Newsletter - May 15, 2002

DIGITAL  MARKETING IN THE LUXURY SECTOR – PART 2

by Tim Stock and Marie Lena Tupot   a scenarioDNA inc

In Part 1 of this series, Acquisition (Getting Them), we discussed the advantages of employing digital marketing to attract discerning luxury customers – even in these economically trying times. In this segment, we’ll help you hold on to them.

Studies indicate that luxury marketers are far outpaced by their lower-end counterparts when it comes to digitizing their messages. Yet, digital marketing could play a key role in retaining luxury clients already won over. Loyalty is a major issue today, especially since there are no extra dollars to acquire new users.

With loyalty programs a determining factor in choice 75 percent of the time, according to InsideFlyer magazine, now’s the time for luxury travel marketers to assert their advantage over mass marketers.

After all, luxury marketers are in a good position to exploit the lack of creativity found in the big brands’ reward programs. They can easily use digital marketing as a tool to ellicit loyal consumer behavior and attitude. And they are well equipped to execute the rewards that reach the core of their guests.

It’s imperative that luxury companies consider taking risks to stand out in these tough times. They must go beyond the typical promotions of their middle market competitors. With a more finite niche market, luxury providers have more to lose. Each customer is worth significantly more money over time. And ultimately, there’s no question that loyal customers cost less to keep.

The desired creature comforts

The question is “What defines luxury now?” A survey commissioned by Advertising Age and conducted by Ziccardi Partners Frierson Mee, New York, found that high-income consumers purchase luxury goods in a quest for well-being rather than a quest for status. That puts quality and value at the forefront for consumers. Brand name alone isn’t nearly as influential today. And according to industry executives who participated in a recent Wall Street Journal article, customers in the new Anti-Terrorism Era place comfort and service above boutique avant-garde.

Of course, digital marketing offers one of the fastest, most cost-efficient ways to remind your luxury clients that you’re there to serve them. Whether it’s an SMS to remind Mr. Johnson to avoid delays by checking in for his flight early or an email suggesting a little R&R and offering complimentary spa treatment, digital media enables you to tailor your message to a particular client. And, with each “personalized” interaction, your property can strength its own identity as a luxury service provider.

Plan your retention strategy

In addition to emphasizing this new “well-being” definition of luxury across the board, luxury marketers should capture transactions based on their business model and long-term marketing goals. As with acquisition, your plan should fit into the key strategies of your property’s business model. Following the paradigms below will set you on your way to digital marketing success.

Be complementary. Your digital efforts should enhance, but not duplicate, your traditional media outreach. Consider campaigns that could be pulled from your more anonymous, mass media outreaches. Would the campaign be more cost-effective from a digital platform? Or should you synergize those broader traditional campaigns with personalized digital messages that “speak” to your returning customer as if you really know – and care – about him or her? Conversely, digital methods should be used in tandem with traditional media. For instance, ads and postcards could be used to drive customers to promotions available on your site.

Tailor your campaigns. Luxury marketing is all about caring and personalizing each point of contact with a client. Think about the information you’ve captured on each particular client. Airlines are already working to capture the food and drink orders of top-notch customers so their First Class stewards can simply ask if Ms. Bentley prefers the cabernet sauvignon she ordered last flight. Even if Ms. Bentley is in the mood for a Chardonnay, she’ll certainly appreciate the effort taken to serve her unique preferences. Does Mr. Chadha always check in on Thursday night and order mango curry as soon as he reaches his room? Proper info-crunching could result in a digital prompt before he arrives – and a steaming meal waiting in his suite.

Go beyond demographics. Recognize the behavioral patterns and design offers around affinity groups, such as those who appreciate cultural amenities or those who appreciate comfort amenities. New York’s Carlyle Hotel recently announced its "Art of Discovery" package via email to the hotel’s guestbook subscribers. The package offers elegant residential accommodations at The Carlyle Hotel on Madison Avenue and 76th Street and a very personal experience at The Metropolitan Museum of Art.

Make it worthwhile. What’s the point of transacting online if it isn’t going to be faster and easier? Everyone has less time to spare these days. Give your loyalty members functionality they can appreciate. Some of the most important factors in a loyalty program, according to a study of 7,500 frequent travelers funded by Six Continents Hotels, are instant online redemption, easy point transfers and point purchase, extended check-out and personal shoppers.

Use the Internet to “listen” your loyal consumers. Capitalize on the fact that everyone loves to give advice and solicit consumer input. Last year, at the suggestion of a Preferred Guest, Starwood introduced a member referral reward program. Starwood received the feedback during a focus group session. However, such information can be easily culled via online surveys. According to a Forrester Research survey, marketers rate online surveys as very effective in creating loyalty.

Choose partners in line with your brand’s identity. Make sure whomever you choose is on par with the caliber of your brand. For example, Hilton Hhonors recently added luxury online retailer Ashford.com to the program’s family of merchandise partners. Members can redeem points for Ashford.com gift certificates in denominations of $100, $250, $500 and $1,000.

Be prepared to embrace change. Keep your radar on for market shifts in these fast-changing times. Don’t sit back and wait for the market to come around again. Be proactive and meet the market head on. Seeing a strategic shift in consumer interest from flying to driving, Coyle Hospitality Group launched the Frequent Driver Miles loyalty program in which small and independently owned hotels offer travelers reimbursement for driving to their hotel.

Regularly revisit existing efforts. Hyatt Hotels Corp. renovated Hyatt.com and 100 Web sites worldwide in order to integrate Gold Passport online and attract frequent business and leisure travelers to book accommodations over the Web. Frequently, sites don’t need major overhauling just well thought out tweaks and tightening. That’s good news for your budget.

Use the element of surprise. Think ahead of your loyalty members and surprise them with things they didn’t know about your brand. With the proliferation of loyalty programs, it’s important to emphasize a property’s uniqueness. For example, did you know that Loews Hotels has a “Loews Loves Pets” program replete with canine amenities? Certainly, dog-owning loyalty members might like to know.

Identify valuable prospects. Use data from more loyal customers to determine prospects. Look for indicators of loyalty and market accordingly. For example, if your more loyal customers are business travelers who request the concierge floor, round up the customers who follow this pattern but are not yet loyalty members. Remember, loyalty develops through a process. Why not begin here?

Identify drops in loyalty early on. Tracking customer behaviors and attitudes will alert you to customer stisfaction levels. According to Forrester Research, satisfaction monitor Satmetrix has helped clients retain up to 95 percent of potential defectors who triggered an alert. In response, marketers can create more effective win-back campaigns based on what worked on other customers with similarly declining loyalty indicators.

Reaping the benefits

As with digital acquisition marketing, digital retention marketing efforts can be tailored to niche clusters, monitored in real time, and adjusted quickly based on client response. Because you’re speaking to the desires of a niche you know – and because you can alter your offer after a test-send – your ROI should rival, if not surpass, more traditional marketing methods. Just by making simple alterations where need be, the most perceptive marketers can reap ample rewards from their digital quest.

Ten questions luxury marketers should ask themselves

Often times the most elementary marketing principles are overlooked when it comes to embracing digital solutions. Here is a simple checklist to follow:

1. Is your online information current?
2. Is relevant information reaching loyalty members?
3. Are you anticipating the needs of loyalty members?
4. Are you focusing on those who rate their stays as outstanding, as well those who rate their stays unacceptable?
5. Do you know what other point programs your loyalty members are involved in?
6. What differentiates your loyalty efforts from the competition?
7. Are your initiatives saving loyalty members time and effort?
8. Are you maximizing the relationship with loyalty partners?
9. Do you have a mutually beneficial relationship with your loyalty members? Both offline and online?
10. Are you surprising your loyalty members with things they did not know about your brand?

Know your customers’ scenarioDNA

Grouping customers according to scenarios creates more effective targeting than segmenting customers by profiling alone. The combination of profile and scenario allows marketers to reach customers at the point of greatest relevance. A point that is all important when dealing with the luxury market. Why? Luxury guests want tangible evidence that the brands they favor know they are important. And if you don’t have an established loyalty program, act like you do by selectively reaching out to those customers on your frequent consumer short list.

Following the traditional travel cycle, a few basic scenarios for luxury customers could include:

Pre-trip Planning
A loyalty member wants to view exclusive programs, promotions and packages.
Digital Enhancement: Make certain that loyalty members can access their account online. Many sites only allow new customers to register for their loyalty program online. Make sure your online program is compatible with all accounts. Existing members should be able to log in and enjoy the benefits of membership.

En Route
A loyalty member wants to redeem points for last minute upgrades.
Digital Enhancement: Allow loyalty members to exercise all their membership privileges online. It will save members time and money, as well as save you from costly customer service expenses. All loyalty program features should be fully functional online. A push-to-talk component could be incorporated for more intensive transactions.

Destination
A loyalty member wants to apply points to destination amenities.
Digital Enhancement: Why not allow loyalty members to apply points once they are at their destination? Enable them to input their registration and apply points for tee-time, spa services, cabanas, etc. These types of services could be made downloadable for PDA access or wireless enabled.

Post-trip
A loyalty member wants to give feedback on their stay.
Digital Enhancement: Don’t miss the opportunity to interact with your customers. Provide them with online forms that make it easy for them to pat you on the back or complain. Don’t confuse them with a long list of email addresses. Feedback forms should be straightforward and customers should receive instant acknowledgement of receipt.

Tim Stock, president/CEO, and Marie Lena Tupot, VP, Consumer Knowledge, of sDNA|travel, a scenarioDNA inc. company. Based in New York City, scenarioDNA (www.sdnatravel.com) develops digital-marketing strategies exclusively for travel/destination clients. 

Source:  Hotelmarketing.com

HVS INTERNATIONAL ANNOUNCES THE RELEASE OF THE 2002 INVESTMENT OVERVIEW OF THE U.S. LODGING INDUSTRY

2002 Investment Overview of the U.S. Lodging Industry:

Historical Occupancy and Average Rate Trends, and Projections Based on Supply and Demand Trends

Profile of Hotel Buyer and Investors

Trends in Hotel Sales Transactions from 1980 to 2001

Hotel Valuation Index (HVI) Developed by HVS International

Future Hotel Industry Trends


HVS International, a global hospitality consulting and hotel appraisal firm, recently published the 2002 Investment Overview of the U.S. Lodging Industry. This comprehensive research document focuses on the various forces impacting the economic viability of the hotel industry and presents informative data that establishes criteria for hotel investors to consider before making their acquisition decisions.

Because hotels generate revenue based on occupancy and average rate, the supply and demand relationship is an important factor in analyzing profits and value in hotels. The Investment Overview presents historical hotel supply and demand information from the 1920s through the present, with particular focus on the period from 1970 through 2001, and projections through 2005.

“History has shown that during economic downturns, hotel values generally do not fall in proportion to the properties’ declining incomes,” states Stephen Rushmore, founder and president of HVS International.

“The decline in hotel operating performance that the market is currently experiencing is similar to the declines experienced in 1990 and 1991,” states Alexandre Sogno. “However, in 1991 the loss of value was driven by the oversupply of hotel rooms, which has a longer-term affect on the market; the current loss of value per room is primarily a result of a loss in demand. Due to these factors, a faster recovery of value can be expected in the United States.”

“The downturn of the economy in 2001 and the events of September 11th have led to the lowest number of hotel sales transactions since the early 1980s. However, these events have not significantly affected average per-room prices, which remained at a level just below the all-time high of $116,000 realized in 1999,” adds Tom Dolan.

The profile of the typical hotel buyer and investor has changed over time. During the mid 1980s, when tax-driven investments were popular, many hotels were purchased by passive investors who hired management companies to operate their properties. These owners had little to do with day-to-day operations, which occasionally led to poor management and, consequently, financial losses. In the early 1990s, the primary market participants were owner/operators who had the ability to turn around under-performing properties with their acquisition funds (usually from a joint venture partner) and management expertise. Hotel buying trends in recent years have consisted of real estate investment trusts (REITs) and C-Corps, which have actively acquired hotels by using funds from public equity stock offerings.

The lending environment has also changed. Many lenders have stopped financing new hotels due to the high rate of supply growth in the late 1990s, along with the slowing economy and the events of September 11th. Today, traditional or institutional lenders are primarily lending on safer investments, such as high-quality, full-service properties with owners that have proven track records rather than on the over-built limited-service properties. However, credit companies are usually willing to look at a riskier class of real estate, and are getting interest rates that are higher than those generally accepted by institutional lenders. Investment banks, the third major class of hotel lenders, were making commercial, mortgage-backed securitized (CMBS) loans until September 11th; however, many of these banks have now decided to wait out the recession.

Historically, hotel average room rates have generally outpaced the Consumer Price Index (CPI) when occupancies are strong or moving upward. However, in 2001, nationwide average room rates actually declined according to Smith Travel Research. In addition, occupancy was also at its lowest level since the 1970s, which led to a substantial decrease in RevPAR. When occupancies are low or declining, room rate growth tends to lag behind the CPI; and in some cases, average rates may drop, as seen in 2001. At other times they were more than 100% higher than the gains in the CPI as seen in 1978 and 1996. Projections for the future indicate a moderate average rate growth with occupancies increasing steadily due to limited new supply.

HVS International constantly monitors hotel markets in order to collect information on hotels sales and trends. HVS’ comprehensive database, the Lodging Databank, contains information on hotel transactions that occurred in the United States from 1990 to the first quarter of 2002. The lodging Databank represents more than 90% of all the hotel sales that took place in this time period, and it demonstrates that the number of transaction peaked in 1996 at 835. This same period was characterized by extremely strong growth in the average sales price per room. The Investment Overview also breaks down the hotel transaction information by quarter from 1997 to 2001 in order to further display how the volatility of the market and the economy affected hotel sales.

A more meaningful indicator of trends in hotel value is the Hotel Valuation Index (HVI), developed by HVS International. This index tracks changes in hotel values in 46 major markets and the nation as a whole. It is developed through an income approach, using market area data provided by Smith Travel Research and operational and capitalization rate information from HVS International, and is indexed to the 1987 U.S.A. value (1.0000). Stephen Rushmore’s latest HVI projections, which were updated in early 2002, are also included in the latest Investment Overview.

Since 1980, HVS International, the leading global hospitality consulting organization, has provided financial and valuation consulting services for more than 10,000 hotels in all 50 states and more than 60 foreign countries. Our professional staff of more than 150 industry specialists offers a wide range of services, including market feasibility studies, valuations, strategic analyses, development planning, and litigation support. Through our divisions and alliances, HVS supplies additional hotel consulting expertise. HVS databases contain comprehensive information on more than 30,000 hotel transactions, operating agreements, financial statements, and compensation information.

For more information about the 2002 Investment Overview of the U.S. Lodging Industry, contact Tom Dolan (ext. 218) or Alexandre Sogno (ext. 217) at1- 516-248-8828, or e-mail Tom or Alexandre at tdolan@hvsinternational.com or Alexandre Sogno asogno@hvsinternational.com, respectively. To purchase a copy of the 2002 Investment Overview of the U.S. Lodging Industry, contact Joan Raffetto at 1-516-248-8828, ext. 231, or email jraffetto@hvsinternational.com. The fee is $250 for an electronic copy or $350 for a bound hard copy.

http://www.hvsinternational.com

MCIL APPOINTS DES PUGSON AS S.V.P. OPERATIONS ASIA PACIFIC

Millennium & Copthorne International Limited (MCIL) has appointed Mr Des Pugson as Senior Vice President of Operations, Asia Pacific and General Manager of the Orchard Hotel and Grand Copthorne Waterfront Hotel in Singapore.

Prior to joining MCIL, Mr Pugson was the General Manager of the Hotel Mulia Senayan in Jakarta. Based in Singapore, his role as Senior Vice President of Operations will be to oversee the operations of all the group’s managed hotels in Singapore and the Asia region.

In his capacity as General Manager of both Orchard Hotel and Grand Copthorne Waterfront Hotel, Des Pugson will be responsible for the overall success of these two five-star hotels.

The 672-room Orchard Hotel is situated in the heart of the famous Orchard Road and houses successful restaurants such as the newly renovated and highly established Hua Ting Restaurant, Orchard Café and La Terrasse.

Grand Copthorne Waterfront Hotel has a total of 539 rooms and is located by the Singapore River on Havelock Road, in close proximity to the commercial and financial hub of this island city.

A graduate of the Ecole Hoteliere in Lausanne, Mr Pugson began his career in the hospitality industry in London. Rising steadily through the ranks, he eventually went on to embark on successful careers with leading international hotel chains such as Sheraton,  Shangri-La International and Ritz-Carlton holding positions at head office as well as running prestigious hotels such as Shangri-la’s Rasa Sayang Resort in Malaysia and the Ritz-Carlton Hong Kong.  He brings with him extensive experience in managing hotels in the Asia Pacific region including Hong Kong, Indonesia, Malaysia, Australia and New Zealand.  His appointment further strengthens and develops the Group’s position as a world player in the international hotel market.

Mr Franz Zeller, former Senior Vice President of Operations, Asia Pacific and former General Manager of Grand Copthorne Waterfront Hotel Singapore is now the Senior Vice President of Operations, Middle East and General Manager of the new Millennium Hotel Abu Dhabi which opened in March 2002.

Mr Heinrich Kapfenberger, former General Manager of Orchard Hotel Singapore, is now the General Manager of the Millennium Hotel and Resort Stuttgart.

HOW FOUR SEASONS WEATHERED GLOBAL COMPETITION

Roger Martin  National Post

Toronto-based Four Seasons Hotels and Resorts is an excellent illustration of distinctive positioning and a reinforcing activity system leading to global competitive success. (Harvard Business School Case: Four Seasons Hotels and Resorts, 2000, Roger Hallowell plus interviews by Roger Martin and Christian Ketels).

Four Seasons operates 54 luxury hotels and resorts in 24 countries around the world. It wins awards at an unprecedented level in industry publications as the leading player in the luxury hotel and resort business worldwide. Ten or more of its hotels routinely make lists of the top 100 hotels in the world. The company often appears on the Fortune list of best places to work. Its revenue per available room in the highly competitive U.S. market is more than 30% higher than that of its closest chain competitor, Ritz-Carlton. Countries and cities around the world encourage Four Seasons to build hotels in their jurisdiction because the presence of a Four Seasons signals a quality location.

The result is growing profitability and growth opportunities that financial markets have rewarded with a significant premium for Four Seasons stock compared with its peers.

Four Seasons has achieved this impressive performance not by being similar to its peers. Rather, the success has derived from making an integrated set of choices that are highly distinctive. Its goal was to develop a brand name synonymous with an unparalleled customer experience.

To meet these aspirations, it chose to focus exclusively on serving high-end travellers. This choice was in direct contrast to large competitors such as Hyatt, Marriott, Hilton and Westin, all of which competed across the spectrum of hotel classes, including high-end niche brands such as Marriott Marquis and Conrad Hilton. By competing across the spectrum of hotel classes, competitor chains struggled to establish consistent high-end service and branding. The only hotel chain with focused high-end positioning, Ritz-Carlton with 36 hotels worldwide, saw its positioning endangered when it was purchased recently by Marriott and made part of a broad-based chain.

A second choice was to pursue a truly global strategy with its growing portfolio of hotels and resorts in key destinations around the world. This distinguished Four Seasons from the bulk of smaller high-end competitors. Competitors such as Mandarin Oriental (20 luxury hotels, mainly in Asia) or Peninsula Group (eight hotels in Asia and the United States) could not provide ubiquitous global service to their high-end clientele.

The final key choice, which was made in 1985, was to specialize as a hotel manager, not a developer and owner. This was a distinct choice in the industry until Marriott divided its business into hotel ownership and hotel management companies.

Imitating some aspects of a strategy, but not all, leads to a large gap in performance. Should one of the other hotel chains, for example, copy Four Seasons' focus on medium-sized hotels in a selected number of prime locations, it would forsake a large part of the market. And without the additional activities in terms of recruiting, training and so on, it would not reap the benefits of superior personal service that merits higher prices from the most discriminating travellers.

Because the Four Seasons strategy is unique and is ensconced in an activity system that would force competitors to make unacceptable trade-offs, its competitors have been disinclined to imitate Four Seasons, despite its obvious success. The result is a Canadian global leader with attractive growth prospects for the future.

uCOMMERCE ENHANCES SERVICE FOR HOSPITALITY COMPANIES

Accenture.com   -  Road Warriors have reason to rejoice. The hospitality industry will soon offer frequent travelers an enhanced level of personalized service and greater convenience with uCommerce technology. And all travelers will need is a Web-enabled cell phone, a personal digital assistant (PDA), or a new wireless device that combines the two.

The "u" in uCommerce represents:

• Untethered—Unconstrained by hard wires of traditional computing and telephony;
• Ubiquitous—Taking place anywhere business is being done; and
• Unbounded—No longer limited to the traditional definition of commerce.

"This wireless solution adds value to the cell phone, PDA and the personal computer," says Julian Sparkes, managing partner of the Accenture Global Travel Services group. "In the long-term, uCommerce makes the entire hotel experience more convenient for the business traveler. uCommerce also enables hotel operators to drive revenues, speed processes, reduce costs, and strengthen brand loyalty among Road Warriors, their most important customers."

"uCommerce offers the next logical step to the hospitality industry," Sparkes continues. "With far more profit potential and refined customer interaction than mCommerce alone, uCommerce can address hospitality inefficiencies across three main interaction points." These points include business-to-consumer—B2C, or hotel-to-customer; business-to-business—B2B, or hotel-to-supplier; and business-to-enterprise—B2E, or hotel-to-enterprise, such as internal operations.

Unlimited worldwide opportunities for uCommerce

Between now and 2005, ubiquitous wireless access should be accepted so rapidly that it will grow beyond its current potential and become a mainstream tool.

The facts support the rapid spread of uCommerce:

• Today, there are more than 50 million Internet-capable phones and PDAs generating billions of dollars worth of purchases annually; by 2005, that will grow 12-fold.
• In four years, more handsets than personal computers will be connected to the Internet; and
• Forrester Research predicts that nearly three-quarters of Europeans will carry a Net-enabled mobile phone by 2005 and more than half will regularly use it.

A Road Warrior scenario of how uCommerce will work

Imagine this possible scenario if you were a Road Warrior rushing to catch a plane for a last-minute business meeting…

On your way to the airport, you could book a hotel room with your PDA. You could specify the room size, designate smoking or non-smoking, and make any special requests. Within seconds, your reservation will be confirmed by a message to your PDA.

Arriving at your destination city, you check into the hotel via your PDA from the taxi. Directions to the hotel and your designated room are transferred to you.

At the hotel, you bypass the front desk and go straight to your room. You use your PDA equipped with Bluetooth™ wireless radio technology to unlock the door and adjust the room temperature to a comfortable 72 degrees.

Once inside the room, you are connected to the hotel's wireless network. You check your messages and download the latest version of your presentation for tomorrow's meeting.

An "mConcierge," a mobile concierge employed by the hotel operator, provides you with details about the surrounding area: restaurants, attractions, shopping, and more. You order room service on your PDA and update your presentation notes for the next day's meeting. Then, you use the video Web camera on the room's TV to talk with your family and friends.

At breakfast, you review the meeting agenda. With your PDA, you locate the conference room and are off to your first meeting.

Later, during a break, you check out of the hotel. Your accumulated expenses are listed. You confirm payment through the "mWallet" feature on your PDA that is electronically linked to your Diners Club account, and your expenses are also transferred to your company's expense report system. As part of the checkout process, you're offered 1,000 reward points to take a quick customer satisfaction survey. You complete the survey and the results are automatically added to the hotel's customer relationship management system.

The next steps hospitality companies should take

"Accenture believes that companies will benefit greatly if they experiment with uCommerce now, then rapidly implement it during the next 12 to 18 months," Sparkes says. "If they are not prepared, there will be a difficult catch-up process where a distinct competitive advantage can be lost."

Accenture recommends these steps to implementing uCommerce:

Get Smart

• Enable immediate, relevant internal communications to enhance service and pricing;
• Increase insights into your customers to improve satisfaction and increase profits;
• Promote the use of wireless networks, cell phones and PDAs with your employees, especially management;

Get Creative

• Hold brainstorming sessions to pinpoint high-potential opportunities;
• Analyze why uCommerce is important to your organization;
• Strive to offer personalized real-time information across your enterprise—to your customers, suppliers, and internal operations.

Get Serious

• Think strategically about your technology needs—start developing alliances with wireless vendors and service providers;
• Coordinate your electronic business planning to include the latest financial enablers: electronic procurement and electronic treasury to streamline hotel operations; electronic travel and entertainment systems for customer convenience; and electronic bill presentation and payment to speed check-out procedures.

Get Going

• Leverage your existing Web presence by creating a Web-enabled budgeting and forecasting system with Web-based reporting to accelerate processes and reduce costs;
• Use uCommerce now because time-to-market is critical.

"It's a perfect fit for the hospitality and travel industry to create higher profit margins through Web-enabled systems, " Sparkes adds, "allowing immediate, relevant communications with their customers."

Report Source:   Accenture.com                    via   Hotelmarketing.com

TOURISM LEADERS MEET IN PARIS TO DEVELOP FUTURE FOR INDUSTRY

Sixty of the most influential business executives in the travel and tourism industry will converge on Paris for the World Travel & Tourism Council's 2002 Annual General Meeting on Friday 17 May 2002, to develop a clear vision for the future of the travel and tourism industry around the world.

The chief executives, representing some of the world's leading companies operating in the travel and tourism industry, and all members of the private sector organisation, World Travel & Tourism Council (WTTC), will meet to exchange ideas, challenge current industry ideology and develop a framework for the continued prosperity of the industry for the future, and its commitment to sustainable growth. Jean-Claude Baumgarten, President of the World Travel & Tourism Council believes 2002 is one of the most critical years in the history of the industry, in that it is facing remarkable challenges and opportunities for the future. "This year's conference will be extremely valuable not only to the members of WTTC, but to the entire travel and tourism industry around the world," says Baumgarten. "It is a time to take stock, not only of how far we have come, but how far we want to go in the future, and in what shape we want that process to take," he says.

The conference which is entitled "Toward a New World Order?", sets out to challenge some of the commonly held beliefs the industry has developed over the past several years, and examine the feasibility of a new long- term framework across all sector areas.

WTTC has been instrumental in working with governments to address problems and provide solutions for the travel and tourism industry following the dramatic impact of September 11. Tourism economic research recently produced by WTTC, Tourism Satellite Accounts, shows that the worldwide industry has suffered badly due to the global impact of September 11, with an accumulative loss of 7.4 per cent in travel and tourism demand, and the loss of 10 million jobs equivalents, in years 2001 and 2002. But WTTC expects the industry will rebound in 2003 with a massive growth rate of six per cent after a year of stabilisation and recovery in 2002.

According to Baumgarten, a massive worldwide rebound will occur in 2003 with global travel and tourism demand forecast to increase in real terms by six per cent. "During this process we will see the creation of 6.8 million jobs, replacing most of the business and jobs lost in the extended wake of September 11," he says. The research also shows a strong positive growth trend for the industry over the next decade with long-term annual growth at 4.5 per cent for the global industry.

During the AGM the Council will launch four new research reports on the following hot topics facing the industry: Taxation Policy; Infrastructure; Human Resources; and Information Technology/E-commerce. The reports are the product of twelve months of work by WTTC taskforce initiatives established during the 2001 Annual General Meeting in Vancouver Canada, comprising a mix of industry leaders - WTTC members, academics and government officials. The reports will be available for free download from WTTC's website.

The Council will also deliver its long-term strategy for corporate social leadership within travel and tourism, and outline how the industry can act as a mechanism to bridge the gap between the "have and have nots". The World Travel & Tourism Council (WTTC) is the forum for global business leaders in travel and tourism comprising the presidents, chairs and chief executive officers of 100 of the world's foremost companies. It is the only body representing the private sector in all parts of the travel and tourism industry worldwide.

TOURISM SECTOR SET TO GROW IN ZAMBIA

 (The Times of Zambia/All Africa Global Media via COMTEX) -- SUSTAINABLE development that ensures that resources are used equitably and efficiently for both the current and future generations is the way forward for Zambia. This school of thought does not, however, tally with the economic structure of Zambia because for decades the mainstream economic activity has been mining in which copper mining has been the major activity. Copper mining is a wasting asset whose end is imminent along the way.

Fortunately Zambia is endowed with a lot of alternative economic resource bases in different sectors. Over the last five to 10 years these sectors have come up as potential replacements of the copper industry. The tourism industry is one such sector. It is obvious that a lot still needs to be done before the sector could compete favourably with well-established African tourist industries such as those in Kenya, South Africa and Zimbabwe. An appropriate focus has been established for the industry. Recent developments and change in Government policy in the sector have resulted in increased tourist arrivals and investment, which have lead to increased employment opportunities.

According to Chief Mukuni of the Toka Leya people in Livingstone, Government treated tourism as a stepchild and concentrated on other economic activities leaving tourism to fend for itself. Giving a comparison between Zambia's tourist capital Livingstone and Victoria Falls town in Zimbabwe, the chief explained that from history Livingstone was an industrial and administrative base while Victoria Falls town has always been a tourist centre. As a result the infrastructure in the neighbouring town is well-developed and accustomed to tourism with adequate accommodation, and a variety of tourist activities. Zambian tour operators running helicopter flights and other services rely heavily on tourist accommodated in Zimbabwe to cross over to use their services. United Air Charters managing director Ignatius Lindeque confirmed that a large number of his customers cross over to Zambia from Zimbabwe.

But now that the industrial base in Livingstone has shut down because of competition and the liberalised economy, there is a discernible shift towards the tourism industry. The establishment of new lodges is ample evidence of this shift. In addition, the liberalisation of travel industry and the prevalence of peace in the country have also contributed to increased tourist arrivals. Ministry of finance economic reports over the years show that a major constraint in the performance of the sector has been the deteriorating state of infrastructure in terms of tourist access roads, unreliable local air network, and insufficient financial resources.

Despite these, however, the trend of tourist arrivals and investments has steadily increased over the years. Last year's the solar eclipse, as well as the Organisation of African Unity (OAU) Heads of State summit accounted for much of the growth in both arrivals and earnings. In 1993 Zambia registered 582,967 tourist arrivals with 415,697 being domestic tourists and 167,271 being international visitors. The sector generated US$ 52.4 million in that year, a modest increase of $ 3 million from the $49.24 million in 1992.

In terms of investment the sector received K2.4 billion in 1993 with 58 tourism licences issued, registering an increase over the 1992 figures when only 34 licences were issued and total investment amounted to K0.5 billion. During the next three years the sector suffered a slump mainly due to a reduction in the number of domestic tourist arrivals. For example, in 1995 total tourist arrivals, both domestic and international, was only 108,435 and a year later this number fell further to 95,621. The revenue generated in 1996 was only US$ 30.9 million. The pledged investment in the sector was slightly over K10 billion with the potential of creating 582 jobs in the sector. The tourism sector at this point in the 1990 decade was in recession as all indicators dropped drastically. The drop in tourist arrivals was a function of the harsh economic conditions experienced during the period. This led to the poverty incidence to increase to well over 70 per cent.

Secondly the 1996 presidential and general elections gave Zambia a poor international standing as a tourist destination. Hence few international arrivals were registered. However, the sector rebounded with the peaceful passing of the elections seeing an increase of international arrivals in 1997 of 279,825 representing a 476 per cent increase, although domestic arrivals only grew by 64 per cent to 77,237. The sector revenue accruals increased by 104 per cent to $63 million in 1997 from $30m in 1996. Interestingly from this point the international arrivals in Zambia has far outstripped the domestic arrivals. The point being that the poverty situation has not improved among the potential Zambian tourists from the local market, in spite of the fact that the image of Zambia as a peaceful tourist destination has improved. International tourist arrivals now average 400,000 per year while the domestic tourists, because of lack of resources, average 100,000 per year. Chief Mukuni, who has welcomed the recent developments in the tourism sector, believes that the coming of Sun Hotels to Zambia has helped put the country on the world map.

He does not believe that this alone is enough. The chief claims that there are too many levies on tour operators in the country thus making the tourism product in the country too expensive. The sector in 1999 realised revenues totalling $85.2 million, after recording 580,781 total arrivals and investment pledges of $64 million. By 2000 the tourism industry's value-added increased by 12.1 per cent and in 2001 this increased by 24.2 per cent. The revenue in 2001 reached US$117.1 million up from the 2000 figure of $111.0 million.

The sector is poised for growth in the years to come as indicated by these trends. However, a lot more incentives have to be given to the sector so that the 1993 levels could be attained. Secondly the sector is very volatile as was experienced last year when the terrorists hit New York and international tourists cancelled their bookings. This affected the sector adversely but the domestic clients could have cushioned the impact but for the erosion of effective demand locally. The tourism sector alone cannot attract visitors because many other sectors - both economic and social - directly influence a visitor's stay in a country. These would include security, amenities, and infrastructure to mention a few. The 2002 budget theme on tourism is to improve on these auxiliary factors which, though not under the sector, can influence and enhance the performance of the sector. For example, Livingstone District Council director of planning Clement Chisanga recognises the role the council plays in the tourism industry.