“You Can’t Ride Two Horses with One Ass.” “The Hotel Company That Shall Not Be Named”
By Jennifer Esposito
Over the past several years, you would have to have been living on a deserted island not to know about the Harry Potter book series. And, of course, one of the central figures of this book/movie series was the evil wizard who was characterized throughout as “The One Who Shall (Must) Not Be Named”. If you talk to tour operators and leisure wholesalers that work in the hotel industry, there is one hotel company that stands out above (or I should say below) all the others in a very negative way. Rather than to state the obvious name, we shall simply call it “The Hotel Company That Shall Not Be Named.”
“The Day the Earth Stood Still” – Earlier this year, “The Hotel Company That Shall Not Be Named” totally eliminated what was left of their Leisure sales team dumbfounding the leisure client base, its franchisees and its hotels. TOTAL dependence on making sure bookings go through “the system” via direct connections (so they can generate additional fees) has eliminated many Leisure clients who are not connected, alienating these same leisure clients. Where this company’s hotels used to be the 1st choice, now it is no choice.
Geez! Why would they do this? There now is no one to push leisure business to “need” hotels; there is no one to educate leisure clients or leisure hotels on each other; there is no one to go to for problem resolution; there is zero customer service; smaller/medium sized hotels with no sales staff are shit out of luck; with no exposure at IPW (Pow Wow) this year, should franchisees really have to pay S&M fees for this business (if they can get it) if the parent company has shut it down?; the competition has stepped in ably and captured hundreds of millions if not a few billion $$$ away from “The Hotel Company That Shall Not Be Named”. Incredibly, no one at the company seems to care as no one is telling the hotels/franchisees about the business they are not getting.
“You Can’t Ride Two Horses with One Ass” – “The Hotel Company That Shall Not Be Named” has put its eggs in the OTA basket which was even mentioned recently by stock analysts as an underlying stock weakness (yes, your stock may be high but everyones stock is high thanks to the much discussed tax cuts coming). The lower online price for frequency guests “strategy” has been a dismal failure as most of us predicted it would be. You can’t preach direct booking and then cave in to the OTA’s of the world as “The Hotel Company That Shall Not Be Named” has done consistently over the past several years (read “The Buggy Whip of the 21st Century” (insert).
And, with the new OTA RFP system for MICE accounts that was recently announced to go along with their Corporate tool and other tools and programs, is the next step to eliminate the Global Sales team?; to eliminate the Brand teams?; to eliminate the Brands? Will there really be any reason for “branding hotels”? Will Expedia and Priceline (and Airbnb) become the Amazons of the lodging world? Well, its heading in that direction at a rapid pace! It seems that “The Hotel Company That Shall Not Be Named” WANTS this to happen?
“If You Don’t Know Where You Are Going, Any Road Will Get You There!” – Clearly, “The Hotel Company That Shall Not Be Named” thinks it knows where it’s going but unfortunately its hotels and franchisees are going in a different direction. What kind of mentality would lead you to prefer a system with 20% incrementally over one with 100% incrementally? In the past two years, this company has made unprecedented layoffs of key personnel a matter of policy. As business guru Edward Deming said, “a bad system will beat a good person every time.”
And, there have been a lot of good, smart, knowledgeable people terminated over the past two years as the company saves its way to prosperity. Well, that helped temporarily with profits but ladies and gentlemen, “It’s Saturday Night but Sundays Coming!” Makes you think that the primary strategy is to sell the company so the execs can cash out! Mindless! Yes, as I said before, “The Hotel Company That Shall Not Be Named” used to make its franchisees rich, now they make their executives rich,….really rich! (see “The Screw Job that is the Best Rate Guarantee”.) (insert)
“The Horse with No Name” – Sticking with our theme of horses (maybe mule would be more appropriate), “The Hotel Company That Shall Not Be Named” has recently announced “A Hotel Brand That Has No Name”. A midscale product (they don’t have enough of those) 10-20% below their current mid-price offerings. A perfect product for…dada!…LEISURE travelers, the very segment they are closing out. HAHAHAHAHAHA! You actually have to wonder what is in the water they are drinking at “The Hotel Company That Shall Not Be Named”. Crazy.
This to go along with the brand they announced several years ago at a now cost of millions of dollars and guess what? Still only a handful open. Do you think maybe there is a demand problem for the company, given that other hotel companies are kicking butt in Leisure, Forward Thinking Strategy and the Shared Economy?
Status quo and “organic growth” isn’t going to cut it anymore and it will lead you to obsolescence. Giving $$$millions back to shareholders instead of investing in the future (you’re still planning on a future aren’t you?) isn’t going to cut it anymore either. Growth by harvesting fees from your hotels and franchisees isn’t going to cut it anymore. The well is running dry!
“It’s Not “The Open”, It’s the “British Open!” – It’s not “The Championship”, it’s the “Wimbledon Championship”. It’s not “The Empire”, it’s the “British Empire”. Oh, scratch that. It WAS the British Empire. Last time I checked, India, Australia, Ireland, Canada, New Zealand, Hong Kong, etc. no longer fly the U.K. flag. But don’t despair, they still occupy and hold sway over the Falkland Islands which they were prepared to spill blood and treasure for a few years ago (for some unknown reason).
I told you that to tell you this. When the Brits bought “The Hotel Company That Shall Not Be Named”, the company held the leadership position in the lodging industry by far. But, with it being split up and with some pretty suspect leadership, it quickly lost that position in the 1990’s and has been getting farther and farther behind every year. You see, Brits have this thing about planting a seed and then digging it up every week to see if it’s growing. Paralysis by analysis!
It’s not that they can’t make a decision, they just need to study it for a few years before doing so. Currently, “The Hotel Company That Shall Not Be Named”, which has held the 3rd position for the last decade is being passed by multiple hotel companies with the aforementioned Forward Thinking Strategies, strong Leisure demand bases and investments in the Shared economy. Sad, sad, sad.
“It Ain’t Over Till It’s Over” – In conclusion, Yogi Berra once said “if you don’t go to somebody’s funeral, they won’t come to yours”. It seems to be unmistakable that the Leisure strategy of “The Hotel Company that Shall Not Be Named” was something concocted by someone with a mission not to help hotels but to help the corporate bottom line and… the company funeral is on the way. Truth be told, “The Hotel Company That Shall Not Be Named” has not recovered from the untimely passing of one of its great leaders a few years ago and it is looking like they never will.
To at least put a positive spin on this, “The Hotel Company That Shall Not Be Named” still has time to fix itself by: 1) re-instituting the Leisure segment within its outside sales team to open up these revenue channels that are desperately needed by its hotels; 2) give a stiff-arm to the OTA’s and use them only as a weapon of last resort, not as a first responder; and, 3) embrace that rate parity is an illusion and let the free market prevail (it’s about revenue, not ADR).
Given that this is not likely to happen I have no doubt that at the end of the day, when “The Hotel Company That Shall Not Be Named” finally rolls up its carpet, the OTA’s will have their hand out with congratulations saying “Mission Accomplished…Thank You!”. Meanwhile, the rest of the hospitality industry sadly or maybe gladly has to watch the slow spiral downward that may be irreversible and terminal for what was once a great company. Too bad, so sad. Rest in Peace “The Hotel Company That Shall Not Be Named”, Rest in Peace!
This article is one of three in a series on issues confronting the hotel industry. Links to the previous two articles are below
- March 7, 2017
Hotel Brands – The Buggy Whip of the 21st Century
Part 1 of 3, by Wallace E. Johnson
- May 18, 2017
“The Screw Job” that is Best Rate Guarantee
Thoughts, Ideas, Opinions on the above…and They are all Mine!
by Wallace E. Johnson
In Which Direction are UK Outbound Arrivals to North American Heading: The Answer is …
Down, Down, Down—Here are some highlights from the latest ONS release:
- June 2017: UK departures to North America were 340,000 (vs. 365,000 in June 2016) = Down 7 percent
- Latest three months: 1,040,000 (vs. 804,000 in 2016) = Down 4 percent
- Year to date for 2017: 1,740,000 (vs. 1,093,000 YTD in 2016) = Down 4 percent
- Latest 12 months (July 1, 2016 thru June 30, 2017) 4,060,000 (vs. 4,100,000) = Down 1 percent
- While traffic to North America was down across the board, overall, UK residents made 6.1 million visits abroad in June 2017=Up 1.4 percent vs. June 2016
The following table, which covers a five-year window of travel activity to North America by Britons, helps to put the April numbers into perspective.
Low Cost Carriers Lead the Way in New Air Service for Summer 2018
Perhaps the surest sign that international tour and travel industry leaders are expecting a bountiful year in 2018 is evident in the number of announcements by both legacy and budget carriers of new flights planned for S18. (“S18” is the airline code for Summer 2018, which extends from the end of March to the end of October 2018, and is the period for which most international flights are booked.)
While airline trade publications scrupulously follow new route launches, there have been no new long-haul flights to the USA announced for the past month. On the other hand, the roster for new flight service in 2018 continues to grow. Here is a list of some of the flights ready to take off next year.
- WOW airlines, which first began flying to the U.S. only two years ago, now fly out of several U.S. cities—St. Louis, Cleveland, Cincinnati and Detroit—with fares starting at less than $100. This deal will take effect in the Spring of 2018. WOW is headquartered at Reykjavik and based at Keflavik International Airport. The carrier is able make the routes profitable by providing connections to many points in Europe.
WOW airlines, which first began flying to the U.S. only two years ago, now fly out of several U.S. cities—St. Louis, Cleveland, Cincinnati and Detroit—with fares starting at less than $100. This deal will take effect in the Spring of 2018. WOW is headquartered at Reykjavik and based at Keflavik International Airport.
On all four routes, WOW will fly four flights a week on single-aisle Airbus A321 aircraft to its hub at the Keflavik airport near Reykjavik. Connecting itineraries will be available to more than two dozen destinations in Europe.
“Our unique opportunity is to use Iceland as a hub. We can then distribute the traffic to our main destinations in Europe, be it London, Paris, Amsterdam, Frankfurt, Berlin, Copenhagen, etc.,” said Skúli Mogensen, CEO of WOW Air. “That’s really the key. Instead of having a single point-to-point flight, we actually give you a very affordable flight to multiple destinations in Europe via Iceland.”
From three of the new cities – Cleveland, Cincinnati and St. Louis – WOW will be one of the few airlines with a trans-Atlantic option. From St. Louis, WOW will be the only carrier flying to Europe. At Cincinnati, only Delta flies to Europe with flights to Paris Charles de Gaulle. And in Cleveland, WOW’s only trans-Atlantic competitor will be national rival Icelandair, just announced its own Cleveland-Reykjavik service.
Most recently, the airline begin flying from both Chicago O’Hare and Pittsburgh earlier this year.
With the new Midwest additions, WOW’s full line-up of U.S. gateways includes BWI, Boston, Chicago O’Hare, Cincinnati, Cleveland, Detroit, Los Angeles, Miami, Newark, Pittsburgh, St. Louis and San Francisco. In Canada, WOW flies from Montreal and Toronto.
- American Airlines has expanded transatlantic service to Shannon Airport in Ireland. American has announced that it is to expand its Shannon to Philadelphia service in 2018, as the airline continues to build on the “growing demand for flights” between Shannon and the major US hub. The world’s largest airline will increase capacity on the route by 18 percent. Over 38,000 passengers already use the daily service annually.
The airline will commence its 2018 service on April 5, a month earlier than this year, and will run until early October. The route is operated by a Boeing 757 aircraft and Declan Power, head of aviation development at Shannon, said the significance of the increased transatlantic capacity “illustrate Shannon’s growing appeal in the transatlantic market and bring US capacity at Shannon next year to well over 550,000 seats, with eight services to seven airports on the US east coast.
Philadelphia is one of the airline’s leading hub airports, offering connections to well over 100 destinations across 25 countries.
- New non-stop Air Canada flights from Montreal to Tokyo will be available from June 2018. The route will be operated throughout the year and the aircraft used will be a Boeing 787 Dreamliner.The introduction of this new flight offers travelers from Canada in the Atlantic and northeastern United States convenient access to Japan and beyond, complemented by the company’s existing flights. Flights will be operated with daily services during peak summer and three times a week in winter throughout the year.
- At the same time, American Airlines will is ending its seasonal Manchester-New York route at the end of this summer. The carrier’s JFK flight has had to compete with more year-round competition from Thomas Cook, Virgin Atlantic and United Airlines in the past few years and American is thought to have decided that its aircraft could be better used elsewhere. American will continue to fly to Chicago and Philadelphia from Manchester.
A Manchester airport spokesperson said that New York remained Manchester’s second biggest US destination after Orlando. New York accounts for almost 419,000 passengers a year and the market has grown by 6.2 percent in the last 12 months.
No Wall Here: Traffic from Mexico to Canada Breaks all Records.
By the time 2017 is history, Canada’s inbound tourism industry should experience its best year ever, according to the industry’s latest monthly profile for June, which shows nearly every one of Destination Canada’s markets increasing and setting the stage for a record year.
In particular, the totals for Mexican arrivals are “off the charts.” Here is how 2017 has been fairing on a monthly basis versus 2016, which itself was a record year.
June 2017 Arrivals Destination Canada
At a Glance: Mississippi
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AmericanTours International Turns 40
Noel Irwin-Hentschel and Michael Fitzpatrick came to a meeting of the minds 40 years ago and along with $5,000 and skill sets that complimented one another—Noel, a natural marketer, and Michael, the inventive developer of product—created AmericanTours International, now the largest receptive tour operator in America.
As an L.A.-based airline group sales manager, Noel came to know the British-born Michael who came to the USA with a background in travel that included working with Swissair in London followed by five years in Bahrain opening a travel agency serving the Emir and ruling family. Michael then relocated to Beverly Hills where he worked in a travel agency. Both, then, had contacts in the celebrity-rich Los Angeles area where Noel ran for Congress as a Republican in Fairfax, a heavily Democratic district where she grew up and lost to a candidate who refused to debate her.
They saw the boom in demand coming. Fitzpatrick had seen how the late Sir Freddy Laker and his Laker Airlines, created in 1966, made travel an affordable purchase for a wide swath of the British population—not just the well-to-do. In 1977, Laker began offering low-fare flights to New York City from Gatwick. Soon, ATI was bringing groups from the UK, Germany and Holland.
Their first big group, Noel recalled, as an incentive group comprising 60 road-building contractors from Holland; they had a budget of $10,000 ($70,000 in 2017 dollars) per person to work with. The next group was different, made up of 200 workers who worked at a plant that manufactured Monroe shock absorbers. Their budget? $250 per person for a week. She said, “We learned that you have to provide the same strong customer service to every group regardless of budget.”
They were the first to connect tours with Hollywood. Michael pointed out that overseas travelers were greatly influenced by Hollywood movies and television programs. It didn’t take long to start naming tours built around programs such as “Dallas” and “Dynasty,” as well as movies such as “North by Northwest.” ATI was first to feature iconic landscapes made famous by John Wayne and Clint Eastwood in their “Western Discovery” tour and to create one-of-a kind experiences as life on a real Navajo Reservation with actors posing as a U.S. Cavalry unit.
They helped define the U.S. industry’s response to 9-11. Their activities here were expansive. They ranged from having Minnesota’s governor, the voluble Jesse Ventura—a one-time pro wrestler—make appearances on television news and talk shows in which Noel prompted him to proclaim: “We’re not going to let the bastards grind us down” to devising a special £99 package, along with British Airways, to get skittish Britons back to the USA. (Virgin Atlantic thought the idea so worthy that they copied it—with a £98 fare).
While not advertised, their social conscience is part of what they are. A couple of unheralded examples: Noel arranged for all the family members of British military personnel killed in the Gulf War, including many by friendly fire, to come to the USA and see America on a cross-country “friendship and healing tour” that included a White House visit with President and Barbara Bush and the entire cabinet. ATI also sponsored cross-country tours for disadvantaged youth that included meetings with President.
The saintly connection. Noel developed a special relationship with the late Mother Teresa—now known as Saint Teresa of Calcutta—whom she met at, of all places, a Young Presidents Organization (YPO) conference in 1988. Noel, who has been supporter of Missionaries of Charity ever since, said, “She inspired us to want to utilize ATI’s business successes to help others.”
They were first U.S receptive in China. Even before the Chinese government gave Approved Destination Status to the USA, ATI had opened an office in Beijing that became an unofficial Visit USA center and was instrumental in securing ADS in China, which helped the tourism industry in this important market.
Noel and Michael continue to spearhead ATI’s aggressive growth strategies; ATI has recently opened new offices in Shanghai and Orlando. One of Noel’s sons, Nick Hentschel, who’s been around the business his entire life, is Executive V.P. with responsibility for sales, product and technology will be implementing the new growth.
They innovate the industry Until ATI came along, group tours to the USA were pre-formed. ATI created the concept of tours to individuals and since inception conducts annual professional tour-guide training for their employees. They implemented the first “host to host” technology connections for FIT hotel inventory including the national parks. ATI brought the first leisure visitors to Alcatraz after it had been closed for years. And, perhaps most remarkably, has retained marquee clients including DER/ADAC, Thomas Cook, British Airways, Qantas Holidays for 40 years and TUI for 30.
And finally, it must be noted that many of those operating as senior management of receptive companies today—Jeff Karnes, Executive Vice President, New World Travel, Margaret Dieterman and Sam Zonni, partners in American Ring, and Jane Ross Mango, formerly of AlliedTpro, just to name a few, came into the industry through Americantours International.
New Luxury Product Brand for New York City: City Chic Travel is excited to announce the launch of their luxury tours. Curated by locals, their itineraries are designed to give visitors access to upscale itineraries such as their New York Spring Fashion Week tour will bring together a team of personal stylists, make-up artists, celebrity hairstylists, photographers and fashionistas to guide their clients through an exclusive week. Over the course of the next few months, City Chic Travel will offer additional themed tours of New York City which center around culinary, shopping and holiday themes. In addition, the company plans to roll out their Signature Tours designed to enable visitors to experience the city like a local, while visiting city highlights and trace the footsteps of their favorite pop culture icons. For those looking for a more custom experience, City Chic Travel also offers personalized tours. For more information, visit: www.citychictravel.com.
The Museum of Ice Cream has a new location, its third, in San Francisco. Following an unprecedented demand in Los Angeles and New York City, Museum of Ice Cream opens its doors this September at the historic 1 Grant Avenue in the heart of the city. Museum of Ice Cream features ten thematically tailored, immersive installations produced entirely by its in-house design team. Interactive elements include a magical candy garden, psychedelic rainbow unicorns, a push pop installation, a cherry on top sky, the renowned Sprinkle Pool and new tastings, including an original Museum of Ice Cream flavor. The pricey attraction will have its curators presenting the best of California ice cream, and visitors will indulge in one “scoop of the week,” from a rotating cast of creameries. For more information, visit www.museumoficecream.con
The National Association for Sports Commissions (NASC) announced today a new educational initiative called the Sport Tourism Learning Institute (STLI). “The Sport Tourism Learning Institute more completely represents our thinking for the new paradigm that positions the leading trade association, NASC, as the premiere education provider for the sport tourism industry in the United States,” said Al Kidd, president and CEO of the NASC. “We will offer wider and deeper content for key players, including sports destinations, sports event owners, and industry partners. Our goal is to provide a variety of educational opportunities for all our members and industry professionals.” Courses will include: event management, a general and advanced tourism certificate, revenue and funding sources, marketing and communications, social and digital engagement, sales training for destination management organizations, event measurement tools, global event management and programs for sports events owners. For more information, visit: www.sportscommissions.org.
You Can Finally Ride the L.A.’s Funicular Once Again
Made famous once again, The Angels Flight Railway, for the first time in more than nine years, resumes ferrying passengers up and down Bunker Hill in downtown Los Angeles Angel’s Flight which, at 298 feet, has been called the world’s shortest railroad. The railway reopened in time for this year’s Labor Day Holiday. The 116-year-old railway shut down after a derailment four years ago for a $5-million safety upgrade. Its small role in the 2016 Academy Award winning film, La La Land, renewed interest in the facility, which is a favorite of visitors.
HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Kyle Edmiston of the Louisiana Office of Tourism has been named national State Tourism Director of the Year. His selection was announced as the honoree before more than 850 of his peers at the U.S. Travel Association’s annual ESTO conference in Minneapolis. US Travel’s National Council of State Tourism Directors votes on the award annually ahead of ESTO. Candidates for State Tourism Director of the Year are nominated by a panel of state and territory tourism directors. Edmiston has been with the Louisiana Office of Tourism for more than five years. Previously, he was president and CEO of the Ruston/Lincoln CVB.
After serving for 15 years on the job, Bob Doak is retiring from his post as president and CEO of the Chattanooga Area CVB. A veteran of more than three decades in the travel and tourism industry, Doak was previously general manager of the Chattanooga Choo Choo Hotel, as well general manager of the Chattanooga Golf and Country Club.
Harumi Leonard has been named head of destination management, Inbound USA and Canada, Japan market at G2 Travel. Leonard comes to the new position from Japan Pacific Travel Service, a company that provides service to high-end customers of Japan Airlines.
Kelly Brady is now North America TMC 3rd party sales manager of Travelport Horizon. She joins the company from SLS Las Vegas, where she was senior corporate and leisure sales manager. She has also served tenures at JacTravel and Tourico Holidays.
Ross Levi has been named executive director for tourism development for New York State’s Empire State Development. Levi, who joined Empire State Development in 2012 as vice president, marketing initiatives, succeeds Gavin Landry, who took over recently as director of the Americas for Visit Britain.
Nancy Walsh is stepping down as president of the U.S. division of Reed Exhibitions which produces the World Travel Market, a staple in the international tour and travel industry. A veteran of more than 30 years with the company, Walsh started with Reed in an entry-level sales position. She later served for 21 years as senior vice president and 7 years as executive vice president, North America.
Paul Maine has left the outbound tour operator business, stepping down from his position as chief commercial officer for STA Travel to join Hotels & More in the newly-created role of group CEO. He will join on September 6 to lead the newly-named Tour Partner Group, the holding company for Hotels & More, Irish Welcome Tours and Authentic Vacations.