Loss of Productivity: When CAPEX and Management Make No Sense...
September 21, 2017 11:54am
by Georges Panayotis
Productivity is not just the quantity of work done. It also means quality, as Kenneth Hartley Blanchard pointed out. One can only agree with him when working in a sector such as the hotel industry where the quality of service lies at the heart of competitiveness and hotel performance. But has the hotel industry increased its productivity in recent years? Far from it. The sector suffers from a loss of productivity, incapable of sufficiently adapting itself to the constant changes and evolutions of our epoch.
Which actors are involved? Hotel groups, hotel operators, employees and the client, or more precisely clients as they are many and polymorphic. Productivity loss affects hotel groups that have not made the necessary investments and have lost control over commercialization. Hotel operators, meanwhile, have not invested in CAPEX and in new procedures in order to get the most out of their hotels. Employees have not been sufficiently trained and given the tools to adapt servuction or even to innovate in the services customers expect. Where does the quality of service come from? At the beginning of the production line, before creation, conception, commercialization of the product, but also and especially at points of direct contact. The machine that is the hospitality industry has slowed in productivity, lost in terms of quality and thus seen a drop in occupancy. To expect the customer to adapt to the product would be both utopian and suicidal when it is the product that must adapt to needs and demands.
How to reboot the machine yet remain productive ?
By promoting its assets: qualified workers who are trained to be autonomous, encouraged to take initiatives, able to adapt. Product ambassadors who are flourishing in their jobs and must be true local entrepreneurs rather than just passive links to the headquarters of brand operators. This is one of the first levers for improving productivity.
Optimal use of new technologies makes it possible to simplify, automate and lower operating costs, thereby allowing employees to concentrate on tasks with higher added value. Only new concepts have succeeded in lowering operating costs, but the problem remains for the other, majority share, of the hotel supply.
Return autonomy to the divisions will make it possible to finally improve the jobs-activity flexibility to enhance productivity, better customer satisfaction and thus better competitiveness and growth in demand. Marginal costs will decrease with the repositioning of the supply, thereby helping demand increase. Labor flexibility is necessary in order to adapt to this new demand, but it has not yet fully implemented in the organization of personnel.
By returning capital and labor assets to the production unit it will be possible to improve competitiveness. Boosting activity must also happen from the bottom up, from the point of direct contact with the client rather than from headquarters, which would be wise to give hotel managers more autonomy.
It is clear that competition between destinations and products has been stepped up in recent years. The arrival of new concepts, the renewal of the camping offer with an improved range and the arrival of new products such as mobile homes, the diversification and modernization of the tourism residence supply and the explosion of the shared accommodations offer are examples that show that when investments are made on the supply, competitiveness becomes obvious. We can bet that if we rethink our functioning and our priorities on a local level, it will be possible to renew the value of the hotel industry and get the machine operating full throttle again.
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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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