Chefs+Tech: What Happens After the TV Cameras Stop Rolling?

Food Network

TV’s Guy Fieri visiting La Isla restaurant in Hoboken, NJ. Food Network

Skift Take: When the TV cameras show up, restaurants should be concerned about who is in front of the camera, not just what’s on the menu.

— Kristen Hawley

chefslogo_use-for-socialEditor’s Note: In September we announced that Skift was expanding into food and drink with the addition of the Chefs+Tech weekly newsletter.

We see this as a natural expansion of the Skift umbrella, bringing the big picture view on the future of dining out, being fanatically focused on the guest experience, and at the intersection of marketing and tech.

The Guy Fieri Effect

All press is good press… usually. And when The Food Network calls, how can a small business possibly say no? Restaurant Hospitality details what happens to a small restaurant when the cameras— in this case the cameras that support Food Network star Guy Fieri — show up. What happens? Exactly what you’d think happens: viewers near and far descend on the restaurant to try whatever it is they saw on television. And this doesn’t just apply to the restaurants; specific menu items see instant increases in popularity.

Given the popularity of destination-oriented food shows, “Triple D” isn’t alone in its ability to give a tiny restaurant instant celebrity. “Anthony Bourdain ate here” has become a badge of honor for restaurants both on and off the beaten path; travel basically anywhere in the world and there’s a Bourdain-approved list of restaurants to visit and the on-demand television footage to go with it. There’s also a new website to support it, too.

Generally, this interest is great. But it also adds another level of branding complexity. It’s almost not enough to get your business on the radar of a TV star — you might be concerned which TV star associates themselves with your brand. (I’d be wrong not to admit that when Fieri visited my favorite bakery in Paris, Du Pain et Des Idees, I groaned worried at the attention it might bring the standout bakery in the 10th arrondissement.) There are also logistics to consider: higher visibility means longer wait times, higher food costs, and perhaps less loyal customers who are boxed out of a favorite local haunt. Still, it seems sentiments are mainly favorable when the TV crews come to town — but how long until not being featured on a television show becomes the new badge of honor?

And Again: Restaurants Cater to Instagram-Lovers

“Instagrammability” may not be a word, but it’s solidly in restaurant business plans around the world. A Financial Times piece describes how the photo-driven social network has quite literally changed restaurant design in the UK. “If you search on Instagram by London restaurants and food, a lot of beautifully executed shots come up on fine china but you’d be hard pressed to say where they were without looking at the geotags to identify them easily,” says one restaurateur quoted in the piece.

As previously noted in this newsletter, instantly recognizable touches that photograph well and share easily help a restaurant attract the oh-so-important Instagram-loving audience. The piece profiles one restaurateur who just “invested an undisclosed sum in making his restaurant more Instagrammable.” For him that means whiter plates and dishes that look unique and photograph well. People have noticed, he says. The piece continues, describing current restaurant-Instagram trends (millennial pink!) and how they’ve influenced how designers think about creating distinct spaces. Still, it’s scary to consider the tens of thousands of dollars spent revamping a restaurant to look good in a square photograph and how any one of those trends could be a literal flash in the pan.

Is UberEats Leading Local Delivery Expansion?

Where I grew up, I could count on pizza delivery… and that was it. There was no push-of-a-button instant gratification (get off my lawn!) But now, lead by what’s happened in major cities, food delivery from all sorts of restaurants is coming to the suburbs en masse. A piece in the San Diego Tribune explains how, in the southern California city,UberEats’ move to the suburbs is changing the way local restaurants do business.

In short: because Uber has the ability to scale its delivery service so quickly, its competitors (and there are many) are scrambling to look beyond the big cities and into the suburbs for more customers. And, according to the piece, this is causing a “turf war” of sorts as all of the delivery companies race to be the best in any given market. With UberEats leading the charge, as the piece suggests, competitors must hustle to catch up. This likely means competitive pricing and lots of marketing promotions for the consumer, and an increased rate of innovation and development at the companies. The internet has already disrupted food delivery, so I think what we’re waiting for is a disruptor of this disruption — and that company will be the clear winner in a seriously crowded space.

Want Free Nuggets? It Only Takes 18 Million Retweets

One hungry Wendy’s fan is on a quest for a year’s worth of free chicken nuggets, attempting to appeal to 18 million Twitter users for help. @carterjwm tweeted to@Wendys asking how many retweets it would take for the restaurant chain to give him free chicken nuggets for a year. “18 million” was Wendy’s reply. And as of this writing, he’s managed 2.6 million retweets. (Even Wendy’s is surprised!) To be honest, 18 million retweets is probably a stretch goal, even on a platform touting 313 million monthly users. But even if he doesn’t make it to 18 million, there’s another way: T-Mobile CEO John Legere offered him a year’s worth of nuggets if he switched his cell service from AT&T to T-Mobile. And if he does make it to 18 million, United offered him a free flight to any Wendy’s in the world. (Though that was before that, uh, other thing that happened.) Regardless: the power of a single tweet… and a super-strong social media team. Go fast food Twitter!

Get Those “Snapplications” Ready

In continued fast food marketing innovation, McDonalds restaurants in Australia are accepting job applications via Snapchat. Prospective employees are invited to share a 10-second Snapchat video though a special McDonalds-themed lens, which serves as a “preliminary application.” After screening the videos, McDonalds sends applicants a link to the company’s formal hiring application. (The lens also lets applicants add hats and nametags to see what they might look like behind the counter at the fast food chain.)

Digestifs:

  • Good Eggs has a new plan for food delivery — SF Chronicle
  • This image went viral, but 3+ iPads at the service station  is real life for restaurants managing multiple delivery services — @cabel on Twitter
  • Jay Rayner’s review of Le Cinq in The Guardian is everything — The Guardian

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HotelPlanner Picks up TravelTicker: Travel Startup Funding This Week

HotelPlanner

HotelPlanner is single-handedly trying to rectify the online travel industry’s gender imbalance. HotelPlanner

Skift Take: The group booking company is on an acquisition spree. Plus, other startups raise funding for booking platforms for serviced apartments, event spaces, and branded budget hotels, while one Indian booking site gets a new investor owner.

— Sean O’Neill

Each week we round up travel startups that have recently received or announced funding. The total raised this week was more than $9.45 million.

>>HotelPlanner, a reservations platform for group hotel bookings founded in West Palm Beach, Florida, has acquired Travel-Ticker.com, a content site offering hotel deals and news that is based in United Arab Emirates. TravelTicker’s traffic is being redirected to the acquirer’s main site. The terms of the deal were not disclosed.

HotelPlanner.com chief executive Tim Hentschel says more acquisitions are to come. It recently acquired Hotel Hotline, Hotelsatanywhere.com, and InternetHotels.com. About one out of every 20 group bookings in the U.S. goes through HotelPlanner’s system, the company says.

>>Zen Rooms has received $4.1 million investment, in a further ratification of the branded budget hotel trend in India and Southeast Asia that has been led by companies like OYO Rooms, which has raised $180 million.

The Series A round is led by Red Badge Pacific and SBI Group. The company was founded in 2015.

>>Japanese online retailer Rakuten has invested $2.8 million in a Series A investment round in MetroResidences, a serviced apartments company for corporate travelers.

MetroResidences was founded in 2014 in Singapore, its main market so far. It will use this funding to expand into major Asian cities like Tokyo and Hong Kong. It has raised $3.5 million to date.

Rakuten keeps investing in small travel companies. Its venture arm recently led a $5 million round in the San Francisco-based tours-and-activity software provider Xola and a tours-and-activities marketplace, Voyagin.

>>HeadBox, the peer-to-peer online marketplace for event spaces, has raised $1.75 million (£1.4 million) in its latest funding round, with angel network Wild Blue Cohort participating. That brings the London-based company’s total funding to $3.54 million, to date.

The 15-employee company launched in October 2015 as a matchmaker for event organizers, managers, personal assistants, agencies, and venues like hotels. It has expanded from London to include other British cities, such as Liverpool and Manchester. Investors include a former CEO of Dyson, a former CEO of IPG Media Brands, and a former CEO of InterContinental Hotels.

>>In a personal capacity, the director of tours company Cox & Kings, Urrshila Kerkar, has taken a majority in stake in Gurgaon-based travel start-up We Are Holidays. The investment is not disclosed but is estimated to be more than $800,000.

We Are Holidays, the online travel information and booking portal, was founded in Gurgaon in early 2011 and has previously received raised more than $2.5 million.

Check out our previous startup funding roundups, here.

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Chinese Travelers Set a New Record for Global Tourism Spending in 2016

Dan Peltier  / Skift

Chinese tourists, like those pictured here in Singapore, spent $261 billion on foreign trips in 2016. Dan Peltier / Skift

Skift Take: With less than five percent of Chinese travelers holding passports, last year’s spending totals for international Chinese travelers represents only a fraction of the market’s spending potential as millions more Chinese choose to travel abroad each year.

— Dan Peltier

Chinese travelers venturing abroad spent $261 billion on foreign travel in 2016, a 12 percent increase over 2015, and that represents a new record for global outbound tourist spending.

Chinese tourists spent more than any other country’s outbound travelers last year and are already the largest outbound travel market with some 135 million Chinese traveling outside China last year, a six percent increase year-over-year, according to data released this week by the United Nations World Tourism Organization (UNWTO). China has been the largest outbound travel market since 2012 and its tourist spending has had double-digit growth each year since 2004.

The World Travel & Tourism Council also projects that China will be one of the 10 fastest growing markets for leisure travel spending through 2026. Chinese travelers were also the second largest market, after the U.S., for their contribution to global GDP last year (more than $1 trillion).

Japan, Korea and Thailand benefited the most from outbound Chinese tourist spending but the U.S. and Europe also saw more spending from China. Increased Chinese spending in Europe comes as more Chinese travelers reconsider the continent for trips after being deterred by terrorism attacks during the past two years.

After China, the U.S. was the second largest outbound market for tourism spending last year with $122 billion spent on foreign trips, up eight percent from 2015 ($9 billion). Germany, the UK, France and Italy were also in the top 10 for outbound tourism spending. Despite Brexit and a drop in the pound, UK travelers’ foreign trips were up by five million (seven percent) in 2016 to 70 million trips and outbound spending was about $64 billion.

UNWTO’s Secretary-General, Taleb Rifai, said global outbound tourist spending results for 2016 are very encouraging. “Despite the many challenges of recent years, results of spending on travel abroad are consistent with the four percent growth to 1.2 billion international tourist arrivals reported earlier this year for 2016,” Rifai said in a statement. “People continue to have a strong appetite for travel and this benefits many countries all around the world…”

The chart below shows the world’s ten largest source markets for outbound tourism spending in 2016.

Top 10 Markets For Outbound Tourist Spending in 2016

Rank Country Spending ($U.S.) % Growth Over 2015
1 China $221 billion 12%
2 U.S. $122 billion 8%
3 Germany $81 billion 5%
4 UK $64 billion 10%
5 France $41 billion 7%
6 Canada $29 billion 0%
7 Korea $27 billion 8%
8 Australia $27 billion 8%
9 Italy $25 billion 1%
10 Hong Kong $24 billion 5%

 

Source: UNWTO

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The Airline Industry’s Tech Problem — Digital Marketing News This Week

United

United had a terrible, horrible, no good, very bad week. United

Skift Take: Technology-driven innovation has done wonders for airline industry stock prices. But is that innovation also doing wonders for passengers? Right now the answer seems to be no.

— Jeremy Kressmann

What’s left to be said at this point about United Airlines’ horrific passenger “re-accommodating” situation from last week? Putting aside the company’s misguided thinking about everything from customer service to crisis communications, there may be an even bigger issue lurking beneath the surface: Any company, not just United, can get into trouble when it prioritizes procedure over customer-first thinking.

A great explanation of this phenomenon comes from Amazon founder Jeff Bezos in his yearly letter to shareholders. As Bezos notes, good companies don’t get overly focused on “process” at the expense of customers.

“Good process serves you so you can serve customers. But if you’re not watchful, the process…becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right.”

Related to this, a focus on “process” can be intertwined with a corporate habit of letting the existing technology dictate what happens to customers.

Technology can do great things for the travel industry. As we’ve already highlighted in this very column, technology is often the travel industry’s solution to every potential problem. And in many respects, technology has allowed the airline industry to make great strides in efficiency and lower prices.

But the hidden danger to this approach is that when things go wrong, technology is often the main point of failure.

In fact, taken to its logical extreme, technology is helping airline executives justify some seriously bad decision-making that dehumanizes the very airline passengers it was originally meant to serve. As Rohit Talwar notes:

“This represents a massive red flag for organisational digital change programs and those pursuing “employee” light AI-first automation strategies. The risk is that we create hollowed out businesses that are too rigid and incapable of responding to both predictable variations and truly unforeseen challenges.”

What Role Did Tech Play in Last Week’s United Airlines Debacle?
Technology has undoubtedly played a vital role in helping improve the airline industry. But is it possible to take technology-driven improvements too far? Farhad Manjoo argues that ugly incident that took place last week was a direct result of an airline industry that overly relies on technology, innovation, and efficiency while ignoring the needs of its customers. Read more

How WestJet’s Approach to Loyalty Keeps Customers Coming Back
There’s plenty of stories in the news lately about airlines mistreating their customers. But one airline that doesn’t fall in that category is WestJet. The Canadian carrier has consistently won praise from passengers for its top-notch customer service. How do they do it? Here are five highly relevant lessons for today’s airline industry. Read more

Airlines Make More from Frequent Flier Programs Than Their Operations
What business are the airlines in again? You might think that as airlines, their central source of income was from transporting passengers. But according to new reports, airlines are making more these days from lucrative frequent flier credit card programs. Read more

How Will Brexit Impact the Travel Industry?
Now that we know Britain is leaving the European Union, what impact should travel marketers expect on their business? There are some potential implications for the industry to keep in mind, including problems with exchange rates, changes in booking habits, and possible complications with visas. Read more

Expedia Experiments with VR for Room Previews
There’s been plenty of hype about the potential for virtual reality to transform travel industry marketing. But while the technology has some exciting potential, there’s been less written about its potential applications to different sectors. Expedia’s potential use of VR for room previews offers an excellent example. Read more

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Airports Installing Quiet Rooms for Autistic Children

Diarmuid Greene  / True Media/Shannon Airport via Associated Press

This March 29, 2017 photo shows Ryan Cunningham in the Sensory Room at Shannon Airport in Shannon, Ireland. Shannon is one of several airports offering quiet rooms for travelers on the autism spectrum. Diarmuid Greene / True Media/Shannon Airport via Associated Press

Skift Take: Kudos to airports that are providing services for an often-forgotten segment of the population, autistic kids.

— Dennis Schaal

Quiet rooms for children on the autism spectrum are popping up at airports.

Shannon Airport, which serves the southwestern region of Ireland, opened a “sensory room” for children and adults with neurodevelopmental challenges, including autism, on March 29. The room is located off the airport’s departure lounge. It’s designed to be a soothing place, with features like a wavy wall and color-changing lights. The official opening of the room came ahead of World Autism Day on April 2.

On this side of the Atlantic, there are quiet rooms at airports in Myrtle Beach, South Carolina, and in Atlanta.

Delta opened a multisensory room at Hartsfield-Jackson Atlanta International Airport in April 2016 in partnership with The Arc, an autism advocacy group. The room, located in a quiet space on F Concourse, contains a mini-ball pit, bubbling water sculpture, a tactile activity panel and other calming features.

The quiet room at the Myrtle Beach airport also opened in April 2016. It came about after a local mom, Becky Large, approached airport administrators about providing “some sort of support for families.”

“We came up with a quiet room at baggage claim, which has worked out wonderfully,” said Large, who runs a group called Champion Autism Network and has two children, one of whom has Asperger’s. A caregiver can stay with a child in the room while someone else “retrieves bags and rental cars. There are cubbies and seating and a glass door so the child can be cordoned off and can’t run away. It gives them a place to decompress.”

London Heathrow opened a quiet room in 2013 as part of a family lounge in Terminal 3. Though it’s mainly for children, it’s not necessarily for those with autism. It’s open to any family that would like to use it.

Some airports and airlines also offer families with travelers on the spectrum opportunities to become familiar with airport experiences that may be stressful. Harrisburg International Airport in Pennsylvania, for example, offers a “Wings for All” program that allows children with autism and sensory processing disorder to experience a run-through of what it’s like getting on a plane, getting ticketed and getting seated so that they’ll know what to expect when it’s time for a real trip.

A similar program took place at Myrtle Beach earlier this year, and Shannon launched a customer care program last year, providing special caps and wristbands for travelers with autism and other special needs so staff can identify them and interact appropriately.

“Going through security even for those without autism can be challenging,” said Michael Schiferl of Chicago, whose daughter is on the spectrum, but it’s even more challenging for kids who are easily overwhelmed by beeping machines, taking off shoes and crowds. He said TSA workers have been “very helpful” when told of his daughter’s special needs.

Large also had her hometown, Surfside Beach, which is near Myrtle Beach, declared an “autism-friendly destination” last year, after restaurants, hotels, parks and other venues participated in training on how to interact with children with autism. For example, she said, they may “become overstimulated by light, sounds, smells, crowds,” so a restaurant might seat their family in a “low-traffic area away from the kitchen.”

Large said a bigger goal is to increase understanding at all levels for special-needs children who may exhibit unusual or awkward behavior.

“Many times when we leave the house with our kids, people look at you like you’re a horrible parent,” she said. “It results in a lot of judgment. Many people stay home. Our mission is to have them come out and play with us.”

This article was written by Beth J. Harpaz from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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The Digital Battle to Improve Traveler Experience — Skift Corporate Travel Innovation Report

Jana Asenbrennerova  / Reuters

Corporate travel management companies are developing new solutions to solve problems for travelers. Passengers wait for their delayed flights after an Asiana Airlines Boeing 777 crashed and burst into flames as it landed at San Francisco International Airport in San Francisco, California July 6, 2013. Jana Asenbrennerova / Reuters

Skift Take: Big corporate travel players are finding solutions to improve the experience for their travelers. American Express Global Business Travel’s acquisition of booking tech company KDS last year shows one way forward.

— Andrew Sheivachman

The Skift Corporate Travel Innovation Report is our weekly newsletter focused on the future of corporate travel, the big fault lines of disruption for travel managers and buyers, the innovations emerging from the sector, and the changing business traveler habits that are upending how corporate travel is packaged, bought, and sold.

SUBSCRIBE HERE FOR WEEKLY UPDATES

The Future of Corporate + Business Travel

As we’re wrapping up our month-plus Corporate Travel Disruptors Series here at Skift, one of the most prevalent themes among corporate travel’s biggest companies is the daily challenge presented by both technology and world events.

Doug Anderson, CEO of American Express Global Business Travel, told us this week that shifts in technology aren’t the only challenges facing the corporate travel industry.

“The disruptors are called disruptors because they create challenges, they create the need to change and innovate,” said Anderson. “I think we’re in a good position in that regard. Some of the things that are current events today create challenges; hopefully they’ll be short term, like the travel ban that is now working its way for the second time to the court system… There are always technical challenges; technology doesn’t always work perfectly. But we strive and drive to make sure that our technology is reliable and that our systems and our applications are up and running all the time, every time. Those are challenges.”

In a world where perfection is almost impossible to achieve, corporate travel giants are partnering with technology providers and startups that provide new ways to solve old problems. Check out our Q&A with Anderson to find out more.

— Andrew Sheivachman, Skift

Social Quote of the Day

United: Cops will drag you off.

American: Same

Delta: Same

Spirit: You have to drag yourself off, but we will punch you in the face.— @Lollardfish

Business of Buying

CEO Interview: How American Express GBT Tackles Innovation: American Express Global Business Travel is investing in technology to give travelers better digital tools and a more streamlined booking experience. Read more at Skift

Virgin America’s Elevate Loyalty Program Will Fold on January 1, 2018: Virgin America’s Elevate members now have an official timeline for when their loyalty program is going to fold. Read more at Skift

Delta Execs Downplay Importance of Basic Economy: Delta says it is using basic economy fares to help better differentiate its products. The jury is still out on whether it will help them compete on routes where they face low-cost competitors. Read more at Skift

How the Meetings Industry Is Attempting to Redefine Its Value Proposition: The Joint Meetings Industry Council’s “Iceberg” project is ambitious in terms of defining the value of the meetings industry more holistically, but there are a lot of challenges to provide the in-depth case studies required to quantify that successfully. Read more at Skift

EU Finds Most Travel Websites in Europe Mislead on Pricing Information: It is not a shock that some websites in Europe — and elsewhere — mislead consumers on pricing as initial search results don’t match final price. But the extent of the problem as cited by the European Commission, without naming names, is appalling. Read more at Skift

British Airways Announces a $495 Million Investment in Premium Experience: British Airways has finally come around and started investing in its business class cabin. But it may be too late to catch up with Delta, United, and the Middle East carriers. Read more at Skift

Disruption + Innovation

Hyatt to Offer In-Room Streaming Entertainment Worldwide: Our guess is, pretty soon, this will be as standard as those in-room iHome docking stations for your iPods, only a whole lot more useful. Read more at Skift

Microsoft Bets on Artificial Intelligence to Help It Succeed Again in Travel: Microsoft thinks that voice-powered internet gives it a shot — via voice assistant Cortana — at upending today’s travel search funnel, which is dominated by Google’s search results. The theory’s plausible, but Microsoft needs to move faster to win. Read more at Skift

Airlines and Airports Look to Biometrics to Improve the Passenger Experience: Consumers are more comfortable with biometrics than ever, and we can probably thank Apple for that. Now airlines are starting to ask whether they might use facial recognition, fingerprints or iris scans to make the passenger experience better. Here’s hoping they succeed. Read more at Skift

Good Airline News Today? You Still Won’t Be Able to Make Calls on Flights: While we were never really excited about the move to make calls on planes, the other lesson from this is that Americans really don’t trust their fellow Americans to have any manners whatsoever. Read more at Skift

COMMENTS

Skift editors Hannah Sampson [hs@skift.com] and Andrew Sheivachman [as@skift.com] curate the Skift Corporate Travel Innovation Report. Skift emails the newsletter every Thursday.

Subscribe to Skift’s Free Corporate Travel Innovation Report

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Trump Hotels’ New Scion Brand Won’t Arrive in Dallas Anytime Soon

Trump Hotels/Scion Hotels

A rendering of a hotel lobby, as depicted on the Scion Hotels’ website. Trump Hotels was in talks to bring the Scion brand to Dallas but plans have fallen through. Trump Hotels/Scion Hotels

Skift Take: … And so the political blowback begins.

— Deanna Ting

Plans have been shelved for a proposed Dallas hotel carrying the Trump Organization’s Scion brand, according to a city council member who met with the developer of the proposed $50-million project on Tuesday.

Dallas councilman Philip Kingston said he was informed by Mike Sarimsakci, founder of Alterra International, that he plans to team with a different hotel operator for the downtown site. Kingston said he met with Sarimsakci and others yesterday at Dallas City Hall at Sarimsakci’s request. The decision came after Kingston and another council member criticized the developer’s plans to go into business with President Donald Trump’s company, Kingston said.

“Mike is trying to proceed with the project but the Trump Organization is no longer the operator he is seeking to do a deal with,” Kingston said.

Neither Sarimsakci nor representatives of the Trump Organization immediately responded to calls and emails for comment after regular business hours. The news was reported earlier Wednesday by the Dallas News website.

Sarimsakci said in February that the Scion project would be funded by individual investors in countries including the U.S., Turkey, Qatar and Kazakhstan. The 220-room hotel was set to open in the first quarter of 2019. Trump’s family company, now run by his two oldest sons, would have licensed the Scion brand and managed the hotel, and didn’t plan to invest any equity capital, Sarimsakci said at the time. He said he had signed a letter of intent with the Trump Organization.

‘Bad Brand’

Kingston said he is a Democrat who voted for Hillary Clinton in the November election. He said Trump’s anti-Mexican and anti-Muslim campaign rhetoric, along with his actions and conflicts of interest as president, influenced his objections to the Scion project.

“The president is a bad brand and we have to protect the Dallas brand,” Kingston said. “We’re trying to sell ourselves internationally as a city that’s welcome and open for business travelers, new residents, innovators, young professionals and the president is an extremely bad brand,” Kingston said. “He’s a hateful and ignorant man who says things that are hurtful to the people I care about.”

Kingston, a practicing lawyer, said Trump’s “disregard for the rule of law and for the decisions of the judiciary is specifically hurtful to me and my profession.”

The new hotel Sarimsakci plans to develop is “still likely to have foreign money backing it,” Kingston said, citing his conversation with the developer.

©2017 Bloomberg L.P. This article was written by Hui-yong Yu from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Skift Editor’s Note: Read Skift’s interview here with Trump Hotels’ CEO Eric Danziger. It includes a discussion about whether the Trump name could potentially impact the hotel business’ growth.

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Airlines Tie CEO Pay to Customer Satisfaction

Southwest Airlines

Airline CEOs Gary Kelly of Southwest (shown above), Oscar Munoz of United and Ed Bastian of Delta have part of their compensation linked to how customers view their airlines. Pictured is Kelly at a Metro Atlanta Chamber Insights on Leadership Luncheon August 22, 2011. Southwest Airlines

Skift Take: Well, this is something that airlines do right: Linking their CEO pay to customer satisfaction. Perhaps the linkage should be even greater although perhaps Southwest has a bit more respect for its customers than some of the others.

— Dennis Schaal

Angry United Airlines customers can now vent their fury at a juicy target: the chief executive’s pocketbook.

United ties about $500,000 of CEO Oscar Munoz’s annual bonus to customer satisfaction questionnaires. The manhandling of a doctor dragged off an overbooked flight in Chicago– and Munoz’s response, widely viewed as ham-handed — doesn’t figure to help his cause.

Each day, United collects about 8,000 customer surveys on items such as legroom and the quality of in-flight coffee. Fliers were already pretty disgruntled. In 2016, researcher J.D. Power rated United dead last of traditional North American carriers. Early returns are now even less promising.

“United Airlines just sent me a customer survey about my flight yesterday,” Meredith Tucker deadpanned on Twitter after the overbooking episode. “Looking forward to sharing my thoughts.”

Of course, Munoz won’t be begging on street corners if he’s docked the half a million. The CEO has 2016 target compensation of about $14.3 million, according to his employment agreement. The actual amount for last year is expected to be disclosed by month’s end.

In a filing, the company’s board said executive pay is “designed to further our objective of aligning the interests of our employees with those of our stockholders and customers.” United declined to comment.

Hashtag: Awkward

Southwest Airlines Co. also ties part of CEO Gary Kelly’s bonus to a measure of customer loyalty. Delta Air Lines Inc. links a part of CEO Ed Bastian’s annual long-term stock award to customer service.

At the airline officially known as United Continental Holdings Inc., the board mentions “customer satisfaction” in the pay filing no less than 20 times. The company didn’t specify exactly how that’s calculated, though the bonus is tied to improvement of the survey results.

Presumably, dragging customers out of their seats won’t help. A Twitter wag named Joe Householder wrote, under the hashtag, #awkward: “Based on experience, the guy on the #united flight is getting his, ‘tell us about your trip,” email survey about now.”

Another Twitter commentator said he actually received one, which asked, “According to you, why do we consider ourselves the best airline to fly with?”

His answer: “beats me.”

–With assistance from Michael Sasso

©2017 Bloomberg L.P.

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

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Skift Podcast: What Hotels Are Doing to Win Your Loyalty

prayitnophotography  / Flickr

The Hyatt Regency Orange County is shown in this photo. prayitnophotography / Flickr

Skift Take: Tune in to hear how hotel loyalty programs are changing — and what that means for the traveling public.

— Hannah Sampson

skift-podcast-logoThis is the year that travelers might have to start questioning their hotel loyalties, if only because hotel loyalty programs are changing so much.

Marriott is merging its program with Starwood’s SPG. Hyatt’s new program just launched. And Hilton recently announced a slate of new features.

And all of these changes are taking place as online travel agencies continue to lure many travelers driven by price rather than points, and up-and-coming accommodations providers like Airbnb win fans without even offering a loyalty program.

On today’s episode of the Skift podcast, we’re talking hotel loyalty: who’s doing it right, who’s still trying, and how it is continuing to evolve.

Our guest is Gary Leff, founder of the View from the Wing blog and an expert on points programs. He joins podcast host Hannah Sampson and Skift hospitality editor Deanna Ting.

We’ll also hear from some interviews that Ting did at the Americas Lodging Investment Summit in L.A. with Scott Berman, U.S. hospitality and leisure practice leader at PwC; Best Western Hotels & Resorts president and CEO David Kong; and Langham Hospitality Group CEO Robert Warman.

 

Start listening to The Skift Podcast, today. Subscribe via iTunesSoundcloud or RSS.

Listen to all the Skift podcasts here.

Ryan Wolkov

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Author: Ryan Wolkov

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Everything AccorHotels Has Acquired and Invested in Over the Past Year

AccorHotels

AccorHotels’ $2.7 billion purchase of Fairmont Raffles Hotels International was the biggest of many investments and acquisitions the company made within the last year. AccorHotels

Skift Take: AccorHotels is buying up and/or investing in a lot of other companies in its pursuit to become an entirely new breed of hotel company.

— Deanna Ting

If it feels to you as though AccorHotels has made a new deal every few weeks or days for the past year, you wouldn’t be far off the mark.

Indeed, the Paris-based hospitality company has completed a number of investments over the past year, snapping up other hotel brands or entering into partnerships with them, getting into alternative accommodations, and acquiring adjacent businesses that can supplement its core hospitality business.

It’s only April now, and already the company has announced five deals and partnerships for 2017. In 2016, the company had approximately eight of those transactions, the largest of them being its $2.7 billion purchase of the Fairmont, Raffles, and Swissotel brands.

What follows is a closer look at each of AccorHotels’ most recent acquisitions and/or investments, including some insight into why and how each one plays a part in the company’s plans to be a new kind of hotel company.

Joining the Alternative Accommodations Revolution

Unlike its peers, AccorHotels hasn’t been shy about actively investing in or even buying alternative accommodations providers. While the rest of the hotel industry is content to say that sharing economy businesses like Airbnb and the like aren’t much of a threat, or that they cater to a different clientele, AccorHotels CEO Sebastien Bazin thinks that kind of thinking isn’t just bad but “irresponsible.”

“It would be absolutely foolish and irresponsible to fight against any new concept, offer, or services like this, let alone fighting against the sharing economy,” Bazin told Skift shortly after the company announced its $168-million purchase of onefinestay. “This is where the world is leading us. All of those new services are very powerful and very well implemented and executed. You need to embrace it.”

In addition to buying onefinestay last year, Accor also made a 49-percent investment in Squarebreak, a French-based high-end vacation rental platform that specializes in Europe, and 30-percent investment in Oasis, a Miami-based platform for “home meets hotel” lodging.

Earlier this year, Accor also announced its intent to buy Atlanta-based Travel Keys, a private vacation rental broker with more than 5,000 villas worldwide. Accor has said it expects to close this deal by the second quarter of 2017.

With each of these investments, it’s clear that AccorHotels is positioning itself for a long-term advantage over its peers, and even Airbnb itself, especially now that Airbnb also owns its own private, luxury vacation rental platform too. When combined, each of AccorHotels’ investments fill out a comprehensive portfolio of alternative accommodations, from upper upscale (Oasis and Squarebreak) to luxury (onefinestay and Travel Keys).

Source: AccorHotels financial filings

Expanding Its Luxury Portfolio

Another area in which it’s clear AccorHotels wants to grow its portfolio is its collection of luxury hospitality brands, a sector where Bazin has admitted AccorHotels has previously lacked strength and expertise. Now, however, with AccorHotels’ multi-billion-dollar purchase of the Fairmont Raffles Hotels International (FRHI) in 2016, as well as its strategic partnership and 5-percent investment in Banyan Tree, the company is proving it’s a formidable player in the luxury space.

Last year, the company carved out its own luxury division, AccorHotels Luxury Brands collection, to be led by veteran luxury hotelier Chris Cahill who previously served as COO of FRHI until 2012. This division includes the Fairmont, Raffles, Swissotel brands, as well as the Sofitel, Pullman, and MGallery brands, among others.

And while AccorHotels’ partnership with Banyan Tree could prove challenging, the company is already seeing success since its acquisition of FRHI last summer. During AccorHotels’ full year 2016 earnings presentation, Bazin said, “Within barely seven months we have signed 20 new contracts at Fairmont, Raffles — more than they had signed over the last two years in fact.”

Forming Very Strategic Hotel Partnerships

In addition to AccorHotels’ partnership with Banyan Tree, the company has also made a number of focused investments in other hotel companies — Huazhu, 25hours Hotels, and Rixos Hotels — in an effort to grow the company’s presence in these global regions (China, Germany/Europe, and Turkey).

The first of these was with China-based Huazhu, which is listed on Nasdaq as China Lodging. In January 2016, Accor struck a deal with Huazhu to work with the company to grow its portfolio in China and in doing so, it signed contracts for 70 hotels in 2016 alone in China, three times more than the company did in 2014, and with another 150 in Accor’s pipeline. As part of Accor’s partnership with Huazhu, Accor also took a 10-percent stake for $193 million in the share capital of Huazhu, and Bazin joined Huazhu’s board of directors. That investment, Bazin said, has more than doubled to be worth $390 million as of February of this year.

“That’s because this market cap has increased from €1.9 billion to €3.9 billion on the NASDAQ, the market cap,” he said. “And the last year in China, we probably made much more than we made in China over the last 35 years. That was exactly what we told you we would do a year and a half ago when we talked with you about this partnership in China.”

In November 2016, AccorHotels announced it had made a 30-percent investment in Hamburg-based boutique/lifestyle chain, 25hours Hotels, in an effort to help that brand grow globally. 25hours Hotels CEO Christoph Hoffmann told Skift that AccorHotels wants to help his brand grow in markets that include Asia and the U.S. and to increase the brand’s distribution channels.

In March 2017, the company also announced a long-term joint venture with Antalya, Turkey-based Rixos Hotels, which operates 20hotels primarily in Turkey and the Middle East. Under this partnership, AccorHotels will eventually own a 50-percent stake in the joint venture management company and will integrate 15 Rixos properties into its network. The remaining five city center hotels will be reflagged to AccorHotels brands and will be managed by Accor.

Adding Complementary Services

AccorHotels’ ambitions of being a new breed of hospitality company are also reflected in its investments into complementary service providers like concierge service John Paul, and soon enough, events specialist Potel & Chabot.

During the company’s most recent investor presentation, Bazin said the addition of John Paul, in particular, would play a major role in how people interact with AccorHotels as part of its efforts to provide services for locals who live and work near the company’s hotels. Accor bought an 80-percent stake into John Paul in November 2016.

“What can I offer them by way of service?,” Bazin asked the audience. “Food and beverage? Dry cleaning? Key service? Leave their luggage? Recover a rental car? Drop it off? When you enter that universe, you say, ‘My God, I have everything that the digital world wants.’ I have John Paul [concierge services] where I can interact with them. [We’re] changing, radically, your mindset, and entering revenue that can grow 20 to 30 percent a year.”

In March, AccorHotels announced it would partner with Edmond de Rothschild Investment Partners to buy French events company Potel & Chabot, which operates major sporting events like the French Open tennis tournament and the 24 Hours of Le Mans endurance race. If Accor is successful in the deal, it will own 40 percent of the company, its partner will own 51 percent, and the remaining 9 percent will be retained by current majority stakeholder 21 Centrale Partners.

AccorHotels has said that an investment in Potel & Chabot would help the company develop new food and beverage offerings for MICE (Meetings, Incentives, Conferences and Events) guests, as well as locals through a concierge service. Investing in the company would also open up opportunities for Accor to offer exclusive experiences at these events for its loyalty members.

Driving Bookings

Following AccorHotels 2015 acquisition of Fastbooking, which allowed the company to open up its booking platform to independent hotels who are not otherwise affiliated with AccorHotels, the company has also made a number of recent investments into driving even more hotel bookings, both for its own properties and those independents whom it works with via Fastbooking.

Both of these very recent investments include the April 3 acquisition of VeryChic, a website platform that specializes in flash sales for hotel rooms, and the April 5 purchase of digital specialist Availpro for an undisclosed amount.

All three of these investments (Fastbooking, VeryChic, and Availpro) demonstrate Accor’s commitment to being a trusted third-party provider of services for independent hotels, and not just the hotels it directly operates or manages.

Graphic Design: Ping Chan

Ryan Wolkov

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Author: Ryan Wolkov

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