Master Of The Universe - RIP Neil Armstrong

"[The launch] began with a large patch of bright, yellow-orange flame shooting sideways from under the base of the rocket. It looked like a normal kind of flame and I felt an instant’s shock of anxiety, as if this were a building on fire. In the next instant the flame and the rocket were hidden by such a sweep of dark red fire that the anxiety vanished: this was not part of any normal experience and could not be integrated with anything. The dark red fire parted into two gigantic wings, as if a hydrant were shooting streams of fire outward and up, toward the zenith—and between the two wings, against a pitch-black sky, the rocket rose slowly, so slowly that it seemed to hang still in the air, a pale cylinder with a blinding oval of white light at the bottom, like an upturned candle with its flame directed at the earth. Then I became aware that this was happening in total silence, because I heard the cries of birds winging frantically away from the flames. The rocket was rising faster, slanting a little, its tense white flame leaving a long, thin spiral of bluish smoke behind it. It had risen into the open blue sky, and the dark red fire had turned into enormous billows of brown smoke, when the sound reached us: it was a long, violent crack, not a rolling sound, but specifically a cracking, grinding sound, as if space were breaking apart, but it seemed irrelevant and unimportant, because it was a sound from the past and the rocket was long since speeding safely out of its reach—though it was strange to realize that only a few seconds had passed. I found myself waving to the rocket involuntarily, I heard people applauding and joined them, grasping our common motive; it was impossible to watch passively, one had to express, by some physical action, a feeling that was not triumph, but more: the feeling that that white object’s unobstructed streak of motion was the only thing that mattered in the universe.

What we had seen, in naked essentials—but in reality, not in a work of art—was the concretized abstraction of man's greatness.

The fundamental significance of Apollo 11’s triumph is not political; it is philosophical; specifically, moral-epistemological.

The meaning of the sight lay in the fact that when those dark red wings of fire flared open, one knew that one was not looking at a normal occurrence, but at a cataclysm which, if unleashed by nature, would have wiped man out of existence—and one knew also that this cataclysm was planned, unleashed, and controlled by man, that this unimaginable power was ruled by his power and, obediently serving his purpose, was making way for a slender, rising craft. One knew that this spectacle was not the product of inanimate nature, like some aurora borealis, or of chance, or of luck, that it was unmistakably human—with “human,” for once, meaning grandeur—that a purpose and a long, sustained, disciplined effort had gone to achieve this series of moments, and that man was succeeding, succeeding, succeeding! For once, if only for seven minutes, the worst among those who saw it had to feel—not "How small is man by the side of the Grand Canyon!"—but “How great is man and how safe is nature when he conquers it!”

That we had seen a demonstration of man at his best, no one could doubt—this was the cause of the event’s attraction and of the stunned numbed state in which it left us. And no one could doubt that we had seen an achievement of man in his capacity as a rational being—an achievement of reason, of logic, of mathematics, of total dedication to the absolutism of reality.

Frustration is the leitmotif in the lives of most men, particularly today—the frustration of inarticulate desires, with no knowledge of the means to achieve them. In the sight and hearing of a crumbling world, Apollo 11 enacted the story of an audacious purpose, its execution, its triumph, and the means that achieved it—the story and the demonstration of man’s highest potential."

Ayn Rand - 1969

Tourism NZ Banks On Hobbit

I see that Tourism NZ have uploaded the new "100% Middle-earth" promo videos to its YouTube page this week (the extended version is below).

Tourism NZ has invested around $10 million on producing the new campaign to ride on the potential success of movie audiences admiring attractive landscapes that provide majestic backdrops to on-screen Hobbit-action. Some may be unnerved by Tourism NZ banking on an influx of visitors based upon the appeal of fictional middle-earth dwelling dwarfs.

I must admit that I've lacked the patience to sit through an entire Lord of the Rings movie, however I will be attempting to endure Peter Jackson's latest mystical fantasy movie when it is released in order to fully appreciate the gush of media commentary that will ensue. 

A good chunk of the Tourism NZ campaign would appear to be social media based and it will be interesting to see if environmental zealots will use the interactive platforms to hijack New Zealand's 100% Pure branding. I suspect that any attempt to knock the 100% Middle-earth campaign in order to elevate an alarmist environmental agenda will be quickly shouted down by Tolkien fan-boys and patriotic Kiwis. 

The imagery of New Zealand looks fantastic and there is a continuation of the 100% Pure You campaign that puts the focus on real people (young and good-looking) interacting with landscapes. 

It's difficult to completely capture a realistic tourism experience that New Zealand can offer in a 2-minute promo. While potential guests may enjoy imagining themselves in a New Zealand natural setting for a portion of their holiday, they may be left wondering what first-world hotel, shopping, restaurant and night-life experiences may also be on offer?

While accommodation providers may not be impressed with a leeching, graffiti emblazoned camper-van as the only accommodation option on display, the campaign is aspirational and may trigger potential quality visitors to investigate further what the real deal is about this quirky little remote country at the bottom of the Pacific.

Will Booking.com Enable Increased Credit Card Fraud?

I note with interest that Booking.com are planing to offer a default option to stop sending customer credit card CVC codes to their accommodation suppliers.

What is a CVC code?

The CVC (Card Validation Code) is also known as the CVV (Card Verification Value) and is the non-embossed 3-digit code usually found on the back of credit cards, on the signature panel.

The 3-digit security code lets merchants know that customers are physically holding the card when they make a purchase online or over the phone. The code can be validated automatically during authorisation by the merchant and is another layer of protection that confirms that the card is in the right hands. 

Merchants that insist on obtaining a CVC at the time of transaction can reduce fraud before it happens. If a person attempts to use a card number but cannot provide a 3-digit security code, or if the number is returned as invalid, the merchant will cancel the transaction. 

There is an emerging trend for merchants to request a CVC during a mail order or online sales process and this additional security measure has to be seen as positive. Any easy process that reduces the rapid rise of credit card fraud adds to the creditability and sustainability of mail order/online sales. The travel industry have a vested interest in keeping consumer's faith in feeling secure handing over credit card details and reducing instances of fraud.

An email sent by Booking.com to accommodation suppliers on Friday announced plans to stop sending CVC codes with reservations as a default option. Suppliers can elect to continue receiving customers' CVC codes by updating the "payment preferences" in their online profile with Booking.com.

In their email to advertisers, Booking.com explains:

"Why has booking.com implemented this change? Testing in the marketplace has proven that an increase in conversion (the number of bookings you get) was a direct result of streamlining the reservation process for potential guests". 

This statement is ambiguous and we assume that Booking.com will be removing the requirement for customers to enter CVC numbers during the reservation process if the supplier applies this as a default option (ie does nothing).

Will removing the CVC field (below) really increase booking conversions? 

We intuitively know that the more easy and the less data a customer has to enter while making an online reservation - the more likely they will complete.

A quick Google search of a few online bulletin boards would suggest that there is an element of customer confusion/resistance in providing CVC numbers and this may translate to some customers feeling uneasy providing this detail during an online reservation process.

After some time, the CVC numbers that are usually printed (not embossed) on cards can become unreadable with wear, making it impossible for some cardholders to make an online reservation if the CVC is a compulsory field- is this another barrier against customers completing an online reservation?

While most merchants are tightening up on credit card security requirements (in particular with card not present transactions), will Booking.com expose their suppliers to a possible increase in credit card fraudulent transactions (charge backs) by reducing the requirement of customer's providing CVC codes in the interest of increased conversions?

It is noted that Booking.com leave it up to their suppliers to collect the accommodation cost from the customer, so the impost of possible credit card charge backs is not their immediate concern.

While I'm always open to making it easy for customers to book accommodation online - is Booking.com's default supplier option of removing the compulsion of the CVC field going too far?

Small Town Motels

An interesting newspaper clipping was sent to me. It tells a sad story of an overenthusiastic clipboard carrying council bureaucrat in Wairoa that temporarily banned a local motel from serving meals.

It would appear that a fair chunk of the motel's unique client base willingly stayed at the property because of the meal service on offer. With a stroke of a pen, the council banned the provision of meals and the motel started bleeding business.

The council admitted that it got it wrong and the motel could have supplied meals after all. Unfortunately the damage has been done with many of the motel's guests long-gone. To rub salt in the wound, the Wairoa District Council's Chief Executive had a pithy response:

"I Can't fix that....I can only say I'm sorry."

This is disgusting treatment. A tame lawyer with a bit of time on his hands could have a bit of fun here ripping the council a new one, however with the motel's business heading through the floor, the services probably would have to be offered pro-bono...

To further rub salt in the wound, it would appear that the Wairoa Council's latest rate increases are particularly harsh upon the town's motels, with one motelier claiming his rates would equate to over $1,100.00 per unit compared to the nation's average of $730.

I guess the last thing Wairoa needs at the moment are successful businesses...

"Rates hit for Wairoa moteliers"

Source: Gisborne Herald

Labour's Leadership - It's Game On!

It looks like David "Silent T" Cunliffe has returned home from overseas after a few weeks of contemplation.

Reporter, Patrick Gower tweets after Cunliffe turns up for work at the office this morning:

Heads up to any provincial motels that hold a reservation for David Shearer and his handlers as he roams throughout New Zealand looking for love on his "Heartland Tour." Expect a late cancellation!

The beard is off and it's now Game On!

Cartoon of The Week

It's only Monday, but already Hodgson nails The Cartoon of The Week!

Mondayising Bill Doubts

It is disappointing that the Tourism Association of NZ (TIA) under "new" CEO, Martin Snedden are out of step with mainstream business groups by blindly supporting Labour's Mondayising bill with the woolly rationale that this impost on business may "boost the tourism economy."

Maybe Sneddon is starting to realise that managing a collective of private small business owners is a little different from his previous position of  organising and delivering the Rugby World Cup at a loss of millions of dollars to the cheers of an adoring rugby mad public:

Doubts over benefits to tourism from Mondayising

Celebrating Individualism

The Olympic Games is all but behind us.

It would seem that all commentators are hailing the games a success as London's one-trick wave of visitors rapidly exit en-masse.

The Left would have enjoyed the centralist planning aspect of the games that brought usual commerce to a standstill. They would have enjoyed seeing £9 billion of other people’s money gambled away on nationalistic ceremonial pride with the flimsy promise that the country will reap benefits for years to come.

The left would have particularly enjoyed the celebration of Britain's National Health Service during the open ceremony and the legacy of nice-to-have sporting facilities that the productive will need to some how pay for in years to come. 

While I started off being indifferent about the games, I soon became drawn-in to watching obscure sporting events that I would normally avoid. 

Who could not be impressed by the stunning bodies and skill on display that had taken years and personal commitment to hone.

One aspect that the Left would not have comprehended was the display and celebration of individual achievement. For New Zealand this was captivated for me by the final gold medal winning performance of Lisa Carrington. All 5'6", 53 kg of muscled individual focus and determination. 

For me, Blogger Liberty Scott succinctly sums up the most positive aspects of the games:

"People who to a man and woman, tried their hardest, spent months or years training and practicing and giving it their commitment to pursue their own goals.

They are not altruists. The medals were not won so that Britain could feel great. They were not won to boost the economy or to encourage others to take up the sport.

They were won by people who wanted to win as their individual achievement - including those in teams. It was a desire to be the best.

This in a world where the word "elite" is taken as a sneer that success comes only from privilege, this in a world where individual success in so many fields is taken as a chance to demand a pound of flesh for everyone else. A world where those who make things happens by applying their mind and energy to ideas are simply seen as obliged to carry everyone else along with themselves. A world where so many see those as succeed as hosts to suck the blood from.

Further to this has been the unashamed joy of those winning, with justified personal pride that their own effort and skill have paid off. However, also delightful has been the joy of many of those who did not get gold. Why? Because they gave it their all, they blamed nobody else for not getting gold, if they did blame someone it was themselves. Total responsibility for their actions and result. This one year after London was beset by riots from those expressing the antithesis of this. Nihilistic parasites destroying, invading, stealing, blaming it on the Police, blaming it on society, blaming it on the government, when their motivation was a combination of euphoria from destruction and personal gain directly at the expense of others.

Yet those celebrating and enjoying the Olympics have not just been those competing and their team mates, families and coaches, but the spectators both in person and on television. Much of that has been a patriotic joy at seeing British men and women succeed, particularly as the story of so many of them is one of coming from an average background, deciding to pick a sport, finding they do well and wanting to do better. However, it isn't just some blind nationalism. Usain Bolt's success has captured the imagination of millions, many of whom have no connection to Jamaica. Michael Phelps likewise. Indeed one of the great points noticed by many athletes have been the spectators, predominantly British, cheering on the winners, regardless of nationality.

This celebration of success, achievement, personal, is overwhelmingly positive."

The Motel Ratchet Clause

I see that the Motel Association of NZ (MANZ) have recently taken a swipe at unsympathetic motel landlords and the pesky (and appropriately named) “ratchet clause" that determines lease rentals can rise, but not fall.

A motel lease is an agreement that is unique in the business world. Splitting up a freehold going concern can satisfy two distinct parties - the long-term freehold investor and the leasehold owner of the motel business. Most motels in New Zealand are set up this way.

Generally a motel lease starts off at a 25-30 + year term. This long term agreement can be problematic as set terms and conditions apply over a longer period of time than most other types of business lease agreements and the parties can endure vast changes in economic conditions.

This arrangement generally works well assuming that the market steadily improves over the term of the lease, however economic road bumps along the way can cause heartache - and there is a perception that any angst will tend to fall upon the leaseholder.

Motel landlords that have the largest stake in the deal expect to receive a fair return on their investment and rightly so. Many motels only exist today because of the long term leases prevalent in the industry that have allowed a lower entry point into buying and running a motel business.

It is accepted that the costs of operating a motel have increased often well above general inflation. The old days of the 1/3 1/3 1/3 rule - 1/3rd revenue to rent, 1/3rd revenue to costs, and 1/3rd revenue to operators profit (before drawing, tax, depreciation etc) is under threat as freehold owners have often pushed hard at rent reviews to get a higher percentage. This has caused operating pressures for some motel lease holders.

The squeeze on the operating costs has been to the detriment of maintenance. Generally the landlord is only responsible for maintaining the buildings in watertight condition - although sometimes this isn't clear-cut if it can be determined that the leaseholder didn't undertake required maintenance that may have prevented moisture entering the building! 

While the ratchet clause may pose a barrier for some motel properties wishing to catch a break over hard economic times, probably the bigger problem with motel leases is how maintenance and refurbishment is prescribed over the term of the lease, well before a crisis point is reached.

Older leases generally don't have a maintenance fund for future R and M and those leases that do may only require 3%-5% of the annual rental. Over the course of a lease (in particular the later years), this reinvestment in buildings is often scarcely adequate to keep up-to-date.

Ongoing investment is also required in motel chattels that form part of the tangible assets of the lease. Most lease agreements generally leave the management of these over to the leaseholder and inactivity/mismanagement in required refurbishment can quickly leave a motel behind-the-times in offering the travelling public what they expect.

The motel stock in New Zealand is aging and some older leasehold motels have become past the best economic use of the land well before their time. This is frustrating for both the landlord and the leaseholder and can be predominately due to an inadequate schedule of repairs and maintenance and refurbishment undertaken by a revolving door of past leaseholders that have stripped value.

While the motel industry looks warily at the scrum of alternative accommodation sectors such as bed and breakfasts, apartments and private accommodation, the real competition has come from the hotel sector. In spite of hard economic times, the hotel sector have retained up-to-date skilled management, reinvested in their product, operate well in the online environment and have managed to effectively deliver and communicate to the public stratas of consistent quality brands. 

All is not doom and gloom as the motel industry is still a valid product that offers value to the travelling public. Large pockets of motels that are run by switched-on moteliers have managed to keep ahead of the game and operate profitably. They have been able to maintain or increase the value of their leasehold investment by keeping up maintenance, increasing tariff, growing occupancy and buying additional lease years at reasonable prices.

FOR IMMEDIATE RELEASE

Rent rises strangling small business says Motel Association of NZ

The relentless rise of rents is acting as a handbrake on many small businesses and in turn restricting the country’s economic recovery, says the Motel Association of New Zealand (MANZ).

The prevalence of “ratchet clauses” within rental agreements does not reflect the economy or the sector in which the business operates, and assumes the tenant is able to absorb rising costs year in and year out, says MANZ Chief Executive Michael Baines.

“Rents are one of the many costs of doing business which are caught in an upward spiral. This is at a time when the country’s economic recovery is still tentative and global uncertainty threatens,” Mr Baines says.

“Obviously it is to no-one’s benefit to see businesses go to the wall under the pressure of rent rises. So we’d like to see landlords take more of a partnering approach and realise that a tenant paying a manageable rent is better than no tenant at all,” Mr Baines says.

More than 75 per cent of MANZ member motels are in premises that are not owned by the operator. Like many businesses at the smaller end of the scale, the pickup in the nationwide economy does not see the benefits flow evenly to everybody.

Some moteliers are still feeling the pinch after slow years in the tourism sector, while some parts of the country, such as the South Island outside of Christchurch, are continuing to struggle.

New Zealand is in danger of forgetting the boom and bust days of the 1980’s when tenants had to pay ever-increasing rents even as buildings stood empty.

“We’d like to see these ‘ratchet clauses’ phased out of rental agreements and replaced with something that more accurately reflects the businesses’ sector and it’s ability to cope with price increases.”

“By working together, we will build a better and healthier economy in the long run,” Mr Baines says.

Will The Razor Signal A Leadership Challenge?

Looks like the red team have some leadership issues? 

As David Shearer stutters his way around the country staying in provincial motels, watch out for David Cunliffe reaching for the razor. 

If the beard goes, Shearer is in trouble...