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Newsletter - July 26, 2002
Starwood Reports
Second Quarter 2002 Results
(BUSINESS WIRE)--July 25, 2002--Starwood Hotels & Resorts Worldwide,
Inc. (NYSE: HOT) ("Starwood" or the "Company") today
reported results for the second quarter of 2002.
Second Quarter Financial Results
-
EPS, excluding special items, was $0.41 compared to $0.54 in 2001.
Including special items, EPS was $0.37 compared to $0.52 in 2001. EPS,
including tax benefits from discontinued operations was $0.87 compared to
$0.52 in 2001.
-
Total revenues of $1.032 billion, excluding other revenues from managed
and franchised properties, decreased 7.0% from 2001 levels. Revenue per
available room ("REVPAR") for Same-Store Owned Hotels decreased
10.1% in North America and
-
10.2% worldwide when compared to 2001.
-
Total Company EBITDA was $320 million compared to $401 million in 2001.
EBITDA at Comparable Owned Hotels worldwide decreased
-
19.2% to $253 million. EBITDA at Comparable Owned Hotels in North
America decreased 20.8% to $178 million.
-
Total Company EBITDA margin was approximately 31.0%. EBITDA margin at
Comparable Owned Hotels in North America was 29.2%, up 190 basis points
from the first quarter of 2002. EBITDA margin at Comparable Owned Hotels
worldwide was 30.3%, up 380 basis points from the first quarter of 2002.
Second Quarter Ended June 30, 2002
Excluding net charges for special items of approximately $14 million
(pretax) in 2002 and $8 million (pretax) in 2001, EPS was $0.41 compared to
EPS of $0.54 in the corresponding period of 2001. Including these special
items, EPS was $0.37 compared to EPS of $0.52 in 2001. Total revenues were
down 7.0% to $1.032 billion compared to the same period of 2001. Operating
income, excluding special items, was $189 million compared to $254 million in
the same period of 2001 and income from continuing operations, excluding
special items, was $85 million compared to $112 million in the same period of
2001. Though in line with the Company's expectations, results were adversely
impacted by the weakened worldwide economic environment. However, operating
results continued the sequential quarterly improvement over the fourth quarter
of 2001 and first quarter of 2002. Operating results continued to improve
primarily as a result of an improving demand environment, a continued focus on
cost control and an increase in vacation ownership interest ("VOI")
results. As discussed in the first quarter 2002 earnings release, in
connection with the repayment of debt with the proceeds from the April 2002
senior notes offering, the Company incurred approximately $29 million (pretax)
of one-time charges relating to the write-off of deferred financing costs,
termination fees for early extinguishment of debt, and terminated interest
rate swaps associated with the repaid debt. During the second quarter of 2001,
the Company incurred approximately $9 million (pretax) of such charges related
to the early extinguishment of debt. Excluding these charges, net interest
expense decreased by $11 million when compared to the second quarter of 2001
due to a reduction in interest rates and the completion of financing
transactions in the past year. Results further benefited from a $16 million
after-tax reduction in goodwill amortization as a result of a new accounting
rule pertaining to goodwill and intangible assets. Depreciation expense
increased $9 million or 8.4% when compared to the second quarter of 2001 due
to prior year's renovation program and the repositioning and acquisition of
certain hotels.
Six Months Ended June 30, 2002
For the six months ended June 30, 2002, total revenues were $1.926 billion
when compared to $2.124 billion in the same period in 2001. EPS excluding net
benefits for special items of $9 million (pretax) in 2002 and net charges of
$7 million (pretax) in 2001 was $0.49, compared to EPS of $0.84 in the
corresponding period in 2001. EPS including these special items was $0.52
compared to $0.82 in 2001 and EPS including discontinued operations was $1.03
compared to $0.82 in 2001. Income from continuing operations decreased to $108
million in the six months ended June 30, 2002 compared to $169 million in the
same period of 2001. Income from continuing operations excluding special items
was $102 million for the six months ended June 30, 2002 and $174 million for
the comparable period of 2001.
Comments from the CEO
Barry S. Sternlicht, Chairman and CEO said, "Though the economic
environment remains extremely challenging and the speed of the economic
recovery has clearly moderated from our expectations in the first quarter of
2002, there are very encouraging trends, both for the industry and for our
company that remain intact. For the industry, future supply continues to
decline rapidly, particularly in large urban markets where our assets are
concentrated and where the recovery is likely to be most pronounced. For our
company, our European operations, particularly Italy and Spain, have fared
better than we had predicted and will be helped further by the Euro's rise.
Asia also has exceeded our expectations with owned hotels posting a 14%
increase in REVPAR for the quarter. South America, particularly Argentina, has
been extremely difficult and is likely to remain so for the foreseeable
future."
Concluding, Mr. Sternlicht said, "As for our brands, our Same-Store
Owned W brand's REVPAR fell just 2% in the quarter and North America
systemwide REVPAR declined less than 1% as the brand continues to build share.
Three new W's in San Diego, Seoul and Mexico City will bring our total to 19
and we soon expect W to expand to Europe. Our Westin brand also performed
admirably with Same-Store Owned Hotels REVPAR down 8.8% in North America and
owned and managed REVPAR down just 5.9%. Westin continues to gain share buoyed
by product innovations like the Heavenly Bed, the Heavenly Shower and a new
marketing campaign. While Sheraton's owned REVPAR did not meet our
expectations, in part because of its heavy urban concentration, we expect to
build upon our Westin and W experience and launch several new Sheraton
programs in the third and fourth quarter as we continue the re-imaging of the
brand."
Operating Results
At the Company's Comparable Owned Hotels worldwide, revenues for the second
quarter of 2002 decreased approximately $89 million to $834 million from $923
million in 2001 and EBITDA decreased 19.2% to $253 million from $313 million
in 2001. EBITDA at the Company's Comparable Owned Hotels in North America
decreased 20.8% to $178 million in the second quarter of 2002 when compared to
the same period of 2001. EBITDA at the Company's Comparable Owned Hotels
internationally decreased 15.1% to approximately $75 million in the second
quarter of 2002 when compared to the same period of 2001. The positive effects
of foreign exchange in Europe were offset by the effects from the continued
weakening of the Argentine Peso. Excluding the unfavorable effects of foreign
exchange, EBITDA at the Company's Comparable Owned Hotels internationally
decreased 11.9% in the second quarter of 2002 when compared to the same period
in 2001. The decline in operating results at Comparable Owned Hotels in North
America when compared to 2001 reflect the impact of lower REVPAR primarily
attributable to the weakened global economies.
REVPAR at Same-Store Owned Hotels worldwide decreased 10.2% in the second
quarter of 2002 when compared to the same period of 2001 as a result of a
decline in occupancy rates of 350 basis points to 66.5% and a decline in
average daily rate ("ADR") of 5.5% from the prior year. REVPAR at
Same-Store Owned Hotels in North America decreased
-
10.1% to $98.93 when compared to the same period of 2001 as a result of
a decrease in occupancy rates to 68.1% from 70.9% in the prior year, while
ADR decreased 6.5% to $145.20. Internationally, Same-Store Owned Hotel
REVPAR decreased 10.5%, with Europe down 7.9%, Latin America down 24.7%
and Asia Pacific up 14.1% when compared to 2001.
EBITDA margins at Comparable Owned Hotels worldwide were 30.3% in the
second quarter of 2002 when compared to 33.9% in the same period of 2001. In
North America, EBITDA margins at Comparable Owned Hotels were 29.2% when
compared to 33.1% in the same period of 2001 but increased 190 basis points
when compared to 27.3% in the first quarter of 2002. Internationally, EBITDA
margins at Comparable Owned Hotels were 33.4% when compared to 35.9% in the
same period of 2001 but increased substantially when compared to 23.8% in the
first quarter of 2002.
During the second quarter of 2002, the Company added five management and
franchise contracts representing more than 1,000 rooms, including the Sheraton
Krakow (238 rooms) in Krakow, Poland; the Lanesborough, a St. Regis Hotel (95
rooms) in London, England and the St. Regis Ft. Lauderdale (197 rooms) in
Florida. New hotel openings during the balance of 2002 include the Westin
Shanghai (approximately 450 rooms) in Shanghai, China, the Sheraton Wild Horse
Pass (approximately 500 rooms) in Phoenix, Arizona; the W San Diego
(approximately 260 rooms) in California and the Hotel Bora Bora Nui
(approximately 120 rooms) in French Polynesia. Including these properties,
through the end of 2003, the Company expects 50 new hotels and resorts around
the world, with approximately 15,000 rooms to commence operations.
Starwood Vacation Ownership, Inc. ("SVO") is currently selling
VOI inventory at ten resorts and engaged in pre-opening sales at two others
currently under construction (Westin Mission Hills Resort Villas in Rancho
Mirage, California and Westin Ka`anapali Ocean Resort Villas in Maui, Hawaii).
Contract sales in the second quarter increased approximately 11.3% when
compared to the same period in 2001 and sales were particularly strong at the
Maui and Mission Hills resorts. SVO EBITDA increased approximately 7.3% when
compared to the same period in 2001. SVO will begin construction of its fourth
Westin-branded interval ownership resort later this year featuring 158 villas
located adjacent to the Westin Kierland Resort & Spa in Scottsdale,
Arizona. The resort is scheduled to open in late 2002. The Company sold
approximately $87 million of notes receivable originated by the vacation
ownership operations in the second quarter of 2002, recognizing a gain of $9
million in operating income compared to a gain of $8 million in the second
quarter of 2001.
Acquisitions and Dispositions
During the second quarter of 2002, the Company sold the Allentown Clarion
for $5 million in cash. The Company continues to review its portfolio for
disposition candidates. In January, the Company announced that it had
initiated the formal sale process for the CIGA portfolio of 25 luxury hotels,
land, golf courses and marinas. The Company is in final discussions with
interested parties with respect to a select group of properties and is
expected to enter into definitive contracts for sale in the next sixty days.
Capital
During the second quarter of 2002, the Company invested approximately $66
million in hotel and VOI capital assets, including VOI construction at Westin
Mission Hills Resort Villas in Rancho Mirage, California and Westin Ka`anapali
Ocean Resort Villas in Maui, Hawaii as well as the ongoing development of the
St. Regis Museum Tower in San Francisco (269 rooms and 102 condominiums)
scheduled for completion in 2004. Work also continues on the flexible new
build Sheraton and Westin prototypes.
Financing
On June 30, 2002, the Company had total debt of $5.497 billion and cash and
cash equivalents of $196 million. At the end of the second quarter of 2002,
the Company's debt was approximately 53% fixed rate and 47% floating rate and
its weighted average maturity was 5.9 years. As of June 30, 2002, the Company
had cash and availability under its domestic and international revolving
credit facilities of approximately $663 million and the Company's debt had a
weighted average interest rate of 5.75%.
In April 2002, the Company sold $1.5 billion of senior notes in two
tranches -- $700 million principal amount of 7-3/8% senior notes due 2007 and
$800 million principal amount of 7-7/8% senior notes due 2012. The Company
used the proceeds to repay all of its senior secured notes facility and a
portion of its senior credit facility. After the close of the second quarter,
the Company entered the market to refinance the remaining senior credit
facility maturing February 2003, with an expected closing of the new facility
in September 2002.
In May 2002, the Company repurchased Series A convertible notes for $202
million in cash. Series B convertible notes, which can be put to the Company
in May 2004 for approximately $330 million, were originally issued in May
2001.
At June 30, 2002, Starwood had approximately 203 million shares outstanding
(including partnership units and exchangeable preferred shares).
Dividend
In 2002, the Company has shifted from a quarterly dividend to an annual
dividend. The final determination of the amount of the dividend will be
subject to economic and financial considerations and Board approval in the
fourth quarter of 2002. At this time, the Company expects the annual dividend
to be $0.84 per share.
Special Items
The Company recorded net charges of $14 million (pretax) for special items
in the second quarter of 2002 when compared to net charges of $8 million
(pretax) in the same period of 2001.
As discussed previously, the net charges in the second quarter of 2002
primarily represent $29 million (pretax) of costs associated with the early
extinguishment of debt, offset, in part, by a non-cash foreign exchange gain
of approximately $9 million (pretax), resulting from the devaluation of the
Argentine Peso and a $6 million (pretax) state tax refund. The foreign
exchange gain represents the mark-to-market, in accordance with Statement of
Financial Accounting Standards No. 52, of a U.S. dollar intercompany
receivable in Argentina. The special charges for the second quarter of 2001
primarily represent $9 million (pretax) of costs associated with the early
extinguishment of debt.
The following represents a reconciliation of income from continuing
operations before special items to income from continuing operations after
special items:
(In millions, except per Share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2002 2001 2002 2001
------- ------- ----- -----
Income from continuing
operations excluding
special items $ 85 $ 112 $ 102 $ 174
------ ------- ------ -------
EPS excluding special items $ 0.41 $ 0.54 $ 0.49 $ 0.84
------- ------- ------- -------
Special Items:
Restructuring and other
special credits, net 1 - 3(a) 1(b)
Gain (loss) on
asset dispositions (1) 1 (4)(c) 1
Foreign exchange gain
from Argentina(d) 9 - 33 -
Debt extinguishment costs(e) (29) (9) (29) (9)
State tax refund 6 - 6 -
-------- -------- ------ ------
Total special items
- pretax (14) (8) 9 (7)
Income tax benefit
(expense) - 35%
incremental tax rate 5 3 (3) 2
-------- -------- ------ ------
Total special items
- after-tax (9) (5) 6 (5)
-------- -------- ------ -------
Income from
continuing operations $ 76 $ 107 $ 108 $ 169
-------- -------- ------ -------
EPS including
special items $ 0.37 $ 0.52 $ 0.52 $ 0.82
-------- -------- ------- --------
-------------
(a) During the first quarter of 2002, the Company sold its investment
in an e-business venture previously deemed impaired and collected
receivables, which were previously deemed uncollectible.
(b) During the first quarter of 2001, the Company wrote down its
investments in various e-business ventures by approximately $19
million based on the market conditions for the technology sector
at the time and management's assessment that these investments
were permanently impaired. This charge was offset by the reversal
of a $20 million bad debt restructuring charge taken in 1998
relating to a note receivable which is now fully performing.
(c) Balance primarily represents an impairment charge recorded in the
first quarter of 2002 to reduce the carrying value of a hotel to
its fair market value.
(d) Amount is reflected in selling, general, administrative and other
expenses and represents a foreign exchange gain resulting from
the devaluation of Argentine Peso.
(e) Balance is reflected in interest expense and represents costs
related to the early extinguishment of debt in 2001 and 2002 and
the associated interest-rate swap unwindings for 2002.
Discontinued Operations
During the second quarter of 2002, the Company recorded a gain of $104
million from discontinued operations primarily related to IRS regulations
issued earlier this year, which allows the Company to recognize a tax benefit
from a loss on the 1999 sale of Caesars World, Inc. The tax loss was
previously disallowed under the old regulations. The remaining gain resulted
from an adjustment to the Company's tax basis in its World Directories
subsidiary, which was disposed of in early 1998. The increase in the tax basis
has the effect of reducing the deferred tax gain on this disposition.
Future Performance
All comments in the following paragraphs and certain comments in this
release above are deemed to be forward-looking statements. These statements
reflect expectations of the Company's performance given its current base of
assets and its current understanding of external economic and political
environments. Actual results may differ materially.
The weakness in North American and European economies, combined with the
current political environment in Argentina and other parts of the world and
their consequent impact on travel in their respective regions and on the rest
of the world, make it difficult to predict future results with any degree of
precision.
-
The Company currently expects full year 2002 REVPAR to decline 2-3%
from 2001 levels, full-year EBITDA of approximately $1.185 to $1.210
billion and EPS of approximately $1.20 to $1.30 with an effective tax rate
of approximately 21%. Based on these assumptions and assuming no asset
sales for modeling purposes, approximate quarterly EPS for the remaining
quarters of 2002 is expected to be as follows:
2002
-----------------------
First quarter (actual) $ 0.08
Second quarter (actual) $ 0.41
Third quarter (estimate) $ 0.26-$ 0.31
Fourth quarter (estimate) $ 0.45-$ 0.50
-----------------------
Full year (estimate) $ 1.20-$ 1.30
=======================
-
REVPAR at Same-Store Owned Hotels in North America for the third
quarter of 2002 is now expected to be flat to up 3% when compared to the
third quarter of 2001.
-
The Company currently expects total capital expenditures in 2002 to be
approximately $300 million, excluding acquisitions and other investments.
-
Discretionary free cash flow (after cash interest expense, cash taxes,
and capital expenditures) is expected to exceed $400 million.
Starwood will be conducting a conference call to discuss the second quarter
financial results at 10:30 a.m. (ET) today. The conference call will be
available through simultaneous webcast in the Investor Relations/Press
Releases section of the Company's website at www.starwood.com. A replay of the
conference call will also be available from 1:30 p.m. (ET) today through 8:00
p.m. (ET) Thursday, August 1, on both the Company's website and via telephone
replay at 719-457-0820 (access code: 343019).
All references to EPS, unless otherwise noted, reflect earnings per diluted
share from continuing operations excluding special items. All references to
total revenues exclude other revenues from managed and franchised properties.
All references to total Company EBITDA and EBITDA margins exclude other
revenues and expenses from managed and franchised properties. All references
to Comparable Owned Hotels reflect the Company's owned, leased and
consolidated joint venture hotels, excluding hotels sold during 2001 and 2002
and hotels without comparable prior year results. All references to Same-Store
Owned Hotels reflect the Company's owned, leased and consolidated joint
venture hotels, excluding hotels under significant renovation or for which
comparable results are not available.
Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel
and leisure companies in the world with more than 740 properties in over 80
countries and 110,000 employees at its owned and managed properties. With
internationally renowned brands, Starwood is a fully integrated owner,
operator and franchiser of hotels and resorts including: St. Regis(R), The
Luxury Collection(R), Sheraton(R), Westin(R), W(R) and Four Points(R) by
Sheraton brands, as well as Starwood Vacation Ownership, Inc., one of the
premier developers and operators of high quality vacation interval ownership.
(Note: This press release contains forward-looking statements within the
meaning of federal securities regulations. Forward-looking statements are not
guarantees of future performance and involve risks and uncertainties and other
factors that may cause actual results to differ materially from those
anticipated at the time the forward-looking statements are made. General
economic conditions including the duration and severity of the current global
economic downturn, the impact of the terrorist attacks in New York,
Washington, D.C. and Pennsylvania and their aftermath, business and financing
conditions, cyclicality of the real estate and the hotel and leisure business,
operating risks associated with the hotel and leisure business, domestic and
international political conditions, competition, governmental and regulatory
actions, risk associated with the level of our indebtedness, and other
circumstances and uncertainties may affect future results, performance and
achievements. These risks and uncertainties are presented in detail in our
filings with the Securities and Exchange Commission. Although we believe the
expectations reflected in such forward-looking statements are based upon
reasonable assumptions, we can give no assurance that our expectations will be
attained or that results will not materially differ. We undertake no
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.)
Further information is available at
Starwood's website: http://www.starwood.com
British
holidaymakers lead the move for environmentally- responsible travel - says new
multi-national report for the International Hotels Environment Initiative (IHEI)
British holidaymakers are leading the move towards
environmentally responsible travel, according to a new multi-national report
on consumer travel trends by the International Hotels Environment Initiative.
Nine out of 10 people surveyed in the UK believe tourism
development is in danger of destroying the environment, compared to 70% of
Australians and a third of Americans.
The report, out today, is based on the first international
survey of consumer attitudes towards the role of hotels in environmental
sustainability. It was conducted this month among travellers at airports in
the UK, US and Australia by IHEI member hotel group Small Luxury Hotels of
the World.
According to IHEI director Karen Fletcher, “Ten years ago
only a handful of hoteliers recognised their vital role in protecting our
environment and sustaining tourism.
“Today there is a groundswell of awareness within the
industry that the survival of tourism destinations depends upon our ability as
individuals and organisations to reduce the pressures on the earths
ecosystems. Fortunately for hotels this translates into tangible cost savings
and business benefits.”
The report shows that 90% of British tourists interviewed
nowadays consider it part of a hotel’s responsibility to actively protect
and support the environment, including local communities, and are more likely
to book a property with a responsible environmental attitude.
This compares with two thirds of Australians and Americans polled.
However, no British respondents reported actually asking if
hotels have an environmental policy, a question posed by a less shy 26% of
Australians and 14% of Americans.
Greater pressure on hotels from the Brits and Australians
British people and Australians expect more from their hotels.
Fifty three percent of each (compared to only 28% of Americans
surveyed) are very likely to choose hotels with equipment like renewable power
supplies and biological wastewater treatment systems.
Australians particularly favour properties which use recycled
toilet paper and biodegradable toiletries (50%), compared to only a quarter of
Brits and 13% of Americans.
Predictably the British are keen on places which protect
animal and marine life (80%, as opposed to 60% of Americans).
Ninety six percent say they pay extra care when throwing away rubbish
likely to harm wildlife (75% Australia; 57% US).
But it is the Australians who show most concern for nature,
with 83% supporting hotels which avoid felling trees (compared to 32% of
people in the US).
Reflecting American food tastes, only 11% of US consumers
prefer hotels using home- or locally-grown vegetables and fruit, as opposed to
an average 58% in the other countries.
At a domestic level…
The Brits and Australians demand more
environmentally-responsible hotel keeping, with an average 65% (compared to
26% Americans) preferring hotels which conserve energy by re-using towels and
closely managing lighting and air conditioning.
Seventy four percent of British travellers surveyed (62%
Australians; 57% US) like hotels which seek to employ staff from local
communities, figures also reflected in the 87% of Brits (63% Australians; 60%
US) which expect their hotels to guarantee good wages and working conditions.
There is a growing recognition that environmental
sustainability extends to protecting the well-being and culture of local
communities and their people, endorsed by 71% of Brits and Australians but
only 53% of people surveyed in the US.
In particular, 62% of Australians interviewed
(57% UK; 49% US) consider it very important that hotels support local
businesses and cottage industries, as well as investing in local schools and
hospitals
Seventy seven percent of Brits surveyed (70% Australia; 54%
US) feel hotels should consult local people on how their land is developed and
used, as well as share prime resources like water and power with their nearby
communities.
However, only 33% of Americans asked want to find local
people on their hotel beach, compared to 75% of more willing Australians and
Brits.
New awareness of personal responsibility:
While all three nationalities are equally happy to save water
by showering, not bathing (70%), the British more readily conserve power by
switching off lights and turning down air conditioning when leaving their
hotel room (91% UK; 67% Australia; 76% US).
Seventy percent of Australians asked
(and 65% of Brits), but only 36% of Americans, cycle or walk on
holiday, instead of travelling by car.
Thirty eight percent of Americans surveyed say they often
fail to dress according to local sensitivities (only 22% Brits), and 35% of
Australians interviewed find themselves intolerant of language differences
(12% Brits and Americans).
The survey: In July 2002, on behalf
of IHEI, Small Luxury Hotels of the World surveyed approximately 300
travellers at airports in the UK, US and Australia.
The
purpose of the survey was to get a feel for current consumer views on
sustainable tourism, identifying attitudinal changes and new holiday trends.
IHEI
Survey on Attitudes to Environmental Tourism
UK -
Asia Pacific -
US
-
Do
you agree with the following statements:
|
|
Yes
%
|
No
%
|
Don’t
know %
|
|
Tourism
development is in danger of destroying the environment
|
87
|
72
|
30
|
13
|
21
|
51
|
0
|
7
|
19
|
|
Tourist
development contributes to environmental protection and
conservation
|
18
|
60
|
30
|
56
|
28
|
47
|
26
|
12
|
22
|
|
It
is important that hotels actively take steps to preserve and
protect
our natural resources
|
96
|
77
|
81
|
4
|
15
|
14
|
0
|
8
|
5
|
|
I
am more likely to book a hotel with a responsible environmental
attitude
|
87
|
60
|
54
|
9
|
18
|
14
|
4
|
22
|
14
|
When
choosing a hotel, how influenced are you if it undertakes
the following:
|
|
Very
%
|
Not
Very %
|
Not
At All %
|
|
Uses
recycled toilet paper
|
9
|
43
|
8
|
35
|
40
|
27
|
56
|
17
|
65
|
|
Uses
non-toxic, biodegradable toiletries
|
40
|
57
|
19
|
30
|
33
|
32
|
30
|
10
|
49
|
|
Only
uses electricity from renewable supplies like solar power and wind
|
35
|
58
|
14
|
48
|
30
|
41
|
17
|
12
|
46
|
|
Is
constructed of indigenous materials
|
44
|
42
|
14
|
26
|
36
|
46
|
30
|
22
|
40
|
|
Is
designed to reflect the surrounding architecture and landscape
|
70
|
73
|
39
|
9
|
22
|
44
|
21
|
5
|
17
|
|
Is
sensitive to its marine life
|
74
|
70
|
46
|
13
|
25
|
31
|
13
|
5
|
23
|
|
Has
gone to great lengths avoid felling trees
|
65
|
83
|
32
|
26
|
13
|
32
|
9
|
4
|
35
|
|
Protects
local wildlife and its habitats
|
87
|
63
|
64
|
0
|
27
|
19
|
13
|
10
|
19
|
|
Contributes
money towards preserving the local environs
|
61
|
43
|
38
|
26
|
43
|
32
|
13
|
14
|
29
|
|
Has
a biological waste water treatment system
|
40
|
47
|
27
|
30
|
38
|
35
|
30
|
15
|
38
|
|
Uses
home- or locally-grown vegetables and fruit
|
65
|
50
|
11
|
9
|
40
|
43
|
26
|
10
|
46
|
How
important to your holiday are the following measures that hotels can take to
protect the environment:
|
|
Very
%
|
Not
Very %
|
Not
At All %
|
|
Offer
to re-use towels
|
52
|
63
|
30
|
22
|
30
|
46
|
26
|
7
|
24
|
|
Conserve
energy by keeping lights and air conditioning low
|
57
|
68
|
22
|
17
|
29
|
47
|
26
|
3
|
31
|
|
Recycle
waste water to irrigate its gardens
|
56
|
65
|
22
|
17
|
30
|
46
|
17
|
5
|
32
|
|
Re-use
and recycles waste
|
61
|
65
|
24
|
17
|
32
|
38
|
22
|
3
|
38
|
|
Use
alternatives to chlorine in the pool
|
74
|
42
|
20
|
13
|
37
|
49
|
13
|
21
|
31
|
|
Seek
to employ staff from local communities
|
74
|
62
|
57
|
13
|
32
|
38
|
13
|
6
|
5
|
|
Guarantee
locally-employed staff good wages/working conditions
|
87
|
63
|
60
|
4
|
27
|
31
|
9
|
10
|
9
|
|
Seek
to serve mainly locally-bought food, even if a different
selection
from products imported from overseas
|
70
|
53
|
28
|
17
|
35
|
42
|
13
|
12
|
31
|
|
Protect
coral reefs against damage from swimmers and divers
|
87
|
88
|
62
|
4
|
8
|
24
|
9
|
4
|
14
|
|
Have
demonstrable environmentally-responsible practices
|
52
|
75
|
49
|
26
|
22
|
35
|
22
|
3
|
16
|
|
Contribute
money towards preserving the environment
|
65
|
72
|
51
|
31
|
25
|
32
|
4
|
3
|
16
|
When
staying in a hotel/ resort, how often do you:
|
|
Often
|
rarely
|
Never
|
|
Save
water by showering, not bathing
|
70
|
65
|
70
|
9
|
28
|
14
|
21
|
7
|
16
|
|
Switch
off lights and turn down air conditioning when leaving your
room
and at night
|
91
|
67.5
|
76
|
9
|
30
|
16
|
0
|
2.5
|
8
|
|
Before
booking, ask the hotel if it has environmental policies
|
0
|
26
|
14
|
9
|
42
|
27
|
91
|
32
|
59
|
|
Make
a financial contribution to local people and businesses
|
30
|
52
|
32
|
22
|
40
|
22
|
48
|
8
|
46
|
|
Buy
local souvenirs
|
78
|
78
|
69
|
18
|
17
|
25
|
4
|
5
|
6
|
|
Order
local dishes rather than international cuisine
|
87
|
68
|
68
|
13
|
24
|
22
|
0
|
8
|
11
|
|
Pay
extra care when throwing away rubbish likely to harm wildlife
|
96
|
75
|
57
|
4
|
20
|
30
|
0
|
5
|
14
|
|
Fail
to dress according to local sensitivities
|
22
|
33
|
38
|
22
|
45
|
49
|
56
|
22
|
14
|
|
Give
preference to facilities and trips run by local people
|
43
|
68
|
50
|
26
|
27
|
44
|
31
|
5
|
6
|
|
Find
yourself intolerant of language differences
|
13
|
35
|
11
|
22
|
35
|
44
|
66
|
30
|
44
|
|
Cycle
or walk instead of going by car
|
65
|
70
|
36
|
26
|
28
|
33
|
9
|
2
|
31
|
|
Avoid
shopping for things you will end up throwing away
|
70
|
65
|
76
|
9
|
23
|
19
|
21
|
12
|
5
|
How
important is it to you that hotels
|
|
Very
|
not
very
|
not
at all
|
|
Support
local businesses and cottage industries
|
61
|
59
|
51
|
26
|
33
|
43
|
13
|
8
|
5
|
|
Invest
in and support local schools and hospitals
|
52
|
65
|
46
|
26
|
23
|
46
|
22
|
12
|
8
|
|
Consult
local people on how their land is used and developed
|
65
|
77
|
54
|
13
|
20
|
32
|
22
|
3
|
14
|
|
Share
prime resources like water and power with the local
community
|
78
|
80
|
64
|
5
|
18
|
25
|
17
|
2
|
11
|
|
Allow
local people to use their beaches
|
78
|
72
|
33
|
13
|
23
|
36
|
9
|
5
|
31
|
|
Help
preserve traditional industries like farming and fishing
|
70
|
78
|
66
|
22
|
19
|
23
|
8
|
35
|
11
|
|
Financially
support their local communities
|
74
|
70
|
50
|
17
|
23
|
50
|
9
|
7
|
0
|
|
Give
job priority to people from the local community
|
82
|
75
|
62
|
9
|
18
|
35
|
9
|
7
|
3
|
Which
element of your holiday do you think has the most negative effect on the
environment (tick one):
|
|
Tick
One
|
|
Flight
|
30
|
18
|
19
|
|
Hotel
|
4
|
8
|
19
|
|
Ground
transport like buses, trains and cars
|
66
|
74
|
62
|
How likely are
you to think about
|
|
Very
|
Not
very
|
Never
|
|
Whether
the place you are visiting will be an attractive destination
for
your children and grandchildren in 20 years time
|
52
|
60
|
41
|
26
|
32
|
54
|
22
|
8
|
5
|
| |
|
|
|
How
much extra would you be willing to pay on a two-week holiday for a hotel you
know is environmentally responsible (UK only):
|
Ł0
|
9
|
|
Ł10
|
4
|
|
Ł30
|
57
|
|
Ł70
|
21
|
|
Ł100
|
9
|
About the International Hotels
Environment Initiative (IHEI)
Backgrounder
Established as a non-profit programme in 1992 by chief
executives of the world’s leading hotel groups, the International Hotels
Environment Initiative (IHEI) this year celebrates its 10th
anniversary.
As a programme of the Prince of Wales International Business
Leaders Forum, an educational charity - and a pioneering business leadership
initiative in its own right - IHEI promotes continuous improvement in the
environmental performance of hotels throughout the world.
Also focussing on the business and financial benefits of
environmental and community best practice, it
facilitates access to environmental information so that
hotels of all sizes and standards can implement environmental programmes
works with partners who can help to multiply its reach and
impact
Providing IHEI’s leadership and funding are senior
executives from 11 multi-national hotel groups, between them representing 68
brands, hotels on five continents and two million rooms. Also supporting the
initiative are hotel brands and partners around the world.
In the past 10 years, IHEI has significantly raised awareness
of responsible business practices amongst members of the global hotel sector
and its suppliers, as well as tour operators, government bodies, academia and
consumers. It acts as a
catalyst and a conduit for members to pool resources and share experiences on
a non-competitive platform.
But IHEI does not just plan and pronounce.
It offers information and networking support, covering cost-saving
programmes and new technologies, a best-practice manual, video and magazine - Green
Hotelier, an environmental action pack, responsible purchasing guidelines
and much more.
Its latest tool is a web-based, benchmarking system designed
in conjunction with WWF UK to measure and improve both the environmental
performance and the profitability of hotels by helping them save energy and
water, better manage waste, carry out more informed purchasing, reduce
chemical use and contribute to local communities.
As the voice of the hotel industry in the environmental
debate, IHEI is highly regarded by not only the world’s top tourism experts
but governments, industry chiefs and powerful people in the hospitality
business.
Indeed, it is represented on the judging panel of prestigious
awards such as British Airways’ ‘Tourism for Tomorrow Awards’ and, in
conjunction with American Express and the International Hotels &
Restaurant Association, the ‘Green Hoteliers Award’.
IHEI’s objectives are
To raise environmental awareness and promote good practice in
the global hospitality industry
To promote the business benefits of sound environmental and
socially responsible business practices
To develop hotel-specific self-help guidance, enabling
properties of all sizes to implement environmental programmes
IHEI’s international council members are:
Accor, Carlson Hotels Worldwide, Fairmont Hotels & Resorts, Hilton
International, Marco Polo Hotels, Marriott International, Radisson SAS Hotels
& Resorts, Six Continents Hotels, Starwood Hotels & Resorts Worldwide,
the Indian Company of Hotels, TUI Beteiligungsgesellschaft.
Corporate and affiliate partners and associate members are:
Association of the Brazilian Hotel Industry (ABIH), Caribbean Alliance for
Sustainable Tourism (CAST), CH2M Hill, Small Luxury Hotels of the World and
the Association of the Hotel, Restaurant and Tourism Industry in Denmark (HORESTA).
For more information contact:
Stephanie Ponsford
Head of International Communications
Luxury Hotel Partners/Small Luxury Hotels of the World
stephanieponsford@hgal.com
AAA’s
delay: good or bad?
By Harry Nobles & Cheryl Thompson Griggs
AAA’s recent announcement to delay implementation of the
latest revision of the Diamond Rating Guidelines has prompted calls and
emails from many of our clients. The
most frequently asked questions are “How does this affect my rating”?
and “Is this good or bad news for my property”?
The simple answer is that the news is good. If your property
has been advised by AAA that your current rating is in jeopardy,
you now have an additional year to address changes that affect the
rating. Even if your rating is
not jeopardized, this is good time to review your rating status and what
physical and service enhancements are necessary
to retain it or you may aspire to earn a higher rating.
Our professional assessment is that the delay is most
beneficial to existing properties that already have a AAA rating.
The delay does not necessarily make it easier for new properties to
earn and retain a higher rating. The
industry should expect to see a continuing increase in the rating
requirements and expectations. This
is not news to managers and owners who have witnessed so many changes in the
physical facilities and guest services at all rating levels in the past
several years.
AAA has regularly revised and updated its ratings criteria to
keep pace with these changes, and no doubt will continue to do so.
We feel confident in predicting that competition will drive guest
expectations and AAA’s rating standards ever higher.
The industry will respond as it always has by building more
sophisticated hotels and providing more extensive services.
Hence, the upward spiral continues;
yesterday’s 5 Diamond becomes today’s 4 Diamond,
a 4 drops to 3, and so on.
It is important to remember that AAA’s moratorium
is only for one year. Once
the 2001 version on the Diamond
Rating Guidelines are implemented in 2003,
the more exacting requirements will affect all properties at all
diamond levels.
While AAA’s decision to delay implementation of the
latest revision does not make it easier to earn and retain a higher
rating, it is an appropriate, fair, and reasoned response to
the 9/11 tragedy. It gives properties some breathing room to deal with the
effects of the event.
One way to use this time is to assess your current rating
status and how it affects your position in the market.
Your property’s AAA rating and market position is always
important and in light of 9/11, this may be a particularly opportune time to
look closely at your rating and the cost to maintain that rating in view of
the higher AAA standards.
Harry Nobles & Cheryl Thompson Griggs
www.optimumrating.com
MGM
MIRAGE Reports Record Second Quarter Results
/PRNewswire-FirstCall/
-- MGM MIRAGE (NYSE:MGG) today reported second quarter diluted earnings per
share of 56 cents before preopening expenses, restructuring credits and fees
received from the buyout of its South Africa management agreement. These
earnings are an all-time record for the Company and an increase of 17%
compared with 48 cents earned on a similar basis in the 2001 quarter. Income
before preopening expenses, restructuring credits and the South Africa fees
was an all-time record high of $90.5 million, compared with $77.3 million in
the prior year's quarter. Before adjusting for these items, net income was
$101.9 million or 63 cents per diluted share during the 2002 second quarter,
compared with net income of $76.6 million or 47 cents per diluted share in
the 2001 second quarter.
Excluding $11.4 million received from the South Africa transaction, net
revenue was down 2% to $1.03 billion from $1.05 billion in the 2001 quarter.
For the three months ended June 30, 2002, earnings before interest, taxes,
depreciation and amortization, restructuring, preopening expenses and
corporate expense (EBITDA) were $336.0 million when compared with $324.8
million in the year-ago period. Excluding South Africa's results from both
periods, EBITDA was $324.6 million in the 2002 quarter, versus $323.5
million in the prior year's second quarter, and the Company recorded a 31.5%
EBITDA margin in the 2002 second quarter, up from 30.8% in the 2001 second
quarter.
Second
Quarter Company Highlights
-- Net revenue and EBITDA (excluding South Africa) were $1.03 billion and
$325 million, respectively;
-- Set all-time record net income and earnings per share;
-- Reduced debt by $153 million during the quarter, resulting in total
debt reductions of $304 million this year and $1.25 billion since the
acquisition of Mirage Resorts, Incorporated in May 2000;
-- Repurchased one million shares of Company common stock during the
quarter;
-- Completed the sale of our South Africa interests and received
$11.4 million for the early buyout of the Company's management
agreement;
-- Successfully launched our Players Club affinity program at The Mirage
and Treasure Island;
-- Construction of Borgata, our 50% owned resort, continues on schedule
and on budget for a summer 2003 opening;
-- Advanced the design phase for a wholly-owned resort at Renaissance
Pointe in Atlantic City;
-- Announced two agreements with Cirque du Soleil for the creation of new
shows at New York - New York and MGM Grand Las Vegas;
Our results again exhibited remarkable resiliency against the backdrop of an
uncertain economy, said MGM MIRAGE Chairman and CEO Terry Lanni. The
operating performance across our portfolio of properties was strong as we
continue to produce industry leading margins. Our properties are in
outstanding physical condition and are poised to benefit from strategic
entertainment and technology investments, including the continued
implementation of Players Club that will drive increased customer traffic,
Mr. Lanni said.
The Company's 2002 second quarter results continue to show sequential
operating improvement in a trend that began in late 2001. Room revenue
continued to strengthen to more normalized levels as a result of improved
hotel occupancy. Hotel occupancy of 91.5% in the 2002 second quarter rose
when compared with 89.7% and 82.7% in the first quarter 2002 and fourth
quarter 2001, respectively, and was down slightly when compared with 93.4%
in the 2001 second quarter. For the three months ended June 30, 2002, the
average daily room rate (ADR) was $106, even with the prior year's second
quarter, and up $5 and $13 when compared with the first quarter 2002 and
fourth quarter 2001, respectively.
As a result, revenue per available room (REVPAR) improved from the 16% and
10% year-over-year declines in the 2001 fourth quarter and 2002 first
quarter, respectively, to a 2% decline in the 2002 second quarter. These
improving hotel trends have led to continued improvement in food and
beverage, entertainment and retail revenue. Casino revenue declined by 3% in
the 2002 second quarter versus the 2001 quarter. A reduction in table game
volume was offset in part by an increase in slot volume. Hold percentages
were normal in both periods.
Our company grows stronger every day. Free cash flow from operations allowed
us to accelerate the pace of our debt reductions even after the repurchase
of one million shares of our common stock during the quarter, said MGM
MIRAGE President, CFO and Treasurer Jim Murren. Our balance sheet has
improved dramatically over the past year, a fact recognized by the rating
agency Standard & Poor's which rates us investment grade. Our financial
objectives continue to be focused on expanding margins, reducing debt,
growing revenue profitably and effectively allocating capital, Mr. Murren
said.
Las Vegas Strip Resorts
Bellagio, MGM Grand Las Vegas, The Mirage, Treasure Island, New York - New
York and the Boardwalk (collectively, the Las Vegas Strip Resorts) recorded
net revenue and EBITDA of $728.1 million and $233.8 million, respectively,
in the 2002 second quarter when compared with net revenue of $759.5 million
and EBITDA of $237.1 million in the 2001 quarter. Quarterly EBITDA margin
for these resorts was 32.1% for the three months ended June 30, 2002, versus
31.2% in the 2001 second quarter.
The decreases in net revenue and EBITDA at these resorts in the 2002 second
quarter were attributable to a 7% and 2% decline in casino and non-casino
revenue offset by a 4% reduction in operating expenses. Casino revenue was
affected by lower table game volume in the 2002 second quarter as compared
with the prior year's quarter while slot volume was slightly higher
quarter-over-quarter. The combined hold percentages were normal in both
periods. The decrease in non-casino revenue at these resorts was
attributable to lower hotel occupancy in the current quarter, while the ADR
matched that of the 2001 second quarter.
The Las Vegas Strip Resorts were led by Bellagio, which recorded its second
highest quarterly EBITDA of $90.4 million in the 2002 second quarter, up 18%
from the $76.3 million achieved in the 2001 second quarter. EBITDA margins
at this property were an impressive 36.4% in the 2002 second quarter
compared with 31.7% in the prior year's quarter. MGM Grand Las Vegas posted
solid results producing EBITDA of $53.4 million in the 2002 quarter albeit
lower than the $60.1 million recorded in the 2001 second quarter. In
general, hotel trends continued to improve in the quarter led by continued
strengthening of the convention business and improved pricing from the free
and independent traveler and tour and travel room segments. These Las Vegas
Strip Resorts have been able to continue to expand their market share.
Other Nevada Resorts
Primm Valley Resorts reported net revenue of $54.1 million and EBITDA of
$10.3 million during the 2002 second quarter, compared with $53.8 million
and $11.5 million in the prior year's quarter. The Golden Nugget properties
in downtown Las Vegas and in Laughlin generated combined net revenue of
$56.5 million in the 2002 quarter, consistent with that reported in the 2001
second quarter, while combined EBITDA was $8.9 million versus $10.6 million
in the 2001 period. For the three months ended June 30, 2002, Monte Carlo
reported EBITDA of $21.6 million on net revenue of $64.7 million, compared
with EBITDA of $24 million on net revenue of $69.0 million. The Company's
50% share of this joint venture contributed $9.1 million to operating
results for the 2002 second quarter, versus $9.8 million in the prior year's
quarter.
MGM Grand Detroit
Net revenue in the 2002 second quarter at MGM Grand Detroit grew by 12% to
$98.9 million from the 2001 quarter, while EBITDA increased 23% to $42.1
million. For the three months ended June 30, 2002, MGM Grand Detroit
produced a 43% EBITDA margin versus 39% in the prior year period. These
results were aided by a 14% increase in casino revenue largely attributable
to increased slot volume.
Beau Rivage
Beau Rivage produced net revenue of $74.9 million and EBITDA $17.3 million
for the three months ended June 30, 2002, compared with net revenue and
EBITDA of $75.0 million and $17.2 million in the prior year's quarter.
EBITDA margins were up slightly to 23.1%. These results were affected by a
6% reduction in casino revenue offset by an 11% increase in non-casino
revenue. The lower casino revenue was a result of a lower table game hold
percentage offset by higher slot volume.
Other Factors Affecting Second Quarter Results
Net interest expense was $69.1 million for the three months ended June 30,
2002, compared with $92.5 million in the prior year quarter. The decrease in
interest expense is due to lower debt levels, a significant reduction in
interest rates on the Company's credit facilities and, to a lesser extent,
savings associated with interest rate swaps. During the 2002 second quarter,
the Company reduced its outstanding indebtedness by $153 million, bringing
year-to-date debt reductions to $304 million and total debt reductions to
$1.25 billion since the May 2000 acquisition of Mirage Resorts,
Incorporated.
The Company repurchased one million shares of its common stock at an average
price of $35.66 per share as part of its previously authorized 10 million
share repurchase program. Since the inception of the program, the Company
has purchased approximately 3.2 million shares at an average price of $25.19
per share.
Second quarter diluted earnings per share as reported of 56 cents was before
the following items:
-- The successful completion of the sale of the Company's interest in
managing four South African casinos resulted in pretax revenue of
$11.4 million (or 5 cents per share after tax).
-- Preopening expenses were $4.4 million (or 2 cents per share after tax)
as a result of the Company's start-up activities related to its 50%
interest in Borgata, the introduction of its Players Club affinity
program, the development of a wholly-owned resort in Atlantic City and
its online development efforts.
-- As a result of improving business levels, the Company continues to
re-hire previously laid-off or terminated employees. Accordingly, the
Company reversed approximately $10.4 million (or 4 cents per share
after tax) of restructuring charges related to previously recorded
severance accruals.
About
MGM MIRAGE:
MGM MIRAGE is an entertainment, hotel and gaming company
headquartered in Las Vegas, Nevada, which owns and/or operates through
subsidiaries 15 casino properties. Its U.S. holdings include: Bellagio, the
MGM Grand Hotel and Casino - The City of Entertainment, The Mirage, Treasure
Island, New York - New York Hotel and Casino, the Boardwalk Hotel and Casino
and 50% of Monte Carlo, all located on the Las Vegas Strip; the Golden
Nugget in Downtown Las Vegas; Whiskey Pete's, Buffalo Bill's, the Primm
Valley Resort and two championship golf courses at the California/Nevada
state line; the exclusive Shadow Creek golf course in North Las Vegas; the
Golden Nugget in Laughlin, Nevada; the Beau Rivage resort on the Mississippi
Gulf Coast; and the MGM Grand Detroit Casino in Detroit, Michigan. The
Company is a joint venture partner in Borgata at Renaissance Pointe, a
resort under development in Atlantic City, New Jersey and also controls
additional development sites in this resort community. Internationally, MGM
MIRAGE owns and operates the MGM Grand Hotel and Casino in Darwin, Australia
ComScore
Study Reveals Previously Unmeasured Characteristics Of U.S. Online Hispanic
Population.
Tourism
Technology -
The
Internet has become a global information source and meeting center for
people of varied cultures and ethnicities. In commemoration of Cinco de
Mayo, comScore Networks has released new statistics which reveal that the
Hispanic community has emerged as one of the fastest growing segments of the
Internet population.
Overall trends in online Hispanic population vs. total Internet population
comScore's analysis reveals an exceptionally high rate of growth in the
online Hispanic community. From Q1 2001 to Q1 2002, the U.S. Hispanic
Internet population grew by 19%, a rate more than three times that of the
non-Hispanic online population. With 14.5 million unique online users in the
average month last quarter, Hispanics now comprise 11% of the Total U.S.
online population, up from 9.9% in the prior year.
Table 1: Trends in U.S. Online Population
|
|
Average Monthly Unique Users (millions)
|
% Change Q1 2002 vs. Year-Ago
|
Share of Total US Internet Population
|
|
|
Q1 2001
|
Q1 2002
|
|
Q1 2001
|
Q1 2002
|
|
Total US Internet Population
|
123.4
|
132.0
|
7%
|
100.0%
|
100.0%
|
|
Non-Hispanic Users
|
111.2
|
117.5
|
6%
|
90.1%
|
89.0%
|
|
Hispanic Users
|
12.2
|
14.5
|
19%
|
9.9%
|
11.0%
|
ComScore
also identified those Designated Market Areas (DMA®) that lead the country
in Hispanic Internet use. ComScore's analysis revealed important differences
between the rankings of markets with the highest number of online users
versus those with the largest number of Hispanics online.
For example, although Miami-Fort Lauderdale is the 15th largest DMA based on
total Internet population, its ranking jumps twelve spots to number three
based on Hispanic Web users. The Sacramento-Stockton-Modesto DMA is the
number 19 market in total Web users, but jumps to number 9 based on
Hispanics online. And San Diego's 250,000 Hispanic Web users drive that
market's ranking to number 10, compared to its 26th-place ranking in total
online population.
Table 2: Top 10 Designated Market Areas (DMAs) ranked by number of
Internet users of Hispanic origin
|
Designated Market Area (DMA)
|
Total Hispanic Unique Users
|
Total Unique Internet Users
|
Hispanic Unique Users % of Total
|
Market Online Rank
|
|
Total Internet User
|
Hispanic Users
|
|
New York
|
1,656
|
9,241
|
18%
|
1
|
1
|
|
Los Angeles
|
1,601
|
6,723
|
24%
|
2
|
2
|
|
Miami-Ft. Lauderdale
|
718
|
1,963
|
37%
|
15
|
3
|
|
San Francisco-Oakland-San Jose
|
483
|
3,070
|
16%
|
5
|
4
|
|
Chicago
|
448
|
4,246
|
11%
|
3
|
5
|
|
Houston
|
384
|
2,232
|
17%
|
11
|
6
|
|
Dallas-Ft. Worth
|
339
|
2,786
|
12%
|
7
|
7
|
|
Phoenix
|
297
|
1,948
|
15%
|
16
|
8
|
|
Sacramento-Stockton-Modesto
|
268
|
1,555
|
17%
|
19
|
9
|
|
San Diego
|
250
|
1,236
|
20%
|
26
|
10
|
In a separate analysis of online shopping trends, comScore
also noted the importance of Hispanics to e-commerce spending. While
slightly fewer Hispanic Internet users made online purchases in a month (8%
vs. 10% of non-Hispanic site visitors), Hispanic online buyers spent 7% more
on average than non-Hispanic online buyers ($229 vs. $214 per buyer).
"It's no secret that Hispanic Americans represent a vital segment of
our population," noted Richard Israel, comScore vice president.
"But, to properly understand the importance of this rapidly growing
community to the Internet requires new measurement systems that provide
clear and detailed insight into its many diverse segments. comScore is
pleased to be the first research company to provide such insight - for
social and marketing research uses alike."
Source: Tourism
Technology
The
State of Wireless Technology and its Impact Within
the
Hospitality and Travel Industry / HSMAI
The state of wireless technology and its impact on consumers
and business systems within the hospitality and travel industry were
addressed at the Hospitality Sales & Marketing Association
International’s (HSMAI) Executive THINK on “Global Wireless Devices:
Connecting the Consumer.”
The full-day forum (fourth in a series of Executive THINKs), held on June 24
at the Swissotel Chicago immediately preceding HITEC, joined senior-level
travel and hospitality executives with experts in the marketplace, who
discussed the present and future state of wireless technology, as well as
offered case studies and demonstrations.
Observations:
Greatly impacted by globalization and technology innovation, wireless
technology is growing at great speed, with an estimated 137 million
Americans equipped with some type of wireless service. The influence
and possibilities that presents for our industry are astounding.
While delivering targeted and personalized information to existing and
potential customers, not everyone needs the same information, nor will they
use it and receive it in the same way. So, the challenge is to
customize it for the end user, always keeping in mind the need for
delivering high-touch in a high-tech world.
Beyond the technical applications, buzzwords and wireless technology
protocols in the marketplace – such as PAN, LAN and WAN – there are
valuable applications and benefits that can enhance a business operation and
customer relationships.
What follows is a summary of highlights and insights presented by experts
and industry leaders.
Statistics:
To set the stage, Henry H. Harteveldt, senior analyst at Forrester Research,
provided some stats to put usage into perspective:
-
U.S. laptop and mobile phone
owners are mainstream, but PDA owners are more elite;
-
15% of U.S. PDA owners receive
them from their employers; as do 11% of mobile phone owners;
-
26% of business travelers are
24% more likely than leisure travelers to have a wireless device;
-
Business bookers are 44% more
likely than all business travelers to own a wireless device;
-
Those who have it use it;
mobile phones are used noticeably more to access the net;
-
Smaller devices win wireless
access on the go: laptops are used the least, both at airports and
hotels; mobile phones win at airports and are #2 at hotels; and PDAs win
at hotels yet are #2 at airports;
-
On the leisure side, interest
in researching leisure travel from wireless devices outweighs
researching business travel; laptops are preferred 50% more for leisure
travel research; 45% more for leisure bookings than PDAs; and PDAs are
preferred 44% more than mobile phones for leisure travel research, and
38% more for bookings.
Emerging Applications:
As for making the connection, beyond all the new great gadgets from
sophisticated phones to PDAs, convergence devices and other state-of-the art
wireless gear, Leonard Fischer, technology section editor of Gannett News
and USA Today, presented some of the need-to-know emerging applications.
-
Location Based Services (LBS)
– the ability to locate cell phones to send information;
-
Voice command service –
basic voice recognition technology, which enables you to call your
email, have it read to you and receive a response, as well as get
headlines, make reservations, etc. A very sophisticated version is
Pronto, voice recognition service with a human aspect, likened to a
concierge;
-
Multimedia – viewing short
videos, like trailers for movies, videos taken on vacation, etc.
-
Speed – faster wireless
networking (802.11b – an Ethernet connection at 11 megabytes per
second, which will be at or close to broadband, doubling if not
quadrupling the present speed);
-
Interoperability – improve
talking to one another.
IBM’s Five Business Strategies:
From the perspective of developing business systems, Kevin Wyne, senior
consultant specializing in wireless technology at IBM Global Services, says
if you want to do something in wireless, you need to consider the following
business strategies and practical applications.
-
Applications – What task do
you want to do?
-
Integration – What systems
need to interact?
-
Connectivity – What networks
should be used?
-
Devices – What will the
players want to use?
-
Management and Support – How
will you keep it going?
Wyne adds that this should be
approached as a business model with an ROI (return on investment), otherwise
don’t attempt it.
“Enterprises are now looking for increased productivity through wireless
extensions of e-business, while mobile operators are moving from voice to
data, mobile e-commerce and personalization, and equipment manufacturers are
producing smaller, network-ready wireless devices,” says Wyne.
He adds that new devices are emerging as point of access for: Information
(news, sports, maps); Entertainment (music, graphics and games);
Communications (short messaging service – SMS, email, instant messaging);
and Transactions (banking, shopping, reservations).
And, Wyne cites eCash being used effectively to support loyalty programs and
increase the “ka-ching” factor.
He provides examples such as:
-
Gaylord Palms Hotel, whereby
guests can use their room key to purchase items from vending machines,
which are all integrated into the hotel POS and PMS systems for a single
checkout feature.
-
Starbucks is testing a dialing
for coffee option, which allows the under-caffeinated to avoid queues
for cups. Consumers need to establish a pre-paid account, and then order
and pay by cell phone for a 25-cent transaction fee. Starbucks says it
will remake an order if the customer gets stuck in traffic and arrives
after the beverage has cooled.
Need for Standardization:
Rob Robless, chief technology officer of UAL Loyalty Services, says that
“travelers want the ability to stay connected with their itinerary, so we
want to provide our customers with the information they need all along the
way, focusing on the entire experience.”
The challenge is dealing with so many vendors, all operating on different
systems. So, how do you get them to talk to each other?
“The idea is to set up standards to integrate and communicate with all
vendors, which works only if all the different pieces of the itinerary allow
you to work together. If a flight is cancelled you don’t want to
have to make all the changes yourself but do it automatically,” says
Robless.
He explains that what’s keeping us from doing this is that there are so
many different devices and proprietary systems, so there are no standards
for which we can all communicate. That’s the idea behind the Open Travel
Alliance, whereby at the application level, you can have your own system,
but if you standardize messages, then you can at least integrate at the
application level. The technology is there; the challenge is integration, he
notes.
Robless’ advice is to attack mobile/wireless in moderation, keep the needs
of the mobile user in mind, and stabilize your investments with standards
and infrastructure.
Given the significant investment to do so, he suggests you find the cheapest
platform and provide that same platform to as many devices as possible –
develop once, deploy across platforms (Web, PDA, WAP, etc.).
He further adds the need for a consumer centric approach: identify the
audience and opportunity, define what is appropriate and take a strategic
technical approach. “Consumers are loyal to brands, not channels. They
will shop in the channel that is most convenient at any given time.”
The Hotel Perspective:
According to Six Continents Hotels’ Eric Pearson, vice president,
E-Commerce, “Our objectives are to provide our guests with new ways for
locating hotels and making reservations, as well as develop new ways of
communicating travel and destination information with guests.”
He says: “Our strategy is to establish a leadership position to help
improve consumer confidence in wireless services and deliver cost-effective
solutions not dependent on a specific device or technology.”
Last March, Six Continents Hotels made available new wireless services.
The three components are:
• Provisioning:
A one-time web-based enrollment feature, which allows the guest to be
identified, the device to be used, and the hotel brands and amenities to
refine hotel searches.
• Hotel Locator and Information:
Allows a guest to search for hotels in a specified area, using either city,
zip code, area code, or even “hotels nearby” as a search criteria.
Once found, hotel information is available such as address, phone number,
amenities and directions.
• Hotel Availability and
Reservations:
-
Allows web-enabled phones and
Palm VII users to book the hotel using their stored preferences in
Priority Club®.
-
Members enter the arrival date
and number of nights. Only hotels with availability are presented with
room types that match the guests’ stored preferences. (e.g. king bed,
non-smoking room).
-
Upon selection of a room,
guests book the reservation which pre-populates their information and
uses the credit card stored on file with Priority Club®.
-
This reduces the security
issues and the amount of information required to be sent back and forth.
Pearson summarizes: “Demand is there and growing quickly,
especially internationally, and opportunities do exist for wireless
services, especially those that enhance the overall guest experience.
He advises that “Consumers want services not platforms, so simplify the
process wherever possible, and recognize that high-touch is more important
than high-tech.
Location-based Services:
Lee Hancock, president and CEO of
go2 Systems, a system that aids ground navigation with real-time, wireless
location-based directory and information applications and services, enables
businesses to reach consumers in a given area when they are deciding where
to go and what to buy.
“When consumers are looking for
you and can’t find you, in their world, you don’t exist,” says
Hancock.
Bridging mobile consumers to
retailers is the premise for go2 Systems, noting that the wireless data
market will take off as devices get better. In fact, by 2004, Hancock says
that 40% of consumer e-commerce will be initiated from wireless devices.
Mobile Services Management:
One example of optimizing wireless
systems on-property, as it ultimately relates to efficiency and customer
service, is via a “mobile services management” system from Nextel and
Corrigo, Inc.
According to Laurie Hoyt, business development director for Nextel, this
generic application for work orders enables tasks to be assigned, tracked
and reported using a wireless device. With minimum data entry, a knowledge
base for procedure instructions and immediate tracking and response, the
guest request and maintenance cycle is realized with greater speed, ease and
efficiency.
Recap:
As we look ahead, Dr. Lalia Rach,
Ed.D, associate dean of the Preston Robert Tisch Center for Hospitality,
Tourism and Travel Administration at New York University, foresees that
“No matter what you provide your customer with in wireless, they will most
likely ask for something more.”
She adds: “The advances of technology have created a customer base short
on patience, but with the advance of wireless throughout society,
hospitality companies will find that customers will have no patience.
So, if we are looking at the tourism industry, lines will have to go away
and you will have to find different ways of delivering service as
expectations change. Consumers will not want to wait in real time when they
don’t have to wait virtually.
Seconds will matter as tiny pieces
of time will really mean something to your guests. While a blanket
response will not work company to company instead a unique and consistent
outcome will be necessary at all levels.”
But, regardless of the pitfalls,
such as concern over privacy, high cost, security and obsolescence, America
is the land of mobility and convenience, therefore, wireless is the future.
All in all, the overriding concern and determination in all of this begins
and ends with the consumer. You have to know what to deliver based on what
the user wants.
HSMAI is an organization of sales
and marketing professionals representing all segments of the hospitality
industry
For further information about
HSMAI, visit the website http://www.hsmai.org
Asia
to Retain Net User Lead
Tourism
Technology
- From 2001 to 2004,
North America will see declines in its percentage of the world's net users
as Europe and Latin America post gains. Nevin Cohen and Noah Elkin tabulate
Asia-Pacific is staying on top.
Because of its large population and the technological sophistication of a
number of countries within the region, Asia-Pacific has one-third of the
world's internet users, according to data compiled by the International
Telecommunication Union (ITU). The region has more internet users than North
America or Europe, as the chart below illustrates. By contrast, the Latin
American and African internet markets together are less than one-fifth the
size of the market in Asia-Pacific. The International Data Corporation (IDC)
estimates that in 2001, 28.5% of the world's internet users were located in
Japan and the rest of Asia-Pacific, a slightly lower estimate than
eMarketer's 33.1%.
By 2004, eMarketer expects the proportions of internet users within the
major geographic regions to stay approximately the same, with Europe gaining
slightly on North America, but with Asia-Pacific still comprising about
one-third of the world's internet users. Comparative figures from Morgan
Stanley are close to eMarketer's projected internet user figures for 2004.
Note that Morgan Stanley breaks out Japan from the rest of the Asia-Pacific
region. When added together with the rest of the region, Morgan Stanley
estimates that 31% of the world's internet users will be from Asia-Pacific,
compared to eMarketer's estimate of 32.5%.
Three countries with the largest number of internet users -- Japan, China,
and Korea -- make up nearly three-quarters of the region's internet user
population. Japan currently has the largest number of internet users, but
China, thanks to its sheer size, is a close second. Meanwhile, India,
despite a population of 1 billion and a globally competitive software
industry, has relatively few internet users. The Yankee Group expects this
situation to change dramatically by 2006. The research firm predicts that
India's internet user population will surge into second place in the region,
although it will remain far behind that of China. Dramatic growth in these
two highly populous nations will counter the tendency toward saturation in
some of the region's more developed internet markets.
Source: Tourism
Technology
|
