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by Georges Panayotis

It is natural for jobs to evolve, for functions to be diversified, for technology to intervene at all stages of management in order to control human resources, investments, costs and improve profitability. But the most delicate is to succeed in doing so without losing sight of the final customer experience and the perception they may have with respect to value, and especially the pleasure/price ratio. This is undoubtedly where that there was some distraction and the price increase was somehow disconnected from the satisfaction element...

While it would be nice to shift gears, the hotel sector continues to be a cyclical sector: not so much because of its seasonality, but because it must regularly adapt to major behavioral changes. Developments that once took nearly a generation now happen in just a few years. Successive waves have broken without the hotel industry having a chance to reinvent itself and succeed in catching the wave of communal sense, of a desire to share opinions and experiences, of the need to have less and use better.

While hoteliers' expectations evolved, too many properties tried to satisfy the basic needs of an undifferentiated clientele. The level of the customer experience remained close to zero and the added value of the service was no higher. They survived and even prospered at major destinations due to the artificially maintained supply shortage. Their marketing strategy has long been summed up by a simple increase in average daily rates. The speculative real estate bubble for urban hotels has attracted nonprofessional investors who are happy to escape taxes on fortunes, without any real interest in the business aside from a sudden passion for interior decoration. They are – and rightly so – the first victims of the AirBnB phenomenon, that served to reset prices. Restructuring will affect those that did not get in touch with reality and reevaluate their services beyond decor.

The good news is that survivors can always pull themselves back together and work a bit harder to catch the next wave, which will be the wave of a hotel product based on the offer of a renewed experience. Two segments understood more quickly than the others that it was necessary to reinvent themselves, and are strongly influenced by the expectations of Generation Y or the Millennials, also known as Generation What?, which questions certitudes and breaks the usual codes for more freedom, autonomy, availability, fluidity and sharing. 

While the economy segment takes inspiration from youth hostels, resulting in hybrid concepts that mix clientele in a modern day Tower of Babylon, properties where knowing how to be and relations between collaborators is more vital than their savoir-faire. Conviviality is facilitated by the new organization of public spaces.

At the other extreme, the luxury hotel industry continues to focus more on the exceptional experience that it can provide through a higher degree of sophistication in terms of the level of comfort, technology or service. The Wow effect is played full force to deserve the average daily rate.

These last two niches rightly applied the plural conjugation of several verbs: seduce, share, surprise, innovate… It is certainly also the direction business hotels as well as resorts should take that are having trouble leaving their traditional fetters. In most cases, they have a good location and many tried and true talents, but suffer from a lack of imagination. Hospitality needs to pick up again, because it is essential to regain the creative strength of the hotel industry of tomorrow. 

A comparison may be made with a new F&B trend where the sleight of the hand is as important as product. The Chef's talent is expressed in a careful combination of ingredients that appears simple at first glimpse. Just as cooking has taken full advantage of time and money saving, preparation and assembly innovations, the hotel industry also benefits from new back office tools that allow more free time, energy and means to go out and reach the client. Those that have not understood this won't be around long enough to testify.

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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