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  • HITEC Special: Does EU GDPR Affect U.S. Hospitality Companies?

    By Alvaro Hidalgo. The EU General Data Protection Regulation has set a path towards protecting personal data which many other countries will follow. In a global industry such as hospitality, it should be a primary objective to take the steps towards compliance.

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    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.

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REPORT: Independent Restaurateurs and Training, What is The Solution

Ecole hoteliere de Lausanne (EHL)·17 August 2018
Independent restaurateurs are driven by passion, an honorable motivator, but not the best when it comes to managing their assets and adapting their business to the digital age. How shall we train independent restaurateurs who do not see any challenges in their business whilst their own industry is collapsing under the pressure of government taxes, large corporations and change in their customers' mindset?

On the Rise: Hospitality in Latin America

Ecole hoteliere de Lausanne (EHL)·19 July 2018
The hospitality industry has shown great dynamism in Latin America over the past five years and that trend looks set to continue in 2018. While tourism growth in Central and South America can be partly explained by the region’s diversity and natural resources, most of its progress stems from the continuous commitment of governments to promote the sector.

Preparing Independent Restaurateurs for the Digital Age

EHL ·18 July 2018
Independent restaurateurs face increasing pressure from large chain operators, many of whom are adopting technology rapidly as part of their global growth strategies. Meanwhile, independent operators may not yet realize the competition they face for their own survival.This latest research focuses on restaurateurs' challenges and behaviors toward training, as well as innovations in education from other industries, to enable the creation of Learning Communities. The concept is an innovative approach to train independent restaurateurs, taking into account the perennial issue of lack of time and money they face, as well as their most significant business challenges, topics of interest, current level of digitalization and preferred training format. The study included interviews with more than 50 independent restaurateurs, academics, experts and restaurant associations. A survey of more than 2,300 restaurant owners, managers, chefs and METRO customers was also completed across France, Italy and Spain as they were selected to represent the European countries for the study. These interviews and survey data were then analyzed to help create a Learning Community concept.Survey results indicated that the main challenges for independent restaurateurs included offering home delivery service, doing administrative paperwork and managing their staff. Their main topics of interest for training, however, centered on managing food, beverage and other supply costs, mastering cooking techniques and forecasting demand. This gap between challenges identified and topics of interest helped inform the Learning Community concept, which offers a solution that trains restaurateurs on what they want to learn while gradually introducing more critical topics and more peer to peer interaction."The Learning Community concept not only provides targeted and pioneering training concept on relevant technologies, but also tackles all primary challenges that independent restaurateurs face in their daily operations," stated Dr. Christine Demen Meier, Chair Holder, METRO Chair of Innovation. As demonstrated by the research team composed of Dr. Christine Demen Meier, Caroline Guigou and Isabelle Vetterli, this innovative educational solution also uses gamification elements to enhance the learning experience, keep participants engaged in the process, and help them develop the ability to comprehend digital content."The first study with the METRO Chair of Innovation showed us how restaurateurs use technologies and if not, what the reasons behind are. Restaurateurs often avoid new technologies due to a lack of time, knowledge and resources. With this follow-up study, we dived deeper to find solutions that start exactly at this point: What learning concepts and support can we give restaurateurs so that they can keep their finger on the pulse of the times and integrate learning into their everyday life with little use of resources?", says Frederic Schumacher, Director of Innovation at Hospitality Digital, a company of METRO AG. "We strive to help restaurateurs to integrate digital tools that simplify their work processes, so that they have more time for the essential."This was the last research carried out by the Metro Chair of Innovation, while the partnership between METRO and EHL will continue to evolve and grow. An announcement will be made soon with further details. For more information on the METRO Chair of Innovation and to download the research results, click here:

EHL becomes a new focal point for finance

EHL ·12 July 2018
Private marketsUnlisted investment products are on the rise. The amount of fund managers in private equity has almost doubled since the financial crisis in 2008. It is also a less abstract financial activity for a youth in search of meaning, with tangible added value. It means stimulating the real economy through investment, creating intellectual property, encouraging transparent governance, generating growth and employment. Value needs to be created at all levels, if only to get out of an investment and make a profit. It is also an activity with varied human dimensions. "Private equity is an activity largely dominated by human relations. It is a question of establishing a relationship built on trust to work together over time. This attracts talent, perhaps wearied by the statistical models of public equity and the dehumanizing dimensions of stock markets" explained Cyril Demaria, speaker at the conference and Head of Private Markets for Wellershoff & Partners, a Zurich-based financial consulting firm. Although most participants agreed that the private markets were nearing the end of a particularly good cycle, there is still great potential for Switzerland, a country which still accounts for relatively few private equity funds for a colossal amount of assets under management by private banks.Participants of choicePension funds, insurers, cantonal banks, Zurich and Geneva-based private banks, family offices, investment funds: everyone wants to be up-to-date and most of the main Swiss financial players responded to the invitation to the conference. For good reason: the outstanding speakers. Per Stromberg, an economist at Stockholm University and member of the Nobel committee, was mandated by the Norwegian sovereign fund (the second largest pension fund in the world) for an analysis of the opportunity to invest in Private Equity. He came to present the main conclusions of his report. "We have time to ask ourselves questions and think about them. It is a luxury that practitioners don't have. It is important that we can meet, as we did at EHL, to create and maintain a bridge between business and academic research", he underlined in an interview. His research, which served as a status report for the industry, was one of the topics discussed during the two days of the conference. Other high-quality interventions took place, with notably the participation of Tim Jenkinson and Ludovic Phalippou, both university professors at Oxford, reporting on the current and future state of private markets.The connexion with EHLThe hotel business is changing, and so are the required skills. At EHL, faculty members engage in research like any other university, and finance is no exception. "Hotels are an illiquid asset par excellence which we know very well", Emmanuel Jurczenko, director of the Hospitality Real Estate Finance Institute at EHL and initiator of the conference, recently said. However, not only the hotel industry needs finance, but also the financial sector that needs EHL graduates. During the conference, Cyril Demaria confided that "EHL graduates are different from the purely technical profiles with standardized courses. They have decisive interpersonal skills to interact with entrepreneurs from various social and industrial backgrounds. Knowing how to listen to them and adapt is important for negotiating, convincing and then collaborating with them". This mix of business knowledge and human know-how is the reason for which, increasingly, EHL graduates are being offered positions in finance, but also in luxury, consulting and many other service activities.About the EHL Private Markets Research ConferenceFor one of the co-organizers of the conference on private markets, Emmanuel Jurczenko, "this event is a forum to explore the latest advances in private market research combining academic and practitioner perspectives. Its ambition is to become in the next five years a leading European reference on private investments thanks to both the quality of the work presented and the diversity of actors represented". Investing in private markets requires an in-depth knowledge of private equity, private debt and real assets (real estate and infrastructure). Although difficult, it is becoming more and more popular among institutional investors due to the low yield environment and the potential for diversification of private investments. Despite the absence of data sets for private markets, significant breakthroughs have recently been made in the research on understanding the performance and risk factors of private investment.

Carbon Accounting is not an Easy Road - but it's Worth it

EHL · 9 July 2018
Environmental performance accounting systems have become key in corporate social responsibility (CSR) strategies and are the focus of attention in international business conferences. From the integrated reporting initiative led by the International Integrated Reporting Council to the Environmental P&L published by Kering in 2016, from the 'True Value' accounting methodology published by KMPG in 2014 to the Natural Capital Coalition standard released in 2016, the world is full of environmental accounting initiatives. On paper, setting up an environmental accounting program is attractive because it allows companies to account for their environmental performance - but is it that simple?Companies wanting to measure their environmental performance have faced major challenges around the development of ever-refined standards, the relevant knowledge to spread in their teams, and the definition of their 'scope of responsibility'. They have also faced challenges in designing and implementing their own measurement tools. Stakeholders - including rating agencies, investors, non-governmental organizations (NGOs), and governments - have all influenced the development of both reporting frameworks and, incidentally, performance measurement systems put in place by multinationals.In this context, we have spent several years studying how one of the world leaders in the agri-food sector - Danone - has tackled environmental performance. Danone already had a strong CSR track record when it embarked on an ambitious environmental accounting program in 2007 to find a new way to measure its environmental performance.In our research, we explore its strategic choices and show the different steps it has made in implementing a company-wide environmental accounting program.We answer the following three questions:how did Danone build an entire carbon management system?what organizational structure did Danone choose for carbon accounting?which stakeholders did Danone involve in its project?In this study, we highlight among other things, the reasons for Danone's decision to measure its carbon emissions.A number of indicators can be chosen as representative of a company's environmental performance. A non-exhaustive list includes waste output, air pollution, water consumption (water pollutants released if applicable), biodiversity loss, ecological footprint, land and raw materials use, or any weighted combination of two or more indicators.Several criteria can be also considered when deciding on the main indicator of environmental performance. Again, a non-exhaustive list includes comparability with other companies, ease of use, auditability, verifiability, relevance, rigor, replicability, consistency, and how material it is to the company's stakeholders [i].Carbon was considered by Danone as a good idea for several reasons: it is understood on a global scale, is already somehow "measurable" as well as under the spotlight, and it was also able to represent the whole chain (from agriculture to landfill/recycling). Other environmental areas do not possess such features. For example, water is more local or there is very little consensus on how best to represent the impact of organizations on biodiversity to date.Tourism currently accounts for about eight percent of global greenhouse gas (GHG) emissions and significantly contributes to global warming, according to a recent study. In addition, annual growth of some four percent is anticipated over the next few years, outpacing most of the other sectors. In this context, tourism-related companies may want to address global warming and climate change and, as the adage of "what gets measured gets managed" states, set up a system to measure their GHG emissions as Danone did. Obviously, the road was full of obstacles.The main challenge Danone had to face was choosing the "right" carbon accounting standard.As Danone initially decided not to use the dominant standard (the GHG Protocol Corporate Standard), it was then difficult to communicate carbon performance results externally. They finally had to converge different accounting approaches as well as professionalize its environmental accounting system. We have seen the emergence of new roles, from carbon masters to carbon accountants, with Danone consolidating its carbon accounting through an ERP (enterprise resource planning) system.The lessons learned from the Danone example (e.g. the human resources organizational structure built to develop carbon accounting and the roles played by direct and indirect stakeholders on how to design an environmental accounting system) can be useful both for tourism or hospitality firms that have already started to tackle GHG emissions, as well as for firms that want to start and learn from the experiences of others.[i] See definitions in the IIRC, GRI, CDSB, and Natural Capital Coalition documents, as well as the SASB, FASB, and IASB.

Unlocking the Innovation Potential of Teams

EHL · 6 July 2018
'What makes some teams more innovative than others?'This is an increasingly important question as hotel companies feel the need to differentiate due to increasing competitive pressure. As evidence of the reinvention effort taking place today in hospitality, my institution - the Ecole hoteliere de Lausanne - conducts about 100 innovation projects each year for all types of organizations and entrepreneurs active in the sector. I recently studied teams of soon-to-be graduates involved in the development of such projects to understand what could explain differences in their ability to innovate.Innovation Is About Transcending Contradictions .Innovation is tricky. It wants to create the new while preserving some of the old; it requires the development of new capabilities while relying on the exploitation of existing ones; it demands boundless creativity while minding operational constraints.The old way of dealing with such paradoxes was through trade-offs and compromises. Today, the demands placed on organizations and their people are more varied than ever. And every stakeholder - think owners, operators, brands, guests - expects their demands to be met. The trade-off mindset is no longer sustainable and must transform itself into a paradox mindset as the simplicity of the 'either/or' is replaced by the expectations of the 'both/and.' In short, embracing contradictions must become the new norm.Do You Have a Paradox Mindset?People able to embrace contradictions are said to have a paradox mindset.To find out whether you belong to the club, simply consider whether the following statements are an accurate description of the way you typically feel:Tensions between ideas energize me.I feel excited when I realize that two opposites can be true.I am comfortable dealing with conflicting demands at the same time.If you recognize yourself in these statements, then you might well be a paradoxical thinker. Paradoxical thinkers tend to accept and even embrace contradictions, instead of worrying about them or being paralyzed by them. But no one innovates alone. So, here's an interesting question: 'When it comes to innovation, should everyone in your team be a paradoxical thinker?'The Research Study.To begin answering this question, I followed 42 teams of hospitality students in the last year of their Bachelor program at the Ecole hoteliere de Lausanne. These teams were mandated by hospitality companies to work on innovative projects such as the development of:new hotel or F&B conceptscreative marketing plans to reposition brands and propertiesambitious business growth strategiesOver the course of their projects, I collected information to profile these teams in terms of the paradox mindset of their members and to measure the extent to which these projects required them to achieve conflicting objectives. Upon completion of their projects, academics and professionals assessed the innovativeness of the teams' recommendations.The Results.Because the ability to think paradoxically sounds like a good thing, one might have expected teams whose members are all paradoxical thinkers to be the most innovative. This stands to reason since paradoxical thinkers should be more successful at addressing and reconciling contradictory demands such as developing a ground-breaking F&B concept that remains operationally viable; or expanding a hotel's offering while remaining true to its brand.However, the results showed something very different.The teams composed mostly of paradoxical thinkers were no more innovative than those with few or no paradoxical thinkers. Importantly, the teams that outperformed them both had an equal split of members that scored very high and very low on paradox mindset. How can this be?Paradox Mindset Diversity Matters.There is now extensive research supporting the view that one of the key factors that explain high-performing teams is 'cognitive diversity'.Simply put, a cognitive style is a way of approaching and solving problems. Our cognitive style is influenced by education, cultural background, experience, etc., and teams composed of members with different cognitive styles have been shown to outperform more homogeneous teams on a number of performance criteria.A brand expert does not think like an F&B director who does not think like a revenue manager. This is the beauty of cognitive diversity. At its core, thinking paradoxically is a way of experiencing and addressing tensions inherent in complex problem-solving. As such, it is a type of cognitive style, and, therefore, diversity is key.Paradoxes Can Be Both Good And Bad.An interesting question is whether tensions that come from the pursuit of conflicting objectives are good or bad for innovation.It turns out that paradoxical tensions are a double-edged sword. While they can foster greater creativity and innovativeness, they can also lead to anxiety and decision paralysis. Most teams that I investigated tended to underperform when projects were fraught with tensions and members were expected to reconcile contradictory demands.The only teams that thrived and became more innovative as a result of high tensions were those that were very diverse in terms of paradoxical thinking abilities. These teams seemed uniquely able to leverage the hidden potential of tensions.Furthermore, the difference in the innovativeness of their outputs was not trivial. In projects full of conflicting objectives, diverse teams were twice as innovative as homogeneous ones. These two observations illustrate the dual nature of paradoxical tensions; sometimes hurting, sometimes enhancing, innovation outcomes.Implications for Hospitality Managers.Taken together, these insights about team composition and paradoxical tensions have important implications for hospitality managers.First, if you have the opportunity to create your innovation teams from scratch, care should be taken in picking members who think and approach problems differently. In particular, if the projects are complex and require the team to fulfill conflicting demands, then you should mix people with a propensity to accept and embrace tensions with those who tend to dislike and avoid them.Second, if you do not have the flexibility to create your own teams - perhaps because they are already in place or the pool of people you can choose from is limited - then you should be mindful about the types of projects you assign to these teams. As a general rule, teams who are homogeneous in terms of paradox mindset should be assigned to projects that have clear and consistent goals and objectives, since such projects are unlikely to create high levels of tension. Conversely, you should reserve complex and ambiguous projects for your more cognitively diverse teams.Key Take-Aways.To summarize, all organizations, as well as most projects, require the simultaneous pursuit of conflicting objectives, as illustrated by the all too familiar demands: 'Let's be efficient, but let's be flexible.', 'Let's maximize profits in the short term, but let's be sustainable in the long term.', 'Let's empower individuals, but let's emphasize team outcomes.' Achieving such objectives in tandem creates paradoxical tensions for the business units, teams, or individuals concerned.While these tensions may lead to synergistic outcomes, they may also frustrate and impede progress.The question of the effective management of paradoxical tensions, therefore, is an important one. This article suggests two ways of dealing with this challenge.The first is through the creation of innovation teams whose members differ in terms of paradox mindset.The second is through the allocation of the right projects to the right teams. The proper use of these two levers could significantly improve how innovative your organization and its people end up being.

Moscow Hotels RevPar Growth During the FIFA World Cup

EHL · 6 July 2018
Moscow's hotels are projected to see growth of 20-30 percent in revenue per available room (RevPAR) during the FIFA World Cup tournament months of June and July 2018, according to the latest market forecast from STR and Tourism Economics. However, such a RevPAR increase would be less than the growth seen in Rio de Janeiro (2014) and Johannesburg (2010), key markets for the previous two FIFA World Cup host countries.While occupancy is likely to grow between eight percent and 10 ten percent in absolute levels to just under 80 percent during the World Cup months, Moscow's average daily rate (ADR) is projected to increase between 15 percent and 20 percent. That trend would be consistent with previous World Cup tournaments as STR analysts note that room rates are more significantly boosted by the event, whereas demand remains fairly stable in year-on-year comparisons.STR analysts note that while demand is helped by such a large event, year-on-year occupancy comparisons are typically hurt due to supply growth, as well as other regular hotel business avoiding the market during major event months. Supply growth leading up to such "mega events" creates more room inventory and pressure on occupancy levels.In Rio de Janeiro in 2014, occupancy rose by double-digits from the previous June (+12.6 percent to 81.6 percent) and July (+18.3 percent to 80.0 percent) in the market. At the same time, ADR increased 72.8 percent and 64.4 percent during the two months, respectively, driving RevPAR increases of 94.5 percent.In Johannesburg in 2010, occupancy jumped from the previous June (+27.7 percent to 78.5 percent) and grew to a lesser degree in July (+7.4 percent to 63.7 percent). ADR increased 56.3 percent and 44.5 percent during the two months, respectively, driving RevPAR increases of 99.6 percent and 55.1 percent.Moscow's room count is substantially higher than in Rio and Johannesburg. That also creates less opportunity for substantial uplift in performance in percentage terms, from a comparable number of additional visitors traveling for the tournament.Through the first four months of 2018, Moscow saw occupancy grow 6.7 percent year on year to an absolute level of 65.8 percent. Using the same four-month year-on-year comparison, ADR was down 0.8 percent to RUB 5,363.70. Preliminary data for May showed occupancy at 74.8 percent (+11.5 percent) and ADR RUB 5,451.5 (+3.1 percent).

Is it Time to Invest in Tourism and Hospitality in Iran?

EHL · 5 July 2018
Following the Islamic Revolution of 1979, tourists gave the country a wide berth. Then came the nuclear deal of 2015, signed by Iran and the US, UK, France, China, Russia and Germany. This promised to open up new opportunities for tourism and hospitality among other sectors, as UN, US and EU sanctions were to be lifted in return for Iran curbing its nuclear activities. However, there has now been a setback, as President Trump has called the deal is "defective at its core" and vowed to re-impose US sanctions.In 2017, some six million foreign tourists visited Iran, mainly traveling to areas and cities to see archaeological sites such as Persepolis, as well as for cultural reasons (Isfahan, Shiraz, and Yazd, among others) and recreational attractions (the resort island of Kish in the Persian Gulf). The country has 22 UNESCO world heritage sites. As most tourists arrive in the country on organized tours, individual travelers are rather rare.Despite the growing interest in international tourism to the country, only two internationally-recognized hotels have been operating in the country: the Accor group's Ibis and Novotel hotels, both at Teheran airport. When the hotels opened in October 2015, Sebastien Bazin, Chairman and CEO at AccorHotels, was quoted as saying that the brands were looking at the"huge growth potential" in Iran which is home to almost 80 million people. Dr Mehdi Jahangiri, Chairman of Aria Ziggurat Tourism Development Company, hailed the agreement with AccorHotels as "a prosperous beginning."Other hotel chains, such as Melia (Spain) and Rotana (UAE), have plans for hotels in the country but those have yet to be built. There are some local offerings, of course, but these are limited: for example, the Abbasi hotel in Isfahan, a former caravanserai from the seventh century, transformed into a luxury hotel in the 1950s by Andre Godard.Hence, the quality and quantity of hotels which could cater for international visitors remain insufficient to accommodate of the increasing numbers of tourists, particularly in context of the country's ambitious 2025 tourism plans as the country aims to attract 20 million international tourists annually.Against this backdrop, Ecole hoteliere de Lausanne recently took part in a pioneer initiative in Teheran to discuss possible cooperation with Iranian tourism educators and experts, with the aim of meeting the anticipated growing demand for hospitality professionals. The initiative was discussed at Isfahan University of Technology, the leading house for the Iran-Switzerland Scientific Cooperation Project, aimed at initiating joint research projects between Iranian and Swiss universities.Potential avenues for cooperation between EHL, a leading hospitality school, and the University of Applied Sciences and Technology in Teheran (UAST), include developing research links, as well as curriculum development at a future hospitality school which UAST is planning to set up on Kish Island.Iran's plans to attract 20 million foreign tourists each year will require some profound changes in the development of its hospitality and tourism sector. Although the country's cultural attractions and natural beauty are breathtaking, Iran's hospitality industry is not ready to host such large numbers of foreign tourists. Despite the fact that international airlines and major hotel chains are increasingly interested in tourism and hospitality in Iran, the risks remain concerning geopolitical tensions in the region. While the jury is still out on whether these tensions will affect tourism development in the near future, Iranian tourism authorities and international tourism entities are well aware of the country's potential and its urgent need for infrastructure and service-oriented hospitality development.

Wine, a Hedonic Investment Par Excellence

EHL · 4 July 2018
Investing in a cellarThe traditional approach to investing in this market is "buy-and-hold". It is based on the purchase of bottles, generally when they are put up for sale on the primary market, and is concluded, when the wine reaches full maturity, by taking a financial profit - via a resale on the secondary market, or hedonist - via the pleasure of consumption.In Bordeaux, the primary market operates on a principle similar to that of futures contracts. In the spring, following the harvest of the last vintage, the wines, which are still resting in barrels, are offered as a first-run initially to buyers through traders and merchants. Payment is made with the order and delivery takes place once the wines have finished maturing nearly 18 months later.In the other wine-growing regions, wines are generally sold once bottled; through an ad-hoc mix of direct sales to the estate and through intermediaries. The secondary market is decentralized and fragmented.Overall, the wine market is characterized by its complexity, relative opacity and low liquidity.These elements have considerable implications; especially for inexperienced investors. They make valuation a complicated exercise and can make it difficult to sell a wine quickly at a price equivalent to its estimated value. It also means that it is difficult and expensive to implement strategies that go beyond the simple "buy and hold".Investing in a fundThe difficulties discussed above certainly do not call into question the attractiveness of wine as an investment, but show the need to have an in-depth knowledge of the market.This explains the development of specialized funds that now allow almost anyone to position themselves on this market. However, their management fees, similar to most alternative assets, make them expensive. It is therefore essential to analyze the value-added brought by the manager. A recent study shows that the strategies used do not always justify these fees, since most funds have difficulty beating their benchmark. This study also highlights the importance, from a risk management perspective, of studying how the fund manages its liquidity and values its positions.Current ContextThe market for fine wines has been extremely dynamic during the last two to three years:Bordeaux has finally recovered after almost five years of correction. The arrival of two great vintages (2015 and 2016) on the market played a driving role for the region. Prices are now close to their highs of early 2011.Burgundy has continued its upward trend - which started more than ten years ago. The rarity of these wines is reinforced by the fact that recent vintages have been highly qualitative but not very quantitative. Thus the imbalance between demand and supply has prompted further price increases.At the same time, several wine regions that were in the shadow of Bordeaux and Burgundy have significantly gained in notoriety. This is particularly true in Italy and notably in the Piedmont, where some wines have seen their prices being multiplied by two or three in just five years. Customers appreciate the classicism of these wines.Ten years ago the market only had eyes for powerful and concentrated wines made in a modern style, today the key words are finesse and authenticity.Low liquidity (a paradox, of course), difficult to value, complex but exciting; wine definitely represents the quintessence of the alternative investments.Access the full study:Wine Funds: An Alternative Turning Sour? The Journal of Alternative Investments, 17(4), 6-20. P. Masset and J.-P. Weisskopf (2015).

INDUSTRY REPORT - 2018 Hotel Industry Innovation Report | By Carlos Martin-Rios

EHL · 3 July 2018
Ecole hoteliere de Lausanne (EHL) recently released a comprehensive Hospitality Innovation Industry Report, authored by Dr. Carlos Martin-Rios, an Associate Professor at EHL.Dr. Rios has been tracking hospitality innovation for the past several years, surveying hundreds of managers and interviewing more than 50 executives and thought-leaders to produce this report.The key objective of this research is to increase knowledge about the adoption of innovative practices by global hospitality businesses, and to support the integration of innovation strategy into hospitality business strategy.Understanding what innovation is to cultivate itFew would argue that innovation is essential to business growth. Yet, it seems surprising that for many hoteliers something as simple as defining innovation can be a challenge.Innovation is both a process and an outcome.As a process, innovations can impact a corporation's internal stakeholders (inward-facing), target end-users (outward-facing), draw from outside knowledge (open innovation) or respond to vertical integration and exclusive control (closed innovation).As an outcome, innovations are defined in terms of their degree of newness or radicalness. Solutions that are new to an organization are counted among 'incremental innovations'. A 'radical innovation' provides solutions that are 'new to the world'.Yet, the hospitality industry is less prone to innovate than other service activities.In the hotel industry, like in most service activities, the interplay between customers and firms broadens the scope of innovation and departs from the narrower technology-driven innovation dominant in manufacturing.However, not only developing truly innovative concepts (i.e. ideas that add value to an existing service) and embedding them within a hotel's operations, present their own sets of challenges - but as true innovations often breed copycats, creating strong differentiators and barriers to inhibit imitation, can be daunting for hotel operators.Hospitality Innovation Report: Key TakeawaysWho are the biggest innovators in hospitality?We put six innovation scenarios to test and asked hospitality industry executives what scenario(s) were more likely to take place in their organization within the next three to five years.Two main groups emerged:One from innovators in big corporations, who intend to move beyond incremental improvements for sources of breakthrough innovation. Although hospitality corporate leaders in innovation remain in the minority and are unevenly distributed across geographies and ownership structures, a few standout companies are demonstrating that innovation can be a driver of renewal, efficiency and lasting business value.The other from small/medium-sized enterprises (SME) and family businesses, who tend to believe they do not have the resources to develop their own innovation strategies and for whom innovation management will remain elusive.What factors can support driving innovative business practices?The report identifies seven evidence-based factors that drive innovative business practices, regardless of size, ownership structure or region.Innovation needs to be more strategicThis was the overwhelming conclusion drawn from the study.One leading innovation factor: highly innovative firms have typically engaged in non-technological innovation. Research results show that technological innovation alone will not be sufficient to hold competitive advantage over the long term, so harnessing the non-technical kinds of innovations (in organizational innovation, workplace, marketing strategy or business models) is critical.One example: investing in technological innovations along with 'creative workspaces' where employees are empowered to develop new ideas and test new concepts.In the short-medium term, innovation is what will determine the productivity performance and competitiveness of hospitality companies, whether independent hotels or national or multinational chain hotels.Big hospitality innovators will look beyond incremental improvements for sources of breakthrough innovation.However, a considerable proportion of executives consider that innovation strategy will remain one of the most elusive dimensions of organizational routine and performance.A quarter of leaders surveyed believe that innovation activities will be outsourced to third-party businesses and/or organizations.A majority of independent hotel owners believe they do not have the necessary resources within the company to develop their own innovation strategies.International multi-brand hospitality firms seem to be better prepared to develop innovation strategies and to deal with long-term conditions.Nevertheless, the research shows that it must be demand-led, inclusive, sustainable, and open to external collaborations.Download the full report here.

Pet Hotels: The Ultimate 'Niche'?

EHL · 3 July 2018
Globally, pet care represents a huge market that's worth some 180 billion USD. So even though the panel discussion at the Window 2 the Future forum was supposed to focus on globalization generally, perhaps it was inevitable that pet care (and pet hotels) would come under the spotlight, especially as one of the panelists was a senior executive with a pet food firm, which is owned by Nestle.Philippe Perianin, Head of Business Development & Ecosystem at Nestle Purina Pet Care Europe, Middle East & Africa (EMEA), told the forum the market was growing steadily. "When you look at Europe for example, Europe has 200 million pets. If you look at countries like France or the UK, already half of the households have pets."Nowadays, he said, people want to travel with their pets, or at least make sure someone is taking care of them at home. "When they go to your hotel, they would expect to have all the necessary facilities and hospitality."Pet owners have become 'pet parents', he said, as "the pet is becoming the additional kid in the family. So people expect exactly the same type of service and experience for their pet."He added that one low-cost airline in Europe - EasyJet - has just launched a pet-sitting service"so that when pet parents are traveling, they don't have to worry about the pet staying at home alone.""So we have to keep in mind that pets will become a customer relatively soon". Consequently the hotel industry will have to figure out how to "bring hospitality as well to these new customers".Samih Sawaris, Chairman of Orascom Development Holding, chimed in with an example from his hotel chain. "Two years ago somebody in El Gouna (Orasacom's flagship town in Egypt) came up to me and said 'I want to make a hotel for pets'. I said, 'Fine with me. It's a crazy idea, I've never heard of it but go ahead.'"The hotel now enjoys the highest occupancy rate in El Gouna and has performed 'beyond our expectations', he said. "People are actually traveling to El Gouna with their pets because they know they can leave their dogs part, or all, of the time in this amazing hotel which has a playground for pets. It's a very good business."The moderator, Mary Gostelow of the Gostelow Report, highlighted how in the Hyatt Regency in Hakone, Japan there are pet rooms with special pet showers. The pet rooms, she added, have 100 percent occupancy.Another panelist, Yaron Ashkenazi, the CEO of GCH Hotel Group, jokingly referred to pets as a 'niche' market, a play on words given that, in French, the term can refer to a kennel. "It's a great idea."One call in 10 to his hotel chain can be about pets so "we're developing a program that will not only make sure they (the hotels) will have the pets but we also have a dog walker that can walk the dogs outside the hotel."So it's a niche. It's not technology. It's not high-tech but it's a niche.During the question and answer portion of the session, Catalin Cighi of Cain Hospitality Innovation (CHI) brought the discussion back to the issue of the 'neglected audience' of pets and asked how more pet parents could be encouraged to bring along their dependents."I didn't come up with the idea of a hotel for pets, but when we saw what success it brought, we built on it," Sawiris replied. "It's going to be embraced in all the destinations we develop because I do believe this is an addition that would attract more clients, not to mention that it's very profitable on its own."And how do they make it profitable? "You charge a hell of a lot," came the response.

INDUSTRY REPORT - 2018 Hotel Industry Innovation Report

Ecole hoteliere de Lausanne (EHL)· 2 July 2018
Ecole hôtelière de Lausanne (EHL) recently released a comprehensive Hospitality Innovation Industry Report, authored by Dr. Carlos Martin-Rios, an Associate Professor at EHL.

Is it Time to Invest in Tourism and Hospitality in Iran?

Ecole hoteliere de Lausanne (EHL)· 2 July 2018
Consider this: Iran, the cradle of the ancient Persian Empire, has great potential for tourism and hospitality but the development of these sectors in the country has been far from linear and that remains the case today, mainly due to geopolitics.

Wine, a Hedonic Investment Par Excellence

Ecole hoteliere de Lausanne (EHL)· 2 July 2018
In recent years, wine has made a remarkable entry into the world of alternative investments. This emotionally charged asset has all the necessary characteristics to thrill not only amateurs and collectors but also investors. In particular, it offers attractive returns and interesting diversification potential.

Pet Hotels: The Ultimate 'Niche'?

Ecole hoteliere de Lausanne (EHL)· 2 July 2018
Globally, pet care represents a huge market that’s worth some 180 billion USD. So even though the panel discussion at the Window 2 the Future forum was supposed to focus on globalization generally, perhaps it was inevitable that pet care (and pet hotels) would come under the spotlight, especially as one of the panelists was a senior executive with a pet food firm, which is owned by Nestlé.

Unlocking the Innovation Potential of Teams

Ecole hoteliere de Lausanne (EHL)· 2 July 2018
This is an increasingly important question as hotel companies feel the need to differentiate due to increasing competitive pressure. As evidence of the reinvention effort taking place today in hospitality, my institution – the Ecole hôtelière de Lausanne – conducts about 100 innovation projects each year for all types of organizations and entrepreneurs active in the sector. I recently studied teams of soon-to-be graduates involved in the development of such projects to understand what could explain differences in their ability to innovate.
Article by Frank Schuetzendorf

Building Customer Loyalty in Restaurant Operations

EHL · 2 July 2018
As director of the Relais Plaza at Paris's iconic Hotel Plaza Athenee, Kuchler is one of the few remaining truly celebrated restaurant directors around.For 44 years, he has orchestrated operations, events and ambiance at the renowned Art Deco restaurant as effectively and more charismatically than most CEOs manage international corporations. Kuchler's remarkable track record extends well beyond creating a magical, sought-after restaurant experience. He cultivates an impressive international network that he manages through his address book--a smartphone--and at times acts as private concierge for desperate, loyal customers who have nobody else to turn to. He is a passionate singer who regularly performs for delighted customers during the restaurant's monthly Jazz Night. He is also a passionate food lover, a well-travelled citizen of the world, and a semi-professional cyclist with close ties to the Tour de France.But above all, he is an inspiring leader. Throughout Kuchler's tenure at the Relais Plaza, not one apprentice has failed, and the members of his team are known for their loyalty and commitment--the average length of employment on his team is 20 years.His beginnings at the restaurant were humble. More than 45 years ago, Kuchler left Germany and arrived by train at Paris's Gare de l'Est. He spoke no French, knew no one in the city, had nowhere to go, nor any firm plans. He spent his first night in the City of Lights under a historic bridge. Perhaps he had an epiphany there, because he started looking for work immediately. He knocked on the door of the famous Hotel Plaza Athenee, located on the Avenue Montaigne in Paris's haute couture district, and was hired as a room service waiter in 1973. Quickly understanding the trade and taking advantage of opportunities, as he is skilled at doing, Kuchler entered the Relais Plaza restaurant.EHL Senior Lecturer Frank Schuetzendorf caught up with Kuchler, now in his 45th year of running the Relais Plaza at the Hotel Plaza Athenee.In this exclusive interview, the legendary restaurant director shares his insights on building customer loyalty and running a successful restaurant operation over a period of more than four decades.Q&A. Talking with Werner KuchlerFS: Werner, what inspires you about what you do?WK: I think that this should be the most important question for everybody in life.What inspires me? There's the relationship, the sharing experience, and then there's the constant questioning of the status quo, the everyday enquiring if things have been done the best way they can be done.Then there are the simple wisdoms of life. When I first started out, for example, we were the only restaurant on our street. So it was easy. The restaurant was packed every day. When the manager retired, they hired another one, and it was the same thing. Then the general manager gave me the opportunity to become the manager, and I said: "Okay, I'll do it, but there are many things that are wrong. I cannot work like this, because the day will come when we will have to work in a different way."Eventually, many other fashionable restaurants opened and, almost overnight, our restaurant became empty. So I said to the GM, "You see--it's because we weren't ready. Now let's start to work on this."FS: Tell me your approach to customer loyaltyWK: If you don't know how to work on this, it can be like fireworks. Restaurants that open and provide something new are fully booked every day, but after a month nobody returns.My approach has always been, "We have to seduce, sell, satisfy and keep the customer, don't let him get away." If you work on these four major elements, then you have the key to keeping your customers.Building a customer base is important for my revenues. When you speak to your customers, you learn what they like and how to treat them. Those customers will tell you if you're on the right track or not. Sometimes you may have to walk away, but you always have to listen to and take in what they have to say and what they are telling you. I believe this is the key to satisfying the customer. Then, if the customer tells you something about something that he doesn't like that much, but comes back and sees the little changes you've made because you agreed with what he said, you're beginning to earn his loyalty.FS: But how many of those customers will become loyal?WK: For a restaurant of 100 seats, a base of 1,200 to 1,500 regular customers should provide you with an occupancy of 50 percent. But you also have to recognize and greet these people by name when they arrive.FS: So what's a loyal customer?WK: In some places like mine, customers come every month, some come every week, and some come for lunch or dinner twice or even three times a week. You recognize and can remember these regulars.But some customers who come three or four times a year--that requires a different kind of work.You have to feel your way when, say, Mr. Smith comes four times a year. How he dresses or the way he looks--these provide information about his values, expectations, and who he is. You have to read all the signals--to bring you back and make you remember or feel what he is expecting something from you. He must be recognized! Of course, when he comes three times a year, you're not sure to recognize him, but he still expects a lot from you. After a while in this business, you begin to acquire a technique for remembering, for how to think back to a day or a dinner, or how you spoke to this couple. Maybe you had spent a lot of time with them. You can really lose this customer if you're not able to remember him or give him the time he is asking for and expecting.FS: Today we use a lot of reservations systems and social media to attract customers. Yet, what we are talking about here are the subtle, underlying things and emotional intelligence--things we cannot extract from raw data.Is this something you can teach and learn?WK: For me it always comes back to my core customer base. But even before that, what I first need is superior quality in cuisine and service. It then depends on what kind of clientele I want and what kind of experience I would like to provide.Say, for example, I seat a beautiful couple that comes in to enjoy a pleasant dining experience with some nice wine. As I said in the beginning, I have to seduce. But how I do this is key. The most important thing is to give--to give good service to everyone and special little attentions to my customer base. So I investigate: Is this couple staying at the hotel? Or have they bought a nice apartment in Paris? Or do they plan on coming to Paris several times a year? In any case, I know that they're observing us. They look around and they see that the restaurant is like a club: the atmosphere is nice, and the team is providing attention to everybody. This gives them a sense of belonging to the group of diners who are present.There are some things you shouldn't do to such guests. You shouldn't share your whole life with them on the first encounter. Just give them a little attention: make them feel valued and let them know that you would be honored to have the pleasure of seeing them again--just little things--because you're not sure if they'll come back one year later. If you tell them your whole life story and the next time they bring friends, they will expect you to recognize them--something you cannot be sure you'll be able to do.When you do recognize them, then you can go a little further: you can give them a nicer table, make them feel more and more part of the club, or you can thank them simply by sending them a card like "Thank you for coming...." Those are all nice gestures, and they don't cost much effort or time.Therefore, to me, customer loyalty means that you know your customers.FS: Being in the same establishment successfully for the past 45 years--how has this contributed to your life?WK: The restaurant is a brand. It's an institution. But there are other institutions. And by maintaining this institution and by helping it grow and consistently evolve, little by little--doing better every day--you develop into a leader. The leader does not necessarily have to agree with Chef or the owners, but he has to be very clear about and say what he wants. There are so many restaurants that were great--for example, the world's best restaurant, Maxim's. They changed the leader. They took a man and replaced him with another man--a more corporate Yes-man that would never dare to go against the decision makers--and that's the way you lose your way.You have to fight for your vision, and the best tactic is to bring in business, which is more difficult today than in the past.FS: How hard is it to build a winning team?WK: Many years ago, everyone was paid on commission, based on your customers. Today, you pay your staff fixed salaries, which makes it much more difficult to excite and motivate people to work with you--especially if they have to be in the restaurant for lunch time and again for dinner, knowing how difficult it is when you live in Paris. And it's even more challenging when the restaurant is open seven days a week and if, within the same hotel, there are different approaches to working together.To succeed and keep the show running, you have to focus on yourself. You have to believe in yourself and not give up. If I gave up, I wouldn't like myself anymore; I would feel bad. Of course, there are moments when I tire out, but I know that I will come back. And if you try in your life and you fix little challenges, it's the same. There is never a straight line, there are always difficulties. But when it works out, it inspires you, and you try another, and another, and another time. This provides you with confidence, which then gives you the confidence of all your employers, because you are realizing things that have never happened before.FS: The restaurant and its patrons make you, and you make the restaurant. Is this a comment on your networking skills?WK: I think the name and the brand are always more important than the manager, but you also have to acknowledge that some brands no longer exist because they were not able to find the right manager.I have found that, in creating this base of loyal customers and, with it, the network, moments happen when all the stars align--when things suddenly connect. If you don't see this when it happens, you are blind or too absorbed in the operations to notice.But you need to connect these things together, because it provides new business opportunities. You need to step back and let go to see the opportunity, which is why you have to have confidence in the people around you. But you also have to control--that's important. Sharing this vision is not always easy to communicate, but you have to try to and persevere.Connecting all these beautiful things together works--it brings you business and opens up new playing fields. For example, the Tour de France cycling championship had their annual party at the Relais Plaza for the third time, and important managers are coming to the Plaza Athenee Hotel and booking rooms and tables. They have become friends. In 2018, the Tour de France will come down the Avenue Montaigne--our street--because we have connected the dots. And, tonight, I have a big private party with 15 journalists outside the hotel, where I'll be an ambassador for my restaurant, the hotel, and the Tour de France.FS: Your network is impressive. What's your secret? And how do you connect with customers that will make them want to give you their private telephone number?WK: Believe it or not, each time the telephone rings and I see it's a customer, I consider this a gift.It's important to me that a customer can directly express his wishes to me. The restaurant is open seven days a week, but I also take my days off and holidays. When I am not sure that the little things are going to get done or when the team needs help and advice, I tell them to contact me. Even if I am on holiday, off, or in a very busy situation, I take the call. Because, for me, that's a gift that makes the relationship stronger.FS: What about generosity?WK: The thing is you create habits--habits that you cannot give up because you are training your customers. For me, it's important that the customer leaves the restaurant and that he is 100 percent happy--the price, the quality and the service all working together to create the customer experience. If I see or feel that things were not all right, I can intervene.There are signs, and I sensitize my staff to look for these signs--for example, if a customer doesn't finish his main course. Asking simple questions to find out what's going on is important. This information must come to me and when it does and it's not okay I can go very far to make it right.So, it's important to read the signs. This also creates customer loyalty. Opening your eyes and ears to listen to customers and letting the customer talk is important. We should always question ourselves when the customer is telling us something.FS: What are today's customers looking for? How can you make a difference in this competitive world today?WK: It's always the same things. What they need is to feel welcomed, which is more difficult today than it was before. Attitudes have changed, money has changed, the world is a faster-paced place today. It's difficult to distinguish people today, because the way they dress is unrevealing. Again, you have to recognize the signs, which I'm not always able to do with customers wearing holes in their pants. Are they coming from Dior or from a second-hand shop? I don't know.FS: Today's managers are butterflying around and trying many different jobs. What does the next generation of managers need in order to be successful?WK: I have the feeling today that our lives are on rails. We are cultivating a lot of followers coming from schools and big companies--but they are on these rails. They do their jobs more or less well, but it's as if they are on autopilot. They speak and teach business, financials, resources, but not entrepreneurship.This really surprises me, and I feel the way they are going is the wrong way. They seek their customers through social media. Maybe it works, maybe not. I can only say that I know how much we spend and how many people we invite through these channels, but I don't know what it brings back. Maybe I just don't know how to calculate this, but if it really works and it's good, why are hotels not packed? Why are restaurants not packed?I believe in working little by little, one customer at a time, one-to-one. Secure your base, because they are your best ambassadors. I talk a lot, but I can also show results, and I am proud of that. That's also the reason why I'm still here--because the customers are coming for an ambiance. They're coming and they're expecting something, so they force me to do my best every day. And I also know that I can call upon this base of 50 to 60 percent regular customers when I need them and I will get a response, because I know them.FS: How does success look like in the future?WK: For me, the secret is to produce daily and yearly honest and emotional work, and to meet, learn and remember. Despite all the technology and social media available today, it comes down to hard work and ethics--there are no substitutes or short cuts. There are some luxury industries today that are smart--they're focusing on one-to-one again. They understand one-to-one and the value behind it, because one-to-one becomes one-to-five, and one-to-five becomes one-to-ten, through ambassadorship.Also, what's important to me is to not complicate things but to get to the heart of things. Instead of spending a lot of money, read the customer's signals, then work on getting recommendations through seduction, sales, and customer satisfaction.FS: Gandhi once said: "A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption of our work. He is the purpose of it. He is not an outsider of our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us the opportunity to do so." Any comment?WK: It's important that your employees know that you are with your customers all the time, both on the job and off. I have the chance to live close to my restaurant, and every day I look to see who is coming. When customers I know have traveled and are sitting in my restaurant, I often stop by just to say hello. This is fantastic--and it costs me nothing. Why do I do it? Because they--nobody else--shaped my life. And it's my way of saying "thank you."This article was first published in May 2018 in Hotel Asset Management. View the source here.

Blockchain: opportunity or hype?

EHL · 2 July 2018
Now there are hopes that blockchain can be applied in diverse domains, including: medical records, luxury goods sales (to weed out counterfeits), as well as travel distribution.Blockchain networks have the advantage that they are decentralized and incorruptible, since transactions are managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks of data.Once recorded, data blocks cannot be modified retroactively without the alteration of all subsequent blocks, which requires the approbation of the network participants.But how realistic is it to believe that blockchain in its present state of development can be used for travel booking purposes?In fact, some travel companies, including the giant tour operator TUI, Air New Zealand and Nordic Choice Hotels, have already signed on as partners of a new blockchain travel distribution startup called Winding Tree.Winding Tree is a B2B platformZug, Switzerland-based Winding Tree is the first company to specifically target travel distribution using blockchain technology.The company completed its ICO (initial coin offering) over a two-week period ending on 15 February, selling US$14'418'196 worth of Lif tokens which exceeded the company's initial goal of US$10'000'000 by about 44%.Lif tokens provide the functionality required by travel companies to send information about transactions over the Winding Tree platform.The token holder is thus able to send value, data, and/or execute a function on those transfers.The number of Lif tokens sold via the ICO has been fixed forever.Contrary to some initial anticipation, however, Winding Tree's goal, at least initially, is not to disintermediate the big B2C global travel distribution players like Expedia and company has been positioned as a B2B platform, which allows for mainstream adoption and incentivises suppliers to list their inventory.As noted above, there are already suppliers and resellers committed to the platform.Blockchain-savvy users are now able to book directly through the blockchain.However, it is not expected that the average retail customer will do so, since most don't have sufficient understanding of the TCP/IP (Transmission Control Protocol/Internet Protocol, a suite of communication protocols used to interconnect network devices on the internet) used to book their travel.TUI Air New Zealand explore uses of blockchainTUI, for instance, is currently using blockchain in its tour operator business to implement its "bed swap application", which aims to more efficiently allocate its hotel supply among its source markets in the UK, Germany and Nordic countries, notes Natascha Kreye, senior manager of corporate communications at TUI Group, who adds that, "It's an internal process to optimise yield across the group as well as to better learn how to use the technology. The plan is to use blockchain to generate smart contracts with hoteliers and improve the company's hotel inventory".It can, nevertheless, be noted that this is essentially an internal supply side use of blockchain - not a high-volume customer-facing one.Meanwhile, according to Air New Zealand chief digital officer Avi Golan, the airline is looking at a number of potential blockchain uses such as cargo and baggage tracking, retail, distribution and loyalty programme opportunities.Nordic Choice Hotels on boardIn what is being heralded as a hotel industry first, Nordic Choice Hotels has stated that they will "explore new ways of distributing inventory" using an open-source blockchain distribution platform developed by Winding Tree.Hobo, the chain's brand new hotel in the centre of Stockholm, is the first to take advantage of what Christian Lunden, director of future business for Nordic Choice Hotels, has termed "a totally new opportunity for our industry".With 30'000 rooms across Scandinavia, Nordic Choice has allowed Winding Tree to test usability on various levels: from the individual property to regionally and even across the entire hotel chain.The Scandinavian chain has been working with Winding Tree on a so-called 'testnet,' where teams gather qualitative data on transaction throughput and latency of the network.Given some doubts about the future scalability of blockchain platforms, it is argued that this will be vital in shaping core parts of the smart-contract before migrating to the 'mainnet', where transactions will have economic value.Hurdles still to be overcomeAs can be seen from the discussion above, the use of blockchain in travel, for the time being, looks to be essentially limited to internal and B2B transactions.In addition to integration challenges, the biggest problem facing blockchain currently is speed.Requiring proof of work to participate intentionally slows down the process, but replicating blocks across many distributed systems means that the top speed is only about seven transactions per second, according to Robert Cole, founder of RockCheetah, whereas traditional reservation systems can handle 250'000 transactions per second.There will be new forms of blockchain-related technologies emerging, according to him, which may challenge even current internet standards and cloud communication protocols.In a discussion I had with Winding Tree's CEO, Maksim Izmaylov, at the recent HOTCO conference in Budapest, held on 29-30 January, he admitted that more widespread use of blockchain in a high-transaction environment awaits further development of the technology.This article first appeared on the SSTH blog.

INTERVIEW: Disrupting the Hotel Sector - Terence Kwok, Founder & CEO of Tink Labs

Ecole hoteliere de Lausanne (EHL)·29 June 2018
When Tink Labs Founder and CEO and creator of, Terence Kwok, started his company in Hong Kong six years ago, he leased a counter at Hong Kong’s airport to rent smartphones to tourists: “we wanted travelers to get connectivity”.

EHL launches a Bachelor in International Hospitality Management on its Graubunden site (Switzerland)

EHL ·25 June 2018
As of this coming September, the first cohort of the Bachelor of Science - HES-SO in International Hospitality Management will kick off on EHL's Passugg campus, in the Graubunden.This site, which is very close to Davos, is hometo the Swiss School of Tourism and Hospitality (SSTH), also part of EHL Group. The Passugg campus will receive eligible students for a direct entry into the 2nd year of the Bachelor program. After two semesters at Passugg, students will move to EHL in Lausanne, where they will complete their final semester.In September, EHL will inaugurate its Bachelor in International Hospitality Management in Passugg, that replicates the content of its Lausanne program. The new degree was put in place for holders of a professional diploma such as the "Diplome Hoteliere-Restauratrice / Hotelier-Restaurateur ES" who wish to advance into a managerial career in international hospitality or any other affiliated industry.Thanks to their pre-existing academic and professional experience, students can integrate the second year of the usual Bachelor program, and tuition fees amount to approximately half of a traditional EHL degree.The degree put in place by EHL experts is delivered in English. Courses are taught by members of EHL faculty and guarantee an optimal study environment thanks to the small size of the classes.Furthermore, students benefit from a transnational and international training experience with the first two semesters taking place in Passugg, at the heart of a highly touristic region that counts many 4/5 star hotels. The program ends in Lausanne, giving students the opportunity to connect with the international EHL alumni network, which is one of the great strengths of an EHL education.With this diploma designed at EHL and taught at Passugg, this new training opportunity stands out by its unique character. With this degree, ambitious students within the hospitality and gastronomy industries will see great opportunities emerge along their career path. "The Swiss model of dual education, which EHL represents within the world of hospitality management education, is praised and is exported internationally. This new program option follows the same values and allows students to reach their personal and professional goals" says Michel Rochat, CEO of EHL Group and member of the Board of SSTH. The Bachelor of Science - HES-SO issued by EHL is the only university-level hospitality management degree that is recognized by the Swiss Confederation. Students are now invited to submit their application for one of the two annual intakes.

The Integrated Revenue Generation Team - Coming Soon to Your Hotel!

EHL · 4 June 2018
One of these trends is related to net room revenue - that is, revenue that remains with the hotel after accounting for distribution costs (online and traditional agency commissions and other expenses).Net room revenue has been declining steadily over the past several years. For instance, US hotels earned roughly $155.2 billion in guest-paid revenue in 2017 but paid an estimated $25.2 billion to acquire guests in the form of OTA commissions and other distribution costs, retaining significantly lower net room revenue of $130 billion (Kalibri Labs).The overall growth in occupancy and revenue per available room (RevPAR) that many hoteliers have been enjoying for some time now cannot possibly compensate for 'the loss of wealth' through steadily increasing OTA distribution costs. Obviously, hoteliers need to increase direct bookings, which come at a much lower cost, and improve the overall direct vs OTA distribution ratio.Integrated strategy: The missing piece of the puzzleOne of the main reasons for the troubling trend of decreased revenue capture and profitability, despite stellar economic performance is the lack of integration, coordination, and singular focus and purpose among the core revenue generation teams at the property or hotel management company: namely, the revenue management (RM), sales and marketing (S&M), marketing, and customer relationship management (CRM) teams.Quite often these teams function in a rather disjointed fashion, leading to missed revenue opportunities, over-dependency on the OTAs, alienated loyalty members, and lower profitability.Often the RM, S&M and CRM teams in a property operate in isolation from one another, without close coordination. In some cases, they even compete with one another to sell the same rooms. In other words, the left hand - one team - does not know what the right hand - the other teams - is doing, to the detriment of marketing efficiency and price integrity, and ultimately overall revenue generation, profitability, and the owner's return on investment (ROI).The reality: highly fragmented hospitalityTraditionally, RM, S&M and CRM operate as separate teams with their own goals, technology tools, databases, vendors, and more.One glaring example of this highly fragmented approach is keeping past guest engagement efforts (CRM) in a silo from new customer acquisition and marketing efforts.For example, looking at independent hotels, less than a third of hotel guests on any given night are repeat guests, while two-thirds are first-time guests.This means that the reality general managers and directors of sales and marketing (DOSMs) face every day is having to fill about 70 percent of their rooms on any given night with brand new guests that they know very little about, while trying to ensure they have a pleasant and meaningful stay.Furthermore, once the property has acquired these new guests, when they walk out the door, if they're not engaged with marketing automation and guest retention initiatives, there is no guarantee they will ever stay at the property again. This results in a vicious cycle that affects the bottom line.Dr. Cindy Heo, an associate professor of revenue management at Ecole hoteliere de Lausanne (EHL), describes the current siloed approach in revenue management and the existing fragmented customer data situation in the industry:Revenue management used to focus primarily on setting room prices and optimizing room inventory. Revenue managers should not just crunch RMS numbers but need to understand guests' selection behavior, consumer psychology, and their competitors' strategies by analyzing various pieces of information. RMS cannot, therefore, be the only toolkit for a revenue manager, because customer data reside in different hotel systems.Tying RM, S&M and CRM together with a 360-degree approach that engages, retains, and acquires guests throughout the customer journey is not only more efficient and more effective at driving direct bookings, but it is critical in growing the bond with your customers and their lifetime value.Obviously there is a need to break down silosToday's travel consumer's hotel planning and booking journey has become increasingly complex in this multi-device, multi-channel, and multi-touch point digital landscape.As consumers remain digitally-connected throughout these micro-moments before making a booking, each touchpoint presents an opportunity for a hotel to build a brand connection, influence intent, win the booking, and be there for every step of the journey.In light of this complex digital landscape, hotel marketers should engage online travel consumers throughout their complex digital journey and can no longer afford to have a fragmented customer engagement and acquisition approach.To summarize, here are the main reasons prompting the convergence of RM, SM and CRM into one cohesive team:The overwhelming shift to online distribution and online customer engagementsExploding mobile channels and the need for lightning-fast pricing and marketing decisionsThe ever-increasing complexity of the customer lifecycle and the emergence of the digitally-savvy travel consumer.The need to lessen overdependence on the OTAs.The solution: The integrated revenue generation teamThere should be a single-minded team at the property: the revenue generation team, consisting of RM, S&M and CRM specialists working together to acquire, engage, and retain guests; optimize performance; and increase revenues, especially direct bookings.What then should hoteliers do to accelerate the switch to an integrated revenue generation team? Here are just a few of the changes and action steps needed:#1 - Hotel management and franchise contracts:Management and franchise contracts should use total gross operating profit (after OTA commissions, traditional agency commissions, and other distribution expenses) and not gross room revenues to calculate management and franchise fees.In this way, every revenue-generating employee and team at the property would be evaluated based on net room revenues collected by the property (gross room revenue minus agency/OTA commissions).#2 - Organizational changes:A new role is needed at the property or hotel management company: that of revenue officer or revenue optimization officer, overseeing the integrated revenue generation department at the property, small or midsize chain, or hotel management company. The revenue optimization officer is not an accounting or finance major position, but a role for a cross-functional leader, versed in all three disciplines: RM, S&M and CRM.#3 - Education and professional development:The whole hospitality educational and professional development system needs to be re-thought and adjusted to create cross-functional experts who are intimately familiar with all three disciplines: RM, S&M and CRM. Existing RM, S&M and CRM employees should be incentivized to get certifications and attend professional development courses in the other disciplines as a prerequisite for their career advancement.#4 - Technology investments:Hotels need to invest in technology that allows alignment of, and cooperation among, the RM, S&M and CRM specialists from the revenue generation team. This is a call to action for the hotel tech community: new technology tools and platforms, especially platforms utilizing AI to crunch big data, are urgently needed to enable the cross-functional, cross-data alignment among RM, S&M and CRM.The independent property, small or mid-size hotel brand can start small by working with existing vendors on cross-functional connectivity, or when considering new technology solutions, to evaluate the cross-functional capabilities of the vendors. Hoteliers should ask themselves, "How can we incorporate our digital marketing and CRM data into our pricing decisions? How can we use revenue management analytics to sharpen the focus and ROI of our digital marketing campaigns? How can we utilize our knowledge from our RFM data into our new guest acquisition efforts?"#5 - Revenue optimization ideationThe revenue generation team and its RM, SM and CRM specialists, under the guidance of the revenue officer, should map out an annual revenue strategy, outlining major markets that need focus or improvement, sales, and marketing (seasonal, multichannel, ad hoc) campaigns needed to achieve the revenue goals, etc.Each quarter, the team should brainstorm and come up with an updated action plan for the next three quarters. Every week the team should meet to discuss current property performance - including occupancy, ADR (average daily rate), RevPAR, and revenue needs - and set out concrete tactics to optimize revenue.#6 - Optimization of the marketing mix:An integrated revenue generation team can finally achieve the elusive optimization of the property's marketing mix of price, product, promotion, and place. Only by working together can the team devise the optimum pricing, product offering, and distribution channel strategy that can bring the best results.There should be collaboration when answering questions such as: should we offer the spring multi-channel marketing promotion to the OTAs? How do we tackle next month's occupancy needs due to group cancelation? How do we improve weekend occupancy? Through this collaboration, action plans can be implemented across all revenue-generating channels.#7 - Personalization:Personalization is not only proven to increase bookings and other key performance indicators, consumers now expect hotel offerings, pricing, and content (textual and visual) to be personalized to their needs and preferences. A recent survey by eMarketer showed that 85 percent of internet users expect personalization, and 75 percent of consumers get frustrated when it's clear that companies are not personalizing content (Janrain).The revenue generation team can devise a robust personalization strategy that includes all aspects of the guest journey: from marketing and website engagements, pricing and channel management, personalized offering and pricing based on RFM and customer lifetime or LTV values, to product offerings and CRM retention and loyalty marketing initiatives.#8 - Multi-channel marketingThe revenue generation team should coordinate marketing efforts using a multi-channel marketing approach. With one cohesive marketing campaign, and the same cohesive marketing message (read: promotion) pushed across all potential touch points with online travel consumers (hotel website, SEO, SEM, GDN and online media, social media, PR and email marketing), hoteliers can build stickiness and traction across channels and devices and dramatically increase revenue.Today's complex multi-touch consumer behavior is what makes multi-channel marketing campaigns the most effective way to address concrete business needs, increase reach, and boost bookings and revenue for the slow season or need period.These campaigns can be structured around the property's seasonality as well as specific business-needs (i.e., need to fill weekdays vs. weekends, occupancy needs, group cancelations, seasonal slowdowns, etc.), and also target specific high-value segments.ConclusionThere is no doubt that today's complex travel customer journey requires an integrated strategy to engage, acquire, service, and retain travel consumers across multiple digital touch points and across all digital channels and devices. This necessitates a single-minded team at the property: the revenue generation team, consisting of the RM, S&M and CRM specialists, working together to acquire, engage, and retain guests; optimize performance; and increase revenue, especially direct bookings.There are no perfect solutions in existence today, therefore hoteliers should start with contractual and organizational changes, with close collaboration and alignment of business objectives and marketing plans across revenue generation teams, as well as make use of cross-functional technology solutions available today and invest in new and emerging solutions as they become available.

STR: For Hotels, China's Best Year in Recent History

EHL · 1 June 2018
Looking at supply development, China's second-tier cities are seeing higher rates of growth than the first-tier cities. This has brought both opportunities and challenges for markets like Xi'an, Hangzhou, Tianjin, Wuhan and Dalian, which have seen rate declines over the past few years. Thanks to a boom in leisure domestic travel, these markets saw growth in both occupancy and rates.Hangzhou's year-on-year performance levels were impacted slightly following the G20 summit in September 2016, but recovery was quite quick thanks to the Chinese New Year and summer holidays. Leisure and corporate demand levels are on a steady track throughout most of the country. After struggling from substantial supply growth in recent years, some markets in western China, such as Xi'an and Chengdu, posted strong occupancy levels in 2017 - with Xi'an coming in the top five major Chinese markets in terms of occupancy growth.Among the top-tier cities, Shenzhen recorded the highest actual occupancy level (85 percent), followed by Shanghai. ADR growth was also strong in these markets, with a number of new notable attractions in Shanghai, such as the Disneyland resort that opened in the summer of 2016 and the new National Exhibition and Convention Center at Hongqiao International Airport. Although Beijing is falling slightly behind, the capital's hotels recorded their best summer since 2009, the year after hosting the Summer Olympics.Looking ahead, hotel operators will likely focus on driving ADR to bring up their gross operating profits or GOPs.This article was originally published in STR's Global Hotel Study, a comprehensive overview of the hospitality industry covering over 100 markets worldwide.

How Halal Tourism is Reshaping the Global Tourism Industry

EHL · 1 June 2018
Spending by Muslim travelers is expected to rise to US$220 billion by 2020, with the number of Muslim tourists growing to 156 million from 121 million in 2016. That's according to the Global Muslim Travel Index (GTMI) 2017, which was produced by Mastercard and CrescentRating, a 'halal-friendly' travel consultancy.'Halal' tourism is clearly a growing market segment, with Muslim tourists seeking destinations which meet their needs, in terms of diet, dress or rituals. Translated from Arabic, 'halal' means permissible in accordance with Islamic teaching. Alcohol, pork, nudity and gambling are off limits.With a burgeoning middle class and increasing disposable income, many countries - whether Muslim or not - are looking to attract these travelers. Malaysia, the United Arab Emirates, Indonesia and Turkey are among the leading Muslim destinations. Singapore, Thailand and the United Kingdom are among the top non-Islamic or OIC (Organization of the Islamic Conference) destinations.Despite being a predominantly Buddhist country, albeit with a sizeable Muslim population in the south, Thailand has proved to be a popular destination for Muslims, mainly from Indonesia looking for affordable vacations and Thai food. As for the UK, Muslim spending is expected to rise to US$4.1 billion by 2020 even though there has been a spike in Islamophobic assaults following recent terror attacks in London and Manchester.Adapting to the needs of Muslim travelersGiven the potential of this sector, it's important for the hospitality industry to adapt to changing halal requirements to meet the needs of Muslim tourists. According to CrescentRating, hotels and restaurants should offer halal food at the very least. A destination is then seen as increasingly attractive for Muslim travelers - as assessed in the GTMI ranking - based on the availability of prayer facilities, Muslim-friendly washrooms and Ramadan-related offerings. While many airports are now offering halal food and prayer rooms, some still lack wash or ablution facilities.Shaping the future with technologyIn addition to more traditional online travel agencies or OTAs such as or TripAdvisor, Muslim-friendly platforms are springing up. Take for instance, a London-based market place for halal tourist accommodation that is expecting to achieve revenues of at least one billion pounds by the end of 2021.Peer-to-peer platforms are also emerging. has become the world's leading portal for halal accommodation rentals. It differentiates itself from Airbnb by guaranteeing halal-certified services such as halal food and designated prayer rooms.Smartphone apps are also being developed. The Tourism Authority of Thailand has launched an app that helps Muslim travelers find halal products and services. It provides information about prayer times, food options and sightseeing tours. Another app, HalalTrip, offers information related to more than 65 destinations worldwide. It generates revenue by selling suitable tour packages, whether it's experiencing Great White Sharks in South Africa, culture and history in Spain, or shopping in Dubai.Compared to more established western OTAs though, halal tourism e-commerce is still in its infancy. As we've outlined, however, it's a growing market that needs to be served. Technology will continue to shape the growth of the sector by allowing hoteliers, restaurateurs and others to demonstrate that they are sensitive to halal requirements.How innovation affects demandWith spending by Muslim travelers on course to reach US$220 billion by 2020, and Islam the fastest-growing religion in the world, Muslim tourists are definitely some of the most important customers in the travel market.Pull factors such as family-friendly and Muslim-friendly services are important, as is halal awareness. Where safety concerns and basic halal requirements are met, Muslim tourism will continue to grow.As for technology, halal tech firms appear to have established a first-mover advantage. But it's only a matter of time before major western OTAs enter and seek to dominate this promising market.

GDPR: Why Hoteliers Should Take the new EU Regulations Very Seriously

EHL ·31 May 2018
New EU rules on data protection - or GDPR - , seven years in the making, come/came into effect on May 25. The advice from IT experts to hoteliers is: take the new rules very seriously or risk heavy fines of up to 20 million euros or four percent of the company's global turnover, whichever is higher.At the recent Young Hoteliers Summit, staged at Ecole hoteliere de Lausanne, Nick Price, CEO of NetSys Technology and CIO of citizenM Hotels, touched on the challenges posed in a keynote address.He said the new General Data Protection Regulation or GDPR was significant as the hospitality industry holds a lot of data which are spread over many different operational systems.In a panel discussion on the future of technology in hospitality after the keynote, he cautioned young hoteliers that their careers in the hospitality industry could end abruptly if they were responsible for a breach.It's criminal law. You can be fined significantly. Understand that the brand will be impacted, not you, the hotel. If your hotel loses some data, you've most likely given access to all your company's data, given how things are interconnected today. Be aware, this is very real.Another panelist, entrepreneur Uli Pillau, founder of tech firm Apaleo, said GDPR wasn't taken seriously enough, as had happened with Payment Card Industry (PCI) compliance. "This is a new topic for the industry and very few people understand what it means. There are big risks with that, but the earlier people take it seriously, the better. And I don't see too many hotel groups and hotels which are really taking it very seriously at this point""Europe has a very different perspective on individual citizens' data than the United States, for example, and these laws are a response to that," Price said during the panel discussion. "You can expect some fairly significant case law established from May when this law becomes enacted Europe-wide and some companies lose this information. With GDPR, European laws will apply and they will fine these companies serious, big money."And his advice to the young hoteliers: "Just sit back and think where customer information is actually held, in which systems in the hotel and how many systems duplicate that information. Imagine how you would collate that knowledge and protect that information in those operational systems, some of which are decades old."Pillau pointed out that legacy systems represent a 'high risk factor'. "The safest way to go is to use token technology which encrypts it entirely, (so that) at the PMS (property management system) or at the hotel level no data is kept which could get outside the systems. I think there are intelligent ways of doing that today."Suzanne Ward, Director of Digital Solutions at Movenpick Hotels & Resorts, noted that not only the data of customers should be protected, but also employee data such as payroll or HR information. "We need to be extremely careful with that sort of data too."Price told Hospitality Insights on the sidelines of the YHS forum that the new rules were 'serious' but would also be beneficial. "This is a good thing as it protects fundamental information about human beings from misuse. We have customers who stay with us and because of the nature of our business as hoteliers, we have to capture information."We have a trusted relationship with these people. They trust us with their safety when they're in our hotels. In order to have that trusted relationship, we have to be able to demonstrate we can protect the information they voluntarily give us and that's quite challenging. But frankly speaking, (the GDPR) should be welcomed by the hotel industry and it's here for a good reason.European governments have recognized, he said, that many companies nowadays are "deriving a lot of value" from the use of customer information."We, as hoteliers, also need to derive value from that information. We need to be part of that same business model," noting that Google and Amazon make money out of personal information and their valuations are 'significant.'Hotel companies should also be able to make money out of the information but in order to do that, they have to be trusted with the information in the first place and they have to give a net beneficial return to the customer that stays with them, which they can do. They're uniquely positioned to do that."But it begins with trust and you can't be trusted as a hotelier by your customer base, if you don't protect really what is in many senses the most valuable data you have, which is the information (you hold) about that customer. So yes, it's a good thing."

4 Reputation Management Challenges Every Hotel Manager Faces

EHL ·30 May 2018
But what exactly is the impact of guest evaluations on a hotel's performance? How do hotel managers cope with negative online reviews? And what are the main challenges they face in improving their results?Our latest research examines these questions based on a survey of international hotel managers to understand their perspectives on online reputation and manipulation.Key Highlights :Guests are increasingly aware of the importance of reviews and their power over reputation.Ratings, ranking positions and new market entries increase pressure on managers.Strategies employed to improve online reputation are often outside the control of platforms.The extent of manipulation appears to vary between individual businesses and countries.Interviewed managers confirm growing competition as a result of ratings and rankings, and they report that guests are increasingly aware of the importance of reviews. To avert negative online feedback impacts, managers intervene strategically. They report - irrespective of hotel standard - to pay close attention to online reputation, and to engage in various strategies to maintain or improve their ratings or ranking position. Specifically, our research reveals four core challenges directly related to online reviews and ratings of accommodations.Challenge #1: Consumer judgement culture not only encourages, it demands opinion.The results have a persuasive power in influencing customer perceptions and choices, and on business behavior. In particular, negative reviews appear to be considered useful by consumers. The emergent consumer judgement culture and consumer citizenship increase pressure on management.Moreover, while prospective hotel guests will be aware of the importance of credibility, also having learned to interpret reviews, there is nevertheless evidence of reputation 'thresholds'; this is, minimum ratings or ranking positions that are specifically attractive or no longer attractive to customers. These behaviors stand irrespective of whether review content is credible and if service quality of an accommodation business may change over time (for instance, when owners change, after renovations, or because of new service offers).Challenge #2: Market dominance of selected platforms, including Orbitz, Travelocity or, can be problematic where a business' reputation depends on one or a few platforms.For example, by September 2017, Travelocity reported having stored 535 million reviews covering over four million accommodations, restaurants, attractions, resorts and destinations.These figures mirror the considerable importance of platforms for information collection, usually before reservations are made.Concentration also means that the online reputation of millions of small- and medium-sized enterprises, larger hotels and entire destinations throughout the world is now controlled by global corporate stakeholders.The emergence of a near market-monopoly of a few selected platforms for reservations (Booking) and recommendations (TripAdvisor) has initiated processes that pose a significant problem for the hospitality industry. These problems are poised to become more prevalent, as market concentration continues and guest awareness increases.Challenge #3: New market pressures force managers not only to improve customer relations and brand relationships; but also to deal with online reputation and manipulation, i.e. activities designed to control opinion to one's own advantage.Manipulation can be complex, comprising strategies to involve staff, friends, bloggers or other parties.Many of these strategies must be considered problematic from legal or ethical viewpoints, as they involve the soliciting of reviews from guests, friends and acquaintances or staff; the invitation of bloggers; or the use of commercial raters, a strategy used by about a third of managers.Challenge #4: Addressing legal disparities is complex as laws with respect to defamation vary according to jurisdiction not just in relation to what constitutes defamation but also whether publishers and/or persons are liable.Rating culture, most widely observed in the form of Facebook 'likes', has profoundly changed the character of customer-hotel interactions.To be able to rate, judge and evaluate is a form of empowerment that affects reflection and empathy: Few guests will consider the implications of a negative review posted in a situation of momentary discontent, for example.As critical guests are simultaneously treated with respect, deference and privilege, opportunities to evaluate generate a sense of entitlement and self-importance.A set of specific responses are derived from the study and include, the emerging importance of reputation management strategy.Online reputation management has become a key asset for most hotels. Guests appear to become increasingly aware of their influence over reputation, and the importance of positive reviews. This is a process fostered by managers anxious over reputation, who may pamper in particular already critical guests. Guest expectations and additional service offers stimulate each other, ultimately working to the disadvantage of businesses.Meantime, hotels still need to offset critical reviews. The use of strategies to reduce negative content posted on platforms is thus an important aspect of reputation management.Specific practices, including linguistic cues, can be used to distinguish manipulated/authentic reviews, though it is generally difficult for individual hotels to control who posted online content or to demand the removal of specific comments, even if these are evidently false.More generally, there are opportunities for legal redress. Negative online reviews can potentially become a point of legal action for a hotel if it is regarded as defamatory and/or comments are not taken down when requested. Nevertheless, this creates further legal cases and costs for accommodation providers, one to obtain evidence of the identity of the person who posted the review and the other by way of defamation. Any legal action is likely to be expensive suggesting that such measures will usually fall outside of the capacities of many hotel SMEs.To conclude, two projected scenarios concerning the future of online reviews are depicted.One is that market concentration continues, and that platforms will implement protocols and algorithms to make it more difficult to post 'false' or manipulated opinion. This, however, already proves to be difficult, and there is little pressure on platforms to remove false content given limited options for SMEs to seek legal redress.Another scenario is that hotels start to realize they are potentially better off without globally managed platforms. It is not unthinkable for entire countries to shun specific platforms; for businesses to find their own, decentralized marketing channels or for new relationship marketing strategies to be developed, particular with established customer bases.About the ResearchOur research presents the results of a survey including 270 hotel managers in five countries - Germany, Israel, Norway, Sweden and Switzerland. This is the first quantitative academic study of manager perspectives on hotel online reputation and manipulation.Our study is the result of a multidisciplinary research team, comprising:Stefan Gossling (Linnaeus University and Lund University in SwedenHarald Zeiss (Harz University of Applied Sciences in Germany),Michael Hall (University of Canterbury in New Zealand),Carlos Martin-Rios (Ecole hoteliere de Lausanne),Yael Ram (Ashkelon Academic College, Israel)Ivar-Petter Grotte (Western Norway Research Institute).

Is an Entrepreneurial Ecosystem Beneficial for Startups?

EHL ·29 May 2018
Innovation and entrepreneurship are clearly flourishing in Switzerland if the from Seedstars, a concept born in Switzerland bringing together investors, educators and innovators for emerging markets; Edouard Treccani from MassChallenge, a worldwide start-up friendly accelerator with emphasis on early entrepreneurs; and Karim-Paul Chibb, an EHL alumnus and the founder of Campus, a vibrant co-working space and start-up coach.Lausanne's ecosystem is something of a hidden gem as it offers entrepreneurs a range of services, network partners, and a state-of-the-art support-system. However, does mere availability of such resources mean entrepreneurs are able to benefit effectively from the ecosystem?According to an article on 'How to Start an Entrepreneurial Revolution', published in the Harvard Business Review several years ago, entrepreneurs are most successful when they have access to the human, financial and professional resources they need.More crucial though are government policies aimed at encouraging and safeguarding entrepreneurs, as well as support networks of entrepreneurs and experienced business leaders who may be able to provide advice on tackling some of the challenges they're facing - particularly if they themselves have experienced similar obstacles in the past.Such networking opportunities clearly bring benefits. Through events and activities, the ecosystem enhances the chances of meeting like-minded entrepreneurs, potential investors, as well as suppliers and partners. For young entrepreneurs starting out in hospitality-related industries, an ecosystem can provide access to customized financial, legal or IT solutions.However, it's easy to misjudge the value of an entrepreneurial ecosystem if we just focus on the number of start-ups in an area or the amount of available funding as indicators of the chances of ventures not only surviving but thriving.Unfortunately, research shows that simply creating opportunities to raise funds or meet other entrepreneurs and business leaders is not enough. What then makes an ecosystem strong and sustainable?Collaboration with other start-ups, the ability to share the experiences of successful companies in the industry, training, and transparent access to resources are among the elements that will produce an effective ecosystem.According to Seedstars, the challenges facing entrepreneurs are more apparent in emerging markets. Along with financial resources and professional mentorship, entrepreneurs seeking to make a difference in their societies also require basic facilities such as co-working spaces.For instance, Seedstars recently built a number of co-working and co-living spaces for Latin American entrepreneurs.Laure de Peretti told the panel session that, having got seed capital, some of these entrepreneurs also needed an adequate place to develop their ideas, which - without Seedstars - they could not easily afford. She also highlighted that leapfrogging is a common practice in emerging markets, making access to the resources available in the ecosystem difficult for entrepreneurs.The way we see it is that you have the culture in an ecosystem, the environment, and the opportunity. These are the three big pillars. It's not only the people in it, or the structure, it's also the culture. - Laure de Peretti, Seedstars."In emerging markets you have leapfrogging, which is huge in the culture of emerging markets. It's jumping from one industry to another one super quickly." For example, she said, some villages in Africa had moved to solar kits from using gas or fire as an energy source, instead of switching to electricity.And the verdict? The panelists all agreed that the ecosystem is a necessary, but insufficient condition for success.It's up to the founders of start-ups to take the initiative and branch out and activate the networks they are part of. That's because they often spend more time and money, and hire more employees than necessary, mainly because they are unaware of what is available elsewhere. While the lean start-up movement is now about a decade old, we still find today that many founding teams don't take the time to seek the support they need to reduce costs, provide seed funding, or access to crucial knowledge.Interestingly, according to Laure de Peretti, the more difficult the environment - as experienced by some of the founders in her portfolio - the more successful they are in making use of the ecosystem. That said, entrepreneurs in places like Lausanne and Switzerland should take full advantage of all the available infrastructure on offer to access training, nurture their networks, and collaborate with other founders - who are, more often than not, facing similar issues.


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