Industry Update
Opinion Article 2 December 2014

Jack of all trades, master of none...

By Georges Panayotis, President & Founder of MKG Group & Hospitality ON

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Today, all hotel groups, depending on their means, are developing a digital strategy involving investments that may be counted in hundreds of millions of euros. The computerized hotel reservation tool undoubtedly deserves to be made more efficient, more convivial, more visible, but it remains just a tool. And if what is essential lay elsewhere?

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What if customers seeking a place to spend the night had a stronger will, a stronger desire, to stay in a hotel rather than an apartment share, one brand over another, one hotel more than the next based on more solid criteria than the property's ranking among Google search results or on the hotel reservations page of an OTA. A double challenge of marketing and pricing lies ahead to make customers want to stay at hotels again.

With exception to major cities, the problem hoteliers are currently facing is to stimulate arrivals, boost occupancy which has progressively dropped further to the persistence of the depressed economy. Tourists, businessmen and now corporations are tempted by money-saving alternatives, even if it means not having everything a hotel worthy of that title can offer. In a context where differentiating the kinds of accommodations available has become less and less clear, where the hotel experience has melted into the background despite official statements, marketing remains in its rightful position, to which it has even more rights. Investments in digital and referencing must not be made to the detriment of marketing and human relations.

Each brand's promise must be as clear and visible as the alternatives that have in some way won the communications and buzz battle. Each hotelier's implication needs to be daily through the development and revival of skills in reception and organization in both services and yield management. The second challenge lies in making pricing appear to be advantageous. In most cities, including those that are notoriously under capacity, it is no longer possible to use average daily rates as a lever to improve results. It even became a deterrent for customers who are lost to the hotel industry. This area deserves much consideration regarding strategy and communications.

The hospitality trade – trades– have become complex with the rise of new competition and handling of new instruments. While new generations are better prepared to combine these different skills, the work needs to be more specialized or shared between managers at headquarters and operators on the field. It is up to the prior to focus on technological developments, research in product innovation and services, brand marketing and its communication, the digital strategy and sales activities. It is up to the latter to be efficient in the personalized customer relationship, in the proximity to their community, and the success of the experiment.

"Jack of all trades, master of none." This specialization is necessary for two reasons: limiting marketing and distribution costs as much as possible within each property, so they represent no more than 8 to 12% of revenues depending on the hotel category and location and to give real autonomy to the hotelier who can then strengthen the value of the business while engaging in a veritable plan of local actions.

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Georges Panayotis

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.

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    Joëlle Renno
    MKG Group
    Phone: +33 (0) 1 56 56 87 95
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