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Declaring 'year of the brand', Worldhotels steams ahead with growth

Posted on 20 Jan 2012 at 10:27 am by Yeoh Siew Hoon

The Euro zone may be on the brink of crisis – how many brinks are there before one blink brings it down – but Worldhotels remains bullish for the year ahead and in fact, is anticipating its best year.

At its annual global conference in London, in between downing cups of “Shrek’s ear wax soup with bacon bits” (in line with the theatre theme) which, by the way, was extremely delicious and comforting, its more than 400 members heard how the group was going to achieve its targets.

And as with the theme, “Stronger, Faster, Higher”, the targets are indeed higher.

In a year described by CEO Rob Hornman (pictured) as “driven by fast forward”, the group aimed for a 25% growth with target revenues of US$297.6 million in 2011. It achieved US$372 million, a 35% growth instead.

Room nights sold reached 1.9 million, a 20% growth since 2009 and this year, it’s set a target of 2.1 million. Average room rates have also recovered – from US$177 in 2010 to US$202 in 2011.

The HIS Group, of which Worldhotels is a part, is also anticipating a record year with Michael Ball, chairman, saying that despite “the law of unintended consequences” and many uncertainties, “specialization sets us apart”.

The group, which includes Nexus, IFH and TRUST, has 12,000 hotels in its network, makes a total of 120 million transactions and accounts for £3.6 billion in room revenues.

Ball said the year ahead will see a continued battle over ownership of inventory and that success in distribution has moved from optional to essential. “It’s all about speed, connections and content.”

“We are so way past the ‘content is king’ phrase – the need to adapt and innovate has never been greater nor more complex.”

In a year where Worldhotels added 70 new hotels (equivalent to 11,000 new rooms) to its network, the group is looking to drive web direct business. It is also opening its own branded hotels, an interesting move marking its evolution from pure representation and marketing to hotel management.

It is launching a new website in the second quarter. Traffic to its website was up 30% last year and the group is getting more social, increasing its fan base by 65%. Its average TripAdvisor rating is 3.95 across the group, Hornman reported.

According to global VP marketing and sales, Paulo Salvador, channel mix is split 60% GDS, 16% OTAs, 25% direct and the rest from voice. The biggest growth has been in direct and GDS.

At the individual hotel level, Salvador is asking properties to reduce OTA dependence. “There are some hotels which gets 50% of their business from OTAs, that’s not healthy,” he said.

“Who will win the battle for the customer? It’s been proven in surveys that customers prefer hotel websites than OTAs – customers want choice, so channel management is very important. You need a good website to avoid OTA dependence.”

Groups such as Worldhotels struggle to control inventory maintain rate parity due to the fragmentation of their hotel membership with individual owners often preferring to work with OTAs directly.

Salvador called mobile the next revolution in hospitality and this would affect how and where customers booked their hotels. Sixty five percent of mobile reservations are being made the same day, he said.

Calling this “the year of the brand”, Salvador said Worldhotels would be investing heavily in branding activities, and has rolled out branded amenities kit for its target customer – “the world navigator” – people who are global yet want to feel and be local when they travel.

Tags: Worldhotels , TRUST , Nexus , IFH , channel management , distribution , OTA sales , rate parity