Indian Aviation Industry set to take off ! Hoteliers watch out !

Posted on March 21, 2011 by Dhana

In a recent statement, the Indian Government has announced that it is going to decide on a proposal to allow foreign airline’s investment in the Indian Civil Aviation sector.

Being the 2nd most populous nation in the world and the economic growth hovering around 8% in the past several years, what does this mean to Hoteliers ?

Lets first start by looking at some numbers.

* Passenger traffic is expected to exceed 180 million by 2015

* 35 new airports are planned to be developed through PPP (Public Private Partnerships)

* Domestic passenger travel has grown from 14 million in 2001 to 46 million in 2010

* International passenger travel has grown from 14 million in 2001 to 34 million in 2010

* Indian Aviation Industry has grown at 18% per annum in the last six years.

So, the numbers are all looking good.

What are the key challenges faced by the Indian Civil Aviation Industry?

While there are several challenges that need to be tackled, some of the high priority ones are listed below:

*Raising cost of fuel (which obviously is a problem elsewhere too)

* Raising airport charges

* Connectivity to Tier II and Tier III cities

* Emission

So, what does all these mean to Hoteliers ?

Increase in travel obviously means Increase in accommodation needs.

With the economy growing at a consistent pace, new affluent Indians will travel more, both for business and leisure. And thus a greater need for accommodation will arise.

Increase in accommodation needs in Tier II cities

While the major cities such as Chennai, Mumbai, Delhi, Bengaluru, Kolkata will see an increase in demand for accommodation, particularly established branded ones, the Tier II cities is where greater demand is going to be.

A chain of hotels, ideally suited for Tier II cities can be expected to be in good demand, since International chains will prefer to be in Tier I cities.

Increase in demand for Business than Leisure travel

As the industry grows, business travel maybe expected to grow faster than leisure travel. Air travel for leisure is still too early in India unless business travel can help grow it by encourage more leisure travel.

India has a long history, and is both culturally and spiritually very rich, so there may be increased demand for specialized packaged services in this space, specifically targeting International travelers.

So, International Hoteliers, if you are eying the lucrative Indian market, watch out for further developments happening in the Indian Civil Aviation sector in the next few weeks !

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A loyal dog stays by his ailing friend after Tsunami

Posted on March 19, 2011 by Dhana

Watch this video :

Words cannot describe the loyalty of the dog.

And, what is the significance of this video in a business blog ?

Because, at Loyaltics, we live by the principles of Loyalty. And we want to feature this video and tell the world the importance of loyalty, not just in business but in every human relationship. The dog in this video stayed with his ailing friend, not for any rewards or points, but for ‘passionate attachment’ to his friend.

And, btw, both the dogs were rescued, as per the latest report.

Our heartfelt condolences to all those who have lost their loved ones in the Japan Tsunami. Wishing good health for those who are still ailing.

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Lets redefine “Loyalty” !

Posted on March 16, 2011 by Dhana

Loyalty has long been associated to Points Systems or Rewards Programs. ie., incentivizing someone to make repeat purchase of your products & services. Incentives could take many forms – discounts, coupons and so on.

Loyalty do exist in all kinds of relationships, not just in business relationships. For instance, a couple remain loyal to each other, not because of any incentives (albeit some do) but for the love and positive experience in staying together. We call this “Engagement“. So, why does a business relationship should differ from this universal principle ?

We already looked at what Customer Loyalty meant to a business in an earlier blog post. You may find it useful to refer to that blog post as well.

At Loyaltics, we have set out to redefine Loyalty. Loyalty is no more just rewards program, but about positive and passionate engagement between a business and its various relationships, that work even without rewards. And, thus came our motto “Rethink Loyalty. Think Engagement.”

Why is engagement based business relationship very important ?

Because, it generates good profits and creates sustainable business. Good profits are generated if you don’t use hard-sell tactics, but focus on exceeding customer’s expectations and offering a positive experience. And, loyal customers bring additional referrals via word of mouth marketing.

Behavioral Economists tells us that decision-making is 70% emotional and 30% rational. Incentive based loyalty programs that tend to be rational do not work well. It is the emotional side of the decision making that creates passionate and engaged customers. Your customers will jump ships if your competitor offers much better rewards program.

What is the difference between Customer Satisfaction and Customer Loyalty ?

If you are able to meet your customer’s expectations, then you get a satisfied customer; if you are able to exceed your customer’s expectations, then you get a loyal customer who in turn will get you lot more customers.

Lot of companies relate ‘loyalty’ to ‘customer loyalty‘ and to some extend to ‘employee loyalty‘ and completely forget about 2 other very important categories – your suppliers and partners. A holistic assessment of all relationships is important for success of a business.

Here are 2 examples on Loyalty and passionate engagement.

1. Apple: We all know Apple delivers great gadgets. They have a huge fan following. They don’t incentivize their customers to make repeat purchases. They’ve grown exponentially simply by positive word of mouth by their customers, who wanted to share their positive experience with others, who are their loyal fans and who in turn bring in hordes of their friends to Apple stores.

2. Harley Davidson: A motor cycle company that created a culture on wheels. It has huge fan following, some even tattoo the company name on their skin.

While some may claim business as a series of transactions, many of you would agree that it is all about trust in a relationship. A business owner need to trust his employees, his business partners, his suppliers and his customers, and the vice versa. It is this trust which drives loyalty leading to a long term business relationship that produces mutually beneficial business results.

So, sign-up NOW for our innovative Loyalty Measurement and Engagement platform, and be notified soon. You can drive significant business results simply by measuring and improving the loyalty of your Employees, Customers, Suppliers and Partners leading to an ever lasting relationships which will only get better with time just like an old champagne.

Rethink Loyalty. Think Engagement.

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‘Listen’ to ‘Retain’ your customers !

Posted on March 15, 2011 by Dhana

Why does travelers vent their frustration at Hotels in the online review sites ? Because, there was no one in the Hotel who took the effort to “ask and listen” to what they have to say (feedback). Hotels would have lost their business forever. And, equally sad, negative news spreads virally affecting new business.

There is an increasing trend that Hoteliers are overtly depending upon ‘Indirect feedback‘ that are posted on the Online review sites, as opposed to ‘asking and listening directly‘ from their guests.

We wrote a couple of blog posts – Hoteliers – Don’t make this mistake and Why Hotel guest comment cards are not helping the cause, in the past about what costly mistakes Hoteliers are making, avoiding which can significantly increase guest satisfaction and loyalty.

Listening is so crucial, in any industry. A Business Owner need to listen to his management team. A Manager need to listen to his subordinates. A subordinate need to listen to his Manager and his peers. Concepts such as 360 degree feedback are so prevalent in other industries. What is more important is ‘listening directly‘ rather than via an Indirect feedback mechanism, that help reinforce the belief that ‘everyone’s opinion is valued‘.

It is not always that guests expect world-class customer service, but it is how you react to your guests when there is a drop in customer service quality. You ask for their feedback with a sincere effort to improve on your service, you listen actively by valuing your customer’s opinion the most, and act on their feedback, and close the feedback loop with the guest.

While most of the feedback systems are oriented towards listening to ‘problems‘ in customer service that the guests want to share, it is equally important to know what is that you are doing good in your customer’s eyes. A Hotel may claim to have a particular ‘competitive advantage’ but what does your guests think ‘your competitive advantage‘ is, is more important. This will help to build on your core competency, differentiate from your competitors, attract particular demographics of guests and retain them forever.

We, at Loyaltics, are focused on solving this problem (and plenty more) for the businesses. Sign-up here to be notified of our Innovative Loyalty driven Word of Mouth Marketing platform.

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Hoteliers – Are you working Groupon to your advantage ?

Posted on March 11, 2011 by Dhana

Groupon - The company that has been making waves recently starting from rejecting a $6 Billion offer from Google, raising $950 Million in private capital, and planning to go public towards the end of 2011 with an unofficial valued at $15 Billion. All is happening just in 2 years.

So, it is certainly worth talking a look at Groupon’s offering and how does it relate to the Hospitality Industry.

The Groupon concept:

In short, it is about ‘group deal’ buying.

To elaborate, Groupon has a huge subscriber list, in hundreds of thousands of people. All are looking for good, if not great deals. Some deals, can save consumers up to 90% of the retail price. Companies can post their group deal offers at the Groupon site, include any rules (if any), preset a time limit and the minimum number of deals, to take effect. Once the deal is on, purchasers will receive a confirmation and print the Groupon for redemption.

What is the viral effect here ? If you like a deal, you’ll share it with your friends, families and colleagues.

Business benefit?

While it is obvious the consumers get a great deal, how does it help the businesses? Groupon is free for businesses, and it splits the revenue generated by the deal with the businesses.

But it is quite competitive to be featured, as Groupon is quite particular in working with top-notch companies. You’ll have to build credibility online via various rating sites.

How can Hotels benefit from Groupon ?

1. If your target market is ‘leisure travelers‘, you are in for a good opportunity: Leisure travelers are always looking for great deals. Offer a deal that is simply irresistible for them.

2. Create a package: If your property has got Spa, F&B, Concert, why not combine them together and create a package and post it on Groupon ? Encourage locals to give it a try ?

3. Explore synergistic partnerships: Work with companies in the Tourism, Spa, F&B, Events space in your area, create a compelling offer that leads to WIN-WIN opportunity for both of you.

Now, before you go and experiment with Groupon, think about the below:

* Do you think you can create ‘loyal customer base’ by offering such outrageous group deals?

* Does it affect your bottom line ?

* Will you not upset your existing loyal customers ?

* What is the frequency with which you’ll offer such group deals ?

* How can you make use of Groupon to sell unsold inventory ?

As with any marketing initiative, the key is ‘testing’ out new ideas and stick with the ones that are working and discard the rest.

Good Luck !.

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Travel Industry harmed by Middle East Crisis !

Posted on March 7, 2011 by Dhana

The Travel industry has been slowly recovering since last year but it is expecting some set back due to the unrest in the Middle-East and North Africa.

Crude Oil price touched $100 per barrel recently, for the first time in 2 years. And, given the situation in the Middle East and North Africa, it seems the price will remain in this zone for quite sometime.

A recent report (NY Times) said the Airlines had increased their fares four times already as peak flight surcharge and fuel surcharge, to keep up with the rising oil prices. If the airfares are going to go up, it may only impact the Airlines industry, because consumers will try and avoid non-essential travels such as leisure. Cruise line industry will have an impact too, as they are pretty much ‘leisure oriented’. This will also have a domino effect on the Hotel industry too.

In any event, the events happening in the Middle East and North Africa need to be monitored carefully and companies need to adjust their strategies accordingly.

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Good News – Traveler Sentiment Index is going up !

Posted on March 3, 2011 by Dhana

Traveler Sentiment Index (TSI) is a measurement of consumer attitude towards leisure travel conducted by US Travel Association based on the following factors:

1. Available time

2. Finance

3. Interest

4. Affordability

5. Travel Safety

6. Service Quality

The data is obtained from US based adults only. So, Hoteliers outside of US, though this key data is useful to you, please take it with a pinch of salt.

The TSI has soared to its highest level since April 2007, driven by four of the six parameters listed above.

The overall TSI, in February 2011, stands at 95.2, up by 9.2% from October 2010.

How is TSI computed ?

TSI is calculated with reference to a base period, which is March 2007. TSI for March 2007 was 100. And all subsequent TSIs wer computed with reference to March 2007 TSI.

Here is the Formula : (Travel Sentiment Score (Feb 2011) / March 2007 TSI) * 100

Now, how is Travel Sentiment Score computed ?

Of the total survey population, determine the

(1) % more interested in travel compared to previous survey period

(2) % less interested in travel compared to previous survey period

Travel Sentiment Score: (1) – (2) + 100

Example: 40-30 + 100 = 110

Some of the other key statistics include:

1). “Interest in Travel” increased to  91 in Feb 2011, compared to 80 in October 2010.

2). “Time for Travel” increased to 95.3 in Feb 2011, compared to 83.3 in October 2010.

3). “Money available for Travel” increased to 89 in Feb 2011, compared to 75 in October 2010.

4). “Safety of Travel” returned to normal.

5). “Service Quality” dropped a bit from 95.6 in Oct 2010 to 95.3 in Feb 2011. So, Hoteliers, watch out !.

6).  “Travel Affordability” is slightly below the July 2009 peak of 124.

Overall several KPIs have gone up thus pushing the Traveler Sentiments. All is well thus far.

Bring in the Middle-East crisis, soaring oil prices in the mix, how does the situation look like?

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OTAs gaining bigger market share than Hotels !

Posted on March 2, 2011 by Dhana

A recent report by Travel Industry Authority PhoCusWright Inc. says Hotel and Airline websites have lost ground to OTAs in travel and accommodation bookings.

In the second half of 2010, bookings from Hotel website dropped drastically from 67-72 % to 57-69% and thus OTAs (Online Travel Agents) have significantly gained market share (increase from 33-28% to 43-31%).

Add to this, the actual conversion on the Hotel website is typically lower compared to OTAs.

Corporate travel is picking up right from late 2010. And it appears that the Hotels have hiked their rates. But what is the travel trend looking like in 2011 ? Leisure travel is expected to pick up. But leisure travelers are not ready to pay what corporate travelers pay. Leisure travelers usually prefer to use OTA sites to look for cheap travel deals, and thus leisure travelers visiting the Hotel website doesn’t lead to expected conversions.

So, the above makes it clear that Hoteliers will have to segment (Corporate Vs Leisure) the market and come up with the right strategy to target them. One size fit all approach may not work well.

With OTAs gaining bigger share, Hoteliers should also focus on selling rooms directly to travelers, by taking advantage of the evolving Social Media.

Sign-up for a sneak preview of our upcoming Engagement Marketing platform that will help sell your rooms directly to travelers !.

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5 business benefits you can get out of Google Alerts !

Posted on February 25, 2011 by Dhana

They are:

1. Monitor yourself

2. Monitor your competitors

3. Find Customers

4. Spot emerging trends

5. Find who’s linking to you

Lets explore !.

Google Alerts is a simple tool that monitors the web for your ‘topic’ of interest and notify you, rather than you spend time hunting for same information.

All you have to do is: enter your keyword, choose content type, notification frequency, search result type and your email. Voila ! You are all set. Isn’t this a cool little tool ?

Lets talk about the various benefits businesses can obtain by using this tool a bit creatively!

1. Monitor yourself:

Obviously, you want to listen to what people are saying about your company / brand on the web. You want to monitor your reputation, you also want to act promptly if there is any negative reputation about yourself spreading around on the web.

So, enter your Company name OR Brand name OR Product name which is of interest to you and set the alert. You’ll start to receive who is talking about you, when and where and what !.

You will also know about the content sources where your brand is mentioned a lot and you can get active at those sources.

2. Monitor your Competitors:

You want to track what your competition is doing: a new blog post, new hire, new press release and so on. Just enter your competitor’s name / product name in the keywords field and start to receive a daily digest about your competition.

This will help you to assess your strategies on an on-going basis compared to your competitor.

3. Find Customers:

If you’ve already identified your target customers, and what they look for in the search engines, then it gets easy for you to locate them. Set alerts for keywords such as “Looking for…” OR “Sell …” or a variation of this, depending upon your product and the industry. Note, you’ll have to continuously tweak the keyword as per the results you get.

So, any mention of your keyword at any of the web sources (blog, discussion, News, Real-time etc), you can get an immediate alert. You can follow-up to find if its a potential lead.

4. Spot emerging trends:

This is a favorite subject of mine. You want to be on top of what’s happening in your industry. So, lets say we want to listen to what’s happening in the Lodging Industry, particularly in the Boutique Hotels segment. Here is the keyword setup:

[Lodging Industry + Boutique]

“+ Boutique” indicates you are specifically looking for this keyword in the broader “Lodging Industry” search. Using “-” instead of “+” will actually mark it as negative keyword and eliminate all searches that contains “Boutique”.

5. Find who’s linking to you:

You attract good traffic if you are back-linked to various highly ranked and related websites. So, you will want to find who’s linking to your website. And, the keyword will be:

Link: Loyaltics.com

The above will send a daily digest of all incoming links to our site. If you find a new link, then write to the site owner, establish a relationship and look for opportunities to work together.

So, How creatively are you using Google Alerts ? Are you using any other tools other than Google Alerts ?

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Is Google influencing Hotel distribution ?

Posted on February 22, 2011 by Dhana

Is Google trying to downplay the importance of direct booking of Hotel rooms ? Let’s explore !.

Google has recently implemented a feature that will show average price and availability of Hotels in its search results on the Google Maps. Typically, travelers use Google Maps to find directions and nearby locations, and Google makes the traveler’s life simple by displaying Hotels, average price and availability. Lets take a look at this case from a Hotelier point of view!

I launched Google search page, entered “Singapore Hotels” and this is what I get:

I clicked on the Map Icon at the top right handed side of the result page, and I am taken to Google Maps, as shown below:

Some important data to highlight from this page:

1. Average price

2. Reviews

3. Price (for each OTAs)

4. Hotel’s own website is listed at the very last with no pricing information

All Hoteliers would love to have direct bookings made, directly at their website. However, the hotel’s own branded site is listed at the very last, with no pricing information. Where do you think the travelers will first visit to make a booking, if he is looking for cheaper hotels ? Obviously to the OTA which has the cheapest price listed at Google Maps.

Google is currently working with a 3rd party vendor to enhance Hotel listing on Google Maps. Its too early to say if Hoteliers will have to pay to get a higher ranking of their own site (direct booking engine) in Google Maps which may also offend the OTAs.

Google may find it extremely hard to get the pricing for direct booking directly from hotels, as they are better off getting the details from OTAs.

Another important feature to note. Click on the downward pointing arrow icon next to a hotel’s name, and you will see an option to ‘write a review’. This is a review stored in Google places and not elsewhere (TripAdvisor etc). So, in the future, what is the need for a review site such as TripAdvisor ?.

Google is still world’s number one search engine. So, if travelers start to use Google to search for a location, find its nearby hotels, their pricing, availability, reviews, all integrated together, why do travelers need a review site such as TripAdvisor ? How does this influence a Hotelier’s distribution strategy ? How to attract direct bookings ?

Is it time to take Social Media a little seriously and engage your guests there and encourage direct booking ?

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