Resistance is Another Way to Reconquer
December 3, 2015 7:42am
by Georges Panayotis
With the tidal wave of service providers, partners, suppliers come to the rescue of hoteliers to help them do their job, a new battle becomes necessary: reconquer the entire value of the business that had been dispersed and grappled over by well-meaning outsiders.
As they focused on problems with operational management and the volume of investment necessary to guarantee surveillance of commercial distribution, control over the eReputation and satisfaction client, hoteliers progressively allowed themselves onto the slippery slope of generalized externalization. Sometimes unbeknownst to themselves, business goodwill that belonged to them and constituted the backbone of the business of a property or chain has slipped out of their hands.
Regardless of segment, the problem is the same. It is just a matter of degree. Whether it is the value of an individual business or the strength of a brand, one thing is clear: their degradation proves the need to fight. A business can no longer generate enough gross margin to pay the rent due to all the owners and guarantee the capex to maintain the working tool, to finance marketing and innovation research when interest rates are at their lowest. In short, the current system endangers the future by dramatically reducing maneuvering margins.
And yet it is not for a lack of solutions to recuperate the work that creates value and format them according to specific needs. Other industries that outsource a number of services - automotive and Apple-style telephone - have led the way by setting standards to differentiate their brand. Hoteliers can and must gather all their tools - on-line commerce modules, revenue management tools, customer satisfaction surveillance and technologies that feed the brand without stripping it bare - around their PMS .
It won't be easy to do overnight, but already just being aware of the need to do it is an important step. Operational staff must concentrate on creating a real specification sheet in function of their needs, without giving in to pressure from suppliers who would rather sell them their white label.
It is necessary to inverse the cycle of lost goodwill to work on an economic model that puts meaning back into the notion of profit margin and clearly guarantees the separation with the notion of asset management. It is not surprising that investment funds and real estate, previously very concentrated in real estate assets, believe it is also necessary to (re)invest in business goodwill. In a healthy economic approach, the value of property depends on its capacity to generate revenues over a long period. As common sense suggests, one can advance better on two balanced legs than hopping on one foot.
By draining goodwill outsourced services have weakened the model. The hour has come to reconquer, and there is another need: to have the means to create a real customer experience that justifies the choice of hotel with respect to other commercial accommodations and highlight the difference from the competition with inventiveness that lies back in the product and service.
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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
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