For Whom The Digital Tolls
By Georges Panayotis, President & CEO - MKG Group
A form of e-capitalism has come into play that gives more weight to middlemen than producers. As a result, an unacceptable power struggle is developing with those who were supposed to assist the actors of the real economy and who ended up taking power and dictating their conditions. The giants of the virtual economy captured productivity levers, leaving their partners with a complex choice: to become simple purveyors of increasingly anonymous products, to leap into a costly technological race to compete on the Web, or to opt for total integration of distribution based on the strength of brands.
Caught in the middle, hotel operators are trying to loosen the vice that is squeezing their margins and investment capacity. Tomorrow mobile applications will add additional costs that will bite a bit further into the margin. In the end, digital marketing has impoverished operators, draining a good share of their business while they still assume most investments and costs.
Now it is urgent to reconsider the mechanics and justification of the different fees to explain the decreased profitability. As in agro-food, a few importers control access to the market, and big distributors are federating small producers under their banner. Each time the licensing fees come around and in the end these small producers must make the final sacrifice in order to exist on a competitive market. One of the solutions is to get back to basics, via destination marketing to give new importance to the initial motivation of clients that justifies their travel. It can only succeed through a collective effort, veritable marketing that is federating and solidary around public and private actors in charge of promoting destinations.
This is the field the battle is headed into: London or Paris? Cannes or Barcelona? Lyon or Geneva? That is the first question that an event organizer, an investment banker or a couple on a romantic trip asks. Local officials become demanding about enriching and valorizing their offer to boost their appeal. Hoteliers owe it to themselves to participate in this recovery by playing the destination card in order to build the real attractive platform of offers and events able to divert clients away from anonymous channels of online sales. Will they know how to lead a reconquest that is vital to their future?
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