What the arts can learn from the hotel industry...


Commentary: ...selling directly to customers is increasingly important

Tim Roberts, Full Houses blog, 3/22/12

I always find it valuable to watch other industries for clues to trends and innovations. The hotel industry may hold some clues regarding the changing role of intermediaries. Yes, it is a different industry, as is airlines. But that does not mean that there may be enough similarities to provide valuable insight. After all entertainment, hotels and airlines all sell the right for a person to occupy a specific location for a specified time period. And it is perishable inventory. So what can hotels tell us?

"...room nights booked through hotel websites last year grew consistently in each quarter, growing 6.8% in the fourth quarter compared to the same time in 2010."

Consumers are increasingly buying direct from the hotel, rather than travel agents or online agencies.

"Hotel companies have been focusing on educating customers about the value and benefits of booking direct on their websites. These companies have been investing in improving their websites and web value proposition to ensure hotels and customers understand and believe in the value of booking direct with them online."

That sounds like a good strategy for entertainment as well, the event owner selling directly to consumers without the need for intermediaries. At the very least, the benefits of control over the service 'promise' made, the service delivered and the reduction of additional service fees and commissions all makes sense. As suggested, it is important to educate and inform customers and for the not for profit entertainment sector a major, related issue is transparency.

"... consumers are spending an increasing amount of time shopping and comparing hotel options online, often visiting between 8-15 different websites to make an informed decision."

Consumers are getting cleverer at comparing options and they are more and more skilled at accessing AND sharing information on options.

"While a hotel's website continues to drive more and more bookings for hotels, it is important to recognise that different channels cater to different types of customers, and having an appropriately diversified and optimal mix will drive improved revenue and profit outcomes,"

Selling directly to customers is not the only option, but it looks like it increasingly must be one option and an important one at that.


Commentary: ...how to tell when to raise ticket prices for your show

Ken Davenport, The Producer's Perspective blog, 3/20/12

Broadway and Off-Broadway shows are fully engaged in the variable pricing war. We used to employ the "set it and forget it" philosophy of our full price sales. Then, of course, we decimate those prices in the discount market. Now, we've gone all airline industry on our consumers, and have started adjusting our full price sales depending upon demand. But when do you know if you've got that demand? How do you know if a show is going to sell out? Especially in a market like NY's, where the week-of, day-of, hour-of, business is so dependent on street traffic and tourist traffic and the like. There are a lot of factors you can use to help determine how you're going to do on a particular weekend. The best thing you can do is use historical data (if your show or your theater has been operating for more than a year). But what if you don't have it? Here's my latest trick . . . and shhhh, let's just keep it between you, me, and the rest of blogoshphere. What do I do? I let other industries with a lot more money and a lot more data figure it out for me. I'll call or go online to check hotel prices in the Times Square area over a month period. On the days they are offering deals, I know we have trouble. On the days where the rates get close to the rack or MORE, I know the hotel is expecting heavy demand . . . which most likely means heavy ticket demand.

Sometimes I'll cross reference this with other tourist cities. A busy tourist time in NYC should also mean a busy tourist time in Las Vegas, DC, etc. Then I'll do the same with the airline industry. See when they are offering deals, or when those deals are blacked out. If you're paying $600 to fly from Chi-town to NYC, guess what . . . there are going to be some peeps in town that weekend. You can't set your watch by these tips, of course, but they are just a little more information that will help you understand more about current consumer behavior.


Commentary: ...ignoring younger customers puts you at competitive disadvantage

Janet Morrissey, New York Times Business section, 3/12/12

Many hotel owners and operators are remodeling existing hotels or introducing new ones that offer...nightly social events, like happy hours and free wine tastings, aimed at luring the iPhone-toting generation to their hotels. "All of the major brands -- Hilton, Starwood, Marriott, InterContinental -- have developed hip products that are targeted at the younger traveler," said Chris Klauda, VP at D. K. Shifflet & Associates, a hospitality market research company. Travel spending by younger travelers rose 20% in 2010, making them the fastest-growing age segment, though they still lag the baby boom generation in overall spending. Hotels that ignore these younger travelers, said Mark Woodworth, president of Colliers PKF Hospitality Research, will be at "a very severe competitive disadvantage." About a decade ago, the hotel industry was concentrating much of its effort on luring people who are now mostly in their 50s and 60s. The changes involved higher-quality beds, brighter lighting and bigger work spaces. And those travelers were loyal to brands that offered reliable, comfortable services. Today, the Millennials, or Generation Y, seem to be seeking the opposite: the innovative and the off-the-wall attract their attention and their wallets. "Interesting is more important than comfort," said Bjorn Hanson, divisional dean of the Tisch Center for Hospitality, Tourism and Sports Management at NYU. "It's the reverse for baby boomers." Marketing and communicating through social networks are also important among hoteliers. When young travelers have a problem at a hotel, they are less inclined to complain to the hotel manager, as their predecessors generally do; they go online and post on Twitter about it. In early 2010, Starwood Hotels and Resorts Worldwide responded by setting up a team of about 20 people whose sole job is to monitor and respond to online complaints and comments.


= = =


Survey: Hotel industry is strongly divided on 'flash sales'

Hugo Martin, Los Angeles Times Business section, 3/18/12

Flash sales -- limited-time-only discount offers -- may be hugely popular among budget-minded travelers, but the hotel industry is strongly divided on the practice. A recent survey by the Cornell University School of Hotel Administration determined that 42% of hotel operators had at least tried flash deals, but 46% of hotel operators said they had no intention of offering them. The remaining 12% were considering using flash sales. Flash sales, offered to subscribers of such websites as Groupon, LivingSocial and Jetsetter, can offer discounts of about 45% to 55% off of regular rates. But hotel representatives said the drawbacks to flash sales are that the discounts may be too deep, don't necessarily entice guests to return and may create false expectations for lower rates in the future. "We were surprised at both the high percentage of hotels that have used flash deals and the equally high percentage that want nothing to do with them," said Gabriele Piccoli, a visiting research fellow at Cornell. "It appears that hotels need to be strategic about how they construct these offers."

Please consider the environment before printing out this email.  Thanks.
YOU'VE COTT MAIL is a free service for professionals in the arts.  Emails are sent most weekdays. 
If you are not already on the distribution list and would like to sign up, please click here:

Join Our Mailing List      Follow me on Twitter     
Click here to view an archive of recent past editions of "You've Cott Mail."