Industry Update
Opinion Article 6 August 2015

Getting burnt by your own fire

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

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"Nothing endures but change" and each day that passes we are reminded of this maxim stated by Heraclitus some 2,500 years ago that still holds true. But there are two ways to live this change: submit to it or anticipate it. That is what innovation is for, forecasting an ever-changing future before anyone else. This is true for all areas of human activity and even more so for hotel accommodations which affect daily lives.


This innovation was not spontaneously generated, but is fed by a regular observation of behavior, an organized consideration of customer expectations, attentive consultation with those closest to the users. Not so long ago Quality Circles were adopted that allowed each employee concerned to decipher the practices, to imagine solutions to improve services, suggest changes to adapt to new needs. Out of this comparison of ideas and sharing of experiences came the products and hotel services of the future.

But that was before. Before yield management upset the relationship established between clients and employees, by adding a new dimension to providing services: optimization of revenues. The game has, in part, changed in nature with the quest for the highest price possible at time T to the benefit of the hotelier and by spirit of competition, and also by the customer's quest for the best promotion. The quality for price value is strongly affected by this and is losing every reference to the "right price".

Distribution has gained considerable importance at headquarters, often rightly so, but in the meantime has also ignored new offers in terms of hotel products, the launch of new concepts and even the evolution process of actual brands. Through the butterfly effect, the optimization of commercialization costs and the drop in charges have led to a reduction in research and development, even if that means eventually appropriating concepts launched by new adventurers in hospitality. The marketing product gave way to the quest for a "Like" on social networks. The customer is asked to express their level of satisfaction but is less and less consulted for improving "servuction". And yet, it is the customer who holds the key to future changes in the product.

The new players stimulate sympathy from the public and through their original suggestions. They don't appear to be a threat for established groups that observe their progress with interest while letting them risk failure. They convince themselves there will always be time to put an option on capital when takeoff is confirmed. But the financial power of hotel groups group cannot do everything. They can be surpassed by a venture capital company banking on the future.

But even more than the financial aspect is the quest for innovation that must remain in the DNA of groups that are based on original products and have made their industrial standards evolve. That question concerns state of mind, maintenance and the broadest distribution possible for this flame that motivates personnel in their daily activities.

Tom Thumbs have defied giants, start-ups have become better capitalized mastodons than the leaders of the CAC 40 or the Dow Jones. It would be unfortunate to get burnt by some backdraft from the fire of innovation, just because one didn't take it into careful consideration when the time was right...


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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