Marriott’s Revamp of Aloft and Element Points to the Future of Select Service Hotels

Marriott International

Marriott debuted a new design prototype for Aloft Hotels following feedback from owners and consumers shortly after its acquisition of Starwood closed. Marriott International

Skift Take: Everyone suspected the efficiency and consistency of the Marriott “machine” would be a perfect match up for Starwood’s creative and innovative lifestyle brands. While it appears to be working for Aloft and Element, the true measure of success will be what Marriott can do with a brand like Sheraton.

— Deanna Ting

After Marriott purchased Starwood Hotels & Resorts for $13.3 billion in September 2016, a tough question emerged: What would Marriott do with all those 30 brands in its now expanded portfolio?

Whether the company needs 30 brands is another issue, and one that’s widely debated in the hospitality industry.

However, a little more than one year after the deal closed, we’re beginning to see what Marriott has done with those 11 Starwood brands it inherited, and one of the best examples of that is the company’s efforts to try to reinvigorate the Aloft and Element brands.

Investors and owners are still keenly interested in both of the categories these brands represent — select service and extended stay — and Marriott knows Aloft and Element haven’t scaled up to their potential. Marriott has opted to focus on revamping these brands while the cycle still has legs.

Aloft and Element owners essentially told Marriott that the biggest problems with both brands are construction costs, as well as property cost models. Marriott’s solution was to focus on smarter room designs and more streamlined food-and-beverage programs for both Aloft and Element, as well as a new floor model for Element that would appeal to groups.

Here’s a detailed look at the evolution of Aloft and Element, and what it says about the future of lifestyle extended stay and select service hotels.

Pioneers in Lifestyle Select Service and Extended Stay

When Starwood launched Aloft in 2005, followed shortly by Element in 2006, the two brands were uniquely positioned for their time.

Aloft, marketed as “a vision of W Hotels,” Starwood’s wildly successful boutique twist on the traditional full-service hotel, was meant to follow a similar trajectory, but for the then very nascent, but growing select-service space. At a time when the boutique hotel movement was in full swing, tech-driven Aloft adopted a design aesthetic that was, at the time, very forward-looking — perhaps too much so. Think concrete floors and bright, vivid hues.

Element, by contrast, capitalized on the “eco-friendly” movement that was gaining momentum in the U.S. and worldwide; it required LEED certification, something the brand no longer mandates. It was an extended stay product, geared toward longer-stay travel, and it borrowed its design aesthetic from sister brand Westin.

“They were very innovative in their early launches,” Mark Skinner, a hospitality industry expert and partner in The Highland Group said of the two brands. “Aloft was more [innovative] in its design and was one of the early lifestyle brands. Element was also creatively designed” and was “very, very high quality.”

Ben Seidel, president and CEO of Ocean City, Maryland-based hotel management firm Real Hospitality Group, said what originally drew him to open his first Aloft property “was the hype.” He opened his first Aloft in 2009-2010 in Brooklyn, New York, next to a Sheraton, which his company also manages.

Today, Seidel is president of Marriott’s Owners Council for the Aloft brand. He has four Aloft hotels in his portfolio, with another Aloft and his first Element property on the way.

The Great Recession of 2008, however, took its toll and “it was hard to get off the ground something new that was coming to the industry for the first time,” he said.

At first, Seidel said, some customers weren’t sure about the Aloft experience. “Because of how strange the concept was for your typical frequent stay and loyal Starwood customer,” it could be a bit of a challenge, he said. “But once they got there they liked it.”

Seidel said he sees more repeat business at the Aloft New York Brooklyn than at the Sheraton Brooklyn New York Hotel next door, and the guests staying at the Aloft range from “young and old to everything in between.”

Although Aloft and Element were creative and unique when they debuted, they never grew to scale, said former Starwood CEO Frits van Paasschen, who led the company from 2007 to 2015. In the fall of 2016, just before the deal closed, van Paasschen told Skift, “With the exception of Sheraton, Starwood’s other brands are still sub-scale. With the proper investment, they have plenty of room to grow.”

Their growth pace lagged other brands.

“They didn’t grow at the pace of some of the other brands,” said Skinner. “The perception with Element was that it cost too much to build. Aloft was initially aimed at urban locations, which is limiting, and has subsequently moved into suburban locations.”

By the time Marriott purchased Starwood, there were 116 Aloft hotels and only 23 Element properties around the world, with 150 Alofts and 73 Elements in the global pipeline. In contrast, Marriott’s extended stay Residence Inn brand has nearly 900 properties in the U.S. alone.

Today, there are 135 Aloft hotels open and 32 Element hotels, and another 137 Aloft hotels and 76 Element hotels are in the pipeline. How they got to this place demonstrates where the lifestyle select-service and extended stay lodging segments are headed.

Marriott CEO Arne Sorenson (second from right) tested Aloft’s new food-and-beverage program at the company’s Innovation Lab last year. Source: Marriott International

The Innovation Lab Approach

As soon as Marriott and Starwood signed the deal, Marriott’s teams immediately went to work on integrating the Starwood brands. They chose the Aloft and Element brands as one of the first targets, said Eric Jacobs, Marriott’s chief development officer of select service and extended stay brands in North America.

The primary reason why Marriott decided to focus on these brands? “Because the cycle is still very hot, it was very important for us to jump quickly into these two brands when investor interest was still high,” Jacobs said.

Another reason was that because both brands had limited footprints, Jacobs said, it would be “easier to make changes,” as opposed to trying to reinvigorate a brand as large as Sheraton, which has 444 hotels globally.

Both of these brands’ categories — select service and extended stay — remain favorites among investors and owners. Marriott’s peers are launching new select-service brands and seeing success with their existing limited service brands. Skinner said, “The largest growth in development in terms of new rooms is in the select-service segment.”

Marriott’s own 2017 numbers demonstrate the popularity of select-service lodging among owners and developers. It signed a record 578 contracts for its 11 select-service brands, 158 contracts of which were in the Asia-Pacific region. In North America, it opened 270 select-service hotels and signed 420 contracts last year.

The extended stay market is seeing record levels of demand and occupancy levels, despite the fact that its inventory, at least in the U.S., continues to rise. Still, there’s plenty of room in both spaces for the industry to grow, Skinner said. “Only 8 percent of the rooms, about 50,000, in the U.S. are extended stay right now,” he said.

To begin work on scaling up these two brands, Marriott held franchise advisory council meetings with Aloft and Element franchisees like Seidel, and taking their feedback and building out prototypes from that input to put on display in what Marriott dubbed its Innovation Lab. Marriott exhibited the freestanding, tent-like structure at last year’s Americas Lodging Investment Summit (ALIS) conference in Los Angeles, just outside the conference hotel, and it was open to hotel owners, investors, and the general public.

Owners essentially told Marriott that the biggest problems with both brands related to the cost of construction, as well as property cost models. Marriott’s solution was to focus on smarter room designs and more streamlined food-and-beverage programs for both Aloft and Element, as well as a new floor model for Element that would appeal to groups.

“What we heard from owners and developers, in particular, at ALIS last year, was around design and making sure that the design is not too trendy but really different at the same time,” said Toni Stoeckl, global brand leader and vice president of Marriott’s select brands. “The ease of building a room is very important, and the original designs for both brands weren’t as easy to construct. In order to grow the brands, they need to be more flexible in how that layout comes to life, especially in products like conversions.”

Stoeckl, who was at Starwood for eight years before joining Marriott in 2009, knew both brands well.

Another part of both brands’ models that required improvements was their respective food-and-beverage programs. Jacobs said Aloft customers were “confused” by Aloft’s grab-and-go market — they didn’t know how to pay for their items in some instances — and Element’s food offerings weren’t aligned with the brand’s wellness concept.

At ALIS, Marriott introduced a digital kiosk where guests could easily order their meals in colorful “pots.” Element’s breakfast options also got a healthy makeover.

With the new Aloft food-and-beverage program, Seidel said, “you’re not inventorying tremendous amounts of food. You’re not employing large numbers of staff. The equipment originally specified for Aloft has not been modified, which is very fair to us owners. The redesign of the lobby just makes flow a lot more organized, too. The payment system is not being done at front desk anymore, so front desk agents don’t have to deal with handling those purchases.”

A floor plan for Element’s new Studio Commons concept shows multiple guest rooms that share a common living and kitchen area. Source: Marriott International

And for Element, Marriott debuted a new guest room concept, called Studio Commons, that remakes entire floors into more communal spaces. Instead of having multiple standard extended stay rooms, each with their own kitchenette, these floors have four guest rooms that share a common area that contains a kitchen, dining area, and lounge space.

Element owners can now build some of their rooms without requiring a kitchenette, lowering costs and adding some flexibility in the types of guests they might attract, including leisure and business groups.

Seidel, for one, is taking more of a wait-and-see approach to see if those new communal rooms will be a success.

“I want to see how it’s perceived,” he said. “I can’t say I like it or don’t like it. I see that kind of concept in a property that’s more of a group hotel.” he said.

Seidel, however, wonders if these rooms might pose some challenges. “How can I guarantee that room pattern will still be available when they check in? It’s like with connecting rooms. If a certain guest decides to extend his or her stay a day or two, that can be a problem in delivering connected rooms for another customer.”

Skinner said Marriott has “value-engineered” these brands, and while he doesn’t have a strong opinion about its work on Aloft, he said the quality of the Element brand “hasn’t been brought down at all. Clearly, there’s been increased developer interest in these two brands and at least part of that can be attributed to Marriott.”

Jacobs and Stoeckl said that all of the prototypes presented last year, with some adjustments following owner and customer feedback, have now been incorporated into both brands. The new designs and food-and-beverage programs are being implemented in a number of hotels this year, and will be in all new Aloft and Element projects going forward.

In addition to trying to make these brands more cost effective for owners and developers, Marriott’s changes to Aloft and Element also seemingly reflect what guests want in their hotel experiences today: efficiency, healthier options, more flexibility, and the ability to better accommodate group travel, among them.

As Marriott continues its work on integrating Starwood’s brands, and striving to ensure that 30 of its brands thrive, the ability to distinguish and make each more appealing to consumers and owners, gets even more crucial.

“With 30 brands now, we have to be really good at what we do,” Jacobs said. “In the old days, you could put out a brand and your objective was how to appeal to broadest customer base that I can. Today’s consumer is so specific about what he or she chooses, and because of our portfolio, we can also be very specific in how we target customers and be really thoughtful about things.

“If you give me a site in Cupertino, California, I can make a business case for any one of the 30 brands, but I need to be really smart about who’s traveling today and what’s the right brand for that location, from a guest perspective, and for our owners.”

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Travel Megatrends 2018: Mergers and Acquisitions Focus on Strategic Innovation

Patricia Mafra  / Skift

Travel technology companies increasingly get creative with strategic investments in emerging technology. They’re looking more at internalizing innovation and startup culture, rather than merely trying to bet on the right horse as a financial diversification move. Patricia Mafra / Skift

Skift Take: The smartest travel companies are beginning to buy startups that may not be central to their main businesses or help them consolidate market share, but could boost the innovation metabolism of their motherships.

— Sean O’Neill

Earlier this month we released our annual travel industry trends forecast, Skift Megatrends 2018. You can read about each of the trends on Skift, or download a copy of our magazine here.

When travel companies go shopping, they often have market consolidation in mind. But lately, some businesses have been using acquisitions and equity investments as a strategic learning opportunity.

Often the additional goal now is to try to cross-pollinate a startup’s culture and innovations with the operations and thinking of corporate headquarters.

“I’m seeing travel companies increasingly get creative with strategic investments in emerging technology,” said Jen Ford, chief financial officer of vacation rental property management tech startup TurnKey and a former key mergers and acquisitions negotiator for HomeAway. “They’re creating dedicated venture capital funds that are designed to create deep partnerships with private companies.”

“This approach allows the investing companies to tap into and rapidly deploy innovative products and services that delight their customers while maintaining focus on their core competencies.”

To be sure, there are still plenty of traditional mergers and acquisitions. A case in point: In 2017, Accor acquired Mantra, an Australia-based hotel operator, to help the French global giant consolidate its market share in Asia Pacific.

But Accor also ventured into a strategic acquisition, attempting to expand beyond its core competency of lodging. In October 2017, Accor acquired Gekko Group, owner of hotel booking sites that serve 14,000 travel agencies — representing a departure into travel management.

Earlier in the year, Accor made a minority investment in events catering company Potel & Chabot, which runs food service at the French Open tennis tournament and the 24 Hours of Le Mans car race. The deal aimed to inject expertise in creating tailor-made food and beverage offerings at high-end meetings and events hosted at its properties.

Deals like Accor’s only work if the companies do more than just write checks, though.

“A danger that corporate venture capital faces is a temptation to invest in the next bright shiny object without setting up methodical ways of internalizing the insights,” said Katherine Grass, head of innovation and ventures at Madrid-based travel technology company Amadeus.

“In the past few years, we at Amadeus have gotten better at instituting processes to make sure our strategy is aligned with key innovations,” Grass said. “We’ve narrowed our interests to a half-dozen of the most salient themes. We’re also engaging with entrepreneurs more routinely, such as by sorting out collaborations with startups hoping to use our APIs [application programming interfaces, or ways of exchanging data].”

Online travel agencies are in on the trend too. In 2017, Booking.com developed its own mergers and acquisitions practice rather than rely on parent company Priceline Group’s team, with a goal of getting closer to the startups themselves.

It bought and absorbed its first company, Evature, which was an Israeli company specializing in artificial intelligence, or AI, that powers chatbots.

Booking.com CEO Gillian Tans is expecting her team to look closely at artificial intelligence-based innovations. “Today a lot of interfaces for booking require a lot of clicking and typing,” said Tans, while speaking in November at Web Summit, a technology conference in Lisbon.

Natural language search and chatbots powered by artificial intelligence can make booking interfaces easier to use, she said.

Artificial intelligence can help in other areas, too, Tans said. “If you think about it, the two questions customers struggle with today are ‘Where am I going to go on vacation?’ and ‘What am I going to do once I’m there?’ and AI technology can really solve these two questions in a much better way than we have today.”

So expect Booking.com to consider closer relationships with startups that have specialized expertise in artificial intelligence, machine learning, and related technologies.

Trivago, for its part, created a subsidiary in 2017 focused on growing business-to-business services for hoteliers and other suppliers. It also acquired a technology vendor that specializes in analyzing data to identify the desires of its customers and become more sophisticated at proposing relevant, customized offers. Trivago’s business-to-business push differs from its core hotel-search business.

Meanwhile, the largest hotel enterprise software company in China, Shiji, acquired ReviewPro, a Barcelona-based company that gives hotels actionable analytics on guests for sales, marketing, and revenue management — services that the parent company hasn’t offered on its own.

What’s driving the trend in mergers and acquisitions becoming more strategic? Large companies are trying to head off the threat of being overtaken by nimble startups.

Complacency often lulls established players into thinking it is trivial to create a layer of products or services above or below their core competency. A startup may often fill a gap others have left open, and then use it as a foothold for a later land grab.

Looking ahead in 2018, we can expect more creativity in how companies buy and invest.

“I see the rise of a trend within this corporate investing trend, where travel companies are partnering with or launching an accelerator for startups whose products are of strategic relevance to the company, such as JetBlue Technology Ventures and Booking.com Booster,” said Ford of TurnKey. In the past four years, the number of such accelerators and incubators for travel specifically has risen from three to 16.

“Accelerators give companies significant influence while assuming less risk than investing directly in a developing company,” Ford said.

Download Your Copy of Skift Megatrends 2018

This year’s Megatrends are sponsored by our partners at AccorHotels, Allianz Worldwide Partners, Hilton Garden Inn, Intrepid Travel, onefinestay, and Upside.

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Hilton CEO Expects to Push Direct Booking Forever

Skift

Hilton President and CEO Christopher Nassetta spoke in the Skift Take Studio after New York’s Skift Global Forum in September 2017.
Skift

Skift Take: Hilton has been working for years to keep customers booking on its website instead of with online travel agencies. Don’t expect that to stop anytime soon — or ever.

— Hannah Sampson

Editor’s Note: This is one of a series of video interviews from the Skift Take Studio, presented by KDS, that were filmed at last year’s Skift Global Forum.

During the 2017 Skift Global Forum in September in New York City, we heard from a host of the travel industry’s top leaders from across every sector.

And after first speaking to them on stage in front of an audience of more than 1,100, we took another few minutes with them to get more insight in our backstage Skift Take Studio.

In our behind-the-scenes conversation, Christopher Nassetta, president and CEO of Hilton, shared his thoughts about personalizing the hotel experience, the potential implications of tax cuts on of business travel, and efforts to encourage customers to make direct bookings with the company.

“As they connect with us directly, we know more about them so that we can customize and personalize the experience,” he said. “So whether it’s in the form of ‘Stop Clicking Around’ or a thousand other permutations, I think you’re going to see a book direct effort from us forever.”

Giving “mass personalization” as an example, Nassetta said one of the main trends he sees now is using technology to create better experiences for customers.

“Imagine a room where anywhere you travel with us in the world we are personalizing, no matter whether you’re in Bangkok or New York City or Reading, Pennsylvania,” he said. “We know you and what your preferences are because you’ve told us that, and our rooms are adapting to you — they essentially are connected to you.”

Watch all the Skift Take Studio videos here.

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Travel Search Engine Wego Labored in Asia But Found Its Footing in the Gulf States

Wego

Co-founder and CEO Ross Veitch poses in front of a sign at the offices of Wego, a metasearch engine that debuted in Asia Pacific but is now focusing on the Middle East. Wego

Skift Take: Wego got its start in 2005. But it only found a path to scaling up recently when it shifted its focus from Asia to the Gulf States.

— Sean O’Neill

Despite its name, Wego never went far.

Founded in 2005 as Bezurk, Wego was similar in design to many travel price-comparison search companies launched around the same time.

Yet the Singapore-based company didn’t grab an exit like Kayak, which the Priceline Group bought for $1.8 billion in 2013; or like Skyscanner, which Ctrip acquired for $1.74 billion in 2016; or even like Momondo, which Priceline bought for $550 million a year ago.

Wego competed with HotelsCombined to get traction in Southeast Asia but never struck gold.

“We were way too early with the metasearch model in southeast Asia,” said co-founder and CEO Ross Veitch. “You need a critical mass of suppliers operating at scale to make the marketplace model work. We thought the market would develop faster than it did.”

Veitch thinks Wego now has a path to scaling up after he and founder Craig Hewett pivoted the company to a mobile-first strategy in the Gulf States — a market relatively underserved by the global giants.

Booking.com and TripAdvisor are the only companies ahead of Wego in traffic in the region, according to figures for desktop and mobile for December 2017 from analytics firm SimilarWeb.

But Veitch said, “We believe Wego sends a lot more referrals to flight and hotel partners from the Middle East than TripAdvisor does.”

Between half and two-thirds of Wego’s revenue comes from the Middle East and North Africa, the rest from Asia Pacific, the company said.

“With the benefit of hindsight, when starting in Asia, we should’ve built cash cows in the more developed markets first,” said Veitch.

“Effectively, that’s what we’re doing in the Middle East,” he said. “This nicely profitable market is throwing off cash we can use to subsidize the marketing, engineering, and supplier relationship expenditure in emerging markets.”

Middle East Pivot

In December 2010, Wego launched 34 country sites beyond the handful in Southeast Asia — to see where it might gain traction.

It received the best response in the Gulf States.

The region had been mostly overlooked by Western and Chinese travel giants.

At the time, it only had five or so homegrown online travel agencies — none of which was dominant.

Wego added regional supply and marketing.

In April 2012, it launched the first Arabic language flights and hotels comparison search service, it claimed. Arabic, Farsi, Hebrew languages are all read right-to-left and the user interface conventions are flipped accordingly — something of a headache for Western-trained frontend Web and app developers.

Volumes remained modest but the transaction sizes were notably much higher than the averages Wego had seen in Southeast Asia. One out of every three Saudi shoppers on Wego picked four-star and five-star accommodation for trips involving four or more travelers.

In early 2013, Wego opened a Dubai office, making it a dual headquarters along with its original one in Singapore.

In June it announced a Series B investment round. Tiger Global was the largest investor, Crescent Point the second, and Square Peg the third — though none took a controlling stake.

Today, Wego claims to be the most-visited travel comparison service in the Middle East and North Africa region, with more than 10 million monthly visits.

Veitch estimated the region’s travel spending, offline and online, to be the equivalent of either the United Kingdom’s or Germany’s.

Skeptics might say the middle- and upper-classes in the Gulf States are smaller than that. Since the oil price slide, the growth of the middle class in the region seems to have fizzled out.

Another difficulty might be that none of Wego’s key countries are yet providing enough profit to fund expansion at a pace that can head off competition from larger players, according to the global analysis in Skift Research’s 2017 Outlook on Metasearch in Travel.

Veitch is bullish, though. Neither Skyscanner nor Kayak are significant players in the Gulf.

“The Middle East market is big enough to support a couple of billion-dollar online travel players,” Veitch said, “Wego will be one of them and probably the first.”

He added that the region broadly lacks rate parity contracts between many hotels and online travel agencies, unlike in North America.

That makes comparison search more valuable to consumers because there is typically more variation in the rates on offer among different websites.

Low-cost carriers like FlyDubai, FlyNas, and AirArabia are triggering fare wares, and this also makes metasearch more useful, he said.

Travel price competition is heating up. There are about 40 regionally based online travel agencies in the Middle East — a fast increase from the roughly five only several years ago.

Veitch declined to comment on the online travel scene.

A look at SimilarWeb found that the biggest online travel contenders are Almosafer/Tajawal, CityBookers, Flyin, Rehlat, Tajawal, and Yamsafer.

Travelstart, based in South Africa, has a significant regional presence, as does Cleartrip, based in India.

Fresh Funding

Up until last summer, Wego had raised $45 million.

In September 2017, Wego received an equity investment that included participation by Middle East Venture Partners, which describes itself as the largest venture capital firm in the region and has Mohamed Alabbar as a billionaire stakeholder.

“It was a C round in terms of preference but our fifth funding round in sequence,” said Veitch.

MBC Group, which owns Dubai-based satellite channel MBC, led the round as part of a strategic partnership.

In November, MBC’s TV, radio, and digital channels began to promote Wego.

Veitch said there’s a potentially interesting parallel in how MBC Group used its media assets to build and promote Anghami, a music-streaming service that has more than 36 million users in the Middle East.

Wego said it has now raised $60 million in total funding to date.

Mobile-First Market

The Middle East stands out from most other regions in its pace of mobile adoption.

Smartphone usage in several Arab states in the Gulf, particularly in the United Arab Emirates and Saudi Arabia, is among the highest in the world.

In March 2014, Wego launched the world’s first Arabic language travel metasearch mobile apps.

Today, Wego says more than 85 percent of its search volume from the Middle East is on mobile.

More importantly, the company has become better at persuading consumers to book on mobile.

Today, Wego said its click-throughs from its mobile apps and mobile Web to suppliers is at nearly the same rate as the brand’s desktop website.

Help From Google Tech

Wego got a bump in usage when it adopted a combination of standards Google has championed for optimizing webpages for mobile usage. Its team worked very early on with the Google on the technology.

In early 2017, it rebuilt its mobile website from the ground up with Accelerated Mobile Pages, which reduces page load time, and Progressive Web App technology, which provides a mobile Web experience that is indistinguishable from a native Android app.

In other words, Wego redesigned its mobile site to mimic its travel app using new technology standards.

In the first three months of 2017, the changes led to a 50 percent jump in the number of customers in Kuwait and Saudi Arabia that Wego successfully handed off to suppliers, particularly for flight bookings, the company said.

Until a year ago, many travel and e-commerce websites still relied heavily on single-page methods, which use large volumes of code and can result in slow-to-appear content, according to Alex Painter, senior web performance consultant at NCC Group.

Speed wins

At the 2017 Google I/O developer conference, Wego presented its work.

Wego claimed it decreased page load time from around 12 seconds to between 0.50 and three seconds, as explained in a video made for the conference. It said it supports around 500,000 sessions a day in its peak season.

Wego claimed to be the world’s fastest travel mobile site.

The Google developers accepted Wego’s claim to be the fastest. But it’s hard to imagine that Google’s own travel metasearch wasn’t faster.

Wego’s advantage was short-lived. Others copied the move.

In our unscientific tests last week, Wego’s site did load fast, but not faster than Google’s metasearch results. Several online travel rivals were as fast, too, having adopted the new standards.

But Wego did provide more regionally relevant results on average for a few sample Asian and Middle East itineraries.

A positive side to the new standards being championed by Google is that they provide a high-quality mobile Web experience for parts of the world where users are reluctant to load travel apps because of infrequent usage and constraints on the memory size of their devices.

A downside to promoting mobile Web over apps is that consumers who don’t use apps often turn to Google search to discover travel brands and that can often be more expensive for travel advertisers.

Wego said 55 percent of its overall Middle East traffic came from its mobile apps, which have also been rebuilt for greater speed, while 30 percent of that traffic came from mobile Web, and the rest from desktop users.

The company has a roughly even split in usage by Apple and Android device users. Wego officials wouldn’t say how many times consumers have installed its apps other than that it was an “8-digit figure.”

As it grows, Wego needs to retain its top talent. It lost chief operating officer Graham Hills to tours and activities tech company BeMyGuest. It lost Honey Mittal, a chief product officer who led the mobile revamp, to a non-travel company.

Veitch said the departures were coincidental. “Wego has a pretty deep management bench, and the developers who led the charge on the mobile changes are still driving the innovation agenda at Wego,” he said.

More Funding Needed?

Based on certain referral and transaction data Wego provided, we estimate that Wego’s revenue last year was likely less last year than the $60 million it has raised to date.

For online travel to expand in the region, more venture capital investment is likely required.

This year, Wego’s 110 employees will have to keep looking over their shoulders.

As soon as one of the global online travel companies decides the Middle East market is worth investing in, competition may appear fast and strong.

Being on the ground and understanding the local market gives Wego an edge, Veitch countered.

Payments is one area. Many users don’t have a credit card or do not want to use it online. So Wego asks users up-front what type of payment they are willing to use and then only shows prices inclusive of the payment fees for each, filtering out everything else. ​

Local touches like that can build barriers to entry for outsiders — for awhile, at least.

Wego needs to take the lessons learned from its stumbles in Asia to solidify its head start in the Middle East and North Africa.

“We’ll have to stay heads down, building the brand, for the next few years,” Veitch said.

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Ryanair Reaches Labor Deals With British Pilots

Chris Ratcliffe  / Bloomberg

Ryanair had to cancel a bunch of December flights because of labor woes, which may now finally be getting resolved. Chris Ratcliffe / Bloomberg

Skift Take: Big news, but don’t be fooled. Ryanair’s long-running labor disputes aren’t over. The Irish carrier is still negotiating with pilots in Spain, Italy, Ireland, and Germany, which have all threatened strikes.

— Sean O’Neill

Ryanair Holdings Plc shares surged after the Irish discount carrier took another step toward de-escalating labor tension, saying pilots at all 15 of its bases in the U.K. have now voted to accept a pay deal.

The shares rose the most in a month after the airline said Thursday that pay increases of as much as 20 percent would take effect next week. Pilots at Ryanair’s biggest base, London Stansted, signed on after previously rejecting its offer.

The U.K. pay agreements remove one potential trigger for added labor strife at Ryanair, which agreed last month to recognize pilots’ unions across its European network after refusing to do so for years. Ryanair was forced to cancel thousands of flights because of scheduling errors last year that stoked tension with its pilots and gave unions support to press for recognition.

The shares rose as much as 3.9 percent intraday in Dublin. Ryanair was up 2.7 percent to 16.54 euros at 3:38 p.m. in Dublin, giving the company market value of 19.6 billion euros ($23.9 billion).

While the company has been engaged with unions including in the U.K., Ireland, Spain and Italy since December, no formal recognition agreements have been reached.

Negotiations with the British Airline Pilots’ Association are ongoing, the airline said, adding that the majority of flight deck crews in Ireland have already agreed to the pay increases, with the exception of its home base in Dublin. Talks with the Irish union, Forsa, are progressing “slowly,” the company said.

Most pilots at its Dublin base who have recently joined or are employed as contractors have accepted the pay offer, which Ryanair says lifts salaries ahead of low-cost competitors that operate similar Boeing Co. 737 fleets. The remaining 35 percent of its aviators in Dublin have refused to put the offer up for vote. Those pilots are no longer eligible for the increase this month, the company said.

©2018 Bloomberg L.P.

This article was written by Benjamin Katz from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Discovery of World’s Longest Underwater Cave Near Tulum Adds to Destination’s Appeal

Guillén Pérez  / Flickr

Pictured is Dos Ojos, a system of natural sinkholes. It is connected to a new discovery that is believed to be the longest underwater cave in the world. Guillén Pérez / Flickr

Skift Take: Mexico’s tourism industry will take good news wherever it can get it these days, and the discovery of a mammoth underwater cave is definitely something that plays well for Tulum’s growing appeal.

— Dan Peltier

When exploring new corners of the globe, the common wisdom is to “dive deep,” but rarely is that advice literal. Now it is: A team of divers in eastern Mexico have discovered what’s believed to be the longest underwater cave in the world, just three miles west of the white sand beaches of Tulum.

The findings confirm that the vast, 164-mile-long Sistema Sac Actun, a waterlogged system of natural sinkholes, or cenotes, is actually connected to the nearby 52-mile-long Dos Ojos system, bringing the total length of the caves to a winding 216 miles. That’s more than the combined height of 24 Mount Everests stacked on top of one another. The warren of caves also stretches downward, to a depth of more than 332 feet, making parts of it deeper than London’s Big Ben is tall.

More exciting than the otherworldly underwater photographs coming out of the caves is the possibility of deciphering the secrets of the Maya civilization, which ruled this region before Spain’s 16th century conquests of Central and South America. Cenotes were often holy sites in Mayan culture, thought to be portals to the gods. Divers have unearthed religious artifacts and eerily perfect human skeletons in many of them, leading researchers at the Gran Acuifero Maya—a project dedicated to the study and preservation of these caves—to believe they were used for sacrifices.

“It allows us to appreciate much more clearly how the rituals, the pilgrimage sites, and ultimately the great pre-Hispanic settlements that we know emerged,” underwater archeologist and project director Guillermo de Anda told Reuters.

It’s yet another reason to book a plane ticket to Tulum, which has gained popularity not just for its pristine beaches, eye-popping coral reefs, and high-end pilates retreats aimed at the female corporate set, but also a varied and impressive culinary scene.

In recent years, Tulum has attracted luminaries that include chef René Redzepi, who opened a pop-up version of his Copenhagen restaurant Noma there in 2016. It remains a luxurious escape for lovers of creature comforts, whether they choose to stay in a ritzy treehouse with seaside views or an art-forward hotel brimming with original works by Picasso, Warhol, and Botero.

Sistema Sac Actun and Dos Ojos were already prime scuba diving destinations, but this revelation certainly means the combined system deserves a designation as one of the most extreme scuba dives in the world. It’s a sliver of good news for the broader Quintana Roo region, which this past summer was included in a U.S. State Department advisory warning Americans about travel to Mexico in light of rising homicide rates. Here’s hoping it’s a harbinger of a bright and shiny future.

 

This article was written by Rachel Tepper Paley from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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U.S. Travel Coalition Aims to Reverse Trump’s Isolationist Stance and 9 Other Tourism Trends This Week

Wayne Thume  / Flickr

Washington, D.C. near Capitol Hill. The U.S. Travel Association officially launched its Visit U.S. Coalition on January 16, 2018. Wayne Thume / Flickr

Skift Take: This week in tourism, U.S. travel brands fight back against isolationism while Europe enjoys one of its best years for visitation. Read more about how President Trump affects tourism worldwide in our new magazine: The Megatrends Defining Travel in 2018.

— Sarah Enelow

Throughout the week we post dozens of original stories, connecting the dots across the travel industry, and every weekend we sum it all up. This weekend roundup examines tourism.

For all of our weekend roundups, go here.

>>Now is the best time for you and your coworkers to get tickets to attend Skift Forum Europe. Save now with group rates! Announcing Group Rates for Skift Forum Europe 2018

>>Europe’s 2017 tourism story is nearly the opposite of its 2016 downward twists and turns. It wasn’t a perfect year and some destinations on the continent are still struggling, but it’s also a sign that many Europeans are choosing to travel closer to home to stick to their budgets: European Tourism Had One of Its Best Years While U.S. Had One of Its Worst

>>This evolution of luxury will require brands to adapt products and experiences consistent with consumers’ new definitions of quality, comfort, and elegance: Luxury Is Evolving But Consistent Themes Connect Old and New

>>Will a traveler who only expects the finest ever decide to board a mass-market cruise ship? Well, the marketplace has spoken and it says, “Maybe, but only under certain conditions”: The Rise of Luxury Outposts on Mainstream Cruise Ships

>>If the travel industry’s lobbying and trade associations have any more tricks up their sleeves, they’ll need them if they will have any chance of reversing what is essentially the Trump Administration’s anti-visitor stance: U.S. Travel Coalition Enlists Restaurants and Retailers to Reverse Trump’s Isolationist Stance

>>From brands as experience platforms to strategic mergers, diversity messaging and beyond: These are the Megatrends in travel we’re watching closely in 2018: The Megatrends Defining Travel in 2018

>>A growing number of mainstream cruise lines think they can capture luxury travelers by offering them a premium product. The approach makes sense. After all, not every luxury cruiser wants the intimacy and exclusivity of a small ship: Merging Premium and Mainstream — New Luxury

>>Interior Secretary Zinke said last year that 30 percent of the park service’s employees were “disloyal to the flag.” Employees, as well as the national parks and monuments themselves, have become political pawns. The advisory board members who resigned were tired of serving as cover for an Interior Secretary who wouldn’t mind chopping down the forest: U.S. National Park Service in Crisis Mode as Most Advisory Board Members Quit

>>If we received a penny for every time a travel industry executive talked about how consumers are looking for “experiences,” we’d be billionaires by now. But in all seriousness, there’s a definitive strategy behind travel brands’ desires to play an even bigger role in travelers’ experiences: Travel Megatrends 2018: Travel Brands Want to Be Experience Platforms

>>Travel brands no longer get political at their own risk — they avoid politics at their own risk. With so much at stake in the Trump era, remaining on the sidelines about multicultural acceptance isn’t an option: Travel Megatrends 2018: Brands Embrace Diversity Message Amid Rising Neo-Nationalism

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Uber Caps the Hours Its British Drivers Can Work in a Bid for Safety

Bloomberg

British taxi cabs like the ones pictured here are in a fierce competition with Uber, which has prompted regulators to investigate the company and try to reign it in. Bloomberg

Skift Take: Unlike Lyft, Uber has no blanket policy designed to keep exhausted workers off the road worldwide. Why not?

— Sean O’Neill

Uber Technologies Inc. will begin limiting the time U.K. drivers can spend on the road to 10 hours a day, responding to regulatory health concerns about tiredness and exhaustion.

Uber said that starting next week it will require drivers to take a six-hour break if they’ve worked for 10 consecutive hours. To enforce compliance, workers will be prevented from logging into the app during rest periods.

Safety was among the issues raised by transportation authorities last year in revoking Uber’s operating license in London, the company’s largest European market.

The decision is being appealed.

In October, lawmakers in parliament also questioned the company’s efforts to keep tired drivers off U.K. streets.

Uber, which is able to track the whereabouts of its drivers through its software, has adopted similar hour-restrictions in some parts of the U.S. and Australia. The company said the average U.K. driver spends about 30 hours a week logged into the app.

“We want to do our part to ensure they don’t drive tired,” Andrew Byrne, Uber’s head of policy, said in a statement.

A labor union representing some drivers criticized the new policy, saying it didn’t address the low pay that leads drivers to spend more hours working.

“The reason drivers are fatigued is because they are not earning enough,” James Farrar of the Independent Workers Union of Great Britain, said in a statement.

“Drivers are being made to pay for the consequences of corporate greed and regulatory failure.”

©2018 Bloomberg L.P.

This article was written by Adam Satariano from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Where to Find Japan’s Hidden Corners During Its Tourism Boom

Noriko Hayashi  / Bloomberg

The Nakahashi Bridge at dusk in Kurashiki. Given double-digit gains in tourism in major cities like Tokyo, savvy travelers are looking for Japans’s less crowded but still desirable gems. Noriko Hayashi / Bloomberg

Skift Take: In 2017 Japan saw double-digit growth in tourist arrivals from the previous year. So savvy travelers may look to avoid some of the crowds by seeking out these four towns that are appealing alternatives to better-known cities.

— Sean O’Neill

Japan is in the middle of a travel boom. Political instability across much of the world has given it the appeal of a safe haven, and before the 2020 Olympics, the country has been rolling out the red carpet for visitors.

Among the new perks are two luxury sleeper trains: the Twilight Express Mizukaze, which offers a circular tour around the Sanyo and Sanin areas of western Japan, and the Train Suite Shiki-shima, connecting formerly extreme corners of the countryside. There’s also the just-formed Ryokan Collection, a consortium of high-end inns that aims to improve access for non-Japanese-speaking travelers outside of the major cities.

Travel to Japan showed double-digit growth in 2017 from the previous year, so you’ll want to take advantage of this development and escape the crowds by hitting the stunning countryside. Here, four towns to discover—before everyone else does.

For Sake and Shopping: Kurashiki

It’s only 45 minutes from Osaka on the bullet train, but Kurashiki feels worlds away. The historic city center of Bikan, a 10-minute walk from the station, is a time warp to the Edo era, when its namesake river formed an important cornerstone of Japanese mercantile trails; the area is still car-free.

Along the riverbanks, willow-flanked white-and-gray houses are just as they were in the 1600s—but instead of acting as rice stores and granaries, they’ve been reborn as cafes, pottery workshops, and Japanese denim boutiques. (Make a beeline to the Betty Smith Jeans Museum, where you can pick up $900, custom-made selvedge jeans.)

Kurashiki is also the town credited with birthing sake. Base yourself at the newly expanded Ryokan Kurashiki, with seven tatami-style rooms in a former sugar warehouse. Then explore sake shops for a day before a trip to the contemporary art paradise of Naoshima Island and the Isamu Noguchi Garden Museum in Takamatsu, where more than 150 of the famous sculptor’s stone works are still preserved. Both are roughly an hour’s drive away.

For a Culinary Pilgrimage: Ise Shima

If your favorite word at sushi restaurants is uni, try Ise Shima. It’s set at the tip of Mie prefecture—four hours southeast of Kyoto by shinkansen—and is known for its amas, or fisherwomen, who free-dive for sea urchin, abalone, and oysters. Sample their daily catch at any of the oyster stands along Ago Bay (it’s best to go with a guide, who will negotiate $25 all-you-can-eat deals) or at Kagetsu, a more formal spot that makes tasting meals out of lobster-infused miso soup and abalone sautéed in a foie gras-like abalone liver sauce.

An alternate plan is a noontime visit to go pearl shopping at Mikimoto, which maintains its headquarters and a small museum in Ise Shima. Stay at the waterfront Hiramatsu Hotel & Resorts Kashikojima, one of four new hotels run by Japanese star chef Hiroyuki Hiramatsu. And don’t miss a visit to the Ise Grand Shrine, one of the country’s biggest and most important monuments, which gets completely rebuilt every 20 years.

For Enchanted Landscapes: Yakushima

Cherry blossoms get all the attention, but Japan is full of natural wonder—much of it little known. Take Yakushima. This tiny island in Japan’s far south has UNESCO protection for its towering cedar forests, all draped in thick carpets of brilliant green moss.

Dreamlike hiking trails are dotted with suspension bridges, river views, and ancient trees—including one sacred cedar that’s considered to be 7,200 years old.

On the coast, you’ll find mangrove-dense beaches that are havens for loggerhead turtles; inland, you might spot unique local breeds of deer and monkeys. And in between are shops of woodworkers who give new life to fallen trees.

Stay at the sustainably minded Sankara Hotel and Spa, with 12 luxury cottages scattered throughout the forest; the innkeepers can point you toward rhododendron-heavy gardens, the island’s best natural hot springs, or firefly-filled clearings with views of the Milky Way.

For Architectural Wonders: Shikoku

The smallest of Japan’s four major islands, Shikoku is best known for its 88-temple pilgrimage route. It’s a place to take in Japan’s remarkable architectural heritage, from the Iya-no-Kazurabashi Bridge, which was built entirely out of thick vines by samurai 800 years ago, to the remote village houses in Iya Valley, which are now being restored by Japanophile author Alex Kerr as part of the Chiiori Trust initiative. You can even rent them out as vacation homes.

Focus on the most beautiful sections of the temple trail—like the five-storied pagoda at temple 31—and save time to visit the country’s oldest Kabuki theater, Old Konpira. The Edo-era homes in the town of Mima are also worth a visit: Many are now shops, selling traditionally made kimonos and wooden sandals.

Then get the ultimate contrast by visiting one of the most modern monuments in the country: the minimalist Komyo-ji Buddhist temple, where the walls of latticed joinery are the work of Pritzker Prize winner Tadao Ando. The architect has also designed a seven-room hotel in the area called Setouchi Aonagi; its concrete-framed lap pool juts out over the countryside for dramatic sunset views.

Whom to Call

Booking an off-the-grid trip to Japan isn’t especially do-it-yourself-friendly—you’re better off working with local experts who can secure insider access at famously closed-off artisan studios or exploring temples with guides who can explain their full significance. If you’re looking for a deep dive on culture, turn to Catherine Heald of Remote Lands, who has an unrivaled proficiency in Japan’s most hidden corners. Each of her trips is bespoke, and all feature top-notch guides.

For more of an active vacation—whether you want a sense of adventure or more hands-on experiences—try Black Tomato, whose co-founder Tom Marchant has a personal passion for Japan. And for true insider access, Japan Curator has an impressive Rolodex with the country’s elite, facilitating everything from brown bear safaris in Hokkaido to private dinners with the cast of a live-action manga movie.

 

This article was written by Nikki Ekstein from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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TripAdvisor Fights to Keep Its Lead in Attractions and 9 Other Digital Trends This Week

TripAdvisor

TripAdvisor bought tours and activities booking leader Viator for $200 million in 2014. The company is fighting to keep its lead in the attractions booking sector. TripAdvisor

Skift Take: This week in digital news, we took a long look at how attractions could become TripAdvisor’s next multibillion-dollar business. Don’t miss our forecasts for Priceline, Expedia, Ctrip, and Google in our new magazine: The Megatrends Defining Travel in 2018.

— Sarah Enelow

Throughout the week we post dozens of original stories, connecting the dots across the travel industry, and every weekend we sum it all up. This weekend roundup examines digital trends.

For all of our weekend roundups, go here.

>>It’s no surprise that Priceline’s CEO expects mobile use for everything in travel to increase. The question is what the online travel company plans to do about it: Priceline Group CEO Expects Mobile Payments to Catch On Like They Have in China

>>Virtual reality continues to evolve as a media format. Vendors and developers are making new concessions based on how consumers use the technology, and the high costs associated with creating 360-degree content: Virtual Reality Was Everywhere at CES but Adoption Remains Limited

>>The attractions booking sector is TripAdvisor’s to lose, especially given its recent success. But unless it pushes faster on mobile innovation, rivals like GetYourGuide and Klook might overtake the company: TripAdvisor Is Fighting to Keep Its Lead in Attractions: The Inside Story

>>From brands as experience platforms to strategic mergers, diversity messaging and beyond: These are the Megatrends in travel we’re watching closely in 2018: The Megatrends Defining Travel in 2018

>>Emerging technologies like facial recognition are still far off from hitting the mainstream of event technology. But for now, there are a variety of options that can help meeting planners become more efficient and improve the quality of their events: Complexity Increases for Meeting Planners as Digital Tools Evolve

>>Figuring out the best technology tools to improve a meeting is hard. Experimentation, within reason, is one path to creating a more efficient planning process and a more dynamic event experience: The Next Generation of Event Tech — Meetings Innovation Report

>>Points, a reseller of airline miles and hotel points, has begun to sign up travel companies to its newer ways of squeezing money out of their programs. But it’s still too early to tell for sure how successful these efforts will be: Points International Claims 2017 Growth for Its Loyalty Tech Platform

>>As a sage songwriter once said, “You don’t need a weatherman to know which way the wind blows.” Trivago CFO Axel Hefer knows that, and he said current headwinds are obviously harder to manage than tailwinds. But if Trivago can work its way out of the mess it’s in, it may emerge as a stronger company: Expedia Could Find a Silver Lining in Trivago’s Woes

>>Travel management companies have tons of data on the behavior and spending patterns of their travelers. Doing something concrete with this information, however, is a work in progress that should be solved sometime soon: The Corporate Travel Tech Revolution Is Still in the Works

>>Corporate travel is still wrestling with building the right platforms to make the most out of traveler data and behavior: Business Travelers Are Still Waiting for Personalization — Corporate Travel Innovation Report

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