Business Will Live on Through Experiences It Will Bring
July 11, 2017 11:29am
By Georges Panayotis
Behavioral evolution raises the question of French specificity: the nature of business capital. With the globalization of accounting practices, which are strongly influenced by the Anglo Saxon world, French businesses resemble a small Gaulish village surrounded by the rest of the world. For now hoteliers are looking for the magic potion.
Many local businesses believed in the "click and mortar" model that combines the best of the Net with the corner shop. The model relies on the desire of customers to see, touch, try products and interact with personnel, who are perceived more as consultants than sales people. But is this always true? The pleasure of shopping is now experienced as a tourist activity during travel and less and less as a daily need. Online commerce has multiplied the possibilities, guarantees, annexed services, immediate delivery … eliminating the need to enter a store.
Commercial real estate is being reinvented in a quest for greater efficiency and profitability per square meter. Thanks to new concepts and practices, a movement is underway in hotel real estate that offers a fine outlook. So, what valorization can a business expect when the primary element - the clientele - is attacked full force by online commerce and when its second pillar, the brand, has difficulty achieving a sufficient level of notoriety?
Real estate has long business cycles with sometimes irrational fluctuations, but with long-term valorization that does not really experience crises. Land owners have been right and regularly successfully raise funds. Is the same true for businesses? Many salespeople have been cruelly disappointed when they attempted to base the transaction on optimistic multiples. Only in France do people still believe that a business has as much - or even more - value than the actual walls. The current evolution risks further weakening its value since online distribution giants are doing everything to appropriate and develop the loyalty of customers they send to hotels. It is difficult to be certain that the brand will give the business solid support.
Due to a lack of means, strength and a constant message, hotel brands have only rarely reached the level of a well-known brand, that is liked, chosen and that justifies its value on the balance sheet. Worse, in terms of spontaneous notoriety, AirBnB, Booking and Expedia are currently reaping benefits. The quest for a hotel experience no longer centers on the hotel brand or the product, which is often easily substitutable, but goes through the distribution channel and its annexed services. Booking a room on AirBnB is like eating at McDonald's. Booking, instead, offers diversity and an option to select associated "experiences". Brand strength lies in being able to exist globally through "universality", or through the simple strength of the Internet. The challenge is more difficult for a hotelier with multiple properties, sociological and legal constraints…
The launch of the mega brand ibis by Denis Hennequin was motivated by this need to reach critical size in terms of awareness, like Holiday Inn or Marriott did on the American continent. By merging developing brands around a real spearhead, Accor successfully created some real momentum towards brand status that is not based exclusively on location and a name, but also on an experience. Just a little more effort and it's done.
This is the next indispensable step for any brand that wants to be able to improve its results through differentiation and thus experience. The hotel experience must take on a new dimension. This is only conceivable if the property becomes a place for life, for meeting and for sharing for guests who receive privileged treatment. Hoteliers have not yet lost their battle, but it is important not to mix up priorities. While the asset light policy remains an essential trend for hotel groups, it is in their best interest to massively concentrate investments on creativity and awareness by renewing key concepts and event marketing. It is a new way to support a business based on the reality of a unique customer experience.
Tags: georges panayotis
Georges Panayotis is President of MKG Consulting. Born in a family of hoteliers for three generations, Georges Panayotis, left Greece at the age of 18 to pursue his studies in Political Sciences and to obtain his Master in Management at the French University of Paris Dauphine. He then joined the Novotel chain, which will become the Accor Group, to manage the International Marketing Division. After developing specific marketing tools for the hotel industry, he left the group in 1986 to start his own company, MKG Conseil, now MKG Group. In twenty years, the group has become the European leader in studies and consulting for the Hospitality industry. The company employs over 70 people in four departments: marketing studies, database, quality control and trade press, with two publications HTR Magazine and Hotel Restaurant Weekly.
The company helped the development of over 2,000 hotels in France and in Europe, with offices in Paris, Cyprus and London. Georges Panyotis is the founder of the Worldwide Hospitality Awards and the Hotel Makers Forum, and the author of several publications on Marketing and Operations in the hotel business, He is a regular consultant for several television channels, among which Bloomberg Television, and radio networks.
Contact: Georges Panayotis
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