Reinvesting for the Return of Visitors: Recovery Periods Take Three to Five Years to Feel Effects
April 24, 2018 1:16pm
by Georges Panayotis
A recovery is wafting over Europe's economy, indicators are in the green, the time has come to reinvest. Our European destinations will fully benefit from this recovery. Less unemployment, better revenues, positive growth perspectives, all the ingredients are at hand to boost arrivals in tourism destinations.
Experience shows that in recovery periods, it takes 3 to 5 years before the effects are felt on tourism activity, but cycles are shortening and the economic problems experienced by destinations in North Africa and the Middle East will naturally favor the transfer of tourist customers to our European destinations that are considered safer.
All indicators converge to push us to reinvest in supply. Worldwide, the number of tourists is growing exponentially to reach 1.3 billion in 2017. In addition to such favorable development, which we should be delighted with, we should also be pleased with the growth prospects, and the very rapid development of digital technologies that enable us to know our customers better and serve them better.
Although we work in a secular industry, we are fortunate to be in an ecosystem that, like the society whose trends it has always followed, is currently experiencing profound upheavals. These upheavals offer us infinite prospects that it is up to us to seize.
Imagine Jacques Maillot, Gérard Brémond, Gilbert Trigano, Paul Dubrule and Gérard Pélisson as young entrepreneurs in 2018. Mr Booking, founder of the Tour Operating à la française with Nouvelles Frontières, Mr Airbnb, founder of time shared second homes with Pierre&Vacances, Messieurs "servuctors" inventors of hotel and resort products including innovative leisure activities and services. They each revolutionized tourism between the 1960s and 1980s by breaking codes, providing complete and different offers with a strong identity and very good value for money. People came to Club Med to find heavenly destinations, leisure activities and out of the ordinary activities, conviviality and a strong spirit. They bought Nouvelles Frontières products for a risk-free escape, they relied on the tour operator's expertise for exceptional destinations and to build an exotic and reassuring trip and stay at the right price.
What would these "founding couples" of cruise products think? Cruise passengers invest billions of euros in the constant development and modernisation of their fleets. At the Global Lodging Forum, MSC Croisières shared its 10-year investment plan (2017-2026) to the tune of 10 billion euros for the construction of 12 new ships, each capable of handling an average of 3,000 to 4,000 passengers. Costa Croisières announced 7 ships under construction, including a very large carrier that will be able to accommodate up to 6,600 passengers. Who in the hotel business can boast such dynamism and confidence in the future? Especially when you know that ships must be 100% full to make their operation profitable. Let us recall here that cruise customers represent 27 million people transported each year, including 7 million Europeans and only 500,000 French. Products are constantly evolving and modernizing, each ship that leaves the shipyards is more efficient, less polluting, with services that are constantly evolving to satisfy customers to the maximum. The cruise product is booming and, no secrets, companies in the sector have never stopped investing and innovating.
Meanwhile, if one of these founders were to go on holiday to a campsite, he would find that there too customers are the primary concern and the product has been focused on their needs.
These great gentlemen would find palaces that are popular today with an ever-growing population of millionaires, but they would also find that the middle class has not evolved much and that much remains to be done for this segment. But as they are only passing through, a warning to the new generation. Because if nothing is done, the mid-range offer is likely to find itself sandwiched between the super-economy and the high-end, and invested by other products such as those from the sharing economy.
The economy and mid-range offer, which has enjoyed its heyday, must be quickly revisited. Notice to the amateurs to take the torch and write the history of this category that represents more than half of the global offer.
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Georges Panayotis is the President & Founder of MKG Group & Hospitality ON.
Born into a family of hoteliers, Georges Panayotis left Greece at the age of 18 to study Political Science and earn a management degree at the University of Paris, Dauphine.
In 1986 he created his own company and started developing specialised marketing tools for the hotel industry.
Over the past 30 years, MKG Conseil, later to become MKG Group, became the leading European consulting firm for the hotel business, food service and tourism industries. He is also a consultant for several radio and television stations that focus on the economy.
Contact: Georges Panayotis
0033 (0)1 56 56 87 77
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