Hotel subscriptions, thoughts and experience. Nike’s direct to consumer and positioning failure, what wont change in hotel tech, more Olympics thoughts.
Hello,
I’ve been lucky enough to see some Olympic events this week and stroll around the city to see all the happy faces. In the end the games were quite good. But I do need to get this newsletter published as promised, so here it is.
Best, Martin
About me: I'm a fractional CMO for large travel technology companies helping turn them into industry leaders. I'm also the co-founder of 10minutes.news a hotel news media that is unsensational, factual and keeps hoteliers updated on the industry – also it is the most read hotel newsletter in Europe. See the international edition of the newsletter and subscribe to it here. 
On Hotel Subscriptions/Memberships
A few years ago, I spent quite some time trying to find a perfect solution for a hotel subscription membership a-la Amazon Prime or Easyjet Plus. They’re the best loyalty systems ever designed, sort of a flywheel or loyalty. I.e. commitment to loyalty from the customer, rewards the customer with increasingly greater wins. Simple but amazingly efficient. But there’s no easy way to replicate that in hospitality. Some data I had researched when working on such a project: in busy cities like Paris 9% of guests return to the same property (over several years). The best hotel groups have less than 12% of their guests return within 12 month (in any property). The frequency is so low that subscription is really hard to justify. Discounts on F&B if you have a good enough restaurant could work – but F&B margins are low, meeting space use could work as remote office space – but is that enough to pay a monthly fee? We’re missing the a point that people dislike so much (shipping costs) they’re willing to pay to make it go away. It isn’t an easy problem to solve.
HOSPITALITY SUBSCRIPTIONS TREND
Nike’s positioning problems
Nike stock hasn’t been doing great lately. Their choice to hyper-focus on direct revenue only didn’t pay off. If one of the most valuable brands in history can’t afford to only focus on direct, then I think hotels should seriously re-consider trying to hyper focus on direct only. The billboard effect is real. I once (a long time ago) conducted a survey of some 15,000 direct bookers in hotels and over 20% of the people said they booked direct after having found the hotel on an OTA. But I think Nike’s problems started when they became an activist brand. I don’t think companies should be activists. Individuals can, but companies shouldn’t. Nike’s position was “the brand for winners” Jordan famously didn’t become an activist because he wanted the shoes to be for everyone. The recent Nike ad “Am I a bad person” is problematic on many levels. For one, it is negative – that might work well for some audiences, but most people believe they are good people and doing the right thing. Secondly it isn’t the spirit of sportsmanship. Yes people want to win – but look at the Olympics, 4th place athletes hugging and congratulating Gold medal winners. There’s a lot more to win in positive positioning than negative.
VALUE DESTRUCTION NIKE
We simply don’t know where tech is going
Meta Platforms’ Ray-Ban smart glasses seem to be a small hit, they have potential but are also useless as an AI assistant. Maybe smart glasses will become a real product category soon. Maybe it will be other AI assistant solutions. Or maybe none of the above. The thing is we don’t know where tech is going next and it is incredibly hard to predict how hotel guests will use it. We need to focus on what is not going to change. What wont change is that guests will have more tech in the future, there will be more systems to integrate, privacy and security attacks will be more frequent, guests will want faster service, and they will want more data and transparency (to name some). So, whatever systems exist in hotels today they will need to cater to that at a core level, not random layers added afterwards. And these changes are happening faster and faster.
META SMART GLASSES, B2B TECH MODERNIZATION
Inspiration ads for hotels
I’ve written about this before, the toughest part of a hotel’s marketing strategy is discovery (inspiration). Today it happens mostly through OTAs, and that is effective. But hotels don’t have a clear way to inspire guests to check-out their property which is also cost-effective. Here comes Youtube, which is now the largest streaming platform (and not only on the small screen). With Google’s AI targeting – hotels have channel to try and reach travellers at the right moment. Now it is a question of making great creative assets for the channel and finding the right balance to make it cost effective.
YOUTUBE STREAMING DOMINANCE
Will hotel design ever include tech?
Hotel architecture and interior design are amazing subjects. Every time I visit a great hotel I spend time checking out door-handles, hinges, shower doors, bed-tables, tiles and all those small details. Admiring the work of the people who put it there. My friends and family (probably pretend to) appreciate my long explanations about why these things are amazing. But what I don’t get is the disconnect between interior design, architecture and technology. It’s either over-done (too many buttons) or non-existant. Yet all should be targeting the same thing – superior guest experience. Experience is in the little things. I really think architects and interior designers should have a good understanding of the capabilities of hotel tech, integrating this into their already broad tool-kit.
DESIGN SUSTAINABILITY INNOVATION
THOUGHTS:
The positive impact of the Olympics
For the last few years Parisians have been complaining about the Olympics. The traffic jams, the organization, the construction project, the unrealistic goals. It kind of follows the stories that have been circulating about the deserted Athens arenas post-olympics and more. Environtmental issues and activism has become the main topic for some time now. Viewers to the events have been declining.
But now that the games are on we get to see the real impact that they have. I’ll be blunt, I have never seen Paris so happy before. I love this city, but it isn’t because of the happiness (lack of) of the people in the city. Tourists are happy, the locals are happy, the police officers are happy, even the subway workers are happy. It is actually quite a nice experience just to walk around the city and take it in.
The organization is spectacular on every level, (also the subway and trains). Parisians are coming to realize that it too and I even heard some whisper to their friends how well it is set-up, god forbid someone hears a Parisian praising.
As one walks through the city there’s some Olympic event, or monument about 15 minutes away all the time, and some great way to walk there which isn’t too crowded. One doesn’t even need to be at an event to enjoy it.
I have pretty much only got good things to say about the event. I keep thinking about the gargantuan task is has been to organize all of it. All the thousands of things that went wrong which we will never hear about or notice.
It is a pity that from a hotel and flights perspective we didn’t manage it well. Raising rates too early and too high must have been a factor in scaring people away. Maybe there’s a lesson to learn that “this time it isn’t different” pace and pick-up still rule. And if one sold too cheap, use it as an opportunity to get rave reviews, so it becomes future revenue.
Well managed events like this and travel form an important part of bringing people together, realizing we’re not so different after all and we do get along.
But Paris has raised the visual bar for the Olympics, let’s see if LA can take it up.
