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5 things to know: 27 November 2012
November 27 2012
Highlights

• Website ‘blueprints’ outline best practices online
• 2013 incentive travel outlook not so rosy
• Hotel revenues fall sharply in Scotland
• HVS report outlines labor costs in India
• NYC’s Plaza Hotel gets a new owner

Hoteliers and room distributors are overhauling their online presence to steal market share by better understanding today’s travelers and presenting them with the best choices online. HotelNewsNow.com’s special report, “Hotel website blueprints,” examines key strategies and best practices to make the most out of their digital footprint.

Today’s installment, the second in this three-part report, puts the spotlight on upselling as a means to drive incremental revenue. While the term can sometimes have a negative connotation, digital sales and marketing experts say the outcome is a win-win for both hoteliers and guests when presented online correctly.

“Instead of thinking about it as upselling, think about it as presenting your guests with opportunities to enhance their experience,” said Caroline Cooper, president of Zeal Coaching and HotelNewsNow.com columnist. 


When asked what impact the economy would have in the coming year on their ability to plan and implement incentive travel programs, only 38% of the 246 respondents to the latest Pulse Survey by the Incentive Research Foundation said it would have a positive impact, versus 60% in March. Just more than one-third of respondents (36%) said the economy would have a negative impact, up from 22% in the spring, reports MeetingsNet.com.

In fact, one-fifth of respondents are expecting cuts in their incentive travel budgets, according to the survey, while 48% expect them to remain the same and 31% expect a slight increase.

How exactly is incentive travel affected when budgets are tightened? Sixteen percent of the incentive buyers and suppliers surveyed said programs will be moved from international to domestic destinations, and 15% said destinations will be closer to home. (That 16% response is far less than in 2010, however, when 42% of respondents were planning to move their trips from overseas to domestic destinations.)


Hotel revenue fell sharply in Scotland in September, prompting fears that tourism businesses will struggle to make it through the lean winter months, according to a BBC report.

According to a regular survey by PKF, occupancy rates were slightly down in September 2011.

But the average revenue per available room fell by 7.8%, compared with a drop of 0.8% in England and a 3.1% rise in Wales. Glasgow suffered from loss of business from corporate events, conferences and concerts, with a 15% drop in revenue. Revenue for hotels in both Edinburgh and Inverness were down more than 4% on the previous year. A sharp drop of more than 11% in Aberdeen was explained by comparison with the bumper September in 2011, when the Offshore Europe conference and exhibition paid its biannual visit to the city.

“This continued decline is of concern for the Scottish hospitality sector, which has already had a difficult year. There will be a long-term effect produced by this continued downturn in the sector,” said Alastair Rae, a hospitality expert at PKF. “The appointment of administrators to the group, which operates the Malmaison and Hotel du Vin brands, as well as the well-publicized problems within the Travelodge group, is surely a further indication of how hard the current economic environment is affecting operators carrying significant debt burdens.”


With India’s hotel industry booming, the need to hire and retain a skilled workforce is more pressing than ever before. But the cost could exceed 296,915 Indian rupees, or $5,363 per annum, according to HVS Executive Search India’s “2012 India Hotel Payroll Cost Study.” That number, which highlights total costs for Indian-owned hotel brands, is slightly higher than the INR239,214 ($4,321) per annum for international hotel brands—a difference that likely is attributed to a higher concentration of luxury hotels in the domestic hotel segment as compared to the international brands that have a larger presence in the upscale and mid-market.

The survey results also indicate that the annual payroll cost as a percentage of annual revenue in India is at 20.3% while the average payroll cost per employee (including labor/job contract) is INR277,858 ($5,019). Additionally, it is observed that the average room-to-manpower ratio for the Indian hotel industry is 1:1.96 (including labor/job contracts) and 1:1.62 (excluding labor/job contracts). 


Sahara India Pariwar, an India-based conglomerate, today completed the purchase of a 75% interest in the iconic Plaza Hotel New York from real estate company El Ad US Holdings’ position in the hotel with a total valuation of $575 million. 

The acquisition includes 230 hotel rooms and retail space. Co-owner Kingdom Holding Company, controlled by Saudi billionaire Prince Alwaleed bin Talal, will retain its 25% stake in the property. Solid Rock Advisors, a real estate consulting firm specializing in luxury resort and hotel transactions, advised the seller in the transaction. Fairmont Hotels & Resorts will continue to operate the hotel under a long-term agreement.


Compiled by Patrick Mayock.

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