Jazztures eNewsletter
Thursday, 1 September 2005

“Industry Focus” – Hotels

A niche solution for your hotelling blues.

The hotel industy is changing.

Hotel guests are different
Room sales typically provide for about 60% of a hotel's revenue, and traditionally, overseas leisure seekers or business travelers make up the bulk of this room revenue. But changes in consumer trends and preferences have made it more difficult to secure this 60% revenue at status quo. Two notable trends:
  1. Leisure seekers no longer simply follow the arrangements of a single travel agency and contribute to hotel group stays. Instead, they shop around, facilitated by the internet. Hotels now have to court thousands of different minds instead of a few travel partners. The rise of budget airlines in the region has also brought in more price sensitive leisure travelers.
  2. Business travelers are becoming more discerning, splitting into two new camps. A bigger camp affected by the volatile economy and shrinking office hotel budget are now seeking decent hotels that provide decent business facilities without the frills and the additional price premium, something a rising number of boutique hotels are catering very well to. A smaller camp on the other hand comprises of luxury-minded travelers who want more royalty treatment to stay loyal to a hotel brand. New niches have arisen in the hotel scene.
Competition in non-room services
F&B operations and other amenities within the hotel contribute to the remaining 40% of a typical hotel's earnings. Even here revenue does not come easy.
  1. Restaurants within hotels have to couple with the perpetual growth of themed restaurants elsewhere.
  2. Traditional hotel wedding dinners, the long time contributor to F&B and function room sales, is facing a declining demand of traditional Chinese dinners, with newly-weds opting for non-traditional wedding celebrations like cruise dinners or in tourist attractions.
A picture of gloom? Not necessarily.

Locals for one, is a burgeoning market for the local hotels. There is a trend of families, couples and working executives checking into hotels for a quick getaway from urban stress. With tourism set to benefit from the increase in tourist arrivals brought about by worldwide events and facilities set up in Singapore, the pie for hotel rooms and services demand may just be increased.

A niche solution for your hotel revenues
Increase your branding touch points so that your guests and their associates will remember you and spread positive word-of-mouth for you.

An ingenious use of promotional items, little corporate gifts and hotel merchandising will earn you much positive exposure. Like selling hotel umbrellas at an economy price when you see the pouring rain, you can earn some money and much brownie points with such a simple gesture. Sell practical lifestyle items like suit covers or toiletries bags to value-minded guests, who will like the practicality and memories associated with it.

Your guests will smile. You will too.

Little gestures of goodwill will go a long way in making these increasingly fragmented traveling parties respond to you.

The hotel industry is changing.

Some Jazztures product links that will help.
Single use camera blog page
Jazztures 199 page
Jazztures Originals page

Research references

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