by Georges Panayotis
Expect the stealthy arrival of new digital services to go on. Look at Uber Pop, which rolls out in new cities, sometimes in total opposition with local authorities, putting whole towns in a turmoil as taxi drivers raise an outcry. The American group continues its forward march, even as sector professionals wait for justice to condemn this “unfair competition”. There’s something hospitality professionals should learn from this.
The strategy aims to rapidly conquer clientele who take habits; creating a market situation that is difficult to turn around. This is particularly true since the quality and diversity of services regularly surpasses that of taxis, who have held a monopoly for so long with no need to compete.
More discretely, AirBnB has announced the launch of TripLink in a partnership with Concur, an American business travel specialist. This mobile application offers business travelers a collection of individual accommodations connected to the management systems of their companies. This Self-Booking Tool is in direct competition with the offers hotel groups make to their key accounts.
These two examples highlight the urgent reactions of traditional corporations, which try to build barriers and dams, dig channels in order to contain the erosion of their clientele base, even if it means creating tension or incomprehension with their historic partners. The market evolves so quickly that short-term tactics have become more important than long-term strategic plans. Distribution is now such a priority that it almost overshadows the fact that the client is looking first and foremost for a product, a service, a result. And that he is capable of estimating its value.
The hotel industry on the whole pays the lack of any real difference between products. If hoteliers need such large distribution channels to feed their occupancy rates, it is because they have not yet created the original product that naturally attracts clients. Online distributors are flooding their clients with well-segmented offers while taking advantage of information accumulated in their databases. When the product became a commodity, its distribution cost skyrocketed. The Price/Quality ratio inversed over time. The price is set by the competition and the strong pressure from distributors, overshadowing a quality that is mediocre at best, unjustified at worst, thus encouraging the drain of potential clients toward alternatives.
It is once again time for segmentation with some real risk taking and real positioning. And if the universal product does not exist, hybrid products, which combine several categories of customers, have largely proven to be relevant. These are just experiments, but they show the right direction that involves a consideration of the need for a client who is traveling at different times of the day, with different people, with different goals. Between crisis products that control prices and innovative products for new generations, the time has come for hotels to review their equations.
Lizards leave their holes and come to life when they bask in the warm glow of the sun as warmer weather comes around. Likewise, why should clients come anywhere lacking in warmth and originality?
