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by Georges Panayotis

With their asset light strategy, brands must now address several types of clientele, because in addition to the public whose loyalty they must develop, they must take at least as much care of their franchisees.

 

In Europe, a land where an operator and owner culture had developed over a long period of time and that only quite recently opened up to broad scale franchise, taking care of franchisees does not come so easily! And yet, this is just what operator-investors expect. They have chosen a brand to access its experience, efficiency, and commercialization, and finally to increase their profitability. Naturally they expect to receive support in order to confirm their choice. Is this truly the case? The question is harsh, but needs asking because it is among the questions that regularly arise in discussions with professionals.

An old timer in the business said with common sense: the franchisee is only truly satisfied when he is convinced he will earn a euro more than the franchiser. In a win-win partnership, one of the two protagonists always does a little better. It seems natural for it to be the franchisee who has invested its own capital.

In a world where temptations to multiply experiences are strong, franchisee loyalty is preserved by an environment that helps them advance. While the franchisees may take the risk of operations, they do not necessarily have all the tools to maximize performance. They thus need support from their brand through a sincere dialogue in order to gain in autonomy, and become managers who mastermind distribution, local marketing and technological innovation.

Group strength is essential for launching heavy technological development programs and creating platforms that franchisees can plug into, but this power can no longer be arrogant or distant when franchisees are the true drivers behind success on the field. Only the network can invest in brand awareness, but it must not be confused with its image which is more tied to the everyday experience at the properties.

This image changes over time and the age of the brand makes it necessary to constantly question its positioning. And young generations may turn away if investments are not regular and if the product does not adapt to the latest trends.

This development strategy that generally calls upon the franchisee can take two directions, as illustrated by the iPhone – Android face-off. On the one hand a highly formatted universe, that is both fun and community oriented, founded on a very strong corporate culture and charismatic directors; on the other, a more open, more flexible and accessible technology, that is less demanding and more diversified and allows more freedom. 

Who in the hotel industry can follow the lead of Apple? Will distributors succeed in occupying the field with private labels and state of the art technology? Business news have put the “sharing economy” –actually, more of a “C2C marketplace” economy– in the spotlight along with the havoc it wreaks in sectors that had become increasingly rigid after decades of habits and resting on their laurels. Hotel chains would be wise to keep this in mind to avoid struggling to justify their added value as well.

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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