Tips on how to make profit (while keeping staff happy too)

March 11, 2013

Veteran hotelier and independent consultant, Giovanni Angelini, offers pearls of wisdom on how to stay afloat in today’s competitive industry.

Picking up from last column’s tips on meeting the changing needs of customers, Angelini offers reflection on branding, sales and distribution, and human resource management.

Studying the brand

Hotel branding is much more than just putting a logo everywhere. Clarify your brand standards carefully and clearly, and sell them internally then externally. Hotel brands tend to be so ubiquitous that they have lost their soul and uniqueness.

Avoid that by asking

Do customers understand the brand promise and is it delivered?
Is the DNA of the organisation reflected?
Is there image consistency on brand-related material?
What is being done to prevent brand erosion?
Have you measured perception of the brand position within the industry?
Of the total advertising and promotions budget, how much is spent on the brand position and how much on tacticals?

Marketing dos and don’ts

Avoid the long annual marketing plan. Have a document that is a useful working tool and with a clear mission statement for the fiscal business. It must have strategies for each segment of the marketplace with flexibility to modify tactics as necessary
The marketing plan is to be supplemented by a working directory of marketing manual. This is a “live” document containing programmes, activities and measurable performance reports. It must be updated on monthly basis
Plan and execute practical campaigns aimed at increasing market share. Listen to your customers and reflect on what needs to be done
Re-evaluate what worked and what didn’t last year. Learn from your mistakes
Traditional markets are important, but always look for new markets and new travellers with spending power
Develop a clear strategy for each segment and how this is measured. E.g. What is the volume and percentage of MICE business?
Focus on weddings as these are revenue generating and recession-proof
Explore the usefulness of a booker programme recognition
Manage your loyalty programme
Look at the condition of the hotel’s database
Measure conversion rate optimisation
Measure the percentage of repeat guests and length of stay
Be proactive on social media and respond to customers’ comments and recommendations

Getting the best yields

The love-hate relationship between OTAs and hotels/operators will continue. OTAs are beating branded hotel websites both on social media and in web searches. Such sites continue to be quick in establishing market dominance through consolidation. Hoteliers are doing poorly at cooperating for the common good of the industry and OTAs are taking advantage of this. OTA commissions remain far too high.

Manage your OTA relationships by

Controlling OTA volume and rate plus commission
Not allowing OTAs to purchase rooms below your BAR rate
Being alert to whether your OTAs have access to your special tactical packages and contracted corporate rates to top producers
Constant monitoring of your OTAs’ activities, refocusing on your own website and managing a dynamic pricing system

Guidance on revenue management

Give your revenue manager necessary tools to analyse data and plan accordingly
Develop a sales-revenue culture in the hotel that takes priority over any other activities and involve all division-department heads on sales and customer relation activities
Involve all division heads on the forecasting process (a month, three months, year-end) and set targets for accuracy
Revenue managers should be seen as a critical part of the executive committee
Manage your rates and ensure rate parity, if necessary adjust your BAR rate on daily or even hourly basis
Practice balance on increasing rate, occupancy (objective is the RevPAR)
Consider creating or participating in hotel search engine websites like Roomkey.com with the objective of reducing costs (commission) and expanding source of business
Are you measuring the amount of commission paid and comparing year-on-year?
Is there a daily revenue meeting at the hotel/s chaired by the GM?
How is the reservation team performing? Also what is the volume of business generated by the regional sales offices? Are there clear KPIs?
Ensure the catering book is controlled (normally one person is responsible)

Running a tight ship

No doubt generating the desired ROI is the final objective of leaders, but do you realise that revenue and profitability are not created at the corporate but hotel level – executed by a team of motivated and committed people and by having a competitive product that actively responds to ever-changing customer/market needs. In this demanding industry, strong and experienced leaders are necessary at both the corporate and hotel levels.

Remember the balance: happy staff and unhappy guests mean poor business, as do happy guests and unhappy staff.

Suggestions on leadership

Create a strong and clear aligned vision towards a common objective, addressing both your staff and customers
Avoid procrastination at all levels and respond quickly to the needs of staff and customers
Lead by example instead of a “do as I say” approach
Be visible i.e. get out from behind your desk
Delegate and recognise results and achievements
Be a solid communicator and maintain creative communication with your team at all times
Hire the right people (those “smarter” than yourself) but get rid of “rotten apples” quickly
Avoid unnecessary lengthy reports as well as third-party consultants who claim they can change the company’s performance. Note that a good and motivated in-house team can produce much better results than consultants.

Treat your staff well by doing the following

Provide an attractive career path and personal growth for staff. Ensure that compensation and incentive packages are among the top three to four in the city and that they are reviewed or updated annually
A long-term provident fund for executives and management staff is a must
Do evaluation often, always let people know where they stand and reward top performers
Avoid overloading your team with complex multi-programmes, but heighten their knowledge in technology, social media, etc
Have a programme that allows you to measure productivity e.g. revenue per labour hour, rooms cleaned per shift, covers per service period, etc
Open your team to new ideas and let them participate and contribute. Provide an environment of risk-taking
Look into basic facilities for staff e.g. lockers, showers, recreation, staff cafeteria and decide if it’s time to upgrade/renovate
Celebrate success but do not accept underperformance in your team
Create confidence and provide support in good and bad times

By Giovanni Angelini

GTA guns for FIT business in Asia

By Raini Hamdi

March 11, 2013

WITH the integration of GTA behind him, GTA’s CEO, Rolf Schafroth is now gunning for “substantial” growth. The business, now solely FIT, has better prospects, he said.

The synergies and efficiencies derived placed GTA on a platform to be “substantially bigger” going forward, explained Schafroth.

“The FIT business in Asia, for instance, is a huge market and that is one area we’re keen to grow, not just in gaining more Asian customers, but also intra-Asia or Asia to the Middle East – you don’t see these kinds of growth rates in the tour operating world.”

Aside from increasing marketshare in growth markets, GTA’s gameplan is to preserve its strong position in Europe; further increase its overall hotel inventory, both in breadth and geographies; enhance its product/service offering; and invest in cutting-edge FIT technology such as customer/supplier interfaces.

GTA is now under a new business division in Kuoni Group called Global Travel Services. Kuoni Connect has been discontinued, its content integrated into GTA.

The Global Travel Services division, of which Schafroth is concurrent CEO, also takes in leisure group business, now branded Group Travel Experts and has its own CEO, David Painter.

The other two Kuoni business divisions are Outbound Europe (comprising the traditional tour operating business) and Emerging Markets & Specialists, comprising DMCs, outbound tour operating in emerging markets and the visa processing business.

Currently, Outbound Europe remains the biggest division in turnover, but the Global Travel Services division is not too far behind.

Schafroth said Kuoni had a different business portfolio now. Five years ago, it was predominantly tour operating but now comprises six to seven different businesses, making it better-placed to tap opportunities while letting go of businesses that were under pressure.

In December, Kuoni sold its loss-making companies in the Netherlands, Spain and Russia. It also closed Kuoni and Best Tours activities in Belgium and its B2C online hotel platform, Octopustravel.

New tourism projects in Johor to lure Europeans and Asians

By S Puvaneswary

March 11, 2013

DESTINATION Resorts and Hotels’ (DRH) upcoming developments in Nusajaya and Desaru Coast in Malaysia’s southern state of Johor are set to appeal to both longhaul and shorthaul markets, using Singapore as a gateway.

According to DRH managing director, Mohd Nadziruddin Mohd Basri, the 283-key Traders Hotel Puteri Harbour – opening in May 2013 – and Legoland Hotel – due to launch in 1Q2014 – will be located next to the Legoland theme park in Nusajaya.

Also in Johor, another DRH project rolling out in 2015 is Desaru Coast. Located a one-and-a-half-hour drive from Singapore, the integrated destination offers a 17km beachfront, luxury resorts by international brands such as Amanresorts, The Datai and Sheraton, a waterfront retail village, a convention centre, two water theme parks and two championship golf courses at the first Els Club in Asia.

To reach out to tour operators and MICE planners in Europe, DRH will conduct a roadshow in Scandinavia in September and will also participate in joint sales missions with Tourism Malaysia and Malaysia Convention & Exhibition Bureau this year.

Tour operators in neighbouring Singapore are also looking forward to Johor’s new tourism offerings.

Dominic Ong, general manager of Star Holiday Mart Singapore, said: “Currently, the leisure market spends two nights in Singapore and three days in Desaru. But once the development is completed, we can look at packages combining two nights in Singapore and seven nights in Desaru Coast for the European market, which loves nature and beachfront hotels.

“With the new hotels, we can also look at converting Legoland Malaysia from a day trip to a one- or two-night stay for the regional as well as Chinese and Indian markets.”

Helen Goh, director of marketing at Vacation Asia Singapore, added: “Singapore’s green fee is expensive and on weekends, most golf courses are for members only. With the Els Club golf courses, we can do golfing on weekends in Desaru Coast and weekdays in Singapore.”

US and Italy ease visa applications for Chinese visitors

By Prudence Lui

March 11, 2013

THE new streamlined visa application process for Chinese nationals applying to visit the US will help to stimulate more outbound growth from the market, said tour operators at last week’s Guangzhou International Travel Fair (GITF).

From March 16, Chinese nationals can go online to schedule their visa interview appointments, pay processing fees and check the status of their applications. Applicants can also pick up their visas at any China CITIC Bank branch instead of forking out money to have their passports mailed back.

Ivana Ren, operator, America International Travel Service US, which exhibited at GITF for the first time, welcomed the new initiative. “(Going online) is more convenient than booking interviews via phone.”

In 2012, the US mission in China processed more than 1.3 million non-immigrant visa applications, posting 34 per cent growth over 2011.

Ren expects the upward trajectory to continue with an increase in flight connections, such as China Eastern Airlines’ Shanghai-San Francisco service, beginning April.

Amazonas Viagens E Turismo, Guangzhou liaison office, sales manager, Marco Li, also believes that South America would also stand to gain, as Brazil is emerging as a hotspot for trade fairs. “In fact, it’s easier to obtain a travel visa (for South America) if visitors possess a US one,” he said.

However, Sea Gull Holiday’s marketing director and deputy general manager, Michael Tang, was less sanguine about the prospects. “The website is only in English, which limits its use to a certain audience, and we expect some Chinese will continue turning to travel consultants for assistance, especially because it is harder to apply for US visas compared to European ones. I (also) don’t think the new visa process would fuel outbound traffic robustly due to the high travel cost like airfares.”

Earlier this year, Italy also abolished its travel consultant visa application quota for Chinese nationals in January.

According to Voglia D’Italia Tour Italy’s deputy general manager, Simon Xia, the three Italian embassies in China saw over 100,000 visa applications last year, while he expects this change to result in 10 per cent growth for 2013.

India introduces prepaid card for tourists

By Shekhar Niyogi

March 11, 2013

INDIA unveiled a new Incredible India-Yes Bank Travel Card for inbound travellers at ITB Berlin last week, the first and only card launched in conjunction with the country’s NTO.

The card allows visitors to pay seamlessly in Indian rupee at shops or restaurants with point-of-sale terminals or to withdraw cash at ATMs. Able to store credit of up to Rs50,000 (US$920) at once, it can be bought and topped up at licensed travel agencies, Yes Bank branches, airport counters, money changers, hotels, airport kiosks, etc.

Rajat Sawhney, general secretary, Association of the Domestic Tour Operators of India, said: “In a country as large as India, most tourists travel long distances, and the Incredible India-Yes Bank Travel Card will provide safety, offer convenience in transacting and guard against loss of cash.

“Widespread availability to buy and recharge the card will also certainly make it a valuable accessory for inbound tourists.”

India’s tourism minister, K Chiranjeevi, said: “The ministry is committed towards creating a seamless tourist infrastructure and facilitating quality services to enrich the tourist experience. I am hopeful that initiatives such as the Incredible India-Yes Bank Travel Card will go a long way in fructifying this vision, and urge tourism stakeholders to come up with more of such innovative ideas to realise the vision of making India a world-class tourist destination.”

Korean Air’s Male-Colombo-Seoul flights lift off

By TTG Asia

March 11, 2013

KOREAN Air’s flights between Seoul and Colombo, Sri Lanka restarted on Saturday (TTG Asia e-Daily, December 7, 2013) as part of a triangle route including Malé in the Maldives.

The new thrice weekly flights depart Malé every Tuesday, Thursday and Sunday, operated by an Airbus A330-300 with 276 seats, including six first class sleeper seats and 18 sleeper seats in business class.

Chang Hoon Chi, president and COO, Korean Air, said: “It is a great pleasure for me to announce that Korean Air has restarted its service to Sri Lanka and has also extended the route so that it now flies to the Maldives.”

The flights depart Malé at 15.30, arrive in Colombo at 17.30 and depart Colombo at 18.50, touching down in Seoul’s Incheon International Airport at 06.10 the next day.

On the return leg, the aircraft will take off from Seoul at 22.40, arrive in Colombo at 04.10 the following day, leave Colombo at 05.40 and reach Malé at 06.40.

Japan and Taiwan tempt Singaporeans with budget joint itineraries

By TTG Asia

March 11, 2013

JAPAN’S and Taiwan’s NTOs are leveraging the services of Scoot and online travel organiser and accommodation hosting site Qiito to offer Singaporeans affordable two-destination itineraries.

The Japan National Tourism Organization (JNTO) Singapore Office and Taiwan Visitors Association Singapore Office (TTB) have worked with the LCC to roll out a series of promotional prices on flights, promoting stopover routes between Taiwan and Japan. With Singaporean start-up Qiito, travellers can personalise their itineraries to both countries, which are three hours apart by plane.

As part of the deal, Scoot is offering fares from S$169 (US$135) to Taipei and S$218 to Tokyo via Taipei.

Qiito also offers up to 50 per cent off Taiwan homestays and bundled rates for selected hotels in Japan.

Langkawi’s charter incentive drives arrivals

By S Puvaneswary

March 11, 2013

MALAYSIA’S Langkawi Development Authority (LADA) is keen to attract more charters to the island, having launched the Langkawi Charter Flight Incentive Programme (LCFIP) early last year.

Through LFCIP, which runs until December 31, 2015, LADA will provide financial support to charterers for their flight promotions to Langkawi, as well as assistance in joint marketing.

Malaysia Airports Holdings, which manages Langkawi International Airport, also provides free landing and parking to charterers participating in the programme.

At press time, LADA had secured 32 charter flights for this winter season, an increase from 27 last winter, with confirmed carriers such as Finnair, Novair, SCAT Air, Eva Air and Korean Air, said Rosnina Yaacob, LADA’s tourism division manager.

She added that LADA had also intensified its marketing efforts in Europe. “Europeans comprised 30 per cent of the total three million tourist arrivals and day trippers to Langkawi in 2012. This year, our target is to grow European arrivals to 35 per cent and total arrivals, including day trippers, to 5.9 million.”

Ting Zhang, sales and administration manager for In Depth Tourism Marketing UK, the sales office for The Danna Langkawi resort, lauded the LCFIP for providing more opportunities to woo longhaul travellers, particularly the high-yield Scandinavian market.

Nasha Abdullah, managing director, Malai Adventure Malaysia, agreed: “Word of mouth marketing is very important for the Scandinavian traveller. They are also creatures of habit, with the tendency to return to the places they have gone before provided they had positive, memorable experiences.”

Hansar Bangkok raises curtain on new rooftop venue

By Xinyi Liang-Pholsena

March 8, 2013

AFTER garnering success with FIT and business travellers as a boutique hotel, the 94-suite Hansar Bangkok aims to net a greater portion of MICE business with the roll-out of the Rooftop Sky Terrace as a venue for events.

Mark Shrives, director of sales and marketing, Hansar Bangkok, said: “The sky terrace has existed all along, but it was like a blank slate before. Now we have spruced it up with more greenery and a cocktail bar that is only open during private events. A large roof will be installed over the bar, so that it will be seen from Ratchadamri Road.”

“Privacy and intimacy are the unique selling points of the Rooftop Sky Terrace. It’s often hard – and expensive too – to get other famed rooftop venues in Bangkok like (The Dome at) Lebua to close for a private event, but we are able to do that at Hansar Bangkok. Plus, our venue offers a lot of opportunities for customisation.”

Comprising both indoor and outdoor areas, the 19^th floor area can be completely closed off from the hotel’s public areas, offering a private space for functions and events of up to 200 pax. The hotel’s chef and events team can customise banquet menus.

The Penthouse, an indoor area measuring 201m² with double-storey ceiling, can accommodate up to 50 pax. It has a connecting kitchen that can be used as a feature show kitchen or closed from view as required.

Overlooking The Royal Bangkok Sports Club, the 441m² Penthouse Garden and Frangipani Bar form the adjacent outdoor deck, and can accommodate 200 pax.

The family striker

By Raini Hamdi

March 8, 2013

In Asia, many hotel owners are starting to transfer the authority to their sons and daughters. How will younger-generation hotel owners in the region shape the industry? Raini Hamdi talks to one of them and glimpses a different energy and perspective

Vitanart Vathanakul, Executive director
Royal Cliff Hotels Group & PEACH, Pattaya, Thailand

Are you and your brother now running the business completely?
Mum (Panga Vathanakul) has taken the MD/chairman position. Think of it as a football team – I’m the striker and my brother (Vathanai Vathanakul, 36, vice president) is defence.

Our responsibilities are clearly defined: I look after sales and marketing, business development and investment. My brother looks after operation, service, maintenance, engineering, etc. Sometimes there are overlaps of course. For example, if we’re building a new restaurant or improving on our design, I would give inputs based on market feedback, recruit a designer, then my brother would take over the responsibility for the contractors, engineers, etc.

So where’s mum in the football field?
She’s the coach, the manager. She also plays as well, in fact sometimes she comes in as the striker. My mum has always been a hands-on kind of person and has always taught us that, as owners, we can’t just stand back and let the GMs do their thing. We’re owner-managers, so we’re very involved in the day-to-day management, sales, reservations and so on.

Why are you the striker and your brother, defender?
My strengths are in presentation and sales skills. I enjoy meeting people. I’m energetic and an extrovert. My brother enjoys sales too and he’s not an introvert, but he prefers not to travel too much. He likes the service and operation part of the business.

It’s funny: growing up, I was actually shy and an introvert. For some reason, this changed as I grew. I’m still shy at heart though.

Are you close to your brother and do you both work well together?
Oh yes, he’s supportive. I’m blessed to have him as a brother. He’s the trailblazer for me; he led the way for many things in my life. I studied in the UK because he went there first when he was 11 and told me how great it was; that it wasn’t just the excellent education but learning multiple skills, sports, making friends from all over the world, understanding different cultures. I went when I was eight.

You’ve been in the role for three years now. Is it hard being back?
Yes, the transition was quite challenging. My education was not in hotels at all. I graduated in electronics engineering from Cambridge (UK) and my master’s degree was in physics.

Do you want to be a hotelier?
I always wanted to be a hotelier, but I always enjoyed those subjects – maths, science, technology – and my parents let us do what we wanted in college/university; we just had to make sure it was a proper subject, challenging and taught us analytical thinking. So when I chose electronics engineering, they said that’s fine, you could use the math skills and apply that to the business environment. I chose physics for my master’s because studying science in Cambridge was a dream.

How is the transition challenging?
When I came back, it was quite difficult to acclimatise in all sense of the word.

I have to use different skills now. While analytical skills still apply in decision-making, people skills are definitely needed. The biggest challenge is managing your team.

I also need multi-tasking and prioritising skills. Every day in a hotel is different.

Another challenge is delegating and trusting because I want to do everything myself. But sometimes, you have to say to the team, ‘help me with this’, and monitor their progress. It’s a steep learning curve.

So what’s the biggest strike you’ve made to date?
The biggest thing I did was set up our Internet marketing team. It was an area we lacked. Of course our sales managers were developing OTA distribution, but I needed fresh eyes to look at this in totality. I needed the young generation who is experienced in digital marketing to look at social media, OTAs, search engine optimisation, website optimisation, email marketing – the whole arena. My team of 12 staff in this department is the youngest in the whole Royal Cliff.

Our online sales rose in the first year by 30 to 40 per cent. I remember we had K-pop idols staying here in (January) 2011. Once we knew there were going to be over 20 bands, with the most famous K-pop stars coming over, we marketed it through social media. Within five hours of announcing it to the online community, we had over 500 rooms booked. I had to go to the reservations room and told the staff to relax – he was so tired because the phone calls kept coming in. Our fan base was 1,000. By the end of the K-pop programme, it was 5,000.

I think I’ve put in more youthfulness into Royal Cliff. When I came in, I also initiated projects such as our new restaurant right on the beach, Breezeo, and its ‘be yourself’ dining with fun things like a menu of over 100 cocktails. If you don’t like the 100 cocktails, there’s also a menu where you can create your own cocktail, choose your own liqueur, glassware, decoration, even ice.

I always emphasise the importance of creativity, being adventurous and taking risks.

“The younger-generation owners are very driven. We want to do a lot in a short time.”

And what’s a big mistake that you’ve learnt from?
Once, we had a lot of requests from bloggers to review the Royal Cliff. I declined them and I regret it to this day. I didn’t think I could get the best ROI from it. Some also felt the way I declined was rude, though I’m never rude to anyone. I learnt from that mistake, redeemed the relationship and they all came back.

I also can get impatient with business partners and we have unnecessary arguments. But I’ve learnt to be more patient.

Do you now see a younger-generation clientele at Royal Cliff?
Yes, we’re trying to tap the younger generation. I had a problem in that a lot of them felt Royal Cliff was unreachable – ‘a five-star plus product for my parents’. We’re saying, no, this is for young, sophisticated business travellers or for people who want to reward themselves and their families, and that it is reachable.

We’ve done a major rebranding exercise, from Royal Cliff Beach Resort to Royal Cliff Hotels Group, to emphasise that we have four different hotel products, one convention centre and 11 restaurants. And far from just a name change, we followed through with a one billion baht renovation and an investment on human resource training.

Do you meet other young hotel owners and how are you all different from the older generation?
Oh yes, there are lots of them in Bangkok and Pattaya. The younger generation is starting to take over from their parents. I studied with some of them and we now exchange notes.

In Pattaya, we meet for dinner sometimes, exchange ideas and do partnerships as well. I don’t see them as competitors. If I’m hosting a 10,000 pax convention, no way can I accommodate them all at Royal Cliff, so I always recommend this and that hotel.

The younger-generation owners are very driven. We want to do a lot in a very short time.

If you could build a hotel from scratch, what would you build?
I would put the Royal Cliff philosophy into it. It would emphasise the authenticity of Thailand and appeal to the younger generation. I would invest a lot in design and hardware because I understand today’s travellers are very intelligent. They may see that the room is beautiful online, but once they go and they touch it, they will know. I would never lie to my customers.

This article was first published in TTG Asia, March 8 – March 21, 2013 issue, on page 7. To read more, please view our digital edition or click here to subscribe.