Lodging Magazine: Marketing

Title: Thinking Green

Summary: The greening of the hospitality industry has become a worldwide phenomenon. The mix between corporate social responsibility, government/private incentives for environmentally sustainable action and the willingness of certain niches of travelers to pay a premium for eco-sustainable lodging has made considering going green worthwhile in all respects. When considering whether or not to spend extra money to be green, one must as in any business decision, weigh the costs with the potential benefits. Companies are now seeking ways to leverage green practices to improve their bottom lines.

Reflection: Going green has been a great way for hotels to save money during the economic downturn via energy efficiency and other conservative measures. Implementing green policies has been surprisingly easy for hotel companies as employees are feeling a sense of empowerment being part of such a crucial movement. Once management and the entire hospitality team is on board, green practices will be influential to the bottom line.

The real challenge for hotels and hotel companies is marketing their green efforts to increase revenues. New markets are arising that will actually pay a premium to stay in green hotels, the “scuppy” market. This niche identifies itself as “socially conscious upwardly mobile persons.” Such travelers are likely to seek out environmentally sustainable properties when traveling as they “demand higher standards for themselves and the companies they do business with.” If this is a market that a property can penetrate effectively, then going green could prove to be immensely profitable as the green movement is sure to grow as the environmental crisis furthers. The dilemma is how to reach them in a cost-effective way.

Moving forward, it will be interesting to see how brands such as element and aloft market themselves as green. I think there is a substantial amount of risk in doing this being that all properties raising the respective flags will be expected to adhere to strict green standards and if one environmentally conscious customer sees these standards not being followed, their reputation as a green brand could be severely tarnished as most socially forward people are savvy when it comes to the use of social media. It will also be interesting to see how quickly the “green movement” customer base grows. Will they become significant within the next one or two years? Or will it be more like five or six?

Source: Lodging Magazine

Hyperlink:http://www.lodgingmagazine.com/ME2/dirmod.asp?sid=&nm=&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=2F0200A4B7C846C3B247A6B056955B75

SmartBrief 2

Date: February 11, 2010

Title: Relaunch Aims to Put Holiday Inn Back on Travelers' Maps

Summary: With the Holiday Inn brand struggling with consistency across properties and brand image in general, Intercontinental Hotels Group made a decision to relaunch the brand and remove flags from all properties not complying with new standards. Now, Holiday Inn and Holiday Inn Express are among the most successful brands in the industry.

Reflection: A brand-wide mandatory revamp is a move that is going to get a lot of attention. This decision by IHG has been covered widely by many publications and admired by the entire industry. In a market where there is little capital investment taking place, IHG was able to get many of their hotels to invest millions of dollars in their properties in order to keep their flags.

The most important change that I think took place in the revamp has to do with the consistency of the brand. As an international brand with such a large volume of rooms that mostly draw overnight travelers, consistency is paramount. Consistency creates loyalty and when your flag can be found in almost every major city, loyalty is very profitable.

Now, about half of the hotels flying the Holiday Inn flag have been relaunched. With the brand's growing success and popularity, the decision for the remaining hotels should be a no-brainer.

It should also be noted that IHG assumed substantial risk with the revamp. Franchisees not looking to invest in refining their properties lose their flags, which in turn, results in a decrease of management contract revenue.

Source: The Columbus Dispatch

Hyperlink: http://www.dispatch.com/live/content/business/stories/2010/02/11/holiday_inn.ART_ART_02-11-10_A8_T4GICJB.html?sid=101

SmartBrief 1

Date: Feb. 18, 2010

Title: Macau Helps Sands Cut Losses

Summary: With Las Vegas' lodging and gaming industries struggling worse than ever, Las Vegas Sands Corp. has seen big losses. With new developments in Macau, however, they have been able to offset some of their shortcomings in the American gaming mecca.

Reflection: Macau's success poses some serious problems for Las Vegas' once dominant control over the gaming industry. The article references that Macau's revenues accounted for 3/4 of total revenue for Las Vegas Sands Corp. The Venetian Macau posted operating profit of US$119.7 million in the fourth quarter of 2009, from US$61.3 million a year earlier, the company said.

Numbers like these reinforce the general sentiment that there will be no new building in Las Vegas over the next several years and that all new major gaming entertainment development will shift to Macau. Declining Las Vegas property values may attract more and more investors looking to buy on the cheap. Billionare investor Carl Icahn, for instance, has bought up two casinos (The Fountainbleau in LV and the Tropicana in Atlantic City) within the past two years for pennies on the dollar and is in the process of buying Trump Entertainment Resorts in Atlantic City.

Macau's growing popularity also poses a threat to the international travel that Las Vegas has seen over the years. The super-wealthy, elitist traveler looking to be "wowed" is more likely to seek an experience that is up and coming, not declining in popularity.

Source: The Straits Times

Hyperlink: http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_491862.html