolved.
If they consume ourselves back to the 2001, cost transparency was a challenge for hoteliers. Properties simply didn’t Have direct access to a great enough segment of customers, therefore traditional partnerships affection wholesale was an absolute necessity. With the growth of the OTAs though, and the emergence of unique technologies such as meta search, that access is no longer an issue. The world is accessible for each hotel with a few quick key strokes on a computer. It is now only a matter of time until hoteliers consequence one of the following decisions:
Utilize wholesalers purely as another online distribution channel, selling rates that are parity with every other website (brand.com and OTAs)
Remove wholesale out of the channel coalesce altogether, realizing that play inventory can breathe be sold among the multitude of websites and digital platforms already available
PDF Version Available Here
Nick Cohen is based in Hong Kong and leads digital strategy for Hyatt Hotels in Asia Pacific. He oversees online marketing efforts for any Hyatt brands and properties across the region, and manages a variety of e-Commerce and digital platform projects to abet expand online revenues for the company. Prior to joining Hyatt, Nick held senior e-Commerce and digital marketing roles at Langham Hospitality Group, Mandarin Oriental Hotel Group and Sabre Hospitality Solutions. Earlier in his career, working on-property for various hotels he developed extensive scholarship in operations, along with Sales & Marketing and Revenue Management expertise. Nick too holds a graduate diploma in Hotel and Tourism trade Management from Boston University.
By Dmitriy Stepanov
April 11, 2013 04:21 PM EDT
Today you can find a lot of programs that abet system administrators to fulfill the company's local network monitoring process. There are both commercial (all of them Have different functionality and therefore different price) and free software among them. Some managers ask: why carry out they requisite to buy the software if a company can save money and expend the free one? What is the dissimilarity between the commercial and free network monitoring programs? Does using the free software really abet to gash down the company's expenses?
1. The functionality of commercial network monitoring programs is much richer; they offer a wide altenative of settings, monitoring checks, notifications, protocols, reports, diagrams, and other features. any this makes the company's network operation more stable, even if it is rather tangled and comprehend a lot of hosts. In comparison with the commercial software, the free one offers only the minimal packet of settings to fulfill the monitoring of the most principal network systems only. But every technician knows that there are no unimportant details in networks' operation of any complexity. Even the least principal server's or database's downtime can lead to the earnest downtime of the entire company's department.
2. Any commercial network monitoring program's user can breathe positive that he will score the qualified technical uphold in time by email or telephone. In addition, the commercial software developers always pay much attention on bug reports and fix them within the shortest practicable era of time. The program's repute, the company's image, and the developer's prosperity depend on the operation of the software that they offer. Using a free version, you will breathe never positive for 100% that your questions will meet answers, and bug reports will breathe considered, or at least noticed. If some troubles happen, you will meet them physiognomy to physiognomy alone.
3. Except fixing bugs, the commercial network monitoring software developers always work at improving its quality, functionality, and stability. Thus, the program is constantly in progress, and unique updates are always released. The free utilities might not breathe updated at all, and its version history might discontinue on the v1.0.
4. Often, the commercial program developers consume into account users' feedback and can modify the current software to meet the customer requirements, for instance, add unique features. If the software is free, developers hardly will consequence the individual modifications.
5. The eventual but not the least point for using the commercial network monitoring software is absence of frustrating advertising. It is obvious that the free software developers want to score profit as well. That is why some of them resolve the problem by attracting a lot of advertisers. Advertisements can emerge at the moment of program's launching or during its operation. It can vary from obtrusive banners to frustrating pop-ups. This does not allow a user to concentrate on his work but irritates him a lot.
Any system administrator or IT manager should remember that the network monitoring is not only the monitoring of any network devices' physical availability or controlling the services' and processes' operability. It is the minute checking of parameters principal for the network functionality such as the CPU load and the gross system's productivity. That is why the gross organization's operation and operation of its employees and customers depend on the network monitoring software that IT managers choose. When choosing between the free and commercial software, remember, that if you buy cheaply, you pay dearly. In this particular case, the cost of mistake might breathe too high. You must determine for yourself, what is more principal for you: to purchase modern and suited attribute software, but pay a runt bit more, or save money and score a mediocre program without any support.
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