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Strategic Planning Committee Meeting Minutes
Meeting Minutes from HEDNA's Regional Meeting
2001 December, San Diego, CA
Meeting Name:
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Strategic Planning Committee
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Location:
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San Diego
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Chair:
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Valyn Erickson
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Date:
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December 5, 2001
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Co-Chair:
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None
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Agenda-Action Items/Issues
Presentation made to attendees:
Slide 1
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I. d like to thank the board for offering me the chair of this new committee
and for allowing me this opportunity to serve the membership. I think
this committee can provide the membership with some new ideas, or at least
a forum for sharing ideas, about how to use strategy in electronic distribution,
not just &
With apologies to the board, the grammatically correct title of today. s
topic is
I am the moderator, and as such will facilitate discussion amongst the panelists arrayed
before you. Before I get to the introductions, I thought I. d
put today. s topic in some perspective and then put it in context.
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Slide 2
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First, let. s talk about the industry.
Things could be worse, I swear.
These are PricewaterhouseCoopers. most recent numbers. We. ve built two
sets of forecasts, showing two different scenarios. This is a difficult
time to be in the forecasting business, but the analysts need something
to go on.
In either case, things will bottom out this quarter then begin to climb. The
question is how fast we. ll get back into positive numbers.
Our forecasts are based on macroeconomic indicators, including GDP, Federal
Reserve funds rate targets, inflation and consumer sentiment; and lodging
indicators, including funded building projects, room starts and room finishes.
We do make some underlying assumptions, including no future terrorist
attacks against US interests, no expansion of military action in Afghanistan
and no military actions beyond Afghanistan.
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Slide 3
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Drilling down to the internet and the overall travel industry.
The Internet is becoming more and more accepted by the traveling public
as an acceptable and sometimes preferable way to book travel because of
High speed access
Internet-only fares and rates
Prevalence of online availability of all types of consumer goods and
services, from groceries to houses to legal advice
A few comments on this chart:
PhoCusWright believes online agencies will be best positioned to weather
the current economic downturn because of their diversified segments
Airline web sites were the hardest hit in terms of bookings (but not
traffic) but will rebound
Hotel web sites will be the slowest to recover due to increased competition
from the online agencies
Online travel will make up 15% of the travel business in 2002
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Slide 4
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As I was thinking through this topic and trying to put it in context of
this meeting. s theme, I was casting around for a central idea, and
I found it in the first line of the session description.
Growth opportunities exist because it is cheaper for travel suppliers
to receive bookings via the internet than from any other channel. In these
times of cost reduction, achieving channel shift has become a priority.
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Slide 5
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But what exactly is "better utilization" of the Internet?
To have more rooms distributed through this channel?
To lower costs by driving bookings through this cheaper channel?
To maximize revenue by most selling the most rooms through the most appropriate
channel?
Or, in these troubled times, to just keep up with your neighbors?
All of us up here on this stage will try our best to address these issues
to hopefully give you some ideas to take home with you.
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Slide 6
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Now we get to the meat of it. How does a hotel company achieve better
utilization?
One way is to choose your partners wisely. But how, you might well ask?
The distinguished panel up here represents both sides of the fence, suppliers
and distributors.
We. ve brought them both up here because to understand what makes a good
partnership, you have to talk to both partners.
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Slide 7
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On the panel today, we have assembled suppliers whose products cross
size and segment boundaries, from small upscale to large economy, and
distributors whose channels range from opaque to full service to niche.
Starting with the suppliers, and in alpha order, we have:
Chris Heinz, SVP of distribution and revenue management for Wyndham,
has spent 17 years in the industry working for Marriott and Starwood.
Chris has been with Wyndham for two years.
Anne Sommer, director of e-commerce for Accor economy lodging, which
covers the Motel 6, Studio 6 and Red Roof Inn brands, has spent 26 years
in the hotel industry, working for AMFAC, InterContinental, Premier Resorts
and Hotels and TSR. She has been with Accor for three years.
Jimmy Suh, corporate director of revenue management for the Kimpton group
of hotels, has worked for ANA, Hilton and Holiday Inn, as well as mortgage
banking, investment banking and advertising.
On the distributor side, we have:
Spencer Rascoff, co-founder of Hotwire, oversees all aspects of Hotwire. s
hotel and rental car products. Prior to Hotwire, Spencer worked as an
investment professional for TPG, a private equity firm, and as an investment
banker in the M&A group at Goldman Sachs
Evelyne Sansarique, VP of Leading Interactive Reservations, a joint venture
between Leading Hotels of the World and McDonald Investments. Prior to
Leading Interactive Reservations, Evelyne worked for Nikko Hotels and
Forte Hotels. She was also a founding member of HEDNA.
Jeff Thomas, manager of hotel partnerships for Orbitz, manages all aspects
of Orbitz. hotel offering. Jeff has been in the hotel industry for 18
years, working for Open World, Hyatt, Covia and Holiday Inns Worldwide.
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Slide 8
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Now that I. ve introduced everyone, let me talk about how this "committee
meeting" will work. As a panel, we have settled on these concepts
on the screen as the most important ones surrounding strategic e-channel
partnering. Based on those concepts, I will facilitate discussion amongst
the panelists, and also, hopefully, between you the audience and everyone
up here on this stage. I consider this a forum, a dialog between partners
to help everyone get a better idea of what needs to happen to find that
perfect match between supplier and distributor. There are microphones
stationed around the room for your speaking convenience, along with people
with microphones in their hands just waiting to let you ask your question.
Let. s get started.
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Items/Issues
Questions
addressed by the panel: Strategy
How does one
evaluate potential partners?
- Questions to ask
- ROI/measurement
- Who are their partners
- Operational impact
How can a hotel group differentiate itself on so
many different channels of distribution, including the GDS?
Why should one consider an e-channel over a traditional
channel?
Inventory and Channel Management/Operations
When and how should hotels use this as a means of
unloading inventory?
How do hotels prevent or measure cannibalisation
of the traditional channels by e-channels?
How does one factor operations into the choice of
an e-channel partner?
How should e-channel partners work with the traditional
partners?
Bias
Define bias on an
e-channel. What form can bias take?
Do e-channels favor large chains over small ones?
What can small hotel companies to do play with e-channel partners, especially
if they can. t afford to be a featured partner?
Brand Integrity
How can a
brand maintain its integrity across multiple channels, both electronic and
traditional?
Revenue Management
How can you maximize your revenue on these
channels?
Return on Investment
Are e-channels more cost-effective than
traditional channels?
How should one measure the effectiveness of an e-channel?
- The actual cost of the channel (including
operational costs)
- Metrics for effectiveness (room nights, room
rate, RevPAR per channel, etc.)
Note: An audio tape was made of this meeting.
Attendees (C= Conference Call Attendee, A=Attended In-Person)
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