The Motella 2012 Predictions

As we look forward to leaving 2011 behind us, we can now focus on the likely predictions relating to the motel industry for next year. Right off the bat we can confidently say that in 2012, trade will continue to be challenging.

With the majority of accommodation businesses unable to fill-their-tanks over the RWC, there is a real risk that many will sink into the depths of winter-blues mid 2012. "Just one-more hard winter" may yet again be the catch cry for next year as accommodation providers tough it out in time for an improving economy over the summer season late next year.

Motels that are well located, have reinvested, offer a good quality product and friendly, professional service will always do well - others next year may continue to struggle. 

We can be thankful that New Zealand is in a relatively fortunate position and it will never be as bad as the naysayers' predict.

Here's our top 15 predictions for 2012:

1. Some Online Travel Agencies (OTAs) will go bust. OTAs have had a period of upheaval and consolidation over the last few years. While online sales will continue to rise, the phenomenal growth experienced as customers gravitated en-mass to online channels is now behind us. Some OTAs may experience growth by continued acquisition, but not at the rate of previous years. Large Northern Hemisphere OTAs are playing the long game and investing unsustainable resource to gain market share. There will be some smaller operations (and a few larger ones) that will be unable to sustain the pace and will not last the distance next year.
2. The Google factor. Google's master plan for world domination of the travel industry appear to be under wraps for now. As the majority of travel decisions are filtered through their search engine, Google have the power to influence consumer behavior and dominate the travel industry. How Google will skirt around anti-trust laws and maximise this influence in 2012 remains to be seen. Google is unlikely to involve itself directly with the travelling public, instead they will cash-in on numerous levels of search advertising and developing/licensing further platforms such as Hotel Finder.
3. OTAs will attempt to raise commission rates. OTAs are experiencing a declining growth in demand along with increased competition. Fickle consumer behavior is necessitating an increase in the ratio of staffing levels per transaction. For OTAs to remain visible, increasing investment in marketing is required (Google is the big winner here) and the cost of new and improved technology is increasing. While traditional agents operating from bricks and mortar on highstreets have been able to maintain commission levels for many years, there seems to be an irony that web based agencies may not be able to sustain the same levels.
4. Some airlines will go bust. The profitability of many airlines have always been volatile and further offshore based casualties may cause ripples in New Zealand.
5. Quality will overtake Environmentalism. Accommodation providers will give green-initiatives less priority in 2012 as the focus is diverted to the necessity of investing in quality. The consumer is increasingly looking for value, but does not want to compromise on quality. After experiencing difficult economic times, eco-guilt is fading. The consumer has a sense of quality entitlement and is starting to resent miserly accommodation eco-practices dressed-up as saving the planet. Accommodation providers will be responding to customer demands by delivering tangible quality customer experiences. In 2012, economic sustainability will replace grandstanding green-wash  
6. 100% Pure. Tourism New Zealand will continue to edge the 100% Pure slogan away from a perceived environmental reference to a focus more on the visitor experience. The new aspirational moniker "100% Pure You" has been introduced this year and there will be continued subtle development in a move away from a reliance on marketing natural landscapes.
7. Qualmark NZ Ltd. Expect some fireworks as Qualmark impose their newly signed-off quality assessment criteria for motels and commences its new regime of inspection by surprise. The motel sector having dragged-on the review process of its assessment criteria longer than any other sector will get a reality-check in 2012 when the new criteria is applied. In line with ever-changing customer expectations, some star ratings will need to fall and those motels that relied upon the previously embedded Enviro-award to boost their star ratings will get a double-whammy.
8. Domestic travel People will still travel in 2012. There will be a modest growth in commercial travel in 2012, as most companies realise that they must continue putting reps on the road to maintain sales. Leisure trade will continue to be challenging as customers are distracted with the perception of "cheap" overseas travel and any must-have consumer-item with a screen on it.
9. Local Government. Moteliers that have faced the brunt of local rate increases will be disappointed with the lack of action after this year's review on the performance of local government. The rationalisation of council operations and the introduction of private enterprise is unlikely to occur in 2012. Expect further council blow-outs next year exasperated by localised RWC expenditure.
10. Bed Tax. This bogey will not die - be vigilant that this still may be raised from "left field" in 2012.
11. Will 2012 be the year of the mobile channel? Maybe - The hype will reach fever pitch as new players line up to offer accommodation providers with directory-style listings. Accommodation providers will also need to consider investment in their existing websites to convert them into mobile capable sites. 
12. The rise of the "Apartment" sector This year, the motel sector by allowing jealousy, ego and insecurity to rule, have cut loose the apartment sector. The motel industry have let the genie out of the bottle and have enabled a small independent new accommodation sector to be formed. Watch this small but perfectly formed sector establish itself and grow in 2012 and present a new appealing accommodation option to the public.  
13. The rise of the "Holiday Home" sector TradeMe's Holidayhouses and AA's Bookabach remain popular travel websites as a flood of privateer homeowners remain willing to expose themselves to the short term accommodation market. The web stats suggest that a vast number of Kiwis planning a trip seem to be at least willing to have a voyeuristic look at the emerging holiday home sector while considering accommodation options.
14. Last minute travel. The last minute model of selling inventory online will continue in 2012 with the average booking lead-in time reducing further. The introduction of copycat mobile apps like Get a Room that only offer rooms after midday on the day will encourage this trend.
15. The rise of Social Media? Social Media will continue to rise in popularity as businesses jump in with a me-too attitude. Those already in this space will be wondering if the time and effort is worth it and sadly 2012 will not reveal a clear answer to this question. The promise of social media channels evolving into a mainstream method of marketing for the accommodation industry is still some time off.

Have we missed anything out?