The Tallest Tree Grew out of a Single Seed
February 11, 2016 4:48am
By Georges Panayotis
In the 4th century B.C., the Greek philosopher Thukydides said: “History is a perpetual new beginning.” In fact, the squabble between the VTCs and taxis, and before them between hoteliers and shared accommodations platforms, reminds us of the Canut Revolt of the silk weavers of Lyon against the weaving machines developed by Monsieur Jacquard. History should remind us that the battle is lost before it has begun because progress is underway and unstoppable so no position is acquired. It should incite us to better prepare the transition, rather than experience it as an affront.
The change in economic model is evident; it has been accelerated by the offer of new services or products via Internet and its nomadic tools. The customer adapts quickly to this new means of consumption, particularly when it is more fluid and less costly. Does this mean the new players must be allowed to appropriate the market without respecting the rules of competition? Of course not.
The reactivity of "traditional" players is imperative so that they do not feel excluded from the New Economy, but manage to adapt and fit into the system. And yet they should not feel like they are carrying around their ball and chain. The government has difficulty positioning itself with respect to players in the New Economy. It is simultaneously seduced by their innovation and impotent with regard to their ability to dissimulate their profits. In light of accumulated deficits, the government does not wish to loosen its grip on taxes and contributions collected from those that are in the unfortunate position of being easily identified. Whence the growing feeling of injustice among hoteliers and restaurateurs, especially those who see a good share of their business slip into the hands of the favored collaborative economy.
Other countries such as Ireland, have chosen an opposite direction by significantly lightening the VAT on traditional activities to give them a boost and allow them to adapt more easily to new market conditions. Changing the model does not mean those businesses that helped develop an entire sector of productivity, such as tourism, have to disappear. In France, particularly, hoteliers and restaurateurs have benefited from the success of the destination for decades. It is a bit easy to drain them even when they need the means to reexamine their operations. A breath of fresh air would allow the current entrepreneurs to reinvent themselves.
Just because they have appealed to the public and caught the interest of the media does not mean "start-ups" should feel free to do whatever they want and enter the economic landscape like so many troopers ready for combat. The role of a modern state is to regulate, channel these new energies within an acceptable competitive framework. No one said it was easy... particularly in a country like France that is reticent to changes. But this is precisely the job of Politics: to manage the harmony of energies and roles in the "Polis", the city in the larger sense.
The new generation of entrepreneurs also feeds on the cumulative experience of their predecessors. They are upsetting the established rules of distribution without looking at the basics of reception, service, customer experience.... Thus, each party must nourish itself on the other. Just as an evolution is underway in the automobile industry with the progressive arrival of hybrid automobiles, we may conceive of the hotel industry of tomorrow as founded upon hybrid concepts associating the New Economy and its technological revolutions and the basic functions of accommodations and dining. The models may cohabit by adopting a new framework for socialization and benefit from all the increases in productivity and the digital economy.
The year 2016 is expected to be a very political one. The debate is opening up with offers from candidates to better regulate the economy, to integrate new players and practices without devastating whole swathes of established businesses. We must not confuse elector and citizen, even if it is the same legal person, by offering a long-term model and not satisfying partisan demands. If we plant the right seed in the right terrain our sector will be able to prosper for generations to come.
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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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