Why are Tainui spending $80 million on a hotel development?

On the heels of last weeks report that Hotel du Vin has gone into receivership (with more hotels predicted to follow), it has been reported that Tainui is planning to develop a luxury $80 million hotel in Auckland in time for the 2011 Rugby World Cup.

At Motella we have been scratching our heads and wondering about the sanity of investing in the hotel business at this time? Do Tainui know something that we don't or have some inside knowledge?

...Err, probably not! With a little bit of investigation, we found the imortal words of Sir Bob Jones written several years ago that appears to explain what is happening here:

"Talk to hotel owners and you will find they live on eternal optimism. Always they'll explain about next year, how the new marketing plan, the new chain alliance, the new wing, the refurbishing plan will make them come right. But with hotels next year never comes. In an unfettered competitive environment, hotels like airlines are programmed to lose money and over any sensible period of assessment, say ten years, they all do."

Hmmm... so Hotels are not a good investment at the best of times?

Is the Rugby World Cup an example of missplaced optimism?

And, why would Tainui invest in a hotel development now?

"The players become captivated by what they are doing. When assessed over any period of time they never make any money but the owners don't care that much. They become satisfied with mere survival so long as they can carry on. And of course, once involved, they're locked into their financial predicament compensated only by their addiction.

Some major players - the big names, Sheraton and the like - are in fact awake to the realities. Consequently they no longer own hotels. Basically they're a franchise operation, renting their name, offering a pooled marketing service and clipping the actual hotel owners ticket for a piece of their turnover, only they are not hoteliers as everyone assumes but hotel provisioners. They all started out as hotel owners but eventually they woke up. Generally the actual hotel owners wouldn't swap place with them as they love owning their hotels so much. Owning a hotel is a highly addictive pursuit and for some affluent individuals an ego gratifying hobby.

Hotel owners envisage themselves in a sparkling chandaliered hotel lobby; greeting celebrities, politicians and the like when they arrive. The cruel reality is that the owners spend most of their time in backyard financial crisis meetings."

C'mon Sir Bob, surely you can't be suggesting that Tainui will be investing $80 million simply because they are addicted to the sparkle, glamor and ego enhancement of hotel ownership?

Brilliant Recession Busting Idea

At Motella were scour the internet for recession busting ideas to assist our fellow accommodation industry players.

If you want to increase your occupancy by a whopping 250%, then why not consider turning your accommodation business into a "Love Hotel"?

Problem solved?

From feedback sent directly to us, we have been aware for some time that people have been having difficulties posting comments on our blog.

Hopefully we have now solved this problem and encourage our faithful readers to change their voyeuristic tendencies by sharing their worthy observations in our commnents section.

Simply click on the "comments" link below each post and an individual window will open. Type in your insightful comments, choose a profile (anonymous if you wish) and then click on the "publish" button.

Go on - stir it up. We look forward to hearing from you!

Target Aimed At Hamilton Motels

The hidden camera segment on TV3's entertainment/consumer program, Target managed to feature one of their perennial favorite subjects - motels.

View the show: HERE

Over the last two years, Target have featured 16 motel properties and follow a similar routine of recording the check-in process with a hidden camera, testing bacteria levels in kitchen/bathroom areas and shining the dreaded UV light on bedding and in the toilet area.

Motels were visited that could accommodate 2 adults and 2 children in Hamilton. Tariff ranged from $110.00 to $185.00.

We would imagine that it would be relatively easy for the show's producers to select certain motel properties that would give the shock horror results necessary to entertain the average voyeuristic viewer. There is a concern that findings at the negative end of the scale will be seen to be commonplace, instill unnecessary consumer anxiety and reflect badly on the motel industry.

This ambush, reality TV style can be most concerning to moteliers. We note that some of the unsavory findings have been reported HERE, however any protest would get little public sympathy and would be counterproductive. Although we could question some of Target's methods, there is simply no defense for finding less than high cleaning standards in the motels that are featured.

Our congratulations to Aspen Manor Motel that scored extremely highly on the show. I have stayed there myself and it is a great property with excellent operators. Interestingly they were the highest tariff for 4 people at $185.00 - very reasonable we would have thought.

Hopefully the biggest lesson that could be gleemed by viewers is that: "you get what you pay for."

Holiday Fever Continues

Ashley Johnston is not a happy chap.

He had the misfortune of purchasing a AUD $99 Holiday Fever membership after receiving an unsolicited phone call from a telemarketer. This was under the assumption that this would give him and his wife numerous nights accommodation and meals at a wide range of hotels and motels.

After receiving the membership pack from Holiday Fever, he found that the vouchers enclosed were virtually worthless.

After investigating Holiday Fever on the web, he found other disgruntled clients and our post: "Accommodation Voucher Scams"

From our point of view we have a particular dislike for any ambiguous scheme that reflects badly on the accommodation industry.

We have done several posts on our blog about Holiday Fever (and others) and these posts generate a lot of web traffic. We can tell when there has been another flurry of activity by their telephone marketers, as our web traffic rapidly increases from their potential customers doing research via the web. We like to think that we have assisted a few potential clients of Holiday Fever avoid being scammed, however it is frustrating that nothing further can apparently be done (?) as this offshore based company continues to operate unobstructed in New Zealand.

Ashley Johnston, a South Island farmer is usually a reserved, mild mannered "good keen man." He believes that all relationships should be based on trust and he has an ardent sense of natural justice. Mr Johnston has picked a fight with holiday Fever and wishes to get in contact with other clients of Holiday Fever to see if he can generate some course of action.

We say, good on him!

For those that have had dealings with Holiday Fever we urge you to contact Ashley Johnston by email: m-aj@farmside.co.nz or give him a call on 03 3027197.

And let us know how you get on...

AA Supreme Host of the Year

The Academy Awards of motelling is held annually at the Motel Association of NZ (MANZ) Conference.

The AA Supreme Host of the Year is a coveted award that recognises hosts that exceed in customer service. This year the winner will be announced at the MANZ conference in Blenheim held over the last weekend this month.

What I like about these awards is that there is recognition of the motel industry's biggest point of difference - The hosts. The award underlines that motels are part of the "hospitality industry" and the way they provide customer service and host their guests sets them apart from the scrum of other accommodation providers.

Moteliers are traditionally a reserved lot, so this award is an opportunity for them to gather, celebrate and pay homage to those that a doing that little bit extra providing excellent quality customer service.

The 2009 award finalists are:

• Best Western Camelot Court, Christchurch
• The Edgewater Motel, Te Anau
• Manukau Motor Lodge, Manukau

What Is The Future of Accommodation Ratings?

How credible are the reviews for motels and hotels and what is the future of accommodation ratings?

The Internet has allowed opinionated critics to rate accommodation options by offering the benefit of their wisdom and insight. Global travel sites such as: TripAdvisor, TravelPost and IgoUgo that are complimented by popular social networking platforms such as Facebook and Twitter aggregate popular opinion. Everybody can now be a critic and the general public are more than forthcoming to offer their opinions.

In New Zealand, Travelbug.co.nz and Ezibed.com are two examples of sites that collect direct customer feedback that can be considered by prospective guests before making an accommodation booking.

Guest online reviews are written by legions of "anonymous" people. Should we be concerned that they have no formal training and some reviewers could possibly be holding unusual bents or grudges? And what about possible influence by the operators themselves?

Qualmark New Zealand is New Zealand tourism's official quality agency and grade tourism product including accommodation of providers that choose to pay their license fee. Trained assessors are contracted to roam the country with clipboards, evaluating accommodation in 3-4 hour stints using an exhaustive list of criteria. The star gradings are a credible comparison between other accommodation options that have also been assessed by Qualmark.

There has been questions raised about the the cost to the New Zealand taxpayer and the limited amount of properties that are willing to subscribe to Qualmark. Are Qualmark focused on what consumers really want? Is their further risk of political influence, especially after the recent forced introduction of their environmental criteria?

Some larger hotel chains have used internal rating systems for many years. Probably the best example of self rating in its rawest form can be seen on wotif.com where accommodation providers have the option to self-rate their quality level alongside those that use Qualmark ratings. On the face of it this would appear to open up an opportunity for abuse. After all, operators are ranked on the site according to their ratings.

In practice however this works remarkably well, with most operators inherently aware that they will face the wrath of the consumer if they overstate their quality level. There are some exceptions and generally if operators get it wrong, wotif can either pull the listing or encourage re-assessment of the published grading based on customer initiated feedback (ie complaints!).

The accommodation rating business appears to be well covered, however there has been the recent launch of a new company that has a goal of "becoming the premier source for independent, professionally produced and in-depth hotel reviews." Oyster Hotel Reviews, is the new kid on the block and has a new way of rating and reviewing accommodation.

Oyster Hotel Reviews plans to establish create a large database of independent reviews compiled by trained journalists employed as full-time employees, not independent contractors. Each review will be about 2,000 words, accompanied by candid photographs. OK, the site has yet to fully cover the globe, however the journalistic review model is interesting and different.

So what is the preferred model that will endure by delivering the consumer the most easily assessable, widely used and credible way of quality assessing accommodation choice?

• Is it the TripAdvisor model that allows the actual users of accommodation to rate their experiences?
• Is it the accommodation operator self-rating model?
  
• Is it a government subsidised central planning model using contractors?
• or..is it the new Oyster Hotel Review model that employs travel journalists?
  

For us it is a no brainer. A quality rating system that has low overheads and aggregates direct consumer feedback in real-time will endure. After all, isn't the consumer always right? The question is, who can successfully harness this model to introduce a widely used and credible accommodation quality rating system?

Will TripAdvisor further grow to dominate this space or will there be other players that will take up the opportunity?

We have had a tip off from industry insiders that there will be further moves by at least two major accommodation reselling businesses commonly used by New Zealand operators that will indroduce customer reviews to their offerings - the rating war looks like it may get crowded - watch this space!

The Times They Are a Changing

Running a small business can appear to be overwhelming at times. The environment changes so rapidly and it is up to the operator to adapt or be left behind.

As business operators, we not only have to second guess what the consumer wants now, but second-guess what they will want in the future.

So how fast are things changing?



Hat tip: Whaleoil

And the Winner is...

In our competition to: Name that Motel we received several emails, however they all arrived after a comment posted on this blog.

....so, we are pleased to announce the winner is: Lawrence who is the Chief Cabbage of web development company, Cabbage Tree Creative specialising in web based software and design for tourism.

Well done that man! A Motella prize pack will be sent off to you next week.

Oh..and the answer was of course one of Palmerston North's iconic properties: Hacienda Motor Lodge. Resident hosts, Deb and Stu featured on the video clip.

The best no-tell motels in New York City

The Arabian Nights room at the Kew Motor Inn, New York

At Motella we like to share our pithy views and give measured advice on a wide range of issues relating to the motel industry - OK, we admit that sometimes we go off-task!

Every now and again we like to take a walk on the dark side and tackle those...er... broader industry issues.

....So, finally we can answer that perennial question: Where can you go for a cheap ’n’ discreet shag—no reservations necessary in New York City!?!

We have fully investigated this probing question and have listed our our suggested accommodation options below. Click on the website links to fully appreciate these fine and gritty establishments.

The Liberty Inn
Sixty dollars for two hours or $70 for three buys you a room with adjustable mood lighting and strategically placed mirrors. For $15 more, upgrade to one of the romantic-interlude rooms; you’ll score a Jacuzzi and a 42-inch plasma-screen TV, which may come in handy thanks to its six free porn stations. We particularly like that the room shots on their website includes pictures of the guest room ceilings! 51 Tenth Ave between 13th and 14th Sts (212-741-2333, libertyinnnyc.com)

St. Marks Hotel
It’s competitively priced at $60 for two hours, but if you or your partner(s) have a hard time getting off quickly, you may want to head elsewhere: Each additional hour costs $30. The plus: The hotel accepts only cash and traveler’s checks, so your name can’t be traced. Rooms include showers and TVs with porn. 2 St. Marks Pl at Third Ave (212-674-0100, stmarkshotel.net)

La Semana
For a spa-like sexperience, snag one of the suites with a Jacuzzi and steam room (three hours for $100). If you’re on a budget, opt for a room with a Jacuzzi only (three hours for $85), or a standard room ($73 for three hours). Showing identification is negotiable, but you must be over 18. 25 W 24th St between Broadway and Sixth Ave (212-255-5944, lasemanahotelnyc.com)

Kew Motor Inn
Trek to Queens—the motel is 15 minutes from the Kew Gardens–Union Tpke stop on the E or F train—and get more bang for your buck (literally). Live out your fantasies in one of the nine theme rooms, including Arabian Nights and Oriental Delight (weekdays $63 and weekends $71 for three hours). Or just order room service in one of the standard rooms (weekends $55 and weekdays $51 for three hours). No ID needed if you pay with cash. 139-01 Grand Central Pkwy at Charter Rd, Kew Gardens Hills, Queens (718-969-3000, kewmotorinn.com)

Days Inn, Brooklyn
This brand-name motel is just three blocks from the 36th Street subway station via the D, M, N or R. The staff checks IDs, but makes no record of them and accepts cash or credit cards, but not checks. Rooms run $60 for three hours on weekends, $50 for three hours on weekdays and $15 more for a Jacuzzi. Extend your stay ($99/night) and receive a complimentary breakfast before your walk of shame. 437 39th St between Fourth and Fifth Aves, Sunset Park, Brooklyn (718-853-4141) daysinn.com