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When providing quality service means meeting basic needsWith 2010 finally upon us, South Africa is in a tailspin of excitement. Many are looking forward to great earning potential, some are eager to make contacts with international visitors, while others are settling for the opportunity simply to catch a glimpse of their favourite soccer players.
Jean Francois Mourier, chief executive officer and founder of REVPAR GURU, was reported as saying that, “If necessity is the mother of invention, then economic challenge is the mother of innovation.
“This is certainly true of the hotel industry, as it exits a particularly challenging 2009 and enters into an uncertain 2010.”
The financial battlefield of the past year has forced hotel managers and owners to consider new ways of increasing occupancy and revenue.
Other industries rushed to make profitable the use of competitors’ information and the sophisticated predictive abilities of the Web-enabled information age, and yet many in the hotel industry continue to stick with history-based rate setting, across-the-board discounting (as a way to boost occupancy), and other time-worn tactics that have been business as usual for the better part of a century, but which are no longer effective in today’s market.
And while the boom years of the early and mid-2000s helped mask the lack of innovation on the part of industry laggards, the current economic environment is not nearly as forgiving.
As online bookings took off and online travel agencies (OTAs) rose to prominence, hotels were faced with not merely one or two sales channels but potentially hundreds.
Whereas before, hotels could rely on their own telephone-based reservations departments and a network of travel agents to generate bookings, they now saw every potential guest acting as his/her own travel agent, booking their own room and travel.
Hoteliers soon realised that they could not direct all online traffic to their own websites without sacrificing valuable bookings, and thus encountered multiple sales channels (the OTAs) that must be managed effectively by a hotel’s revenue manager to maximise occupancy and revenues per available room (revPAR).
Today’s operating environment has rewarded those hospitality enterprises that have embraced innovation and incorporated forward-thinking practices into their operating strategy.
The slim margin of error presented by the decline in business travel and the limiting of travel expense accounts has placed the leaders and followers in the hospitality industry in stark relief; for a hotel, the smallest variations in offered rates can make the difference between optimised occupancy and revPAR, and leaving money on the table.
The benefits of real-time rate adjustment and the incremental revenue enhancement it can bring are being realised already by innovators in the industry – but as the industry enters 2010, it is becoming more important than ever.
Size doesn’t matter
In a world rife with competition, every establishment is striving to be on the top 10 world’s best list. South Africa has been fortunate to hold titles on many of these lists for best vacation destination, best restaurants and best beaches, among others.
As an example of size doesn't matter, the little-known Southern Sun Al Manzil four-star hotel in Dubai recently passed the five-star Grosvenor House for the city’s top spot on one of the world’s leading travel websites. The South African-managed hotel had received dozens of five-star ratings and ebullient accolades from users of the TripAdvisor site.
Al Manzil is at the top of a list of 370 properties in Dubai, making it the only four-star hotel to feature in the top 10 hotels listed for the emirate. The resort-style hotel may be regarded as ‘low key’, but the facilities are excellent.
“A hidden gem”, “quirky”, and “a fresh and modern decor with the right touch of old Arabic” are some of the guest comments that took Al Manzil to the top spot.
Other properties in Dubai in the top 10 include the Madinat Jumeirah hotels, the Jumeirah Beach Hotel, Al Maha Desert Resort and the One & Only Royal Mirage Hotel. The Burj Al Arab, one of the most expensive hotels in the world, is only in 19th place.
Spending is not top of the list
The world-renowned Joseph Baum & Michael Whiteman Co. has created high-profile restaurants for hotels, restaurant companies, major museums and other consumer destinations. Its highlights include: the Equinox in Singapore; the world’s first food courts; five three-star restaurants in New York; and numerous first-class hotels.
It predicts that companies which follow the guidelines set below, are sure to reap the rewards:
Companies should get to terms with the present and what consumers require now, instead of thinking in pre-recession times. Consumer concerns and needs are ever evolving and with the recession easing out, their concerns have become more complex and on a deeper level as they reflect inward.
Spending is not top of the list at the moment, as many still are recovering financially and this trend should continue for at least another four to five years.
Consumers are more concerned with:
• Financial survival;
• Intimacy and friendship;
• Knowledge and intellectual growth;
• Community;
• Authenticity; and
• Comfort and safety.
Baum + Whiteman states that a complete change to become a ‘green’ environmentally friendly company is addressing the wrong issue.
Millions of people have been affected by the financial storm and require a ‘safe harbour’. Companies should capitalise on that by building emotional ties and connecting to communities. They need to audit their business based on the hot buttons listed above, as these issues will remain on the table for years to come.
Baum + Whiteman’s buzzwords for 2010 are: Authentic Neapolitan pizza; lamb riblets; too many food trucks, not enough kerb space; Latino street food; farmed trout creeps up on farmed salmon; curry and Indian-spiced fried chicken; Vietnamese sandwiches (bahn mi); gelato; global comfort food; artisan hot dogs; made-to-order ice cream; chefs turned butchers; casual comfort food; touch-screen kiosks and home delivery in fast food outlets; wood-oven cooking; more energy drinks; mood food; backyard and rooftop beehives; stevia (herb used as a sweetener); kimchee (Korean spicy pickled cabbage); urban farms; griddled burgers; free food; and homemade everything.
Staff writer
