* required

Vacation rentals: More parallel universe than accommodation?

June 30, 2012

Portugal's Algarve region, which forms a bulk of that country's tourist market, has witnessed what is yet to be seen, at least in scale, in other parts of the world: a raft of scams in the area of so-called "parallel accommodations" which are touted as an alternative to regular hotels.

The region's association known as AHETA recently put out a warning to the traveling public "want to stay-cate to be careful about booking into unlicensed rental properties – so-called ‘parallel accommodation’ – through the internet, which can sometimes turn out to be scams. The president of the assocation urged prospective vistors to "not let themselves be fooled by tempting offers often advertised via websites" and noted that "in recent years the number of fraudulent situations of deals done over the Internet regarding unlicensed holiday accommodation, which is neither legalised nor registered with local councils and many times doesn’t even exist, have soared" The AHETA went on to suggest a few simple preventive measures such checking with local townhalls to verify the authenticity of the renters.

The foregoing, as has been noted, is unfortunately not a problem peculiar to Portugal. The New York Times last year reported on a vacation rental scam in London. More recently, New York city too recently witnessed a similar scam when a tourist having prepaid for a "bed and breakfast" on Prince street arrived only to find that the address did not exist.

New York is one of a handful of cities that makes it illegal to rent rooms as alternatives to hotels with the city shutting down several illicit operations offering in the recent past some of whom were offering dorm rooms for a mere $25 or 3 bedrooms for $195. There are scores of other examples many of which go unreported. In the end more regulation or even enforcement may not solve the problem in a seemingly caveat emptor universe that still prevails on the internet. Travelers are best served by exercising caution. The old and trite adage that if it is too good to be true it is not true evidently holds.

Stimulating business travel

June 23, 2012

The Wall Street Journal had a somewhat intriguing report a couple of months ago headlined "The Trust Molecule". Centered on the hormone Oxytocin the Journal article showed how "appears to be the chemical elixir that creates bonds of trust" and "why some people give freely of themselves and others are coldhearted". As a feel good chemical messenger Oxytocin seems to promote positive outcomes in a number of areas including business travel.

The latter seems to be a real if tongue-in-cheek basis for advice on promoting business travel in a report in Britain's Financial Times. The FT's report entitled "Business Traveller: Getting Travel Approval" has suggestions for corporate executives on how to snag permission for business travel from superiors. One pointer held out by a psychologist notes that the "best argument is Oxytocin as it's the bonding chemical generated by touch, such as handshakes, and proximity. You cannot generate it without phsyically being there". The expert points out that "they (business contacts) are likely to interpret your behaviours more positively". Further, apart from "reading body language" business trips also enable personal opinions.

 However, straitened travel budgets may be on the wane per a recently released report from American Express Global Business Travel. The financial and travel services giant says business travel pricing from its Business Travel Monitor shows the average prices business travelers are paying to be higher. American Express goes on to offer some advice to companies on "proactively supporting employees in making the best travel purchasing decisions to help them stay within budget as they continue to hit the road." The travel giant reports all around growth in hotel and airline business on both the domestic and international front ranging from 1 to 6%.

The Financial Times column also addressed another perennial factor that dogs travel approvals: the tendency to view them as boondoggles as was the case for travel to Las Vegas which was (in)famously pilloried in the aftermath of the financial crash of '08. The FT suggested the tried and tested response to the tendency for people to view business trips as “jollies". An explanation to the powers-that-be of the business benefits accruing from the trip even if it seems obvious would be a good place to start.

Ultimately, as this report in the Harvard Business Review points out, so long as the handshake and not a written contract remains the most effective way of conducting business, business travel, when smoothed for business cycles, has only one way to go: up.



Customer Interaction in the Multi-Channel Age

June 16, 2012

Between the web, mobile and social media, the recent past has witnessed a proliferation of touchpoints for customer interactions with some industries like hospitality and airlines often actively encouraging and engaging customers across platforms. A recent survey by NICE,  an industry leader in the area of "intent based solutions" affirms that dynamic. The company's survey focused on customer "interactions with providers of financial, telecommunications, travel and hospitality, and healthcare and insurance services."

The findings of the survey has many implications for service providers. Among them, that customers interact across more channels, more often, and demand more from providers. A perhaps unsurprising finding is that "on average, the engaged customer contacts service providers across six channels." Also unsurprising is the fact that the Internet "remains the channel of choice" while the use of smartphone apps, SMS, and social networks is trending upwards.

Half of the survey's respondents said that "if they were unable to accomplish a task on a company website, they will then turn to the contact center to resolve their issue." That is a finding that is consonant with what prevails in most hospitality companies where, despite the presence of online feedback, calls to the toll free customer service center remains at a substantial level.  NICE's survey notes that "this is often due to the fact that respondents find complex tasks difficult to complete via the web self-service channel." They go on to predict that as self-service channels are more often used for easier tasks, the contact center will evolve to "Tier 2" status, for taking care of escalated service requests."

An interesting aspect of that though was that a significant 40% of survey respondents noted that they expected a live representative to already know about their experience prior to commencing a conversation so as to bring about a speedy and satisfactory resolution to their issues. That bodes well for those in industry as it requires fewer "man" hours and consequently dollars to close out a customer interaction. As a Nice rep noted an "empowered customer who uses more channels, more often, is in effect creating a big data challenge and opportunity for businesses".

Further, the findings of the survey suggests that service organizations that shape the customer interaction as it happens" on a consistent and continual basis over countless interactions through the lifetime of customer relationships will not only survive the rising tide of customer interactions but that will they will actually thrive.  Perhaps the most tellingly positive aspect to multi-channel interations is the obvious benefit that comes not just from quicker resolutions for customers but also more satisfactory outcomes.

Commercial customers: cuthroat corporates?

June 09, 2012

The Wall Street Journal reports entitled "Small Firms' Big Customers Are Slow To Pay" saying how "small businesses are waiting longer for commercial customers to pay their bills as many big companies continue to hoard cash to bolster their own working capital."

The paper reports that it is a trend which began in the recession and has worsened in recent years putting growing pressure on smaller firms, who generally are more vulnerable in this area. Among the corporate stars forcing the small biz credit squeeze are venerable names like Ford, Apple and, somewhat predictably, Walmart.

Walmart took 29.5 days to pay its bills in the first quarter of this year, up from 27 days during the same period in 2009 while  Ford a spokesman claimed that 80% of the company's $75 billion in annual purchases are paid within 40 to 45 days. Apple with over $110bn in cash reserves took an astonishing 52 days up from 43 days previously. What the article leaves out is that 40-45 days really is 70-75 days as most accounting departments send out a bill upto about 30 days of incurring the expense. One Fortune 500 company even went so far as to demand 120 days to pay resulting in a spiral of financial woes going down the economic ladder.

Yet none of these tightwad titans  seem to be suffering any consequences from their Scrooge like behavior, which at least in the case of Apple seems wanton. That it continues despite their being direct-to-consumer companies is noteworthy. Though not mentioned in the Journal, the hotel industry, particularly small and medium operators, face a similar situation when it comes to payments from the giant OTAs (online travel agents) whose stranglehold is not limited to finance but also extends to trying to control the customer base.

One answer to some of the foregoing woes of small business is in a new Allstate-National Journal Heartland Monitor survey "on the changing economic conversation between consumer and corporation." The survey showed how "consumers now tap into their collective power providing instant feedback to companies, causes, and candidates.  Corporations are utilizing social media technologies to better understand the desires of their consumers and try to provide better products and services". While Social Media did not elicit as much trust among consumers, newspaper articles like the foregoing in the Wall Street Journal were nearly at the top for trustworthiness. Clearly getting one's story out via newspapers could go some way towards spurring the corporate giants to be more responsive.

Drawing a bead on ROI in marketing

June 02, 2012

The old saw attributed among others to Henry Ford and Lord Leverlhume about not being able to figure out which 50% of their advertising/marketing dollars works apparently endures.  Among the surpising findings in a new survey by Balihoo, a provider of Local Marketing Automation (LMA) technology and services to national brands comes is that a majority of them do not invest enough in developing ROI metrics whether for national or local marketing dollars. Notably, the survey revealed that many national brands lack insight into local marketing return on investment (ROI).

At a more global level McKinsey & Company's Quarterly of a couple of years ago noted that " Marketing may be hard to measure, but many companies aren't even using the tools available to them." The consulting company conducted its own survey of company chief marketing officers to "assess their marketing campaigns, make their budgets, and plan new campaigns, as well as how their plans have changed as a result of the economic crisis." Distressingly, they found that many "don’t use basic best practices such as clearly allocating—or even defining—marketing spending  or regularly reviewing the results. Further, they allocate their marketing budgets based on historical allocation levels rather than campaign effectiveness."

A more recent Quarterly following up on the same vein noted what may seem obvious to many: "that a firm can't spend wisely without understanding marketing's full impact". The journal posed five questions with a view to developing a plan that helps maximize the bang for (marketing) bucks. The queries included  "what influences customers in today's environment". Despite troves of data companies don't seem able to wrap their arms around it, a point that also emerged from a Financial Times  survey of luxury brands: "digital luxury is already a much more important market than many executives have acknowledged" and growing three times as fast as offline.

The Quarterly also underscored the fact that "marketing has always combined facts and judgment" with judgement, heretofore, influenced by the use of old traditional platforms. The advent of new media and its continually changing platforms sets limits on the ability to use judgement based on experience despite the presence of vast amounts of data. Which raised the important issue of what metrics to use. Although "nothing approaches a definitive metric for social media and other emerging communication channels, and no single metric can evaluate the effectiveness of all spending" companies must find a way to track progress and hold marketers accountable.  Apropos that luxury retailers, many of whom were initially skeptical of the web, invested vast amounts on social media only to find via an Altagamma survey that tens of millions of Facebook fans had very little effect on direct sales.  It is a finding that could perhaps apply to a variety of industries including the vast service sector.


My Photo


  • President of Apple Core Hotels, a chain of 5 midtown Manhattan hotels offering value and comfort in the heart of the city.

    Member of the board of Directors - Hotel Association of New York.



  • The views expressed in this blog are my own and not that of any company, association or organization.