Squaring the Circle: We're Working On It!
October 6, 2016 12:43pm
By Georges Panayotis
All the interest politicians are showing in Tourism, particularly as the next elections approach, has produced two figures: 7% of the GDP, which is far from naught, and 2 million direct or indirect jobs, the first characteristic of which suggests that they cannot be relocated. But can we be so certain?
This reasoning is based on the fact that the companies and activities that generate tourism are solidly associated with territories, and that it is impossible to dismount them and expatriate them. Undoubtedly! But what about clients who prefer to do their shopping on Bond Street rather than avenue Montaigne? What about travelers who decide to visit Rome’s Coliseum rather than the Eiffel Tower? The same is true for travelers who set down their suitcase in Barcelona’s hotels rather than Marseille’s? Jobs in hotels and restaurants, department stores, museums and châteaux will not stand up for long if the tourists desert France. And boosting average daily rates rather than developing a new hotel supply, does not increase its appeal.
Moreover, this generation of tourism combined with the unfurling of the digital economy has created new jobs in sales, promotions and marketing, that requires a smaller and smaller presence locally. In the best case scenario, tourism businesses keep employees in their headquarters. But the tendency to externalize can seriously endanger these jobs that result from digitization. The demand for profitability from investors has forced some short-term decisions, even if it means complicating the future and turning things over to the Internet giants.
Sales people who are used to managing key accounts, sales managers at large properties, marketing teams of hotel groups… are all threatened to gradual extinction to the benefit of call-centers at Booking and Expedia, the multilingual staff at TripAdvisor, Trivago, Kayak… Between the temptation to save or renouncing technology, tourism business are eliminating support functions that still represent two millions jobs in the sector.
Telecommunications and online networks make it possible to be anywhere and still answer calls immediately at any time of day or night. Morocco and Tunisia, Amsterdam and San Francisco are all opening their doors to welcome the new virtual tourism actors. Thousands of jobs have left the country without tourists taking notice. To bring them back today would mean spending considerable sums that would be better invested in product innovation. Operating accounts have shrunk massively and yet they are expected to finance capex to maintain their standing.
The new hotel concepts insist on giving guests their autonomy for check-in, ordering at the restaurant, relaxing at the fitness club... But more autonomy means fewer personnel. We must not kid ourselves; the economic model of France’s hotel industry has trouble functioning with numerous available personnel. Onerous taxes encourage keeping salaries low, maintaining the spiral that has led to the disaffection for services.
The choice made previously –whether out of convenience or narrowmindedness– put the hotel industry in an impossible situation. Thank you! So rather than singing out loud and clear that jobs in tourism cannot be relocated… look around… servuction is losing it human dimension. If the client shies away, if local services are outsourced, social charges remain high and personnel are demotivated, then it becomes totally impossible to square the circle. While investing in product innovation is vital, investing in a human dimension fundamental. It is the only way out for a hotel industry that will one day be able to develop a new approach to customer relations.
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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