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August 26, 2014 / HMG Hotels

Hospitality Miracle on El Camino Real in Mountain View, California

HMG Hotels Profit 2014The Numbers Speak for Themselves: HMG Hotels Transforms $32,000 Loss into Multi Million Dollar Profits

This month we share with you a remarkable internal report whose numbers speak for themselves. Occasionally, the Hotel Managers Group gets a phone call from a discouraged hotel owner whose property is not performing well despite robust expense ledgers. One such appeal came a few years ago when one owner shared their books which reflected steep losses of $32,000 in the space of just six months. Hotel Managers Group quickly came to the rescue of Camino Inn and Suites in order to stop the financial bleeding and implemented a number of professional fixes. To the owners eyes, the transformation was nothing less than miraculous. In just one year, HMG hotels not only turned losses into gains — or transformed red into black — but actually realized a net profit of over $40,000 in the space of only twelve months.
 
The numbers speak for themselves: between August 2011 and June 2014 the net operating profits of Camino Inn and Suites were over three million dollars — $3,065,451 to be exact. Obviously projections for the future are bright: 2014 is expected to generate a year-end net operating income of about $2,200,000. Results like these may appear miraculous to most, especially to hotel owners worried about an under-performing asset, but to the team at HMG Hotels dramatic turn around stories like this one are a regular part of doing business.

Read more about our Miracle on El Camino Real HERE: http://www.prlog.org/12362678-the-miracle-on-el-camino-real-camino-inn-and-suites-in-mountain-view.html 

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August 18, 2014 / HMG Hotels

Hotel Guests Want Culturally Enriching Vacations

Remember when we were 10 years old and our parents sent us to summer camp in the mountains. At first we may have objected to the notion of spending two weeks away from home. Once we arrived and saw the sparkling lake and got involved in camp activities, we had a great time. That youthful exuberance for experiencing new things does not always disappear as we age. Many adults still have that spirit of adventure and want to pursue culturally rewarding activities when they travel or go on vacation. 

Woman learning and experiencing massage techniques

Hotel guests can learn massage techniques while on vacation

Creative Tourism

Recently, hotels have been paying closer attention to the growing number of guests who want to participate in creative tourism. The term “creative tourism” was coined back in 2000 by Crispin Raymond. Raymond defined the term as “Tourism which offers visitors the opportunity to develop their creative potential through active participation in courses and learning experiences which are characteristic of the holiday destination where they are undertaken.” 

Crispin Raymond’s daughter was the inspiration for his book entitled “Creative Tourism.” While his daughter was traveling through Southeast Asia and Australia, she related stories of her experiences back to her parents. Among the activities she participated in was a week of learning and experiencing massage techniques in Thailand, a day spent learning vegetarian cooking in Bali, Indonesia, and taking a course in the Australian Outback that taught her how to become a “Jillaroo” (Cowgirl).

Around the world there are countless ways to take part in a creative tourism trip. Hoteliers regularly partner with local companies and skilled tradesmen to create unique and culturally enriching experiences for their guests. For example:

• In the French village of Biot, tourists can take a 5-day course in glass-making from a master craftsman. Each student learns the techniques and gets to make their own creation. 
• In Guatemala tourists are offered weaving classes and learn how to dye fabrics in the vibrant colors favored by the native population.
• Hotel guests can take dance lessons in Brazil and then Samba the night away at a club in Rio.

Destination Experiences

Closely related to creative tourism is the implementation of destination experiences. Tourists are looking for more unique experiences than just dining at a fine restaurant or visiting an amusement park. They want to feel like they are part of a new culture by getting involved in local activities. Whether it is taking sailing lessons in San Diego or spending a day riding a mule along the South Rim of the Grand Canyon, active participation adds to the travel experience. A three hour ride on a mule in the Grand Canyon is an unforgettable experience. 

Rewards Points Can Buy Memorable Cultural and Destination Experiences

Earning miles and rewards points through loyalty programs has been possible for decades, but only recently have the rewards focused on creating truly memorable travel experiences. Originally, airlines rewarded loyal customers with travel miles that could be converted to upgraded seating or complimentary plane tickets. Hotels exchanged free rooms and other perks for their customers who participated in their loyalty programs. Eventually, companies of all types started loyalty programs of their own (from the CVS card to your local grocery store, casinos and the NFL) and offered all types of merchandise. For many frequent travelers with large point balances, getting a new TV or set of golf clubs is no longer what they want. Loyal customers are looking for one-of-a-kind experiences for their loyalty points. Some colorful examples include:

• Diners Club points were used to send a 13 year old boy to a 5-day NASA space camp for his birthday.
• 500,000 Diners Club points were used by one couple to go on a 180 mile professionally-guided dogsled trek through the Alaskan wilderness.
• American Express allows its members to exchange points for cooking school in Tuscany and for backstage passes to concerts.
• Hilton Hotels offers a yoga retreat in Bali and helicopter tours over London.
• Marriott Rewards feature a hot-air balloon ride over wine country in the Napa Valley or a guided kayak tour down the Russian River in Northern California. 

Culturally Diverse Neighborhoods 

One does not have to travel overseas to get one’s share of exciting cultural experiences here in the United States. Almost every major city in America has ethnic sections or neighborhoods where it is possible to absorb different cultures and traditions. For instance, in San Francisco, it is easy to walk around Chinatown, shop, eat, and interact with someone who was born in Shanghai. In New York, a melting pot of dozens of nationalities, one can go from Little Italy to Chinatown in Manhattan and over to Brooklyn to interact with Russian immigrants and the Hasidic Jewish community. Head south to Miami and there is a vibrant little Haiti neighborhood that sells Jerk chicken. Along SW 8th Street in Little Havana, order a cup of Cuban coffee and ask the old-timers in Domino Park to demonstrate the finer points of this dot-matching tile game.

Dedicating Resources to Give Hotel Guests the Best Possible Experience

The hotel industry is proceeding along the same path as the most successful leaders in the cruise ship industry. Most cruise lines offer interesting daily excursions in the ports of call where they dock for a day or two. For instance, Holland Lines offers a cruise of the Western Caribbean, making stops in the Cayman Islands, Mexico and Guatemala. Passengers can schedule a combination bus and river tour through a banana plantation and watch the native population fish, canoe, and wash clothes along the river banks. The excursion also includes a beautiful fruit-filled luncheon under a thatched roof restaurant. Cruise lines charge extra and share in the profits of these local excursions. For hotels, facilitating cultural and destination excursions can help improve narrow profit margins. 

While smaller hotels may not have the resources to hire a full-time employee to coordinate the various activities, they can still develop relationships within their local community by simply reaching out and making contact. When tourists have a memorable experience while staying at your hotel, they will tell their friends and probably come back for a future visit. 

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July 31, 2014 / HMG Hotels

From Waste to Earnings: How to Minimize Hotel Waste

Hotels strive to please guests. To keep visitors coming back, hotel managers must continually offer the newest and cleanest options available. Because of this, hotels run the risk of being a strain on the environment. With so much laundry, daily cleaning supplies and regular small repairs, hotels consume a great deal of resources to maintain peak performance levels.

zero waste

Fortunately more hotels are becoming aware of the advantages of being environmentally conscious. Many hotels have adopted more conservation techniques, including giving guests the option to not have their towels washed every day. While these changes may seem small, they can have a real impact on the environment over the longterm. Another excellent way to reduce waste is through hotel surplus organizations.

All hotels generate surplus as an inevitable part of their life cycle. Surplus is created when hotels upgrade their facilities, which generally happens every few years. Upgrades are often considered necessary in order to preserve customer appeal. Because guest rooms necessarily experience wear and tear, hotel furniture will often show signs of damage. If too much damage is visible, guests begin to notice. Guests do not want to pay for an unpleasant experience, and damaged, outdated furniture is disappointing for many.

It makes good business sense to upgrade furniture and decor regularly. When hotels bring in new furniture, something must be done with the furniture that is being replaced. Fortunately, thanks to environmentally conscious initiatives, there are a number of organizations available that can help deal with surplus and turn waste into earnings for everyone.

When considering these organizations, it is important to know that there are two major types of organizations available. First, there are for profit businesses that help place used hotel furniture. These surplus businesses operate all across the country, with some options that are regionally based. When considering a for profit company, it is important to look at where the business is located and how it handles the transfer of goods.

In many cases, hotels can liquidate their unwanted items quickly and interested third parties can find great deals on this furniture for their own personal or business use. This means that furniture and goods are being reused, which keeps them out of landfills. Businesses specializing in surplus will also provide some form of compensation to the hotel. Although the price will not come close to covering the cost of new furnishings, it can help offset the overall cost, which can be a great incentive to go green. There are many companies that offer this service, including Hotel Surplus, Hotel Liquidation and Alibaba.

Another alternative is working with a nonprofit organization. Some nonprofit organizations perform similar services, but with a minimum of funds exchanged. Instead of selling used items, nonprofit organizations can repurpose items and funnel them back into the community as needs arise. These donations can end up in schools, universities, charities and other places. While this does not provide as much economic gain to the hotel, it is a great way to give back to the community and ensure that nothing goes to waste. One example of an effective and creative nonprofit organization that works with hotels is San Diego based Sustainable Surplus Exchange.

Another way to minimize waste during periods of renovation is to work with existing furniture. In many cases, hotels may be able to successfully repurpose their own items and avoid buying new goods altogether. This approach is very environmentally friendly since it dramatically reduces the amount of waste generated overall. It is also cost effective since buying new is generally expensive. Many hotel owners are surprised by how good most items can look after being refurbished or repurposed. Property-wide reupholstery using eco-friendly fabrics can achieve wonders.

Hotels can choose an option that works best for their current inventory of furniture and their overall goals. Any of these options will help minimize the environmental impact of necessary upgrades. By maintaining zero waste as an objective and repurposing furniture, fixtures and equipment (known as FFEs in the hospitality industry), hotels can continue to provide top tier accommodations for their customers and simultaneously create a sustainable future.

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July 17, 2014 / HMG Hotels

Five Ways the New Facebook Layout Affects Hotels

Facebook can be a powerful marketing tool, but hotels should be aware of how recent changes will affect their performance on this social media site.

Facing Facebook ChangesAny hotel that is committed to growth understands the potential of Facebook. Because of this, some recent changes to Facebook are of great importance to hotels. Although some of the changes may seem dramatic, it is essential to understand the nature of the changes and their full scope. To help make sense of things, here is the breakdown in five simple points.

1. Feed layout. One of the most visible changes is to the content feed. This is the main part of any Facebook account, where users can post their own content. Previously, the content feed was broken up in order to provide different outlets for posts and status updates. In the updated version, however, all this content has been streamlined into one column. This shift makes the page less cluttered. Now users will be able to see all content, including posts, videos and photos, in one centralized location.

2. More contact information. The left column has always been reserved for personal information at a glance. However, with the new layout, there is more space for information. In particular, hotels can now include a full address and phone number in addition to their hours of operation. There is even a map feature, which can display the location. Other information that can be displayed includes likes, visits, posts from other users and more. This long list of possible customizations makes it easy for hotels to pick the items that are most relevant to their overall marketing plan. Part of this redesign means that the apps tab has been relocated from the top to the left side. This can make it harder for users to find, but its new location on the expanded left side is very intuitive for most visitors.

3. Updated header design. The top of the page has also received an overhaul. Buttons are now included on the cover photo to make it fully interactive. The information on the header now includes the hotel name and industry. Users will also have the option to use “like,” “follow” and “message” buttons on the cover photo. There is also a new drop down menu to give users other options, which can include a review, apps and more. Because all of this is now located on top of the cover photo, it is important to choose your picture with even more care. Look to see where these buttons appear in order to avoid a photo with too much detail in that area.

4. New administrative options. There is also a new range of administrative tools that can be better employed by hotels on Facebook. Now it is easy to see more information about your page with minimal effort. In particular, hotels can use a handy administrative panel to see how many likes and other notifications they have received. Private messages and unread posts are also visible in this area. These tools can give administrators the power to see how well ads may be functioning on the page. There are even more ways to see who is visiting your page and where they are from. All of this information can show how effective the Facebook page is, which can lead to future changes and more effective marketing strategies.

5. Advanced tracking capabilities. The updates also allow hotels to track other users more carefully. It is now easy to monitor as many pages as desired, which can give hotels the opportunity to stay up to date with other hotels on Facebook. This is more than just reading the posts of rival hotels, but actually includes details about how many posts they have published and how many likes they have received. This analysis can show what works and what does not, giving hotels even more ideas to help their own marketing development. This feature is included under the Insights tab, and other users will not know they are being watched.

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June 23, 2014 / HMG Hotels

2013 Overseas Visitation to the U.S. at Record Highs

overseas travelers 2013 USIt was good news for the hotel and hospitality industry when the results of the U.S. Department of Commerce’s 2013 Survey of International Air Travelers (SIAT) were released. The positive report showed that overseas visitor volume to states and cities in the U.S. increased over 2012 levels. Based on Department of Homeland Security records, 2013 international travel to the U.S. was up eight percent compared to the previous year.

The annual Survey of International Air Travelers has been conducted since 1983. Analysis of the raw data collected in the survey includes the purpose of the trip, international visitor count, and specific results by state and selected cities. For 2013, the general findings showed that visitation increased to some degree in every port of entry. The volume of overseas travelers also increased in most, but not all, destination cities. Compared to 2012, the average number of states and destinations visited declined while the average length of stay increased. More first-time travelers visited in 2013 and there was no significant change in the size of the travel party. Let’s take a closer look at the findings.

Leisure Travel

A record 21.4 million people arrived from overseas in 2013 to enjoy a vacation in the United States. That represents a seven percent increase over the number of leisure travelers in 2012. South America, Asia (except Japan), Europe, and Oceania were all regions that had gains in outbound tourists to the United States. Florida, California, and Hawaii all showed double-digit increases (over 2012) in the percentage of overseas visitors. Both Florida and California set state records for the most international tourists in a single year.

Visiting Friends and Relatives

This was the second most popular reason to visit the United States. In 2013, about 9.2 million people came to visit family and friends – a seven percent increase over the number who visited for the same reasons in 2012.

Business Travel

Doing business in America continues to be very important for foreign companies and businessmen. In 2013, roughly 4.9 million (up six percent from 2012) business travelers spent time in the United States. Large gains were experienced in New York, California, Texas, and Illinois, all of whom have aggressive policies to attract international business to their states. India stepped up its U.S. business travel by 28 percent and Japan showed a healthy year-over-year increase of 23 percent.

Attending Conventions

Up three percent from last year, the number of overseas visitors who attended conventions in 2013 hit the 3 million mark. Millions were attracted by the opportunity to learn about American businesses, technology, and pop culture. They attended the annual auto show in Detroit, the big Consumer Electronics Show in Las Vegas, and the wildly popular Comic-Con in San Diego.

Number of States Visited

Data revealed that more people, on average confined their travel to fewer states than was the case in the previous year. While some visitors may fly into Los Angeles and then take a side-trip to Las Vegas, NV or the Grand Canyon in Arizona, more people elected to stay within the state in which they arrived. The percentage of states visited declined from 1.5 percent to 1.4 percent in 2013. In addition, the percentage of travelers visiting only one state increased 1.7 percent to 72.2 percent in 2013.

Destinations Visited

Another finding from the survey was that the average number of destinations visited on a single trip declined from 2.0 in 2012 to 1.9 in 2013. More overseas visitors to visit just one destination, and while that was good for the most popular cities and destinations, it hurt some of the secondary travel destinations.

Length of Stay

The average number of days a typical overseas traveler stayed on a trip to the United States edged up slightly to 17.5 nights in 2013 – up from 17.0 nights in 2012. Even though the overall average daily stay was up, the average length of stay was down for visitors from the UK, Japan, China, South Korea, and China.

First Trip to the United States

The number of first-time overseas visitors to the U.S. in 2013 increased by roughly 10 percent to 7.6 million. Higher incomes, particularly among the younger generation, made it possible for more people to travel overseas. In addition, the US government made it easier to obtain travel visas and US tourism groups increased their marketing efforts overseas.

Top States Visited in 2013

New York held the honor for the most-visited state with approximately 9.8 million overseas visitors in 2013. That was a 5.0 percent increase over 2012. Florida came in second with 7.2 million (a record number for the state), and California was solidly in third with 6.5 million (up 8 percent from 2012).

Considering all of the overseas visitors, New York had a 30.6 percent market share, Florida achieved a mid-twenties market share, and California did well with a 20.2 percent market share. Other states that showed high growth rates in overseas visitor in 2013 included Louisiana, Texas, and Hawaii.

Top Destination Cities in 2013

• New York City
• Miami
• Los Angeles
• Orlando
• San Francisco
• Las Vegas
• Honolulu

Top 3 California Destination Cities in 2013

• Los Angeles – 3,781,000 (+ 11% from 2012)
• San Francisco – 3,044,000 (+ 9% from 2012)
• San Diego – 833,000 (+8% from 2012)

Encouraging more overseas visitors should be a national goal. Not only do visitors from around the globe inject money into our economy, but they also allow all of us who interact with them to see the habits and cultural differences that make our world so interesting. While the 2013 Survey of International Air Travelers offers some very valuable information about international tourism to the U.S., it does not include the large number of international tourists who arrive from Canada or Mexico. Hotels, major attractions, and restaurants all benefit when more overseas visitors are in town. Without the vibrant travel and tourism industry, our economy would struggle more than you could ever imagine.

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June 2, 2014 / HMG Hotels

Hotel Brands in the Future – What Will Hoteliers Have to Do to Survive

Future Hotel Brands SuccessIt is safe to say that you will receive the same high-level of service whether you are staying in a Four Seasons Hotel in San Francisco, Paris, Budapest or Hong Kong. The Four Seasons brand is well-established. Both business and leisure travelers, who are looking for luxury accommodations, know what to expect when they check in to any Four Seasons Hotel or Resort anywhere in the world. The reason the Four Seasons has such a loyal following is because they deliver on the promise of their brand.

The hotel industry is comprised of many well-known brands as well as many unbranded properties. It is dangerous to draw any conclusions about whether you will have a more enjoyable stay if you choose a branded hotel or a family-run hotel, without a well-known brand, two blocks away. In Deloitte’s Hospitality 2015 report entitled, Game Changers or Spectators, the role that branding will play on the future success of hotels was discussed in detail. The key points of the study center on the difference between the mass market and luxury market, the emergence of Lifestyle brands, and the use of social media.

Build Brand Loyalty

It takes money and time to create and build a strong brand. Over the years, some of the world’s most successful companies like McDonald’s and Coca Cola have spent millions, if not billions, protecting, promoting and improving their brand’s image. Every customer that orders a Big Mac at McDonald’s knows that they will get the exact same Big Mac in San Diego, Miami or Mountain View. A loyal Coke drinker will not buy a Pepsi or any other type of cola drink. Without their brand, McDonald’s and Coca Cola would be just another hamburger joint or soda company. Brand loyalty is what every non-generic company wants.

In the hotel industry, brand loyalty tends to be a greater choice factor for travelers who stay at luxury hotels and not as important for travelers who stay in economy or more modestly priced hotels (mass market). The person who chooses to stay at high-end hotels is more interested in the experience than the price. The person who chooses to stay in more modest accommodations is more interested in the price than the experience.

Mass market hotels attract hotel guests primarily because of price and location. Other than price, and possibly location, they do not perceive much of a difference between staying in one two-star hotel or another two-star hotel. People who book rooms in two or three-star hotels are looking for a comfortable bed, a clean room and competent service. Brand loyalty is low as this large group of travelers are driven more by the cost to stay overnight than having a special experience.

Major hotel operators recognize that there is opportunity to build brand loyalty in every market segment. Almost every major chain participates in a loyalty program where guests earn points and rewards each time they stay. Hoteliers can also help build their brand and differentiate themselves from their competitors by adding value to a guest’s stay. Common extras that guests enjoy include such things as free in-room WiFi and continental breakfasts.

Turning to the luxury segment, the best way to build brand loyalty is to offer guests something they want that they can not get at your competitor’s hotel. Individuals stay at high-priced hotels because they want a wonderful experience. Almost every top-of-the-line hotel has high thread-count sheets and comfortable beds. They have business centers, exercise equipment, swimming pools, a bar, and a nice restaurant.

It is not always easy to differentiate your hotel from that of your competitor’s hotel, but that is the key to creating brand loyalty in the luxury hotel market. Hotels have to work hard to know their guests and understand what really makes them happy. Instead of putting chocolates on the pillows, surprise your guest with a gift basket of unique local items. Go the extra step and slip your guest’s home town newspaper under the door so he’ll have something familiar to read with breakfast. Use your imagination to create good experiences and positive impressions for your guest.

Another reason why companies pay so much attention to differentiating themselves from other brands is that the luxury hotel market has become very saturated in many of the major cities in the United States.

• 11 branded luxury hotels in New York City
• 9 branded luxury hotels in San Francisco
• 8 branded luxury hotels in Washington D.C.
• 6 branded luxury hotels in Boston

Competition is fierce for the traveler who can afford to stay in the most expensive hotels in these cities. The available pool of guests who stay at luxury hotels is only a small fraction of the pool of guests who stay at more modest hotels.

Consider Building a Lifestyle Brand

Many hotel groups are already pouring money into building lifestyle brands into their family of hotels. This rapidly growing brand has achieved RevPAR that is about 25 percent greater than other hotel brands. Lifestyle hotels are designed to enhance a guest’s stay by offering such things as healthier menus, recreational activities and in-room exercise equipment. Many such hotels are environmentally friendly and the staff is very conscientious of their guest’s needs. Some of the popular Lifestyle hotels are:

• Starwood lifestyle hotels include W Hotels, Aloft Hotels and Element
• IHG has Hotel Indigo
• Marriott has Edition
• Hyatt has Andaz Hotels

Use Social Media Effectively

It is common practice for almost every hotel brand to have an active presence on social media sites. If done properly, a good social media strategy can enhance a hotels name and brand recognition, create loyal customers, and drive profits. Social media can also be a two-edged sword. If your hotel disappoints guests, and does nothing to remedy the situation, that can quickly erode brand loyalty. Today, and in the future, hoteliers must pay close attention to how they use social media.

In the future, hotels will have to step-up their game in order to not fall behind their competition. Hotels that differentiate themselves from their competition by providing better service, better value, and better guest experiences, will prosper. Hotels that do not do such a good job will lose business and struggle to survive.

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May 31, 2014 / HMG Hotels

US Hotel Industry Happy to See Higher International Visitor Count in 2014

January 2014 Totals Beat January 2013 Totals by Six Percent.

The US Department of Commerce recently announced that the number of international visitors in January of 2014 beat the January 2013 international visitor count by six percent. Over 4 million of the total 5.1 million international visitors to the United States came from just 10 countries.

International Airport Terminal
Canada and Mexico, countries that both share a common border with the United States, held the top two spots. China was a very distant third on the list. The list below shows the top 10 countries, the number of visitors to the US in January 2014, and the percentage change from January 2013.

Canada …………………..                1,580,761          0%
Mexico ……………………               1,228,663         +8%
Japan ………………………              270,598            -3%
People’s Republic of China ….. 221,705            +33%
Brazil …………………….                208,646            +2%
United Kingdom ……………..      186,438            +3%
South Korea …………………         138,917             +10%
Germany …………………….          89,069              +4%
Australia …………………..             81,167               +3%
Argentina ……………………          71,538               +11%

Notable among the US Department of Commerce figures is the big year-over-year increase for China in the month of January and Japan’s slight drop in total visitors from the prior year. South Korea, with a 10% increase, further illustrates the growing number of Asians interested in visiting the United States.

You must remember that these numbers only represent one month of an entire year. According to the National Travel and Tourism Office’s 2014 Spring Travel Forecast, there were annual international visitor count to the US in 2013 was 69.7 million, an increase of 3 million over calendar year 2012. The forecast for all of 2014 calls for 72.2 million international visitors.

Canada and Mexico accounted for almost 55% of all international visitors in January 2014. Overseas visitors made up the remaining 45% of the total 5.1 million January, 2014 international visitors to the United States. Miami, New York, and Los Angeles ports once again accounted for 41% of all overseas arrivals.

More visitors mean more money for the tourism and hospitality industry. California, for instance, is the most popular US destination for Chinese travelers. Hotels are doing their best to cater to the Chinese traveler, in part because they stay longer and spend more than travelers from almost any other country.

A combination of factors may explain the steady rise of international travel and tourism to the United States. Recognizing the importance of international tourism to the economy, President Obama issued an executive order that encouraged and made it easier for more international citizens to visit the United States. America has devoted a substantial amount of resources in many countries to help market and promote travel to the US. The standard of living is going up in places like South Korea and China, making it possible for more people to travel abroad.

While hoteliers in the United States are not throwing big parties or setting off fire works to celebrate the positive January 2014 international visitation numbers, they are smiling a little more. The hotel industry welcomes every guest from all corners of the world.

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