Month: November 2020
Which? annual chain hotel report and hotels standards
I thought you might appreciate some light distraction from agonising over what the Chancellor’s spending review may or may not hold, what form and duration the, hopeful UK wide, “Christmas truce” may take or, for those in England, from fretting about what various revised tiers actual mean for the survival prospects of various business types, the likely tier your area will be placed in from 3 December and, critically, the process and timelines for moving up or more especially down the scale thereafter. With luck some or all of this should be a lot clearer by the end of the week. Meanwhile let’s talk UK hotel standards:
Which? recently released their annual report on hotel chains. It an easy read and if nothing else provides some excellent tables that show, the current holdings of each different brand, the average price points and their perceived standing within the Which? customer survey. There is nothing particularly startling in it. Essential there has been some minor jostling for this year’s top places and, at the other end of the scale, for a remarkable 8th year in a row, one well-known brand picking up the accolade of the worst hotel group in the Which? consumer survey. The high-level background information the report provides might prove particularly useful going forward into a period of speculative investment interest, closures, acquisitions and rebranding which is almost certain to follow close in the wake of covid-19 or even pre-empt its eventual conclusion in the coming month and years. If hotels do start change hands or brands locally the Which? report provides a useful single, starting source of who’s who, how big, price points and what consumers actually think.
Perhaps not unsurprisingly, given the subdued demand for serviced leisure and business accommodation, this year’s Which? hotels report didn’t pick up the usual levels of popular media interest when it released a couple of weeks ago. What coverage there was thin on the ground and, or has since, been lost without online trace or is obscured behind subscription barriers. The Times chose to roll the major chain hotel report in with one on an undercover investigation of covid-19 secure cleaning arrangements in UK hotels. Although, based on a relatively small sample, there were a few examples of apparently very poor cleaning standards reported. The overall Times report was not simply critical of the individual hotel standards but also about what it perceives to be a largely, or in some cases exclusively, a self-assessment, based approach to most of the UK’s schemes. Sadly, the national, “We’re good to go campaign” was included in their negative commentary. Again, unusually, few other papers have yet picked up on the theme but that doesn’t necessarily mean we can safely ignore it.
It is worrying that perceived failings among a small number of businesses, apparently across the board, may already or could still serve to damage public confidence, in the accommodation sector in particular, and/or indirectly act to discredit some or all of the increasing number of individual hotel group based or national schemes. Ensuring these schemes and, in particular the various national schemes remain credible is to my mind a critical task in recovery planning in both the domestic and international markets and one that needs careful thought and management at all levels. This is something that really needs to be addressed soon and certainly by no later than the end of March 2021 when with luck and good management we may see the first signs of the start of a sustained tourism recovery. Engendering public confidence was thought to be key to reopening last July. Unfortunately, the accommodation sector, in common with others, has since experienced a series of setbacks. I see absolutely no reason why engendering and maintaining public confidence shouldn’t be as critical when we eventually start the recovery proper, hopefully beginning in late spring 2021.
You can access the Which? report at: https://www.which.co.uk/reviews/uk-hotel-chains/article/best-and-worst-uk-hotel-chains-aaVVF4u1jZpe
And on the subject of group-based schemes Booking.com has announced changes to their star system for sharing accommodation sector businesses first introduced in 2019. They are now adding a minimum cleanliness score commitment which, in theory at least, gives teeth to their user review based system, in that they are committing to remove (after due warning and failure to improve) those properties that don’t routinely achieve a 6 out of 10 or higher cleanliness rating. It may go some way to address a potential problem area that the consumer can clearly see for themselves, but it doesn’t necessarily address less obvious issues like gas, electrical, CO and fire safety, insurance, legal and other problem areas associated with the home share market. The detail of the announcement can be seen at: Booking.com Affirms Commitment to Quality with Minimum Cleanliness Score Requirement – VRM Intel
Does Airbnb’s public offer documents tell use more than they might otherwise wish us to know?
News of Airbnb’s planned December initial public offering (IPO) has been circulating for a couple of days. Apart from generating questions in the minds of those among us struggling to comprehend how a relatively new company, that has never turned a profit, can still command an estimated stock market value of $18 bn (less than half its $38 bn pre-covid-19 valuation!), the news has yet to attract, much if any, immediate attention within the UK travel, hospitality and tourism industries.
Then again, the potential game changing news from early October, that in settling its own tax affairs, Airbnb were handing HMRC the detail of c 225k UK hosts and their income for 2017-18 and 2018-19 tax years has also, oddly, attracted little or no industry comment either. Nor perhaps, has it had the wider public airing it needs, if those hosts who may have inadvertently made errors in their returns are to make full use of the opportunities to correct these, with little or no additional penalty, before the end of January 2021. HMRC are apparently taking a relaxed approach to this, at least until the correction deadline for 2018-19 tax year. Thereafter, hopefully any alleged past and potential, future, illegal tax advantages the previous opaque nature the sharing accommodation platform business models may have given will begin to evaporate as news spreads and HMRC begin to investigate, starting, presumably, with the more obvious or larger anomalies?
Taxation is of course is only one of a number of regulatory and legal areas of concern regarding the sharing accommodation sector. These are all areas of concerns that Airbnb appears to have taken a leading role in contesting and downplaying, while also working closely with Governments and their agencies to resolve, but without necessarily directly addressing the root causes. So where is the compelling evidence that better regulatory and legal compliance represents a risk to the business model and the profitability of sharing accommodation platforms and/or might be one that Airbnb has and is working to avoid? Perhaps surprisingly but on reflection understandably, it is in Airbnb’s own IPO documentation lodged with US Securities and Exchange Commission on Monday 16 November, or at least that is my layman’s reading of its content. I am assuming the IPO needs to be brutally honest, if it is to serve to avoid any miss selling liabilities for previously known or predictable issues?
Rather the reading the news articles on the IPO, of which there are many, I would urge destination managers, regulators, policy makers and those in various levels of government with an interest in tourism, housing and associated safety and other necessary controls, to at least scan, if not read in full the “risk factors” section of the Airbnb IPO (pages 27 to 100). A lot of it is unremarkable but scattered around in odd bullet points or over full paragraphs, especially in the first half, are some necessarily frank assessments of future risk and, by inference, of current and past risk.
This assessment includes much that arises from regulatory compliance on Airbnb itself and, critically, that on professional and individual hosts, who it seems to say might be dissuaded from using the platform if they were compelled to abides by existing, or new laws, regulation or taxation. I may be being naïve but knowing that there may be a substantive compliance problem in your business model and then activity working to avoid addressing it seems, at the very least, to be morally questionably? The sections on page 36 and 43 are particularly interesting but are by no means the only significant paragraphs.
It seems to me that, various parts of the Airbnb own business risk assessment, either taken separately or combined, serve to confirm much of what many in the wider industry have said for years and which Airbnb have worked tirelessly to deny and or avoid doing. These complaints are themselves are even identified as a risk factor. Making sharing platforms safe, legal, and regulatory compliant environments for both hosts and customers isn’t in Airbnb’s own assessment apparently, necessary a good thing for the performance of such platform’s or their business models. Rectifying the problems is also something that, read in the round, the IPO implies that Airbnb have and should apparently continue to try to avoid doing, when and wherever possible.
There are other potential gems in the risk assessment, for example, comment around the validity of their metrics (page 54). This may be the stuff of a standard liability clause in an IPO but certainly isn’t to my knowledge how they have presented the validity of their metrics when using them to make the case for why they should be allowed to do business the way they do and how it is the public and small individual hosts bests interests to allow it to continue doing it in this way. I am sure others will find many more potentially interesting snippets when reading the IPO.
The public listing of Airbnb will almost certainly go ahead and consequentially its new public owners will soon be wrestling with making Airbnb both more profitable and sustaining the arguments in the UK and elsewhere that it is in the customers and the wider industry’s best interests that there is light touch, or better still, a hand free approach to regulatory control of the platforms and the host community. Meanwhile, those of us who doubt the motivation and wisdom behind this position need to continue to question it and raise our concerns with Central Government. The unexpectedly more robust stance recently taken on taxation has, I feel, unlock the door but may not yet have opened it; industry representatives now need to keep push to try and obtain a more uniform appliance of necessary regulation and, thus, a fairer, safer environment for both individual businesses and for all consumers.
The IPO can be accessed at: https://www.sec.gov/Archives/edgar/data/1559720/000119312520294801/d81668ds1.htm#toc81668_2
16 Nov 20 covid-19 update
Among notable highlights last week, we saw the lifting of the firebreak lockdown in Wales and its replacement with a new single pan-Wales set of restrictions instead of the previous patchwork of local restrictions. As the First Minister was at pains to point out, while they are confident that the 17day firebreak will have an effect in the come days and weeks, it is still too early yet to measure the impact. The new pan-Wales rules remain relatively restrictive: overseas travel, for example, remains banned, as does travel to and from England during its current national lockdown. The First Minister has also urged that whist residents can travel in Wales they should not unless it is really necessary. Nonessential shops, services and hospitality are now reopened but in reality, they are operating under significant restrictions, for example a new 4-person rule now applies both indoors and outdoors in pubs and restaurants.
Early in the week news of the potential success of one of several major vaccine trials lifted the nation’s spirits and even share prices, particularly in areas like the hard-hit travel and airline sectors. Speculation as the week progressed about what it actual all means and by when suggests that, like the impact of the Welsh firebreak, it is far too early to call. Nonetheless, what is increasingly clear is that effective, widely available and widely applied vaccine or vaccines remains central to avoiding the successive imposition of lockdowns and varying levels of restrictions as the primary means of controlling the spread and impact of covid-19 and, thus, vaccines are almost certainly, critical to the earliest possible return to normality. We may not be there yet but we have made a leap closer to achieving it at some point in 2021. Today another successful trial in the US was announced, albeit this time of one of the vaccine that the UK Government has as yet no pre agreed access rights to.
The changing tone of reporting over the week suggests that the benefits of any successful vaccination programme are more likely to fall towards the end of 2021, rather than the begin but that too is speculative as there are so many unknows, options and variation of approach and policy in play. How those variables might then impact on domestic, domestic outbound and inbound international travel and, therefore, the implications of that on the value and volumes of domestic visitor economy in 2021 is as yet still largely informed guesswork. The only really certainty is that as ever the key window of opportunity for recovery in our industry remains firmly fixed between late March and October with critical period, focused on July and August. The precise timing of any marked improvements, vaccine driven or otherwise, are as if not more critical in 2021 as they were in 2020.
Reports that interest in, and in some case bookings for, outbound domestic international travel in 2021 have increased significantly last week (from a low base?) might suggest that any return to normality could also mean a relatively rapid return to the competitive frictions between domestic and domestic outbound travel. There will also be additional competition for the domestic leisure pound between traditional domestic destinations and popular inbound international tourism destinations that urgently need, temporarily at least, to replace lost international visits. This assumes as VB and others predict, that international business and leisure tourism will be somewhat slower to recover to, or towards pre-covid-19 levels, than either UK domestic and UK domestic, international outbound travel. What is clear is that they have a long way to climb back (see comment on ONS IPS figure below).
In other news last week also saw the announcement of a large number of new and updated guidance notes on the support available to business, particularly in England. I saw no point in highlighting their release, as this now well-established process. What I would highlight, however, is that there does still appear to be considerable confusion about what is available to whom, particularly but not exclusively in those areas which went in quick succession from local restricted areas, to tier three to national lockdown where businesses may or may not, therefore, be eligible for various forms of locally negotiated and agreed support as well as new or amended national support programmes. One of the bigger issues I am told has been getting businesses to apply for grants that they are not entirely sure they are eligible for. Some businesses as a consequence may be missing out now or may miss out if and when discretionary grants are subsequently tweaked as they sometimes are.
Last week ONS published the latest IPS inbound international travel estimates for June 2020 these are genuinely even more of an estimate, as not unreasonably ONS have suspended the face to face surveys that are normally used in and key to modelling the IPS figure. They June 2020 headlines show a 95% drop in visits and a 98% decline in income against the same month in 2019. Forecast for the full year are currently predicting a 74% decline to 10.6 million visits and 79% decline in spending to £6.1 billion. The scale of the losses and the impact on businesses are frankly hard to grasp: https://www.visitbritain.org/latest-monthly-data-1
Finally, there was considerable coverage last week of research suggesting that Northern England had been particularly hard hit by the social and economic consequences of covid-19. The base research documents underpinning this case has been added to our c-19 research library for anyone wishing to better understand what is essentially a case for greater central support the North over and above other regions of England. I suspect that this may be of interest to Northern members and to, arguably, equally challenged towns and areas within other outwardly more affluent parts of England. If pressed for time Page 4 contains the summary detail: https://britishdestinations.net/c19-research/
Correction Covid-19 Update PM 4 Nov 20
Apologies the UKinbound resilience fund paper mentioned at the bottom of this post had not been added to the c-19 research page as promised. It has now or go direct to it at: 2 Nov 20 Ukinbound resilience und proposal
Yesterday’s post reads:
Again I have taken the view this week that you don’t need me to tell you how potentially grim things are, for example, already under a firebreak lockdown in Wales or with a month-long lockdown looming in England from tonight, following on as it does from the recently introduced tier system in England and Scotland. Nor, did I think that it would have been helpful to bombard you with in England’s case with updates on the emerging “rules” that by now you are well used to accessing elsewhere; some of which, on past form, are likely to be tweaked and reinterpreted before they are implemented.
What is more important to me now is to understanding what questions have not been answered by the emerging direction and any omissions or anomalies being seen or experienced on the ground in destinations , either now or as the lockdown starts to takes hold in the coming week or two. The sooner we know what they are, the sooner we can seek to have them addressed.
I also think but need you to confirm, that the critical path now lies with understanding, with as much certainty as possible, when these new restriction might be lifted and what level of tier/restrictions, different places are most likely to return to. Even if that at best is a simple understanding of the optimal and worst case scenarios. Restoring some degree of both business and consumer confidence and doing it as soon as is practically possible, is essential if anything is to be salvaged for leisure, tourism, hospitality and high street retail out of the traditional pre Christmas , Christmas and New Year boast.
Beyond the problems of the immediate lockdowns I feel we should now be looking at what might be done locally or more importantly, nationally to ensure that the most can be extracted for the visitor economy during the normally dire January February period. Nothing is normal, so what could or should now be done to positive influence the normally slow first quarter of 2021?
We also need to be taking a joint view on what realistically can be expected in the opening months of the 2021 season from late March onwards. I doubt anyone in the industry is still clinging to the hope that the new season heralds anything like an immediate return to the old normality. Understand what the best and worse case might be and then starting to managing consumer expectation well in advance would seem to me to be prudent, if not an absolute must do. Views from those of you actual having to deliver on the theory would as ever be greatly appreciated.
I have received a copy of an excellent lobbying paper from UK Inbound on the support needed to see the UK inbound industry through its current unprecedented crisis. I believe most destinations, regardless of the relative importance to them of inbound international tourism, would be very supportive of claim for support made by UK Inbound, of which two of the three I believe are essentially ” no brainers”, (access to tourism and hospitality business rate relief and airport based testing). The third being a resilience fund specifically for hard pressed businesses entirely relent on inbound tourism.
I have sat on the report for a couple of day while I got confirmation of what precisely is mean within the paper by “Destination Management Company” one of the categories of business identified as being in need of targeted financial support. As I had assumed, DMCs are not either public or private sector based Destination Management or Marketing Organisations (some of which are companies) but are commercial inbound operators, offering overseas tour operators logistic services in their destination providing: meet and greet, transfers / transportation, hotel accommodation, restaurants, activities, excursions, conference venues etc. For absolute clarity a typical example being: Tour Partner Group . In the absence of anywhere more appropriate I have added it to the covid-19 research page, see link below.https://c0.pubmine.com/sf/0.0.3/html/safeframe.htmlREPORT THIS AD
The latest Great Yarmouth business survey is also now available on the covid-19 research page: https://britishdestinations.net/c19-research/
Correction Covid-19 Update PM 4 Nov 20
Apologies the UKinbound resilience fund paper mentioned at the bottom of this post had not been added to the c-19 research page as promised. It has now or go direct to it at: 2 Nov 20 Ukinbound resilience und proposal
Yesterday’s post reads:
Again I have taken the view this week that you don’t need me to tell you how potentially grim things are, for example, already under a firebreak lockdown in Wales or with a month-long lockdown looming in England from tonight, following on as it does from the recently introduced tier system in England and Scotland. Nor, did I think that it would have been helpful to bombard you with in England’s case with updates on the emerging “rules” that by now you are well used to accessing elsewhere; some of which, on past form, are likely to be tweaked and reinterpreted before they are implemented.
What is more important to me now is to understanding what questions have not been answered by the emerging direction and any omissions or anomalies being seen or experienced on the ground in destinations , either now or as the lockdown starts to takes hold in the coming week or two. The sooner we know what they are, the sooner we can seek to have them addressed.
I also think but need you to confirm, that the critical path now lies with understanding, with as much certainty as possible, when these new restriction might be lifted and what level of tier/restrictions, different places are most likely to return to. Even if that at best is a simple understanding of the optimal and worst case scenarios. Restoring some degree of both business and consumer confidence and doing it as soon as is practically possible, is essential if anything is to be salvaged for leisure, tourism, hospitality and high street retail out of the traditional pre Christmas , Christmas and New Year boast.
Beyond the problems of the immediate lockdowns I feel we should now be looking at what might be done locally or more importantly, nationally to ensure that the most can be extracted for the visitor economy during the normally dire January February period. Nothing is normal, so what could or should now be done to positive influence the normally slow first quarter of 2021?
We also need to be taking a joint view on what realistically can be expected in the opening months of the 2021 season from late March onwards. I doubt anyone in the industry is still clinging to the hope that the new season heralds anything like an immediate return to the old normality. Understand what the best and worse case might be and then starting to managing consumer expectation well in advance would seem to me to be prudent, if not an absolute must do. Views from those of you actual having to deliver on the theory would as ever be greatly appreciated.
I have received a copy of an excellent lobbying paper from UK Inbound on the support needed to see the UK inbound industry through its current unprecedented crisis. I believe most destinations, regardless of the relative importance to them of inbound international tourism, would be very supportive of claim for support made by UK Inbound, of which two of the three I believe are essentially ” no brainers”, (access to tourism and hospitality business rate relief and airport based testing). The third being a resilience fund specifically for hard pressed businesses entirely relent on inbound tourism.
I have sat on the report for a couple of day while I got confirmation of what precisely is mean within the paper by “Destination Management Company” one of the categories of business identified as being in need of targeted financial support. As I had assumed, DMCs are not either public or private sector based Destination Management or Marketing Organisations (some of which are companies) but are commercial inbound operators, offering overseas tour operators logistic services in their destination providing: meet and greet, transfers / transportation, hotel accommodation, restaurants, activities, excursions, conference venues etc. For absolute clarity a typical example being: Tour Partner Group . In the absence of anywhere more appropriate I have added it to the covid-19 research page, see link below.
The latest Great Yarmouth business survey is also now available on the covid-19 research page: https://britishdestinations.net/c19-research/
British Destinations