TDA Face-to-Face: Bob Gilbert, President & CEO, HSMAI International
1) Asia is currently seeing a huge influx of supply into the hotel market; in your view is this making up for a lack of rooms in previous years, or is there a danger of over-supply in certain markets?
I think the bigger issue is the anticipation of future demand growth. Speaking at a recent HSMAI event for lodging chief marketing officers, economist Bernard Baumohl, said that the global economic backdrop is very positive for travel. Globally, the BRIC countries (Brazil, Russia, India and China) are projected to be the leading economic drivers for the foreseeable future. With hotel room demand closely correlating to GNP of geographic markets and countries, the supply growth should be no surprise. However, each new hotel in any market has a short-term impact on the market and existing supply. It will just be a matter of time before the demand growth catches up with the supply growth. Professionals responsible for hotel marketing, sales, and revenue management will be vital to a hotel’s success as they capture and optimise their performance in changing market conditions.
2) A recent TripAdvisor survey found that more than 60% of hoteliers still view discounting rates as their preferred strategy for boosting occupancy. What are your views on this?
I would suspect that the sample size of this survey was predominantly independent hotels. Research has proven, and many global brands have reiterated, that discounting alone does not work to stimulate demand. While discounting may capture some short-term market share, the long-term implications on the hotel doing the discounting and the market can be unfortunate. Many markets have been lead into a downward spiral because of anxious owners or operators of independent hotels who look only at the short term implications of this tactic. Once someone starts this, the ripple effect in a market is difficult to control. What is important is that when demand rebounds, price increases are made that more than compensate for the discounting that may have occurred.
3) Which Asian markets do you believe currently offer the greatest potential for hotel development?
This is difficult for me to answer specifically but I would encourage developers to watch the markets where major “demand generators” are developed. A demand generator could either include corporate office development, a government centre, or a series of leisure demand attractions. Again, hotel demand growth closely correlated with GDP growth.
4) How do you see the future of hotel sales & marketing, in terms of mobile technology, social media and other technological advances?
Sales, marketing, and revenue management competencies today are the same all over the world and continue to expand. The most important trends for any successful hotelier to watch is that of their consumers. The amount of search query for hotel terms being done on mobile devices today is growing exponentially. This should not be a surprise to the hotel industry if you look at the number of mobile devices being used. In many markets, this has actually created re-build call volume to call centres and consumers use the click to call features that exist in many mobile devices. Social media and other web technology tools have made the entire world transparent for hotel corporate, leisure, and group customers. While word of mouth has always been the number one referral source for a hotel, now word of mouth can have an exponential amount of impact to a hotel’s business – one more reason that customer service and positive guest experiences are more paramount today than ever before. You never know how many millions of current or potential customers of your hotel can be impacted by a positive or negative experience by a customer.
5) Are there any critical issues you believe need to be addressed within the Asian hotel industry, to help manage its rapid expansion?
I think the critical issues that the Asian hotel industry will need to address are the selection and continual training of competent hotel sales, marketing, and revenue management professionals. The hotel industry serves the travelling public and the changes in our global society impact consumer expectations for travel. And those expectations may be different for business travel and leisure travel. Successful hoteliers will employ individuals who are successful in sales, marketing and revenue management because successful individuals will embrace lifelong learning as key to their ability to adapt and be successful in the profession.