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Tim Peter

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March 3, 2020

Coronavirus COVID-19 and the Travel Industry: How Hotel and Travel Companies Can Manage Business Disruption

March 3, 2020 | By | No Comments

Coronavirus COVID-19 and Hotels: Guests checking into hotel

[Latest update: 31 March 2020
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Table of Contents – Coronavirus COVID-19 and the Travel Industry: How Hotel and Travel Companies Can Manage Business Disruption

  1. Overview
  2. Why We're Tracking This
  3. The Bad News
  4. The Good News
  5. What You Can Do To Help Your Hotel Manage Through Coronavirus

Coronavirus COVID-19 and the Travel Industry: Overview

Travel and tourism make up about 10% of global GDP, according to World Travel & Tourism Council (WTTC). And that number grew faster than the global economy in 2018. Again according to the WTTC, travel accounts for one job out of every ten around the world and an additional "one in five new jobs were created by the industry over the last five years." So, travel is a huge deal. And anything that disrupts travel, by definition, is also a huge deal. Which brings us to the outbreak of the novel coronavirus COVID-19. For instance, GBTA (The Global Business Travel Alliance) stated that the impacts from the virus to business travel alone could be as much as $47 billion. Again, that's huge.

The Latest on COVID-19 and Its Effects on the Travel Industry

First, some background. To paraphrase Bones McCoy, here at Tim Peter & Associates we're consultants, "not a doctor." Lots of our clients are in travel, tourism and hospitality. It's an industry we're deeply passionate about. And we're trying to do our part to help our clients – and the industry as a whole – weather any storm around COVID-19. We're not making any predictions around what will happen with COVID-19, when its impacts will fade, or other medical information. For that, we recommend you check with the World Health Organization (WHO), the U.S. Centers for Disease Control or your local health officials. The CDC in particular also has a great set of resources and FAQs for travelers that are worth reviewing.

Similarly, we're not economists. However, we do know some really good ones. The Conference Board has a list of possible ways that we might "reboot an economy in free fall" that is worth a look. None of the scenarios pictured are necessarily rosy. But they offer several outcomes you can expect for each of the likely ways that the economy will recover once the immediate health crisis has passed.

We're also not looking to catalog all of the stories about COVID-19 and its impacts to the travel industry. The fine folks at Phocuswire have a great liveblog for all the latest stories and HospitalityNet is offering a fantastic round-up of news stories and advice that is well worth your time. The last thing we want to do is ratchet up fear about this situation. This situation is already disruptive enough; we don't want to make it any worse than it is.

Instead, our intent is to update this post regularly over the coming days, weeks and months with tips and insights to help you navigate the business impacts associated with the novel coronavirus COVID-19 so that you can:

  1. Understand the bigger picture around novel coronavirus COVID-19
  2. Properly assess the likely impacts to your business
  3. Mitigate the risks and manage your business appropriately through this (potential) crisis

What Hotels and other Travel Businesses Should Do About Coronavirus COVID-19

Finally, here are a series of tips, techniques, and links to case studies to help you manage through the coronvirus COVID-19 crisis and the eventual recovery. We have been updating this section regularly during the last few weeks as the impacts have become clearer and will continue to do so as better insights emerge into how long the crisis will last.

For the recovery to begin, three things need to happen:

  1. Your market needs to address the underlying health situation. The situation will not get better until medical authorities can control the disease itself. A full vaccine isn't likely until somewhere in 2021 — if ever. But we're starting see some areas have success in controlling the spread and effects of the illness. As other national and local leaders learn from these successes — and implement appropriate next steps — we may see reductions in the extreme "social distancing" that is causing so much pain to the travel industry.
  2. Guests have to have the money to travel. The forced shutdown of many "non-essential" businesses has created unprecedented effects on the economy. The Washington Post noted last week that "a record 3.3 million Americans applied for unemployment benefits last week…" and that "Many economists say this is the beginning of a massive spike in unemployment that could result in over 40 million Americans losing their jobs by April." For context, "During the Great Recession, for example, the worst week for jobless claims was 665,000. Last week the nation saw five times that amount." How long it takes for workers to get back to work as local communities rebound will play a big role in how long it takes for them to be able to travel again. Hopefully, government stimulus and other interventions limit the downside economic effects enough to ensure sufficient demand exists. Obviously, time will tell. And, even if they're able to travel, there may still be one lingering effect…
  3. Guests must not be afraid to travel. This represents the biggest wildcard at the moment. Even once the immediate health effects have been addressed and guests have the money to travel, travelers may still have lingering concerns about the risks. There's simply no way at this point to predict how it will take. In all likelihood, guests will split into one of a few sub-groups:
    1. More adventurous types who, tired of weeks or months of forced isolation, can't wait to get back on the road.
    2. More cautious types for whom the current crisis will shape their longer term behaviors.
    3. A third set that falls somewhere between the first two.

I don't plan to predict which one of these groups will be most dominant. We should see recovery in luxury travel first, though, so it will be worth watching those travelers to see which group(s) take a leading position — or if some other as yet unknown set emerges.

What Your Hotel Should Do During Coronavirus and to Prepare for Recovery

For now, here are some best practices you can follow to minimize the effects to your hotel or other travel business:

  • Don't cut your rates. Anytime business softens, an easy "fix" is to offer deeply discounted rates to your guests. The theory behind this action supposes that you can use lower rates to attract attention and steal market share from your competitors. Except that most of the time it doesn't work.

    While you may experience a short-term lift in occupancy, competitive hotels typically react swiftly and lower their rates to avoid any lost share – before you're able to gain any long-term benefit from additional occupancy. Instead, all you've succeeded in doing is driving down rates for the market as a whole. It leads customers to put less value in your product overall. And it reduces your ability to market or serve customers effectively. We call trying to capture share by lowering rates "the race you can't win." Our advice: Don't run that race.

    Underscoring this point, research from Cathy Enz, Linda Canina, and Mark Lamanno at Cornell and STR found "the best way to have higher revenue performance than your competitors is to have higher rates. A hotel should not drop its prices below those of its true competitors if it wishes to enjoy a RevPAR premium" [PDF link].

    Revinate also outlines some of the challenges that hotels face when aggressively cutting rates during a soft period. The bottom line is that you're not going to influence a non-economic decision with an economic solution. As noted above, two of the three big issues driving travel decisions are the current health crisis and, longer-term, any fears guests have as we begin to recover from that crisis. Wait on using rate as a lever until it's absolutely clear that only economics influences your guests' behaviors. One thing you can do, however, is…

  • Consider offering value-adds instead. Continue any promotions you have in the marketplace (unless of course, they reference "sick deals" or some other truly unfortunate turn of phrase). But also look at including value-adds in your offers to attract attention and interest from potential guests. They can help you differentiate your product from your competition, increase the perceived value your guests and travelers will receive, but also help you maintain rate in the marketplace. It's tougher for guests to place a direct value on a spa, dining, or event credit included in their stay – and tougher for them to compare your offering 1:1 with competitors.

    Value-adds allow you to drive interest in your property, but don't carry the same risks associated with cutting rates. They can make the difference for many guests while giving you more control over your price in the marketplace for the longer term.

  • Control your costs. This one is obvious, but it's important to remember how important it is to control your costs at any time – bus especially during a crisis. A few ideas that may help:
    • Have a zero-tolerance policy against sick employees coming to work. Make your sick employees stay home. Seriously. We fully recognize the challenges that exist in a tight labor market. But sick employees run the risk of infecting guests and their fellow workers, each of which introduces a host of additional problems. If you can afford to pay workers for their lost time, we'd recommend it. You'll engender greater loyalty and increase retention overall. But, in any case, make sure that employees who aren't feeling well stay home.
    • Take rooms out of service. This one's tougher for some properties, but if you have rooms that need renovation or repair, slow periods are the perfect time to get those done. You can improve your property's overall service and experience without sacrificing additional revenues.
  • Review your insurance and other financial tips. Is coronavirus COVID-19 part of your coverages? Are you able to recoup any losses from business interruption insurance or similar? While insurance is unlikely to cover all your costs, they may help lessen any economic burden COVID-19 places on your business.
  • Market efficiently and effectively. One cost you absolutely don't want to cut is your marketing spend. Yes, you absolutely must monitor and control your expenses during any economic disruption. But evidence shows that travel companies that continue to invest in marketing during a downturn significantly outperform their competitors in both the short and longer-term. Research from Amrik Singh at the University of Denver and Chekitan S. Dev at the Cornell University School of Hotel Administration shows that "The results of this study show significant differences between winners and losers when measured by top-line indicators (Average Daily Rate [ADR], RevPAR, TRevPAR) and profitability (GOPPAR and NOIPAR). Winners were also found to spend significantly more on marketing than losers… total marketing expenditures are significantly and positively correlated with RevPAR, GOPPAR, and NOIPAR [during a downturn]. This finding implies that an increase in marketing expenditures has a positive effect on revenue and profit." [PDF link]
  • Tips for how you can market your hotel most effectively
    • Leverage your content marketing strategy to tell a great story about your destination and brand. Screen Pilot has developed a tremendous set of resources for hotel marketers working their way through the current crisis. Their "Hotel Marketing COVID-19 Resource Center" is one of the best I've seen. In particular, they've got an amazing piece on how to use content marketing effectively during this period that's well worth your time. Fuel Travel also has a great Crisis Management for Hotels Resource List filled with excellent insights and ideas.
    • Don't disappear from social. Screen Pilot also put together an outstanding set of recommendation on how to effectively be "aware, available, and agile" on social. Many of these include items addressed above such as "encouraging consumer confidence" and using your FAQ pages to reassure guests. But the whole set is excellent and truly worth your time. You can check out their advice here.
    • Use email effectively. Email is always one of your best marketing and communication tools. But what's the right way to use email right now? Revinate offered 6 fantastic tips forwriting a guest focused email during coronavirus that you should definitely bookmark and refer to often during this situation.
    • Think about adopting a "Fast Follower" approach to the recovery. This one is more of a suggestion than a recommendation. But it's likely someone in your market will be the first to try to commercialize and capitalize on the recovery… and will do that too soon. This remains a rapidly evolving and emotionally charged situation. Jumping the gun on selling risks a negative backlash from those still coping with the crisis or concerns around coronavirus. We'd strongly suggest you let someone else in your market be the first to take that step. As long as you put together the right plan and prepare to launch quickly when the recovery starts to take hold, there's little downside that anyone will beat you to capturing your fair share of the demand when it exists. Plan to be a "fast follower" and you should be fine.
  • Keep learning. The current situation requires an adaptable approach to the rapidly shifting marketplace. Anything that helps you keep learning is a good move. This post attempts to help there. And my friends Loren Gray from Hospitality Digital Marketing and Robert Cole from RockCheetah put together a fantastic AAHOA Webinar addressed to hotel owners in the age of COVID-19, "Creative Marketing & Messaging Strategies," that you can — and should — review here. And Fuel Travel has put together several excellent podcast episodes on dealing with the difficulties caused by coronavirus, including one with Loren Gray on "Applying Lessons Learned from 9/11 To The COVID-19 Crisis" and an interview with our own Tim Peter reviewing "8 Things Hotels Should Be Doing About The Global Crisis." (We've also embedded that episode at the bottom of this post). All are well worth your time.

Conclusion

Amazingly, it's still somewhat early days of novel coronavirus COVID-19, especially here in the Americas. But some things are starting to become clearer. It's increasingly less likely that this event will blow over with only short-term effects. And it remains possible that we will face a longer-term disruption or ongoing challenges every flu season from COVID-19.

What's more certain is that travel businesses and hoteliers who plan ahead, keep learning, control their costs, work to maintain rate, and continue marketing effectively will likely weather this storm – as well as any others that come along.

We'll continue to update this blog with additional techniques, tips, and strategies you can use to manage through this situation. And we'd love to hear from you. What's working for your business? Where have you found success in driving revenues and profitability? Drop us a line at revenuegrowth@timpeter.com. We'll be sure to share that here and keep the conversation going.

Past Coronavirus COVID-19 Coverage

We originally put together the following items to educate readers on the novel coronavirus COVID-19. There's now lots of coverage out there about what's going on with the illness and its economic effects. However, we're keeping these following sections available for your reference if you need them:

The Bad News About Coronavirus Covid-19

Let's start with the bad news. And, I'm sorry to say that there's a fair bit of it. The disease originated in Asia and, as you might imagine, that's where the greatest impacts have been felt so far. But, health officials are tracking rising numbers of cases in Europe, the Middle East, and the Americas, with, for example, California monitoring at least 8,400 people for the coronavirus. This sudden spike – which is expected to get worse – is leading many businesses to restrict or cancel conferences and business travel. Some of these include:

Again, Phocuswire's liveblog can help keep you up to date on additional cancellations that might matter to your business.

Impacts to Travel Businesses from Coronavirus COVID-19

A number of news outlets are also rounding up stories around the impacts from COVID-19 that may be worth checking out. We'll update these as needed over the next few days/weeks, but mostly these are to give a sense of the overall travel industry effects of the virus:

The Good News about Coronavirus Covid-19

Thankfully, it's not all "doom and gloom." Here are a handful of positive – or at least neutral – stories that show how some events and travel businesses are managing through the crisis. We'll highlight specific case studies where relevant:

Tim Peter

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February 11, 2020

We Live in the Future (Thinks Out Loud Episode 274)

February 11, 2020 | By | No Comments

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We Live in the Future (Thinks Out Loud Episode 274) – Headlines and Show Notes

When you look around, do you feel like you’re living in a futuristic utopia? Or does it feel more like a dystopian future to you? In either case, it’s clear that we already live in the future. Whether you see a world filled with global access to instantaneous information, improved medical treatments, and declining poverty, or one filled with information overload, disparate access to healthcare, and growing income/wealth inequality, the fact remains that the future is here, now.

This week's Thinks Out Loud looks at the “state of the future” that we’re living in, positive and negative, and offers some thoughts on how you can make it more positive for you — and for the world around you.

Want to learn more? Here are the show notes for you:

Relevant Links – We Live in the Future (Thinks Out Loud Episode 274)

Subscribe to Thinks Out Loud

Contact information for the podcast: podcast@timpeter.com

Past Insights from Tim Peter Thinks

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Technical Details for Thinks Out Loud

Recorded using a Heil PR-40 Dynamic Studio Recording Mic and a Focusrite Scarlett 4i4 (3rd Gen) USB Audio Interface into Logic Pro X for the Mac.

Running time: 20m 20s (I didn’t plan this one. But, c’mon. The episode “We Live in the Future,” released in 2020, is 20:20. That’s awesome!)

You can subscribe to Thinks Out Loud in iTunes, the Google Play Store, via our dedicated podcast RSS feed (or sign up for our free newsletter). You can also download/listen to the podcast here on Thinks using the player at the top of this page.

Transcript – We Live in the Future (Thinks Out Loud Episode 274)

Well, hello again everyone, and welcome back to Thinks Out Loud, your source for all the digital marketing expertise your business needs. My name is Tim Peter, this is episode 274 of the big show, and thank you so much for tuning in. I really think we've got a cool show for you today. This is something that I'm passionate about, just unbelievably passionate about, and that is this idea, you know, anyone who follows me on Twitter has probably seen me say recently that we live in the future. We are in a remarkable time.

The Good News: We Live in the Future (Thinks Out Loud Episode 274)

You know, obviously I talk a lot about mobile and how it shapes the future. Believe me, I'm going to go way wider than mobile here. But just to point out a couple of recent statistics, you know, there's new data from Pew Research that shows that mobile phone ownership has reached 94% in advanced economies and 83% in emerging economies. Smartphone ownership is 76% and 45% among advanced and emerging economies respectively. So almost half the world has a smartphone. And internet use among people in advanced and emerging economies has reached 90% and 60% respectively.

Now, as you might imagine, those numbers are even more dramatic among millennials, or as I like to call them, adults under 40. So that's amazing, right?

Well, there's even more amazing stuff, none of which has anything to do with business in the just spot-on view. But if you broaden your lens a little bit, you're going to say, Oh, that's got some amazing implications.

You know, for one thing, we have a longer life expectancy according to the World Health Organization. This is a quote, "global average life expectancy increased five and a half years between 2000 and 2016, the fastest increased since the 1960s. Those gains reverse declines during the 1990s when life expectancy fell in Africa because of the AIDS epidemic and in Eastern Europe following the collapse of the Soviet Union."

Think about it. It's not that people don't die of AIDS any longer. It's not that people don't die because of economically depressed conditions, and I'll speak a little bit more on that in a moment. But overall, people are living longer. They're healthier. Cancer rates are down. The American Cancer Society said "the death rate from cancer in the U S has declined steadily over the past 25 years. As of 2016 with a cancer death rate for men and women combined had fallen 27% from its peak in 1991. This decline translates to about one and a half percent per year, and more than 2.6 million deaths avoided between 1991 and 2016." Again, that's amazing. So people are, you know, living longer. People are healthier, they're more connected.

And that all leads to the fact that we have a growing middle class according to the Brookings Institution. "As of [September, 2018] just over 50% of the world's population or some 3.8 billion people live in households with enough discretionary expenditure to be considered middle-class or rich." That's amazing. And it's a reality that would have been tough to predict not that long ago. But that's the world we live in.

You know, it's, think about Star Trek and the fact that they talk about, you know, "Star Trek: The Next Generation." Yes, I'm a nerd. I've been watching "Star Trek: Picard." I love it. It's amazing. You should check it out.

But this idea that, you know, in the future we will have fewer concerns because some of our more basic needs — you know, if we think Maslow's hierarchy — are being taken care of. We no longer worry as much about lodging and food and shelter and basic health. And I want to be really clear, obviously, there's a lot more than can be done.

I promise you I'm going to come to that, but we live in amazing times. You know, just as a, for instance, think about the things that exist now that would have sounded like science fiction even 10 to 15 years ago, but no longer do. We have space tourism launching this year. Virgin Galactic and Jeff Bezos's Blue Origin will begin flights this year. According to the BBC, "Swiss bank UBS released a report," this was in 2019, "that estimated space tourism could become a $3 billion industry in the next 10 years." There was an interesting article in late December on Politico that published an article about concerns about the lack of regulation in space tourism. And this isn't a science fiction piece. This is like a legitimate serious conversation they're having. You know?

Also not science fiction, quantum computing made huge breakthroughs in 2019, with Google claiming they had achieved quantum superiority. Now, there's probably a little bit of PR in that. But that's extraordinary. We have things like quantum teleportation. We have things like gene editing with CRISPR. We have telepresence and augmented reality, and oh, I don't know, podcasts and all kinds of crazy stuff that people take for granted day in and day out.

If we don't live in the future — I don't know when we will — right now. To be fair, I want to point out two things here. One, I'm sure if you're an adult under 40 right now, and especially if you're an adult under 30 right now, you're probably saying, well, c'mon, this is just normal, and that's kind of the point. If you're older than 40, if you're older than 35 a lot of this stuff was the future, not that long ago. And today it's normal. It's reality. And that's something we need to just, accept, we just need to take in and, you know, own, right? We need to embrace it.

The Bad News: We Live in the Future (Thinks Out Loud Episode 274)

Now the other side of this is, of course, the future isn't all good news. We've seen a rise of hate groups and criminal activity on the internet. That's terrible, right? I'm, I'm paraphrasing Benedict Evans, who's a partner in the venture capital firm a16z, who recently gave a talk and said, you know, when everyone is connected to the internet, everyone includes the bad people.

So you absolutely get bad actors and you know, whether they're doing it for fun, whether they're doing it for profit, or whether they're doing it for fun, like trolls and things like that. In his fantastic book "LikeWar," which is stylized as #likewar, the writer Peter W. Singer quoted Robert Bateman who said, "Once every village had an idiot. It took the internet to bring them all together." Which is not, I mean, it's a funny line, but it's also tragic.

I have mentioned many times before that "digital is like gravity" and quoting Paul DeLillo, the a French philosopher, you know, "when you build the ship, you also build the shipwreck. When you invent the ship, you also invent the shipwreck." And digital is like gravity. It's got these problems.

I had a podcast episode not too long ago where I asked did we break the internet or did the internet break us? And I think those are questions we have to pay a lot of attention to. You know, I'm going to give you my point of view on this in just a moment.

But I want to take a step back to this great book from, Oh gosh, 10 years ago or more, a guy by the name of Joel Garreau, who wrote a book called "Radical Evolution." And he talked about the fact that there are multiple scenarios for the future. He called them the Heaven scenario, the Hell scenario, and the Prevail scenario. Right? I've also heard them referred to as "the Pollyanna scenario," right, where everything's going to be amazing. The "Gray Goo scenario" where everything's going to go to crap, and "the Muddle Through scenario," you know, where we just kind of take one step forward and 1.99 steps back.

And I'm going to be honest, I think that's the scenario that's most likely, the muddle through. You know, the future is not utopia, though there are elements of utopia in it. You know, when we talk about things like cancer rates going down and longer life expectancy and more people being middle class and having access to a modern economy, that's phenomenal, right? And that's before you get to the science fiction stuff, like space tourism and access to information and all that kind of stuff, right? That's utopian. That's heaven. That's Pollyanna, right? It's also not all dystopia.

You know that we don't live in a utopia. We don't live in a dystopia. We just kind of live in a "Topia" where things kind of muddle through and we have muddled the through for millennia, and I expect we're likely to continue to do so.

There's going to be amazing breakthroughs that make the world a better place. And we're going to have bad actors and criminals and all those other kinds of things of people who want to exploit the system to their own advantage. You know, when we look at people, when we look at some of the divisive rhetoric on the internet, some of the people who are, you know, saying terrible things or doing terrible things, you know, ask yourself who benefits from this. Are they are these legitimately good actors? Are these people who are trying to thrive on the chaos? So I think we have to recognize that, you know, it's not utopia. It's not dystopia, it's just a "Topia." And we will muddle through.

What You Can Do About It: We Live in the Future (Thinks Out Loud Episode 274)

Now, if you think about it, I think there's a few things you can do to, to, you know, do well at because we live in the future.

And the first is kind of embrace the chaos. And I don't mean, you know, I don't mean necessarily create more chaos or add to the chaos. I mean, it's likely we're gonna muddle through. It's not all going to be wonderful, but it's probably not all going to be crap. You know, take it for granted that this is the world in which we live and try to make changes for the better in the areas that you can for the people around you.

Another thing you can do is learn to live in the future. Keep learning, keep reading. I'm going to paraphrase yet another quote, and I would attribute this if I could find the source, but there was a politician who said, once upon a time, you may as well embrace the future. You're going to live in it anyway.

That's the reality. That's the world in which we live, and so you're better off saying, okay, if that's true, if we live in the future, how do I live in it successfully?

Another thing you can do is plan. You know, I realized that dropping quotes all over the place here, but one of my favorite comes from a Yiddish expression that says, "Man plans, God laughs," by which it means that the circumstances that happen every day will likely force you to change whatever plans you make, sometimes dramatically. You know, Mike Tyson probably had the best version of this when he said, "everyone has a plan until they get punched in the mouth." But that doesn't mean you shouldn't plan. It means that you should have a plan that's adaptable as circumstances change.

If you know change is going to occur, why not plan for that change and say, okay, what do I do if this occurs? What will I do if this occurs, what will I do if that occurs? What do I do? You know, what do I do to achieve the outcomes that I'm looking for? How do I make sure I put myself in a position to be successful as circumstances change and for lots of different definitions of success, not just in business, but in your personal life, in your interpersonal relationships, in your you know, health and wellness.

And that leads to my last point that I want to talk about, which is, let's be fair, the future hasn't always been bright for everybody. So look for opportunities to bring along those who are currently left behind. You know, I think it's really clear that the technologists and tech evangelists often only look at the bright side. They don't always look at the impacts — whether they're environmental or financial or cultural or just basic human — of those who don't get to participate as early adopters. And the reasons that they don't pay attention to this aren't evil. They're just blinded by the bright side. And let's be fair, they have some reason to be.

Think about all the news about longer life expectancies, more people in the middle class, greater access to information, et cetera. Full disclosure, this may be my blind spot. But just because it will probably get better for everyone eventually doesn't mean it's all good for everyone now. In fact, quite the opposite. And you don't have to look to the far side of the world to find examples of that.

Think about people in your local communities who struggle with access to education or information or you know, things like water that isn't mostly made of lead, right? I mean, you don't have to go that far to find places where people are being left behind. And the thing you can do is ask, okay, what can I do about that? How can I help?

I once met a hotel operator in Mexico who had built a series of schools for local kids to improve their access to education, to improve their education and their economic prospects. And yes, one of the reasons he did it was because he wanted to improve the quality of the workforce in his area. And yes, one of the reasons he wanted to do it was to give himself access to a local market. But he was educating far more kids than he could ever hope to employ and far more kids than he could ever hope would stay in his hotel. And he knew that, and in his view, that was a good thing.

I think it's amazing that you have the ability to use these tools to do well for people. And even if you don't believe that helping others matters altruistically — and I do by the way — but just like this hotel operator, think about how you can benefit if you have richer customers, more educated employees, and all the other benefits that come with that.

We Live in the Future (Thinks Out Loud Episode 274) Conclusion

So we live in amazing times. We live in an era of unbridled opportunity. We have people who are living longer. They're making more money. They have access to more information that should bring the world closer together, that should bring you closer to your customers, but also just closer to people generally. And if that isn't a bright vision of the future, I don't know what is.

So don't just wait for the future to happen to you. Embrace it. Recognize that you live in the future and that because of that, you can do some truly extraordinary things. Personally, I can't wait to see what you do with it.

Show Closing — We Live in the Future (Thinks Out Loud Episode 274)

Now, looking at the clock on the wall, we are at a time for this week, but I want to remind you that you can find the show notes for today's episode, as well as an archive of all our past episodes by going to TimPeter.com/podcast again, that's TimPeter.com/podcast. Just look for episode 274.

While you're there, you can click on the subscribe link in any of the episodes you find there to have Thinks Out Loud delivered to you every single week. You can subscribe to Thinks Out Loud on Apple Podcasts, Google Podcasts, Stitcher Radio, Overcast, whatever your favorite podcatcher happens to be. Just search for Tim Peter Thinks, Tim Peter Thinks Out Loud, or Thinks Out Loud, we should show up for any of those. While you're there. I'd also appreciate it if you could provide us a positive rating or review. It helps listeners find us and it helps them understand what the show is all about. It makes a big difference for the podcast overall.

You can also find Thinks Out Loud on Facebook by going to facebook.com/TimPeterAssociates. And you can find me on Twitter using the Twitter handle @tcpeter. And of course you can email me by sending an email to podcast@timpeter.com again, that's podcast@timpeter.com.

As ever, I'd like to thank our sponsor. Thinks Out Loud is brought to you by SoloSegment. SoloSegment focuses on AI-driven content discovery and site search analytics to unlock revenue for your business. You can learn more about how to improve your content, increase your customer satisfaction, and make your search smarter by going to solosegment.com.

With that, I want to say thanks so much to you for tuning in. I really appreciate you listening. I know I say this week after week after week, but I really would not do the show without you. It means so much to me to have you listen every single week. I hope you have a great rest of your week, wherever you may be. I hope you have a fantastic weekend ahead and I look forward to speaking with you again on Thinks Out Loud next time. Until then, please be safe, be well, and as ever take care everybody.

Tim Peter

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December 11, 2019

The Lessons You Should Learn from Expedia’s Recent Troubles (Thinks Out Loud Episode 268)

December 11, 2019 | By | No Comments

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The Lessons You Should Learn from Expedia’s Recent Troubles (Thinks Out Loud Episode 268) — Headlines and Show Notes

Literally days after our episode calling out the dangers of Google forcing your company to become a "hidden intermediary" — and using Expedia’s recent troubles as one example of where things are going terribly wrong — Expedia fired CEO Mark Okerstrom and CFO Alan Pickerell. The reason? Well, apart from a "disagreement over strategy," the real issue is that the company simply doesn't have a plan for dealing with Google's rising dominance. And, as stated, that's something you want to keep from happening to your brand.

How can you do that? How can you avoid Google taking over your share of the market? How can you compete with the search giant to win customers and profits? Tim Peter & Associates' president Tim Peter has a few ideas for you on the latest episode of Thinks Out Loud.

Want to learn more? Here are the show notes for you:

Relevant Links — The Lessons You Should Learn from Expedia's Recent Troubles (Thinks Out Loud Episode 268)

Subscribe to Thinks Out Loud

Contact information for the podcast: podcast@timpeter.com

Past Insights from Tim Peter Thinks

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Technical Details for Thinks Out Loud

Recorded using a Heil PR-40 Dynamic Studio Recording Mic and a Focusrite Scarlett 4i4 (3rd Gen) USB Audio Interface into Logic Pro X for the Mac.

Running time: 15m 52s

You can subscribe to Thinks Out Loud in iTunes, the Google Play Store, via our dedicated podcast RSS feed (or sign up for our free newsletter). You can also download/listen to the podcast here on Thinks using the player at the top of this page.

Transcript — The Lessons You Should Learn from Expedia's Recent Troubles (Thinks Out Loud Episode 268)

Well, hello again, everyone. Welcome back to Thinks Out Loud, your source for all the digital marketing expertise your business needs. My name is Tim Peter. This is episode 268 of the big show, and thank you so much for tuning in. I really appreciate it. We have a crazy show today. I did an episode last week that talked about the biggest risk to your business is becoming a hidden intermediary, and I really used what's going on with Expedia lately to illustrate the problem of becoming hidden intermediary — how Google, how Amazon, how Facebook, how Apple, you know how the big tech giants are really threatening companies that don't provide a direct value-add to their customers. And you know, one of the things that drove this was that Expedia reported really, really crappy earnings in Q3.

And I talked a little about the fact that, you know, they needed to sort this out and they probably would, well, no sooner did I publish the episode. Then the very next day Expedia fired Mark Okerstrom, the CEO, and Alan Pickerell, who was the CFO. Like out. Gone. Hit the bricks.

Phocuswire who covered the story brilliantly. I'm going to link to a lot of focus wire stuff here because they're really great at this. They do a wonderful job, but I will say, I thought the framing of their headline was kind of funny because it's “Expedia group CEO Mark Okerstrom out amid board disagreement over strategy.” I think the biggest disagreement that the board had was that, you know, Okerstrom and Pickerell thought they were the right people to lead that strategy. And the board, you know, disagreed.

So I'm, not that I was in the room, but I'm pretty sure the biggest disagreement was, you know, "are these, in fact, the people who can fix this?" Now I want to point out, I tweeted on December 3rd, another story about this that was also from Phocuswire because at the Phocuswright Conference, Mark Okerstrom talked about the challenges that we're having with search, and I tweeted — and this is important to those of you who are listening, who are not in the travel industry — I said, “don't let Expedia fool you. This isn't just about travel. Google is coming for a lot of folks.”

I also tweeted on December 3rd, you know, a link to an article from the Motley Fool that said, “why Expedia blamed Google for its earnings debacle.” And I said, because "Google is a huge problem for Expedia. That's why, and they may be coming for your business next."

This is a thing I've talked about a ton when it comes to travel. Google is the dominant player in organic paid search, organic search, paid search, and a thing called metasearch, which if you're outside of travel, don't worry about it. Well actually, let me rephrase that. If you're outside of travel, you don't need to know precisely what metasearch is, but you should worry about it because it is a canary in a coal mine. And I'm going to come back to that canary in a coal mine in just a second. This is a thing that I've been talking about since at least 2014 when I referred to the big myth about hotel metasearch. Which you know, the nice thing about predicting things years in advance is you only need to be right once. 😉

But there was another Phocuswire article from November 14th where they talked about Skyscanner becoming a search company, pivoting from their original model of being a metasearch engine and instead becoming a marketplace with bookings. Functionally, they're getting out of the business of aggregating search results, right? They're no longer going to be a search engine primarily, and instead they're going to sell travel directly, which by the way, is exactly the problem that, you know, Expedia and Booking.com and the like and TripAdvisor, who I all talked about last week, seemed to be having.

Now remember the canary in the coal mine that I talked about a moment ago? Well, Social Capital CEO Chamath Palihapitiya was speaking at the Phocuswright Conference a couple of weeks ago, by the way, that is run by the same people who run Phocuswire, and I'm going to quote pretty extensively here from a a CNBC review of this. So I'm quoting from the CNBC article. It says, quote

Speaking at The Phocuswright Conference this week, Palihapitiya said that while he “loves” Google and its stock as an investor, he warned that time is running out for companies who have become reliant on it. “The longer it takes for Google to find a second act, the more you’re f—-d,” he said about those companies, adding that investor patience will wane. “If you are in the business of being a parasite on top of Google, your medium-term and long-term prospects are terrible; you’re an impaired company, you don’t know it,” he added. The only way to win, he argued, is to offer unique value; many companies have done the opposite, becoming more like their competitors and relying on Google to drive volume. That’s a recipe for disaster. “This is accurate,” tweeted fellow venture capitalist Bill Gurley, of Benchmark, Thursday evening.

Palihapitiya pointed to the travel industry, calling Google’s travel efforts a “canary in a coal mine” and citing both Expedia and TripAdvisor. “At the core of it is the decision that they will capture the overwhelming majority of profit in the travel sector,” he said about Google.

He's not the only one saying it either. Ben Thompson on Stratechery a couple of weeks back now, on November 12th, actually right after Expedia's earnings call, referred to "the Google Squeeze" and the challenges that Expedia and people like TripAdvisor and Booking.com will have in competing as you go forward.

This is a huge deal, and it's not about travel. This is what Google's doing in a number of markets. Look at what's happening with online retail. Look at what's happening with Google Shopping. Look at what's happening with Google News. They aggregate demand to use Ben Thompson's phrase, and because they have the demand, they control the marketplace for whatever that product or service is.

And this is a huge issue for all kinds of companies. Mark Oak Ostrom got fired because of this, by the way, to point out how rare this is. He was named CEO of the company two years ago. Less than two years ago. Find me another example of a CEO of a public company that by the way, is doing basically okay, right there.

Their revenues were up 9% year on year. Their costs were up dramatically more, but find me a CEO who gets booted after two years. And the reason he got booted was because the board didn't believe that he had a good plan for dealing with the fact that Google's going to come along and you know, eat their lunch or drink their milkshake, or you was whatever your favorite, you know, analogy is basically the board said, mr , mr Pickerell, we understand what you say you're going to do and we think it's not going to work.

Now. Last week on the show, I laid out a three point framework for how you can succeed and make sure what just happened to Okerstrom and Pickerell doesn't happen to you. I said, you must differentiate. You must become a destination and you must diversify. You must get your traffic and your revenue from more than just one source.

A lot. Don't get all your business from Google. In fact, I had a podcast, a podcast a weeks ago where I said, stop outsourcing your sales and marketing to gatekeepers like Google at a minimum. Don't outsource a hundred percent of it to those folks, but there's one more point that I want to add to that framework, and I hinted at it last week, but I want to get a little more in detail about it this week, which is, I said, you have to differentiate, you have to become a destination.

You have to diversify. And you have to deliver. There was a fascinating article that on marketing charts that said, uh, uh, here's what B2B content marketers are prioritizing in 2020 and near the very top, they had increased conversions and near the very bottom they had no the customer better, and I thought that was insanity.

Because I think the first of those follows from the last of those. You don't increase your conversion without knowing your customer better. One leads to the other, and we see this all the time when I've talked about customer experiences queen, this is what I'm talking about. Steffan Berelowitz had another great example, a guy from a company called Travel Tripper that said, consumers want Amazon to be a travel booking site.

Why?

Because they really like the experience that they have on Amazon. I talked about this actually two weeks ago with Amazon Go, instant gratification, and the boring future of business customers expect. That the experience will become invisible. It will become so seamless that they don't even notice it.

And that's kind of what Amazon has done with Amazon. Go and now travel. Customers say, why can't they do that for my travel too? That's a huge threat to an Expedia or booking.com and frankly to a Google. And the reason it works is because they're using data to understand the customer and using that understanding to create a deeper, deeper, richer experience.

Uh, there was another fantastic article that was out, uh, Oh, about a week ago from CMS wire about how brands still haven't tapped AI's full promise. Why do I talk about AI? I'm going to talk about customer experience. Because that's how you know your customer better. That's how you use the data to inform your decisions.

It's not that AI is going to tell you, here's exactly how you make the customer experience better. It's going to tell you, here are the pain points and here's what we understand about sentiment analysis. When people talk about our brand and our business, and here's where we see patterns emerge.

That co that you know. Uh, reflect challenges people have when they interact with a product or a service. And so you need to do that to understand what's going on and understand your customer better so that you can deliver a greater customer experience. And so that you can differentiate your product or service from those of your competition, especially the competitors who are the big guys like Google and Amazon and Facebook.

And that's how you can become a destination. And it's how you can diversify the marketing and sales channels from which you get your business. Because at a minimum, your destination, your own web presence becomes one of the places people want to go.

So you must differentiate. You must become a destination. You must diversify. And you must deliver. Because if you don't — like Mark Okerstrom and Allen Pickerell — your board or your company CEO or your customers are going to show you a fifth "D" — and that is the door.

Now looking at the clock on the wall, we are out of time for this week, but I want to remind you that you can find the show notes for today's episode as well as an archive of all our past episodes by going to TimPeter.com/Podcast again, that's TimPeter.com/Podcast just look for episode 268.

While you're there, you can click on the subscribe link in any of the episodes to have things out loud delivered to your favorite podcatcher every single week. You can also subscribe on Apple Podcasts or Google Podcasts or Stitcher Radio or whatever your favorite podcatcher happens to be. Just do a search for Tim Peter Thinks, Tim Peter Thinks Out Loud or Thinks Out Loud. We should show up for any of those. And while you're there, I'd very much appreciate it if you could provide a positive rating or review. It gives other listeners a great insight into what the show is about and helps them understand whether it's something they'd like to listen to too. It makes us easier for new listeners to find us and when it would mean so much to me

You can also find Thinks Out Loud on Facebook by going to facebook.com/TimPeterAssociates. You can find me on Twitter using the Twitter handle @tcpeter. And of course you can email me, just send an email to podcast@timpeter.com. Again, that's podcast@timpeter.com.

As ever, I'd like to thank our sponsor. Thinks Out Loud, is brought to you by SoloSegment. SoloSegment focuses on AI-driven content discovery and site search analytics to unlock revenue for your business. You can learn more about how to improve your content, increase your customer satisfaction, and make your search smarter by going to solosegment.com

With that, I want to say thanks so much for tuning in. I really appreciate it. It means so much to me. I hope you have a great rest of the week, a wonderful weekend ahead, and I look forward to speaking with you here on Thinks Out Loud next time. Until then, please be well be safe and as ever take care everybody.

Tim Peter

By

July 23, 2019

What the Big Shift to Mobile Means for Your Business (Thinks Out Loud Episode 251)

July 23, 2019 | By | No Comments

What the Big Shift to Mobile Means for Your Business: Group of folks using mobile to find the answers to her questionsLooking to drive results for your business? Click here to learn more.


What the Big Shift to Mobile Means for Your Business (Thinks Out Loud Episode 251) – Headlines and Show Notes

Following up on Thinks Out Loud's 250th(!!!) episode last week, host Tim Peter talks through what the big shift to mobile means for your business right now. And, just in case you're curious, it's a much bigger deal than you think.

Want to learn more? Here are the show notes for you:

Relevant Links:

Subscribe to Thinks Out Loud

Contact information for the podcast: podcast@timpeter.com

Past Insights from Tim Peter Thinks

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Technical Details for Thinks Out Loud

Recorded using a Heil PR40 Dynamic Microphone through a Cloud Microphones CL-1 Cloudlifter Mic Activator and a Mackie Onyx Blackjack USB recording interface into Logic Pro X for the Mac.

Running time: 15m 59s

You can subscribe to Thinks Out Loud in iTunes, the Google Play Store, via our dedicated podcast RSS feed )(or sign up for our free newsletter). You can also download/listen to the podcast here on Thinks using the player at the top of this page.

Tim Peter

By

December 10, 2018

In a Digital World, Is Every Company a Technology Company? (Thinks Out Loud Episode 236)

December 10, 2018 | By | No Comments

Is every company a technology company? Leaders use technology to answer customer questionsLooking to drive results for your business? Click here to learn more.


In a Digital World, Is Every Company a Technology Company? (Thinks Out Loud Episode 236) – Headlines and Show Notes

Subscribe to Thinks Out Loud

Contact information for the podcast: podcast@timpeter.com

Past Insights from Tim Peter Thinks

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Technical Details for Thinks Out Loud

Recorded using a Heil Sound PR 30 Large Diaphragm Multipurpose Dynamic Microphone through a Cloud Microphones CL-1 Cloudlifter Mic Activator and a Mackie Onyx Blackjack USB recording interface into Logic Express 9 for the Mac.

Running time: 12m 13s

You can subscribe to Thinks Out Loud in iTunes [iTunes link], the Google Play Store, via our dedicated podcast RSS feed )(or sign up for our free newsletter). You can also download/listen to the podcast here on Thinks using the player at the top of this page.