by Georges Panayotis
Every economic sector is influenced by cycles, whether or not they are able to master them. For a long time, the hotel industry has experienced long and relatively regular cycles that allowed it to establish rules for investment. The relaunch of construction happened just when the increase in occupancy rates suggested the beginning of a room shortage. Intensive renovations of room and spaces took place every 7 years on average in order to keep with the times.
As the lamp lighter in The Little Prince would say, "from year to year the planet has turned more rapidly and the orders have not been changed." And the hotel industry has been caught up in a tumult that continues to upset the traditional model. Regularly upset by financial and geopolitical crises, the cycles can become chaotic, skipping stages with no clear vision of the next. Having begun their asset light policy, hotel groups need their owners and franchisees in order to carry out the works needed to maintain the working tool, and to invest in new concepts required by the market.
It is a fairly exceptional situation in the industrial world that can lead to a fateful discrepancy between supply and demand. The automobile industry has not renounced financing the research, concept cars, the new production lines and the marketing of new models. It relies on retailers and dealers but absorbs the major investments that are giving rise to the new generations of hybrid and electric cars.
During this time, hotel groups, listed and not, spend much of their time managing their existing assets, meaning selling them at the best price, and closing up the gaps created by on-line sales giants in their commercial distribution. The restructuring of the supply is behind schedule, and this delay is now being compensated for by new offers from the sharing economy.
There is an urgent need to snap back and very quickly redraw the landscape of the hotel industry by gaining control. The sector needs new products with the arrival of a new generation with radically different behavior. They combine their desires and needs with a certain agility that is disconcerting for marketers: luxury no longer has the same dimension, loyalty has a new meaning, conviviality is demanded and this is as evident in the use of common areas as in the eventual sharing of rooms and bathrooms. Living in a permanently connected world to facilitate everyday duties, they are receptive to another approach to personnel. A refusal to waste and a penchant for environmental protection motivate a quest for excellent value for money.
As for cars, hybrid products are looking like an interesting response, but they would need to move beyond the embryonic stage of networks they are still in. The commercial accommodations family has grown. New members are joining it and want to find their place as they have not always been well received. If they wish to play in the big league, it is possible to teach them the ways while encouraging them to grow, supporting them, and why not integrating them since they have an innovative vision of the market.
The good news is that this market is not about to collapse. The need to travel remains a powerful reality, demonstrated by steady growth in international tourist travel. But that is not a reason for all forms of accommodation to prosper at the same speed. In any restructuring project, there are agile winners as well as plodding dinosaurs chomping at the air. Which side do you want to play on?
