February 2007

Edition no. 1

Welcome to this first edition of our newsletter, which is designed to keep you up to date with our news, as well as giving brief details about some of our most recent assignments. The newsletter, which we plan to send to you at least twice a year, also gives us the opportunity to share some of our thinking on current issues and hot topics.

We feel sure that many of you will relate to the issues we've addressed in the course of our consultancy activities and we hope that you and your business partners enjoy reading about them.

Extending the spectrum

Last year, the network went from strength to strength. We were fortunate to attract several new members and, as a result, we added additional expertise in several key areas including the whole hotel-related real estate and shared ownership sectors, such as:

• condo hotels
• fractional/residence clubs
• resorts
• boutique hotels
• resort villas

We are able to offer consultancy in the field of tourist attraction and visitor destination development; we have strengthened our ability to provide hotel marketing and planning research services, including statistical analysis and model building; and we've added expertise to our ability to design and deliver people-centred solutions for hotels and hotel companies.

On the menu

Last year, we undertook a wide variety of new assignments for clients old and new. In addition to working on projects around the UK, we delivered successful assignments in locations as far apart as Poland, Spain and Greece, which involved:

• process design
• website development
• searches for hotel investors, hotel operators and hotel brands
• organisational development
• strategic planning
• business planning
• brand management

And we worked with businesses across the entire hotel spectrum - boutique and full service, branded and unbranded, existing and planned, independents and chains.

The new year got off to an excellent start with a number of assignments from new and existing clients who asked us to help them come up with solutions to the challenges and opportunities facing their businesses.

We've just completed an assignment looking into the investment opportunity for a boutique hotel in Bucharest; we've been re-engaged by one of our Spanish clients to provide further management services; and we're also assisting a hotel-owning company in Bangladesh assess its growth strategy.

Insights

Are there some common themes emerging from our work that hotel owners and operators, and the brands they use, need to be alert to?

We think so. For the past few years, there has been much talk about the separation of ownership from operation and now most of the majors (Wyndham, Intercontinental, Hilton and IHG) have completed their metamorphoses. Lenders and investors alike believe the new industry structure is likely to result in more focused management, better run businesses, higher profits and greater asset values.

In our view, it's not enough to restructure the elements of ownership and operation; it's also necessary to update the core guest and customer experience which forms the essential inputs of the hotel experience. The reshaped 21st century hotel industry must remember that its roots are in hospitality.

Only if guests and clients are welcomed and cherished by hotel management and staff alike and encouraged to return will the newly-focused brands and newly- liberated operators deliver the value that is being promised. Customers are no longer satisfied with the simple product or service. Increasingly, they are buying an experience - and it's an experience they are designing for themselves.

Hotel brands need to recognise what retailers have begun to discover – that the mass market has gone and customers want to be treated as individuals, each with their own specific requirements. They need to find a way of enabling guest-contact staff to sell the various elements of the offer to each and every guest consistent with minimum brand standards. In our experience, today's guest-contact staff are often not provided with the appropriate products, services or tools to sell, nor well trained in giving sales messages.

Just as important, owners with management contracts and management companies with franchise agreements increasingly want to design their own relationship with the business partner – not just the fee structure but which services the business partner provides.

Hotel brands, operators and managers need to address the processes that deliver the owner, guest and franchisee experience in the context of these paradigm changes.

Checkout

Thank you for reading this newsletter.

We'd like to hear your views and comments on any of the topics mentioned – or about the newsletter itself - and we'll use your feedback to help us develop future editions.

If you feel that we can assist you or your business partners, do get in touch.