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  • New Global Directors Join the 2018-2019 HFTP Board

    The HFTP 2018-2019 Global Board of Directors was installed during the association's 2018 Annual Convention and introduces new directors Toni Bau, Carson Booth, CHTP and Mark Fancourt. These extensive director profiles give insight into the distinguished professions and personal goals of HFTP's newest association leaders.

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  • HFTP GDPR Guidelines: Privacy Policies for Hotels

    This document offers points to consider in the development of a hotel’s privacy policy. In view of the multiple organisational and legal structures under which hotels operate, as well as the complexity of the third party landscape that may be part of the complete guest experience, this document serves as a guideline only.

Artificial Intelligence: Hospitality, and That Human Touch

EHL ·14 February 2019
Artificial intelligence is undoubtedly going to have an impact on the hotel industry as the bots - robots and chatbots - play a greater role. Julia Aymonier, CIO of EHL, says yes, some jobs will change, particularly those related to repetitive tasks. "The biggest challenge," she told Hospitality Insights in an interview, "will be to train people for jobs that are created by artificial intelligence."Robot-concierge?"There will be jobs, and if we don't train people, we won't have the staff we need to do these new jobs."We're unlikely to see robot concierges in four- and five-star hotels, as you can't have the "human touch" and the sort of relationship or contact expected in these hotels with a robot."But room service, why not? If you've got a robot which comes to your door and is capable of behaving like a human, taking a tray out and putting it on a table, then that job will probably go." "Robots which can go into a room and take all the laundry and put it in a (washing) machine, why not?"Aymonier, who has been speaking at a range of forums recently on the topic of AI, says that although there are plenty of opportunities to do other types of value-added work that would be more interesting, "we need to gear up the way we train these people. We already have huge holes on the market for a lot of positions in IT today.""It takes a lot of work to train a machine, even an artificial intelligence machine, to understand what you want it to do.""We need a quantum leap in terms of technology. We've got machines which can do artificial intelligence today but to give us the power to go further we need quantum computing."It takes a lot of hard work to teach an AI system to do what you want it to do. I relate that to having a baby. You have this baby that knows nothing and then you have to teach it, correct it, show it the right path .... In terms of AI, the system will then be able to answer - most of the time - what you want it to answer. But we're not there yet and it's not magic."EHL is currently running two AI-related projects.One is a virtual personal assistant named 'Amelia', which initially will help guests and students connect to the Wi-Fi, and at a later stage will answer questions from potential students and parents about the school's courses. ("She's hardworking and not supposed to get sick.")The other project will an 'Alexa' of sorts - the virtual assistant developed by Amazon - at the reception to answer questions and provide general information.The school has already been trying to train a robot concierge, albeit with varied results. (The Hilton in McLean, Virginia, near Washington DC, is already using a small, IBM-developed robot called Connie.)So the next idea will be to take whatever platform - whether Alexa or the virtual personal assistant - and connect the two together and have a machine that has that intelligence behind it to learn from, but also have mobility. In the end, the idea would be to have several robots wandering around the campus and have artificial intelligence built in, so the robots can answer questions and you don't have to go to one specific place."We're also looking at using AI to give us some gamification types of courses and mixing these with augmented and virtual reality systems.The school is about to launch a virtual reality class for first-year students, "which is based in a five-star hotel and deals with housekeeping issues which would be quite interesting.""We decided to do that as a proof of concept to see what it can actually bring" in terms of value. That project is due to be launched in February 2019."Virtual reality is quite interesting because it may be the way we'll sell holidays in the future."Aymonier expects AI to be used to provide predictive analysis of students' results so "we can give extra training to (a particular student who is likely to fail) in certain subjects." The school may start to explore this in 2019, using software to examine patterns related to learning habits and outcomes to see if students "might have a bit of a problem so we can give them some extra coaching or extra time in class."Based on their ability, classes could also be tailor-made for the students.All that, however, involves some sort of cost. Aymonier though believes the cost of the extra time and coaching can be offset. "Do we really need to bring it down to money? If we can help somebody we should do it. If machines can give that information and prevent students spending all this time in school and coming out with nothing, I think that's worth more than the money."Julia Aymonier was named EHL's Chief Information Officer in February 2016, making her the first woman on the Executive Committee in the school's history. She had previously specialized in IT for the banking, finance and trading industries, working for companies such as JP Morgan (Suisse), La Compagnie Benjamin de Rothschild, Banque Bordier et Cie, and Union Bancaire Privee. She graduated from Glasgow University and the Polytechnic of Wales with a BSc (Hons) in Computer Science.

New Dimensions of Service

Ecole hoteliere de Lausanne (EHL)·11 February 2019
The service industry is a unique powerhouse, which has seen constant growth over the past 20 years, with hospitality contributing some 10 percent of GDP. But what’s in store for the sector, particularly as it becomes ever more competitive and the pace of change ever rapid? At a recent event in Shanghai entitled ‘First Global Service Excellence Forum’ staged by CEIBS and Ecole hôteliere de Lausanne, we examined trends in the service sector.

Managing Overtourism

Ecole hoteliere de Lausanne (EHL)·11 February 2019
What, for you, makes an ideal vacation? Being alone in a beautiful spot or sharing the experience with loved ones? More likely than not you prefer to avoid the ‘madding’ crowd but you may already have had first-hand experience of the increasing numbers of tourists visiting major destinations such as Machu Picchu, Angkor Wat, the Taj Mahal and Venice.

EHL: The Berceau Des Sens Receives Its Michelin Star

EHL · 6 February 2019
LAUSANNE - Le Berceau des Sens has become the first educational restaurant in Switzerland to receive a Michelin star. The Michelin Guide has awarded a star to Berceau des Sens, the educational restaurant of Ecole hoteliere de Lausanne. Already holding the highest Gault & Millau rating for an educational restaurant, the establishment was awarded this Michelin star, the ultimate culinary distinction, while EHL Group is in a healthy growth phase.A new decor, a high-quality service offered by students under the watchful eye of instructors, as well as a refined and modern cuisine. The Berceau des Sens, which is open to the public and is booked out every noon and evening of the week, has never done better.Heading its kitchen since September 2017, Cedric Bourassin has given a new impetus with the help of an outstanding team of professionals who rely, among other things, on the talents of the best sommelier in Italy. "The star was not a goal we were trying to achieve, because the primary goal is to train our students, but it is a wonderful recognition of the product that we strive to offer our customers. I am proud of what we have accomplished and thank the Michelin Guide for this fine distinction," said the freshly starred chef at the end of the ceremony in Lucerne.Michel Rochat, CEO of the EHL Group, said he was "very happy to see the efforts of a passionate team rewarded and recognized on the international culinary scene".The Berceau des Sens offers a menu inspired by exceptional French cuisine, since Cedric Bourassin worked with Anne-Sophie Pic and the Bras family in Laguiole. But the menu is also in pursuit of umami, the fifth flavor that the passionate chef was able to explore during his long stay in Japan.
Article by Stuart Pallister

Luxury Hospitality and the Risk of Obsolescence

EHL · 5 February 2019
Luxury hospitality is at risk of becoming obsolete, according to PwC Global industry leader for hospitality and tourism, Nicolas Mayer. That's because it no longer fulfills the 'needs and desires' of clients that they couldn't get elsewhere.Mayer told EHL students recently in classroom sessions that, in decades gone by, luxury had involved 'standard expectations' about security, beautiful surroundings and service levels that guests were willing to pay for.Whereas now, this brand promise and standardization, this consistency promise, doesn't need to be obtained from a luxury operator anymore. You can get it online and through different channels yourself or through peers or people you trust.These are complex businesses, Mayer says, so hoteliers should not be on the lookout for a new competitor that is going to disrupt the industry and put them out of business.However, citing the examples of the online travel agencies (OTAs) and alternative booking platforms such as Airbnb, he argues "there are disruption innovators that chisel away at the core revenue-generating activities that operators deliver on behalf of hotel owners."Unbundling is becoming an issueMany businesses are increasingly "looking at hospitality as an unbundled sequence of services and disruptors saying 'well, I can't become a full service hotel operator but I can do distribution, revenue management or procurement, or I can do housekeeping or engineering better than (hoteliers).'"Owners no longer want the full service offering from hotel operators, he says, but only certain elements of the bundle, combined perhaps with the services of small companies. "So that's how, in my view, disruption will come." It will not come from one big player pushing the others around but "will chisel away at some of the core services of hospitality."Neither Uber nor Airbnb are truly disruptive innovators, Mayer argues, adding their offerings are more incremental than revolutionary. He sees Uber as a taxi offering and Airbnb an accommodation offering that is "incrementally developing what the hotel industry has been doing all along and, by being more agile through technology, basically grasping market share." Indeed, Airbnb may become a victim of its own success, he says, due to pressures on real estate prices and rental space, as well as security issues,butNobody has really asked themselves in the hotel operators' business: how is it possible that a new guy comes along and immediately so many of my clients run away and switch ships? That's the question that needs to be answered. They're grasping a piece of the market share and are here to stay.Towards obsolescence in luxury hospitality?Mayer further says the issue of obsolescence in luxury hospitality is serious because it takes time for hotel groups to reinvent themselves."I don't think any of the large, recognized players will become obsolete tomorrow. However their value proposition now is increasingly being challenged because the historic deal was: I shall provide a number of useful services in a package deal, in a management contract with a three percent base fee and a ten percent incentive fee on the owner's side. But both owners and consumers want to spend more on those parts of the package where they see value. For instance, some may prefer to spend 'disproportionately' more on a room than cross-finance a fitness or business center."The luxury delivery model is in danger of obsolescence," says Mayer, "because it is based on a transactional premise where we say you give us $800 a night and I will make available an array of things, some of which you'll use and a cross-subsidizing deal that works for everyone." That classical or traditional model is being challenged, he says, through the development of lifestyle hotels.If you start unbundling an $800 daily rate and take out the cross-subsidization that goes towards fitness, MICE (meetings, incentives, conferences and events), the business center, beach club, etc., what is left over is probably not going to be sufficient to cover the costs.So the unbundling and change in business model are actually putting the luxury model at risk of obsolescence. It's not so much that people will no longer wish to have human contact or nice experiences whether they be in dining or something else.Mayer stresses that luxury hotels are weak in terms of processes, IT and digital systems, and the development of staff.Hospitality-specific systems, whether for revenue management, or distribution, had had been bought in. In addition, due to a lack of training, systems are "being poorly used."As for processes, the hospitality sector is "among the least mature, the least standardized and the least modern"compared to any other major industry.Check-in processes, he says, have not changed fundamentally since the 1970s (although he does praise citizenM for being a pure digital company which "never had to build processes on top of an analog heritage"). Most operators have merely transferred analogue processes to a digital environment "but that is not digital transformation in a process environment."As for the development of staff, Mayer says "the hospitality industry is particularly suffering from a lack of access to talent because they have amongst the weakest management development programs of any industry." Consequently he urges hotel groups to offer career tracks and career clarity. "That doesn't need to mean that I will map out the next 12 years until your first GM position but people want to know there is a plan for them, rather than feel they're a reserve battalion to be dispatched when the first vacancy pops up somewhere in the chain."What solutions?Plenty of areas for improvement then, so what advice does Mayer have for hoteliers as they tackle these issues?My first recommendation would be, look at industries that are really good at process improvement and ask yourself what is that they're doing that you can replicate.The airline industry, he adds, is a good example as it "constantly looks at every micro process" to make improvements and, as in the hotel industry, "if you fix it, even in just a very small piece, that can have very big effects.""Looking outside the industry is tremendously important. One of the issues of the hospitality industry - and it's not a very original statement - is that it's almost incestuous," as hoteliers switch from one group to another, taking their expertise with them. Whether it be financial services (for the check-in process) or manufacturing (for purchasing and human capital management processes), the results have been 'phenomenal', Mayer says, when hoteliers have looked outside the sector for inspiration.

Empowerment In The Hospitality Industry - How To Make It Work

EHL ·22 January 2019
Dr. Steffen RaubSteffen Raub is a Professor of Management at Ecole Hoteliere de Lausanne. He has written extensively on the topic of empowerment and addresses empowerment in his teaching and consulting activities.Philip JonesPhilip Jones has been in hospitality for 25 years. He started his career in his native Ireland, where he worked for an independent boutique hotel for 5 years. Then worked for the next 12 years for Ritz Carlton in the USA before working for Jumeirah for 2 years in the Middle East. Most recently he has been with Movenpick for 7 years, as a general manager in Vietnam, Singapore and Dubai. Philip Jones is currently General Manager of the Movenpick Hotel Jumeirah Beach.This interview was conducted at Ecole Hoteliere de Lausanne.Q: Philip, you describe yourself as "a great fan of empowerment". Why do you think empowerment is important for the hospitality industry? What attracts you to the idea?Jones: Well, working for Ritz-Carlton for 12 years was obviously how I became introduced to the concept of empowerment. I saw the very positive effects it had, both from the guest's and from an organizational standpoint. It is not only important when something bad happens and needs fixing, but also looking at how processes can be improved. We always looked at the phrase "improvement begins with dissatisfaction of the way things are."We really need to be pushing the boundaries and I am always one of these people who believe that corporate policies and rules are really important, and brand standards are really important, but they also need to be challenged. If you don't challenge them, you'll never get any better, you'll just do what you've always done, and you need some empowerment across all levels of the organization for people to feel comfortable to speak up and say: "No, I've got the responsibility to help and improve our business".Q: So, for you, empowerment and brand standards are not either/or, it's not a contradiction. The two need to go hand in hand...Jones: ... they need go hand in hand. One helps drive the other.Q: What do hospitality organizations have to do to implement empowerment successfully?Jones: Empowerment is one of the hardest things to implement. It's so easy to say, but, you know, there are so many boundaries to it. So, I really start with communicating what the boundaries and framework of the empowerment are. What we want people to do. To have that shared vision or common goal that we all work toward and to make it clear that empowerment is a tool within the box to pull out as and when appropriate.It then goes into training and I mean training that comes from me. So when we do our empowerment training to help look at specifically how we can "surprise and delight" and resolve guest problems, the colleagues need to hear it from me directly, Philip Jones, the General Manager. That way, there is no ambiguity. It is not "okay, well, yeah we're empowered, but are we really empowered?" And we do physical exercises. When we do those, we explain the limitations behind them, i.e. that every situation people are going to encounter is going to be unique and different.And then, most importantly, you have to make sure that empowerment never results in any punitive action - so long as the actions have been done ethically and within the framework that has been provided. If we look back and someone does something where we would say "wow, that was maybe a little much, or this is maybe a little beyond what we thought", but it's not written in the framework, then that's our fault as leaders for not being more specific. And that gives us the opportunity to go back and re-work the framework. Again, procedures and policies, they're all living, breathing documents that constantly get updated you can never conceive every possibility and eventuality.Q: For you personally, what does it mean to empower your direct reports? What do you do specifically?Jones: Telling them, simply, "Make the decision. Do what you believe is right." When I talk to my Senior Executives, I say "look, my working style is very simple: as a general manager I will always keep 51 percent of the vote and you have 49. But I will let you exercise that 49 percent of the vote 99 percent of the time. Unless, I really feel you're making a great mistake. But I want you to go out and learn from your mistakes."One of the best things that ever happened to me was on the very first job. My boss said "Look, make as many mistakes as you want, but make them only once and learn from them". And for me that was great. Having people feel comfortable to make mistakes is a good thing. I'm not afraid of mistakes, and even when you do things for guests and it results in a blunder ... Hey, you know, we're not judged by the mistake, we're judged by how we react to it. As long as we do the right thing, we're okay. We'll be okay. We are in a people business. People understand. People are very fallible.Q: Sometimes, critics of empowerment say "No, this is not for me. Empowerment is too risky, people can make exceedingly costly blunders." How do you react to that?Jones: So, if you don't mind, I'm going to share a story. I was working at the Ritz Carlton Kansas City, this was back in 1999. We had a young valet parker and he was going through the orientation. And during orientation, of course, we explain that whoever receives a complaint or encounters an issue has responsibility to resolve it to the guest's satisfaction, and to that end they are empowered up to $2000 dollars per guest, per day. And this particularly young valet parker, he was on his first day on the job and a guest pulled in a huge Lincoln Navigator. And, of course, he does his job: he parks the car. I mean, we don't need to train people how to drive or anything like that. He knows exactly what he has to do, i.e. put it in a parking space, label it ... The problem is, as he drove towards the parking space, there was a big sign that said "max headroom: 1.76m". And, yeah, that Lincoln Navigator was transformed into a convertible ...The valet parker was in tears. His first day on the job, he has destroyed a $70.000 car at that time. He's pretty sure he's getting fired... I was the Front Office Manager at the time. I saw him and I said "Look, you're not fired. In fairness, this is our fault. We should have told you that the big cars go over in another lot, and no one told you that, yet. So, this is a training issue. We're not going to penalize you for something that's happened and we can't avoid what is done at this stage."I said "I'll go tell the guest". And the young valet parker, in his tears, he said: "No, no, no, I've got to tell the guest. You remember what you said at orientation yesterday that I'm supposed to resolve this". And I said: "Yeah, but that was kind of like for little stuff and that this is kind of like this is a big one... I don't think you want this. You know, the guest is probably going to be really mad and shout and scream at you". But he said "No, words mean something." So he went up and told the guest. The guest was not actually that mad. His first reaction was "was anyone hurt"?Two weeks the Lincoln Navigator comes back to us perfectly fixed and the valet parker drives it out to the guest to return it. The guest looks at him and says: "Hey, this is great. And I just want to say thank you. You've made this such a seamless and easy experience. In a lot of organizations I would have be dealing with insurance companies and your boss, and your boss's boss and so and so forth. Just out of curiosity, as I do want to write a letter after this, so I get this right, what's your position? Are you the guest services manager? Valet parking manager?"And the employee replies: "No, I'm the valet parker". To which the guest replied "How the hell did you do this? This is a big blunder, and I only dealt with you, I didn't deal with any of your bosses". And the valet parker goes "Well, I'm empowered! We all agreed, I damaged your car, and if I didn't address the issue you'd probably have taken us to court to resolve the issue."Long story short, the guest writes a beautiful letter saying that from now on, he will only stay at that particular brand because he knows that people care and are empowered to fix issues. In addition, when his team travels on business, he will insist they only stay with that brand, as he knows they can focus on getting their work right, not spend time fixing issues they may face in a hotel.So, yes, sometimes, you put a framework on it, but that framework has to be flexible to a situation. I've had situations where a Ferrari crashed into a Porsche. Do you think that was $2000? No!Q: What about cultural barriers to empowerment? Does the concept apply everywhere?People sometimes just don't feel comfortable. Culturally it's not something they're used to. They don't want to be seen, to show people up or to do the wrong thing or make mistakes. And, in the Middle East, where I work know, it's very different. So, a lot of owners are very skeptical about empowerment, particularly because, unfortunately, we don't have typically college educated ladies and gentlemen working. There can be a lower education level. That doesn't mean they're any less smart. They just haven't had the benefit and the good luck and opportunities that we've had. But it does create slightly more restrictive boundaries that people want to work within. So yes, when we do it, when we implement empowerment in the Middle East, it's not quite as extensive as the $2000 per day.But, people have an opportunity. If the meal is not right, the waiter has an opportunity to take the meal away. No problem. If it's genuinely not correct. But we educate our ladies and gentlemen that the resolution should mirror the defect. So let's say someone is delayed on check-in because the previous guest didn't check out on time and they don't get the room until 5 o'clock. Well, give them a late check out the following day, if they want it, and maybe if they don't want that, we offer to buy them breakfast. Do something that acknowledges that the experience was not perfect.Obviously you are not going to say "I'm going to remove the entire night", because you didn't lose 100% value. And a key thing for me when it comes to empowerment: it's so much more effective for a front line professional to resolve the issue. Because by the time he gets to me, his general manager, or to one of my other executives, it's going to cost the organization much more. Because the guests expects ... by the time they get to me they will say: "oh, I've had to explain this to five people and now I'm REALLY fired up and now I REALLY expect something good from you..."Q: How do you see the future of empowerment? Is it here to stay? Is it going to become more important or less important?Jones: I think, it's going to become even more important. There is no question, our industry is going to continue to evolve very rapidly as technology improves. I think we're going to see a lot more artificial intelligence and automated activities take place, which is now going to drive the human element of our business into the personalized service, into the problem resolution, and into ensuring guests still have great experiences. And because at the end of the day, people want to walk away with that sort of "conversational currency" from the holiday, from the business trip, where they can, you know, where there is a sense of pride about where they stayed and what they experienced. And that will only be delivered by people. And by the right people. So, empowerment is here to stay, I think. It goes in conjunction with making sure you make the right selections of individuals who are going to have the talents and abilities to deliver it.
Article by Dr. Steffen Raub

Empowering Front-line Service Employees: One Size Does Not Fit All

EHL ·21 January 2019
Intuitively there is a lot that speaks in favor of empowerment. Service contexts are notoriously dynamic, uncertain, and time constrained. Guest expectations are hard to predict and even harder to satisfy on the spot. And when service delivery failures occur, guests often expect a solution right here and right now. The more upmarket a property is, the more pronounced these issues become ...Empowerment facilitates appropriate reactions by front-line service employees and speeds up both service delivery and service failure recovery. When front-line service employees are empowered to act, they can make sure that guests receive the appropriate response quickly. After all, "I have to check with my supervisor" is the last thing a disgruntled guest wants to hear.However, with all the excitement about the power of empowerment, a couple of basic assumptions have been overlooked. Managers often take it for granted that empowerment can be applied in a "one size fits all approach". But what if employees lack the skills that are necessary for empowerment to succeed? And what if they genuinely do not wish to be empowered?A look at some recent research on empowerment sheds more light on what the approach can achieve - and what it cannot ...When properly implemented, empowerment programs can indeed have positive consequences for hospitality firms. In several studies in mid-market and upmarket hotel chains operating in Europe, the Middle East and East Asia, employee empowerment was strongly related to employees' willingness to "walk the extra mile". These behaviors include positive contributions to co-workers - for instance helping and supporting co-workers who are overloaded - and to the organization as a whole - for instance making constructive suggestions for improvements in service processes.Maybe even more important is the tendency for empowered employees to show stronger customer service behaviors, especially ways that go above and beyond rigid service protocols and role requirements. So it seems that those who empower their front-line service employees will reap benefits. But where is the catch?It seems like there are two main barriers to empowerment, one of them related to skills and the other related to attitudes.Employees who are new in their workplace, who lack experience, or more generally, who lack self-assurance in their work environment will have a natural tendency to react with less enthusiasm to empowerment. For them, the increase in responsibility and accountability that goes hand in hand with the empowerment concept may translate into anxiety and a perception of being overwhelmed, rather than the exalted feeling of being liberated from procedural and supervisory shackles. For these employees, tight procedures or the watchful eye of a more experienced superior may be more then welcome. They provide the scaffolding for successful performance in the job.The other finding that emerged quite strongly from the research is an attitudinal one. Employees differ strongly in the extent to which they perceive hierarchy and "power distance" between superiors and subordinates as something desirable or undesirable. Some of these differences are of an individual nature. They are related to personal values that an employee developed over time.Others, however, have strong cultural origins. As a matter of fact, "power distance" is one of the fundamental variables on which seminal research in the area of culture, for instance the work by Geert Hofstede, have differentiated national cultures. In national cultures that are high on the power distance variable - many of those countries are located in the Middle East, large parts of Asia and Central and South America - a certain distance between superiors and subordinates is perceived as desirable. Bosses are expected to lead from the front and provide guidance. Empowerment may seem like an invitation to exhibit behaviors that would normally be interpreted as challenging or disrespectful towards one's superior. In such cultural contexts, the usually beneficial effects of empowerment can be neutralized or even reversed.In summary, research on empowerment in hospitality suggests the following recommendations:Understand your staff members before you empower themAre you dealing with subordinates who are experienced, possess all the necessary technical skills and work in effective teams. If not, empowering them can make feel them powerless and overwhelmed - rather than empowered to do good thingsUnderstand your cultural context and the values of your staff membersIf you work in a cultural context that is characterized by high power distance, or if your staff members come from backgrounds that encourage high power distance values, you may want to be careful in empowering them.Consider that empowerment does not have to be "all or nothing"You can empower employees selectively. Many organizations have successfully introduced empowerment programs with a safety net. For instance by setting certain boundaries on what employees can decide themselves or on the financial commitments they may not surpass without consulting their superior.After all, performing tightrope acts with a safety net is always preferable ...
Article by Philippe Masset

2019 Top 10 Hospitality Trends

EHL · 7 January 2019
The TEN trends that have reshaped (and are still reshaping) the industry:#1 - Virtual communitiesSocial networks and in particular TripAdvisor have had a profound impact on customers. This has led to more transparency and, overall, to an improved quality of the services provided by hospitality companies.#2 - Sharing economyAirbnb represents a major disruption in the hotel industry, making the competitive landscape tougher than ever. This is further reinforced by the fact that lodging properties listed on Airbnb do not necessarily have to comply with the same rules and regulations than traditional hotels.#3 - Online Travel Agents (OTAs)They have had at least three major impacts on the hospitality industry.First, they have altered distribution channels and consequently taken value away from hoteliers.Second, the notoriety of brands owned by Booking Holdings and Expedia are such that these companies have almost replaced hotel brands.Third, they have built solid relations with travelers. Now, hoteliers have to pay to get access to these customers, thereby leading to a thinner profit margin for the former.#4 - Digitalized guest experiencesApps, in particular, are increasingly important in the way hoteliers manage the services they provide to their customers and can now control many aspects of the guest cycle and experience.#5 - Booming global tourismLow cost carriers enable more people to travel the world at a reasonable price. Moreover, several emerging markets have seen their GDP increase at a rapid pace, thereby enabling their citizens to travel the world. Customers from South Korea, China, India, and others, now constitute a large body of potential travelers. Their demand, of course, has a big impact on the offer.#6 - Experience economyCustomers request extreme personalization, unique experiences, and so on. This could very well lead to the death of the travel agent and the rise of the independent traveler.#7 - Asset management practicesThe asset-light approach has become prevalent in the industry. The separation between the management of operations and real-estate assets now allows hospitality companies to focus on their core business, thus improving efficiencies.It however induces additional complexity and potential agency problems, explaining the emergence of new types of jobs, such as asset managers.#8 - ProfessionalizationAs stated above, new job profiles have emerged following the increasing complexity of the hospitality industry. In parallel, the need for quantitative competencies (for forecasting, budgeting, etc.) has also increased.#9 - Generations Y and ZThese new generations have different requirements and needs compared to older generations. A respondent said "Older generational think about hotels and car rentals. Younger generations think about Airbnb and Uber."#10 - SustainabilityPeople are becoming increasingly sensitive to environmental and social issues. A respondent said that this "has to be considered in branding, but beware of green-washers: consumers are now well-aware that window-dressing exists, and they will not buy it."Today - hospitality industry 2.0What does the future of hospitality holds? Overall, our faculty suggests the need for hoteliers to properly embrace the above mentioned trends and understand what's at stakes. Six dimensions came out from our survey:#1 - Standardization can no more be the norm.It is becoming critical to personalize and tailor the services to the needs and preferences of the travelers.#2 - To create value, focus on niche markets.More customization and specialization may enable to increase value creation for hospitality companies. But be careful, as a respondent said, as this requires to genuinely think about the value proposition of your offer and not "simply branding and rebranding".#3 - Exploit technology as an accelerator for business.Technology will be at the core of the hotel experience both in room, before and after the trip. This will lead to the development of new concepts and more innovation in the industry and contribute to the emergence of an ever more individualized offer.#4 - Social responsibility is a moral and an economic obligation.The impact of global warming can today be considered a major risk for both corporations which may lose in revenues and profits and society as a whole. It is thus critical for governments but even more so for corporations to become more sustainable: "not just green, but real sustainable business models".#5 - Develop more responsive and resilient business models."Tourism, despite ever growing flows of travelers, will become riskier and more prone to crises" as the number of travelers steadily continues to grow. This will be accompanied by increased regulation as a response to a disproportional increase in tourist flows in some places (e.g. Venice or Barcelona).#6 - Manage talents actively.The days of long-lasting employee retention as well as passive, hierarchical management styles are definitely gone. "Attracting, developing and keeping the right talent into and within the hospitality industry continues to remain a core challenge."Tomorrow - The hospitality industry 3.0?While, as seen above, the consensus revolves around the need for the industry to evolve in order to better adapt to the current environment, some respondents were more 'extreme' and suggested that hotel rooms, as we know them today, "will become a thing of the past".These respondents refer to the impact of the sharing economy and the tendency of today's customers to avoid traditional hotels. They believe that adjustments in the offer, like the ones listed above, are not sufficient and that the industry has to truly reinvent itself.This standpoint is reinforced by the increasing importance of technology in the hospitality industry and the power that technology firms are acquiring. A respondent elaborates:Major technology firms will replace most hotel brands, because they can offer technology solutions and create markets to attract customers. The traditional hospitality industry will evolve into niche markets (serving specific types of customers), or extremely luxury sector (so they can afford to pay their staff reasonable salary). Those who can't identify their niche will become the money machines for technology companies. Some brands big enough may survive, but their business will get tougher.While respondents are more or less alarmist as to the future of the industry, all nevertheless agree that it has to evolve and reinvent itself in order to exploit the opportunities and cope with the challenges it faces. The only question remaining is up to which extent this transformation will have to take place.
Article by Stuart Pallister

Business Creativity: Think Differently, Ask Challenging Questions

EHL · 7 January 2019
Is there a linear, structured approach to developing innovation?"Systematic yes, structured no," says EHL Associate Professor of Service Management Marc Stierand. "Innovation is actually something that happens if you're lucky. That's the accepted result of a creative process."Stierand, and his colleague Ian Millar, are currently setting up a new Institute of Business Creativity (IBC) at EHL. "What large, institutionalized organizations need these days in these turbulent times is actually an entity like ours that pushes them to think differently."Learn more about the EHL Institute of Business CreativityConsulting & ResearchYes, there are established consulting firms out there proffering plenty of advice, "but I think being an institute at an academic institution has one big advantage: we don't have to hide behind a certain agenda or jargon," Stierand says. "We can be pretty blunt - polite but blunt - as to how we see things. I think the businesses that really want to change, like that very much. They're very receptive to this idea."The institute's inaugural commercial partner, Metro AG, which set up a digital division a couple of years ago, has already been working closely with EHL on various projects linked to the digitalization of hospitality.Millar, a senior lecturer and the institute's manager, says EHL students have already conducted some 18 consulting projects with the German retail group, which partners many small and mid-sized independent companies, "resulting in almost 20 of our students being hired by the company."Previous research, Millar says, focused on "how to digitalize the very much analog world of HoReCa (hotels, restaurants and cafes/catering). It's a tough thing to do.""There's a very large wall in front of us but we're slowly chipping away at it, and Metro - through the hospitality digital division - are putting together new digital tools for restaurateurs. We've been a core part of that and are happy to see the success of that."Bridge Between Academia & IndustriesStudent employability will continue to be a priority, but the institute will also conduct research for Metro as well as executive workshops. "And then, really, the idea is, as the institute grows, to replicate the framework."The new institute aims to act as bridge between academia and the business world, and according to Stierand, will offer "good, practice-based research for the service industry, with the ambition of doing something a bit differently - creatively -- but, of course, appropriate and useful."Management research needs to be applied and useful but this does not mean that we would not allow for 'big thinking' ... to ask challenging questions. But the aim is really to give something back to the industry.EHL, in conjunction with its Innovation Lab, is currently looking into innovating hospitality education.As for Metro specifically, the IBC is currently exploring "how we can innovate hospitality training and education at the vocational level, where there is a very urgent need worldwide to act very fast." Stierand adds: "And for this we need to not only involve practitioners but also policy makers and politicians to change a lot of things that should have been changed a long time ago and we're working on that."Creative Concept DestructionThe IBC will also be looking to work with a range of companies and partners as it builds on the academic foundations of innovation developed by Joseph Schumpeter to develop what Stierand terms 'creative concept destruction.'We offer a service where companies can come to us with a concept which is almost finished and we will basically rip it apart, test it, and give them our honest opinion about the things - micro and large - that could positively or negatively influence the success of the concept.Learn more about the EHL Institute of Business Creativity"The reason why we have set up the institute like this is that, in creativity research, we talk about 'The Medici Effect,'" says Stierand, referring to Frans Johansson's exploration of innovation which outlines how combining insights from different disciplines can create breakthroughs.Sometimes you can learn incredible things by simply being in contact with a partner from a different discipline where they've done something and you see the potential by translating this to your discipline."In order to push this forward, we have set up a very exciting community of worldwide academics, leading figures from different disciplines all interested in the topic of creativity." This network, he says, includes psychologists and academics with management expertise. "We'll make this community accessible to our industry partners."The Future of the InstituteUpcoming projects include the publication of a book, with chapters by some of the institute's associates, "based on methodologies that can be used in the realm of creativity and that will give us a very robust foundation on which we can build and stand. And, yes, I'm very excited about it."So what will success look like for the institute?"Success for us would not only mean financial success ... but, more importantly, that we establish ourselves as the 'go-to' place for businesses who want to become different, think differently and who want to say 'okay, let's think about this differently than we did for the last 25 years'. We aim to build a very inclusive environment for academics and practitioners, to come together and say 'Let's do something together, something that will have an impact.'"For more information about EHL's new Institute of Business Creativity, contact ibc@ehl.ch.Marc Stierand, PhD, is an Associate Professor of Service Management and the Director of the Institute of Business Creativity at EHL. Before joining the world of academia, he was a chef in Michelin-starred restaurants and luxury hotels. His research focuses on managerial and organizational cognition and management education and development in the hospitality context, with particular interest in personal and team creativity, intuition, and talent.Ian Millar is a Senior Lecturer in the Entrepreneurship and Innovation department at EHL working on the Student Business Projects and delivering hospitality technology courses. His expertise in the areas of hospitality and information technology sets him at the forefront of new developments in the international hospitality industry. He is also a mentor for the Metro Accelerator program, advising various hospitality technology start-up companies. He is currently on the HITEC Amsterdam advisory council, organizing Europe's largest hospitality technology conference.

Top 10 Trends Reshaping Hospitality in 2019

Ecole hoteliere de Lausanne (EHL)· 7 January 2019
The hospitality industry has been undergoing tremendous changes and disruptions over the last two decades.What key trends have been steadily reshaping the industry and where is hospitality heading in the near future? A study conducted among EHL faculty in the fall of 2018 provides insights on past and new challenges (as well as opportunities) hospitality players need to take into consideration.

Business Creativity: Think Differently, Ask Challenging Questions

Ecole hoteliere de Lausanne (EHL)· 7 January 2019
“Systematic yes, structured no,” says EHL Associate Professor of Service Management Marc Stierand. “Innovation is actually something that happens if you’re lucky. That’s the accepted result of a creative process.” Stierand, and his colleague Ian Millar, are currently setting up a new Institute of Business Creativity (IBC) at EHL. “What large, institutionalized organizations need these days in these turbulent times is actually an entity like ours that pushes them to think differently.”Is there a linear, structured approach to developing innovation? "Systematic yes, structured no," says EHL Associate Professor of Service Management Marc Stierand. "Innovation is actually something that happens if you're lucky. That's the accepted result of a creative process."

Future of Education: Universities Are not Placement Offices

Ecole hoteliere de Lausanne (EHL)· 7 January 2019
With around 19,000 universities in the world today, are higher education institutions producing the right sort of graduates required by industries such as the hospitality sector, and are students getting the education they deserve and need? Academic Denis Berthiaume, who has been recognized by the International Council for Educational Development (ICED) for his contribution to pedagogy, outlined the changes and trends within higher education in a recent session with faculty at EHL.

Gilets Jaunes' Protests: More Bad News For Parisian Hotels?

Ecole hoteliere de Lausanne (EHL)· 7 January 2019
What does not kill you makes you stronger. That phrase was coined by German philosopher Friedrich Nietzsche who died in 1900 after suffering serious health issues for years, but it's a phrase that still resonates today as hoteliers struggle to survive, adapt and thrive in the highly complex hospitality environment in the 21st century. France has been subject to a series of challenges over the past decade, from the financial crises at the end of the first decade of the new millennium, triggering an inevitable period of recession, followed by the 2015 terror attacks and, most recently, the local uprising of French citizens in the so-called 'gilets jaunes' anti-government protests, immobilizing historical locations in Paris such as the Champs-Elysees, Place de la Republique and Place de la Bastille.

Restaurant Staff: to Tip or not to Tip?

EHL ·27 December 2018
Tipping has even come into the political spotlight In the UK, where the government - which is currently contending with Brexit - has been reportedly considering introducing legislation to ban restaurant owners from keeping tips earned by waiters.EHL Assistant Professor of Organizational Behavior Sebastien Fernandez says the UK government's proposed action is well intentioned but questions the way in which it would tackle the issue."For sure, employees who do not receive their fair share of the tips are going to be dissatisfied, but should we really force restaurant owners and managers to do it or should we educate them that if they don't do it, they're going to lose the trust of the employees?"On the plus side, the move should at least make restaurant managers aware that tips belong to the employees and not the restaurant, he says.Dr. Fernandez believes the Swiss system is good as staff don't have to rely so heavily on tips as in the US. Tipping motivates waiters and other staff to "give their best".In Switzerland, he adds, "there is an issue as to whether the employees should share their tips with each other." If the staff - including those working in the kitchen - don't get a share of the tips there's no incentive to do their jobs as efficiently as possible.The fairest way might be to have a common pot or pool, Fernandez says, with the waiting staff taking half, the kitchen staff getting perhaps a quarter, and the remaining quarter going to other employees, so "everyone benefits."If we really want employees to perceive the management as fair, the management should not receive (any of the tips unless) the manager serves the customers like any other employee. But he should not be entitled to receive more tips just because of the position. That's the danger.Tipping: A cause of resentment?A study by an EHL student, Catherina Bosshard, as part of her undergraduate program, highlighted the impact on employee satisfaction if management kept any of the tips. She surveyed some 183 waiters working in 32 restaurants in Switzerland."What was interesting was employees or waiters or waitresses tended to be more dissatisfied by their jobs when the management took even a small part of the tips and they were more likely to say they would try to find another job in the next year," Sebastien Fernandez recalls.The reason for the resentment was that management is usually perceived to have higher salaries, so restaurant employees "have the impression their tips are being stolen by the management. It truly creates resentment and dissatisfaction." In some hotel and restaurant chains, he says, management may even take the biggest share of the tips.Dr. Fernandez has conducted several studies into tipping behavior in Switzerland. In one study, he coached restaurant staff in Switzerland on how they could get bigger tips by, say, adding a personalized 'thank you' note on the bill. When employees used some of these techniques, tips increased on average by a staggering 40 percent. Even if the customers didn't give larger tips, they complimented the staff more. "So there was really a shift to a more positive direction."He is now working on a study comparing tipping behavior in eight European countries, including Sweden, Germany and the Netherlands. "We are currently analyzing the data to see if we find some similarities or huge differences between European countries, knowing that most of the research so far has been done in the US or Canada, because in these countries the employees rely on tips to get decent wages.""So far, from the first countries we have analyzed, food quality is again not so important. Service quality is a bit more important in some, but not in other countries."It is expected that the analysis of the data will be completed by the end of 2018, with publication of the findings possibly next year.

Testing Guest Interactions with Robots

EHL ·27 December 2018
EHL is currently working on a project aiming to improve customer experience through a robot concierge solution. Lead by the team of Associate Professor Reza Etemad-Sajadi and working with partners from heigvd (Professor Andres Uribe's team) and Swiss company Avatarion, this Innosuisse-funded project uses a Pepper robot whose movements, gestures and conversation skills are controlled remotely via a real live agent, mimicking the behaviors of a human concierge. The goal of this project is to evaluate how customers perceive the quality of service delivered and provide insights for service companies using an avatar as a concierge.Based on the evaluation survey done right after people interacted with our robot, the team outlined here some of the key findings their pilot unveiled.THE IMPORTANCE OF EMOTIONAL APPEALThe emotional appeal of the interface has a major impact on how satisfied users turned out to be conversing with a robot (See Figure 1).In this particular context, experiential aspects such as focus on fun, playfulness and emotional worth appeared to be important criteria to actively engage customers in the interaction. In some cases customers even developed feelings of empathy for the robot they were interacting with.In terms of marketing, we know how important the emotional connection with guests is and the emotional appeal of any avatar-based interaction should be taken into account.SERVICE QUALITY AND DESIGNTo define the core aspects of service quality of our robot-based service should be evaluated upon, we measured the behaviors of our robot based on the 5 below service quality dimensions (adapted from the SERVQUAL model):Reliability (ability to perform the promised service dependably and precisely)Assurance (knowledge and courtesy of the robot and its ability to inspire confidence)Responsiveness (provide prompt service)Aesthetic/tangibles (visual, equipment)Empathy (individualized attention given to customers)Although the robot-as-a-concierge was positively perceived across the five dimensions, the most important score appeared to be around the "aesthetic" of the experience, through a visually pleasing design and equipment. Beyond merely supporting typical engineering requirements to deliver a performant experience, good design can be used to establish the premises for a good human/robot relationship.Figure 1: Service quality resultsTECHNOLOGY ACCEPTANCE Several other dimensions, such as the ease of use, usefulness, social presence, scare of robots, etc., have also been measured.One interesting result we observed was around the somewhat "innate" reluctance to use robots, partly due to the threatening nature of robot-based interactions for humans (part of the users indeed expressed concerns about the fact that robot might replace humans in the future). Even though the final score ranges in the middle of the results scale, this aspect should be taken into consideration when designing an avatar-based experience.GENDER PERCEPTIONAlthough our results showed that women tend to judge robot-based experience more positively than men (see Figure 2) - in terms of ease of use, usefulness, social presence, reliability, responsiveness, and empathy of the robot - it is interesting to note that they express more fears about robots' taking over humans in the near future.Figure 2: Comparison Men vs. Women PerceptionAlthough we know that new technologies can be very quickly obsolete and replaced by new ones, we found that the "usefulness" and "enjoyment" perceived by users interacting with the robot have a significant influence on their desire to use the robot in the future. Indeed, if the only goal is to increase service productivity with robots, the impact can turn out to be very negative for companies. To truly live up to the challenge of increasing the customer experience through robots, aspects pertaining to the human touch should be taken into consideration.Hospitality robots in actionThe hospitality industry has already taken some steps towards implementing robot-based solution to improve and/or complement the service experience it provides to guests. Here are a few example of hotels and restaurants using robots as part of their daily operations.Henn na Hotel - Nagasaki, Japan - The world's first robot-staffed hotelMulti lingual robots at front deskRobotic arm locker servicePorter robot transporting luggageFacial recognition software to open doorsSpyce Kitchen - Boston, USA - A robotic-powered restaurantRobotic kitchen, capable to cook relatively complex mealsBionic Bar - On the Royal Caribbean Cruise ShipA pair of robots that can stir, shake and strain all types of cocktailsGuests can select on a tablet predefined drink recipes or create their own beverage

Three Reasons why LVMH's Acquisition of Belmond is a Smart Move

EHL ·26 December 2018
LVMH, the world's largest luxury group by revenue (42.6 billion euros in 2017), hit the headlines recently on the news of its acquisition of Belmond, which operates luxury hotels and train services in two dozen countries, for 3.2 billion dollars, including debt.Through the acquisition, the LVMH group will increase its presence in luxury hospitality as Belmond's portfolio includes the Hotel Cipriani in Venice, the Copacabana Palace in Rio de Janeiro, and Hotel Splendido in Portofino on the Italian Riviera, as well as the Venice Simplon-Orient-Express and Royal Scotsman train services. LVMH owns brands such as Christian Dior, Louis Vuitton, and Bulgari Hotels and Resorts, as well as Cheval Blanc hotels.In my view, the acquisition makes sense for three main reasons:First, the hospitality luxury sector grew by four percent and luxury cruises by 14 percent in 2017 (D'Arpizio, Levato, Kamel, & Mongolfier, 2017) and luxury travel is expected to grow further, thanks to generations X and Y, with an increasing number of high-net-worth individuals within these segments willing to spend more on their travel experiences. Therefore, LVMH will be able to capture market share from these fast-growing sectors of the overall luxury industry.Second, there is a clear trend in the luxury industry towards more experiential rather than pure material purchases. Luxury consumers are demanding more than physical luxury goods, as they want to be immersed in an overall luxury experience. This evolution is observed in many industries and has been referred to as the experience economy (Gilmore & Pine, 2007) but it is even more present in the luxury industry today.The third reason, based logically on the above trend to seek out the experiential, relates to an increasing desire for authenticity in consumption. From the research literature, the perception of authenticity can emerge from three sources: objective, constructive and existential authenticity (Morhart, Malar, Guevremont, Girardin, & Grohmann, 2015) but it is the latter source that is particularly relevant for consumption experiences. Existential authenticity refers to feeling true to one's self when living a specific experience. If this phenomenon happens thanks to a brand, the brand will be perceived as more authentic by consumers.The LVMH group is currently facing some challenges with the authenticity perceptions of its luxury goods brands.As more and more consumers buy and wear luxury products from a particular brand, that brand is in danger of losing its exclusive image, which is at the heart of the definition of luxury (Kapferer & Bastien, 2012). Moreover, some LVMH-owned brands - such as Louis Vuitton - are being criticized for outsourcing production to countries with low-labor costs while, at the same time, increasing prices for their products. For a fraction of their targeted consumers, these practices tend to decrease their perceived brand authenticity and, as a result, their loyalty towards those brands.LVMH's acquisition of Belmond represents an opportunity to offer transformative experiences to their customers and increase their authenticity perceptions of - and, in turn, their loyalty towards - other brands in LVMH's portfolio through a positive halo effect.Accordingly, it would not be surprising to see some of Belmond's activities, such as the Venice Simplon-Orient-Express,renamed or co-branded with a luxury goods brand from the LVMH portfolio. Indeed, Louis Vuitton and its "Spirit of Travel" brand positioning would be a perfect fit for an association with the Venice Simplon-Orient-Express.As brand equity is one of the main assets of a luxury company, increasing brand loyalty is key, particularly among younger consumers as their potential customer-lifetime value is greater than for older generations.In summary, it should not come as a surprise to see LVMH paying more than three billion dollars to acquire Belmond, as it will help the LVMH group capture a greater share of the potential growth in the hospitality luxury sector, while increasing the perceived authenticity of its brands by offering authentic experiences to younger customers.ReferencesD'Arpizio, C., Levato, F., Kamel, M.-A., & Mongolfier, J. d. (2017). Luxury Goods Worldwide Market Study, Fall-Winter 2017. Retrieved from bain.com: https://www.bain.com/insights/luxury-goods-worldwide-market-study-fall-winter-2017/Gilmore, J. H., & Pine, B. J. (2007). Authenticity: what consumers really want. Boston: Harvard Business School Press.Kapferer, J. N., & Bastien, V. (2012). The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brands: Kogan Page.Morhart, F., Malar, L., Guevremont, A., Girardin, F., & Grohmann, B. (2015). Brand authenticity: An integrative framework and measurement scale. Journal of Consumer Psychology, 25(2), 200-218. doi:https://doi.org/10.1016/j.jcps.2014.11.006

The Royal Academy of Culinary Arts (RACA) becomes an Associate member of Ecole hoteliere de Lausanne's (EHL) Certified Schools network

EHL ·21 December 2018
The partnership aims to develop and expand the course programs offered at RACA, whilst RACA and LHC will be working together towards moving RACA to full EHL Certification.This step aligns with the Royal Academy of Culinary Arts' celebrations of its 10th anniversary; RACA was established in 2008 as one of the initiatives of the King Abdullah II Fund for Development (KAFD) to raise the level of education in the tourism sector and to offer educational paths related to the country's labor market. The Royal Academy of Culinary Arts currently awards a diploma in Culinary Arts.HE Dr. Wajeh Oweis, Chairman of RACA's Board of Trustees and Chef Jacques Rossel, RACA's Director signed on behalf of RACA and Mr. Olivier Roux, Senior Managing Director of LHC and Mr. Jens-Henning Peters, LHC Consultant, signed on behalf of Lausanne Hospitality Consulting.Based on 125 years of experience in training hospitality professionals, EHL provides guidance and support to other hospitality or hotel management schools and helps them reach a level of quality that meets EHL standards in a given program and location. Through its consulting entity, Lausanne Hospitality Consulting (LHC), EHL has developed a network of certified schools through which it transfers knowledge of international hospitality industry standards and trends, management education methods and the latest learning technology with the vision of sharing the Swiss hospitality excellence around the world.EHL Group offers support for hotel management schools worldwide. Thanks to years of experience in launching and developing educational centers, the EHL certification recognizes the best institutions in their categories. These institutions work hand-in-hand with the local industry and show a strong commitment to hospitality education, while students enjoy a higher curriculum quality, personalized infrastructures and opportunities to visit other EHL-certified schools.About EHL GroupEHL Group encompasses a portfolio of specialized business units that deliver hospitalitymanagement education and innovation worldwide. Based in Lausanne, Switzerland, the Groupincludes:Ecole hoteliere de Lausanne (EHL) is an ambassador for traditional Swiss hospitality and has been a pioneer in hospitality education since 1893 with over 25,000 alumni worldwide. EHL is a leading university that provides a range of on-campus and online learning solutions, including undergraduate, graduate and certificate programs to talented students from 119 different countries.The Swiss School of Tourism and Hospitality (SSTH) has been one of the leading hospitality management schools for hotel specialists for 50 years. SSTH delivers Swiss-accredited vocational training and higher vocational education in its newly renovated 19th century spa-hotel in Passugg, Graubunden, to Swiss and international students from 20 countries.Lausanne Hospitality Consulting (LHC) is a comprehensive hospitality solutions company, providing knowledge advisory, management support, people development, executive education, schools development and vocational training solutions.

Testing Guest Interactions with Robots

Ecole hoteliere de Lausanne (EHL)·18 December 2018
With funds from Innosuisse and working with partners from heigvd (Professor Andrès Uribe's team) and Swiss company Avatarion, this project uses a Pepper robot whose movements, gestures and conversation skills are controlled remotely via a real live agent, mimicking the behaviors of a human concierge. The goal of this project is to evaluate how customers perceive the quality of service delivered and provide insights for service companies using an avatar as a concierge.
Article by Jean-Philippe Weisskopf and Philippe Masset

The hospitality industry 2.0 ... and soon 3.0?

EHL ·10 December 2018
The TEN trends that have reshaped (and are still reshaping) the industryVirtual community: social networks and in particular TripAdvisor have had a profound impact on customers. This has led to more transparency and, overall, to an improvement in the quality of the services provided by hospitality companies.Collaborative economy: Airbnb represents a major disruption in the hotel industry. The competitive landscape is tougher than ever. The latter is further reinforced by the fact that lodging properties listed on Airbnb do not necessarily have to comply with the same rules and regulations than traditional hotels.Online Travel Agents (OTAs): they have had at least three major impacts on the hospitality industry. First, they have altered distribution channels and consequently taken value away from hoteliers. Second, the notoriety of brands owned by Booking Holdings and Expedia are such that these companies have almost replaced hotel brands. Third, they have built solid relations with travellers. Now, hoteliers have to pay to get access to these customers, thereby leading to a thinner profit margin for the former.Digitalization: Apps, in particular, are increasingly important in the way hoteliers manage the services they provide to their customers. The latter can now control many aspects of the guest cycle and experience.The boom of global tourism: low cost carriers enable more people to travel the world at a reasonable price. Moreover, several emerging markets have seen their GDP increase at a rapid pace, thereby enabling their citizens to travel the world. Customers from South Korea, China, India, and others, now constitute a large body of potential travellers. Their demand, of course, has a big impact on the offer.Experience economy: customers request extreme personalization, unique experiences, and so on. As a respondent said, this leads to "the death of the travel agent and the rise of the independent traveller".Asset management practices: the asset-light approach has become the prevalent model in the industry. The separation between the management of operations and real-estate assets allows hospitality companies to concentrate on the core business and thus to be more efficient. It, however, induces additional complexity and potential agency problems. This explains the emergence and progression of asset managers.Professionalization: as stated above, new job profiles have emerged following the increasing complexity of the hospitality industry. In parallel, the need for quantitative competencies (for forecasting, budgeting, etc.) has also increased.Generations Y and Z: these new generations have different requirements and needs compared to older generations. A respondent said "Older generational think about hotels and car rentals. Younger generations think about Airbnb and Uber."Sustainability: people are becoming increasingly sensitive to ecological and social issues. A respondent said that this "has to be considered in branding, but take care, because guests and consumers are now well-aware that window-dressing exists, and they will not buy in."Today - The hospitality industry 2.0The interviewees were also asked to formulate their opinion about the future of the hospitality industry. To a large extent, the answers suggested the need for hoteliers to properly understand the consequences of the above changes and to adapt to them. We hereafter outline six main dimensions:"Standardization can no more be the norm": it is becoming critical to personalise and tailor the services to the needs and preferences of the travellers."To create value, focus on niche markets": more customisation and specialisation may enable to increase value creation for hospitality companies. But be careful, as a respondent said, this requires to genuinely think about the value proposition of your offer and not "simply branding and rebranding"."Exploit technology as an accelerator for business": technology will be at the core of the hotel experience both in room, before and after the trip. This will lead to the development of new concepts and more innovation in the industry and contribute to the emergence of an ever more individualised offer."Social responsibility is a moral and an economic obligation": the impact of global warming can today be considered a major risk for both corporations which may lose in revenues and profits and society as a whole. It is thus critical for governments but even more so for corporations to become more sustainable: "not just green, but real sustainable business models"."Develop more responsive and resilient business models": the positive effect of an increase in the number of travellers around the world is accompanied by negative side-effects. "Tourism despite ever growing flows of travellers will become riskier and more prone to crises" as all of sections of the population start to travel. This will be accompanied by increased regulation as a response to a disproportional increase in tourist flows in some places (e.g. Venice or Barcelona)."Manage talents actively": the times of employee loyalty over 40 years and passive, hierarchical management styles are definitely gone. "Attracting, developing and keeping the right talent into and within the hospitality industry continues to remain a core challenge"Tomorrow - The hospitality industry 3.0?While, as seen above, some respondents outlined the need for the industry to evolve in order to better adapt to the current environment, some were more 'extreme' and suggested that hotel rooms, as we know them today, "will become a thing of the past".These respondents refer to the impact of the sharing economy and the tendency of today's customers to avoid traditional hotels. They believe that adjustments in the offer, like the ones listed above, are not sufficient and that the industry has to truly reinvent itself.This standpoint is reinforced by the increasing importance of technology in the hospitality industry and the power that technology firms are acquiring. A respondent elaborates on this: "the major technology firms will replace most hotel brands, because they can offer technology solutions and create markets to attract customers. So the traditional hospitality industry will evolve into niche markets (serving specific types of customers), or extremely luxury sector (so they can afford to pay their staff reasonable salary). Those who can't identify their niche will become the money machines for technology companies. Some brands big enough may survive, but their business will get tougher."ConclusionThis article shows how dynamic and uncertain the environment, in which the hospitality industry operates, has become. While respondents are more or less alarmist as to the future of the industry, all nevertheless agree that it has to evolve and reinvent itself in order to exploit the opportunities and cope with the challenges it faces. The only question remaining is up to which extent this transformation will have to take place.
Article by Michael C. Sturman, Demian Hodari and Michael J. Turner

Agree to Agree: Aligning Hotel Owners' and Operators' Goals

EHL · 3 December 2018
Hotel owners increasingly rely on hotel management companies to operate their hotels through formalized hotel management agreements (HMA). Separating ownership and operations supposedly benefits both parties: owners are able to invest in hotel real estate and access the professional operating expertise of hotel management companies, while operators can generate important income streams, expand any brands they may have, and earn profits, all without having to invest in the underlying real estate.Although both parties have a vested interest in the hotels success, their different sources of income, risk profiles, and investment strategies mean they often have different interests, which may lead to misaligned and possibly even conflicting goals.For example, because the vast majority of an operators fees are derived as a percentage of the hotels sales, owners are concerned that operators may focus on increasing sales rather than profits.Operators are also strategically focused on the reputation of their brands and their hotel-level decisions may support this at the owners expense.In addition, operators tend to emphasize customer relationships and long-term success of their business, while owners are more likely to have a short-term focus that emphasizes payback and returns.Furthermore, because operators rarely (if ever) share in the owners profit from an eventual sale of the real estate asset, their decisions may not be aligned with increasing the assets value, even though this is of paramount importance to owners.The risk for owners, therefore, is that an operator, although acting as the owners agent, may in fact be tempted to act in ways that are not in the owners best interests. This is why owners spend considerable resources to monitor, control and/or influence the management companys decisions and actions, including hiring asset managers.While management companies often point out that an HMAs incentive fee clause helps align the two sides interests, as they only earn profits when they generate these for owners, past research has shown that hotels rarely generate such incentive fees.This implies that such hotels are not, for the most part, generating the profits necessary for owners to pay incentives to the operators. While there could, of course, be extenuating circumstances impacting a hotels performance, the general lack of incentive fees suggests that owners may seek other ways to align management companies interests with their own.Given the growth in hotel management agreements, and their importance to both owners and operators, we were surprised not to find any research examining the actual goal alignment of owners and operators once the agreement had been signed.We thus set out to study the degree of owner-operator goal alignment.Furthermore, while greater alignment might suggest a more unified vision for the hotel, it does not necessarily mean the property would perform any better. In fact, less alignment could possibly mean that the management company, which has professional management expertise, might be operating the hotel optimally, even if not in line with the owners goals.We also looked at the relationship between goal alignment and hotel performance.We investigated these questions though a unique survey where we matched the answers of owners and management company representatives in 64 different hotels.Specifically, we examined their level of agreement about the priority of 21 different objectives over the coming two years and across five functional areas (Human Resources, Finance, Sales and Marketing, Property, and Operations).Hotel performance, meanwhile, was measured by the owners who rated 16 different aspects of performance related to the five functional areas.Our statistical analyses involved two parts. We first used correlation analyses to look at overall effects. We then used a series of regression analyses to look at the effects of alignment on hotel performance after putting in place controls for alternative explanations that could have arisen from property, individual and/or situational characteristics.Overall, the goal alignment we discovered was, on average, 3.31 out of 5 (where 5 indicated higher alignment). While it can be difficult to interpret the substantive meaning attached to averages, an average only somewhat higher than the mid-point (as is the case here) suggests a moderate degree of goal alignment amongst the sampled hotels. The average level of hotel performance was 4.29 on a scale of 1 (low) to 6 (high). Although there was a relatively wide range of performance scores (from 1.44 to 5.81), the results suggest that our sampled hotels were, overall, performing reasonably well.More importantly perhaps, we found that goal alignment was significantly correlated with hotel performance. In other words, the greater the goal alignment, the better the hotels performance. In order to eliminate some possible explanations for this relationship, we controlled for the effects that some other variables, such as the GMs experience, the presence of an asset manager, and the hotel size could have on its performance. We found statistical evidence confirming that alignment does in fact have a positive effect on hotel performance.Our results therefore suggest the need for owners and management companies to agree upon a core set of common goals for their hotels, as such alignment is linked to superior operating performance. While each party will clearly have its own objectives, an ability to align these will end up better serving each party as superior operating performance should ultimately result in higher fees for most operators and higher asset valuations, as well as returns for owners.Researchers and practitioners often recommend that, in order to create a win-win situation, owners and operators need to consider and agree upon a wide variety of issues in the negotiation of management contracts. While we unequivocally agree with this sentiment, it may be even more beneficial for hotel owners to, first, spend as much time and resources on selectingthe right hotel operating company and maintaining the relationship after the contract has been signed.This may mean selecting a company whose vision and goals for the property are well aligned with their own or one whose goals and vision are different but enticing.This is important because goal misalignment has often resulted in costly legal battles involving, among other things, accusations of management companies not fulfilling their responsibilities as owners agents. Owners are thus advised to have detailed discussions with different management companies, not only to ascertain their analyses and plans for the hotel, but to compare these with their own.An owner may, as well, realize from these discussions that it should in fact defer to the management companys plans, which could in turn also help align their objectives.We thus also suggest that management companies fully commit to ensuring that their hotels owners not only know managements plans for the property, but also the underlying reasons for these decisions, as this may help achieve owner support. A healthy discussion should hopefully lead to better and more aligned objectives, which should benefit both parties and help ensure a better long-term relationship.FULL PAPER: Hodari, D., Turner, M. and Sturman, M. (2017). How Hotel Owner-operator Goal Congruence and GM Autonomy Influence Hotel Performance.Acknowledgements: This study relied on the support of the hotel owners and members of the Hospitality Asset Managers Association (HAMA) of Asia Pacific, Europe and the Middle East & Africa, the European Hotel Managers Association (EHMA), and The Master Innholderswho graciously provided the data used in this study.
Article by Michael J. Turner and Demian Hodari

How Important is Strategic Management Accounting to Hotel Managers?

EHL · 3 December 2018
While hotels have long used traditional management accounting practices, their use of contemporary strategic management accounting (SMA) techniques has not been as widespread. As researchers, this intrigued us because studies conducted outside the hotel industry had found that the relationship between firm strategy and firm performance was significantly enhanced through the use of SMA techniques.In our recent publication in the International Journal of Hospitality Management, we set out to determine which type(s) of hotel strategy act as the key precursor(s) of hotel property SMA use, and whether the use of SMA had a positive impact on hotel property performance.So what exactly are Strategic Management Accounting (SMA) techniques?At the hotel property level, they involve the collection of long-term, externally-focused and forward-looking information for the purpose of:Customer profitability analysis - involves calculating profit earned from a specific customer or customer segment. The profit calculation is based on costs and sales that can be traced to a specific customer or to a specific customer segment;Benchmarking - the comparison of company performance to an ideal standard;Competitor cost assessment - the provision of regularly-scheduled and updated estimates of competitors unit costs;Strategic pricing - the analysis of strategic factors in the pricing decision process. These factors may include: competitor price reaction, elasticity, market growth, economies of scale, and experience;Value chain analysis - involves viewing the organization as a link in the chain of all value-creating activities;Integrated performance measurement - a measurement system which focuses typically on acquiring performance knowledge based on customer requirements and may encompass non-financial measures. This measure involves departments monitoring those factors which are critical to securing customer satisfaction;Competitor performance appraisal - the numerical analysis of a competitors published statements as a part of an assessment of a competitors key sources of competitive advantage;Attribute costing - of specific product attributes that appeal to customers. Attributes that may be costed include: operating performance variables, and after sales service; andStrategic costing - the use of cost data based on strategic and marketing information to develop and identify superior strategies that will produce a sustainable competitive advantage.To conduct our study, we gathered data via a survey from 80 hotel properties.Our primary finding was that the key precursor to hotel property SMA usage is a hotel propertys adoption of market orientation business strategy; and where this is the case, superior hotel property financial performance was in evidence.So what exactly is a market orientation business strategy?A hotel which adopts this type of business strategy will tend to operate in a highly competitive market, and therefore puts their customers at the center of their strategic and operational thinking. To implement this strategy, the hotel will need to gather market information related their target customers needs, as well as of their competitors capabilities, to deliver superior customer value. Knowing this will enable the property manager to discontinue product offerings that add no value, and to include only value-added services.Realizing that in a competitive environment, competitors capabilities and target customers needs are in a constant state of flux, there is often a feedback loop and learning is essential. The focus is on offering only those products for which customers find value and are willing to pay. We find that the information generated through adoption of SMA techniques assists managers with these needs, and they enjoy superior hotel property performance.Sales orientation business strategyOn the other side of the constellation is the sales orientation business strategy. A hotel which follows such a strategy will usually only do so where they compete in a market with a low level of competition. Hotel managers are able to offer their product to the market in way that is somewhat divorced from or at least shows little correlation with customer and competitor considerations. Management considers that there are few, if any, alternatives for customers in their market and so they see little merit in expending the resources and effort needed to gather competitor or customer information (e.g., through SMA). Instead they are able to set a price up to the maximum customers are willing to pay. Our findings suggest that the further a hotel moves away from a market orientation business strategy, the less benefit there will be from adopting SMA techniques.Hospitality industry: highly competitive industryIn summary, while there may remain some locations globally where hotels operate in less competitive markets, the overarching trend is toward hotels facing higher levels of competition. Where there is greater competition, there will be a need for hotels to adopt a market orientation business strategy, and our findings highlight that such hotels will be unequivocally better off in terms of superior hotel property performance by adopting SMA. This article is based on the following research paper:Turner, M. J., Way, S. A., Hodari, D., & Witteman, W. (2017). Hotel property performance: The role of strategic management accounting. International Journal of Hospitality Management, 63(May), 33-43.Access paper here

Data Security in Hospitality: Risks and Best Practices

EHL · 3 December 2018
Information security is a pivotal aspect of many industries, not least the hospitality industry due to the nature of the data collected by companies operating within hospitality. Hotels, motels, resorts, and rented apartment complexes all gather and electronically store a range of sensitive personal guest data, such as names, phone numbers, addresses, and credit card details.From the perspective of cybercriminals, hospitality appears to offer an ideal target vector for conducting crimes such as identity theft and credit card fraud due to the existence of multiple databases and devices containing both Payment Card Information (PCI) and Personally Identifiable Information (PII).This article focuses on five of the biggest data security concerns in the hospitality industry and highlights some best practices for protecting hospitality data.Data Security Concerns in HospitalityComplex Ownership StructuresRestaurants, hotels, and other companies in the hospitality sector often have complex ownership structures in which theres a franchisor, an individual owner or group of owners, and a management company that acts as the operator. Each of these groups may use different computer systems to store information, and the information can also frequently move across those systems.A case in point was the Wyndham Worldwide breaches of 2008 and 2010. Hackers gained access to the systems of an individual operating company through easily guessed passwords, and the attack easily proliferated through the entire corporate network, with the result that 619,000 customers had their information compromised.Reliance on Paying By CardThe nature of the hospitality industry is such that it is extremely reliant on cards as a form of payment. Restaurants and hotels alike often require credit card details for reservations, and final payment is also frequently made by the same card.Cybercriminals use this reliance on cards to infect point-of-sale (POS) systems with malware that steals credit and debit card information by scraping the data. In fact, it was reported in 2017 that out of 21 of the most high-profile hotel company data breaches that have occurred since 2010, 20 of them were a result of malware affecting POS systems.Because this malware can often proliferate or move between POS systems run by the same operator, multiple individual and groups of hotels can be afflicted by these types of attacks, and they can go unnoticed for months.High Staff TurnoverA vital part of protecting data is training staff to securely gather and store personal information. Well-trained staff also know how to recognize social engineering attempts and they understand an organizations compliance requirements. The risk is that the hospitality industry involves lots of seasonal work in which people might move on after only a few months, or they might be transferred. In the U.K., for example, the job turnover rate in hospitality is as high as 90 percent.The high level of turnover and high degree of staff movement between different locations makes it a real challenge to maintain teams of well-trained staff. All it takes is one person who isnt familiar with the importance of data security for a cybercriminal to exploit a hospitality companys systems and gain access to sensitive data. ComplianceData security risks in the hospitality industry extend far beyond the reputation hit that a hotel can take if guests data is compromised. Industry and political regulators are becoming stricter in governing how organizations process and store personal data.The GDPR regulation was introduced by the EU in May 2018 as a landmark legislation that aims to return control over personal information to individuals while simultaneously enforcing stricter rules for organizations in protecting such information during any period in which they possess it.While GDPR protects individual data within the EU and EEA, its ramifications have rippled through industries globally, and organizations are realizing the need to put greater compliance measures in place.PCI DSS is another important global regulation that protects credit card data, and fines for non-compliance begin at $500,000 per incident. The risk here is not just to data security but to the future survivability of hospitality companies, many of which would not be able to absorb the substantial losses resulting from non-compliance fines. Insider ThreatsThis type of data risk is more subtle and it involves employees selling data to third parties without the knowledge of the organization that employs them. Such insider threats typically occur to data on customer preferences and behavior, which hospitality companies can collect at multiple touchpoints, from interactions with their website, to form data on booking systems, to review data.This data could be potentially lucrative when it ends up in the hands of those who know how to use it to gain a competitive advantage.Best Practices for Data Security in HospitalityBest practices for companies in the hospitality sector to protect data include:Always encrypt payment card information.Operate a continuous training program in cybersecurity to maintain a well-trained workforce.Always adhere to relevant regulations, such as PCI DSS.Use cybersecurity measures such as firewalls, network monitoring, anti-malware, and traffic filtering to protect against common threats.Conduct tests against your organizations cybersecurity defenses in which you mirror the behavior of an actual hacker.Know where your data is and enforce the principle of least privileges to limit access to sensitive information.Wrap UpWith a full understanding of the main data security risks and some best practices for mitigating those risks, organizations in the hospitality sector are better placed to implement a comprehensive information security strategy that entails the necessary procedures, processes, and people to improve cybersecurity.

Keep Your Distribution Options Open and Grow Direct Bookings

Ecole hoteliere de Lausanne (EHL)· 3 December 2018
In this crowded and competitive market, what's the best approach when it comes to marketing your hotel online? Hoteliers would - if they could - just focus on direct bookings with their potential clients. But with a plethora of online travel agencies out there such as booking.com and Expedia, hoteliers are having to reach out to potential guests via OTAs, even though it often means paying commissions of 15-20 percent on bookings.

Data Security in Hospitality: Risks and Best Practices

Ecole hoteliere de Lausanne (EHL)· 3 December 2018
Information security is a pivotal aspect of many industries, not least the hospitality industry due to the nature of the data collected by companies operating within hospitality. Hotels, motels, resorts, and rented apartment complexes all gather and electronically store a range of sensitive personal guest data, such as names, phone numbers, addresses, and credit card details.

Climate Change, Wine Production and Grapes Diversification

Ecole hoteliere de Lausanne (EHL)· 3 December 2018
Scientists have been warning for decades about climate change and its potential damaging impact on agricultural production.

Restaurant Staff: To tip or not to tip?

Ecole hoteliere de Lausanne (EHL)· 3 December 2018
Tips are crucial for restaurant staff in the US where salaries are generally low, but in Switzerland tips are a form of bonus based on customer satisfaction and not so critical as basic salaries can be around 4,000-5,000 CHF or USD a month.

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