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000-M246 IBM Smarter Commerce Sales Mastery Test(R) v1

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000-M246 exam Dumps Source : IBM Smarter Commerce Sales Mastery Test(R) v1

Test Code : 000-M246
Test appellation : IBM Smarter Commerce Sales Mastery Test(R) v1
Vendor appellation : IBM
: 50 real Questions

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IBM IBM Smarter Commerce Sales

big Blue Launches IBM ExperienceOne to mix advertising and marketing, sales, capabilities | killexams.com real Questions and Pass4sure dumps

First identify: final name: email tackle: Password: verify Password: Username:

Title: C-level/President supervisor VP body of workers (associate/Analyst/etc.) Director

characteristic:

function in IT decision-making process: Align enterprise & IT desires Create IT system verify IT needs control dealer Relationships consider/Specify brands or providers other duty authorize Purchases no longer involved

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analyzing IBM's Sale Of Retail outlets solutions | killexams.com real Questions and Pass4sure dumps

No influence found, try original key phrase!Toshiba TEC (OTC:TSHTF) will purchase IBM's (IBM) retail shop factor-of-sale options company. The agreement makes it practicable for each to tap the growing smarter commerce opportunity. A multi-year enterprise partner ...

Smarter commerce ends up in happier shoppers | killexams.com real Questions and Pass4sure dumps

Happy shopper card

In trendy ever more linked world patrons indulge in a lot greater expectations of the groups they deal with.

They need groups to hold note their preferences and bring a personalised, moneymaking experience. What's greater they foretell this every bit of of the time now not just at the aspect of sale.

To attend businesses deliver for his or her clients IBM is the usage of its Smarter Commerce international acme in Florida to unveil ExperienceOne, an built-in portfolio of cloud-based and on premise choices to assemble marketing, income and service practices and help create deeper, more helpful consumer engagements.

IBM ExperienceOne draws on innovation from IBM analysis as well as greater than $three billion invested in biological construction and acquisitions. it's also developed on ultimate practices drawn from IBM's event of working with over 8,000 companies throughout the globe.

"Smarter Commerce is about assisting shoppers constantly reinvent themselves around the customer journey," says Craig Hayman, well-known supervisor, industry Cloud options at IBM. "IBM ExperienceOne provides a relaxed and simplified portfolio -- together with innovation from more than 1,200 partners -- to aid valued clientele design and convey more efficacious client engagements. With cloud, on premise and hybrid alternate options, IBM ExperienceOne quickly scales to interact every customer in the jiffy whereas preserving their privacy".

New capabilities aid to help figuring out of client relationships, maximize income through directing the privilege present to the commandeer customer, and create expend of cell and gregarious media to deliver superior consumer journey. Combining ExperienceOne with SoftLayer cloud infrastructure IBM is additionally in a position to tender consumer statistics, customer analytics and digital commerce as a service.

The enterprise is aiming to convey identical levels of customer perception to the B2B sector as neatly with the launch of original companion and employer appointment application via its Smarter Commerce initiative. This includes a Multi-enterprise Relationship management (MRM) platform for enhanced collaboration. IBM Sterling B2B functions Reporting and Analytics to video parade transactions and attend company spot traits and create advised selections. Plus other outfit present superior adherence to compliance requirements and quicker and greater efficient sharing of statistics.

"Now more than ever, the fate of any company is deeply intertwined with the success of its network of companions and suppliers everywhere," says John Mesberg, vp, B2B & Commerce solutions at IBM. "via orchestrating these complex engagements with brilliant precision and perception, businesses can create original gateways to change that allow corporations to deliver extremely pleasurable client experiences. With these days’s information, IBM basically transforms these dynamics with partners and clients to pressure quicker time to earnings throughout the prolonged expense chain".

you could locate more about IBM ExperienceOne on the company's web site. there's also an infographic on how Smarter Commerce can deliver improved customer appointment below.

IBM-Summit-Infographic S

graphic credit: Sergey Nivens / Shutterstock


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IBM Smarter Commerce Sales Mastery Test(R) v1

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Data heart Linux | killexams.com real questions and Pass4sure dumps

In recent years, the adoption of Linux in the data heart has progressed beyond infrastructure services such as e-mail and file, print, and Web serving. Today, Linux is widely used as a industry application server and is affecting deeper into the data heart as a database and content server. Given a vibrant evolution community and innovative solution providers, Linux continues its foster toward becoming the enterprise-computing platform of choice.

The benefits of Linux to data heart customers are well known: superior economics, no vendor lock-in, reliability, and increasing independent software vendor (ISV) and system vendor acceptance and support.

However, with success comes higher expectations. User requirements for Linux in the data heart continue to escalate. IT professionals are always looking for more performance, manageability, and other features that they've approach to hope from an enterprise operating system. However, the user requirements list is as varied as it is long. Lacking a "center of gravity" where developers, users, and vendors can every bit of recognize at Linux capabilities and requirements together, the necessary advances will approach more slowly.

Enter OSDL Data heart Linux Working Group (DCL). The DCL is a virtual center-of-gravity where interested parties can approach together to accelerate the evolution and adoption of Linux in the enterprise. Made up of a number of OSDL member companies and other interested individuals, the DCL focuses on services, databases, applications, and mid-tier and high-end multiprocessor servers used for a variety of mission-critical applications.

Accelerating Linux Adoption Overall, the OSDL DCL focuses on every bit of the things you'd hope from an organization trying to accelerate the deployment of any enterprise software, namely:
  • Meet or exceed performance and availability currently expected for data heart applications
  • Scale to enterprise-class server hardware environments
  • Meet or exceed currently accepted security standards
  • Provide standards that animate end-user, ISV, and third-party software adoption
  • Yield a elevated degree of usability for activities requiring human interaction
  • In this early phase of the DCL's work, it is taking a two-part approach to accomplishing its objective. First is to identify capabilities required for accelerated Linux adoption in larger organizations. Second, recommend technical approaches to meet those requirements.

    Periodically, the DCL working group also publishes capabilities requirements documents for public review. The 1.0 version of the OSDL DCL Capabilities Document can exist organize on OSDL's Web site under DCL Documents. The intent of this and future DCL documents is to stimulate discussion and review, then drive toward future, specific technical requirements from the list of capabilities. Thus, the capabilities document is neither a list of requirements nor a specification, but is an analysis of the enterprise usage needs of Linux, thus providing a starting zone for driving efforts that facilitate building solutions to satisfy those needs.

    The DCL identifies two levels of technical priorities for Linux in the data center: Priority One Capabilities are considered the most well-known for data heart readiness for Linux, while Priority Two Capabilities are those intended to stimulate thought and discussion.

    Beyond general priorities of importance, the DCL working group examines Linux enterprise capabilities in the traditional functional areas:

  • Scalability
  • Performance
  • Reliability, availability, serviceability (RAS)
  • Manageability
  • Clusters
  • Security
  • Usability
  • Standards
  • The standards category references specifications controlled outside DCL. This category includes only capabilities with standards related to adopting Linux in data centers.

    At this stage, the OSDL DCL investigation is focused on enterprise-level usage models. The technical discussions heart around data heart issues such as security, storage networking, and file system performance. Because the objective of the DCL is to accelerate the maturation of Linux as an enterprise operating system, investigation of the other features on this list concentrates on server functionality and data heart administration needs. Clearly, most of the features on this list are equally well-known to every bit of who develop, use, or administer the system. But these nonserver-related issues are addressed in other OSDL initiatives such as the Desktop Linux working group.

    In the latter half of 2004 the DCL Working Group will sprint on to its second objective: documenting the requirements necessary to foster Linux further in the data center, and recommending technical approaches to meet those requirements.

    Call for Participation The mission of the Data heart Linux (DCL) Working Group is to provide a forum for industry leaders to accelerate adoption and deployment of Linux in data centers.

    The working group has completed its first pass at identifying Linux capabilities in the data center, and has developed a prioritized list of capabilities needed. The Data heart Linux Technical Capabilities v1.0 document is available for public review on the OSDL Web site. They animate any interested person to review it and provide input. Together they can every bit of attend Linux become the enterprise operating system of choice.

    For more information on how you can participate in the DCL, gladden visit www.osdl.org/lab_activities/data_center_linux.

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    Category: Trends | killexams.com real questions and Pass4sure dumps

    October 31st, 2018 in industry Practices, tumble 2018, Millennial, Restaurants, Technology, Trends

    By Tyler Titherington

    I am a restaurateur.  I’m behind schedule.  Again.  Not because I am disorganized or indulge in too much to do, more so because I indulge in a hierarchy of tasks that are addressed based on priority.  Guest needs are my first priority, staff needs are a immediate second and everything else last.  There is a tertiary hierarchy in the ultimate basket as well.  Some tasks with a lower priority tumble through the cracks.  Not because they are unimportant, but rather there just was not enough time.  The truth is that I am obsessively organized.  I fondness “To Do” lists, calendars, flux charts and the accomplishment of tasks.  I consume projects for breakfast, while vital on the edge of chaos and complete catastrophe.  Short staffed?  Yawn.  Drains flooding?  Been there, done that.  POS system crash during service on a weekend?  Bring it.  I am the duck – smooth above water and feet affecting nonstop below.  However, how carry out I manage every bit of the curveballs and noiseless manage to gain time without compromising any of my other priorities?  It is very simple – reconcile and embrace technology wherever possible, specifically, cloud-based computing solutions that allow one to exist in many places at one time.  These applications simplify daily tasks for management teams and staff, which will ultimately leverage senior management down to focus on the bigger picture.  Maybe even win a day off…

    Over the ultimate 10 years or so, the increased availability of cloud-based computing solutions (using network computers over the internet rather than property-based difficult drives) has been a major paradigm shift for many industries.  However, as with most technological advances, the restaurant industry has been very tedious to adapt.  tense margins, resistance to change, and concern of unknown outcomes indulge in long driven the restaurateur’s decision-making process.  However, with increased options, cheaper costs, and ease of use, that mindset is quickly becoming a thing of the past.  Restaurant operators are birth to embrace cloud-based solutions for everything from Point of Sale and Tableside Payment to Menu Design and Scheduling.

    Our foray into cloud computing began with an hapless set of circumstances that the entire industry was facing.  The year was 2010 and the impending doom of PCI Compliance was upon us.  At best, their network infrastructure was dated and they needed to act quickly to win it into compliance.  like most operators, their hand was forced and they had no choice.  What is PCI Compliance?  The retort depends on who you ask.

    Your guests indulge in never heard of it and indulge in no notion what it is.  Most restaurant operators will construe you that PCI Compliance is an almost unachievable set of network security standards designed to protect the credit card giants, who already freight them artery too much for credit card processing and continually squeeze them with a plethora of monthly fees.  The definition of PCI Compliance is below, according to PCI ComplianceGuide.org

    “The Payment Card Industry Data Security measure (PCI DSS) is a set of security standards designed to ensure that every bit of companies that accept, process, store or transmit credit card information maintain a secure environment.  The PCI Security Council Card focuses on improving payment account security throughout the transaction process. It is an independent body that was created by the major payment card brands (Visa, MasterCard, American Express, ascertain and JCB.).”[i]

    PCI DSS is mandatory for any and every bit of businesses that accept credit cards.  It involves a process of assessment, remediation and reporting.  Operators must identify network vulnerabilities, physical vulnerabilities, and operational vulnerabilities that could result in a credit card infraction and fix them.  In summary, it is a painfully tedious, extremely time consuming, and potentially expensive process.

    It is extremely well-known for the security of their guest’s payment information, both for ensuring reliance with their customers and limiting legal liabilities.  In 2017-8, major retail stores including Home Depot, Macy’s, Sears, Kmart, Best Buy and Lord & Taylor made headlines across the country for data breaches possibly compromising customer’s credit card personal information. The restaurant industry is also plagued with security breaches, including great chains such as Darden (Cheddar’s), Panera Bread, Sonic and Arby’s. The number of customers whose credit card information may exist compromised totals into the millions.[ii]

    At Grafton Group, the process of obtaining Credit card security involved working directly with their IT vendor and POS vendor to achieve PCI compliance.  The first order of industry was to win their network infrastructure in order.  Some of the major network upgrades that they undertook were upgrading wiring, locking down patch panels, securitizing external ports, adding wireless access points (WAPs), and replacing firewalls. The WAPs and original firewalls were the heart of the upgrades and would ultimately allow us to operate unencumbered in the cloud.  The original access points give their guests their own network and forestall them from accessing ours.  The security firewalls forestall intrusions and also allow their IT vendor remote access so they can create changes without actually being in the restaurant.  What used to exist a scheduled visit from their IT vendor that may indulge in taken weeks, is now a simple email and can often exist addressed online in minutes.  In a nutshell, PCI DSS forced us to upgrade their network, which ultimately allowed us to operate in the cloud.  This unintended outcome to a painful requirement was truly a blessing in dissimulate and it pushed us into original territory – the cloud!  Being in the cloud has allowed us access to exciting applications and services that would otherwise exist unavailable to us.

    IBM defines cloud computing as “the delivery of on-demand computing resources — everything from applications to data centers — over the internet on a pay-for-use basis.”[iii]  For their purposes, these on claim computing resources primarily consist of “SaaS” or Software as a Service.  Here are some of the areas where cloud computing can streamline their operation.

    Point of Sale

    POS systems are the most captivating zone of cloud-based solutions for restaurant operators.  Legacy systems such as Positouch, Micros, and Aloha are bulkier, more expensive, and much harder to program and implement.  There are quite a few cloud-based POS options, most notably Boston-based Toast.  Toast has done a much job streamlining and simplifying the interface for both front and back conclude users.  Management can access the system remotely for screen programming, troubleshooting or reviewing sales.  It is extremely intuitive, like using a smartphone, thus needing very shrimp training. As wireless POS solutions evolve, legacy systems will eventually exist phased out.  It is only a matter of time.

    Tableside Payment

    EMV (Europay, MasterCard and Visa) is another set of regulations that are coming to the restaurant industry. “EMV is a global measure for cards equipped with computer chips and the technology used to authenticate chip-card transactions.”[iv]  Used in Europe for years, the credit card never leaves the customer and every bit of transactions are processed tableside with a handheld device. One specimen of an EMV compliant, cloud-based device for tableside payments that they at Grafton Group are currently analyzing and goal on implementing is Pay My Tab.  Pay My Tab will fully integrate with their POS system and eliminates many bulky PCI DSS requirements. Many similar systems are already in expend at quick service operations, where guests and staff indulge in easily adapted to them.  In addition to tougher security, the implementation should reduce payment time, purge paper receipts (emailed instead) and simplify the process for management to search for specific receipts.

    Reservations and Floor Management

    There are a variety of solutions for reservations and floor management systems.  Their difficult has been using OpenTable for over 15 years, so when they rolled out their cloud-based system, GuestCenter, they were early adopters.  This has been one of the single best applications in terms of roll out, ease of use, and seamless integration.  It is iPad-based and eliminates every bit of the wiring and host stand real estate.  It is compatible to smart phones that allows for remote access, allowing management to check flux of service, identify unique reservations, and create sure that waitlists are being managed appropriately.  Soon to approach is an interface with POS systems that automatically applies any “guest notes” from GuestCenter to the server’s check, such as special occasions, etc. Most importantly, due to its intuitive design, their millennial hosts expend the system seamlessly.

    Private Event Management

    Private events are the foundation of most replete service restaurant operations.  They are the dissimilarity between a pleasurable week and a much week.  However, it can exist a very confusing process with every bit of of the affecting parts.  In order to sojourn organized, they expend TripleSeat to manage leads, create BEOs and track their events calendar. The cloud-based event management system allows their Private Event Coordinators to respond at any given time from anywhere, giving them a leg up on the competition, giving them the chance to rate fees for each event.  Since their coordinators receive an administrative fee for each event, they indulge in responding when available off-site; pleasurable communication is key for making sure work-life equipoise is maintained.

    Bar at the Russell House Tavern in Cambridge, MA. Photo: graftongrouphospitality.com Inventory

    An zone which the cloud has really saved their restaurants time is with food & beverage inventories.  No more paper and no more transposing paper to spreadsheet.  Inventories can exist uploaded in real time using a tablet, laptop or even a smart phone. BevSpot is used for both their food and beverage inventories.  They indulge in also given access to their accounting firm, in order to reduce bulky invoice scans and uploads.  every bit of information can exist entered into the cloud and accessed by every bit of of their approved users.  It also allows for multiple people to hold inventory simultaneously.  One person can exist on the bar, another in the walk in fridge, and another in the liquor room, every bit of at the very time.  In addition to being a major time saver, it has helped Grafton Group to reduce sitting inventory by a significant amount across every bit of properties.

    Scheduling

    Staff scheduling is a weekly administrative headache for managers, but there are cloud-based scheduling applications that lessen the pain. They indulge in organize HotSchedules to suitable their needs as it interfaces with their POS system and allows their difficult to carry out some creative reporting in regards to budgeting and forecasting, as well as taking employees requests and requirements into consideration.

    Email and File Sharing

    Grafton Group has approach a long artery from sharing access to a desktop version of Outlook and toggling between accounts.  They were able to purge their main server entirely and now they expend Office 365 for their email and file sharing needs.  Not only is this highly securitized, it has redundancy so their information is always backed up.  They access both their email and files from anywhere in the world.  This has greatly improved productivity and allowed their management teams to communicate in real time.

    Grafton Street in Cambridge, MA. Photo: graftongrouphospitality.com Computer Hardware

    Our office hardware now consists of much less expensive “Network Computers”, which carry out not require expanded recollection for giant programs, CD drives for downloading drivers, or expansion slots for extraneous drives.  They can purchase more computers at a reduced cost and their managers no longer indulge in to participate computer access in the office.

    Menu Design

    For their menu design need, they indulge in organize InDesign to exist the most efficient program, which is participate of the Adobe Creative Cloud.  This program can now exist selected a la carte from Adobe’s menu of programs and paid for on a month to month basis for under $20.  This is much more palatable than paying $600 for the entire Adobe suite.

    These are just a handful examples of how cloud computing has impacted their operations and ultimately saved time for their management team and staff.  Ten seconds here, 5 minutes there, an hour tomorrow – it adds up to impactful chunks of time that can exist better spent elsewhere.  They indulge in only scratched the surface as an industry – they will view more and more options for cloud-based solutions to real world restaurant problems. Although the solutions highlighted above create efficiency and redeem time, they carry out not serve guests and they don’t understand the expertise of hospitality.  It is imperative that as restaurateurs they continue to create a positive environment, embrace innovation, and engage and train their employees in the expertise and skill of hospitality.

    There are some things you will never indulge in time for in the restaurant industry, regardless of cloud-based advancements.  “Lunch”, for example, I indulge in heard is a meal that takes zone in the middle of the day.  For me, “lunch” is the sandwich that I consume in 30 seconds somewhere between 2pm and 6pm standing over a trash can in the back of the kitchen.  There is no technology for that…

    PDF Version Available Here

    References [i] “PCI Compliance guide FAQ.” PCIComplianceGuide.Org. September, 2018. https://www.pcicomplianceguide.org/faq/#1. [ii] Green, D. and Hanbury, M. (Aug. 22, 2018). “If you shopped at these 16 stores in the ultimate year, your data might indulge in been stolen.” https://www.businessinsider.com/data-breaches-2018-4 [iii] “What Is Cloud Computing?” IBM.com. September, 2018. https://www.ibm.com/cloud/learn/what-is-cloud-computing. [iv] Kossman, Sienna. ” 8 FAQs about EMV credit cards.” CreditCards.com. August 29, 2017. https://www.creditcards.com/credit-card-news/emv-faq-chip-cards-answers-1264.php. Tyler was born and raised in Portland, Maine and has lived in the Boston zone since attending Boston University.  After graduating from the Boston University School of Hospitality Administration, Mr. Titherington operated a handful of bars and restaurants in Boston.  He has been with Grafton Group since October 2007. 

    October 31st, 2018 in industry Practices, tumble 2018, Restaurants, Trends

    By Christopher Muller

    In participate 1 of this analysis of the restaurant delivery system they looked at the owner/operator models which noiseless tender some measure of control over expense and quality.  This is lickety-split becoming an issue with the mount of the Ghost Kitchen where the ODP is an integral participate of the equation.  Here they present the larger challenges from the preeminent ODP control of the marketplace.  It is pleasurable to recall that most of the ODPs themselves are noiseless looking to find profits in what they do, a suggestion that those profits will need to approach at the expense of the restaurant providers in one artery or another.

    5. The Aggregator or On-Line Delivery Provider (ODP) – No Driver Fleet

    If someone were to say, “Let me hold care of every bit of of your delivery problems for a small slit of your revenues” many restaurant operators, especially those enthusiastic to win into the market with the least amount of upfront investment, would jump at the chance.  Enter the On-Line Delivery Provider with a industry model built upon a brand appellation customer-facing APP, website or phone number and an colossal amount of back office computing power to drive order volume.

    At its core, to exist successful the Aggregator needs to exist a world-class matchmaker for food orders, with both a great customer database of users and a broad assortment of restaurant menus offered in major cities.  like many of what MIT’s Bill Aulet calls an Innovation Driven Enterprise (IDE)[1] the cost of customer acquisition is the key hurdle in entering this distribution channel. What it doesn’t need is its own fleet of employee delivery drivers. Capitalizing on the DIY gig economy, drivers are hired on a contractual basis, working as independent delivery agents with their own vehicles.

    The barrier to lowering this elevated cost of entry has favored early market entrants and great well-funded digital innovators.  Worldwide, the fastest growing ODP is Uber Eats, the natural extension of car service provider, Uber, with its existing colossal data base of users, an ever expanding fleet of drivers, and the understanding for a driver that delivering food with an APP-based pre-payment system is considerably faster and easier than dealing with human passengers.

    The upside for restaurant companies using an ODP such as Uber Eats, from those as preeminent as McDonalds or as small as the local pizzeria, is that there is no need to hire and train non-core employees.  As touted by Uber Eats delivery service can inaugurate almost immediately upon signing up.  The downside, that has a potential for long term impact, is two-fold.  The fee structure for traditionally low margin restaurants can exist between 20-30% of a menu item price, leaving shrimp to cover remaining expenses.  Worse though is that the restaurant gives away its brand and trade dress image to the company making the delivery to the front door.  McDonalds hamburgers may exist in the bag, but the appellation on the ordering APP and the uniform on the person handing it to the customer says Uber Eats.

    6. The Consolidator – Bulk “Bus Stop”

    As noted, the most expensive single piece of the delivery perplex is getting food from the restaurant to the front door, what is called “the ultimate mile.”  One proven artery to minimize that expense is to indulge in the customer meet the food delivery at a central drop-off spot (see: Amazon [2]).  A start-up, Yun Ban Bao, in original York City is taking handicap of ethnic Chinese food deserts through direct targeted marketing using the preeminent Chinese online service provider, WeChat.  By doing so it is creating a captive delivery market with the handicap of pre-ordering and payment.[3]

    Taking online requests for delivery on the next industry day, then consolidating orders using a bulk delivery model, Yun Ban Bao is lowering the cost of delivery while maintaining control with its own fleet of drivers.  It advertises a data analytics service for smaller restaurants as well as being a revenue growth accelerator for restaurants in suburban locations which otherwise could not find original or broader market opportunities.

    Using a pre-arranged group delivery network, often outside parks, office towers or apartment buildings, the system mirrors a bus route, not the more traditional taxi route model of one-on-one delivery.  This also affords the network of restaurants a artery to lower operating costs by controlling the production process in advance.

    7. The Aggregator ODP – Owned Fleet

    Some of the largest ODP players started in the delivery industry by controlling their own fleets of employee managed delivery drivers.  The global leader, Just Eat,[4] has used this model throughout the UK, Europe and worldwide.  But it also has worked directly with restaurants who indulge in their own in-house deliver fleets to create a broad partnership.  Just consume acts as the online ordering platform, but then allows the local branded company to exist the kisser at the door.

    The ability to present a standardized customer facing brand identity means that reliance may exist established with the customer directly.  While this can approach at the risk of the restaurant losing its direct brand relationship, what Just consume has been able to master is the collection of a vast customer database of its users.  It has created a relationship with many of its restaurant partners to assist them in finding ideal store locations, menu item design and creative targeted pricing and promotions programs which would not otherwise exist affordable or even available to smaller companies.

    For these ODP companies, the costs for maintaining their own fleets or working as a hybrid with a local restaurant creates a higher operating expense, but these are often offset with a higher fee participate from both the restaurant and the consumer.  It also creates a competitive handicap by building a broader network of restaurants to select from for the customer, which builds long term loyalty and habitual purchase behaviors.

    8. The ODP Aggregator – sunless Kitchens

    One of the greatest threats to the bricks and mortar restaurant delivery partners is the emerging concept of a sunless Kitchen.  This is a space created by an OPD to facilitate the lowest cost per delivery mile from restaurant kitchen to the highest density of users.  While this is similar to the Cloud Kitchen model, in this case the OPD establishes a cluster of small dedicated but competitive restaurant kitchens in a single site.  A sunless Kitchen is also similar to the trending food hall concept, but comes with no direct customer interaction—no walk-in guest visits these production facilities.  In the UK this was pioneered by Deliveroo with its urban RooBox or Editions concepts.[5] partner restaurants rent portable kitchen space from the delivery service and pay a larger percentage fee to cover the build-out costs for their space.  Restaurants staff the kitchens at their own expense, as well.

    Earlier this year, Grubhub invested $1 million in Green acme Group (see Ghost Kitchen in participate I), a startup with nine virtual restaurants operating from a single kitchen. DoorDash is renting extra space from the Santa Clara Fairgrounds in San Jose, Calif., and making it available to foodservice operators who want to create delivery-only options. In Los Angeles, Postmates leased a commissary kitchen space so its restaurants can reach original customers. And UberEATS is exploring the concept with Poke Café in Chicago — a virtual restaurant serving Hawaiian poke bowls.

    “We can travail with existing restaurant partners to create delivery-only menus. (They would) loom as entirely original restaurants on the UberEats app,” Ambika Krishnamachar, UberEats product manager, said in an article on Mashable.[6]

    And again, while on its kisser this appears to exist a positive chance for independent or chain restaurants to lower costs or disaggregate the dine-in from the delivery production process, it is not cost free.  In fact, as a logical progression would suggest, the OPD Deliveroo service has realized that the actual local restaurant in this mix is not a necessity for success.  Instead by using its own “innovation fund” it will to proceed directly into the restaurant industry itself, creating “from scratch” concepts by working with celebrity chefs and data mining information from its colossal customer data base. [7]

    As more of the OPDs recognize to find profits to pass along to the aggressive investors who indulge in funded rapid growth, they will inevitably recognize to slit out the middleman and provide meals themselves to extend margins. The kitchen that may actually proceed “dark” is the local one on the corner down the street in an independent restaurant.

    Conclusions

    This is undoubtedly both an captivating and a challenging time for the restaurant industry and the Online Delivery Providers who are feeding from it.  Neither side seems to indulge in figured out how to create the original consumer claim for off-site delivery travail to their complete advantage.

    It is impossible to believe that any restaurant can survive if it gives away up to 30% of its top line revenues when the detached net profit is less than 10%.  No amount of increased volume in sales will create up for that.  As Cameron Keng wrote in his column “Why Uber Eats Will consume You Into Bankruptcy” in March, 2018:

    Based on the detached profit margins above, every restaurant that engages Uber Eats will lose money on every order they take. The more orders coming from Uber Eats, the more money a restaurant would lose.[8]

    At the very time, while it is difficult to win exact information, it appears that almost not one of the largest On-Line Delivery Providers, in any of the described segments is actually showing a profit.  Uber Eats is only profitable in 27 of its more than 100 urban markets,[9] and while Deliveroo’s sales rose in 2017 to £277 million ($356 million), the company lost an astounding £185 million ($237 million).[10]  Yet Uber Eats is offering over $2 billion to purchase/merge with Deliveroo.

    Finally, as Jonathan Maze wrote in his Bottom Line column in early October the restaurant industry is simply unprepared for what appears to exist a tectonic shift in traditional restaurant segments, consumer behavior, labor utilization, real Estate valuation and investor interest.

    If delivery is the future of the restaurant business, the restaurant industry as it is currently constructed is in trouble.

    The service is growing rapidly. But it’s increasingly replacing existing restaurant industry rather than taking industry away from grocers or other food retailers. [11]

    As they noted in the beginning, it took the lodging industry almost 20 years to inaugurate to create this benign of tectonic change and it is nowhere near complete.  A few very great hotel companies, through merger and acquisition, indulge in consolidated enough power to start the sprint away from handing over every bit of of their pricing to the OTA’s.  In economic terms, hotel companies are trying to proceed from being expense Takers to expense Setters.

    At this early stage of the restaurant OPD’s domination of the delivery cycle, it is not lucid that any restaurant organization is great enough to shatter the fever, especially now that McDonald’s is partnering with Uber Eats.  While it may loom that the On-line Delivery Provider is a restaurant’s partner, friend or even savior, it is not one of those.  In fact, in order to become profitable the OPD is looking to become a direct competitor.

    What is unavoidable is that few restaurant companies, and certainly no independent operations, can survive the next two decades letting third parties ordain what convenience and expense mean.  In fact, this might exist a pleasurable time to win out of the house and proceed visit your favorite local restaurant.  Sacrificing some convenience for a much tang is a pleasurable value and that restaurant may not exist around the next time you want to expose up.

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    References [1] view Bill Aulet, Disciplined Entrepreneurship, [2] The Financial, October 25, 2018,  https://www.finchannel.com/~finchannel/business/76317-amazon-expands-grocery-delivery-and-pickup [3] Menqi Sun, WSJ, September 9, 2018, https://www.wsj.com/articles/how-to-get-food-delivered-from-your-favorite-faraway-restaurant-1536516000 [4] See https://www.just-eat.com/ [5] James Cook, industry Insider, April 5, 2017, https://www.businessinsider.com/deliveroo-editions-pop-up-restaurants-roobox-2017-4 [6] Tim York, The Packer, March 23, 2018, https://www.thepacker.com/article/rise-virtual-restaurant [7]Sophie Witts, Big Hospitality, May 21, 2018, https://www.bighospitality.co.uk/Article/2018/05/21/Deliveroo-to-create-own-restaurant-brands-using-5m-fund# [8] Cameron Keng, Forbes, March 26, 2018, https://www.forbes.com/sites/cameronkeng/2018/03/26/why-uber-eats-will-eat-you-into-bankruptcy/#778a3b0621f6 [9] Ibid., DealBook, September 21, 2018 [10] BBC News, October 1, 2018, https://www.bbc.com/news/business-45707700 [11] Jonathan Maze, Restaurant industry Online, October 17, 2018 https://www.restaurantbusinessonline.com/financing/delivery-could-force-changes-restaurant-business-model Christopher C. Muller is Professor of the exercise of Hospitality Administration and former Dean of the School of Hospitality Administration at Boston University. Each year, he moderates the European Food Service Summit, a major conference for restaurant and supply executives. He holds a bachelor’s degree in political science from Hobart College and two graduate degrees from Cornell University, including a Ph.D. in hospitality administration. Email: cmuller@bu.edu

    October 31st, 2018 in industry Practices, tumble 2018, Restaurants, Trends

    By Christopher Muller

    The entire restaurant industry, from the simplest quick service joint to the most complex fine dining jewel, is caught in a veritable frenzy of delivery.  It may be, unfortunately, a very risky path to travel for the uninitiated restaurant operation, but delivery is driving the investment community to a fever pitch. [1] They indulge in entered into the time of the restaurant On-Line Delivery Provider (ODP) which mirrors in many ways the On-Line Travel Agent (OTA) which has so disrupted the lodging industry.

    In two complimentary BHR articles here, they present a recognize at the 8 different models of restaurant delivery and how they are affecting both senior management and customer choices.

    A Quick Lesson From Pricing History

    For observers of the global Hospitality Industry this should send up warning flags.  In a galaxy far, far away, the Lodging industry managed revenues by using simple seasonal or assign pricing models (On-, Shoulder- and Off-Peak rates, or premiums for “A elbowroom With A View”) and sold some limited excess inventory through a network of independent Travel Agents (at an onerous 10% commission!).

    Then, as the Internet expanded, and the travel market imploded after the 9-11 tragedy, a original and exciting model emerged – the On-Line Travel Agent (OTA) acting as a third party aggregator appeared.  Hotel companies willingly gave open access to every bit of of their unsold elbowroom inventory to the OTAs (Expedia, Travelocity, Priceline, Booking.com, Kayak, Trivago, etc.) to sell directly at deep discounts, often between 25 and 30% off posted Rack Rates.  Occupancies rose, but detached Daily Rates plummeted, and profits quickly diminished.  Hotels, relying on the conventional pricing models were caught competing “with themselves” and watched as formerly loyal customers switched their buying habits and loyalties to the OTA that gave them the best rate.  Customers could scroll through pages of prices, often for the exact very elbowroom in the very hotel, searching for the cheapest rate.  Hotel rooms, instead of being unique destinations became interchangeable commodities.

    It has taken almost twenty years, but through brand consolidation and a total system-wide transformation into a Revenue Management based pricing model, the hotel industry has been transformed and the OTAs are being aggressively challenged for dominance. This should exist a lesson for the restaurant owner/operator, the OTAs drove nothing but expense as a decision attribute, the ODPs are poised to carry out the very thing with both expense and convenience, unfortunately restaurants probably won’t indulge in decades to recover.

    Today’s Restaurant Delivery Frenzy –The mount of the ODP

    Whether it’s the savvy but shape-shifting Millennial, the rapidly aging Baby Boomer, or the rising adolescent digital aboriginal from the i-Generation, it seems that customers in every bit of shapes and sizes just want to indulge in their meals brought to them at home, the office, or somewhere in between.  Breaking the code of the delivery model—becoming the customer’s option of who serves up breakfast, lunch or dinner at home, travail or play—has emerged as the Holy Grail of the foodservice business. But it may exist more like the other mythic sunless Ages metaphor, the Plague, potentially killing upwards of 30% of existing restaurant units.

    So, what exactly is “delivery” today, how did it evolve into such a big, expanding component of the restaurant offering and what are the implications going forward for the industry?  Just how carry out the On-Line Delivery Providers, the ODP, dominate the market?

    We can inaugurate by agreeing that delivery is a discrete and rapidly growing distribution channel, although it has been around in one configuration or another for a very long time.  And while not exactly a original technology, nor necessarily a profitable one, the exploding market for the delivery of food is poised for an inevitable shudder out as it quickly approaches a develope phase consolidation.[2]

    In late 2018 delivery is every bit of about instant gratification, not just for the diner but some would imply for the restaurant as well. At first glance, it every bit of feels so simple and easy. But like so much in restaurant management, there is more than one artery to win something done, even the simplest of things.

    Emerging Key Success Factors

    Like so many emerging industry models in the on-line digital age, food delivery is developing its own metrics and factors to exist considered and mastered. While noiseless evolving, among these now are:

  • Addressing the profit challenges of “The ultimate Mile” in the delivery chain
  • Minimizing the elevated cost of Customer Acquisition
  • Developing an integrated APP, website, tablet and smartphone ordering platform
  • Designing the most efficacious delivery driver fleet system
  • Establishing an attractive and competitive user fee basis
  • Creating positive and immediate Brand recognition
  • Building a proprietary lore base of data storage, analytics and access
  • Delivery of food, especially from a restaurant to a consumer, has become a multi-billion dollar segment of the industry.  Some are predicting that it will overtake the traditional dine-in segment completely within a decade, although the complexity of getting it privilege and turning a profit while doing so, can noiseless exist elusive even for the largest players.  And of course, no one should forget that Amazon is over in the corner waiting to view how things evolve in an online delivery world they basically invented.

    Traditional and Controlled

    As noted, the delivery of food from a restaurant directly to a local customer is not a original notion although traditionally the customer came to the restaurant and picked up or carried out their food order.  Both delivery and carry-out were best suited to a restaurant with a simple, easily transported menu.  Where a significant amount of the value of the meal was the dining tang and table service, meals to proceed were often comprised of a package of leftovers or the long gone term “doggie bags.”

    Here is a recognize at four models with some measure of control for restaurant owners and operators over the character and profitability of their offerings.

    1. The Independent – One Shot

    As a service provider a restaurant may settle that in order to meet the needs of its local customer base it should provide a delivery option.  At one time, only a few restaurants in an urban core would indulge in delivery offers and these might typically exist delicatessens or Chinese restaurants with few seats and a very stout focus on offering takeout options. The food can exist cooked, boxed, wrapped and brought quickly to an office or apartment within a few blocks on foot or by bicycle.

    This model is the most basic – a caller, the kitchen, and an employee bringing flaming food directly to the customer.  The restaurant controls the quality, manages the relationship with the diner and absorbs the replete cost and every bit of the revenues.  It typically comes with higher operating costs for labor (primarily from an in-house paid delivery driver fleet) and with premium rent from the need for an attractive customer-facing retail space.  On the plus side, every bit of local customer information may exist controlled by the restaurant and there are no fees to participate with an outside third-party service.

    But as the independent operator reaches for the brass ring on the delivery merry-go-round, they also need to exist observant not to lose their grip on their existing ride.  A original distribution channel can exist much more challenging that just taking a customer order.  As noted by Jennifer Marston:

    …restaurants are under pressure to adapt…More and more, that means altering the physical restaurant space so it can better accommodate this influx of original orders. Extra meals require extra bodies to cook and package the food, after all, not to mention extra space for third-party devices, and somewhere to Put completed orders waiting to exist picked up by a delivery driver.[3]

    An captivating twist on this single restaurant model of trying to find a artery to both control and expand the delivery system while maintaining some measure of profitability is one recently proposed in the restaurant trade magazine Restaurant industry Online:

    He (CMO Nabeel Alamgir) explained that Bareburger is already striving to transmute customers ordering through third parties’ apps into users of the chain’s own channels. Patrons of an Uber Eats or Postmates might exist offered a 10% discount on their next order if it’s placed through Bareburger’s website. The chain can afford a discount that deep because the financial impact is noiseless less than the 20% or 30% discount an outside service typically charges.

    Alamgir noted at the start of the panel’s presentation that a service started by restaurants for restaurants would indulge in been an attractive alternative to some of the third-party giants. “Let’s create their own platform. Let’s create their own Grubhub,” he said.[4]

    2. The Cloud Kitchen – A Hub & Spoke System

    It can exist argued that today’s focused delivery channel began in earnest when Domino’s offered up a “30 Minute or Free” guarantee in 1973.  In order to create this guarantee effective, the company created a hub and spoke system, in result building a sequence of franchised units in low cost locations. They were characterized by being geographically market-centered but with no need for a “High Street” customer facing address.  This was directly in contrast to the overwhelming market handicap owned by Pizza Hut and its network of “Red Roof” replete service pizzerias with their focus on dine-in and takeout service.  But the competitive handicap that came from having units with no dine-in, limited customer carry-out, and which were serviced by a central commissary set in motion the shift away from the traditional eat-in model.

    “The reality is, when the red roof restaurant was created, the notion of delivery wasn’t participate of the concept,” said Pizza Hut chief executive David Gibbs, a 26-year veteran at parent company Yum Brands…”so in many cases, their industry has outgrown the capabilities of those restaurants…”[5]

    Now, four decades later Domino’s is the world leader in delivery, pizza or otherwise.  It has done this by controlling the entire process or what is called the “full stack” in the delivery cycle.  Now describing itself as an IT and logistics company that sells pizza, the backbone of the system is that they control the customer ordering process, the production character process, and through a vast franchise network the delivery process.

    Next to come, using original GPS and AI technologies, Domino’s predicts that it will exist able to create deliveries not just to a formal building address, but to anywhere a customer can exist located by tracking their cellphone, even if that is a park bench or a blanket on the beach.

    But Domino’s is not the only leader to exist expanding its Cloud Kitchen delivery system. Already designed on a commissary production system model, giant lickety-split casual leader, Panera Bread, tested delivery in Boston and then announced an expansion across the United States in early May, 2018 with a system based upon using its own delivery drivers. [6]  Following the trend in October the largest chicken sandwich chain, Chick-fil-A, announced it was birth to test the hub and spoke model of delivery in Nashville, TN and Louisville, KY.

    Chick-fil-A is opening two original restaurants that don’t indulge in something you commonly associate with the chain: seats. 

    Chick-fil-A, the Atlanta-based chicken sandwich chain, is testing catering and delivery locations in Nashville and Louisville, Ky., that will open this month.

    The locations, according to an announcement on the chain’s website, indulge in no dining rooms or drive thru’s and are designed to exist hubs for catering and delivery orders. The restaurants will not accept cash, either.[7]

    The Cloud Kitchen model can exist very efficacious for restaurant companies with great enough scale, whether in a single city or across a region, to hold handicap of a single production kitchen site with remote staging kitchens.  Ultimately the “full stack” control from order to front door can approach from as few as three restaurants or as many as 3000. This also means that the foundation is laid for vast proprietary customer data collection and eventually data mining by the most forward-looking operators.

    It can exist argued that the Food Truck movement of the past decade is a subset of the Cloud Kitchen model.  By most local health code laws, food trucks must indulge in a “home kitchen” or commissary for their bulk production that meets every bit of health and sanitation code requirements.  In many urban centers, to be successful a food truck company needs to indulge in multiple trucks on the road acting as a distribution network.  While this is also a classic Hub & Spoke model, it comes with similarities to a model in the next article, #6 The Consolidator, with distribution on a bus discontinue route and not a one-to-one ultimate mile taxi route.

    3. The Ghost Kitchen

    One further refinement of the Cloud Kitchen is the Ghost Kitchen.  As delivery becomes more of a threat to the traditional dine-in restaurant option, some imply that this model, in fact, is the future of restaurants—basically a highly efficient hybrid of menu concepts, specialized production and logistics, and low labor cost with no eat-in customers.

    In that way, this model is identified by three key components.

    First, it removes the dining elbowroom or takeout from the restaurant completely, working out of a kitchen whose location is based on nearness to its core customer market yet in a typically low rent out-of-the-way space.

    Second, it does not hire any paid employees to deliver, instead making expend (through partnership or agreement) of the many third-party delivery companies like GrubHub, Postmates or Doordash.

    Third, and possibly the most important, because of the flexibility of only needing an APP, website or traditional telephone ordering system, more than one cuisine can exist produced in the very kitchen space.  simple to prepare, cook and deliver foods such as salads, sandwiches, Asian and other ethnic dishes, or gourmet pizza can every bit of exist offered while cross-utilizing similar ingredients in creative menu offerings.[8]

    This can best exist described as an “order only” restaurant.  The most prominent or well-known of these Ghost Kitchens would exist Green acme (see transition to #8 sunless Kitchen in participate 2).  While garnering a pleasurable amount of press, the celebrity chef David Chang’s Maple, closed its operation in 2017 with some assets affecting to London and the delivery company Deliveroo.[9] Chef Chang sold the physical kitchen space, Ando, to Uber Eats after ceasing operations in January, 2018. [10]

    Because no customer ever sets foot through the front door the owners can Put every bit of of their investment in kitchen outfit and the technology of ordering.  A Ghost Kitchen offers customers great menu choices, and just as its cousin the Cloud Kitchen, has the option to withhold track of its own proprietary customer data set through the direct ordering process.  The tradeoff is that ownership sacrifices the customer interface at delivery of the Cloud Kitchen model.  Operating and start-up costs are low and efficiency can exist very high.  The risk is that a great portion of the margin (sometimes up to 30%) from market-driven menu prices is taken by the delivery partnership, who also control the brand image when customers receive their orders off-site.[11]

    4. Virtual Restaurants

    Along with disrupting the taxi business, Uber Eats is about to globally disrupt the restaurant delivery business.  As of October, 2018, Uber Eats had over 1600 “virtual restaurants” around the globe, with almost 1000 in its US partnership portfolio.  The majority of these are not the Cloud or sunless Kitchen models mentioned above, but are existing restaurants with original brands that only exist through Uber Eats. This model, while charging very elevated fees to the restaurant, allows them to technically not compete with themselves in the home delivery marketplace.  Uber Eats gains more menus to offer, and limits any need for an investment in a commissary space.

    For SushiYaa, Kim says the virtual restaurant concept has been transformative. “Because this concept worked so well for us, they actually changed one of their restaurants from a sushi buffet concept to a regular restaurant with 8 different virtual restaurant brands inside it. The buffet sales weren’t doing so well and the delivery side was doing better, so they thought — let’s change it completely so we’re focused more on delivery.” From a sales standpoint, he says it’s “almost as if they indulge in another restaurant without paying additional rent and labor, even though [Uber Eats] takes about 30 percent.”[12]

    One other nature of Virtual Kitchen involves the licensing of existing restaurant recipes and menu items in a curated virtual model.  The start-up concept pleasurable Uncle is using this to compete in the university meal goal segment, offering a compass of pricing options for higher character prepared meals, delivered by their own delivery fleet using the bus discontinue common drop off method.  This is a limited menu, limited target market, which benefits from a direct marketing approach, lower operating costs, and uses both a subscription and premium fee based pricing system.[13] It is a Virtual Kitchen because there is no restaurant or other customer facing facility, it exists only online.

    Part One – Conclusions

    Delivery models, some traditional, some evolving, tender many opportunities for restaurant operators, especially those in the QSR and lickety-split Casual segments, where quicken and expense and convenience are the drivers of consumer choice.

    The challenge in today’s delivery market is how owners and operators can maintain both elevated character and long-term profitability in the products/services they offer.  For many meals, the time and distance from kitchen to table can exist more than 30 minutes or multiple miles. character of presentation and flavor may quickly diminish.  More importantly, where the medium annual profitability for restaurants across every bit of segments in the USA is considerably less than 10%, losing up to 30% of top line revenues is not a path to a successful future, (even if total sales extend by 20%).

    PDF Version Available Here

    References [1] Heather Haddon and Julie Jargon, The Wall Street Journal online, October 24, 2018, https://www.wsj.com/articles/investors-are-craving-food-delivery-companies-1540375578?mod=cx_picks&cx_navSource=cx_picks&cx_tag=contextual&cx_artPos=4#cxrecs_s [2] Liam Proud, DealBook, NYTimes, September 21, 2018, https://www.nytimes.com/2018/09/21/business/dealbook/uber-eats-deliveroo.html [3] Jennifer Marston, The Spoon, July 31, 2018, https://thespoon.tech/delivery-is-making-these-restaurants-literally-redesign-the-way-they-do-business/ [4] Peter Romeo, Restaurant industry Online,  Oct. 19, 2018 https://www.restaurantbusinessonline.com/operations/3-big-changes-looming-restaurants [5] Karen Robinson-Jabos, Dallas News, Jan 6, 2016. https://www.dallasnews.com/business/business/2016/01/06/pizza-hut-is-ditching-the-iconic-red-roof-for-a-more-modern-look [6] Janelle Nanos, Boston Globe, May 7, 2018, https://www.bostonglobe.com/business/2018/05/07/panera-expanding-its-delivery-service-cities/sZg4pO0yTw9cEdYpv514tL/story.html?event=event12 [7] Jonathan Maze, Restaurant industry Online, Oct. 09, 2018 https://www.restaurantbusinessonline.com/financing/chick-fil-opening-new-delivery-focused-prototype [8] Neal Ungerleider, 01.20.17 lickety-split Company  https://www.fastcompany.com/3064075/hold-the-storefront-how-delivery-only-ghost-restaurants-are-changing-take-out [9] Closing announcement from Maple, May 8, 2017 https://maple.com/letter/ [10] Whitney Filloon, Eater, October 24, 2018, www.eater.com/2018/10/24/18018334/uber-eats-virtual-restaurants [11] view the online Audiopedia site https://www.youtube.com/watch?v=BKO5JFbqKTA [12] Ibid, Eater, October 24, 2018 [13] view https://www.gooduncle.com/  Christopher C. Muller is Professor of the exercise of Hospitality Administration and former Dean of the School of Hospitality Administration at Boston University. Each year, he moderates the European Food Service Summit, a major conference for restaurant and supply executives. He holds a bachelor’s degree in political science from Hobart College and two graduate degrees from Cornell University, including a Ph.D. in hospitality administration. Email: cmuller@bu.edu

    October 31st, 2018 in industry Practices, tumble 2018, Hotels, Marketing, Sharing Economy, Technology, Trends

    By Makarand Mody and Monica Gomez

    For a long time, the hotel industry did not account Airbnb a threat. Both the industry and Airbnb claimed they were serving different markets and had different underlying industry models. Over the years, as Airbnb become more successful and grown to being larger than the companies in the hotel industry, the rhetoric has changed. The hotel industry began to realize they had something to worry about.

    A stage of denial was followed by the American Hotel & Lodging Association (AH&LA) attacking Airbnb by sponsoring research to demonstrate its negative impacts on the economy and lobbying governments to impose taxes and regulations on homesharing. The association is arguing for a flush playing bailiwick between homesharing and hotels (and rightly so). The next stage of this battle involves competition and integration. Not only are hotels looking to add homesharing-like attributes and experiences to their properties, to more effectively compete with Airbnb, but are also looking to tap into the platform-based industry model that underlies Airbnb’s success.

    The Past: How does Airbnb impact the hotel industry?

    Airbnb’s disruption of the hotel industry is significant, both existentially and economically. A recent study by Dogru, Mody, and Suess (2018) organize that a 1% growth in Airbnb supply across 10 key hotel markets in the U.S. between 2008 and 2017 caused hotel RevPAR to decease 0.02% across every bit of segments. While these numbers may not loom substantial at first, given that Airbnb supply grew by over 100% year-on-year over this ten year epoch means that the “real” reduce in RevPAR was 2%, across hotel segments. Surprisingly, it was not just the economy but also the extravagance hotel segment that was difficult hit by Airbnb supply increases, experiencing a 4% real decline in RevPAR. The impact of Airbnb on ADR and occupancy was less severe. In Boston, RevPAR has decreased 2.5%, on average, over the ultimate ten years due to Airbnb supply increases. In 2016 alone, this 2.5% reduce in RevPAR amounted to $5.8 million in revenue lost by hotels to Airbnb. Brands that felt the impact the most were those in the midscale and extravagance segments, with a reduce in RevPAR of 4.3% and 2.3% respectively. These supply increases are also fueling Airbnb taking an increasing participate of the accommodation market pie. For example, in original York City, Airbnb comprised 9.7% of accommodation demand, equaling approximately 8,000 rooms per night in Q1 2016 (Lane & Woodworth, 2016). As a whole, Airbnb’s accommodated claim made up nearly 3% of every bit of traditional hotel claim in Q12016.

    Buoyed by a growth rate of over 100% year on year, Airbnb now has over 4 million listings, with the U.S. being its largest market. The company also has significant elbowroom to grow in other countries, particularly emerging markets in Africa and India. The company has hasten into some competition in China, with local rivals Tujia and Xiaozhu. Also, within the U.S., the pleasurable advice is that Airbnb will not grow at 100% indefinitely and will eventually plateau as it reaches a saturation point (Ting, 2017a). In view of this, the company has turned to alternative strategies to continue to extend supply. It is now targeting property developers to gyrate entire buildings into potential Airbnb units, through its newest hotel-like brand, Niido. Currently, there are two Airbnb branded Niido buildings in Nashville, TN and Orlando, FL with over 300 units each and Airbnb plans to indulge in as many as 14 home-sharing properties by 2020 (Zaleski, 2018). Niido works by encouraging tenants to list their units on Airbnb, with Airbnb and Niido taking 25% of the revenue generated.  Airbnb has also clearly evolved from its original premise of “targeting a different market” to attracting segments traditionally targeted by hotels, such as the leisure family market, industry travelers, and the upscale traveler, as evidenced through its latest offering, Airbnb Plus. These homes indulge in been verified for quality, comfort, design, maintenance, and the amenities they offer. They also indulge in simple check in, premium internet access, and fully equipped kitchens. Their hosts are typically rated 4.8+, and proceed above and beyond for their guests. Through Airbnb Experiences, travelers can partake in everything from the much outdoors—hiking and surfing—to “hidden” concerts and food and wine tours.  In addition to these products, Airbnb has also “created” its own segments of travelers: novelty and tang seekers who are looking for unique and unconventional accommodation like yurts, treehouses, and boats, every bit of things that a traditional hotel company cannot provide.

    The Present: Understanding what consumers want lies at the heart of the battle between hotels and Airbnb

    There are larger societal trends that are impacting what consumers seek travel, and they speculate this has implications for the Airbnb and hotel dynamic. These trends include:

  • A shift to a “new luxury”—seeking out unique, real experiences that serve as a launchpad for self-actualization—fueled by an increased wealth gap in the United States.
  • An increased mobility, particularly among previously under-represented groups in the United States (the black travel movement, for example) and the global traveler (more Indian and Chinese international travelers than ever before).
  • The changing nature of brand loyalty: from long-term relationships to consumers’ needs for instant gratification and personalization.
  • Changing nature of “ownership”: In a post-consumerist society, the accent on “access-based consumption” has Put a spotlight on wellness and well-being, beyond materialism.
  • A co-everything world where work, play, and life blend into one seamless mosaic: Technology has changed the artery they live their lives, and how they are connected to work, to each other and to the things that drive us. An upcoming 5G world and the IOT is only likely to accelerate the pace of change. hold LiveZoku (https://livezoku.com/), for example: is it a residence? A hotel? A WeWork? A space for the local community? A thriving food and beverage destination? It’s every bit of of these things.
  • What carry out these trends mean? They require marketers and tang designers to re-think what the travel tang means to the customer. The notion of the tang economy was created by Pine and Gilmore in 1998, and included four dimensions: escapism, education, entertainment, and esthetic. Leveraging one, or ideally, more of these dimensions creates memorable experiences for customers, which in gyrate results in brand loyalty. This dynamic has been fairly well-established in the academic literature. However, Airbnb has changed the game for the tang economy by emphasizing the sharing lifestyle and a sense of community, cleverly incorporating the above highlighted trends into its communications with customers. Because of Airbnb popularity and success, six original dimensions indulge in been incorporated into the tang economy, in the context of the travel experience: personalization, communitas, localness, hospitableness, serendipity, and ethical consumerism, as was presented by Mody in 2016.

    Interestingly, in a recent study by Mody and colleagues (Mody, Suess, & Lehto, 2017), the researchers organize that Airbnb outperformed hotels on every bit of the dimensions of this new, expanded, accommodation experiencescape. Airbnb outperforms hotels in the personalization dimension because of its wide array of homes and locations, enabling genuine micro-segmentation and the “perfect match” between guest and host (Dolnicar, 2018). Moreover, no one home is similar to another, giving customers a unique tang every time, enhancing the serendipity associated with an Airbnb stay. Airbnb elevates the sense of community that consumers seek, particularly when sharing space with other travelers and/or with the host, and allows consumers unparalleled access to “the local”—that café or cute shrimp store that only locals know about. However, there are areas where hotels hold their own. For example, the pathways between these dimensions and memorability were just as stout for hotels as for Airbnb, emphasizing the need for hotels to engage customers by leveraging the “right” dimensions for the brand—dimensions that align with the brand’s mission, story, and personality.

    One such dimension where hotels perform just as well as Airbnb is hospitableness, as confirmed in a study by Mody, Suess, and Lehto (2018). More “investor units” on the Airbnb platform means that the host is often not present when guests arrive to the home; moreover, every bit of communication is done electronically and with someone who “manages” the Airbnb unit and doesn’t necessarily own or live in it. In turn, hotels that leverage the human factor—the welcome of a friendly check-in agent, the helpfulness of the concierge,  the warm greeting and genuine interaction between guest and food and beverage staff—create more positive emotions, which subsequently lead to higher brand loyalty. It is imperative that hotel brands really speculate about the high-tech, elevated handle tang they are looking to provide, particularly in the golden age of brand proliferation that they live in.

    From a non-experience standpoint, regulation is another bone of contention that merits immediate inspection. After years of denying that Airbnb was a competitor, in 2016, the American Hotel & Lodging Association first began an extensive lobbying distress for the imposition of taxes and regulations on Airbnb that flush the playing field. Over the ultimate brace of years, the voices of the hotel lobby and other community groups indulge in translated into governments taking some action, in the U.S. and abroad. However, in a study of regulation across 12 European and American cities, Nieuwland and van Melik (2018) organize that governments indulge in been fairly lenient towards short-term rentals with shrimp to no (meaningful) regulations thus far. Moreover, regulations indulge in been designed to alleviate the negative externalities of Airbnb on neighborhoods and communities rather than to flush the playing bailiwick between Airbnb and hotels. Another challenge with regulating the peer to peer economy has been enforcement. In original York City, under the Multiple Dwelling law, it is illegal for a unit to exist rented out for less than 30 days unless the owner is present in the unit at the time the guest is renting. However, it is noiseless practicable to find “entire homes” on Airbnb in original York City, even though, in principle, these typically embrace homes where the host is not present during the guest’s stay. Moreover, Nieuwland and van Melik (2018) and Hajibaba and Dolnicar (2017) indulge in organize that regulations watch to exist very similar across cities, without accounting for the specificities of a particular location, which makes the process perfunctory and superficial. There also remains the danger of over-regulating Airbnb, given that there is noiseless very shrimp lore about efficacious ways of regulating these innovations in the sharing economy, thus stifling their potential. Avoid over-regulation is critical, since Airbnb has significant welfare effects in the economy. In addition to stimulating travel to previously inaccessible markets, Airbnb also creates customer surplus (Farronato & Fradkin, 2018), an well-known economic value measure. Moreover, other research has suggested that the detached resident is not as negative towards the Airbnb as media rhetoric might imply (Mody, Suess, & Dogru, 2018). The need for a data-driven approach to Airbnb regulation remains paramount.

    The Future: Competing with the sharing economy requires re-thinking the brand and the experience

    While regulation is outside the control of the hotel industry, the brand and the customer tang are not. They contend that these are the areas where hotel companies’ efforts need to exist focused. Hotels need to re-think the brand promise, both for the parent brand as well as individual brands in the portfolio, and how it defines and shapes the guest experience. Recent research by Mody and Hanks (2018) indicates that while Airbnb leverages the authenticity of the travel experience—by enabling local experiences that provide a sense of self and sense of place, hotel brands that are perceived as being authentic—original, genuine, and sincere—can generate higher brand loyalty. Thus, while it’s difficult to compete with homesharing in terms of experiential authenticity, brand authenticity is a pillar on which hotels can build a stout foundation for loyal brand relationships. This is particularly well-known because while Airbnb promotes experiential authenticity as a key reason to expend the brand, most travelers watch to sojourn with the brand for much more functional requirements, such as space and expense (Chen & Xie, 2017; Dogru & Pekin, 2017)

    There is no one definition for or manifestation of an “authentic” brand. It’s a perception, a feeling that consumers indulge in about what you stand for. An real brand has at its core the brand promise, an real value proposition that gives consumers a raison d’etre for associating with the brand. However, what an real brand does require is efficacious storytelling. A brand is perceived to exist authentic, if it has an real record that feeds it. Brand stories can approach from many sources: a brand’s values, personality, heritage, uniqueness, or its quest and purpose. What is well-known is telling compelling and coherent stories across the brand’s various touchpoints to engage consumers at a visceral, emotional level. Taking off industry blinders, and looking for inspiration outside the hotel industry, is critical. Tom’s Shoes is an excellent specimen of leveraging its quest—One for One—in creating a compelling brand story. As another example, in an industry typically focused on the in-store, “physical” experience, Burberry has set the gold measure for authentic, digitally-led and emotive storytelling, by looking within and leveraging over 150 years of history (Watch the YouTube Video here). In this vein, they speculate that Fairfield Inn and Suites’ revert to “where it every bit of began”—the Marriott family’s Fairfield Farm in the Blue Ridge Mountains of Virginia— to craft the brand tang of the future, from a design and communications standpoint, is an excellent specimen of leveraging authenticity and crafting a compelling brand pledge (Ting, 2017b).

    Another notion that lies at the heat of the brand pledge is what they summon the experiential value proposition, or EVP. For the longest time, hotel marketers indulge in relied on the guest elbowroom as the primary source of value for the guest. But speculate about the ultimate time you traveled. Was it the prospect of the hotel elbowroom that got you excited about your trip? Or was it everything that the hotel enables you to carry out – the tang outside the guestroom? From experiencing expertise and music in the lobby to its proximity to the must-do craft beer garden, hotel marketers must realize that it’s the complete package—what’s inside and outside the room—that customers expend as cues for making  their decision to select an accommodation. They summon this proposition offered by the hotel—what’s inside and outside the guest room, enclosed within an tang of hospitableness and a connection to humanity—its EVP. They present the EVP in device 1.  The EVP mirrors the value paradigm of the modern traveler, something that must exist reflected in the hotel brand’s sales, marketing and pricing and revenue management efforts. Thinking about a brand through the lens of the EVP paradigm has the power to re-orient the customer’s mindset from one of price-shopping to experience-shopping.

     Figure 1. The Experiential Value Proposition Framework

    How does a hotel marketer apply the EVP paradigm? Its application can open up many avenues. Hotels can start by rethinking the design of their primary digital channels, led by the website by adding more rich, vivid content that goes beyond the guestroom, in order to better integrate aspects of the wider hotel and local experience. The measure Hotels serves as an excellent specimen (http://www.standardhotels.com/) Its website feels more like a local lifestyle and culture magazine than a digital media property “selling” a hotel room. The website’s affluent images and stories draw the visitor into wanting to learn more about what the brand has to offer. While not every hotel can or would want to proceed the measure way, since the brand has its own discrete voice and personality, there is a case to exist made for going beyond static images of beds in guestrooms, which watch to blend into one indistinguishable gross after a point, particularly on OTA websites. When was the ultimate time the image of a hotel bed excited you to want to sojourn there? Yet, when you recognize at the imagery Put out by most hotels, this is what marketers noiseless focus on.

    Placing an accent on humanity and providing a sense of hospitableness can also enhance a brand’s EVP. Instead of technology replacing the human connection, the industry needs to recognize for ways in which technology can actually free up employees so that they can disburse their time crafting more personal and unique experiences, delighting guests instead of performing routine transactions. Moreover, if the human connection is what people seek out when traveling with Airbnb, why is it that hotel confirmation emails noiseless win sent out by automated systems that highlight the “facelessness” of the hotel entity. Why not expend that as an chance to truly welcome the guest; a simple handle such as a welcome epistle from the GM with his/her photo, or that of an employee who is “assigned” as “your personal host” during your sojourn can proceed a long artery in emulating the human connection that the sharing economy enables.

    The design of the hotel’s public spaces can exist used to enhance the guest’s tang of “communitas”. Ian Schrager would disagree (Schaal, 2017). After all, with much of Airbnb’s supply being dominated by investor units that provide shrimp or no host contact, what better an chance for hotel brands to expose that they are the original connectors of human beings? Sheraton has been sage in incorporating some of these communal elements into its brand makeover by introducing productivity tables and studio spaces and a day-time coffee bar that transforms into a bar at night. In terms of another design element, Airbnb’s attractiveness to family and group travelers can exist offset by offering connecting and/or multiple rooms for one price, with other tang value-adds thrown in (as with the Marriott family elbowroom connecting rooms package.

    Finally, the role of the loyalty program cannot exist emphasized enough. Loyalty programs must sprint beyond programmatic levels to being able to leverage data from guest history, gregarious media, and other marketing data sources, powered by predictive analytics, to personalize and individualize the guest tang of the brand. In an age of instant gratification, the loyalty program has to exist gamified to unlock value-adds and tender creative bundling.

    At the flush of the hotel company, beyond the individual brand, the hotel industry has started participating in the home sharing industry and is increasingly looking to integrate these platform industry models. For example, while Accor purchased Onefinestay, Marriott has teamed up with Hostmaker to create Tribute Portfolio Homes, a partnership that was recently expanded to four European cities (Fox, 2018). From an organic brand evolution standpoint, Accor’s newest Jo & Joe brand mimics the sharing economy within the confines of a traditional hotel space. Other, more innovative and bold ways of integrating the sharing economy ethos into a hotel could embrace offering an “Airbnb floor”, an antithesis to the club floor, one that would not tender housekeeping and other hotel services and thus exist offered at a lower price. With hotel brands becoming “branded marketplaces” for accommodation and not just hotel rooms, perhaps there is merit in listing hotel rooms on alternative accommodation platforms. HomeAway is already adding hotels to its platform through the Expedia Affiliate Network, while Airbnb is making a propel for bed-and-breakfasts and boutique hotels. Homesharing providers hope that by adding these options to their listings, they will fulfill their goal of being “for everyone”, while allowing independent and boutique hotels to gleam the benefits of branded distribution at a lower cost than traditional OTA brands.

    In sum, hotels must adopt a sales, marketing, and revenue management approach that is both strategic and tactical.

    At a strategic level, hotel brands need to re-think their story, and how they portray and fulfill their authenticity and brand promises. At a tactical level, it’s the tang and value beyond the guestroom that must exist factored into what is presented to current and potential guests, what they are charged for it, and how it is leverage to create “memorable memories” that lead to higher net promotor scores and brand loyalty. They present a graphical summary of the past, present, and future of Airbnb vs. hotels in device 2.

    Figure 2. Summarizing the past, present and future of Airbnb vs. hotels

    PDF Version Available Here

    References Chen, Y., & Xie, K. (2017). Consumer valuation of Airbnb listings: a hedonic pricing approach. International Journal of simultaneous Hospitality Management, 29(9), 2405–2424. http://doi.org/10.1108/IJCHM-10-2016-0606 Dogru, T., Mody, M., & Suess, C. (2018). Adding evidence to the debate: Quantifying Airbnb’s disruptive impact on ten key hotel markets. Dogru, T., & Pekin, O. (2017). What carry out guests value most in Airbnb accommodations? An application of the hedonic pricing approach. Boston Hospitality Review. Dolnicar, S. (2018). Unique Features of Peer-to-Peer Accommodation Networks. In S. Dolnicar (Ed.), Peer-to-Peer Accommodation Networks: Pushing the boundaries (pp. 1–14). Oxford: Goodfellow Publishers Ltd. Farronato, C., & Fradkin, A. (2018). The Welfare Effects of Peer Entry in the Accommodation Market: The Case of Airbnb. Fox, J. (2018). Marriott expands homesharing program in Europe. Hotel Management. Retrieved from https://www.hotelmanagement.net/own/marriott-expands-homesharing-program-to-3-european-cities Hajibaba, H., & Dolnicar, S. (2017). Regulatory Reactions Around the World. In S. Dolnicar (Ed.), Peer-to-Peer Accommodation Networks: Pushing the boundaries (pp. 120–136). Oxford: Goodfellow Publishers Ltd. Lane, J., & Woodworth, M. (2016). The Sharing Economy Checks In: An Analysis of Airbnb in the United States. Retrieved from http://www.cbrehotels.com/EN/Research/Pages/An-Analysis-of-Airbnb-in-the-United-States.aspx Mody, M. A., Suess, C., & Lehto, X. (2017). The accommodation experiencescape: a comparative assessment of hotels and Airbnb. International Journal of simultaneous Hospitality Management, 29(9), 2377–2404. http://doi.org/10.1108/IJCHM-09-2016-0501 Mody, M., & Hanks, L. (2018). Parallel pathways to brand loyalty: Mapping the consequences of real consumption experiences for hotels and Airbnb. Mody, M., Suess, C., & Dogru, T. (2018). Not in my backyard? Is the anti-Airbnb discourse truly warranted? Annals of Tourism Research. http://doi.org/10.1016/j.annals.2018.05.004 Mody, M., Suess, C., & Lehto, X. (2018). Going back to its roots : Can hospitableness provide hotels competitive handicap over the sharing economy ? International Journal of Hospitality Management. http://doi.org/10.1016/j.ijhm.2018.05.017 Nieuwland, S., & van Melik, R. (2018). Regulating Airbnb: how cities deal with perceived negative externalities of short-term rentals. Current Issues in Tourism, 0(0), 1–15. http://doi.org/10.1080/13683500.2018.1504899 Schaal, D. (2017). Ian Schrager Calls Out Hotel Industry’s Airbnb Strategy as Misguided. Skift. Retrieved from https://skift.com/2017/12/08/ian-schrager-calls-out-hotel-industrys-airbnb-strategy-as-misguided/ Ting, D. (2017a). Airbnb Growth record Has a Plot Twist — A Saturation Point. Skift. Retrieved from https://skift.com/2017/11/15/airbnb-growth-story-has-a-plot-twist-a-saturation-point/ Ting, D. (2017b). Marriott and option hold Varied Approaches to Reviving Classic Midscale Brands. Skift. Zaleski, O. (2018). Airbnb and Niido to Open as Many as 14 Home-Sharing Apartment Complexes by 2020. Retrieved from https://www.bloomberg.com/news/articles/2018-08-14/airbnb-and-niido-to-open-as-many-as-14-home-sharing-apartment-complexes-by-2020 Makarand Mody, Ph.D. has a varied industry background. He has worked with Hyatt Hotels Corporation in Mumbai as a Trainer and as a character Analyst with India’s erstwhile premier airline, Kingfisher Airlines. His most recent experience has been in the market research industry, where he worked as a qualitative research specialist with India’s leading provider of market research and insights, IMRB International. Makarand’s research is based on different aspects of marketing and consumer conduct within the hospitality and tourism industries. He is published in leading journals in the field, including the International Journal of simultaneous Hospitality Management, Tourism Management Perspectives, Tourism Analysis and the International Journal of Tourism Anthropology. His travail involves the extensive expend of inter and cross-disciplinary perspectives to understand hospitality and tourism phenomena. Makarand also serves as reviewer for several leading journals in the field. In tumble 2015, he joined the faculty at the Boston University School of Hospitality Administration (SHA). He received his Ph.D. in Hospitality Management from Purdue University, and also holds a Master’s degree from the University of Strathclyde in Scotland. Monica Gomez is a graduate student in the School of Hospitality Administration at Boston University. She received her Bachelor’s degree in Tourism, Recreation, and Sport Management from the University of Florida and has held previous internship positions in hotel operations and event management. She is a member of the Hospitality Sales and Marketing International Association and is interested in hotel revenue management.

    June 12th, 2017 in Spring 2017, Technology, Trends

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    By Mike Oshins

    Over the past 15-20 years, changes in hotel ownership and management, the growth and evolution of online reservation systems and the proliferation of lodging alternatives indulge in altered the hospitality landscape, bringing original complexity to the industry. Two decades ago, a Marriott hotel was commonly owned and managed by Marriott; now, many are owned by one company, franchised with the Marriott name, and managed by a third company.  While customers used to exist able to pick up the phone and summon a hotel’s reservations heart or expend their local travel agency to reserve a room, today online distribution systems like Expedia, Travelocity, and Kayak are powerful intermediaries that indulge in every bit of but replaced traditional consumer travel agencies.  Travelers may select among many alternatives to hotels for lodging, including AirBnB, HomeAway, Flipkey, and VBRO.  Mergers and acquisitions continue to multiply, exemplified most notably by Marriott’s purchase of Starwood to create the world’s largest hotel company with 30 brands. Millennials’ preferences indulge in pushed the evolution of original brands with original thinking about hotel design, as demonstrated with Hilton’s Tru, Best Western’s Vib and Glo chains, and Intercontinental’s EVEN.

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    Hotel companies are expanding their portfolios to embrace Millennial-focused brands like InterContinental’s EVEN Hotels and Tru by Hilton. Image sources: Creative Commons InterContinental and Tru

    Travel patterns indulge in also changed.  China has become the largest exporter of tourists in the world, totaling almost 100 million outbound travelers and representing almost one in ten tourists in the world. Chinese travelers also spent the most money, roughly $250 billion in 2015. For reference, the second highest spenders were Americans at $110 billion.  In the U.S., national discussion about travel bans, original barriers to hiring non-domestic seasonal workers (a key factor in original England’s summer tourist season), practicable elimination of the national Brand USA marketing effort, and tenuous Cuba travel policies are every bit of creating skepticism in the tourism market.  These changes and ambiguities present original challenges, both great and small, for the hospitality industry, requiring those at the forefront of the bailiwick to anticipate and respond to the subsequent fallout.

    Prolific industry author John Kotter states that the main role of leadership is dealing with change.  Depending on how it’s viewed, with the commandeer perspective and pliancy, change can present an organization with original opportunities—the possibility of taking handicap of changing demographics, original technologies, or the emergence of original markets.  Change can also raise dilemmas, such as the need to address original competitors, contend with a crisis or cope with a need of available employees.  Even before developing and implementing successful change management processes, organizational leaders must indulge in the ability to recognize the opportunities and dilemmas presented by change and know how to speculate about them.  To view the need for change, to identify original realities, either current or future, one must exist able to view the Big picture and the current climate in original ways.  This ability to view the present and near future from a original vantage point is one of the main reasons general Electric (GE) CEO, Jeff Immelt, moved GE world headquarters to Boston’s expanding Seaport District.  GE’s original home will “place his leadership team in a vibrant city with a world-renowned innovation scene, instead of in a wooded Connecticut suburb” (Boston Globe), thus giving his senior team a original perspective, and the chance to create closer connections with institutions able to stimulate original ideas and create a original pipeline for employees.   Other than affecting a $240 billion company’s world headquarters—something that’s not always feasible to achieve—how else can one enhance a leadership kit with tools for responding effectively to change?  The ability to speculate more creatively, configuration original habits, change paradigms, reframe one’s perspective, and speculate differently by learning original ideas are every bit of tools that can aid in addressing the first factor of leading change, that is identifying that change is needed.  The following examples highlight some of the ways one can learn to exist more successful in thinking about and capitalizing on the opportunities presented by change.

    Creative Thinking 21st May 1974: A chainmail-clad John Cleese reads a newspaper while Graham Chapman smokes a  soundless pipe on the set of 'Monty Python and the Holy Grail'. (Photo by John Downing/Express/Getty Images)

    Popular British comedy group Monty Python expressed creative thinking in every bit of of their productions, further captured by their tagline, “And now for something completely different!”.  Pictured above: A chainmail-clad John Cleese reads a newspaper while Graham Chapman smokes a soundless pipe on the set of ‘Monty Python and the Holy Grail’. (Photo by John Downing/Express/Getty Images)

    IBM interviewed 1500 CEOs around the world in 2010 and organize Creativity is now the single most well-known leadership competency and is needed in every bit of aspects of leadership.  If one thinks in the very artery as everyone else, the chance for original ideas (and original solutions) is limited.  The irreverent and offbeat humor of Monty Python is captured in their tagline, “And now for something completely different!”  speculate Different! is the mantra for Steve Jobs and Apple, as eloquently explained in Simon Sinek’s Start with Why. Sir Ken Robinson, author and the holder of the top TED Talk carry out Schools destroy Creativity, defines creativity as, “the process of having original ideas that indulge in value.” There are many ways to extend creativity, including:

  • Establishing a culture in which failure is a participate of learning.  “A growing number companies are explicitly rewarding failure – giving cash prizes or trophies to people who foul up (WSJ). Earlier in his career, Johnson & Johnson CEO James Burke once went to view Mr. Johnson after his product launch failed miserably.  Instead of being fired as expected, Mr. Burke organize instead that Mr. Johnson shook his hand and congratulated Burke on the failure.  Along with the handshake, Burke was given the following recommendation that became his philosophy: “Business is about making decisions.  You can’t create decisions without failures.  Don’t ever create that very mistake again, but please, withhold making original mistakes!”  Burke made this philosophy “always making original mistakes” an well-known value within his leadership vision. Similarly, Michael Jordan credits his success with ability to overcome the concern of failure: “I’ve missed more than 9000 shots in my career. I’ve also lost more than 300 games. 26 times I’ve been trusted to hold the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”
  • Collaboration.  Ken Robinson touts that creativity loves collaboration as even individual creativity is almost always stimulated by the work, ideas and achievements of other people. Author Daniel Goleman agrees:  “A close-knit team, drawing on the particular strengths and skills of each member of the group, may exist smarter and more efficacious than any individual member of that group. Yale psychologist Robert Sternberg calls it “group IQ”—the sum total of every bit of the talents of each person in the group. When a team is harmonious, the group IQ is highest…The value of collaboration is a difficult lesson to learn in [some] cultures, where the trailblazing lone hero has long been idolized, and where the role of the individual are so often placed over those of the group. But even those working solitary can learn the advantages of teamwork.”
  • Positive thinking.  It has been proven that merely thinking you are more creative increases creativity. Change your attitude with the mantra: I am creative. IDEO founder David Kelley organize positive reinforcement increased creativity for employees and helped ascertain original solutions to design challenges.  As people become more comfortable with the realization that they can exist more creative, the upward spiral of success is reinforced.  Goleman concurs: “The more you can tang your own originality, the more confidence you get, the greater the probability that you’ll exist creative in the future.”
  • Challenge the Rules. Pablo Picasso believed in challenging tradition, “Every act of creation is first of every bit of an act of destruction.”  A questioning attitude of asking “why” multiple times for the very question (e.g. why carry out they expend time clocks for front line employees?) may result in discovering established rules may exist hurting more than helping and organization. For example, typewriters were designed with QWERTY keyboards to avoid keys from sticking together if the operator went too lickety-split (i.e. slowed down how lickety-split one could type).  Why carry out computer keyboards noiseless expend this configuration as a default?  World War II American five-star general Douglas MacArthur  believed “you are remembered by the rules you break.”
  • Humor. “More than four decades of study by various researchers confirms some common-sense wisdom: Humor, used skillfully, greases the management wheels” (Sala). When people are working together on a problem, those groups that laugh most readily and most often are more creative and productive than their earnest counterparts. Joking around makes pleasurable sense because playfulness is itself a creative situation (Goleman). The expend of humor or “being silly” can reduce stress and create a learning environment conducive to original ideas.  Author Jonah Lehrer agrees: “When people are exposed to a short video of stand-up comedy, they unravel about 20% more insight puzzles.”
  • Brainstorming.  building upon the traditional brainstorming technique where ideas are developed in an atmosphere of non-judgmental environment, additional creative methods indulge in emerged, including Edward Debono’s Six Thinking Hats, where “wearing” different colored hats requires addressing the situation with a special focus, Synectics’ inclusion of springboard and excursion techniques to expand notion generation and reason mapping to visually develop ideas. At IDEO, brainstorming sessions embrace the “odd person in” technique, involving people from very different backgrounds that can spark original ideas.
  • New Habits

    Creating a original exercise or set of habits is another artery to change how they view things.  In his iconic 1989 book, The 7 Habits of Highly efficacious People, Stephen Covey illustrates how powerful an influence habits can exist in their lives. Covey describes a exercise as the intersection of knowledge, skill, and desire: “Knowledge is the what they carry out and why they carry out it [principles], crave is the motivation, the want to do, and skill is the how to do.” His seven habits—Be Proactive, inaugurate with the conclude in mind, Put first things first, speculate win/win, seek first to understand…then exist understood, Synergize, and Sharpen the saw—provide a artery of thinking and acting in industry and life.  By embracing these habits, one can maintain a better equipoise and create the chance to find original ways of looking at situations.

    Barista Kim Jung Mi, a mother who had left the workforce seven years ago and is now employed by Starbucks Coffee Korea Co. under its "returning-mom" program, right, serves a customer at one of the company's stores in Gimpo, South Korea, on Friday, March 7, 2014. Starbucks Korea's "returning-mom" program is   participate of a drive to raise female participation in Asia's fourth-largest economy as the nation's first female leader, President Park Geun Hye, tries to counter the effects of an aging population. Photographer: SeongJoon Cho/Bloomberg via Getty Images

    Through role playing, discussion, and feedback, Starbucks employees are trained to develop habits of willpower. (Photographer: SeongJoon Cho/Bloomberg via Getty Images)

    Charles Duhigg’s more recent bestseller, The Power of Habit, addresses the notion of habits as “why they carry out what they carry out in industry and life.”  Taking a psychological approach, Duhigg explores the theory of cues (something that triggers a habit), routines (actions taken in response to cues), and rewards (the positive experiences resulting from routines), which together comprise the exercise loop.  For example, Starbucks develops habits of willpower to attend their staff deal with stressful times. Through role-playing, discussion, and feedback, they train employees how to react to a cue (e.g., an ireful customer or a industrious period) by choosing a unavoidable routine ahead of time (e.g., remaining calm, looking for solutions, etc.). When an inflection point arrives (cue), employees are able to wield the situation smoothly, resulting in the reward of a satisfied customer and successful chaos management. In this scenario, Starbucks helps their staff create habits by helping them change how they approach and address dilemmas.  One employee now thinks of his green Starbucks apron as a shield – when he puts it on, ireful customers can no longer influence him!

    Cue

    Taking a psychological approach, Duhigg explores the theory of cues (something that triggers a habit), routines (actions taken in response to cues), and rewards (the positive experiences resulting from routines), which together comprise the exercise loop.

    Reframing

    “The power of reframing things can unlock a vast array of solutions to problems Big and small,” states author Tina Seelig.  She illustrates reframing using a classic scene from the Pink Panther movie (a hospitality example, no less).

    Inspector Clouseau: Does your dog bite?

    Hotel Clerk: No.

    Clouseau [bowing down to pet the dog] Nice doggie.

    [The dog bites Clouseau’s hand.]

    Clouseau: I thought you said your dog did not bite!

    Hotel clerk: That is not my dog.

    We might exist tempted to blame the clerk when the dog bites Clouseau, but the clerk’s final statement surprises us and causes us to account the situation differently.

    One of the key elements of reframing is to view a circumstance with a fresh perspective. In Tom Stoppard’s play, Rosencrantz and Guildenstern are Dead, they view Shakespeare’s classic record of Hamlet through the lens of two minor characters, and in the Broadway hit Wicked, the Wizard of Oz record is interpreted from the witches’ perspectives, revealing a more complex and altered understanding of the Wicked Witch of the West and Glinda, the pleasurable Witch.  Reframing a situation allows the possibility of original lessons and solutions which otherwise may proceed unnoticed.

    NEW YORK - JUNE 6: (HOLLYWOOD REPORTER OUT) American singer and actress Idina Menzel of "Wicked" performs on stage during the "58th Annual Tony Awards" at Radio City Music Hall on June 6, 2004 in  original York City. The Tony Awards are presented by the League of American Theatres and Producers and the American Theatre Wing. (Photo by frank Micelotta/Getty Images)

    The Broadway hit Wicked, the Wizard of Oz record is interpreted from the witches’ perspectives, revealing a more complex and altered understanding of the Wicked Witch of the West and Glinda, the pleasurable Witch. (Photo by frank Micelotta/Getty Images)

    In their approach to reframing, authors Bolman and Deal expend frames as a useful implement to create sense of organizations.  The four frames, structural (emphasizing roles & policies), human resource (highlighting human needs, skills and relationships), political (focuses on power, contest and competition) and symbolic (emphasizing culture, meaning, ceremonies and stories) tender different perspective on how to speculate about organizations.  Each frame provides a different language and model in managing, evaluating, diagnosing and understanding and leading an organization.  Altering the artery in which they typically frame an organization can attend us better communicate with those who interpret the organization differently.  Viewing an organization from different frames may also unleash a variety of original ideas to address current or emerging dilemmas or raise up original opportunities to respond to change in their world.

    Another specimen of reframing is illustrated, quite literally, in how they view the world. This spring, 600 classrooms in the Boston Public School system switched from teaching the traditional European-centric Mercator map, developed in the 1500s, to the Peters Projection map (1974), in which land masses are more accurately represented in relation (size and proximity) to one another.  For example, using the Mercator map, Greenland and Africa loom the very size; in the Peters map, however, Africa, which is 14 times larger than Greenland, is more proportionally displayed.  This notion was brought to mainstream US in a 2001 West Wing clip by the ‘cartographers for gregarious equality’. At one point, when confronted with these original perspectives, a West wing official asked, “You signify Germany is not where they speculate it is?”— to which a cartographer responded, “Nothing is where you speculate it is.” The issue of perspective and change about their world, met with incredulity in a fictional drama, became reality this spring in Boston Public Schools.

    Paradigms Shifts

    The Oxford Dictionary defines a paradigm as “a typical specimen or pattern of something; a pattern or model.” Scientist Thomas Kuhn introduced the concept of the paradigm shift in his influential 1962 book, The Structure of Scientific Revolutions.  Groundbreaking paradigm shifts embrace examples in areas as diverse as physics, health, and astronomy—think of what Galileo had to proceed though to convince royalty that the earth rotated around the sun (Copernicus theory) when most astronomers believed the invert to exist true.  A paradigm shift changes how they recognize at things. Malcolm Gladwell’s best-selling books focus on rethinking preconceived ideas, starting with his breakthrough 2006 reserve The Tipping Point and continuing with his more recent reserve David and Goliath, which offers several real life examples of when a perceived strength can exist a weakness and a weakness… a strength.  For example, an extraordinary elevated number of successful entrepreneurs are dyslexic, including Jet Blue founder David Neeleman.  The challenge of dyslexia as a child may provide coping skills later in life – billionaire Sir Richard Branson of Virgin Air considers his dyslexia his greatest industry advantage.

    AUSTIN, TX - MARCH 15: Journalist Malcolm Gladwell attends 'Bill Gurley And Malcolm Gladwell In Conversation' during the 2015 SXSW Music, Film + Interactive Festival at Austin Convention  heart on March 15, 2015 in Austin, Texas. (Photo by Robert A Tobiansky/Getty Images for SXSW)

    “As the playwright George Bernard Shaw once Put it: “The reasonable man adapts himself to the world: the unreasonable one persists in trying to reconcile the world to himself. Therefore every bit of progress depends on the unreasonable man,” from Malcolm Gladwell’s David and Goliath: Underdogs, Misfits, and the expertise of Battling Giants. (Photo by Robert A Tobiansky/Getty Images for SXSW)

    In business, paradigm shift examples embrace disruptive innovations (e.g., the Internet, mobile technology, and Big data analytics), shifting global economies, climate change, employee and societal demands, and changing consumer preferences.  Futurist Joel Barker explains that when a paradigm shift occurs, everything resets to zero, past successes guarantee nothing, and shifting industry models shift to create original realities.  For example, once-successful Big box stores and corporations that could not reconcile to the digital age, such as Borders Books, Blockbuster, and Kodak, went bankrupt. Compare these examples to Netflix, which was able to successfully navigate from their industry model of renting DVDs through the mail to streaming movies and television shows over the internet to extend their market share.  Flexibility to reconcile to paradigm shifts is a powerful tool. As Charles Darwin explains in describing his iconic research: “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”           

    UNSPECIFIED - AUGUST 01: Biology - Evolutionary theory: theories of Jean-Baptiste Lamarck and of Charles Darwin. Illustration. (Photo by DeAgostini/Getty Images)

    An illustration of Darwin’s well-known notion of “Survival of the Fittest” (Photo by DeAgostini/Getty Images)       

    Self-Reflection and Understanding

    Shifting paradigms and changing one’s perspective starts with self-reflection: the better they understand ourselves, the better they can approach change.  Daniel Goleman provides the multi-faceted framework of emotional intelligence, including two personal competencies (self awareness and self management) and two gregarious competencies (relationship management and gregarious awareness) that should exist examined to attend better understand moods and how they influence those around them. Peter Drucker asserts in order to exist productive over a 50-year work-life it is well-known to cultivate a deep understanding of one’s self.  He offers several penetrating questions in his Harvard industry Review article Managing Oneself, including “How carry out I work?” “Where carry out I belong?” and  “What can I contribute?”

    There are also many tools available to attend provide insight into the ways in which they each view and navigate the world around us. With over two million Myers Briggs nature Indicator (MBTI) assessments being administered every year in more than 70 countries, this personality profile tool, based on the travail of noted psychologist Carl Jung, continues to exist wildly favorite in helping people better understand themselves. Key MBTI elements embrace how they focus their energy (introversion vs. extroversion), the artery they hold in information (sensing vs. intuitive), create decisions (thinking vs. feeling) and their attitudes toward the external world and how they orient ourselves to it (view the world to exist organized and methodical vs. springy and exist experienced).  The Big Five personality traits, Fundamental Interpersonal Relations Orientation (FIRO), Thomas-Kilmann contest mode instrument (TKI), and the stout Interest inventory are every bit of additional tools that can attend analyze one’s preferences.

    Identifying one’s personal values is also a stout trend in industry today, with a plethora of instruments available for self-discovery.  For example, after a two-day, internal values-clarification exercise, each member of the senior leadership team of the Vail Centre posts his/her top five values on the company’s website for everyone to see.  Determining and focusing on one’s strengths rather than one’s weaknesses is the cornerstone approach to Gallop Poll and Don Clifton’s Strengthfinder 2.0.  This self-assessment implement enables one to identify their  top 5 of 34 different talent themes, from Achiever to WOO (winning others over).  By better understanding one’s natural instincts, strengths, weaknesses and personal preferences, one can extend the likelihood to learn how other colleagues or customers from different backgrounds, cultures, generations or perspectives view things differently, enabling original approaches or frames to address change.

    In his book, The Spirit to Serve, Marriott International founder J.W. Marriott, Jr.  adopted 19th century philosophy Alfred North Whitehead’s  perspective when developing the Marriott Way, “The expertise of progress is to preserve order amid change and to preserve change amid order.”  The ability to speculate differently as the hospitality industry moves into uncharted territories—both nationally and internationally, within organizations and in local markets, online and in person—is becoming more well-known as change continues to evolve at a faster pace than ever before.  Being facile and open-minded enough to adapt, addressing challenges and/or seizing opportunities, will determine which companies wither away and which ones thrive.  At the heart of these circumstances is the ability to recognize trends, realize the need for change and act on these situations in ways that navigate the needs of an organization, and its staff and customers.  Mental flexibility, adaptability, creativity and personal awareness are key tools in this process that can attend hospitality leaders view things from different perspectives, gain original insights, develop and pilot original ideas and better respond to an ever-changing world.

    PDF Version Available Here

    Oshins

    Michael Oshins is Associate Professor of the exercise of Leadership in the School of Hospitality Administration at Boston University. He is former Vice President of Integer Dynamics, a hospitality consulting difficult focused on operational productivity and technology. He holds a doctorate in human resource education from Boston University and a master’s degree in hotel administration from Cornell University. Email: moshins@bu.edu References
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  • June 7th, 2017 in Hotels, Sharing Economy, Spring 2017, Trends, Uncategorized

    Left: Boston-area Airbnb hosts prepares her spare  elbowroom for rent Right: A suite at the Godfrey Hotel, a recent addition to Boston's hotel offerings. Photo Sources: Getty Images

    Left: Boston-area Airbnb hosts prepares her spare elbowroom for rent Right: A suite at the Godfrey Hotel, a recent addition to Boston’s hotel offerings. Photo Sources: Getty Images

    By Tarik Dogru, Makarand Mody, and Courtney Suess

    If you are in the hotel industry, chances are that Airbnb has approach up in conversation at some point or another. The sharing economy phenomenon and the economic, social, and technological changes fueling its growth indulge in challenged the hotel industry to rethink its experiential value proposition to the customer (Mody, Suess, & Lehto, in press). Airbnb founder and CEO Brian Chesky tweeted that “Airbnb hosted more than 2 million guests in the past original Year’s Eve,” and that with the ultimate round of financing, which was $1 billion, Airbnb is now valued at $31 billion (Yurieff, 2017). As a result, Airbnb has been at the core of discussions in the world of hospitality and beyond, mainly due to its potential and uncalculated impacts. On one hand, Airbnb might indulge in positive economic impacts on hospitality and tourism institutions, such as restaurants, bars, and other zone attractions, through increases in income and job creations. On the other hand, potential adverse economic impacts of Airbnb cannot exist overlooked: Airbnb might negatively influence the hotel industry, if visitors were to shift their claim from hotels to Airbnb accommodations. However, it is not yet lucid whether Airbnb is taking a participate of the existing hotel industry pie or increasing the size of the overall accommodations industry.

    LOS ANGELES, CA - NOVEMBER 17: Airbnb founder/CEO Brian Chesky speaks onstage at "Introducing Trips"  disclose at Airbnb Open LA on November 17, 2016 in Los Angeles, California. (Photo by Stefanie Keenan/Getty Images for Airbnb)

    Brian Chesky, Airbnb CEO and founder, tweeted that “Airbnb hosted more than 2 million guests in the past original Year’s Eve”. Photo Source: Getty Images. Photo by Stefanie Keenan/Getty Images for Airbnb

    The results from the most comprehensive study analyzing the effects of Airbnb on the hotel industry showed that a 1% extend in Airbnb listings decreases hotel revenue by 0.05% (Zervas, Proserpio, & Byers, 2016). Thus, although negative effects on hotel revenues by artery of Airbnb were reported in this study, the magnitude of these effects was small in the given location of Texas. On the other hand, a study conducted in Korea showed that Airbnb does not influence hotel revenues at every bit of (Choi, Jung, Ryu, carry out Kim, & Yoon, 2015). A recent study conducted by Smith Travel Research (STR) in 13 global markets reported that Airbnb listings did not influence hotel claim and revenues (Haywood, Mayock, Freitag, Owoo, & Fiorilla, 2017).

    While there are limited studies from which to draw definitive conclusions on the effects of Airbnb on the hotel industry, according to Mr. Chesky, Airbnb does not directly compete with the hotel industry. He claims that Airbnb guests are not typical hotel customers, but rather those who would indulge in stayed with friends and family (Intelligence, 2017). Although Airbnb argues that it brings original visitors to destinations and that 70% of its listings are outside of hotel districts, a report by Morgan Stanley indicates that about 42% and 36% of Airbnb guests switched from hotels and bed and breakfasts respectively, whereas only 31% of Airbnb guests limn those who would indulge in stayed with friends and family (Intelligence, 2017). Furthermore, a recent study conducted in Los Angeles showed that more than 60% of the properties listed on Airbnb are solely used for commercial purposes and thus are excluded from the residential real estate market (Lee, 2016). According to a recent report by CBRE, revenue generated by hosts renting out two or more units was about $1.8 billion, and hosts renting out ten or more units generated $175 million in 13 major US markets in 2016 (CBRE, 2017). Despite this massive amount of generated revenue, the hosts are generally not paying taxes on their properties.

    While there seems to exist free-riders on the market that hold handicap of the sharing economy platforms like Airbnb by listing multiple properties, based on the current knowledge, it is noiseless not lucid whether Airbnb has an adverse result on the hotel industry. The present study compares the hotel industry and Airbnb in terms of key performance metrics, including occupancy, ADR, and RevPAR, to determine whether and how Airbnb affects the hotel industry in Boston. Boston is a stout hotel market, but italso has a considerable and growing Airbnb supply, so it provides an excellent context for their analysis.

    In their analyses, they treated Airbnb as an accommodation difficult to analyze whether it is directly competing with hotels in Boston. Accordingly, the number of Airbnb units listed and the number of units rented (including entire homes and private and shared rooms) multiplied by the number of days in a specified time epoch constitute Airbnb supply and claim figures, respectively. Occupancy, ADR, and RevPAR were calculated following the very methodology used to compute these statistics in hotel industry. The Airbnb and hotel data were provided by Airdna and STR, respectively. They analyzed data for the epoch between January 2015 and September 2016.

    ANALYSIS Comparing changes in supply and demand

    Tables 1 and 2 present the supply, demand, and revenue statistics for Airbnb and hotels in the city of Boston during the analysis period.

    Table 1. Airbnb Supply and Demand Period Airbnb Supply % Change in Supply Airbnb Demand % Change in Demand Jan-15 79,110 N/A 575 N/A Feb-15 85,890 8.6 4,506 683.7 Mar-15 91,710 6.8 7,811 73.3 Apr-15 106,380 16.0 18,733 139.8 May-15 114,330 7.5 30,547 63.1 Jun-15 123,180 7.7 38,545 26.2 Jul-15 122,670 -0.4 51,378 33.3 Aug-15 119,580 -2.5 37,555 -26.9 Sep-15 128,730 7.7 51,757 37.8 Oct-15 142,470 10.7 41,011 -20.8 Nov-15 363,660 155.3 76,451 86.4 Dec-15 383,880 5.6 65,064 -14.9 Jan-16 380,910 -0.8 73,300 12.7 Feb-16 375,480 -1.4 101,409 38.3 Mar-16 372,540 -0.8 112,501 10.9 Apr-16 373,050 0.1 134,951 20.0 May-16 374,970 0.5 137,347 1.8 Jun-16 378,870 1.0 147,947 7.7 Jul-16 385,260 1.7 148,473 0.4 Aug-16 385,620 0.1 123,588 -16.8 Sep-16 390,270 1.2 107,690 -12.9 Table 2. Hotel Supply and Demand Period Hotel Supply % Change in Supply Hotel Demand % Change in Demand Jan-15  1,588,843  N/A  896,065  N/A Feb-15  1,436,512 -9.6  901,459 0.6 Mar-15  1,598,701 11.3  1,200,426 33.2 Apr-15  1,550,910 -3.0  1,216,283 1.3 May-15  1,605,304 3.5  1,328,932 9.3 Jun-15  1,558,800 -2.9  1,357,872 2.2 Jul-15  1,610,760 3.3  1,413,521 4.1 Aug-15  1,616,278 0.3  1,393,622 -1.4 Sep-15  1,564,170 -3.2  1,335,976 -4.1 Oct-15  1,616,340 3.3  1,394,364 4.4 Nov-15  1,564,170 -3.2  1,105,292 -20.7 Dec-15  1,616,309 3.3  906,619 -18.0 Jan-16  1,632,367 1.0  909,132 0.3 Feb-16  1,482,796 -9.2  895,546 -1.5 Mar-16  1,646,410 11.0  1,150,937 28.5 Apr-16  1,593,300 -3.2  1,273,368 10.6 May-16  1,650,409 3.6  1,303,974 2.4 Jun-16  1,603,050 -2.9  1,366,553 4.8 Jul-16  1,656,392 3.3  1,406,893 3.0 Aug-16  1,667,955 0.7  1,403,774 -0.2 Sep-16  1,622,130 -2.7  1,347,565 -4.0

    The number of Airbnb listings has increased dramatically from 79,110 in January 2015 to 390,270 in September 2016. While the highest growth in hotel elbowroom supply was about 11% month-over-month (in March 2016), Airbnb supply experienced a phenomenal growth rate of 155% (in November 2015). Extraordinary changes in hotel elbowroom supply might exist due to renovations and the completions of ongoing projects in the pipeline. However, the extreme supply shocks in the case of Airbnb are due to the greater flexibility of adding or removing existing residential properties in the market.

    Changes in claim were greater than the changes in supply for both Airbnb and the hotel industry. Yet overall trends bespeak that Airbnb experienced greater increases in claim as compared to the increases in the claim for hotel rooms. For example, Airbnb claim increased by 684%, 140%, and 33% in February, April, and July 2015 respectively, whereas hotel claim only increased by 0.6%, 1.3%, and 4.1% during these months. Although the changes in claim for Airbnb and the hotel industry during the analysis epoch were, for most part, in the very direction (albeit to varying degrees), there were some anomalies where the changes occurred in the contradictory direction. For example, in September and November 2015, while hotel claim decreased by around 4% and 21% respectively, the claim for Airbnb accommodations increased by about 38% and 86% respectively. Also, claim for Airbnb accommodations decreased by 21% in October 2015, whereas hotel claim increased by 4% during the very period.

    Comparing Occupancy, ADR, and RevPAR

    Tables 3 and 4 shows occupancy, ADR, and RevPAR statistics for Airbnb and hotels in the city of Boston during the analysis period.

    Table 3. Airbnb OCC-ADR-RevPAR Period Airbnb Occupancy Airbnb

    ADR

    Airbnb RevPAR Jan-15 0.70 $158.86  $1.15 Feb-15 5.20 $133.05  $6.98 Mar-15 8.50 $153.44  $13.07 Apr-15 17.6 $161.00  $28.35 May-15 26.7 $134.61  $35.97 Jun-15 31.3 $186.51  $58.36 Jul-15 41.9 $180.12  $75.44 Aug-15 31.4 $142.24  $44.67 Sep-15 40.2 $183.34  $73.71 Oct-15 28.8 $171.78  $49.45 Nov-15 21.0 $151.97  $31.95 Dec-15 16.9 $149.88  $25.40 Jan-16 19.2 $142.60  $27.44 Feb-16 27.0 $160.89  $43.45 Mar-16 30.2 $156.35  $47.22 Apr-16 36.2 $158.33  $57.27 May-16 36.6 $160.96  $58.96 Jun-16 39.0 $187.26  $73.13 Jul-16 38.5 $176.45  $68.00 Aug-16 32.0 $145.23  $46.55 Sep-16 27.6 $159.41  $43.99 Table 4. Hotel OCC-ADR-RevPAR Period Hotel Occupancy Hotel

    ADR

    Hotel RevPAR Jan-15 56.4 $142.74 $80.50 Feb-15 62.8 $144.29 $90.55 Mar-15 75.1 $170.58 $128.08 Apr-15 78.4 $188.01 $147.44 May-15 82.8 $205.62 $170.22 Jun-15 87.1 $206.68 $180.04 Jul-15 87.8 $200.44 $175.90 Aug-15 86.2 $193.64 $166.96 Sep-15 85.4 $209.00 $178.51 Oct-15 86.3 $220.10 $189.87 Nov-15 70.7 $183.17 $129.43 Dec-15 56.1 $147.97 $83.00 Jan-16 55.7 $146.43 $81.55 Feb-16 60.4 $146.65 $88.57 Mar-16 69.9 $171.94 $120.20 Apr-16 79.9 $201.51 $161.04 May-16 79.0 $207.29 $163.78 Jun-16 85.2 $212.35 $181.02 Jul-16 84.9 $199.52 $169.47 Aug-16 84.2 $198.45 $167.02 Sep-16 83.1 $219.26 $182.15

    Hotel occupancy rates decreased to 83% in September 2016 from 85% in the very epoch of the previous year, whereas Airbnb’s occupancy has seen a greater reduce from 40% to 28% in the very period. In February 2015, Airbnb’s occupancy was around 5% and reached about 28% in September 2016. While Airbnb experienced a dramatic extend in occupancy growth throughout the analysis period, these gains did not look to influence the hotel industry’s occupancy rates.

    Although hotel ADR was generally greater than that of Airbnb, Airbnb’s ADR figures were greater than hotel ADR in three months (January 2015, December 2015, and February 2016). Hotel ADR was $209 in September 2015 and increased to about $219 in September 2016. Despite the lower occupancy in hotels in September 2016 as compared to the very time in the previous year (September 2015), the RevPAR was comparatively higher even after correcting for inflation. (Note: The RevPAR increased from $75.17 to $75.58 based on 1982=100 prices.) A lucid trend can exist observed in hotel ADR and RevPAR figures through 2015, and this trend seemed to persist in 2016 in terms of the month-over-month growth rates. However, Airbnb ADR and RevPAR seemed to fluctuate throughout 2015 and carry out not look to follow a seasonal movement. Indeed, supply and claim dynamics may indulge in caused the changes in Airbnb ADR and RevPAR, where the equilibrium expense is set within the Airbnb market. However, the need of revenue management practices by Airbnb hosts might also indulge in contributed to these fluctuations in ADR and RevPAR.

    Boston Change in supply Airbnb vs Hotels

    Change in  claim Airbnb vs Hotels BostonChange in occupancy Airbnb vs Hotels Boston

    Figure 4

    Change in RevPAR Airbnb vs Hotels BostonBoston Hotel Perforamnce Trends 2005-2016 12 years

    Hotel performance before and after the arrival of Airbnb

    We further analyzed the hotel industry trends for Boston during ultimate 12 years (presented in Table 5), both before and after Airbnb’s entry into the market, to determine whether Airbnb has an result on hotel supply, demand, and revenue dynamics. The hotel elbowroom supply has continued to grow, which suggests that hotel industry look to continue to grow despite the mount of the Airbnb. The hotel industry’s occupancy saw its lowest point in 2009 and reached over 85% in 2015. Although hotel occupancy experienced a few declines year over year, these decreases loom to exist due to supply shocks. For example, in 2016, occupancy decreased by about 2.7%; however, supply growth was around 3.7%. That is, the decline cannot exist entirely attributed to the growth in Airbnb. Despite the declines in occupancy, both ADR and RevPAR indulge in continued to extend without a decline after the crisis epoch and around the arrival of Airbnb onto the scene (2008-2009), and reached their peak in September 2016.

    Table 5. Historical Hotel Dynamics Period Supply Demand Occupancy ADR RevPAR Sep-05 1418370 1092599 77.0  $143.85  $110.81 Sep-06 1460070 1095808 75.1  $152.20  $114.23 Sep-07 1472790 1164487 79.1  $165.97  $131.23 Sep-08 1492830 1105819 74.1  $171.52  $127.06 Sep-09 1504560 1091371 72.5  $143.20  $103.88 Sep-10 1512540 1176147 77.8  $155.26  $120.73 Sep-11 1512810 1225707 81.0  $162.31  $131.51 Sep-12 1528290 1208011 79.0  $170.08  $134.43 Sep-13 1538100 1251193 81.3  $180.20  $146.58 Sep-14 1537860 1306622 85.0  $202.38  $171.95 Sep-15 1564170 1335976 85.4  $209.00  $178.51 Sep-16 1622130 1347565 83.1  $219.26  $182.15 So, has Airbnb impacted hotel performance in Boston? The data suggests “no”!

    Hotels were able to sell more rooms over the ultimate 12 years—that is, more people stayed in hotels in 2016 compared to previous years, despite the claim that was captured by Airbnb. Although it is not lucid whether the excess claim in the overall accommodations market was created solely because of Airbnb, the additional demand, at least to some extent, could indulge in been accommodated by hotels in Boston. Hotels in the city have, on average, around 83% occupancy. Thus, for example, if the Airbnb guests were to exist captured by the hotels in Boston, the detached hotel occupancy would indulge in been around 90% in September 2016. However, considering the fact that Airbnb’s ADR was lower than that of hotels ($159 vs. $219), hotels would probably indulge in captured the Airbnb claim within this lower Airbnb expense range. It should also exist noted that, historically, the hotel occupancy in the Boston market has fluctuated between 74 and 85%. With this in mind, Airbnb does not look to whip from the hotel industry’s market share, but rather seems to indulge in created original demand. Although correlation does not bespeak causation, the correlation coefficients between hotel and Airbnb supply, demand, revenue, occupancy, ADR, and RevPAR (presented in Table 6) also imply that Airbnb does not look to adversely influence the hotel industry in Boston.

    Table 6. Correlations Hotel Supply Hotel Demand Hotel Occupancy Hotel ADR Hotel RevPAR Airbnb Supply 0.386 Airbnb Demand 0.289 Airbnb Occupancy 0.716 Airbnb ADR 0.494 Airbnb RevPAR 0.358

    Nevertheless, as Table 7 indicates, Airbnb has been able to extend its market participate quite remarkably. In particular, Airbnb’s market participate in terms of supply has increased from about 5% in January 2015 to about 19% of the overall accommodation market (i.e., available elbowroom nights) in September 2016. Theoretically, the Airbnb supply can exist as great as the residential real estate market in a location. However, it takes a few years to develop a hotel and thus boost the hotel elbowroom supply in the market, so comparing the market participate in terms of supply is less than ideal. Airbnb’s market participate in terms of claim also shows significant growth, from less than 0.1% in January 2015 to more than 7% in September 2016. Despite Airbnb’s penetration into the market in terms of supply and demand, Airbnb’s market participate in terms of revenues was only around 5.5% in September 2016. The lower market participate in revenues is likely due to lower prices compared to those of hotels and the need of revenue management practices by the Airbnb hosts. While a 5.5% market participate in terms of revenue is considerable for a start-up like Airbnb, it should exist highlighted that Airbnb seems to indulge in created original claim by increasing the market size. They estimated approximately $15 million in tax obligations based on the revenues generated by Airbnb during 2015-2016, which is similar to the figures organize in the recent CBRE report.

    Table 7. Airbnb Market Share Period Airbnb Market participate (Supply) Airbnb Market participate (Demand) Airbnb Market participate (Revenue) Jan-15 4.74% 0.06% 0.07% Feb-15 5.64% 0.50% 0.46% Mar-15 5.43% 0.65% 0.58% Apr-15 6.42% 1.52% 1.30% May-15 6.65% 2.25% 1.48% Jun-15 7.32% 2.76% 2.50% Jul-15 7.08% 3.51% 3.16% Aug-15 6.89% 2.62% 1.94% Sep-15 7.60% 3.73% 3.29% Oct-15 8.10% 2.86% 2.24% Nov-15 18.86% 6.47% 5.43% Dec-15 19.19% 6.70% 6.78% Jan-16 18.92% 7.46% 7.28% Feb-16 20.21% 10.17% 11.05% Mar-16 18.45% 8.90% 8.16% Apr-16 18.97% 9.58% 7.69% May-16 18.51% 9.53% 7.56% Jun-16 19.12% 9.77% 8.72% Jul-16 18.87% 9.55% 8.54% Aug-16 18.78% 8.09% 6.05% Sep-16 19.39% 7.40% 5.49%

    While it is noiseless not lucid from their analysis whether the extend in overall claim was caused by Airbnb or other economic factors, the descriptive analyses presented in this study imply that Airbnb does not look to exist competing directly with the hotel industry. However, this was an investigation of the overall hotel market with limited Airbnb data; further analysis is required to determine within-hotel industry effects (e.g. midscale, economy, luxury) and whether Airbnb has a greater impact on asset hefty hotel-REITs or asset-light hotel management and franchising companies (Dogru, 2017a).

    With 242 rooms, the Godfrey Hotel is one of many recent additions to Boston’s hotel market. Photo by Pat Greenhouse/The Boston Globe via Getty Images.

    Airbnb accommodations may provide substantial financial, economic, and gregarious benefits to the city of Boston if the listings drive additional tourists to the city, which seems to exist the case as suggested by their analyses. These benefits embrace but are not limited to generating additional tax revenues for cities and local governments, especially to neighborhoods not traditionally visited by guests staying within the hotel-dominated areas (Tussyadiah & Pesonen, 2016), and additional income for hosts, which would reason a surge in per capita income. Furthermore, during peak seasons or in the cases of mega-events like the Olympics, the availability of supplementary Airbnb rentals may exist more advantageous than building hotels that will later not exist utilized at optimal levels (Dogru, 2016, 2017b).

    However, the positive economic impacts may not sufficiently compensate for the potential decline in residents’ character of life. Airbnb could indulge in an adverse impact on the character of life of local residents in neighborhoods that hold Airbnb offerings because of nuisances and disruptions caused by visitors. Also, the increasing number of Airbnb listings might indulge in undesirable effects on the residential housing market. Homeowners might simply gyrate their properties into Airbnbs if they believe they can create more money, which may exacerbate preexisting housing problems in metropolitan cities (Lee, 2016). There is shrimp empirical evidence on the economic or gregarious impacts of Airbnb to support either the proponents or the critics of Airbnb. Thus, the course and the magnitude of these impacts carry out not proceed beyond speculation for the time being. Moreover, the economic impacts of Airbnb might exist better observed once the sharing economy market is regulated. Therefore, further investigations are necessary to measure the economic and gregarious impacts of Airbnb.

    Summary of key findings
  • Airbnb supply experienced more extraordinary “supply shocks” due to flexibility in adding inventory in Boston. Hotel supply displayed a marginal extend over the analysis period.
  • Airbnb experienced greater increases in claim as compared to the increases in the claim for hotel rooms, mirroring the trends in supply growth for the start-up.
  • While Airbnb experienced a dramatic extend in occupancy growth throughout the analysis period, these gains did not look to adversely impact the hotel industry’s occupancy rates, or either hotel ADR and RevPAR growth rates.
  • Hotel ADR and RevPAR indulge in continued to grow following the arrival of Airbnb onto the accommodation scene, continuing their pre-Airbnb growth momentum.
  • Key performance metrics for Airbnb and hotels bespeak a stout positive correlation, suggesting that Airbnb claim is potentially different from hotel claim (i.e., they target different customer segments), and thus, Airbnb’s negative economic impacts on the hotel industry are, at best, marginal.
  • Future research should supplement economic analyses with the profiling of customer segments across the hotel industry and Airbnb and should also examine the gregarious impacts of the sharing economy.
  • PDF Version Available Here

    Dogru Headshot Tarik Dogru earned his Ph.D. in Hospitality Management from University of South Carolina, and holds Master’s degree in industry Administration from Zonguldak Karaelmas University in Turkey.Prior to joining the Boston University School of Hospitality Administration faculty, he was an adjunct faculty at University of South Carolina (2013-2016) and research second at Ahi Evran University (2009-2012) in Turkey. He has taught a variety of courses, including Economics, Finance, Accounting, Hospitality, and Tourism in industry and hospitality schools. He is a Certified Hospitality Educator (CHE) and holds Certification in Hotel Industry Analytics (CHIA) from American Hotel & Lodging Educational Institute. Tarik’s research interests span a wide compass of topics in hospitality finance, corporate finance, behavioral finance, real estate investment trusts (REITs), hotel investments, tourism economics, and climate change. Mody Makarand Mody, Ph.D. has a varied industry background. He has worked with Hyatt Hotels Corporation in Mumbai as a Trainer and as a character Analyst with India’s erstwhile premier airline, Kingfisher Airlines. His most recent experience has been in the market research industry, where he worked as a qualitative research specialist with India’s leading provider of market research and insights, IMRB International. Makarand’s research is based on different aspects of marketing and consumer conduct within the hospitality and tourism industries. He is published in leading journals in the field, including the International Journal of simultaneous Hospitality Management, Tourism Management Perspectives, Tourism Analysis and the International Journal of Tourism Anthropology. His travail involves the extensive expend of inter and cross-disciplinary perspectives to understand hospitality and tourism phenomena. Makarand also serves as reviewer for several leading journals in the field. In tumble 2015, he joined the faculty at the Boston University School of Hospitality Administration (SHA). He received his Ph.D. in Hospitality Management from Purdue University, and also holds a Master’s degree from the University of Strathclyde in Scotland.

    Suess Raeis New

    Courtney Raeisinafchi, Ph.D spent 6 years designing and developing hotels and restaurants with Jordan Mozer and Associates, Ltd., an architecture difficult based in Chicago, IL, after completing a bachelors degree at the School of the expertise Institute of Chicago where she studied architecture. Some notable projects she was involved in includes Marriott’s Renaissance Hotel, Times Square and Hotel 57 in Manhattan, NY; both hotels indulge in received the International Hotel , Motel and Restaurant Society’s Golden Key Awards for Best hotel design. While drafting original proposals for hospitality projects for Jordan Mozer and Associates in Southeast Asia, she began a masters degree, studying hospitality administration, at the University of Nevada, Las Vegas (UNLV) in Singapore. After graduating, she continued to complete her doctoral degree in Hospitality Administration at UNLV in Las Vegas and studied towards a second masters degree in architecture at UNLV’s School of Architecture. Courtney joined the Boston University School of Hospitality Administration in 2013. She teaches the Design and evolution Class as well as Lodging Operations and Technology. She is an dynamic quantitative researcher on the topics of hospitality evolution and built environments, as well as design and atmospherics impacts on consumer behavior. References
  • CBRE. (2017). Hosts with Multiple Units – A Key Driver of Airbnb Growth. Retrieved from https://www.ahla.com/sites/default/files/CBRE_AirbnbStudy_2017.pdf
  • Choi, K. H., Jung, J. H., Ryu, S. Y., carry out Kim, S., & Yoon, S. M. (2015). The relationship between airbnb and the hotel revenue: In the case of Korea. . Indian Journal of Science and Technology, 8(26), 1-8. doi:10.17485/ijst/2015/v8i26/81013
  • Dogru, T. (2016). evolution of the Hotel Industry in China: Mega-Events, Opportunities, and Challenges. E-review of Tourism Research, 13.
  • Dogru, T. (2017a). C-corporation Hotels vs. Hotel-REITs: A hypothetical and Practical Comparison. Boston Hospitality Review, 5(1).
  • Dogru, T. (2017b). Under- vs. over-investment: Hotel firms’ value around acquisitions. International Journal of simultaneous Hospitality Management, 29(8).
  • Haywood, J., Mayock, P., Freitag, J., Owoo, K. A., & Fiorilla, B. (2017). Airbnb & Hotel Performance: An analysis of proprietary data in 13 global markets. Retrieved from http://www.str.com/Media/Default/Research/STR_AirbnbHotelPerformance.pdf
  • Intelligence, B. (Producer). (2017). Airbnb CEO speaks on disrupting hotel industry. Retrieved from http://www.businessinsider.com/airbnb-ceo-speaks-on-disrupting-hotel-industry-2017-3
  • Lee, D. (2016). How Airbnb Short-Term Rentals Exacerbate Los Angeles’s Affordable Housing Crisis: Analysis and Policy Recommendations. Harvard Law and Policy Review, 10, 229-253.
  • Mody, M., Suess, C., & Lehto, X. (in press). The Accommodation Experiencescape: A Comparative Assessment of Hotels and Airbnb. International Journal of simultaneous Hospitality Management.
  • Tussyadiah, I. P., & Pesonen, J. (2016). Impacts of peer-to-peer accommodation expend on travel patterns. Journal of Travel Research, 55(8), 1022-1040.
  • Yurieff, K. (2017). Airbnb raises $1 billion in funding. CNN. Retrieved from http://money.cnn.com/2017/03/09/technology/airbnb-billion-funding/index.html?iid=ob_homepage_tech_pool
  • Zervas, G., Proserpio, D., & Byers, J. W. (2016). The mount of the Sharing Economy: Estimating the impact of Airbnb on the Hotel Industry. Journal of Marketing Research(ja), null. doi:10.1509/jmr.15.0204 %U http://journals.ama.org/doi/abs/10.1509/jmr.15.0204
  • June 7th, 2017 in Hotels, Spring 2017, Trends, Uncategorized

    Creative Commons Tommypjr

    Multiple photos, kitchen access, laundry, and friendly hosts are every bit of listing properties that attract views and reservations. Photo source: Creative Commons Tommypjr

    By Tarik Dogru and Osman Pekin

    The sharing economy has become a major phenomenon; Airbnb, Uber, ZipCar, Kickstarter and many more comprise the rapidly expanding list of pioneers in the world of the sharing economy. This original concept has introduced an alternative platform for consumers, widely known as peer-to-peer marketplace, in which participants are motivated by the notion of “what’s mine is yours” (Botsman, 2010). Unlike traditional businesses, the concept of the sharing economy is a two-way street wherein users at both ends can benefit either as consumers, suppliers, or both. Sharing economy platforms allow people to participate their underutilized properties through user-friendly websites or mobile applications with relatively lower transaction costs and usually at a lower rate compared to those of traditional businesses. Thus, many people indulge in started to participate in sharing economy platforms because of the economic and financial benefits it provides both for consumers and suppliers. In particular, these platforms provide cost-saving benefits and convenience to the consumers, while allowing suppliers to generate extra income (Mohlmann, 2015).

    Participants of sharing economy platforms, however, indulge in indicated that gregarious benefits are more well-known than the economic and financial benefits that sharing economy platforms provide (Tapio & Airi, 2015). Indeed, consumers may perceive differently the value of services offered through sharing economy platforms than they carry out the value of traditional businesses. For example, consumers may value the sociability, trustworthiness, and friendliness of their Airbnb hosts and the tang they indulge in during their sojourn (Mody, Suess, & Lehto, in press). However, the value placement might exist more closely tied to the dollars consumers spend. That is, the artery consumers perceive the benefits from goods and services is likely to exist different in sharing economy platforms. While traditional businesses are tedious to withhold up with these changes, the mutually advantageous characteristics of sharing economy platforms look to exist one of the main reasons behind the significant growth of the sharing economy marketplace, which is now considered a major threat by traditional businesses.

    Airbnb, the largest accommodation difficult in the sharing economy marketplace, has about 3 million listings, including entire homes, shared rooms, and private rooms, which is more than world’s largest three hotel chains combined (IHG, Marriott, Hilton, 2.58 M listings). Over five years, it hosted about 50 million guests, 30 millions of whom were hosted in 2015 solitary (Airbnb Summer Travel Report, 2015). In a recent report, STR showed that Airbnb currently has around 9% of the market participate in terms of supply. Although Airbnb supply dynamics are much more springy than those of traditional accommodations, such a great supply capacity might create a substantial threat to the lodging industry (Haywood et al., 2017).The remarkable volume of listings and record-breaking growth in number of guests has caused Airbnb to exist recognized as a “disruptor” for the lodging industry (Guttentag, 2015). Critics of the sharing economy argue that if Airbnb did not exist or if it were to operate by the very rules that traditional lodging firms do, then most, if not all, of the elbowroom nights would exist booked in traditional hotels. In a recent study, researchers organize that a one percent extend in the number of Airbnb listings decreased hotel elbowroom revenue by 0.5% in Texas (Zervas, Byers, & Proserpio, 2017). These results provided support for the concerns expressed by stakeholders in the lodging industry that the growth of sharing economy platforms is likely to adversely influence the lodging industry’s revenue stream. Furthermore, if the hotel claim were to exist shifted to Airbnb, hotel developments in the pipeline might create an overinvestment problem in the market (Dogru, 2017a).

    The impact of Airbnb on great lodging corporations’ revenue streams does not necessarily imply that Airbnb will disrupt the overall economy or local economies. In other words, despite the potential adverse effects of the sharing economy on traditional industry platforms, the sharing economy could instead provide positive economic benefits for local communities and the tourism industry by generating original jobs and original sources of income (Fang, Ye & Law 2015). According to an economic impact study conducted by Airbnb, guests spent $352 on detached in the neighborhood where they stayed, supporting 490 jobs with an overall economic impact of $51 million from July 2013 to June 2014. The company also suggests that this sharing economy platform helped conserve energy equivalent to 220 homes in Boston during this period. Similar findings were also reported in other major cities in the US and around the world. Although these reports might exist biased and independent studies should exist conducted to determine the economic impact of Airbnb, these findings point out the flip-side of the coin and provide insight about potential positive impacts of the sharing economy on local economies.

    Regardless of the potential economic, social, and environmental impacts, whether they exist positive or negative, Airbnb should exist considered one of the major competitors in the lodging industry, considering its market participate and value (Dogru, 2017b). Recent efforts of the lodging industry to “ensure [regulatory] legislation in key markets” imply that the industry indeed considers Airbnb to exist such a major competitor (Benner, 2017). Therefore, understanding what drives consumers to reserve Airbnb accommodations becomes necessary for the hotel industry in developing strategies to compete with Airbnb. The physical (i.e., space, location, amenities, etc.) and non-physical (i.e., sociability, trustworthiness, friendliness, etc.) attributes, which are reflected on the expense of the Airbnb accommodations, may play a crucial role on Airbnb guests’ decision making. In other words, the expense of Airbnb properties is determined based on the value consumers zone on the attributes of Airbnb accommodations. Therefore, examining the expense determinants of Airbnb properties may play a crucial role in understanding the factors that drive the growth of the sharing economy based accommodation services. This study examines the expense determinants of Airbnb properties listed in the city of Boston using the hedonic pricing approach.

    Studies that indulge in investigated the pricing determinants of sharing economy-based services are limited. A number of studies indulge in examined the effects of reviews, ratings, and host photos on the prices of Airbnb accommodations. Hosts awarded a “Superhost” badge, a status given to hosts with a pleasurable standing and excellent service standards, post their properties at higher prices, especially when they receive more reviews and higher ratings (Liang, Schuckert, Law & Chen 2017). Furthermore, studies indulge in shown that guests determine the trustworthiness of hosts from their photos and are willing to reserve more expensive Airbnb properties if the hosts look to exist trustworthy. However, online reviews and ratings did not loom to indulge in an result on the listing expense (Ert, Fleischer, & Magen, 2015). These results can exist attributed to the fact that, on average, Airbnb hosts indulge in a rating of 4.5 out of 5, which is very extreme compared to hotel firms’ ratings (Zervas, Proserpio, & Byers, 2015). Analyzing the expense determinants of Airbnb accommodations in 33 cities, where claim and supply dynamics for accommodation services are likely to exist different, Wang and Nicolau (2017) organize results similar to those of the hotel industry (see e.g., Chen & Rothschild, 2010).

    In general, factors related to the site and property characteristics, amenities, services, rental rules, and customer reviews significantly influence the prices of sharing economy-based accommodations. In particular, Airbnb listings that tender amenities such as real beds, wireless Internet, and free parking had higher prices compared to those that lacked these amenities. Although the city of Boston was included in this study, the time epoch studied was limited to October 2015, and Boston was defined as the greater Boston area. In their study, they analyzed the expense determinants of Airbnb accommodations in the city of Boston, and they included properties listed during the epoch of January, 2015 to September, 2016. Although the expense determinants might vary greatly from one city to another, the former study analyzed these determinants using aggregate data from 33 cities around the globe. Therefore, it is necessary to conduct a city-level analysis to identify the expense determinants more accurately.

    Analysis

    The data was obtained from Airdna, which is a company that provides data and analytics to entrepreneurs, investors, and academic researchers (Airdna, 2017). Airbnb listings with no reviews were removed from their analysis in order to provide more accurate estimates, as Airbnb listings with at least one review will exist closer to the market equilibrium price. The final sample consisted of 2,699 Airbnb properties listed between 2015 and 2017. Table 1 presents the summary statistics of the conditional and independent variables used in this study, along with minimum and maximum values of these variables where applicable.

    Table 1. Summary Statistics Variables Mean Std. Dev. Minimum Maximum Dependent Variable Published Rate 215.12 214.17 10 10,000 Space Attributes Entire Home 0.70 0.45 Private Room 0.27 0.44 Shared Room 0.03 0.17 Quality Attributes Cleaning Fee 0.70 0.45 Overall Rating 92 9.40 20 100 Number of Reviews 18 32.31 1 374 Number of Photos 12 9.19 0 105 Superhost Badge 0.09 0.28 Friendliness Pets allowed 0.12 0.33 Handicap Accessible 0.06 0.24 Family Friendly 0.46 0.49 Freebies Kitchen 0.94 0.23 Washer 0.69 0.46 Dryer 0.69 0.46 Free Parking 0.05 0.22 Breakfast Included 0.06 0.23 Commerciality Attributes Suitable for Events 0.04 0.19 Business Ready 0.17 0.38 Hosts with Multiple units 18.34 45.65 1 242 Location Distance from City Center 3.25 1.39 0.19 7.24

    The conditional variable, the published nightly elbowroom rate, averages $215 in the city of Boston and ranges anywhere between $10 and $10,000. They classified the attributes of Airbnb accommodations, which are the independent variables of this study, into six categories. Exhibit 1 shows the attributes of a extravagance Airbnb accommodation in Boston.

    Luxury Airbnb Accommodation

    Exhibit 1: extravagance Airbnb Accommodation (Click to enlarge) Source: Airbnb.com

    Space attributes embrace entire homes, private rooms, and shared rooms. According to these results, 70% and 27% of the Airbnb listings are entire homes and private rooms, respectively, whereas only 3% of Airbnb listings are shared rooms. Exhibits 2, 3, and 4 illustrate examples of Airbnb listings in Boston.

    Exhibit 2: Shared  elbowroom listing in Boston

    Exhibit 2: Shared elbowroom listing in Boston (Click to enlarge)

    Exhibit 3: Private  elbowroom listing in Boston

    Exhibit 3: Private elbowroom listing in Boston (Click to enlarge) Source: Airbnb.com

    Exhibit 4:  extravagance Entire Home listing in Boston

    Exhibit 4: extravagance Entire Home listing in Boston (Click to enlarge) Source: Airbnb.com

    Quality attributes consist of the cleaning fee, overall ratings, number of reviews, number of photos, and the Superhost Badge status. A major percentage (70%) of Airbnb hosts require a cleaning fee. While overall ratings vary greatly between 20 and 100, on detached hosts receive an overall rating of 92. Further analysis showed that there were only 242 hosts with an overall rating below 80. The data for the number of reviews indicates the number of times an Airbnb property was booked, since only people who indulge in stayed in a property are allowed to provide a review. On average, Airbnb hosts had 18 reviews or stays during the study period. Airbnb hosts on detached posted 12 photos of their properties, and only 9% of the hosts had the Superhost status.

    Friendliness attributes define whether the property listed is pet-friendly, handicap accessible, and family-friendly. Only 12% of the properties studied allow pets. While 46% of the Airbnb properties listed in Boston are family-friendly, only 6% are handicap accessible.

    In general, a kitchen and laundry services are the amenities most commonly offered in an Airbnb property. In Boston, 94% and 69% of the hosts offered access to a kitchen and the expend of washer and dryer, respectively. Furthermore, the percentage of Airbnb hosts who offered free parking and free breakfast were about 5 and 6%, respectively.

    As they define it, the commerciality category includes attributes like suitability for events, business-readiness, and hosts with multiple units. Only 4% of the Airbnb properties are suitable for events and about 17% are business-ready. On average, a host has 18 units listed on Airbnb. More strikingly, some hosts in Boston indulge in 242 properties, whether they exist entire homes, private rooms, or shared rooms, listed for rent.

    The ultimate assign category is the location, which represents the geographic distance of an Airbnb property from the city center. Distance from the city heart seems to exist low—3.25 miles on average—suggesting that most of the properties are in immediate proximity to the city center, which may create a convenience to the guests.

    We examined the expense determinants of Airbnb properties utilizing the ordinary least squares regression technique. In particular, they analyzed the effects of space, quality, commerciality, friendliness, freebies, and location factors on the nightly published rate of Airbnb listings. Table 2 presents these results.

    Table 2. expense Determinants of Airbnb Accommodations   (1) (2) (3) (4) Space Attributes Coefficient t-statistics Significance Relative Entire Home 0.88 15.60 *** 141% Private Room 0.25 4.33 *** 28% Quality Attributes Cleaning Fee 0.16 8.14 *** 17% Overall Rating 0.005 5.38 *** 0.5% Number of Reviews -0.001 -8.00 *** -0.4% Number of Photos 0.01 10.11 *** 1% Superhost Badge 0.05 1.80 * 5% Friendliness Pet friendly -0.02 -0.72 -2% Handicap Accessible 0.11 3.26 *** 11% Family Friendly 0.10 5.43 *** 10% Freebies Kitchen -0.15 -3.73 *** -14% Washer 0.06 1.04 6% Dryer 0.10 1.71 * 10% Free Parking -0.002 -0.06 -0.2% Free Breakfast 0.11 2.88 *** 11% Commerciality Attributes Suitable for Events 0.06 1.52 6% Business Ready -0.04 -1.88 * -4% Hosts with Multiple units 0.001 6.25 *** 0.1% Location Distance from City Center -0.01 -1.84 * -1% Notes: The conditional variable is published nightly rate. ***, **, and * denotes 0.01, 0.05, and 0.1% statistical significance flush respectively.

    Key findings can exist summarized as follows.

  • Entire homes and private elbowroom prices are 141% and 28% higher than shared rooms, respectively.
  • The prices are 17% higher for Airbnb accommodations that require a cleaning fee compared to Airbnb properties that carry out not require such fees.
  • Overall ratings positively influence Airbnb listing prices, albeit only slightly.
  • Posting more photos of the Airbnb accommodations positively affects prices at a corresponding rate. That is, a 1% extend in number of photos extend prices by 1%.
  • Airbnb accommodations listed by superhosts indulge in 5% higher prices compared to those of hosts without such status.
  • The expense increases 10% if Airbnb accommodations are handicap accessible.
  • Family-friendly Airbnb accommodations indulge in 11% higher prices.
  • Offering access to a washer and dryer increases prices by 6% and 10%, respectively.
  • Serving free breakfast increases prices by 11%, compared to the Airbnb accommodations that carry out not tender free breakfast.
  • Airbnb accommodations that are suitable for events indulge in 6% higher rates.
  • A 1% extend in the number of reviews decreases prices by 0.4%.
  • The prices of Airbnb accommodations with a kitchen are 14% lower.
  • Airbnb listings that are defined as “business ready,” which provide additional amenities for industry travelers, indulge in 4% lower prices than those of without this status.
  • Prices of Airbnb accommodations reduce with increased distance from the city center.
  • What carry out these results construe us about Airbnb hosts and guests and what can hoteliers learn?

    The motives driving people to sojourn in Airbnb accommodations are yet to exist determined for certain. Although Airbnb guests might zone more value on the sociability, trustworthiness, and friendliness of their Airbnb hosts and the experience, Airbnb guests are, to some extent, economically motivated. That is, Airbnb guests might exist specifically comparing Airbnb and traditional hotels for cost-saving purposes. The results of their study showed that Airbnb guests zone more value on space, cleanliness, number of photos, handicap accessibility, family friendliness, free breakfast, location, and unique experiences. Based on this information, hotel firms might focus on these factors to attract guests from Airbnb’s consumer base.

    Airbnb guests pay more for space and privacy, despite the conception that the sharing economy is a gregarious platform wherein participants are motivated by potential gregarious interactions. While such gregarious interactions may noiseless occur when guests rent entire homes, they either value privacy and hence carry out not want to live with the host, or they value the space because they are traveling in Big groups and they require more zone in which to spread out. Despite the potential economic gains, Airbnb guests look to pay extra for cleanliness. Specifically, Airbnb guests pay an additional cleaning fee that may compass between $5 and $700 and also pay 17% higher rates compared to properties that carry out not require cleaning fees. Airbnb guests pay less for properties that allow access to the kitchen, suggesting that these properties are regular apartments, condos, and houses and that Airbnb guests are not likely to pay extreme prices for staying in such properties. The expense dissimilarity might rather exist due to the rate divergence within Airbnb listings, where unique properties, such as treehouses, villas, and yachts, are posted and guests pay more for the experience. However, further research is required to analyze this issue. Airbnb guests also appreciate and pay more for more photos of the Airbnb properties; however, they pay lower rates for Airbnb properties that look to indulge in commercial purposes. Previous studies indulge in shown that Airbnb hosts carry out not look to utilize revenue management practices, which serve to maximize hosts’ profits, but rather list their properties around the median market expense (Tapio Ikkala & Airi Lampinen, 2015). Their results may guide Airbnb hosts in determining their properties’ rates. For example, Airbnb hosts may tender free breakfast and hence extend their rates by about 10%.

    In conclusion, Airbnb guests pay higher rates for space, quality, friendliness, and unique experiences. To compete with Airbnb properties, traditional hotels should create more opportunities for unique experiences, post more photos of the hotel and guest rooms and provide a family-friendly environment. In particular, hotel firms might tender alternative packages to attract Airbnb guests, especially when operating at lower occupancies. Hence, it may exist the time for hotels to embrace Airbnb in their competitive sets or regularly track Airbnb claim and supply dynamics, especially in the markets with a great Airbnb presence.

    PDF Version Available Here

    Dogru HeadshotTarik Dogru earned his Ph.D. in Hospitality Management from University of South Carolina, and holds Master’s degree in industry Administration from Zonguldak Karaelmas University in Turkey.Prior to joining the Boston University School of Hospitality Administration faculty, he was an adjunct faculty at University of South Carolina (2013-2016) and research second at Ahi Evran University (2009-2012) in Turkey. He has taught a variety of courses, including Economics, Finance, Accounting, Hospitality, and Tourism in industry and hospitality schools. He is a Certified Hospitality Educator (CHE) and holds Certification in Hotel Industry Analytics (CHIA) from American Hotel & Lodging Educational Institute. Tarik’s research interests span a wide compass of topics in hospitality finance, corporate finance, behavioral finance, real estate investment trusts (REITs), hotel investments, tourism economics, and climate change.

    Osman Pekin

    Osman Pekin is a recent graduate from the Boston University School of Hospitality Administration. As a student he served as a research second and accounting tutor while working as a Food and Beverage Supervisor at the Westin Boston Waterfront Hotel. References
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  • October 3rd, 2016 in tumble 2016, Restaurants, Technology, Trends

    By Christopher Muller

    What is a restaurant?

    In today’s omni-channel foodservice system what exactly does it signify to swear something is a restaurant meal?  Does it signify a replete formal dining tang with a chef-prepared customized meal, presented by a waiter to a guest at a table with a white tablecloth or can it exist a hand-made burrito delivered by a kid on a bicycle working for a third party service directly to your front door?

    Ultimately the question comes down to determining the two main components of a restaurant, food and service. For the food the questions are: how fresh is it; what configuration is it in; and how immediate to immediately edible is the preparation of each meal? For the service the main question is: how much supplier labor intensity is required versus how much consumer labor intensity is necessary?

    The Evolution of configuration and Function

    Just a few decades ago the restaurant tang was divided into only two categories, replete Service (or “white table cloth”) and Limited Service (or “counter service’) restaurants.  Both were built on the requirement that food was personally served by someone to the consumer, typically in a very structured menu format, inside a simple square meter of physical space.  The diner was expected to indulge in a working lore of this system: being informed of the hand crafted preparation in the kitchen by the trained chef or a skilled short-order cook; the nature of the logical flux of the courses as they were presented; and how to order and pay (including how to properly leave a tip).  For the vast majority of customers this was something done only on special occasions or when dining away from home, and could exist too intimidating to master.

    Then in the mid-1950’s came a original upstart, the Fast-Food or Quick Service Restaurant, which by being systems based and not chef driven created a original approach to how consumers viewed the dining experience.  In a disruption of tradition, both the composition and order of the meal (“…if I want to consume my fries before my burger, who cares?”) and the concept of self service (“…no waiter, no tipping, I’ll gladly lucid my own table”) were controlled by the consumer, not the supplier.  Much of the food was prepared in an off-site facility and assembled to order or batch cooked by semi-skilled kitchen workers. Once the drive-thru window came into play, the need to even win out of the car for a meal disappeared (“…is my front seat a restaurant?”).  Anyone could expend this system at any time during the day. While the QSRs were not originally considered “real” restaurants, dining out became an simple and every day option.

    During the 1990’s the market saw the explosion of the Casual Theme restaurant which took every bit of of the formality out of Fine Dining, including the white table cloth, and significantly sped up the dining process. Table service was noiseless an integral participate of the tang but with less personal connection to the waiter as food was often delivered by a runner directly from the kitchen. Standardized meal choices were assembled on-site by slightly more skilled journeymen led by a kitchen manager instead of a chef, who used a mass customization process to match the individual desires of the consumer.

    In the ultimate decade the lickety-split Casual restaurant came to the attention of the consumer public. This original hybrid is a mix of the self-service from lickety-split food with the consumer selection options presented by a traditional cafeteria system.  Table service is replaced by a modified multi-phase counter service with customers being given more customizable options, whether by a barista or a burrito-maker.  This customization is made practicable with the revert of an on-site short-order cook who assembles to order food which has the appearance of being hand-crafted, but is prepared in a batch style and often brought in from an off-site commissary.

    This brings us up to date where they are witnessing an explosion of segments and dining choice. Today they view a marketplace of narrow segments (Casual Elegance, Food Trucks, Grab & Go, Build Your Own, GastroPub, Convenience Store, Market Hall, Delivery) and other fine grained niches that front simple categorization.  For example, Panera Bread is a leader in the lickety-split casual segment while filling the role of the top retail bakery/café offer. But it also leads in the technology of smartphone based customized take-out.  The top of the food chain for fine dining is at one and the very time a celebrity chef-driven stratospheric offering such as Keller’s French Laundry or a standardized, national prime aged steakhouse chain like Del Frisco.  For the dining public, what exactly does Casual grace signify except that there are no tablecloths, there is a wine list and expensive cocktails, no chef and the wait staff wear logos on their shirts? What really is the dissimilarity if I buy a packaged turkey sandwich at a Pret a Manger, at a 7 Eleven, or at a gross Foods?

    Where Are They Heading?

    So, the retort to the question “what is a restaurant?” can really only exist answered with “it depends.”  What does it depend on- mainly how the dining public continues to redefine how, when, why, where and what a meal actually is?  Is a smart phone a modern day vending machine? Is a communal table in a market hall a dining room? Is a “sous vide” pouch heated by a chef in a two-star restaurant a freshly prepared dinner? Is Chef Chang’s Ando really a restaurant or just a conceptual kitchen? Are Just Eat, Grub Hub, Deliveroo, Uber Eats and Amazon Prime just waiters expanding the ultimate square meter of personal restaurant service? The answers are probably every bit of yes.

    When someone wants to eat, it might exist better to quiz “what isn’t a restaurant?”

    A Restaurant Taxonomy for 2017 A Restaurant Taxonomy for 2017 If I Bring It Home To Reheat For Dinner Tomorrow, Is It A Restaurant Meal? Photo Source: Olive Garden If I Bring It Home To Reheat For Dinner Tomorrow, Is It A Restaurant Meal?

    Photo Source: Olive Garden

    Is Eataly a restaurant or a market?Source: Creative Commons / Mary Crosse Is Eataly a restaurant or a market?

    Source: Creative Commons / Mary Crosse

    What Does It  signify If My Pizza Restaurant Is On My iPhone? Photo Source: Pizza Hut Mobile App Screenshot What Does It signify If My Pizza Restaurant Is On My iPhone?

    Photo Source: Pizza Hut Mobile App Screenshot

    If I Pick Lunch Up In 10 Minutes And  consume In My Office Is It A Restaurant Meal?Photo Source: Panera Bread Mobile App Screenshot If I Pick Lunch Up In 10 Minutes And consume In My Office Is It A Restaurant Meal?

    Photo Source: Panera Bread Mobile App Screenshot

    How About Dinner Arriving Via UberEats in 3 Minutes To My Front Door? Photo Source: Uber How About Dinner Arriving Via UberEats in 3 Minutes To My Front Door?

    Photo Source: Uber

    Is It Really A Restaurant, Chef Chang? Is It Really A Restaurant, Chef Chang? chris-muller-423x636Christopher C. Muller is Professor of the exercise of Hospitality Administration and former Dean of the School of Hospitality Administration at Boston University. Each year, he moderates the European Food Service Summit, a major conference for restaurant and supply executives. He holds a bachelor’s degree in political science from Hobart College and two graduate degrees from Cornell University, including a Ph.D. in hospitality administration. Email cmuller@bu.edu

    PDF Version Available Here.

    May 27th, 2016 in Hotels, Marketing, Millennial, Spring 2016, Trends

    Airbnb's  tender an at-home atmosphere and depending on the host, includes a variety of unique amenities at an affordable price. (Photo by Getty Images, Britta Pedersen) Airbnb’s tender an at-home atmosphere and depending on the host, includes a variety of unique amenities at an affordable price. (Photo by Getty Images, Britta Pedersen)

    By Makarand Mody

    No one can gainsay that the hotel industry has a fight on its hands when it comes to the peer-to-peer accommodation market. A recent PWC report showed that while 6% of the US population has participated in the sharing economy for the hospitality industry as a consumer; 1.4% has served as a provider. Following a sequence of acquisitions, Airbnb is the undoubtedly the hotel industry’s biggest competitor. While much of the discussion that follows uses Airbnb as an example, the underlying logic applies to the broader concept of the sharing economy and its implications for the hotel industry.

    Some veterans in the hotel industry indulge in tried to shrug off the emerging threat by highlighting that the sharing economy is a “fundamentally different business” model, serving a gross original set of consumers, and thus not a direct competitor. A recent analysis by Smith Travel Research of Airbnb’s impact on original York City’s five boroughs seems to support this claim by highlighting that “Airbnb might exist filling a void in the original York City market by providing a different lodging option at a much lower expense point”. Concurrently, the analysis points to the fact that “it is difficult to gainsay that some claim might exist affecting from hotels to Airbnb”. An American Hotel & Lodging Association (AH&LA) report about Airbnb host activity organize that the most successful and valuable hosts on the site are a rapidly growing class of micro-entrepreneurs – replete time hosts and multiple-unit operators, accounting for around 65% of Airbnb’s $1.3 billion revenue in its top 12 markets. There seems to exist increasing evidence that the greater elbowroom supply created by Airbnb has helped curb prices that traditional hotels can freight in some markets. Such statistics indulge in resulted in the hotel industry crying foul about not having a flush playing bailiwick on various accounts, from occupancy taxes to sharing economy providers skirting health and safety standards. Cities and other jurisdictions across the country are engaged in their own efforts to regulate the sharing economy.

    Consumers are getting more comfortable with the  notion of becoming Airbnb hosts with their own properties. In Cuba, Airbnb has  organize booming success as locals become private entrepreneurs. (Photo by Getty Images/Yamil Lage0) Consumers are getting more comfortable with the notion of becoming Airbnb hosts with their own properties. In Cuba, Airbnb has organize booming success as locals become private entrepreneurs. (Photo by Getty Images/Yamil Lage0)

    Meanwhile, sharing economy operators continue along their artery to intensify their fight for the hotel industry’s customers. Now that more consumers  themselves comfortable hosting, the supply of operators like Airbnb seems to exist growing exponentially, offering renters an unprecedented compass of accommodation choices, from a US$15 per night spot on the couch to an $8,000 per night mansion on a sprawling 100-acre property (and everything in between). Consistent with the theory of the Travel Career Ladder (suggested by Philip Pearce and his colleagues), while younger leisure consumers often travel on a tense budget using the sharing economy, tastes and preferences become more expensive as these consumers become older and more settled. Just like hotel companies indulge in their loyalty programs that capture travelers as they progress through their life-cycles by offering a variety of different brands, operators such as Airbnb look to exist performing well at the differentiation game.

    What About the industry Traveler?

    The industry traveler market is expanding for sharing economy providers. While travelers working for themselves or small companies were the most likely professionals to expend the sharing economy, more industry travelers are using these platforms when Big trade shows indulge in filled city hotel rooms; in fact, that’s how Airbnb was originally birthed Recognizing these patterns, Airbnb recently launched its industry Travel Ready initiative that identifies specific listings with a industry Travel badge, indicating that the hosts are providing additional amenities suitable for industry travelers. These amenities compass from ironing boards to fire alarms and CO2 detectors. The company also formed a partnership with a leading meeting planning management company, Experient, for adding Airbnb elbowroom blocks to official MICE event elbowroom inventory (Meetings, Incentives, Conferences, and Events), and providing metrics about booking patterns. There also seems to exist an increasing “official” acceptance of the company: the San Francisco Tourism Board recently partnered with the company to provide neighborhood tourism materials for local businesses to attend attract Airbnb guests. Such official recognition by Destination Marketing Organizations (DMO) is likely to further intensify the hotel industry’s efforts to impose regulations on the sharing economy.

    Airbnb is finding both opposition and support in cities  every bit of over the world. In October 2015,  original York City residents showed support for Airbnb while the city council debated on how to regulate the company. The San Francisco Tourism Board recently partnered with the company to provide neighborhood tourism materials for local businesses to  attend attract Airbnb guests. (Photo by Getty Images/Andrew Burton) Airbnb is finding both opposition and support in cities every bit of over the world. In October 2015, original York City residents showed support for Airbnb while the city council debated on how to regulate the company. The San Francisco Tourism Board recently partnered with the company to provide neighborhood tourism materials for local businesses to attend attract Airbnb guests. (Photo by Getty Images/Andrew Burton) Hotels Advantages vs. Airbnb’s Sense of Community

    There are factors that remain in favor of hotels: for reasons of security, hygiene, and uncertain and fluctuating quality, consumers close with the sharing economy are 34% more likely to reliance a leading hotel brand than Airbnb. A spate of safety-related incidents is likely to withhold this statistic in favor of hotels: from the horror record of Jacob Lopez, who was allegedly sexually assaulted and locked in his elbowroom in a Madrid Airbnb, to the company being sued by a woman over an alleged hidden camera in a rented apartment, there is likely to exist a population of skeptics who are unlikely to rent from strangers. However, the immense popularity of the concept is supported by a host of economic, social, and technological changes in society. A Skift report organize these changes to encompass issues pertaining to amenities, diversity and local experiences, a “personal concierge”, a “home away from home” experience, and the ability to develop personal connections/a sense of community. These varied experiential value propositions are evidenced in Airbnb’s strategic platform of “Belong Anywhere”, and, more recently, “Don’t proceed There. Live There”; propositions that are changing the artery tourists travel within the United States and outside. Thus, while regulation of the sharing economy is likely to flush the playing bailiwick to a unavoidable extent, the hotel industry must also recognize to contend with the underlying experiential drivers of consumption that are fueling the popularity and growth of the sharing economy.

    Airbnb Research and Training

    According to Chip Conley, the inventor of the boutique hotel aesthetic and Airbnb’s Head of Global Hospitality and Strategy, the company’s focus on enhancing the guest tang lies at the very heart of its strategic plans for the future. Airbnb has created a hospitality lab in Dublin to provide training to hosts on standards, and to study hosts and guests together in a physical space in an distress to enhance its experiential offerings. The company has also experimented with providing add-on services such as full-service cleaning and stocking facility for hosts in cities such as original York, San Francisco, and Los Angeles. Recently, Airbnb has been testing hotel-style packaging and amenities – such as local treats, wines, and upgraded bath products – in a select number of highly rated listings in Sonoma, California, to broaden its appeal to travelers who prefer more of a blend of a traditional hotel sojourn and that of an Airbnb: the comforts of a hotel sojourn like special amenities and treats as well as instant booking, combined with the more personalized, peer-to-peer, local tang that the Airbnb platform facilitates. Such efforts bespeak Airbnb’s goal to gyrate itself into a full-blown hospitality brand, one that delivers a seamless end-to-end tang when its customers travel. While the company initially disrupted the hospitality industry by serving as a provider of alternative accommodation, it is now trying to hold this disruption to the next flush by competing along the lines of the guest experience.

    Applying Extended Framework of the tang Economy

    At such a time, the Pine and Gilmore’s seminal concept of the tang economy can exist immensely useful to hotel companies looking to fight back against its sharing economy competitors. When elevated flush product and service character can no longer exist used to differentiate choices for consumers, hotel companies must focus on creating unique, memorable experiences in order to develop a discrete value-added provision for products and services that indulge in already achieved a consistent, elevated flush of functional quality. To demonstrate how this can exist done, I not only advert to Pine and Gilmore’s framework but rather extend the four realms of tang to eight realms.  Examples are highlighted of what sharing economy providers, especially Airbnb, and hotel companies are doing privilege in each of these realms that the industry as a gross can learn from and incorporate into their own tang creation efforts. These eight realms are represented in the extended framework of the tang economy.

    Extended Framework Extended Framework of the tang Economy (adapted from Pine and Gilmore, 1999)

    Pine and Gilmore’s four original dimensions embrace education, escapism, esthetics, and entertainment. While education and escapism are classified as dynamic dimensions in which participants personally influence the performance or event that becomes participate of his or her tang i.e. there is an interactive appointment of the reason and/or the body, esthetics and entertainment are passive dimensions in which participants carry out not directly influence or alter the nature of the environment presented to them. To these, I add four additional dimensions (highlighted in blue) that capture the essence of the nature of tang that the sharing economy aims and claims to facilitate: two dynamic dimensions of localness and “communitas”, and two passive dimensions of hospitableness and personalization. While these dimensions are not exclusive to the sharing economy, providers such as Airbnb attempt to create them their own by providing for and emphasizing these dimensions in how they develop products and communicate their experiences.

    Getaway, a startup concept of the Millenial Housing Lab, builds tiny houses, currently outside the Boston and original York City areas, places them on dazzling pastoral land and rents them by the night to city dwellers looking to shun the digital grind and test-drive tiny house living. The sense of adventure is maintained by the fact that the exact location is only provided to travelers after the booking is completed, serving as a consummate specimen of Escapism for couples, writing weekends, or those looking to “put a dent in a stack of unread books”. onefinestay is an specimen of the sharing economy at travail from an Esthetics perspective. It offers over 2,500 extravagance vacation apartments in London, original York, Paris, Los Angeles, and Rome, each one handpicked for space, character, comfort, and a distinctive design aesthetic. It differs from other sharing economy concepts like Airbnb in that each home is selected for inclusion into the brand’s curated portfolio based on exacting standards of architecture and design. The Liberty Hotel in Boston, participate of Starwood’s extravagance Hotel Collection, leverages the Entertainment dimension of the hotel tang by engaging guests into the creative flux of elevated style in Boston. Fashionably Late Thursdays is a weekly event that showcases the collection of a style designer or seasonal fashions from a major retailer in a live style expose format. The expose begins at 10 pm, followed by music, mingling, and signature mixes from the bar. Airbnb’s original positioning, “Live There”, focuses on affecting the brand beyond stays to creating experiences, which embrace Education(al) activities in neighborhoods and communities. For example, Ranida, a Thai aboriginal and hospitality management grad, working and vital in San Francisco, offers 3 hour long group-based real Thai food cooking classes, allowing guests and locals alike to learn a original cuisine from someone with a zeal for cooking and teaching.

    Airbnb’s previous positioning of “Belong Anywhere”, which the company is using to supplement “Live There”, is centered around creating the sense of community and belonging that its travelers seek. vital in someone’s home naturally involves individuals putting themselves out there to meet original people. Airbnb has cleverly used this simple but powerful notion to position itself as a platform that helps people shatter barriers and truly leverage the socially transformative power of travel. Its sharing economy competitor, HomeAway, on the other hand, claims to tender the most comprehensive selection of rentals for families and groups, allowing them to recreate “home away from home”, a sense of Communitas with those immediate to you. Guest Personalization is an increasing focus for travel brands, with many hotel companies using their loyalty programs to gather information about their guests in order to enhance the overall guest experience. Moreover, technology such as tracking Beacons and Augmented Reality is likely to play an increasingly well-known role in the future in terms of personalizing the guest experience. For example, The James Hotels, which has locations in Chicago, Miami, and original York City, offers the James Pocket Assistant, which uses Beacon technology to allow guests to access special offers, view maps, contact the hotel, and request services. The app also lets users hold a self-guided tour of the hotel’s expertise collect and notifies users of special offers and perks based on their location on the property. The Clarion Collection Hotel Tapto in Stockholm offers a walk-in closet where guests are given a selection of their favorite clothing brands to try on. If they find something they really like, they can add it to the bill. Airbnb is jumping onto the personalization bandwagon with a original “matching system” that takes travelers’ preferences into account, matching them with homes, neighborhoods, and experiences that meet their needs.

    Standard Hotels provides a masterclass in the expend of Localness. Its original website, with a mobile-first mission, leads wholly with lifestyle content about music, food, arts, and other cultural programming, both on-property and offsite. The website reads more like an online travel magazine, with the hotels positioned to serve as base-camp from which to explore “the local” in the cities in which they are located. Airbnb’s Guidebooks and Neighborhoods features carry out something similar, with stunning photography, local editorial perspective, insider tips from Airbnb hosts, and practical information about neighborhoods worldwide. The eight and final dimension of Hospitableness, which lies at the very core of the hotel industry, is something that sharing economy competitors look to exist leveraging more so than the hotels. These companies claim to tender an alternative to bland, cookie-cutter, inhospitable hotel experiences, with local hosts at the very heart of delivering hospitality in its most primal configuration – creating memorable experiences through good-old fashioned interpersonal contact. For example, an Airbnb host and his wife in San Francisco rent out the second floor of their two-storied house to families, and cook a savory barbecue in the evening to welcome their weary travelers. My own recent tang in the town of San Luis Obispo in California attests to this dimension. The hosts, a retired brace who seemed truly delighted to indulge in us in their home, did everything from talking every bit of about their family and getting to know more about mine, to providing hotel-like toiletries in the bathroom, leaving croissants and fresh strawberries in the refrigerator, and, most memorably, placing a small welcome sign on a chalkboard on the dresser – a natty shrimp touch. Interestingly, it appears that while the hotel industry, to a much extent, is placing technology-enabled convenience and entertainment at the heart of its tang (digital keys, selecting your exact elbowroom prior to arrival via app, a robot that stores your luggage, Netflix on your guestroom TV, among others), the sharing economy is using technology to facilitate a simpler, more authentic, down-to-its-roots hospitality experience.

    A simple welcome sign that makes  every bit of the  dissimilarity in creating an authentic, memorable, hospitality experience. A simple welcome sign that makes every bit of the dissimilarity in creating an authentic, memorable, hospitality experience.

    Two other elements of the extended tang economy framework – Serendipity and Ethical Consumerism – can attend hoteliers speculate about the design and delivery of memorable experiences. These elements straddle multiple dimensions, and, as such, can serve as experiential “deltas” that can set one tang apart from another.

    The very local, customizable, peer-to-peer nature of the sharing economy tang allows guests to exist surprised by their hosts, exist it with a bottle of local wine upon arrival, or a stocked refrigerator that satiates the need for that midnight snack (of course, the safety-related incidents mentioned earlier can also lead to unpleasant surprises). Canopy by Hilton, one of the latest additions to the company’s portfolio adds this factor of astonish with a property-specific gift to welcome guests on arrival. But hoteliers need to speculate beyond gifts to add that factor of Serendipity to an otherwise predictable guest experience. Last, but certainly not the least, they live in the age of activist Millennial. There is enough evidence to expose that this original generation of travelers is more likely to support a company that does it bit for society, beyond the adhoc corporate gregarious responsibility initiatives that create for pleasurable PR but are subsequently forgotten. An factor of Ethical Consumerism can and should exist weaved into the consumer’s tang wherever possible. There is some evidence to imply that consumers believe that the sharing economy provides opportunities for a liable configuration of consumption (and travel). The Airbnb machinery has been awake to this marketing opportunity. A recent NPR article talks about how Airbnb is changing the artery global tourists win to know Africa, by connecting them directly to the local economy. The record of Ndosi, a 23 year conventional from Arusha, Tanzania, is used to demonstrate the company’s “vision” to “create a original generation of micro-entrepreneurs from local hosts to local businesses”. Not only does the article talk about how some tourists staying with Ndosi and his parents “found their family” (Communitas), but also the money allowed him to fund his graduate school education. Many hotels indulge in been doing their bit for the environment for some time now; with towel re-use policies and LEED certified buildings, among other initiatives. Perhaps it is time for hoteliers to speculate about how the “social” dimension of Ethical Consumerism can exist weaved into the guest experience.

    A Fundamental Rethink for Hotels

    The extended tang economy framework provides hoteliers with a mechanism to create experiential value. By no means does this imply that hotels carry out not or are not innovating. The examples provided above are by no means exhaustive; there are many hotels around the world executing unique, innovative features along these dimensions of experience. However, the sharing economy providers indulge in the handicap of a clean slate and look to exist making several of these dimensions their own. The emergence of these competitors means that the hotel industry may need a fundamental experiential rethink to proactively sojourn ahead of the game. Don’t believe me? Maybe Marriott floating the notion of factor being “an captivating alternative to sharing economy platforms” may convince you otherwise. While one can only miracle how such a transformation of the factor may hold place, the framework presented here can serve as a starting point for such a rethink.

    Mody

    Makarand Mody, Ph.D. has a varied industry background. He has worked with Hyatt Hotels Corporation in Mumbai as a Trainer and as a character Analyst with India’s erstwhile premier airline, Kingfisher Airlines. His most recent experience has been in the market research industry, where he worked as a qualitative research specialist with India’s leading provider of market research and insights, IMRB International. Makarand’s research is based on different aspects of marketing and consumer conduct within the hospitality and tourism industries. He is published in leading journals in the field, including the International Journal of simultaneous Hospitality Management, Tourism Management Perspectives, Tourism Analysis and the International Journal of Tourism Anthropology. His travail involves the extensive expend of inter and cross-disciplinary perspectives to understand hospitality and tourism phenomena. Makarand also serves as reviewer for several leading journals in the field. In tumble 2015, he joined the faculty at the Boston University School of Hospitality Administration (SHA). He received his Ph.D. in Hospitality Management from Purdue University, and also holds a Master’s degree from the University of Strathclyde in Scotland.

    PDF Version: Creating Memorable Experiences How hotels can fight back against Airbnb and other sharing economy providers

    February 2nd, 2016 in industry Practices, Higher Education, Trends, Winter 2016

    auditorium

    By Christopher Muller

    On the first day of my HF 100 Introduction to Hospitality Management class I present a lecture that raises the question, “How carry out You teach Hospitality?” It’s my first Power Point skid and is then repeated as my ultimate skid for the day. I suspect (maybe hope) that this question is at the front of the minds of the thousands of people who daily speculate about hospitality education, training, management and leadership.

    In his book, Setting the Table, restaurant icon Danny Meyer (2006) notes that his company, Union Square Hospitality Group, looks to hire individuals he calls the “51-percenters.” These are people who expose a positive equipoise of 51 to 49 percent between emotional skills and technical excellence. The five core emotional skills which USHG looks for are: Optimistic Warmth; Intelligence (defined as insatiable curiosity); travail Ethic; Empathy; and Self-Awareness/Integrity. He notes that:

    Emotional skills are harder to assess, and it’s usually necessary to disburse meaningful time with people—often in the travail environment—to determine whether or not they are a pleasurable fit. But it’s faultfinding to inaugurate by being specific about which emotional skills you are seeking.

    It should approach as no astonish that emotional skills are not easily imbedded in a modern university industry curriculum, which is the academic realm where Hospitality Management programs most often reside. Yet many hospitality management students loom to bring with them a tacit lore of these emotional skills when they inaugurate their studies. After more than three decades of watching hospitality students develope I would swear that they certainly exhibit stout emotional skills when they head out for a original career. Where then does this knowledge, or alternately, artery of knowing, approach from?

    Is there something discrete about the traditional Hospitality Management curriculum? First offered in 1893 at the Ecole Hoteliere Lausanne in Switzerland and launched in the United States at The School of Hotel Administration at Cornell University in 1922, has this course of study evolved over time to focus on both of Meyer’s skills – originally based on technical skills but now transforming to emotional skills?

    A pleasurable zone to start their inquiry may exist to determine this: is Hospitality Management an academic discipline, suggesting it is something which can exist codified, written down, and erudite by specific means? Or as some educators note, is it better described as a bailiwick of study which dwells in the realm of tacit learning and requires extensive personal contact, tang and observation but may not exist adequately articulated by verbal means? How is lore managed by teachers, practitioners and students of the industry?

    Next they should account how innovation is applied in the exercise and study of hospitality. Is the industry built on the sustaining innovation of measured small improvements in character and process or on the disruptive innovative introduction of completely original products and services unlike any others which indulge in approach before?

    On another dimension, they must add a component on the process of thinking and decision-making in hospitality management. Which parts of the industry are more intuitive, heuristic and built on gut-feeling and which are more iterative, objective and built on quantitative data analysis?

    And a fourth zone may exist included, how students and practitioners learn. For example, at which point in the education process is it more desirable to indulge in a convergent, fact-based and systematic perspective leading to a single solution, and which point is more likely to reward a divergent, multiple-option perspective where there may exist more than one creative or “correct” answer?

    This paper presents a model using each of these well-regarded hypothetical constructs in an attempt to foster the discussion and retort the question, “How carry out you teach hospitality?”

    Tacit and specific Knowledge

    Michael Polanyi (1958, 1966) suggested that lore could exist segmented into two different realms, tacit lore and specific knowledge. His seminal travail focused on tacit lore and “tacit knowing” which he suggested requires a personal involvement at the individual flush of learning. Tacit lore is acquired in a non-verbal, observant or experience-based way. It is the lore where “we know more than they can tell” to others, or possibly even to ourselves. Harry Collins (2010) expanded the definition of tacit lore to embrace three areas, one involving the relational nature of human gregarious life, one including the autonomic nature of the body and one in the collective nature of society.

    Common examples used by both men to clarify tacit lore embrace learning to ride a bicycle or to play piano – thinking about the details of the process often leads to not being able to perform at all. Reading a reserve about riding a bicycle will not lead to winning the Tour de France nor will a manual about finger placements in C# scales gyrate one into Vladimir Horowitz, no matter how long the study. But months riding a bike through the French Alps with a professional coach or taking a Master Class with a professional musician may in fact lead to personal success. Observing the “embodied knowledge” of experts in a manner which involves personal contact, regular interaction and reliance may create tacit lore in the observer.

    While tacit lore is non-verbal, practical and tang based, specific lore is articulated, codified, and language based. It is more deductive and logical. Another characteristic of specific lore is that it can exist collected in a single zone to exist accessed by both individuals and groups (a library, Wikipedia, or a smartphone app should approach to mind).

    Tacit lore is the accumulation of individual “know-how” while specific lore is the fact-based aggregation of shared “know-that.” Collins points out that tacit lore is a prerequisite for specific knowledge, you need to know something before you can clarify what it is that you know. Yet the powerful human tendency to participate their knowledge, to write things down, to articulate the non-verbal lesson is at the heart of every bit of education, and is also the driver for automation, digitalization and emerging synthetic intelligence technology.

    Les Roches Food and Beverage Course (Photo via Les Roches) Les Roches Food and Beverage Course (Photo via Les Roches International School of Hotel Management)

    Students who are enrolled in an introductory Culinary Arts program preparing menus of measure recipes from the Professional Chef textbook can exist said to exist using the specific lore of cooks. Students who are engaged in a rotational Stage with the chef at a 3-star Michelin restaurant who exhibits grace and timing under pressure are mostly experiencing tacit knowledge. Both types of lore are necessary in learning to exist a cook, one articulated and one individually experienced.

    Sustaining and Disruptive Innovation

    Dr. Clayton Christianson originally proposed the favorite management theory of “Disruptive Innovation” in a 1995 Harvard industry School article. He clearly owes a great debt to Joseph Schumpeter (1942) and the concept of capitalism being built on “creative destruction.” The current model presents a framework for the creative process in industry formation and innovation. Christianson lays out the differences between the iterative improvement he terms sustaining innovation and the discontinuous offering of the next original thing he terms disruptive innovation.

    Sustainers are the well established and typically market dominating major players in an industry. They maintain their leadership position by keying on the needs of their best and most profitable customers. They accomplish this by seeking continuous improvement of products and services they already indulge in on offer. There are many observers who rightly point out that this configuration of innovation has a significant track record of success, the “standing on the shoulders of giants model” of accretive progress.

    The disruptors in industry thrive most often when they are technically simpler, cheaper, faster or easier than the established previous generation of products and services they flush to replace. The risk is that these very attributes are often also of inferior character and therefore indulge in a short, volatile, and vain-glorious impact on the industry they seek to change. But it is the disruptors, like a thunderstorm providing both the destructive potential of a lightning strike and the torrential rain that leads to original growth, who give us the energy to renew and revitalize an industry.

    The incumbents maintain their market positions when customers are seeking incremental innovations to existing products or services that are already perceived as being of higher quality. These sustaining innovations are often associated with the phrase “new and improved” although by definition nothing can truly exist both original and improved. In many cases step-wise improvements are more likely to find market acceptance than the disruptive newcomers, though the “blue ocean” mindset does withhold the capital markets constantly looking for the next original thing just over the horizon.

    In industry education and exercise much has been made of the process of Total character Management or the principles of Six Sigma. The step-wise improvement known as the Deming Cycle is another specimen of the application of sustaining innovation in the classroom. The disruptive innovation of Strategic Management, Principles of gregarious Media Marketing, or the study of charismatic Leadership styles, every bit of where the original is a positive addition to the topics, also suitable well in the Hospitality Management curriculum.

    Heuristic and Iterative Thinking

    The Nobel laureate economist, Daniel Kahneman, wrote Thinking lickety-split and tedious (2011) to detail the different modes of thinking used by humans, modes that he termed System 1 or “Fast Thinking” and System 2 or “Slow Thinking.”

    Fast thinking is automatic, intuitive and associative. The process comes to the surface in the human tendency to create heuristic mental programs based on previous experiences, rubrics or tested frameworks. An influence Heuristic decision is made quickly using judgments based on shrimp more than feelings of liking or disliking the kick or situation. An Availability Heuristic is quickly made on the crave to find signification and patterns using information suitable into the immediate present situation. In both cases the reason finds a best decision by rapidly relying on pertinent past experiences or situations that look close and similar to other successful past decisions.

    Slow thinking is controlled, iterative, systematic, or what Kahneman termed “statistical.” This is the decision-making style where thinking about a topic requires attention to detail, focus, and a narrow bailiwick of vision. Each original decision, and the thoughts associated with it, is built on the structures of previous decisions in an arduous step-wise process. tedious thinking can exist easily disrupted when attention spans are slit short, but it is the balancing counterweight which keeps humans from acting impetuously or in an antisocial manner.

    Students in a course learning about Entrepreneurship may exist called upon to travail in small groups “brain-storming” original concepts for their final project. In another course they may exist using industry case studies where they will approach to reliance their gut feelings for identifying the best practicable alternative from a broad selection of outcomes. First year students who hold Accounting 101 which then leads in year two to Accounting 201 and so on are engaged in an iterative learning process. A doctoral dissertation is the ultimate specimen of a controlled, systematic and step-wise model of original lore creation.

    Convergent and Divergent Learning Perspectives

    The theorist J.P. Guilford (1967) offered a general theory of human intelligence he named the Structure of Intellect. While this complex theory incorporates up to 150 dimensions, participate of it describes the learning processes for reasoning and problem-solving, which he termed Convergent and Divergent production. People who unravel problems via a convergent strategy are focused on finding a single reform retort (consider a question on a multiple option test). In many situations, the convergent learner feels most comfortable in a traditional student/teacher role, with data and facts presented to finding one outcome, for specimen a single mathematical calculation. Convergent learners collect facts, often from a variety of sources, analyze the situation and seek to test for the best feasible or optimal solution.

    In opposition to this pattern would exist the divergent learner, one able to identify multiple practicable options or solutions. Guilford was very interested in the creative process, which he saw as in the realm of divergent production. A divergent perspective might draw an individual to the arts and humanities, creative writing, or history (where multiple perspective need to travail together to find broad solutions) as opposed to science, technology or math as a course of study.

    After an internship or travail experience, students benefit from reflection assignments.

    For the Hospitality Management major, convergent production might exist seen in fact-based introductory or survey courses, the proscriptive side of Hospitality Law, or in the financial skills associated with an MBA curriculum. The divergent production side might best exist embedded in courses with a fluid or “what if” set of answers, including Communications, the self-reflective analysis after an internship or travail study program, and the group process.

    The Amalgamated Model

    In order to expend these theories in a comprehensive way, an Amalgamated Model (Figure 1) can exist formed into a rubric using each of the four key competencies on alternating sides of a two-by-two matrix. lore is either specific or Tacit, Learning is Convergent or Divergent, Innovation is Sustaining or Disruptive, and Thinking is Heuristic or Iterative. The corresponding quadrants each then imply a different means for evaluating a Hospitality Management curriculum.

    Table 1 Figure 1. A Suggested Learning Rubric (Click image to enlarge)

     

    The Quadrant Profile

    Expanding on the basic model (Figure 2), each quadrant suggests a teaching/learning viewpoint with specific weight placed on different emotional and technical skills. The ECSI quadrant would reward a codified, focused, incrementally improved and statistical (slow) set of learning objectives. Quadrant two encompassing the EDSH attributes would recognize for codified, expansive/creative, incremental and intuitive (fast) offerings. The third Quadrant with a TDDH mix encourages learning in an experiential, expansive/creative, discontinuous original and intuitively lickety-split manner. The final TCDI quadrant would involve an experiential, focused, discontinuous original and statistical (slow) combination.

    Table 2

    Figure 2, Characteristics  (Click image to enlarge)

    Application to the Hospitality Management Curriculum

    If they account the traditional Hospitality Management curriculum (Figure 3), both required and elective courses, and recognize at the entire compass of educational levels, from undergraduate to doctoral studies, the Amalgamated Model can thus exist helpful in creating a typology of course offerings.

    Quadrant One (ECSI) concerns itself with student competence and technical skills, with courses that build on a core lore structure or discipline. Such classes as the Accounting sequence (Financial Accounting, Management Accounting, and Finance), or a Marketing sequence (Introduction to Marketing, Services Marketing, Advertising Communication, Consumer Behavior) suitable well here. A case can exist made that the core Master of industry Administration curriculum is also focused, stepwise, specific and data based and is best located here.

    Quadrant Two (EDSH) is more the domain associated with concept mastery, noiseless using the accumulated articulated lore of specific topical information. The various travail done in a kitchen or culinary class, based on the army of recipes and cookbooks can exist exhibited here. But so can the specific lore written down in the configuration of industry case studies, where students learn by creating their own system of decision-making heuristics.

    In the third Quadrant (TDDH) the practical life tang which students bring with them to class gives them an chance to learn by doing. Experiential learning in the configuration of internships and travail study, group projects and brain-storming original industry concepts allows them to exist creative in a industry setting.

    The final Quadrant (TCDI) is where students gain the focused perspective that enables a measure of expertise to develop. Whether at the elective/concentration flush for undergraduates or the process of undertaking the years long process involved in doctoral studies, this is the time when data and hypotheses are tested, and preconceived notions are challenged.

    Table 3

    Figure 3. Suggested Curriculum and Learning Levels  (Click image to enlarge)

    Getting to 51%

    Let’s expend the information shared by Danny Meyer in the quote from above but parse individual phrases to attend disclose how the theories just discussed are informing the discussion:

    Emotional skills are harder to assess, and it’s usually necessary to disburse meaningful time with people—often in the travail environment—to determine whether or not they are a pleasurable fit. But it’s faultfinding to inaugurate by being specific about which emotional skills you are seeking.

    Emotional skills, what Meyer uses to determine the attractiveness of the “51%-ers” to a restaurant unit of USHG, are as he suggests difficult to assess. These “soft skills” carry out not approach with easily tested variables. But there is also the 49% applied to the technical skills of the travail of hospitality to consider. The specific lore erudite in first the ECSI and then the EDSH afford the student a artery to build up a base shared lore of facts, protocols and historical constructs (Figure 4). These courses also establish the foundation of a shared vocabulary, and mastery of skills which will allow them to become participate of a broader gregarious environment.

    Figure 4. Pathways to Learning

    Figure 4. Pathways to Learning (Click image to enlarge)

    Meyer also suggests that it is well-known to invest time in each individual in order to highlight the emotional skills his company desires. The slow, iterative process of constant improvement and character control also appears in the ECSI and EDSH quadrants.

    …necessary to disburse meaningful time with people…

    Also embedded in the Meyer observation is the tacit learning only afforded by an individual, tang based and hands-on set of lessons in the actual travail environment. This is the internship model used extensively in hospitality management education.

    …often in the travail environment…

    To create his search uniform and standardized, he acknowledges the need for affecting from the highly personalized, but incongruous system of tacit learning. He suggests, as did Collins, the need to participate their learning and expertise by making it explicit, articulated, and language based.

    …it’s faultfinding to inaugurate by being specific about which emotional skills you are seeking…

    Finally, although it is unstated in his admonition for every bit of industry enterprises to embrace hospitality in their development, he noiseless requires employees to indulge in the technical skills and lucid focus to become experts in their endeavors. Whether it is in the expertise of the Sommelier, the Executive Chef, or the Chief financial Officer, no much hospitality company can survive without highly skilled and knowledgeable practitioners.

    A revert To Their Question

    So, as I quiz my students, and indirectly myself, “How carry out you teach Hospitality?” the Amalgamated Model may relent a better chance of finding an answer. Not too long ago hospitality management suitable comfortably in the experiential apprentice/journeyman/master craftsman system of observational study. While pertinent for the passing along of both tacit and technical skills, this system continues to tumble short of the specific lore and fact based needs of a modern industry enterprise. Likewise the current distress focused only on financial numeracy and a statistical path to lore also falls short in the emotional intelligence necessary to achieve Meyer’s 51% status.  

    Instead of a curriculum being centered in just one or two quadrants, a more holistic approach, one looking to satisfy the requirements of being competent, conceptual, pragmatic and a content expert may relent a more robust and therefore more rigorous option for hospitality curriculum design in the 21st Century.

    chris-muller-423x636Christopher C. Muller is Professor of the exercise of Hospitality Administration and former Dean of the School of Hospitality Administration at Boston University. Each year, he moderates the European Food Service Summit, a major conference for restaurant and supply executives. He holds a bachelor’s degree in political science from Hobart College and two graduate degrees from Cornell University, including a Ph.D. in hospitality administration. Email cmuller@bu.edu

    Reference Texts

  • Meyer, Danny, Setting the Table: The Transforming Power of Hospitality in Business, 2006 HarperCollins, original York
  • Polanyi, Michael, Personal Knowledge: Towards a Post-Critical Philosophy ,1958, The University of Chicago Press, London
  • Polanyi, Michael, The Tacit Dimension, 1966, The University of Chicago Press, London
  • Collins, Harry, Tacit and specific Knowledge, 2010, The University of Chicago Press, London
  • Christiansen, Clayton, The Innovator’s Dilemma: The Revolutionary reserve That Will Change The artery You carry out Business, 2011, Harper industry Essentials, original York
  • Schumpeter, Joseph, Capitalism, Socialism and Democracy, 1942, Harper & Brothers, original York
  • Kahneman, Daniel, Thinking lickety-split and Slow, 2011, Farrar, Straus and Giroux, original York
  • Kolb, David A., Experiential Learning: tang as the Source of Learning and Development, 2015, Pearson Education, Upper Saddle River, NJ
  • Guilford, J.P. The Nature of Human Intelligence, 1967, McGraw-Hill, original York
  • Tagged higher education, Innovation, Teaching


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    Like its predecessor, the OQO model 2+ weighs less than one pound and is truly pocketable with dimensions of 5.6"(W) x 3.3"(H) x 1.0"(D) and the best-in-class integrated backlit thumb keyboard. The model 2+ supports great external displays up to 1920x1200 with HDMI/DVI and VGA interfaces, offers Wi-Fi(R) 802.11a/b/g and Bluetooth 2.0 with EDR, and is compatible with the replete compass of OQO model 02/e2 accessories. These embrace the OQO docking station with embedded dual layer DVD+/-RW/RAM drive, as well as a wide compass of cases, GPS and vehicle mounts, and power solutions including measure and extended batteries and the OQO air/auto power adapter.

    Full specifications of the OQO model 2+ are available at: http://www.oqo.com/products/model2+/specifications.html

    OQO pioneered the ultra mobile PC category and has led the market with each innovation. With today's announcement, OQO has further established its commitment to leading this growing category and providing mobility solutions for worldwide markets.

    With pricing starting at $999, the OQO model 2+ is available to order immediately from OQO and through OQO enterprise, government, and retail sales channels listed at http://www.oqo.com. First deliveries are expected to hold zone during the first half of 2009.

    About OQO

    Based in San Francisco, California, OQO, Inc. has redefined mobile computing with its groundbreaking products, including the original ultra-small, powerful, ergonomic, and connected OQO model 2+. With an award-winning design, the OQO model 2+ is a full-featured computer running measure Windows XP or Windows Vista and a pocketable, dockable form-factor that gives the mobile professional lawful Anytime/Anywhere Productivity(TM).

    "OQO", the OQO logo, and "Anytime/Anywhere Productivity" are trademarks of OQO, Inc. Other trademarks are the property of their respective owners. (C) 2009 OQO, Inc. every bit of rights reserved.

    (1) Benchmarking data based on tests using MobileMark(R) 2007 version 1.05 and SiSoftware Sandra 2008. Comparisons are to the OQO model 02 computer.

    SOURCE OQO, Inc.



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