Setting Future Tariff In Print

One of the vexing problems that moteliers go through every year is the need to engage a crystal ball in order to try and predict appropriate future room tariff levels. The following year’s advertising space in guide books and wholesale rate arrangements need to be fixed many months in advance.

For many operators, there is the added complication of the likelihood that GST will be raised to 15%.

So what to do?

It’s a gimmie that tariff should be increased every year by at least the rate of inflation. For a bit of indulgence the Reserve Bank Inflation Calculator is worth a look to gauge historical CPI changes.

To calculate future tariff, operators should start with their existing tariff, then add a likely guesstimate of the future rate of inflation based on historical trends, add a small margin for good measure and then round it to the nearest whole figure. This should be an exercise that will take about 10 minutes.

The main guidebooks will need to include a motel’s GST inclusive tariff rate range that is usually for 2-persons and this will need to be applicable until late 2011. Although the guidebook reps are out on the road now, it is important to realise that tariff does not have to be set in stone straight away.

I have had a few conversations with moteliers last week that were concerned about a  MANZ newsletter published recently that discussed  the probability of a GST hike in relation to motel tariff.

From what I have been told, there is an inference by MANZ that moteliers should now consider advertising tariff ex-GST. There was also mention about moteliers attaching terms and conditions (tariff riders) to published tariff such as "tariff is subject to change" or "seasonal rates may apply." 

We suggest that ALL tariff published for public consumption should remain GST inclusive. Full details of any GST changes should be announced by the government in the next Budget due on the 20 May. This will give moteliers plenty of time to amend published tariff rate ranges if necessary before publication in the main accommodation guides.

For the accommodation industry to revert back to quoting tariff ex-GST would be a giant leap backwards. Quite simply this would complicate the buying process for the consumer and add that nasty element of surprise. It has taken years to eliminate this draconian practice and it would be a tragedy to go back.

And as for adding tariff riders, this also needs to be discouraged for similar reasons. Setting future tariff requires business acumen and nous. Moteliers should be able to deliver what they promise without having to insert out-clauses.

We say that the accommodation industry should be publishing in guide books clear tariff rate ranges that cover the lowest and highest tariff for a stated number of persons for a specific term. Period.

Curious to get further feedback from other accommodation operators.

Picking Winners

We see that Labour's Sport and Recreation spokesperson, Chris Hipkins is whinging that the Rally of NZ has been denied taxpayer funding.

It appears that the usual default position for anyone holding an event is to declare that it is "an exciting tourism opportunity that will bring significant tourism dollars." This is code to demand that others should subsidize and and bear the risk.

True to form, Chris Hipkins appears to have been sucked in with the emotion and has said:

"The government ought to be proactive in finding ways to bring events like this to New Zealand and to help the Rally of NZ. Instead they have just sent them away. It's a do nothing government with no ideas for how to create jobs and grow New Zealand."

We love motorsport and anything else that burns copious quantities of fossil fuels, however if Rally of NZ organisers are unable to extract private funding from the competitors, spectators, sponsors, media outlets etc then just maybe they should be be trying harder to raise the profile of their chosen event. Maybe the organisers don't have the ability to host future international events or maybe the scale of such an event has gotten beyond the capacity of a country of  our size.

Frankly we do not know the answer, however if the expectation of corporate welfare was removed from the equation we suspect that the Kiwi petrol-head fraternity would extract from their masses the funding and the acumen that would host a kick-arse event of an appropriate scale that would reap substantial economic rewards.

We need to move on from the left wing mentality that governments create wealth and jobs. Tourism businesses and events should not be given favour and propped-up with centralist wealth redistribution. Unlike socialists wowsers, we have faith that the tourism and event marketing sectors will still be able to take on the world without the distraction of corporate welfare .

Hotel Karma Ratings

Is the travel industry at risk at drowning in a flurry of politically correct enviro-slogans?

Are the traveling public becoming jaded by the constant chest-beating and self-congratulatory back-slapping of accommodation providers that are desperately trying to hide the shame that they are a business by grandstanding their environmental, social and cultural virtues? 

Do guests really care about constant overinflated, ego-enhancing boasts by accommodation providers that are outbidding one another in a race on who can generate the most greenwash?

Well, apparently so! 

We were interested to read about a boutique travel company, Journeys Within, that believes enviro-cringe should be ramped up to a whole new level. They wish to exploit the travel market of politically correct, hand-wringing do-gooders that are inflicted with the guilt of living in a first world country by designing a new rating system for Southeast Asia hotels.

The new "Hotel Karma Ratings" measures and rates hotels based on the effectiveness of their policies to improve the world. The new rankings will help travelers who are more interested in the philanthropic work of a hotel rather than the usual: amenities, service and location.

The four-tier rating system is as follows:

Nirvana: These hotels have taken on a project or projects to support and then do so in a sustainable manner. They also take the initiative to involve their guests in the projects.


Enlightened: Enlightened hotels, similar to Nirvana ones, find and support projects that change lives or save the planet, but have not yet gotten their guests involved.


Novice: These are newbies to the game. They hire locally and give guests the option to not change their sheets and towels, but the buck stops there. While they have the right idea at heart, they have not taken the big step to become a community leader.


Non-believer: These properties have not made the effort to benefit their communities and did not even respond when asked about their practices.

At least in New Zealand, we can be confident that our official tourism quality agency would never impose such a silly, irrelevant enviro system upon accommodation providers;-)

Celebrating Human Achievement Hour - The countdown

My time management leaves a lot to be desired and I determined long ago that I am addicted to the adrenalin rush of leaving things to the very last minute.

So unusually, I have started planning one month early for this year's Earth Hour.

Naturally, I will not be joining the hippies, enviro-activists and other associated loonies around the world that will turn off their lights for one hour on Saturday 27 March 2010 in order to highlight the confused ideals of man-made global warming.

Last year we managed to bathe our motel in in light by turning on every light source we could muster as the odd building nearby sat in delusional darkness.

This year we intend to go one better and have spent today investigating hiring some industrial lighting equipment to ensure that we do our bit to confront globalised gullibility. 

After some deliberation, we have managed to reserve two of these babies from our local hire centre:  

The NIGHTSHIFTER 4000 is a self contained lighting tower that will turn night into day. Powered by a CAT diesel engine powering 4 x 1000 Watt high performance metal halide lamps.

Oh Boy! This should ensure that our motel frontage will be set ablaze by an intense white light and as an added bonus, we get to burn diesel to generate the power!

While some people return to the Dark Ages, we will be celebrating human achievement with Human Achievement Hour. Light represents man's ability to think, reason and change his environment to suit his needs.

The countdown to 27 March 2010 begins...

Entirely World Famous NZ Tour!

Entirely Kiwi, a Christchurch-based reservation specialist, recently ran a competition where the winner was awarded a three-month expenses paid trip all over New Zealand to become “Entirely World Famous in New Zealand.” This was a great campaign that attracted some good coverage in the MSM and it's not over yet...

The winner, Nicquel Rhoden will travel the length of New Zealand, participating in different activities and visiting beautiful destinations - basically just being a tourist. This vivacious Ozzie looks to be a worthy winner and her adventures will be interesting to follow.

In exchange for traveling throughout New Zealand, Nicquel will use social media to share her experiences that will hopefully generate a buzz motivating others to start their own Kiwi adventure. Along the way, Nicquel will be mainly staying at motels and this should be a tremendous opportunity to profile the New Zealand motel sector. We like that!

We were so taken with this campaign that we will be hosting Nicquel and her possie on one of her many stopovers. We also intend to drop in the odd post on "Motella" tracking her movements as she showcases the best of New Zealand travel while having a blast on her trip of a lifetime.

Follow Nicquel on: myspace, facebook, twitter, blogspot and wordpress.

We'll see you there!

Hotel Trade

Although the motel sector took the biggest hit for the 2009 year, the hotel sector was down 111,000 guest nights with international guest nights falling by 3 percent. 

It is interesting to see what effect this has had with the end of year financial results being reported at the moment. 

Millennium and Copthorne Hotels New Zealand Ltd owns, leases, manages and franchises a portfolio of 30 hotels in New Zealand under the Millennium, Copthorne and Kingsgate brands. The Company, that has hotel assets with a net book value of $326 million recorded a modest profit of $12.4 million for the year to December 2009.

Profit was down 30% and total revenue of $108 million was down from $123.7 million last year.

Trading conditions were described by the hotel's MD as "one of the firm's most difficult trading years in recent times. We remain cautious about the trading prospects for 2010 as a sustainable recovery and an increase in tourism numbers is still some way off."

Millennium and Copthorne Hotels will be paying a 1.2c a share dividend.

With optimistic announcements of new hotel developments gathering momentum as we count down for the Rugby World Cup, we think it is time to pause and reflect on the immortal words of Sir Bob Jones:

"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."

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."

The Validation of Blogging?

We enjoy from time to time the rantings of Michael Laws who seems to have an opinion on most topics of consequence - even the personal idiosyncrasies of bloggers:

“Blog­gers” are opin­ion­ated losers who spend way too much time in dark­ened rooms. They have porn addic­tions, sta­ple microwave pizza to their bibs, are blub­bery and smell.

This pecu­liar purview has been harbored ever since blog­ging became the online onanism. Which was the first day some idiot decided to anony­mously opine and imag­ined that peo­ple gave a continental.

I’m prob­a­bly still right. If I was to take a cross-section of blog­gers I’d wager that most don’t have a part­ner or a wardrobe, are in des­per­ate need of a stom­ach sta­ple and regard deodor­ant as the devil’s snare. They would also be exceed­ingly jeal­ous of each other: like lit­er­ary fic­tion writ­ers. Too many only chil­dren, I suspect.

OK, Michael has a few things wrong (we won't say which ones), however the one thing that gives us obsessive bloggers a wee thrill, is our mere mention on other blogs AND in the print media. Sorta alleviates some of those anxiety and validation issues...

So we were delighted to feature in the Tourism Business Magazine this month in a collection of blog and tweet profiles under the headline "Useful business blogs and tempting tweets."

Tourism Business Magazine is a great read and we suggest that you all go forth a purchase a copy - once you have, please correct our blog address on page 7 that was %*#@! misprinted!

Promoting Dead Tree Marketing

One of the quirks of the travel industry is that we are still trapped in a never-ending cycle of producing copious amounts of brochures and directories. We often note with dismay at the mountain of unread accommodation directories, maps, regional guides, activity brochures etc tossed aside and left behind by our leisure guests that regularly strip brochure racks during their travels.

One of the problems that the travel industry has is the increasing amount of brochures and directories produced that have little return on investment. There is also a seemingly increasing tendency to duplicate material that reduces the return of scarce tourism marketing funding and only serves non-producing tourism organisations to empire build.

The economic viability of producing mountains of printed literature is debatable. We ceased producing the regimental DLE sized rack cards for our motels many years ago.

With the Rugby World Cup fast descending upon us, every RTO, government funded institution and private tourism business will be adding further layer of dead wood promotion material to landfills with increased gusto - guess who will be paying?

We love irony and hypocrisy, so it is with passing interest we note that the self appointed guardians of environmental evangelism, Qualmark NZ partnered with their minority shareholder, the AA to produce the second edition of the Qualmark New Zealand Travel Guide.

We estimate that the 2010 edition will have a similar print print run to last year's 15,000. With a little under 900 pages, this weighty annual doorstop that cut and pastes information from other paper based material will produce over 13 tonnes of waste.

We are sure that environmentalists would be horrified, however we are more concerned about the economic viability and the opportunity cost to the travel industry. Although the Qualmark New Zealand Travel Guide is promoted to operators as a free add-on, the publication has a (substantial) cost - and it's always the operator that pays in the end.

Wotif.com Takes Flight

Robbie Cooke Wotifgroup MD and CEO 

Back in November 2009, we did a post on Wotif.com's plan to move into air travel. Yesterday, Wotif launched its new site in Australia, Wotflight (www.wotflight.com) that claims to offer one of the widest ranges of domestic Australian flight bookings available online. 

We were interested to see if there would be any attempt at packaging flights and accommodation - Well, apparently not, however we see that all flight bookings from wotflight.com will recieve a $AUD10.00 accommodation voucher that can be used on wotif.com. The voucher is transferable and valid for 6-months.

We think that the look and feel of the new site is very clean and intuitive that complements the look of its big sister accommodation site Wotif.com very well.

We like the subtlety of cross selling accommodation from wotflight.com and the simple reciprocal hotlinks from Wotif.com. A clear definition and call to action has been maintained between Wotif.com and Wotflight.com. We like that.

Wotif have ignored the temptation to package and appears to be developing two distinct brands. We look forward to Wotflight.com taking off in New Zealand later this year.

***Update*** 

A kind reader pointed out the fees that Wotflight.com will be charging.

Online reservations will incur a $AUD16.95 Booking Fee per reservation.

Unfortunately, any changes, amendments or cancellations of flights can not be done on the Wotflight.com website and must be advised via email or to a call centre. Acceptance will be subject to the terms and conditions of the airline.

Any charges or amendments that are able to be made where permitted by the airline, will incur a $AUD39.00 Change/amendment Fee.

Any cancellations that are able to be made where permitted by the airline, will incur a $AUD29.00 Cancellation Fee.

Ouch!

Tourism Industry Demands $97m Queens Wharf

Been busy at the motel this week and have decided to do some lazy blogging.

In a brief rest between bell rings, we discovered the AKT Blog (originally Auckland Trains Blog) that covers most transportation issues. 

We were interested in the discussion taking place about proposed cruise ship terminal in Auckland. The writer, Jon C doesn't necessarily assume the most common default position that the taxpayer should pay:

The tourism industry groups are stepping up their campaign for a cruise terminal in Auckland – but like the Ports of Auckland seems to expect the government (that’s you and me as taxpayers) to be paying. 

Tourism Industry Association Chief Executive Tim Cossar says the industry wants a world-class cruise ship terminal for Auckland that will meet the new Super City’s needs for the future, and emphasises that its preference is for the $97 million cruise ship facility and public open space on Queens Wharf.

He says the industry is not in favour of a short term option or temporary-fix facility that won’t meet the long term demands of the lucrative cruise market. READ MORE...