In many respects, 2020 was supposed to be a milestone year. It has a pleasant ring to it, with balance and heft. It also had a convenient correlation to the optometrist’s shorthand for perfect vision. Well, 2020 certainly was a milestone -- but for reasons that no one ever could have predicted. Given that hindsight is always 20/20, we figured it was time to look back on the history of travel and pull out some of the most important innovations in travel technology over the last half-century. It was a period of tremendous growth, with major expansions of the industry in all directions: land, sea, air. The tourism industry grew from around 165 million in 1970 to 1.5 billion in 2019 (obviously 2020 is an outlier here, so we went with 2019). Technology was a tremendous force in driving this growth in travel, mirroring broader trends in technology-fueled growth across the global economy. So which travel tech innovations had the greatest impact and fundamentally and positively changed the trajectory of the industry? Here's a timeline of the most important moments in travel technology over the last 50 years. Each signifies a milestone that influenced travel’s journey, ultimately becoming a global industry that provides opportunities for millions of people. The travel industry is changing rapidly and even the dominant online travel agencies aren't safe from disruption. New technology from augmented reality to next-gen social media like TikTok will continue to change the way we get inspired, where we go and how we share our travel experiences. Pressing questions lie ahead as we think about the next 50 years and to predict the future it's important that we first understand the past. The past informs our thinking around transformative questions like: If virtual reality becomes ultra-realistic will we still want to travel in the future? Will biometrics safety tech be so accurate that we'll no longer have lines at the airport? Will the internet of things (IOT) help travel companies deliver hyper-personalized travel experiences? Let's hop on a time machine through the last 50 years of travel innovation! January 1970: The 747 officially enters service The era of mass tourism really took off with the Boeing 747, which was in and of itself a technical marvel. For the first time, tourists could be transported in large numbers across vast distances. Both leisure and business travel became not just more practical and convenient but also a bit more affordable, as airlines could lower prices by packing more people into a single aircraft. October 1971: Magic Kingdom opens in Florida And with it began the relentless global march of theme parks worldwide. As the first expansion beyond Disneyland in California, it not only heralded the beginning of an era of mass tourism and packaged culture -- but also the idea that technology could enable more fluid in-person experiences: the entire kingdom was built one story above ground level to accommodate utilidors, the passageways that cloak all operations from public view. That preserves the fantasy -- and put the “magic” in the kingdom. 1976: SABRE opens to travel agents Since going live in 1960, the GDS had transformed how American Airlines managed its bookings. But the real moment that mattered was when SABRE opened up to travel agents. This meant that travel agents could more efficiently serve customers and thus accelerated the popularity of package tours, resort destinations and last-minute travel. Eventually, of course, Amadeus and Travelport entered the market, further fueling travel’s digital transformation, such as OTAs making self-serve travel a reality. 1976: FOSSE installed as Marriott’s first PMS Dave Berkus wrote the code for his PMS in 1974, growing his business rapidly as he installed his property management system at more hotels. Eventually, Marriott licensed the technology, called it FOSSE, rolled it out worldwide...and proceeded to use it for nearly three decades! The PMS was a companion to existing Central Reservations Systems, which managed reservations externally but didn’t offer functionality to manage internal operations and the guest experience. Today, there are nearly 700 PMS vendors, alongside other hospitality technologies that help hotels manage operations, reservations and customer relationships. Legacy tech held sway for decades, but cloud-based options are loosening the grip. [source] 1976: Foreign currency exchange replaces gold standard With the Jamaica Agreement among IMF member countries, floating exchange rates became the global norm. Travel between nations would eventually be influenced greatly by the relative value of each country’s currency, creating a new dynamic in how travel trends unfolded around the world. Fluctuations in currency valuations would now influence the ebbs and flows of travelers based on their home currency’s relative strength and weakness. May 1981: American Airlines launches loyalty program American Airlines wasn't the first to launch a loyalty program (that honor goes to the defunct Texas International Airlines). But it remains the world’s largest and longest continuously operating loyalty program. Marriott followed closely after, launching its loyalty program in 1983. Loyalty would eventually become a billion-dollar business for hotels and airlines, who benefited from the rise of premium rewards credit cards. An early AAdvantage loyalty card shared on FlyerTalk Forum September 1983: GPS goes public Originally developed for military use, President Ronald Reagan opened the system up to the public in September 1983 after a Soviet jet accidentally shot down a Korean passenger plane. Since then, GPS has been the lynchpin for so many of travel’s transformation technologies. What would rideshare be without mapping? How popular would the iPhone have been without point-to-point directions? Would travelers be comfortable exploring new places in such great numbers without the help of digital maps? The cost would have been too prohibitive for any one company to develop this technology on its own. A military GPS tracker prior to its public release [source] January 1988: The first STAR Report The STR report has become the world’s most indispensable source of market intelligence for the hospitality industry. With the Smith Travel Accommodations Report (STAR), hotels could use actual aggregated data to measure performance against similar hotels. The STAR became indispensable and maintained its place at the center of a revolution in data-driven market intelligence. The STAR report became an essential part of hotel revenue management. Early 1990s: Marriott creates Demand Forecasting System Taking a cue from the nascent application of revenue management in the airline industry, Marriott created a Demand Forecasting System for its full-service hotels and a Revenue Management System for its limited service ones (read the genesis story here, it’s a good one!). By building models to predict demand, the hotel could more accurately price its rooms and optimize its revenues. This strategy was obviously transformative and became widely used across the industry -- especially as cloud computing made revenue management more practical for hotels of all sizes. October 1996: Microsoft Expedia Travel Services Expedia started as an internal project within Microsoft. Its launch in 1996 heralded a sea change in the way travel was booked. No longer reliant on travel agents and ticketing departments, travelers could now research and book travel for themselves. Eventually joined by Booking.com, Google and hundreds others, Expedia entered the scene just as millions of people were accessing the internet for the first time. As pure-play technology companies, OTAs rapidly cemented themselves at the center of the industry. An early version of the Expedia website [source] February 2000: Salesforce launches its Web API The first enterprise application programming interface (API) was launched by Salesforce at its IDG Demo conference. Its XML API was the first out of the gate, unleashing a wave of innovation as businesses could share data with other companies and customers in an entirely customizable manner. As APIs proliferated, data silos fell. Organizations could build applications that pushed and pulled data across products internally, while also making data more accessible to external partners. This accessibility drove innovations around open APIs, which enabled hospitality brands to build customized tech stacks with two-way data sync, all at a lower-cost than legacy tech. The original Salesforce site. [source] 2001: First review added to Tripadvisor Tripadvisor began as a personalized trip planning website that aggregated reviews from guidebooks. But a small button asking visitors to add reviews took off, with eager travelers leaving reviews en masse. As the first user review site in travel, Tripadvisor began to wield extraordinary power over traveler decisions. Hotels began to watch their online reputations closely, focused on both responding to reviews and getting guests to share positive experiences online. Yelp followed in 2004, cementing user reviews at the center of the online reputation economy. June 26, 2001 from the Wayback Machine. June 2004: CouchSurfing and “live like a local” home-sharing Conceived in 1999 and launched in 2004, CouchSurfing was a precursor to the commercialization of home-sharing by Airbnb. Alongside other sites like Hospitality Exchange, it offered travelers an online platform to connect with locals. These “hosts” would not only share their homes with travelers but would often become local guides, showing travelers a real slice of local life -- yep, this was also the original “live like a local” brand promise! [source] April 2006: Google Translate introduces instant translation While translation services transformed the way that we communicated across cultures, instant translation changed how we interact in real-time with others. Google Translate was the first mainstream instant translation service. Launched in 2006, it started off as browser-only and struggled to be accurate and sensible. Even in its earliest iteration, it was a tremendous help to travelers. Today, the app now supports 109 languages, with 500 million users translating 100 billion words per day. The app also translates photos and has a “conversation mode” so travelers can communicate fluidly with others. Instant translation also became a standard feature on Apple's latest iOS 14 update, which includes a Translate app that supports 10 languages. Users can download languages for offline translation and can also set up automatic language detection, which makes it a must-have tool for any traveler. Google Translate’s simple interface made instant translation easy August 2006: Amazon Web Services and cloud computing Cloud computing has been a fulcrum for innovation. Dave Berkus, investor and inventor of FOSSE PMS, sees cloud as central to the future of hospitality technology: “If we look ahead ten years, and certainly beyond 10 years, it would be easy to see a single cloud based system integrating everything from CRM to reservations to the accounting functions at the properties, all the way through all forms of marketing and follow-through.” Amazon Web Services accelerated adoption of cloud computing by making it easy for companies to access shared server space on a “pay what you use basis.” Eventually embraced by Microsoft, Google, IBM, Oracle and others, cloud computing helped enterprises reduce IT infrastructure costs and increase flexibility. For startups, the technology was even more transformative, as it reduced upfront IT costs and simplified scaling up to accommodate demand. [source] June 2007: the iPhone changes everything After the GDS, which streamlined the buying and selling of travel via phone and online, the iPhone arguably had the biggest impact on travel. It was the start of the mobile computing era, which would eventually put smartphones in the hands of billions of people worldwide. Now travelers could take their computers wherever they went, meaning that they could make reservations at restaurants, search for things to do and, most importantly, stay in touch with friends and family while traveling. The smartphone became an indispensable tool -- and massive fulcrum for the growth of the industry, becoming cameras, contactless credit cards, room keys, taxi dispatchers, check-in counters, mobile travel agents and local guides. The first iPhone on display in 2007 [source] August 2008: Airbnb ushers in the home-sharing economy Originally called Airbed & Breakfast, Airbnb essentially commercialized the CouchSurfing model of connecting travelers with locals offering a place to stay. It gave homeowners a way to monetize unused space and fulfilled the emerging “live like a local” traveler ethos. The company would eventually transform the entire hospitality industry by expanding the diversity of accommodation types worldwide. Hotels were threatened, local governments bristled, and Airbnb grew to be a behemoth. The concept would rapidly expand to other assets, such as cars, boats and RVs, forever changing the economics of stuff -- and giving travelers an entirely new way to experience the world. 2010: UberCab launches rideshare revolution Taxis had long been a pain point in travel. From unknown wait times and handsy drivers to cabbies not wanting to go to certain neighborhoods and price-gouging at the airport, grabbing a cab was always a bit fraught. Now, with cabs on demand, pricing was transparent, wait time was visible and a driver’s reputation upfront. Travel would be forever different. Early images of UberCab October 2011: Apple integrates Siri into iPhone 4 Voice forever changed the way that we interact with our devices. The journey began when Apple integrated its Siri voice technology into the iPhone 4. As one of the earliest efforts in voice control, it was far from perfect. But it signaled a shift in thinking about the flexibility and accessibility of our digital devices. The adoption of voice accelerated with Amazon's Alexa in 2014 and Google's voice assistant in 2016. With all the major players integrating voice, it's now become a ubiquitous way to interact with our devices -- including the curtains, lights and appliances in smart hotel rooms! Original coverage of voice control by Engadget. November 2014: Digital keys become the next must-have Demagnetized cards are frustrating -- even more so when you happen to be in Vegas and the front desk is half a mile away. The first hotel chain to introduce digital keys was Starwood, who piloted the SPG Keyless program at 10 hotels in November 2014. Other brands followed close behind, with Hilton announcing a similar pilot later that year. Since then, keyless has become standard across hotels worldwide. Digital keys also became a clever driver of loyalty, as digital keys could only be accessed by members. Keyless entry also has become a major part of the vacation rental experience, allowing owners to manage properties remotely without a traditional “hand off” of keys. The ease of access was welcomed by guests, which often valued the self-service aspects of vacation rentals in the first place. Keyless entry becomes standard as hotels partner with technology vendors worldwide. 2014: Uplift brings “buy now, pay later” to travel Even before Diner’s Club launched its charge card in 1950, most department stores offered some sort of installment plan. Then, as banks began to issue credit cards that didn't need to be paid off each month, America turned to credit and installments fell out of favor. Other regions preferred installment payments over credit, with certain countries (like Brazil) maintaining a strong consumer desire to pay in installments. In 2014, FinTech startup Uplift began offering its core service: a “buy now, pay later” installment option integrated directly into the payment systems of major travel suppliers. There’s also Affirm, which integrated with Expedia in 2016, and FOMO Travel, which offers interest-free payment plans for travel booked through its partners. Uplift integrates within the checkout flow [source] Bonus: Travel insurance The first known seller of travel insurance was James Batterson, who opened his travel-focused agency in 1864. For those who could afford to travel, the insurance was a must-have, given the risks of traveling long during that era. Today, travel insurance has become a global industry with a variety of options that range from stand-alone policies, add-ons to existing health insurance policies and benefits attached to premium credit cards. Travel insurance is an important innovation as it provides peace of mind and confidence for travelers. Travel insurance that can be customized to individual needs offers a backstop to uncertainty for travelers. Of course, the global pandemic revealed how complex the product has become, with many travelers realizing that their policy did not cover COVID. -- The tourism industry is one of the most exciting and rewarding career paths one can take - staying on top of travel technology trends is critical to success. Did we miss any major innovations? Let us know over live chat so we can add yours to the list!
Hotel Revenue Management Software Articles
Looking for your next career step in the hospitality industry - or outside of it? Whether you’ve just worked in the hospitality industry briefly or you’re an industry veteran, you should be proud of and excited about the skills you’ve developed working in hotels, restaurants, casinos, cruise ships, or any other hospitality organization. Hospitality work experience delivers a plethora of benefits that make you an attractive candidate for jobs even outside of the hospitality industry, and many employers specifically seek out candidates with hospitality-style skills and experiences. So if you’re polishing up your resume or just looking for some inspiration during the job hunt, keep reading to discover more than 30 benefits of having hospitality experience under your belt (and why employers are lucky to have you). Organizational and technical skills A hospitality career presents an ideal opportunity to develop a variety of skills that you will use throughout your career - wherever your career path leads. Communication skills: Any hospitality job, from a front desk agent to a line cook, requires strong communication skills. You’ll learn how to communicate effectively with even the most difficult of guests or communicate efficiently during events or busy rushes. In addition to verbal communication with internal audiences (colleagues and leaders) and external audiences (guests), many jobs set you up to master written communication too. Listening skills: Of course, you can’t have good communication skills without strong listening skills! For example, you’ll practice listening skills when getting to the root of a guest’s complaint or learning about a new policy or procedure. Problem-solving experience: At the heart of many hospitality jobs is service recovery - or problem-solving. Ever turned a guest’s horrible stay around into a positive one? Or figured out how to accommodate new reservations in an almost full house? These are all examples of problem-solving in action. Customer service expertise: The goal of every hospitality job is to deliver great service. You’ll master not only service recovery, but you’ll also learn to proactively create a fantastic experience for the guest, diner, or customer. Tech-savvy: Hospitality jobs across the industry now include a technology component, as many roles rely on various digital tools and systems throughout the workday. Your position might give you a chance to become an expert in point of sale systems, property management systems, marketing software, and more. Attention to detail: If you’ve had any hospitality experience, you know that attention to detail is crucial to delivering a great guest experience. Every task requires you to be detail-oriented, from taking a lunch order for a guest who’s allergic to shellfish to carefully loading all of a guest’s luggage into their car upon check-out. Upselling: Front desk agents, restaurant servers, and bartenders get the chance to master the art of the upsell. These roles teach you how to identify needs and sell effectively - which are important skills to know even if your career path takes you to a different industry. Handling of sensitive data: Many roles in hotels or restaurants require handling of credit card information, dates of birth, government IDs, and other sensitive data. By learning how to safely and securely handle this data, you can prove that you’re a trustworthy employee comfortable with that responsibility. Continuing education: Want to learn skills that will take your career to the next level? Many hospitality companies have continuing education and training programs that help you become a better manager and leader. Your hotel or restaurant may also offer trainings that don’t relate specifically to your role but are still interesting and engaging - like wine tasting classes or menu tastings. Transferable skills: Just because hospitality work experience is on your resume doesn’t mean you need to stay in the hospitality industry forever. In fact, the skills you’ve honed by working in hospitality, like communication skills and flexibility, are easily transferable to a slew of other industries. Hospitality experience is actually a great launchpad to start a career in a different vertical, such as business, education, medicine, entertainment, technology, public service, and more - even celebrities like Tom Hanks and Lady Gaga worked in hotels and restaurants before their famous careers took off! Resume-ready experience: Speaking of transferable skills, if you’re applying to customer service jobs outside of the hospitality sector, for example, you probably don't need to make many changes to your resume. Stats like number of calls taken per day, numbers of guests assisted, and guest satisfaction scores are all relevant to similar roles in other industries. People skills One of the top benefits of hospitality management experience is that these jobs give you endless opportunities to develop people skills through customer experience interactions. Front-of-house roles, in particular, teach you to be more patient and flexible when working with guests. And all hospitality roles give you a chance to become a better team player and to grow your personal network. Conversational skills: If you work in a front-of-house role like check-in or concierge, you were probably a people person even before you were hired. But if not, you’ve probably gotten ample opportunity to practice your conversational skills, since engaging conversation is a key to making people feel welcome, important, and appreciated. Flexibility: Have you ever experienced an unexpected situation in your hospitality job? Most industry veterans have story after story of crazy situations which required them to think on the fly and be flexible in order to find a solution. In a hospitality role, you’ll probably, at times, need to help out in other departments or try something new, tasks which also give you the chance to embrace flexibility. Emotional intelligence: If you’ve ever been taught to anticipate a guest’s needs, then you’ve been trained to use your emotional intelligence. By reading small signals like the guest’s tone of voice and body language, you can uncover more about their wants and needs then they might even be able to tell you. Emotional intelligence is a powerful skill to master no matter where your career path takes you. Teamwork: Nearly every hospitality business has more than one employee, so you’ll likely be working on a team no matter which kind of hospitality organization you’re a part of. A great hotel or restaurant runs like a well-oiled machine, which means you’ll have the opportunity to become a better team player. From cleaning hotel rooms to proactively handling service requests - hospitality is a team sport through and through. Leadership skills: Many hospitality organizations are hierarchical, and if you’ve started in an entry-level role, it probably won’t take long for you to get promoted to a supervisory role. Hotels and restaurants are the perfect training grounds for future managers and leaders since you can work up to managing teams of people with increasing responsibility. Patience: Whether you’re an entry-level employee or a manager, working in a hotel or restaurant will certainly teach you to be patient - not just an important career skill, but an important life skill too. Empathy: Sometimes we complain about our guests’ demands, but at the end of the day, hospitality professionals truly care. Working in the hospitality industry helps you develop empathy when you put yourself in your guest’s shoes to better understand their wants, needs, and frustrations. Integrity: Working in a hotel offers many opportunities for you to do the right thing - sometimes instead of the easy thing. Maybe you’ve stopped a guest from driving home after a few too many drinks at the lobby bar, for example. Being a person of integrity will help you succeed in your career and in life. Confidentiality: Hospitality businesses must often keep secrets, like about high-profile guests in-house, which means every employee is entrusted with confidential matters. Working in a role that requires confidentiality proves you can be trusted with sensitive data and a high level of responsibility. Experience working with people from different backgrounds: One of the most enriching parts of working in hospitality is working with colleagues from every walk of life. It’s not uncommon to hear a variety of languages spoken in the employee locker room or work alongside people from around the world. These experiences help you appreciate diversity and become a more effective and empathetic leader. Valuable network: In addition to your colleagues, hospitality professionals have the chance to meet interesting people every day - from guests to managers to vendors. Your expansive network might lead you to opportunities you wouldn’t have known about otherwise, or perhaps one of your connections could become your employee in the future. International experience: Working with and serving people from different cultures might not be the only international exposure you gain from a hospitality job; hospitality is a global industry, so you might also get the chance to work abroad. International work experience gives you the opportunity to learn a new language, understand different customs, and open your eyes to other cultures. Unique perks that only a hospitality job provides Hospitality jobs don’t only pad your resume with in-demand skills, they also offer some amazing perks that you’ll never find in a traditional office job. Debating whether to switch industries? This list just might entice you to stay in hospitality. Free hotel stays: What’s one of the best benefits of working in the hotel industry? Comp nights! Besides just being a fun perk, experiencing hospitality from the guest’s perspective can help you see opportunities for improvement in your own organization or career. Career growth within one property: Hospitality businesses, especially hotels, are hierarchical, and there’s a clear trajectory to the top - the role of general manager. If you’re determined to become a GM someday, you can work your way up from an entry-level role at the same hotel. Career growth within a brand: If you work for a large hotel company like Marriott or Hilton, opportunities for internal transfers abound. If you’re a front desk manager in one city, you can likely earn the chance to transfer to a similar role at sister property in the location of your choice. International opportunities: As you move up in your hospitality career, you might also consider working abroad. Many hotel brands and groups have international transfer programs that help you sort out visas, temporary housing, and language skills to make a move to a new country easier than if you were to go at it alone. Work where people vacation: Forget the stuffy office building, if you have a career in hospitality, you might have the chance to work in some of the most beautiful destinations in the world - places where people visit on bucket-list vacations and honeymoons. Even if the hours are long, time flies when you’re surrounded by jaw-dropping architecture and picture-perfect scenery. Making a guest’s day: As a hospitality professional, you might be responsible for making guests’ dreams come true. Maybe you’re helping pull off a surprise engagement party or giving a young guest a stuffed animal; there’s a special kind of satisfaction that comes with knowing you played a role in memories for a lifetime. Industry nights: That hospitality bond doesn’t end at the doors of your hotel or restaurant; the entire industry forms a sort of family, and many cities are home to a thriving culture of hospitality professionals. It’s common to find discounts for industry employees at local bars or special events only open to hospitality workers. Camaraderie: Hotel and restaurant employees make up one big family. There’s a special bond that forms between hospitality workers as the result of hard work, long hours, and crazy situations that you get through together. -- Whether you're in event planning at an urban boutique hotel, a bellhop at a remote resort customer or even hotel manager at a roadside motel - customer satisfaction is everything in hospitality. These customer interactions will groom you to be a better person in both your professional and personal life. Hotel management may seem like a challenging career path especially in the wake of the pandemic that hit last year but the pros far outweigh the cons to this fulfilling lifestyle. Did we miss any fantastic benefits of hospitality experience? Let us know!
We love metrics in hospitality and real estate. From RevPAR to ADR, tracking key metrics are what allows us to understand our performance, improve operations and ultimately drive profitability for management and owners. But what's the point of working so hard operating a hotel if you are not making money once all expenses are paid? Cash flow is king! That’s where net operating income comes in: it shows you how well you’re doing at managing expenses and turning top-line revenue into bottom-line profit. In this article, you’ll see the value of NOI by learning both how to calculate it and how to translate it into operational improvements at your hotel. What is NOI (Net Operating Income)? NOI, which stands for net operating income, is the amount of money left after you have paid out all of your expenses. It's a profitability metric that shows you how well a hotel operates, from both a total revenue standpoint and total expenses standpoint. NOI is less prone to manipulation than other metrics, as you can’t really perform too many tricks to inflate income or reduce expenses. You may also see this metric as net operating profit, or NOP. Understanding the NOI Formula (NOI Calculations) NOI = Gross Operating Income - Operating Expenses and can be found at the very bottom of your income statement. Property owners focus on this metric because it tells them a lot about property value, potential rate of return on investment and even impacts financing costs like mortgage payments since banks and lenders want to know that there's enough income to cover interest payments. NOI can also be expressed as a percentage of total revenue, which is how hotel management can easily identify upward and downward trends in profitability. In that case, the formula is: NOI = (Gross Income - Operating Expenses/Gross Income)*100. Gross income would include all potential rental income a property generates, from both rooms and non-room lines of business. Operating costs are all expenses necessary to maintain and operate the business. Among these expenses are insurance, brand fees, property management fees, utilities, property taxes, repair cost and maintenance (even preventive maintenance), payroll, commissions and anything else related to day-to-day operations. Not included here are any expenses related to debt payments, income taxes, capital expenditures, depreciation and amortization. Given the relationships in the formula, you can increase net operating income in two ways: increase revenue or reduce expenses. Ideally, you'd like to do both! If you successfully increase income and reduce expenses, you'll see a much more powerful impact on NOI than doing one over the other. Other factors that influence NOI include a property’s ADR, the market segment it serves and the property’s characteristics, such as age, amenities and location -- all things that affect a property’s income potential and overall cost structure. Why is NOI so Important to Commercial Real Estate Owners? Every facet of real estate investment is based around NOI since investment properties are valued and compared by a metric called capitalization rate (cap rate). We'll get deeper into cap rate in a future article but the value of a hotel can generally be measured by dividing NOI by cap rate. Let's say a hotel does $1M in NOI and it's located in downtown San Francisco with a cap rate of 6%. That hotel's value would likely hover around 1,000,000/.06 or $16.7M. See why NOI is so important to hotel owners? But wait, there's more. It's not only real estate investors care about NOI - lenders typically base their willingness to lend on the amount of earnings before interest (EBIT) that a property can generate. EBIT is equal to NOI + interest expense + taxes. Whether you own a hotel, rental property or own any other kind of commercial property, understanding the net operating income formula (and how to grow NOI) is critical to your success. Ultimately we use a lot of terms and acronyms in real estate investing but ultimately we want to know how we're doing relative to comparable properties. Understanding NOI informs our investment decisions and are more important now than ever before. How to Influence Your Hotel’s NOI Since NOI is a fundamental metric for calculating a hotel's ability to generate profit, it correlates directly to hotel valuation -- and thus a focus for owners and management: Hotels with healthy/growing NOI will be valued more highly than those with low/diminishing NOI. And those with negative numbers? That would be Net Operating Loss, or NOL. Not a place ownership wants to be! Here are three tactics to influence your hotel’s net operating income and make your boss happy! Expense Reduction's Impact on NOI NOI benchmarks operational efficiency and helps you identify areas for improvement in your hotel operations. A simple way to turn NOI into a powerful tool for expense management is to track variable costs as percentages of revenue. You won't do this with your fixed costs, as those don’t fluctuate with occupancy. It’s your variable costs, which go up or down alongside occupancy, that you have direct control over each day. For instance, rent, management payroll and other overhead expenses are fixed; they don’t change each month and you have little control over them. But, for expenses that you can influence, such as front-line labor, linen usage, third-party commissions and cleaning supplies, you can control these on a daily basis. By tracking these variable costs as a percentage of revenue, you can easily see trends and catch runaway costs before they become problematic and depress NOI. For the most precise control over expenses, monitor your NOI on a daily basis so that you can adjust operations on the fly and keep your finger on the pulse of profitability. RevPAR's Impact on NOI Growth Of course, increasing revenue also has a positive impact on NOI. After all, you can only cut expenses so far because each property has fixed overhead costs. And aggressively slashing costs can negatively impact the guest experience -- a short sighted move that ends up making it more difficult to maintain desired occupancy levels. Work closely with revenue management and marketing to create compelling campaigns that are targeted to the right people. That means that you aren’t just discounting rates in pursuit of occupancy. You are carefully marketing your hotel in a way that attracts the best guests who are paying rates that don’t jeopardize your pricing power. Marketing to your most loyal guests is a great way to both boost occupancy and preserve ADR. These guests are already familiar with your hotel, so there’s less education needed. And, even better, these guests are often less price-sensitive than transient guests booking via a third-party. So you have an easier path to booking, one that doesn’t require “race to the bottom” discounting. NOI Can Benefit Greatly From Upsells and Ancillary Add-ons The third tactic to influence net operating income is to increase income from other areas of the property beyond just putting more heads in beds. This can include a variety of initiatives, such as focusing on upselling guests after booking and offering incentives to book packages that include ancillary services. You should also do what you can to maximize revenue from guests once they have arrived on property. You've got a relatively captive audience; thoughtfully optimize the on-property experience to entice guests to spend more during their stay. This could include things like a generous happy hour at the bar, merchandising efforts to highlight your property’s culinary delights or a welcome drink that gets guests ready to grab a bite. NOI During A Pandemic or Downturn Major asterisk: the pandemic has dramatically restricted the ability of hotels to increase revenue. There's not just lower demands but there's also limited capacity. In this environment, NOI is even more valuable. To stay afloat with revenue harder to come by, you must assiduously track expenses. Those that carefully manage expenses will be more likely to survive than those without a strong focus on NOI.
Curious about property management? Whether you own an investment property, you're a property manager - or even just looking to break into the industry - you’ll gain a solid introduction to property management in this article. By the end of this page, you’ll know the differences between a property management company and an individual property manager and understand the benefits of using one or the other. Let’s get started! Property Management Defined In short, property management is the operation and oversight of real estate assets. Property managers can work with residential properties, such as apartments, condominiums, townhouses, or detached single-family homes, or commercial properties, like shopping centers and office buildings. Property management serves as the bridge between the property owner and the tenant, and the property manager often handles maintenance and physical upkeep in addition to driving revenue and interfacing with tenants or guests. Types of Rental Properties When it comes to residential rentals, properties that look the same on the outside can be managed in completely different ways. Residential rentals can be split into two categories: short-term rentals and traditional long-term rentals. Depending on the goals and preferences of homeowners, they might decide to focus on short-term or long-term rentals. Short-term rental properties are made available for stays less than one month in duration. Some short-term rentals allow nightly reservations while others focus on weekly stays. Short-term rentals are an alternative to hotels for vacations or business trips; they’re fully furnished and usually come stocked with linens, toiletries, and kitchenware. The phrase “short-term rental” often refers to urban apartments that allow short stays, while “vacation rental” or “vacation home” refers to detached houses available for short stays. Long-term rentals, on the other hand, generally only allow stays longer than one month, and it’s not uncommon to find traditional rentals that have a 1-year minimum leasing term. These properties are usually unfurnished. Tenants can bring their own furniture, set up their own utilities, and make the place feel like home with their own decor. Property Management Structures In some cases, the property owner manages their own property, but many owners choose to outsource the hassle of property management activities to a professional, whether that be a real estate agent, an individual property manager, or a property management company. In all of these structures, the owner pays the property manager a fee or commission for their services and pricing varies based on the level of service provided. Some service providers only handle key hand-offs while others may manage multiple units within a larger multi-family complex and handle other facets of the operation such as: listing sites, maintenance requests, rental income accounting, setting up VR management software and even managing housekeeping services. In popular leisure destinations, it’s common to see real estate brokers that double as property managers. Why? Many of the broker’s clients are purchasing vacation rental homes that they want to rent out during the parts of the year they’re not using the property. These broker-managers offer deep expertise in the local market and in the real estate and property management fields. Other owners might choose to hire an individual property manager to handle all property management activities. An individual property manager will be dedicated to the property and know all the ins and outs of the property, the market, and the tenants or guests. Professional property management companies also bring a wealth of experience and access to relationships with construction companies, travel agents, and other relevant connections. Some property management companies focus on a specific niche, like condos at a specific ski resort, while others manage hundreds of vacation homes of various sizes and price ranges across the world. A Day in the Life of a Property Manager What exactly does a property manager do? Whether a company or an individual manages the property, the operational tasks will be quite similar. Property managers have two main responsibilities: maintain the physical property and handle the business aspects of the property’s operations. From a maintenance perspective, the property manager would respond to any alerts of damage or maintenance issues. If a tenant or guest notifies the property manager that there’s a leak in the bathroom, the property manager will contact a plumber and ensure the issue is resolved. The property manager will also schedule seasonal maintenance, such as winterizing pipes or cleaning gutters. The property manager is also the link between the owner and the tenant or guest. At short-term rental properties, the property manager advertises the property, manages reservations, ensures guest satisfaction, and schedules cleanings between stays. At long-term rental properties, the property manager also advertises the property, but rather than accepting reservations, they screen potential tenants, manage lease contracts, and bill tenants for rent payments. Why use a Property Management Company? Property owners who want to outsource property management must decide whether to use a broker, an individual property manager or a property management company. Property management companies can offer several important benefits that deliver additional value for the owner and the overall business: expertise, connections, and scale. Property management companies that work with dozens or hundreds of properties and have years of experience can bring valuable expertise to the table, especially for short-term rentals. These companies know how to market properties online, delight guests, and provide great experiences. Their operations are a well-oiled machine, and they know the nuances of hospitality, marketing, and legal requirements in the area. In addition to operational expertise, property management companies have relationships with vendors and contractors who work closely alongside them. If your property needs maintenance or decor advice, the property management company can likely snag a discount on these services. Not only that, but if the property management company provides cleaning services, furnishings, or linens, they often receive bulk discounts by operating at a larger scale, which means the owner can save money too. While property management companies can deliver a lot of benefits for owners, it’s important to remember that these benefits come at a literal cost in the form of a management fee or commission. The owner must balance their own financial goals with the efficiencies that come with using a property management company. Property Management Licenses and Credentials Another reason that owners choose to work with property managers is that many local municipalities require specific licenses or credentials. Some states or cities require property managers to hold community management licenses or special operating licenses for short-term rentals. The application process for these licenses can be complicated and lengthy, and a professional property manager will know secrets to a successful application. Besides operating licenses, some states mandate that property management companies also hold broker’s licenses, which allows them to advertise properties via the multiple listing service (MLS) and hold showings at rental properties. Whether you’re investing in real estate for the first time or considering launching your own property management company, you can find exciting business opportunities with short-term and long-term rentals. What else do you want to learn about property management? Let us know!
COVID-19 has had deep and far-reaching impact on the tourism industry. And, while the world waits for a universally-safe vaccine, most businesses – especially hotels – are starting to plan for the future. How will consumer tastes change as a result of the pandemic? The “new guest” of the immediate post-COVID era will have different needs and expectations of their hotel stay. Property managers can start building services and amenities that meet the demands of the first influx of travelers to arrive after the lifting of COVID travel restrictions now – because only by investing in the right tools and technology today can you get an edge on your competition then. Here’s how traveler expectations have changed during the COVID-19 pandemic and what your hotel needs to do to win more bookings in the future. Who is the Traveler of the Future? Travelers are paying close attention to how all brands – and especially hotels – are communicating and reacting to the pandemic. Brands that are perceived as “insensitive” to keeping guests safe, or seen as not taking precautions seriously, will be punished in the post-COVID era. There are a few data points from RateGain that demonstrate this point. First and foremost, guests are putting health and safety first. Hotels can expect to see a 4x increase in questions around property restrictions and safety procedures. If your property can’t give a satisfying answer to how it’s keeping guests safe, your brand will suffer: 60% of travelers punished brands for being insensitive in their response to the pandemic. The guest of the future is also turning to social media to learn more about your hotel’s safety protocols, as well as room availability. RateGain found that 65% of Indian travelers prefer getting brand updates on Facebook. In fact, few travelers are turned off by brands that advertised during the pandemic – 92% of those surveyed by RateGain said they could understand the economic stress the pandemic caused and didn’t feel that it was inappropriate to advertise during the crisis. What does this mean for your hotel? The post-pandemic guest is looking for balance in the way your property communicates. More communication is definitely preferred – guests want to hear from your hotel regarding availability, safety protocols, and opening/closing restrictions. This guest wants your property to acknowledge the severity of the crisis and to show how your team is taking every precaution to stay open to travelers responsibly. This guest is open-minded when it comes to marketing messages; they won’t punish your property for continuing to run promotions, so long as you demonstrate you’re putting the guest’s needs first and foremost. On social media especially, your marketing team must strike the right balance between promotion and precaution. Building the Digital Experience Before the pandemic, guests interacted with a hotel brand primarily through the physical experience (e.g., how comfortable was the bed?) and the service experience (e.g., how easy was the check-in process?). Now, there’s a third layer through which the hotel will leave an impression with a guest: the digital experience. All three pillars will be important to meeting the needs of the post-pandemic traveler, but hotels are currently least equipped to capitalize on the digital experience. The digital experience incorporates technology and online platforms to meet guest needs virtually – before, during and after their stay. The digital experience is the primary way to make a post-pandemic guest feel seen, heard, and cared for by the hotel’s physical and service experiences. Here’s what this means in practice. Drive Revenue by Prioritizing Guest Safety Integrating this digital experience with a property’s amenities and service offerings is key to driving revenue. For a general manager, winning the guest of the future starts by clearly following global health and safety standard operating procedures – and communicating these measures as transparently as possible using social media and email to win guest trust. Digital tools can simultaneously reduce variable costs at the property while meeting guest demand for social distancing measures. In your operations, implement touchless check-in and contactless room-service for your F&B team. Shut down buffet-style dining options and add healthy meals to your menu. Augment the service experience with immunity-boosting in-room snack options. And, evolve the physical experience by creating a safe in-room experience and offering a digital concierge. These measures both personalize the guest experience and drive revenue by supplying amenities that guests actually want. Sales and marketing teams should focus their effort on improving your hotel’s reputation using guest feedback. This team must communicate what is being done to improve safety at your property as well as to promote user-generated content, providing social “proof” that your hotel is being honest and transparent in its effort to keep guests safe. Harness positive customer reviews to win trust with travelers by showing, rather than telling. Make sure you’re regularly updating your social media profiles, OTA listings, and website with all precautions your property is taking. Finally, revenue managers will play an outsized role in attracting new travelers following the pandemic. New data from RateGain shows how the market has become much more dynamic since COVID-19 started: A hotel changes its room rates 5x per day 60% of users seek to access content via mobile 45% of activities can be automated using technology That technology can lead to 50% cost savings 26% of work is accomplished outside traditional work hours What do these numbers mean for revenue managers? The digital experience isn’t just for guests: revenue managers need a reliable rate intelligence platform that can integrate with your existing Revenue Management system to optimize rate shopping and monitor real-time rate changes, improving your price strategy accordingly. You also must be able to capture mobile-first guests – otherwise, you’re missing a massive competitive advantage. Three Ingredients to Attracting Post-COVID Travelers It’s hard to know when the pandemic will be over, but it’s possible to start pivoting your hotel’s operations and outreach to be prepared for that inevitable eventuality. The new guest will expect to have consistent, positive service, physical and digital experiences with your hotel. Focus now on three key investments which will help your hotel win more bookings from post-pandemic travelers: Cognitive revenue management: how can a digital revenue management tool help you optimize pricing in a dynamic market? Can you improve competitive intelligence and use booking data to show the guest you know and anticipate their needs? Smart distribution: how can your brand partner a channel manager to simplify room distribution? How can you improve discovery with OTAs and other new channels? Targeted social media: how is your brand listening to customers on Facebook and other platforms? How are you sharing your safety measures transparently? How can you build your brand reputation using customer reviews and other user-generated content? By focusing on the digital experience, your hotel can drive revenue and increase brand trust with the first post-pandemic travelers.
Choosing a career path is a big deal. And deciding whether or not to pursue a bachelor's degree is a major part of that career plan. So what to do during a pandemic -- especially when you’ve been considering getting a bachelor's degree in Hospitality Management (hotel and restaurant management)? You’d be right to take a minute to consider whether or not pursuing a degree in hospitality is really worth it, given that hospitality has been hit especially hard by the pandemic and there are tons of low-cost online accreditations available today. There are a few key areas to explore, such as the outlook for the industry, what you’ll learn, and what marketable skills you’ll get from your investment in the degree. From there, you can make an educated decision about whether or not a hospitality degree is right for you. Developing a Framework to Answer the Question Like anything in business (or life) there is a cost and a benefit calculation you'll need to make to decide which path to pursue. The cost side of the equation includes both the direct expenses of higher education like tuition as well as the opportunity cost (i.e. how much money would you be making during those years if you went straight to work?). Hospitality and tourism management school tuition varies widely based on pedigree (reputation of the school) and location. A Bachelor of Science in International Hospitality Management from EHL costs around $206k (188 CHF) over 4 years including food and accommodation. According to NerdWallet's student loan calculator a $200,000 loan with 5% interest and a 10-year term requires $2,121.31 in monthly payments. That doesn't necessarily mean that you need to make $25,000 per year more from year 1 but you should expect that over the long run the difference in salary helps to more than offset the cost of a degree. Let's use a stylized example to illustrate this point: you are considering whether to leave high school and go straight to becoming a hotel concierge to refine your skills and ultimately become a hotel manager. The average full-time hotel concierge or guest services manager makes from $23,000-$38,000 per year. Let's say, for simplicity, it will take you 10 years working your way up as a concierge before you can become a hotel manager without a degree. During those 10-years you would make $300,000 using an average of $30,000 per year salary. Hotel managers typically make from $61,000-$200,000 per year. Now let's say that with a degree from EHL it would only take you 3-years as a concierge to become a hotel manager. That means in years 1-4 you spend (-) $200,000 on education. Then in years 5-7 you make $90,000. Finally in years 8-10, you make $210,000. In this scenario, you would have netted $100,000 in salary so all else equal you would be better off without the degree. This example is designed to stylize the decision-making process, not to tell you whether or not you should get a degree. What if EHL grads make more as hotel managers than non-grads? Are there other long term benefits of a degree like the potential to move into higher-paying corporate management roles? Are there networking and alumni opportunities that must be factored in? Will you get paid real-world experience with your degree or exposure to differentiated entrepreneurship coursework that are otherwise inaccessible to those without one? Do you need the degree program to be eligible in the future for a Masters in Business Administration (MBA) and unlock even higher salaries in the future? Are there financial aid packages or scholarships available to lower your expense levels? The first step to answering this question is plotting out what you think the future looks like and then going out to validate your hypotheses by talking to real people who work in the hospitality business. Ultimately this exercise will show you that there is no black and white answer, these calculations vary dramatically based on which segment of hospitality you aim to work in. It probably doesn't make sense to attend EHL at full tuition in order to get into foodservice or entry-level guest service roles but it may be the only way to grow into a business management role VP level or higher at brands like Marriott and Hilton. What’s The Outlook for Travel and Hospitality? The pandemic has put industry forecasts into disarray. What had been shaping up to be another strong year in a decade-long boom of travel and tourism turned into quite the opposite. Travel has flatlined and things are changing so fast that it’s hard to get a grasp on the industry’s future prospects. One of the most reliable forecast sources is STR, which tracks the health of the hospitality industry. STR’s Data Insights Blog has been tracking the regional and global impact of COVID. The bad news is that STR predicts a long road ahead, with recovery back to 2019 levels not happening until 2023. That’s a long way away; but as we’ll see below, this long road to recovery can be an advantage to those just starting out in their careers. The good news is that industry fundamentals remain strong. People love to travel. And, even though it’s likely that business travel will be slower to return (and may forever be changed), the industry’s gradual recovery provides ample opportunity for career advancement. What Marketable Skills Will I Learn? The value of a hospitality management degree lies not just in the future career opportunities but also and be marketable skills that you will learn. There are four core areas that a hospitality management program will cover: Operations. First and foremost, you will learn the ins-and-outs of the business of hospitality. This includes all day-to-day aspects of hotel operations: checking guests in at the front desk, managing guest requests in the back of the house, scheduling staff, Revenue. The business of running a hotel involves three key departments: sales, marketing, and revenue management. You’ll learn how each department contributes to a property’s topline revenue and bottom-line profitability. Increasingly, these departments are overlapping and so it’s helpful to have a grasp across all aspects of a hotel’s revenue-generating roles. People management. One of the most important skills for any hospitality professional on the management track is people and human resources. It’s a critical piece of any job in hotels because there are so many people to manage. You’ll learn about what it takes to manage a workforce, including performance management, hiring and training staff to meet service standards. Customer service. The essence of hospitality is customer service. This is the most practical skill that you will learn, as people skills will always come into handy. With the practical hands-on training of a Hospitality Management degree, you'll get Leadership. Many college degrees struggle to include a hands-on component that teaches you real-world leadership. You can go through college for four years and end up without any practical experience. All of the best hospitality management programs include an internship component of part of the graduation requirements. This means that you will have hands-on experience in an actual business upon graduation. So even if you decide not to go into hospitality, you'll be able to translate your real work experience into conversation points for your job interviews. What Can I Do with a Bachelors in Hospitality Management? The most obvious career path involves a role in hospitality. Your potential path with a hospitality management degree may include roles in a few different departments, such as: Operations: The operations of a hotel include the front desk, housekeeping, maintenance, and day-to-day management. Roles here include managing a department, such as the front-of-house or housekeeping, and culminate in a job as a general manager. Revenue: Sales, marketing, and revenue management are responsible for generating business for the hotel. There are many roles here to consider: Revenue manager, HR: One of the core back-office functions at a hotel is HR. This could be both at the property level and corporate level. HR managers are responsible for people operations: overseeing the hiring, firing, and performance management process so that everything is legal and according to company standards; handling employee complaints and generally being an advisor and resource to employees across the operation. Accounting: Another core back-office function is accounting. These employees are the ones that manage the financial inflows and outflows from property (or group of properties). Most roles in this specialization require a further degree in accounting, so keep that in mind if you want to pursue a dual degree alongside hospitality management. Business Development/Finance: Business development involves finding locations for new hotels, evaluating the financial feasibility of acquiring existing hotels, and working on the financial side of the industry. Someone with a hospitality management degree working in business development has a very unique skill-set but maybe in high demand. Gaming: Casinos have a very unique footprint and require their own set of skills. Specializing in gaming can give you a competitive advantage in certain circumstances, especially if you're interested in working in a hotel market with a heavy gaming component, such as Las Vegas. Also, if you are interested in gaming, it makes sense to strongly consider UNLV’s hospitality program! Food and beverage: Many properties have expensive food and beverage operations. There are many aspects to manage here, from room service and catering to individual outlets, which means that F&B offers many opportunities (both in and outside of hotel-affiliated outlets). The skills you learn from your degree in hospitality management are transferable to other areas as well. A graduate with a strong grasp of management, leadership, and operations will be well-positioned for other roles too. Some related roles to consider: Hospitality tech: Expertise in hospitality is in especially high demand with technology companies serving the industry. You could translate your hospitality management degree into an entry-level role at one of these companies, which will put you on a career path in the technology industry. Account manager/sales manager. Sales and account management requires a lot of soft skills that you'll learn when you get a degree in hospitality. There are also many entry-level jobs in these two fields -- especially for those with strong sales and people skills. HR. People management is an essential part of any company. Put your organizational and operations knowledge to work, alongside your interpersonal soft skills, in HR. Management training: Your degree is a signal that you are organized and capable of. You could also look for a role in a different industry that come on a management training track. Hospitality consultants: There are many firms that serve hotels and Hospitality brands as contractors and independent hospitality consultants. If you wanted to tackle a broader array of challenges for multiple clients, this could be a great choice for you. Event planning: Event planners don't necessarily have to be on staff at a conference center attached to a hotel. From independent wedding planners to corporate event specialists, you could put your hospitality knowledge to use as an event planner. See more in our in-depth guide to hospitality careers, including job descriptions, salaries, and more. How Do I Choose a Hospitality Management Program? There's a lot at stake when you choose a hospitality management program. It’s a major investment. A few things to consider as you evaluate programs: Quality: First and foremost, make sure that you are going to a reputable school. A few of the most well-regarded are the Ecole Hôtelière de Lausanne, Cornell University’s School of Hotel Administration, Hotelschool The Hague, and the University of Nevada’s William F. Harrah College of Hotel Administration. For a full list, check out the top hotel schools in our hospitality industry guide. Each school should be evaluated for the quality of instruction and access to industry leaders. You also want teachers that are practicing experts in their field, rather than relics of an industry long gone. Specialization: Next, look carefully at the program’s class offerings. Does the program offer the courses that you need for your career path? Do you see specializations that interest you? Remember that it is not just a general education that matters; you also want to get deep dives into the most marketable skills for today's economy. Make sure that you can get the type of education you need to position yourself for success. Network: Major part of the investment is getting access to a quality Alumni network that can help you find jobs once you graduate. It might seem far away, but you’ll want to leverage the power of the university’s network when you're looking for a job. And also: a career office that can connect you to the best job opportunities. Some notable alumni from the top schools: Cornell: Andrew Tisch, head of Loews Hotels; Will Guidara, restaurateur of Eleven Madison Park and NoMad and TV personality Aida Mollenkamp. UNLV: Marco Benvenuti, co-founder of hospitality tech company Duetto; hotel-casino mogul George Maloof; Bill Hornbuckle, president of MGM Resorts International; Celebrity Chef and Restauranteur Guy Fieri. EHL: Daisy Soros, philanthropist; Craig Claiborne, New York Times restaurant critic; Georges Plassat, businessman. Hotelschool: Joris Bijdendijk, Dutch celebrity chef; Marc Bolland, businessman and CEO of Marks and Spencer; Erik Tengen, founder and CEO of Oaky. Cost: Finally, you want to make sure that the cost is worth it! Sticker shock is understandable, especially in the United States where college costs have skyrocketed. Look at the overall cost of the program tuition, as well as related cost-of-living, and measure against the income potential for your career. See next section, as this is usually a top criteria under consideration when deciding on a Hospitality Management program. How much does a hospitality management degree cost? Out of the criteria listed above, cost is often one of the most important ones. With the cost of fees and other non-tuition expenses, the total cost of a degree can get quite expensive. As a prospective student, you want to know that your degree will be a good investment. Here's a breakdown of the cost of the best hospitality management programs, followed by a quick calculation you can make to see your return on the investment. Cornell School of Hospitality. Undergraduates can expect to spend $58,586 (out of state) or $58,586 (in state) per year on tuition and around $16,000 on housing and dining. For a Cornell Master in Hospitality degree, expect to spend $87,879 for tuition and around $2,500 per month for books, fees and other living expenses. There are also several scholarships and financing options for those looking to fund the program with federal and private student loans. More on Cornell Hotel School tuition, financing and scholarships here (undergrad) and here (graduate). There’s also a useful financial aid calculator. EHL. The total cost of an undergraduate degree is 197,789 Swiss francs, including housing and health insurance. That cost is less if you are a Swiss citizen or are eligible for a subsidy: “only” 112,010 Swiss francs, also including housing. There are also scholarships for international students and Swiss citizens. More on EHL’s tuition and scholarships here. Hotelschool. One of the more affordable hospitality business schools, tuition for a bachelor's is 24,300 Euros per year for non-Europeans and just 10,360 Euros for Europeans. Other expenses are variable, depending on where you decide to live while on campus. International students can also apply for the Holland Scholarship for students outside of Europe who want to do a Bachelors or Masters in the Netherlands. More on the bachelor program’s costs for non-Europeans here and Europeans here. University of Nevada. Annual undergraduate tuition costs at UNLV run $8,604 for residents and $24,258 for non-residents. Graduate tuition is $6,517 for residents and $22,171 for non-residents. Depending on whether students live with parents, on-campus or off-campus, non-tuition expenses range from $20,000 to $40,000 per year. For financing the degree, there are both federal and private loans available, as well as scholarships. More on tuition here, with this calculator to estimate total tuition and fees. Of course, the sticker price doesn't necessarily mean that you need to pay out-of-pocket. Each program offers financial aid and scholarships, so you can take out a combination of loans and perhaps some “free” money to make the program tuition accessible to you, regardless of your personal financial situation. To calculate the return on your investment in a hospitality management degree, you need to first determine what your career path looks like. Review the average salary of hospitality jobs in our hotel industry guide and then calculate a 10% payback rate, a reasonable expectation on repayment. And then divide it by the cost of your degree to calculate how quickly your investment will be repaid. Since the goal of getting a degree is to earn a higher salary (and thus increase your lifetime earnings over your entire career), this helps you compare one program to another. This is just a rough estimate but it is a helpful calculation! ROI= (target role salary*.10)/cost of degree For instance, let's say that you go to the University of Nevada as a non-resident undergrad and your target role is GM at a boutique hotel. Per our guide, the average salary of a hotel general manager is between $75,000 and $140,000. Take the midpoint of that as $100k, multiply by .10 (assuming that you use 10% of your salary to pay down loans) and divide by an estimated total cost 220,000 for a 4-year program. You get a payback period of 22 years. Of course, that doesn't include any amounts paid out of pocket, scholarships or interest costs. So you should adjust this comparative calculator accordingly, adjusting for your own interest and non-tuition costs. So...Should I Get A Bachelor’s In Hospitality Management? Ultimately, the decision is yours. While it may seem like a tough time to go into hospitality, we are bullish on the future of travel and hospitality, especially when the time frame is three to five years out. So now could be the perfect time to get a degree in hospitality management, as you have two major advantages being early on in your hospitality career: your salary needs are lower and you have plenty of time for the industry to recover. You could take the time to earn your degree and really dive into a specialization that will remain competitive as the industry recovery unfolds. Then, right when you're ready to enter the workforce, you’ll be well-positioned. For instance, you may want to consider focusing on revenue management and marketing, which are marketable skills regardless of industry. and then you will have more options upon graduation, so you could enter the management track and operations, revenue, or marketing. Hotels will be doing more with less for the foreseeable future. So you just want to make yourself as competitive as possible if you choose to get a bachelor's in hospitality management. If you use your time earning a degree wisely, develop a broad base of soft skills around collaboration, communication, team building, and leadership, you'll be well-positioned to thrive! Further Resources Want to learn more about the hospitality industry as you decide if a bachelor’s in hospitality management is right for you? Check out these resources: Our complete guide to the hospitality industry Our complete guide to the hotel management industry A deep dive into the various hospitality careers to consider Everything you need to know about hotel operations Exploring the revenue management career path
It’s not so far-fetched to think that, in the near future, three different types of hotels could coexist, no longer classified on the basis of stars or reputation, but on the basis of the percentage of “biological staff” employed. Budget hotels will likely benefit the most from the replacement of human employees with robots, self-check-in kiosks, and other automatisms, and it is not difficult to think that they will be able to offer extremely competitive prices thanks to the reduction in the cost of human personnel; On the other side of the spectrum, I predict that there will be human-centered hotels, completely (or almost completely) run by human beings. The assurance of being welcomed and accompanied for the entire duration of the stay by real people will be a “plus.” The luxury guests of the future may be willing to pay extra for this human-centered service, just as today they are willing to pay extra for handmade items, compared to those created on a larger, industrial scale. Therefore, a higher ADR would compensate to the increase in costs associated with the use of human personnel; In the middle (and here I would include the vast majority of hotels) there will be "hybrid" properties, where the human and artificial elements coexist, maintaining a service that is as human as possible but reducing costs and improving processes wherever feasible, in a sort of "technological humanism." To recap, the hotels of the future can be divided into: Technocentric hotels: budget, young, hostel, corporate, hi-tech Anthropocentric hotels: hi-end, niche, luxury, experience Hybrid hotels: mass leisure This distinction leads us to a central assessment: the mere fact that a certain technology can be adopted does not necessarily coincide with the need to adopt it. Some properties, in order to remain faithful to their corporate culture, may be forced to implement less technology not to betray their brand values and vice-versa. The approach should be neither technophobic nor technophile, but of simple critical evaluation based on the product. And, above all, one must remain open to change direction, if necessary. It should be remembered that automatisms, in hotels, are still in their infancy and even all the literature on them is highly speculative, so we cannot be dogmatic and, realistically, it will take at least a decade to finally be able to analyze if and how these technologies have had an impact on specific KPIs, such as brand perception, awareness, profitability, and return on investments. Elon Musk said that “you shouldn't do things differently just because they're different. They need to be… better.” Ray Kurtzweil's comment on tech is even more caustic: “Technology has always been a double-edged sword. Fire kept us warm, cooked our food and burned down our houses." I agree: let's not forget that the technology that gave us Tinder is the same that made it tolerable that one-third of all divorce applications in the United States, in 2011, contained the word "Facebook". Technology is also responsible for some biological changes that, under normal conditions, would have taken hundreds if not thousands of years. A typical example is that of London taxi drivers, who for decades had to memorize over 25,000 streets, leading their brains to develop a larger than average hippocampus, while today they can simply rely on their GPS, atrophying that part of the brain that is the guardian of our memories. It’s typical do ut des: technology gives, technology takes it away. And, in a moment in time when Indian Space Research's Indian mission to Mars costs less than a Hollywood movie about a space mission (the Mars Orbiter Mission cost $ 74 million, versus $ 108 for The Martian movie), adoption on a large scale of technology in hotel is no longer a topic of discussion, but must still be calibrated according to one’s own needs, values, and inclinations, both personal and corporate. As the futurist and transhumanist Zoltan Istvan rightly states, a radical change, even if attainable and practicable, would not be acceptable to most people, because they are emotionally and intellectually unprepared. In travel and, above all, in hospitality, we find ourselves in this limbo of techno-illiteracy: change is at hand, but we do not (yet) have the intellectual means to accept and adopt it.
RevPar may be the hotel industry's favorite KPI (see: What’s RevPar?) but ADR (average daily rate) is a close second! And the truth is that they are closely intertwined. So, even if you are still confused about the jumbled terminology of hotel revenue management, we're here to sort you out! By the end of this article, you'll understand how to calculate ADR and how to interpret and influence it in your hotel’s revenue management strategy. Average daily rate metrics aim to help business owners understand the average price rooms are being sold for in isolation. By pulling metrics apart we are better able to identify problems and opportunities to forge stronger revenue strategies. What is ADR? (Average Daily Rate) ADR stands for average daily rate and is widely used in the lodging industry as the best indicator for hotel room rate quality since total revenue metrics can be obscured by other factors like ancillaries or food and beverage. For real estate businesses and specifically hotel operators with perishable inventory, pricing strategies can make or break profitability. The formula for ADR is simple - just divide the total rooms revenue at your hotel by the total occupied rooms. So if you have $10,000 in rooms revenue and 100 rooms sold, your ADR is $100. The "A" in ADR stands for "average" because you'll usually be looking at YTD (year to date) or TTM (trailing twelve months) averages. You can really use this metric for any given time period but you'll need to make sure key performance indicators are always being compared apples to apples for a time perspective. It's a common mistake to divide rooms revenue by total number of rooms - this methodology can lead to artificially deflated RevPAR since it accounts for unoccupied and complimentary rooms. ADR= Room Revenue/Occupied Rooms ADR shows hospitality industry revenue managers how well they are doing at maintaining the pricing strength of their properties. An ADR that's trending upwards or downwards can be a worrisome sign or it can be the result of a clear revenue management strategy. Evaluated on its own and out of context, ADR doesn't tell the full picture of a property’s performance. Context comes from using ADR as a performance benchmark for comparing one hotel against another. Hotel revenue manager will create a “competitive set,” made up of hotels that attract similar types of guests, and then track the performance of the individual property compared to the comp set. If your hotel’s ADR is higher than other properties in your compset, it may have resulted in fewer bookings (i.e. lower occupancy) because you are less price competitive than other hotels all else equal. In other words, when a traveler compares your hotel to similar hotels, the lower rate will entice them to book with a competitor. Generally, this is a bad thing; you want your hotel to be competitively priced so you don’t lose bookings! In general, lower rates will result in higher occupancy and higher rates will result in lower occupancy. However, this is a bit simplistic, as we’ll cover in the next section on tactics to influence ADR. Generally speaking there is no such thing as "good ADR" in isolation because you'll also need to consider and compare occupancy with historical results and the compset to see how your property is doing. ADR is a component of RevPar Alongside occupancy rate, a property's ADR impacts RevPar (or revenue per available room), a key industry metric that tracks interactions between a hotel’s ADR and its occupancy rate. Hoteliers love RevPar because it shows how well they’re doing relative to similar hotels when adjusting for the number of available rooms. It's also a helpful revenue management signpost, showing how well a hotel generates revenue from its rooms. To boost RevPAR, you can increase ADR and/or occupancy; a higher ADR and occupancy rate means more revenue per available room. However, as we mentioned already, there’s a breaking point where a higher rate reduces demand. In general, you increase your rates too much, your occupancy will go down. This can actually be a net positive for revenue, as long as you’re increasing your rate enough to account for the lost occupancy. But it can also cause a dip in occupancy that can’t be made up with higher rates. For example, let’s say you decide to push your RevPar up by increasing ADR from $120 to $140. The occupancy at your 100-room hotel goes from 60% to 50%, which means your RevPar goes from $75 to $70. But now you are servicing 10 fewer rooms, which can save you money on the operations side. And, you can then target guests at that $140 rate and rebuild your occupancy. If the initiative succeeds, your RevPar ends up at $84 ($140 ADR*60% occupancy). Win! The effect of increasing or lowering prices on reducing or increasing demand is known as the price elasticity of demand. Thankfully, price isn’t the only thing that affects hotel revenue. Factors such as geography, traveler demographics (income, etc), hotel category and macroeconomic trends also affect the relationship between rate changes and occupancy. Sometimes, a higher ADR results in more bookings and a higher RevPAR. Like during periods of high demand, when inventory is constrained in the local market and consumers are far less price-sensitive. Or, as we saw in our example, a hotel can take steps to position itself as a more premium brand to increase ADR without necessarily decreasing occupancy. The complex dynamics and interplay between pricing and demand is the cornerstone of revenue management. Tactics: How to Influence Hotel ADR ADR is a fairly straightforward hotel performance metric: to increase it, raise your rates! However, as we saw above it's important to consider the impact of rate increases on your hotel’s overall revenue potential. Blindly increasing rates to boost your ADR can reduce occupancy and thus revenues. On the other hand, strategically increasing rates can actually lead to more revenue! It's a bit counterintuitive but it's true. Tactic #1: Brand Marketing Thus the top tactic to influence your hotel’s ADR is to focus on brand marketing. There are three reasons why investing in premium brand positioning can be the most rewarding tactic in the long-term: You can command higher rates. If your brand is perceived as premium, You can set your right tire without risking occupancy dips. In some cases, higher rates of loan can make your brand seem more premium! Pricing psychology is a funny thing! Loyalty is more profitable. If your brand fosters strong loyalty with past guests, you’ll rely less on public discounting and promotions. Rather, you can market directly to past guests and offer exclusive discounts and promotions that don't require you to pay commissions. You'll also notice that strong loyalty supports strong price position, as you won't have to publicly discount rates to generate business. Self-reinforcing cycle. As you build your book of higher-end guests, your premium positioning will build on itself. A strong brand also acts as a buffer to any downward pressures. That way, if you have had ones, your brand is already well-positioned in the eyes of consumers and won't necessarily have to resort quickly to blanket discounts. Tactic #2: Segmentation Another way to influence ADR is to segment your marketing so that you are better matching message to each audience. By segmenting in this way, you’ll be able to yield higher rates because you’ll speak more directly to each guest segment. The best example of this is with targeting past guests with loyalty marketing. These guests already know you’re property -- and hopefully love it! That means they are not just more likely to book direct but also less price-sensitive overall. These guests aren’t just looking for deals, they’re looking for predictable and familiar experiences that fulfill their expectations. In general, capturing more revenue from past guests also lowers your distribution costs and increases your net ADR (see next tactic). Since segmentation allows you to have different messages for different audiences, you can also section off certain cohorts for a more premium offer while keeping discounts focused elsewhere. One lever to achieve this price-based segmentation is to leverage the power of package promotions. The benefit of packages is that you’re able to hide the actual rate of the room within the broader package. This is a fantastic tool to boost ADR, as you can create “value-added” packages that don’t actually cost you much more to deliver, such as a complimentary welcome drink or meals included. Once you subtract the true cost of delivering these add-ons, you’ll be left with a healthier ADR. Tactic #3: Distribution Costs All revenue is not created equal. Each channel that sells your hotel rooms has its own associated costs. So one approach is to focus on Net ADR, or the amount of money that your hotel keeps after paying all distribution costs for each booking. While this won’t be a metric you can use for benchmarking against your compset, its great for internal tracking of how profitable your distribution strategy is. By optimizing your channels, you reduce commission costs and increase net revenue. This will have a direct impact on profitability. And it will also make you more competitive in the marketplace; since you are securing bookings more profitably, you’ll have more pricing power when it comes to setting your rates against your competitors! Tactic #4: Upsells and Rate Restrictions Another path to higher ADR is to sell more to upcoming reservations and current guests. By convincing guests to upgrade to a higher category of room, you’ll increase your ADR without having to increase the public rates. This avoids the occupancy issues of increasing your public rates and keeps your hotel competitive in the marketplace. When setting up your automated upselling initiative, consider doing more than just upgrades to bigger rooms. Can you create a package that offers exclusive access to amenities or some sort of upgraded experience beyond a bigger room? These are often seen as more valuable by guests, who then are willing to pay a bigger price premium than you may get from category upgrades alone. Rate restrictions are also a powerful tool, especially non-cancellable rates. Since guests aren’t able to cancel the booking, you can offer a better rate. This appeals to value-minded guests and reduces annoying last-minute cancellations, which can wreak havoc on yields. Length of stay is also another rate restriction to experiment with. Try different LOS requirements, such as a Friday/Saturday night stay, to better yield longer stays. While encouraging longer stays may not necessarily increase ADR (last-minute and weekend bookings are usually more expensive), it can help you maintain occupancy and keep supply low enough to merit higher ADRs.
What would the hotel industry be without chain hotels? Can you imagine a world without online travel agencies like Expedia? Or what about a world without Airbnb? A few exceptional individuals made contributions to the lodging industry which revolutionized not only our industry, but the world. Thanks to the ideas, leadership, and drive of the 7 titans of the hotel industry, we can travel better today. In this article, we’ll introduce you to seven of the most important figures in the hotel business: Conrad Hilton, J. Willard Marriott, Isadore Sharp, Jay Pritzker, Barry Sternlicht, Brian Chesky, and Rich Barton. You’ll learn about their backgrounds, their career paths, the companies they founded, and how they fit into the evolution of the hotel industry. And you might find the inspiration you need to bring your ideas to life or to start your own company! The Early Days of the Hotel Industry The concept of a hotel is hardly a new one; boarding houses, inns, caravanserais, and other early lodging types have been in existence for thousands of years. These simple accommodations offered travelers a place to sleep, a hot meal, and stables for their horses. Early “hotels” were family-run and often located in the same building where the family lived. As travel became more common, starting in the 1400s, a few European countries mandated that hotels document their guests. These new laws signaled the beginning of the hotel industry - hoteliers were now running legitimate businesses in the eyes of the local governments. By the 1700s, every city had at least several hotels operating in the center of town to meet the demand for overnight stays. Many hotels became attractions in their own right, like the Le Grand Hôtel Paris and Palmer House Hotel in Chicago, which were famous for beautiful architecture and glamorous clientele. The Hotel Industry Boom in the United States Until the mid-1900s, nearly all hotels were independently owned and operated. There was also a clear distinction between the stylish, cosmopolitan hotels in city centers and the simple roadside motels in rural areas. Two entrepreneurs on opposite sides of the country saw opportunities to bring a high standard of service to the hotel industry and created the eponymous names that we all know today: Conrad Hilton and J. Willard Marriott. Conrad Hilton entered the hotel industry somewhat accidentally when his plan to purchase a bank fell through; instead, he ended up buying the Mobley Hotel in Cisco, Texas in 1919. Seeing that he could run a hotel successfully, Hilton scouted out promising hotel deals and continued growing his portfolio over the next few decades. Landmark hotels like New York City’s Waldorf-Astoria and the Plaza Hotel became Hilton properties, and the company acquired the Statler Hotel Company in what was the largest real estate transaction of its time. Hilton is not only credited with building a global hotel empire, but also with popularizing the star rating system and combining hotels, restaurants, and casinos. Like Hilton, J. Willard Marriott didn’t plan on becoming a hotel magnate. He got his start in the hospitality business by running A&W Root Beer shops in the Washington, D.C. area, and built a sizable restaurant and foodservice business. When it came time for his next venture, Marriott opened a motel in Arlington, Virginia with great results. Marriott became known for his hands-on leadership style and perfectionist mindset, and as the Marriott company grew, he continued to stay in the middle of the action. In fact, he never retired from Marriott, even after his son Bill took over as CEO. Under their leadership, Marriott became the largest hotel company in the world with over 30 brands under its umbrella. In addition to Hilton and Marriott, numerous hotel brands popped up in the mid-20th century, like Holiday Inn and Motel 6. These brands could offer quality and consistency to travelers who didn’t want to risk a sub-par experience at an independent property. Remember, back then, there was no Tripadvisor, so brands offered an appealing solution. The Rise of Hotel Brands Speaking of brands, Marriott and Hilton are only two of the great hotel brands that shaped the industry. While Hilton and Marriott were building their companies, another entrepreneur saw an opportunity to create a new type of hotel: Jay Pritzker. Already an established businessman, Pritzker was on a business trip to Los Angeles in 1957 when he noticed a lack of high-quality hotels located near airports. He didn’t think travelers should have to choose between nice downtown hotels and seedy airport motels, so he launched the Hyatt brand, which focused on upscale hotels near airports. Hyatt Hotels eventually branched out to urban hotels, notably when the company launched the Hyatt Regency brand, which is known for its signature atrium design. But Pritzker wasn’t the only one to realize that architecture can be an asset to a hotel brand; as a trained builder, Isadore Sharp knew architecture would always be a pillar of his Four Seasons hotel brand. He opened the first Four Seasons hotel in Toronto in 1961, and guests appreciated the innovative courtyard design that allowed them some relief from city sights and noise. Sharp grew the Four Seasons brand to become a globally known icon of service and luxury, and the company now manages over 100 hotels in cities like Paris and far-flung destinations like Bora Bora. Sharp wasn’t alone in grabbing an opportunity to appeal to affluent travelers. Barry Sternlicht, the founder of Starwood Capital and Starwood Hotels and Resorts, also noticed a gap in the luxury hotel market when he launched the W brand in 1998. In contrast to the pretentious, stuffy luxury hotels that were the norm, W hotels offered a playful, youthful version of luxury. The W brand is considered the first “lifestyle” hotel brand, a trend which is still popular today. Starwood Hotels and Resorts’ portfolio also included brands like Westin and Sheraton, and in 2016 Marriott purchased Starwood and formed the largest hotel company in the world. Lodging in the Digital Age By the 1990s, hotels had taken over the world. You could book a Marriott or Four Seasons on six continents and dozens of countries. But how would you actually make that booking? Most travelers relied on travel agents to secure reservations, or you could call the 1-800 number for a chain line Hilton or Hyatt. That all changed when Rich Barton, a product manager at Microsoft, came up with the idea for Expedia in 1994. He saw how the power of the internet could put travel booking into the travelers hands - he just had to create a platform to house all the data. By the time Expedia went public in 1999, it was far from the only digital booking platform, or online travel agency. Competitors like Booking.com, Priceline, Orbitz, and Travelocity gave consumers access to good rates and information about hotels around the globe. The popularity of brick-and-mortar travel agencies declined as online travel agencies took off. Two decades later, the OTA space is dominated by two big players who now own the majority of brands: Expedia Group and Booking Holdings. But Expedia and Booking.com aren’t the only sites where you can book a place to stay. In fact, hotels are no longer your only option. Just as Uber disrupted the taxi industry, Airbnb offers a new type of accommodation for travelers seeing local experiences or apartment-style short-term rentals. Founded by Brian Chesky in 2009, Airbnb has come a long way from its humble beginnings. Chesky and his two roommates had the idea to rent out a few air mattresses in their apartment during a busy conference in San Francisco, and a few years later their company became a Silicon Valley “unicorn” with a valuation over $1B. Airbnb has grown to over six million listings and is planning an IPO in late 2020. What can we expect for the future of the hotel industry? The industry’s pioneers are probably already hard at work building something that will further change how we travel and experience hospitality. -- Brian Chesky illustration by Mike Nudelman
There’s no question that the coronavirus has deeply impacted the tourism industry. As the pandemic continues to evolve, however, what’s difficult to discern is the breadth and depth of its impact in both the short and long term. We’re still facing the repercussions of intermittent lockdowns, border closings, and economic stress, but these 50 statistics show the initial and ongoing impact of coronavirus on the tourism industry. We’ve broken these data points out into the following areas: Global Impact: 2020 and Beyond Air Travel and Transportation Hotels and Accommodation Food and Beverage Tours and Attractions Business Travel The impact of the coronavirus pandemic on global travel is not black and white. Some tourism business' like smaller California wine country hotels and hotels adjacent to national parks have achieved record numbers despite a near complete shutdown of inbound tourism and international travel. Domestic tourism has been far from safe in the global pandemic with economic development initiatives supporting hotels, tour operators and other travel companies support their workers via aid programs like America's PPP (paycheck protection program). Global tourism will rebound from this the same way it did from the 9/11 terrorist attacks but experts uninanimously agree that it will take longer. The hotel industry has been devastated by low levels of international visitors as tourism demand dropped to all time lows with tourism destinations even turning potential travelers away. Read on for some of the most remarkable numbers showing the widespread impact of COVID-19. Global Impact: 2020 and Beyond The tourism industry worldwide is impacted by coronavirus – so much so that global GDP is expected to shrink dramatically and unemployment to skyrocket. Here are a few stats that show how tourism worldwide has been decimated. 1. Global revenue for travel and tourism is estimated to decrease by 34.7% to an estimated $447.4 billion. The original 2020 forecast was $712 billion in revenue. 2. European tourism is expected to take the biggest hit from COVID-19: revenue for the travel and tourism industry in Europe will decrease from $211.97 billion in 2019 to roughly $124 billion in 2020. 3. The tourism industry lost 1.5% of global gross domestic product after four months of being shut down, reported the UN Conference on Trade and Development. 4. If international tourism remains shut down over 12 months, the UN predicts a loss of 4.2% global GDP ($3.3 trillion). 5. The World Travel and Tourism Council predicts that 121 million of the 330 million jobs tied to tourism around the world will be lost in 2020. 6. Tourism is going to take a while to recover, says McKinsey. The consulting firm predicts that international tourist arrivals will decrease 60 - 80% in 2020, and tourism spending is not likely to return to pre-crisis levels until 2024. 7. Not only are consumers traveling less, but they’re also dining out less. Statista reports that the “year-over-year decline of seated diners in restaurants worldwide was a staggering 41.36% on August 23, 2020.” Tourism in the US In the US, the economic effects of a slowdown in tourism are expected to be on par with many so-called “developing countries.” In addition, the impact of a decline in tourism will have wide-reaching effects on many other parts of the economy. 8. The travel industry says it accounts for 15.8 million American jobs—that’s employment for one in every 10 Americans. That means the economic impact of coronavirus could have a major impact on the US unemployment rate. 9. Some reports predicted that the loss in travel-related jobs caused the U.S. unemployment rate to double from 3.5% in February to 7.1% in March/April. 10. Based on current trends, experts predict that the United States will lose far more than any other country in dollar terms and nearly double that of China. (Source) 11. In April, when many states encouraged or mandated that residents stay home, tourist arrivals in Hawaii fell 99.5%. Tourism accounts for 21% of Hawaii’s economy. 12. Florida also faced a drop in tourism, with their tourism sector declining 10.7% in the first quarter of 2020. The state reports that tourism has an economic impact of $67 billion on Florida's economy 13. On April 11, 2020, only 3% of hotels in Austin, Texas were occupied: 342 rooms were booked, compared to 10,777 in 2019. 14. Statista predicts a drop in spending of $355 billion in 2020 in the US, a decrease of 31%. Air Travel Consumers are not interested in boarding an airplane anytime soon, due partially to border closures as well as safety concerns and high ticket prices. Air travel is predicted to be depressed for a long time. 15. Travel restrictions at borders impacted air travel and other forms of transportation. There were four categories of restrictions impacting a total of 217 destinations: 16. 45% of destinations (97 countries) implemented total or partial border closures; 17. 30% of destinations (65 countries) suspended flights totally or partially; 18. 18% of destinations (39 countries) enforced border closures aimed at a specific group of destinations; 19. 7% of destinations (16 countries) required visitors to quarantine or implemented similar measures. (Source) 20. Data from Flightradar24 showed that the average number of commercial flights per day fell from 100,000+ in January and February 2020 to around 78,500 in March and 29,400 in April. 21. Despite many governments providing aid to the airline industry, passenger revenue is estimated to drop by $314 billion in 2020 — a 55% decrease from 2019, according to the International Air Transport Association. 22. As of May 4, 2020, international flights had decreased by 80% as compared to 2019. Many airports were closed and flights banned due to border closings. 23. IATA, the International Air Transport Association, reported in June, 2020 that coronavirus would account for a net loss of $84.3 billion for all airlines, worse than the $30 billion loss in 2008. Income is projected to remain negative through 2021. (Source) 24. IATA also predicts that plane ticket prices will increase, especially if airlines are mandated to comply with social distancing measures. Ticket prices may rise by as much as 50%, according to Alexandre de Juniac, the head of IATA. 25. One company tracking ticket prices during the height of COVID-19 found that fares through April 13 and May 4 rose 13.7% and 10.9% year over year, respectively. Hotels & Accomodations Sector Travelers are unlikely to feel comfortable staying at hotels in the near future, meaning low-occupancy rates will impact the hospitality industry for years to come. 26. Since mid-February, hotels in the US have lost more than $46 billion in room revenue, according to the AHLA. The industry expert expects hotels to lose up to $400 million in room revenue per day based on current occupancy rates and revenue trends. 27. In the US, AHLA found that individual hotels and major operators are projecting occupancies below 20%. For many occupancies, a rate of 35% or lower makes it impossible to stay open – and many accommodations are closing altogether. (Source) 28. McKinsey predicts that COVID-19 is likely to accelerate the shift to digital. Travelers will be looking for flexibility and be willing to make last-minute bookings as the situation evolves. Case-in-point: more than 90% of recent trips in China were booked within seven days of the trip itself. 29. The consulting firm also ran a few different scenarios to see how hotel RevPAR would be impacted: 30. In the worst-case scenario, RevPAR will be down 20% by 2023. 31. RevPAR of luxury rooms is the slowest to recover due to their higher variable and semi-fixed costs. (Source) 32. A July 2020 Ipsos survey found that 51% of Americans are willing to stay at a hotel, the same percentage as the month before. Attitudes toward frequenting hotels seem to be improving or staying the same. 33. US travelers have certain expectations of the tourism industry. The Tourism Crisis Management Initiative at the University of Florida found that airports, accomodations, and attractions must take the following initiatives to communicate safety protocols: (Source) 34. Airbnb is not faring any better than traditional accommodation options. The platform, which relies on hosts, have seen 64% of guests cancelling or planning to cancel their bookings since the pandemic began. In addition: 35. 47% of hosts don't feel safe renting to guests 36. 70% of guests are fearful to stay at an Airbnb 37. Hosts anticipate a 44% decrease in revenue for June through August 38. Daily rates have dropped as much as $90 (on average). 39. Hyatt reported a $236 million second-quarter loss, a 376% drop in income since the same quarter in 2019. RevPAR was down nearly 90%. Food & Beverage Many restaurants and bars all over the world have had to close due to coronavirus and social distancing measures. 40. In the US, full-service restaurant reservations dropped starting in March – visits were down by 41% across the country. (Source) 41. The scheduling tool Homebase reported that the number of hours worked at local restaurants and bars dropped 40% by March 17, while the number of hourly workers overall declined 45%. 42. Restaurant workers have been hit hard by the pandemic. The National Restaurant Association reports that two out of three restaurant employees have lost their jobs. 43. Industry advocacy group James Beard Foundation found that restaurants, on average, laid off 91% of their hourly workforce and 70% of salaried employees due to COVID-19 and closures resulting from the pandemic. 44. The National Restaurant Association expects that the dining industry will lose up to $240 billion by the end of 2020. 45. What will it take for restaurants to reopen? A lot, according to the James Beard Foundation. Restaurant owners report that these are the biggest obstacles to reopening again successfully: 41% say the slow return of customers, 35% say they need cash to pay vendors, 16% would need to rehire staff, 3% would need to retrain staff, 2% are worried about health inspections. 46. In-person dining may be off limits, but in one survey, 33% of consumers said they’re getting more takeout than before the pandemic. Tours & Attractions Historic sites, theme parks, cruises and museums were shut down for the majority of this year. Here’s how the tour and attraction sector fared during COVID-19. 47. UNESCO reported on International Museum Day that nearly 90% of cultural institutions had to close their doors during the pandemic; almost 13% may never reopen. 48. The New York Metropolitan Opera had to cancel its season by the end of March, and expects to lose $60 million in revenue. 49. Safari bookings, according to one survey, are down by 75% or more, jeopardizing the tourism industry in countries that need internationla visitors badly to support their economy. (Source) 51. The CDC issued a no-sail order for cruise ships, finding in their study that 80% of ships within U.S. jurisdiction had cases of COVID-19 on board during March - July. 52. Mastercard recorded a 45% drop in travel-related transactions as compared to the same period last year. The credit card company looked at cross-border transaction volume processed in three months ending June 30. 53. In March, 77% of members of the American Society of Travel Advisors (ASTA), an organization for travel agencies, predicted they would be out of business in six months or less. 54. The Walt Disney Co. lost nearly $5 billion in April, May and June, due to its theme parks being closed: Disney World, Disneyland, Disneyland Paris, plus the brand’s resorts and cruise operations Business Travel 55. The pandemic has deeply impacted business travel: this sector is predicted to lose $810.7 billion in revenue this year. 56. China is expected to see the biggest loss in business travel from COVID-19, where spending is expected to decrease by a total of $404.1 billion. 57. Experts are predicting that 5 - 10% of business travel will be permanently lost, due in part to remote working tools that enable virtual meetings. 58. Business travel declined 89% as a result of COVID-19, more than the Great Recession and 9/11 losses combined. PwC reports that almost half of all businesses canceled corporate travel during this pandemic. (Source)