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Posts tagged ‘hotels’

Examining Global Travel Trends – Domestic vs International Travel

April 6, 2014

VaultPad

Examining Travel Trends is a fascinating exercise. Gleaning nuggets of wisdom is often fun to do. As I travel a far amount – I am not likely to be your typical traveller. However there are trends that support what one can intuitively feel.

For some time I have been watching the decline of the domestic market travellers. On face value this trend was driven in most part by the high cost of fuel. In general many believe that the high cost of both gasoline and aviation fuel have slowed growth of domestic travel (both leisure and business). However there are other trends which are fueling the decline in growth. Image

The following chart shows the disparity between domestic and international growth rates in accommodation 2002-2023. (From the Oxford Economics/Amadeus Travel Trends 2014. http://blogamadeus.com/wp-content/uploads/2014/04/AmadeusTravelTrends.pdf).

In my view there are multiple factors driving this trend, here are my take on these:

  1. Hassle factor – short haul traffic is not fun. In all regions of the world the ability to travel at all has created a barrier to entry that just makes short haul travel – well not nice.
  2. Technology reduces the need. Desktop communications such as Skype and Join.Me has dramatically reduced the need for direct face to face travel in total but particularly for short haul. Desktop small meetings have also reduced the need for these to take place. This may seem counter intuitive to the need for increased meetings (yes you know what I mean).
  3. Unmetered (free) mobile communication tools the emergence of such tools as WhatsApp, Wechat, Line etc etcmeans that the small meeting market has become itself mobile
  4. Yes men can actually multi-task. We have all learned the skill of multi-tasking.
  5. Consolidation and Concentration in the air transportation sectors. Domestic and International is now an oligopoly. This has resulted in far higher costs per travel unit
  6. Congestion and poor shorthaul traffic infrastructure and lack of efficient medium haul public transport. (See also #1)
  7. Cost per unit of each travel component. Hotel, Air, Ground, Meals etc etc
  8. Peer to Peer travel products such as AirBnb, Uber et al. While I personally find these services to be illegal or unreliable – the other factors make these attractive.

I think its important to recognize that when we are looking at the long view – be careful with short term data trends.

Cheers

 

 

 

 

Some you win – some you lose – Part 2

January 2, 2013

VaultPad

 

 

In the some you lose column is the sad story of Lodgenet. the dream of piping media into the hotel room was a long time held belief that this was a great way to reach an upscale and valuable audience at a time when they were most susceptible to influence.

Well it took a LONG time. It was expensive and also prone to technology change.

The sales cycle was part of the problem. But the company failed miserably in my view to address the issue of the internet. So here we are nearly 20 years after the birth of the consumer web and they are still plugging away at a conventional media base.

The writing on the wall should be clear, Internet pipes are valuable but portal real estate is not that great.

On Monday the company filed for Chapter 11. It is up to its eyeballs in debt. It has little future and in my view is a dead duck. Why?

It has failed to recognize that consumers now want to consumer media in their own mode and via own tools, services and especially own devices. During the waning days of 2012 – I met with a large hotelier who operates and dominates a market segment. They have Lodgenet in some of their properties but it has little value and in some instances does not make the hotel any money.

Interestingly Colony Capital who is plunging $60 million into the company has a history of bailing out lodging based companies. Let’s wish all the best for them.

The company lost the plot on what it’s business is/was. It is to provide access to entertainment content. In that they have failed to keep pace with the market and the consumer. For that they have been well and truly spanked by the marketplace. The lesson to startups here is to remember and focus on what your core business is. And don’t EVER lose sight of that.

 

Cheers