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CANADIAN LODGING NEWS
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LodgingNews
Com m e n t By Colleen Isherwood, editor
EDITOR
Colleen Isherwood ext. 231 · cisherwood@canadianlodgingnews.com SENIOR CONTRIBUTING EDITOR
Leslie Wu ext. 227 · lwu@canadianrestaurantnews.com CONTRIBUTING EDITORS
Marni Andrews · marni@trolltales.com Larry Mogelonsky · larry@lma.com Don Douloff ext. 232 · ddouloff@canadianrestaurantnews.com Jonathan Zettel ext. 226 · jzettel@canadianlodgingnews.com Kristen Smith ext. 238 · ksmith@canadianlodgingnews.com SENIOR ACCOUNT MANAGER
Debbie McGilvray ext. 233 · dmcgilvray@canadianlodgingnews.com ACCOUNT MANAGER
Kim Kerr ext. 229 · kkerr@canadianlodgingnews.com PRODUCTION
Stephanie Giammarco ext. 0 · sgiammarco@canadianlodgingnews.com CIRCULATION MANAGER
Don Trimm ext. 228 · dtrimm@canadianlodgingnews.com CONTROLLER
Tammy Turgeon ext. 237 · tammy@canadianlodgingnews.com
How to reach us: Tel. (905) 206-0150
Attracting new resort club members Six years ago, I attended what was then called the Vacation Ownership Investment Conference in Orlando, listening to a panel of Canadians discuss shared ownership. One panellist spoke of the decline of the stock market that was taking place as we sat in that room. At that time, the vacation ownership industry seemed durable and recessionproof—after all, it dealt largely with prepaid vacations, and studies showed that consumers value their travel. Like many sectors, timeshare was adversely affected by the recession—and also by changing demographics and aging facilities. The industry’s problems seem to be a magnified version of those of the lodging industry as a whole. Facilities are aging. Marketing and sales costs are going through the roof. Owners are aging too—someone whose spouse passed away has no desire to use their club member-
ship any more. They just want to sell. As Michael Burns, president of Vacatia, told the recent Canadian Resort Conference in Toronto, “the backlog of resales is a tsunami that could crash the industry.” The idea of a vacation ownership program that could go on in perpetuity seems outdated and silly to the new generation of buyers, who want variety and exotic locations. The telephone sales and minivacation sales pitch has no appeal for younger potential buyers, who want a low price point and maximum flexibility—a true value product. The Canadian Resort Conference, the new incarnation of last year’s VO-Con and previous Canadian Resort Development Conferences, provided a valuable forum for key players in the resort industry to air ideas on how to deal with the changing face of the industry. Here are some of their ideas.
o Generation X and millennials are fine with purchasing things online—why can’t they buy a timeshare online? o Why not have a condo rental program as a first introduction to the younger generation—if they enjoy their experience, then that’s a potential sale. o Similarly, use hotel rental programs as a bridge to vacation ownership. o How about a 12-year product with a guaranteed buy-back program? o Align your product with celebrities. o Measure satisfaction costs of potential buyers going through a sales presentation—to get a handle on what they think. o Get rid of the ridiculous qualifications for potential buyers—age requirements, no gay men, etc. These make timeshare companies look foolish. o Make sure resale companies disclose restrictions placed on new resale buyers. As conference moderator Jim Madrid, CEO of Advance Corporate Technology, told delegates in his closing remarks at the conference, “These are changing times, and for those of you who don’t change, these are challenging times.” The next Canadian Resort Conference will be held in 2015 at the Pan Pacific hotel in Vancouver, dates to be determined.
PUBLISHER
Steven Isherwood ext. 236 sisherwood@canadianlodgingnews.com
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EDITORIAL ADVISORY BOARD Jason Cheskes Above The Line Solutions Vito Curalli Hilton Worldwide Justin Friesen Western Financial Group Philippe Gadbois Atlific Hotels & Resorts Mark Hope Coast Hotels & Resorts Elizabeth Hueston Sysco Guest Supply Canada Inc. Brian Leon Choice Hotels Canada Inc. Robin McLuskie Colliers International Hotels Brian Stanford PKF Dr. David Martin Ted Rogers School of Hospitality Christine Pella Serta Mattress Company Tony Pollard Hotel Association of Canada Andrew Chlebus LG Electronics Canadian Lodging News Volume 11 · No. 8 · October 2014 Canadian Lodging News (www.canadianlodgingnews.com) is published 10 times a year by Ishcom Publications Ltd., 2065 Dundas Street East, Suite 201, Mississauga, Ont. L4X 2W1 T: (905) 206-0150 · F: (905) 206-9972 · Toll Free: 1(800)201-8596 Other publications include the Canadian Chains and Buyers’ Directory as well as:
By Larry Mogelonsky, P.Eng. www.lma.ca
Meeting channel strategies for the digital space The Internet and all its iterations have forever changed how we do business and how we reach out to customers. A foremost example in the hospitality industry has been the OTAs and their impact on revenue management and consumer behaviour. One part of the hotel space that has yet to feel the full brunt of this evolution is the meeting and conference business. But that’s soon about to permanently change. This is not to say that the group business has been entirely ignored by Internet startups to date. The opposite, in fact, only they are just warming up in terms of how much these new channels will influence the way hotels acquire their meetings revenues. Websites like Hotel Planner, Group Hotels, Groople and meetings.com are all viable candidates. Two that I am quite familiar with are Cvent (www.cvent. com) and eVenues (www.evenues.com). The former, which I’m sure many of you already know, is a publicly traded company specializing in facilitating large meeting RFPs and registration. Still in the gestation phase, the latter allows any venue provider to post their space for private rental.
eVenues not Airbnb for meetings
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The word I want to focus on from that last sentence is ‘any’—on eVenues, it’s not just hotel spaces proffered to customers, but also less conventional venues like theatres, bars, churches, town halls and barbershops. Unlike Cvent, where the target audience is primarily meeting planners, at eVenues it’s the “everyday” meeting/event organizer—or the attendees. Your first gut reaction may be to liken this to Airbnb for meetings. But it’s not, it’s simply another channel for hotels to compete in, only now the playing field has been widened to include many other contestants. Developments like eVenues raise a confounding dilemma for hoteliers: how does one compete? The first step must be the opposite
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The OTAs have had a huge impact on revenue management and consumer behavior. One part of the hotel space that has yet to feel the full brunt of this evolution is the meeting and conference business. But that’s soon about to permanently change. —Larry Mogelonsky
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of denial—acceptance. You must acknowledge that these technological ideations have and will continue to occur. Just like with the nowaccepted practice of extensive Cvent usage, you must go where your customers are searching. But simply meeting consumers and displaying your wares in an arena where they happen to already be browsing isn’t enough. Just look at how this played out with the OTAs. If we all just start posting our products to a website with a standardized layout, then, outside of location and proximity to a desired site, price becomes the number one point of differentiation. This leads to commoditization, which inevitably drives product price down. For a channel like eVenues, where you will be cross-compared by consumers with other such venues as loft studio spaces and community centres, you simply cannot compete solely on price. Hence, you must fall back on your brand’s reputation and your ‘quality guarantee.’ That is, only you can guarantee that the power and Internet will work, whereas a bar or restaurant might not necessarily have enough power outlets near the arranged tables. And if the Internet isn’t up and running, only you, the hotel, will have a qualified technician on standby. Additionally, unlike a church basement or an empty office on a weekend, you can cater
vastly superior F&B for your attendees with a far greater selection.
Offer service quality, not price Facilitating a quality and productive meeting requires more than just space; it needs the care and the diligence that only an experienced operator such as a hotel can provide. The bottom line: compete on service quality, not on price. (And this motto extends to all other digital hotel channels, whether they are for leisure, business or both.) The next dilemma, then, is how you go about communicating these values to the average modern consumer who might not read too far into each choice’s description or features list. Essentially, you must convey this guarantee of service instantaneously in order to properly entice those who aren’t already acquainted with your product. The first solution I employ to this end is some clever copywriting—concise descriptions with all the fat trimmed and the most pertinent information on display at the top. The next one requires a bit more work upfront but pays off tenfold—YouTube video tours of your various meeting space offerings. In this way, you are literally showing them your guarantee of service. Beyond these two sample methods of enticing new consumers to favor your hotel meeting space over some other low-cost entrant, it all comes down to reaffirming the value of your services during the time attendees spend with you. Basically: customer loyalty. Strive to always deliver your best and consumers will recognize this, then stay with you rather than whatever new competitor or bargain basement offer comes their way. Larry Mogelonsky (larry@lma.ca) is the president and founder of LMA Communications Inc. (www.lma.ca).. Larry’s latest anthology book entitled “Llamas Rule” and his first book “Are You an Ostrich or a Llama?” are available at Amazon and Barnes & Noble.