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by Georges Panayotis

We can’t ignore that the current situation for hotel operations is pretty morose. The profitability expected from a well-managed business is far from what it was a decade or so ago. How did this happen with the steadily increasing numbers of travelers? Where have these profit points gone that made this business one of the most interesting financially in addition to its human dimension?

 

It is undoubtedly because some of the components that diversified and enriched the hotelier’s trade were abandoned. Hoteliers answered –a bit too readily – the call of seductive Sirens beckoning with the promise of less work for more profit. Why bother with personnel management when cleaning, room maintenance and security can be outsourced? Why mobilize a team in the kitchen when it is so easy to get 4th and 5th range products, that are ready to assemble? Why work in the primary zone to develop a sales force when choosing to be part of a brand naturally brings in enough flow? Why work to develop loyalty when a listing on an online distributor’s site does all the work for you?

And the hotelier’s list of “good friends” entered into play to lighten the polyvalent innkeeper’s load in the kitchen, in the dining room, at reception, on the floors, at the tourist office at the town festival, at fairs and the threshold…  But each one naturally lays claim to proper remuneration for their services, because every service deserves a salary. Work less, but earn more, while concentrating on welcoming guests can only last for as long as the euphoria of the good years of the hotel cycle. When the market becomes more difficult, turnover drops and the multitude of expenses becomes heavier until it reduces operating results to nothing.

In attempts to sophisticate operations and hotel management, the basic economic model grew heavier. During periods of tension the owner-operator finds himself faced with expenses he has difficulty absorbing while suppliers relieve themselves of the risk but send in the bill. He has no other choice but to increase the price of services to a point that is considered unreasonable to a growing number of clients.

Periods of crisis offer an opportunity to raise questions. The time has come to wonder about the new economic mode or its renaissance based on the fundamentals of the hotel trade. Owner-operators need to come up for air and take a careful look at all those who have drained their resources. They must look at the customers’ interest in a product that might be more rustic, but more friendly and more in line with their current expectations. Instead of trying to make an outdated model more complex, it is necessary to take a look at simplicity and the core(s) of the hotel trade. It is undoubtedly not easy, but in order to stop clients from abandoning them for other kinds of accommodations and other destinations.

About Georges Panayotis

Georges Panayotis is President of MKG Consulting. Born in a family of hoteliers for three generations, Georges Panayotis, 51, 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

g.panayotis@mkg-group.com

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