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Article by Linchi Kwok

Something to look forward to in 2019

CAL Poly Pomona 17 December 2018
The holiday season is around the corner. It is a good time for us to review the major events discussed in 2018. A quick overview will very likely inform us what we can expect in 2019.Airbnb: Into which market will it expand in 2019? This year marked the 10th birthday of the company. I wrote 24 commentary articles (excluding this one) in 2018 about the industry updates and trends, among which six (or 25%) was about Airbnb.Looking forward, Airbnb and hotels will fight in a bigger battleground in 2019. On one hand, more hotels, including Marriott, have entered the short-term residential rental market. On the other hand, Airbnb introduced two new brands --- Airbnb Plus and Beyond by Airbnb, which offer many "certified" enhanced services that are usually found in a traditional hotel.In February, Brian Chesky, the company's CEO announced "Airbnb for everyone." Besides the new products of Airbnb Experience, Airbnb Plus, and Beyond by Airbnb, Airbnb has also taken on several new initiatives, including adding hotels to its listings, teaming up with local hotels to ease the check-in and check-out experience, building peer-to-peer residential-rental-ready properties, and rewarding Airbnb's loyal customers. As an enterprise in the tourism industry, Airbnb is competing directly with OTAs (online travel agents), such as Expedia and Priceline.The most recent update is Airbnb is set to enter the real estate market as early as in 2019 --- Airbnb will soon design and sell residential homes. Airbnb is definitely more than just a room-sharing company. The question is what new territories will Airbnb get into in 2019.Other discussions about the room-sharing business in 2018 include the similarity-attraction effect in short-term residential rentals, price positioning on Airbnb, and buyer-seller similarity in room-sharing business. Tech trends: What can't be replaced by machines? Technology appeared to be another hot topic in our discussion in 2018, with five (about 20%) commentary posts. Technology products are helpful in at least four major areas: enhancing the guest experience, improving service operations, supporting sustainability, and protecting cybersecurity, according to my observations in HITEC Houston 2018 and the Hotel Experience Show in New York City.Many hotels and restaurants, however, focus more on using technology to enhance guest experience and improve operations; they might have underestimated the risks of cybersecurity. For example, McDonald's opened a new headquarter and planned to add more self-service kiosks to its stores, aiming to provide better service to the customers, and companies can now use AI in hiring and selection. Nevertheless, if companies have invested more in cybersecurity, the recent data breach in Marriott could have probably been avoided.For most workers, the advancement of technology creates major concerns to job security. The fact is machines are replacing more and more humans at work. Most recently, we also heard about the concept of self-driving mobile hotel rooms. Machines will soon complete most tasks that are perceived to be performed by human beings only.One reason why Marriott workers participated in the largest hotel strike in the U.S. history in 2018 was they worried if their hours would be cut. I am glad the strike is finally settled, but nothing can stop the advancement of technology. Tech trends will forever remain to be a hot topic.Hotel loyalty programs: Is bigger necessarily the better? Almost every hotel wants to be the "big" player in the market. This idea was supported by numerous examples of hotel mergers and acquisitions.When hotels are getting bigger, so do their hotel loyalty programs. Marriott, Accor, and Hyatt, for example, have introduced their newly combined loyalty programs. As a matter of fact, Hilton, without any big acquisition or merger in 2018, also updated its Hilton Honors Program. Even though there were glitches and confusions among the travelers for the new Marriott Reward Program, the problems are expected to be solved soon (hopefully). Let's see how being bigger will play out in 2019.Gen Z: They are taking over.Gen Zers, either defined as those who were born after 1996 or 2000, are growing up. This generation is even bigger than the Millennials in the world population. They also began entering the workforce. More discussions will probably follow in 2019 as we get to know more about this generation.Innovations and sustainability: They will never go away.Innovations and sustainability are closely related to the advancement of technology. As shown in the example of McDonald's flagship store, technology plays a critical role in service innovations. In another example where airlines, restaurants, and hotels are switching to more sustainable products, the development of green products also relies on the advancement of technology.Other topics In terms of business strategies, I discussed the dynamic pricing strategies for restaurants, hotels, and Airbnb listings. Suggestions are made for DMOs (destination marketing organizations) to improve their service to hotels. Additionally, I reviewed two predictions, one for the travel industry and the other for the restaurant industry. Lastly, I offered travelers some tips to avoid hotel hygiene horrors.As a review, what event(s) happened in 2018 caught your attention? Looking forward, what are your predictions for the travel and hospitality industry in 2019?
Article by Linchi Kwok

HX: The Hotel Experience 2018 and BD

CAL Poly Pomona 15 November 2018
Over the Veterans Day weekend, I attended the HX: The Hotel Experience 2018 and the BD | NY: A Boutique Design Trade Fair with a group of students from the Collins College of Hospitality Management at Cal Poly Pomona at the Javits Center in New York City. Also known as the "Hotel Show," the HX: The Hotel Experience 2018 is often perceived as the largest hospitality trade show in North America.What did the HX: The Hotel Experience 2018 entail? There were four components in the trade show, including HX: The Marketplace, HX: The Conference, Boutique Design New York (#BDNY), and the STR Market Study Competition. Attendees of the HX Marketplace or Conference also had access to BDNY, one strategy that helps trade shows attract more participants.HX: The Marketplace - there were more than 300 exhibitors in this part of the trade show, a place where buyers and sellers met. The exhibition hall also featured three designated areas for 30+ education sections under three areas of HX: Onstage Hotel, HX: Onstage F&B (food & beverage), and HX: Onstage Tech.HX: The Conference - this conference featured one general opening session and 15 breakout sessions that focus on three areas: Future Trends, Technology, and Operational Excellence. There were also over 50 HX: GenFWD education sessions tailoring to hospitality students.#BDNY - this was the marketplace designated for over 750 manufacturers or representatives of the suppliers for boutique-design products in the hospitality industry, such as furniture, lighting, wallpapers, artwork, flooring, bath, spa, and etc. It is expected 8,000 interior designers, architects, hotel owners, hospitality business operators, and purchasing executives will attend this trade show.STR Student Market Study Competition - this competition was hosted and sponsored by STR (Smith Travel Research); it also took place during the "Hotel Show" at the Javits Center. Since its debut in 2015, STR provides the real market data of a destination to the participating programs usually in few months before the competition. Then, the students in the participating programs (usually in a team of three to five students) will analyze the data on their own and present the results of their analysis, along with their recommendations in the competition. The judging panel will decide and announce the winning teams based on their evaluations on the students' presentations.The trends revealed at the HX: The Hotel Experience 2018I found similar trends from the HX: The Hotel Experience 2018 to the ones I observed at the HITEC Houston 2018 and CHRS2017. For example, many products are designed to enhance guest experience and improve the efficiency of operations.I was also surprisingly pleased to finally meet "Sally - the robot who makes perfect salads" on the exhibition floor. I used Sally as an example of the automatic services emerged in the hospitality industry when the concept debuted in April 2017. I am glad I was able to touch the machine in person and speak to the manufacturing team.The trends revealed at #BDNY: A Boutique Design Trade FairIt appeared to me that most products displayed in #BDNY had contemporary designs with bold colors, reflecting the recent lodging trends. First, more roof-top bar concepts/designs were popping up on the exhibition floor than the past. Then, I also noticed more booths were set up by two or more suppliers rather than by a single supplier. For example, a booth that showcased a roof-top garden design could feature six suppliers --- one provided the carpet, another supplier designed the ceiling, and the others set up the rest of the bar.Another interesting observation - More hotels are charging a destination or resort fee nowI stayed in a boutique hotel in midtown Manhattan during this trip. I was informed by the hotel chain that a $25 per night "destination fee" plus taxes would be added to my account. Such a destination fee, however, also comes with the following benefits:$25 daily food and beverage credit that can be used inside the hotel$15 daily laundry creditSelf-guided audio tour at Grand Central (up to two guests)Big Bus City Tour Ticket (at a value of about $60 per adult or $50 per child)According to a friend of mine who is also working in a boutique hotel in Manhattan, it has become more common now for the hotels in the New York City to charge a destination fee --- "One (hotel) started it, and the travelers still paid for it. Then, everybody else followed." It is not surprising to see hotels are expected to collect a record of $2.93 billions extra revenues in fees this year.Such an add-on destination or resort fee can definitely push travelers to spend more money inside the hotel. It could turn out to be a good value for those who will actually use the services. For the travelers who need not use those services every day, however, such fees can only contribute additional net profit to the hotel.Did you attend this year's HX: The Hotel Experience 2018 and/or the #BDNY? What do you think of this year's trade show?In another note, what do you think of the fact that more hotels are charging resort or destination fees? Will more hotels follow?
Article by Linchi Kwok

Do price positioning and dynamic pricing work on Airbnb too?

CAL Poly Pomona 17 October 2018
Airbnb, for example, introduced the "smart pricing" tools to assist hosts in adopting the right pricing strategies for the listing(s) they manage. Nevertheless, it is still up to the hosts to decide how much they want to charge a listing against others in the same neighborhood (i.e., price positioning) and whether or not they wish to adjust the listing price according to the fluctuating demands by the travelers (i.e., dynamic pricing), the practices often adopted by hotel revenue managers. Many hosts, however, lack professional training or experience of how to manage a lodging product or adequately price their listing(s).To gain a better understanding of how pricing strategies work the listings on room sharing websites --- a new and interruptive lodging product, it is essential to find out whether such pricing strategies as price positioning and dynamic pricing are helpful in increasing a listing's revenue performance. Additionally, will such pricing strategies' effects on listing performance vary between multi-unit and single-unit hosts (i.e., hosts managing more than one listing vs. those managing one only)?The research studyI worked with another researcher, Karen Xie at the University of Denver on an empirical study - "Pricing Strategies on Airbnb: Are Multi-unit Hosts Revenue Pros?" which was published in International Journal of Hospitality Management. In this study, we aimed to test the following hypotheses:The hypothesesH1a: Price positioning positively affects an Airbnb listing's revenue performance.H1b: Dynamic pricing positively affects an Airbnb listing's revenue performance.H2: An Airbnb listing managed by a multi-unit host has a higher revenue performance than the one managed by a single-unit host.H3a: The positive effect of price positioning on an Airbnb listing's revenue performance is more salience for a multi-unit host than for a single-unit host.H3b: The positive effect of dynamic pricing on an Airbnb listing's revenue performance is more salient for a multi-unit host than for a single-unit host.The data and the analysisWe collected the data from a research company that provides trusted data and analytics services about Airbnb. Our data represent the 10 major Airbnb markets in the U.S., which are also the top 10 metropolitan areas with largest populations and gross domestic products (GDPs) in the nation, consisting 320,243 listings operated by 216,058 hosts over 34 months from October 2014 to July 2017. The unit in our econometric analysis is A Listing's Monthly Revenue Performance. Other variables in our analysis include: host type (multi-unit vs. single unit hosts), price difference (a listing's average rate - the average rate of other listings in a neighborhood), price variation (standard deviation of the listing price in a given month), supply control (number of other listings in a neighborhood in a given month), listing control (e.g., number reviews of a listing, average rating, number of bedrooms, etc.), and host control (e.g., availability in days of a month, response time in minutes, etc.).The resultsPositioning a listing at a higher price point than the average price of neighborhood listings can significantly increase the listing's revenue performance, supporting H1a.Dynamic pricing is also effective in driving up a listing's revenue performance, supporting H1b.A listing managed by a multi-unit host out-performs the one managed by a single-unit host, supporting H2.A multi-unit host will magnify the positive effect of price positioning on a listing's revenue performance, supporting H3a.Contradicting to H3b, the positive effect of dynamic pricing is weakened for a multi-unit host.The practical implications Drawing from the results from our analysis, we make the following recommendations:For multi-unit hostTo maintain a relatively high price positioningTo be careful when using the dynamic pricing strategy to avoid its negative effects.For single-unit hostTo maintain a relatively high price positioningTo consistently monitor the market demand and fluctuate the listing price accordinglyFor room-sharing platformsTo conduct more analysis in other markets for more insights, using ours as an exampleTo provide training on the topic of price positioning to help hosts set up the initial priceTo provide market insights for hosts, making suggestions or reminders to hosts in adjusting the listing price.To offer different training sessions on dynamic pricing for multi-unit and single-unit hostsFor hoteliersTo pay close attention to those listings with a relatively high price positioning in the market and see how their price points are compared to the hotel's average daily rate.To pay close attention to the dynamic pricing strategy adopted by multi-unit hostsThe theoretical implications We establish the relationships between Airbnb hosts' pricing strategies, including price positioning and dynamic pricing, and an Airbnb listing's revenue performance, responding to the need for more in-depth analysis of the pricing strategies adopted by Airbnb hosts as entrepreneurs.Our findings reveal the important role that multi-unit hosts play in the P2P room-sharing context. The moderation effect of host type should also be considered in relevant studies.The conclusionWe believe our study addressed a few important research questions. The results provide some insightful business intelligence to several key stakeholders in room-sharing businesses, assisting them in making informed business decisions regarding the effective pricing strategies in the room-sharing sector.Through your observations or experience, what other pricing strategies can be useful in helping hosts increase listing revenues? What other research questions that need to be addressed in future studies?Note: A relevant (but somewhat different) discussion about this research is also available on
Article by Linchi Kwok

HITEC Houston 2018 - 4 themes from the exposition

CAL Poly Pomona 28 June 2018
Were you in Houston last week for HITEC 2018? HITEC (Hospitality Industry Technology Exposition & Conference) is hosted and organized by the Hospitality Financial and Technology Professionals (HFTP); it has become the world's largest hospitality technology event.I am glad I got a chance to participate in HITEC Houston 2018. I spent a day walking through the exposition, where I experienced the latest tech products available in the hospitality industry. Through my observations, I was able to identify four themes from this year's tradeshow.1. Tech products that enhance the guest experienceThe phrases of "guest-centric," "guest experience," "guest satisfaction" are almost everywhere in the tradeshow. Using technologies to improve guest satisfaction is definitely one big theme I observed in HITEC Houston 2018.Many exhibitors showcased how they can provide better customer service for hotels by integrating their tech products with the hotels' existing property management system (PMS). For example, consumers can now interact with machines more often than a real human being during a hotel stay. Machines can:Accept and manage reservationsAnswer most of the customer inquiriesAllow guests to check-in in a kiosk or with their mobile devices, select the available room for their stay, and issue a room key or activate the "keyless" option in their mobile appAllow guests to control "smart" room devices with voice commands or on their mobile apps, including lightings, curtains, entertainments (TV, radio, and sounds), and the thermosetAssist guests in navigating the hotel and the neighborhood through voice commands or with a mobile deviceMake reservations for a spa treatment and other servicesOrder room serviceMake special requests, such as setting up wakeup calls, getting additional items from the housekeeping, and etc.Review all charges during their staysCheck out with a click on their mobile devices or on the TV set in the hotel room without making a stop at the Front DeskIt seems to me, however, many of these tech products function like a customized "Alexa" by Amazon or Google's AI even though I did not see Amazon or Google had a booth in this year's exposition.2. Tech products that improve service operationsThere are also many tech products in the exposition that are designed to help hotels run smooth operations. On one hand, technologies can assist human resources in attracting/recruiting the right talents and retention management. Billing the payments can also be handled by machines.On the other hand, big data and blockchain can help hotels gain better insights into what the customers want. Many companies in the exposition want to provide business solutions for hotels to connect the dots or various footprints that a consumer left in the hotel, allowing operators to see the "whole journey" of their customers.I saw products that can predict consumer behaviors using big data analytics. The ultimate goal of this type of services is to encourage customers to spend more in the hotel (mainly through cross-selling and up-selling), helping the business maximize the revenues.Other tech products that got my attention include "smart" linens that use RFID (Radio Frequency Identification) to help hotels automatically manage inventory as well as facility management system that allow managers to keep track of the utilization, lighting, and air conditioning of the space available inside a building (hotel).3. Tech products that support sustainabilityMany hospitality businesses have already adopted green practices and pay close attention to sustainability. It is hence not surprising to find companies in HITEC Houston 2018 that provide solutions to hotels, helping them save consumptions on energy, water, and other resources (e.g., paperwork).4. Tech products that protect cybersecurityHotels are managing a tremendous amount of personal information about customers and often become the target of hackers or victims of cybercrimes. As a result, cybersecurity remains to be a critical issue and should remain on top of a hospitality business' top agenda. We must do our best to protect the customers who trust us and do business with us.What I expected to see but did not find in HITEC Houston 2018As more machines are replacing humans at work, and even the cities we live in are getting smarter than ever, I was expecting to see a few companies promoting new robots in the exposition. I understand robotic service is no longer a new concept, but I was hoping to see newer generations of robots that would "wow" me.Meanwhile, I was expecting to see more companies using facial recognition technology in analyzing consumers' reactions towards the services they received. In China, for example, facial recognition has been used in analyzing students' reactions in the classroom (note: I personally do not think that is right and would vote against using this type of technologies to monitor students' behaviors).I suggest hotels and restaurants use similar technologies to measure customer satisfaction because it is not difficult for machines to tell who looks happy, who looks boring or becomes impatient of waiting, and who looks unhappy with the experience. I assume one reason why such technology has not been used in the hospitality industry mainly is because it is still unclear where we can draw the line between protecting privacy and market research.Did you attend HITEC Houston 2018? What did you see? Did anything surprise you? * This post is also published on
Article by Ally Orlandos

Technology in Human Resource Management

CAL Poly Pomona 30 April 2018
What keeps the hospitality industry going, especially in hotels, are the employees. Human resources (HR) have become an important asset to many hospitality businesses.Since workers in a hospitality business are the ones who make connections with the guests and make sales, it is very critical to keep the employees happy. Finding the right employee that fits into the company has also become an important component of human resource management (HRM). Lately, there emerge a lot of new trends, one of which is about employee satisfaction and growth with the aids of technology.Technology in Human ResourcesHR managers and directors come up with many strategies to recruit the "right" employees. For example, HR managers are now implementing web-based programs to assist them in their day to day work. Such implications have been put into place at Pechanga Resort and Casino. With the employment pool being over 5,000, the HR managers have to have their work cut out for them. These web-based programs can help them manage the employee records efficiently. By using such programs, employees can be easily recognized and possibly get promoted quicker than if the HR managers were going through employees' performance reviews individually.With a few HR specialists handling the questions and concerns from thousands of employees, these web-based programs can be very helpful for everyone. These specific programs can help improve the happiness of employees too. For example, employees working in companies that implement such programs will be able to skip the frustration of waiting in long lines if they want to talk to the HR about a concern. Employees also have more of chances of being recognized for the hard work they are doing.My Own Experience with Technology in Human ResourcesWorking at a large resort with over 700 employees, I know it can be hard for the small HR team to deal with each individual employee on a daily basis. Being a college student, I only work on the weekends, which does not allow me to interact with the HR team who mainly works from Monday to Friday. Thankfully, my employer has made it possible to handle the majority of HR tasks online or through an app on my phone.I can complete multiple tasks with the mobile app, such as requesting time off, calling in sick, fixing anything pertaining to insurance, and others. Without this mobile app, I would have had to fill out a form with a pen and submit the form for further review and approval. One can imagine how long it would take for the HR department to process various requests from hundreds of employees in the hotel. The mobile app also comes with other features, such as internal job postings, communicating with other co-workers, and submitting a resume. The idea of attaching an employee's resume on his/her profile allows the HR managers to easily identify the qualified employees for promotions and/or job rotations. Assisted by the technology used in HRM, the HR team are able to focus on the growth of the resort as well as the employees as a whole.In conclusion, the emerge of technology has made many changes in HRM, some of which can be very beneficial. Technology's applications allow HR managers to focus more on what is best for the employees.Is it Really For the Better?In my opinions, the new technological changes that have been implemented in HR are for the better to a large extent, but there are also some other extreme changes that may occur, such as using more sophisticated technology including artificial intelligence (AI). Many professionals in the HR field also fear to lose their job or get replaced by AI. I, however, believe there will always be a place for HR as humans were made for contact with one another, but not machines. Right now, such changes seem to be positive and have made the workplace better. As there are more millennials entering the workforce, it is inevitable that there will be more technology being used in the workplace.What do you think? Is technology helping HR or killing HR? In what way?
Article by Linchi Kwok

Research reported positive effects of Airbnb's price positioning on hotel performance

CAL Poly Pomona 3 October 2017
Some of those findings are challenged by industry professionals on several grounds, including conflicts of interest involving room-sharing platforms in data analysis, methodology rigor as most of them were descriptive studies, and the oversight of some confounding factors, such as price comparison among Airbnb and hotels, which could cause bias in their estimations.Price is a very important influential factor when consumers choose between a hotel room and an Airbnb listing. Meanwhile, price is a critical variable in analyzing supplies and demands in economics. Hence, Airbnb's price positioning in a market should not be ignored when Airbnb's impacts on the hotel industry are mesasured.Accordingly, I worked with Karen Xie, a professor at University of Denver on an empirical study, which was published in International Journal of Hospitality Management [1]. Our particular interest in this study include:Purposes of the studyTo (re)assess the impact of Airbnb supply on the performance of its hotel counterparts in a market.To investigate if Airbnb's price positioning in the market, as measured in price difference between a hotel property and the hotel's nearby Airbnb listings in the same zip code as well as price dispersion among these Airbnb listings, moderates the main effects of Airbnb supply on the performance of its hotel counterparts in the market.To examine if hotels' quality attributes, including class category (e.g., budget traveler hotels vs. luxury hotels) and average ratings on online review websites, moderate the main effects of Airbnb supply on the performance of its hotel counterparts in the market. In other words, we tested if the main effects vary according to a hotel's class category and/or online review ratings.The data and analysis The dataset used in our analysis was built from three different sources, including (a) for hotel-related information (i.e., class category and review ratings of the hotels), (b) for listing-related information (e.g., listing price and characteristics), and (c) Texas Comptroller of Public Accounts for hotels' quarterly performance records in the Austin, Texas market. The dataset included 1,482 observations of 86 hotels located in 20 zip codes of the city over a period of 12 quarters from Quarter 3, 2008 to Quarter 2, 2011, covering all hotels in the Austin market during the period of observations as long as they reported financial performance data to the Texas Comptroller and received reviews on TripAdvisor. Then, we used a blend of econometrics models to perform the estimations for hypothesis testing.The results Our analysis confirmed Airbnb's negative impact on hotel performance. As the supply of Airbnb listings in a market increases, hotels' RevPAR (Revenue per Available Room) performance will go down.Interestingly, depending on Airbnb's price position, hotels may gain benefits from the Airbnb in the neighborhood. Our analysis reveals that price difference between a hotel and the Airbnb listings, as well as price dispersion within Airbnb listings are positively related to a hotel's RevPAR performance. Such results can be explained with the "agglomeration effects" of a product's strategic orientation, in which low-cost hotels can possibly yield higher RevPAR if they are strategically located in an area with many high-priced competitors (in our sample, the average price of Airbnb listings were much higher than their hotel counterparts).Furthermore, as the gaps in price difference and price dispersion increase, the negative impact of Airbnb supply on a hotel's RevPAR performance decreases significantly, supporting the moderations effects from price difference and price dispersion.A hotel's class category and online review ratings have no impacts on Airbnb supply's negative effect on the hotel's RevPAR performance. In other words, hotels of different types cannot immune from the negative impacts from Airbnb. Implications Theoretically, we added "price" as an important variable into the analysis of Airbnb's impacts on hotels in a market. Practically,We suggest managers should also pay attention to the price positioning of the Airbnb listings in the same neighborhood. When Airbnb listings are charging for a much higher or lower price than the hotel, chances are they are not competing in the same market. Yet, special attention should be given to those Airbnb listings in the same price range.If a hotel is located in a nice neighborhood with a lot of high-end short-term residential rentals, the hotel may be able to leverage the "agglomeration effects." It turns out having some pricy Airbnb listings in the neighborhood is good for hotels.Because many OTAs have already added residential rentals into their room inventory, OTAs now have the business intelligence of both hotels and short-term residential rentals. We encourage hotels to reconsider their relationships with OTAs.We also suggest hotels to consider adding Airbnb listings as part of their competitive sets what they have been doing with their competitors.In conclusion, it is no doubt the supply of Airbnb negatively affects a hotel's performance, but depending on Airbnb's price positioning in a market, such impact might not be as bad as what we thought. What other factors should researchers look into when they measure Airbnb's impacts on the hotel industry? What are your suggestions?[1] This journal article is available for free access on the publisher's website until mid November 2017.

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