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THE MEGA TRENDS OF HOSPITALITY Comments Off on THE MEGA TRENDS OF HOSPITALITY 1803

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The world of hotel management has evolved at tremendous pace over recent years, largely driven by technologies.

In simple words these three technologies have single handedly been the enablers and disruptors.

a) The Cloud

b) Social Media

c) The Mobile Revolution

Platforms have made a logical inroad with the creation of sophisticated infrastructures, networks and connections & integrations. These elements are driving the entire industry to re-invent itself. We have seen the emergence of new distribution patterns and options. The surge of OTAs and the loss of market share from intermediary agents and tour operators, whilst direct reservations become increasingly important and strategized by hotel companies.

Social media also play an increasingly important role in driving sales, whilst hotel reputation management has become a key success component. This has given rise to innovative hotel management structures in this 21st century, and these have become totally ‘Guest-Centric’. In other words, it’s all market driven in real time, and guests dictate how quickly these changes are adopted by hotels. Failing to identify these fundamentals will likely drive hotels out of their markets.

The four phases of the hotel management cycle, as we see them at Hospitality Plus are simplified as being –

a) Pre-Booking

b) Reservation

c) In House Operations

d) Post Stay

They need managing distinctly.

So where do we see the hospitality management market going next?

As digital breakthrough speeds up, and we get compelled into implementing complex to manage hospitality solutions, it will become increasingly important to harness people around corporate objectives, corporate culture and the whole digitalization process. No single service will work in isolation, and technologies will continue being ‘people’ driven, demanding more self service solutions.

At Hospitality Plus we have gambled on a few predictions to support our strategies.

These are, in our independent view;

  1. More guest centric solutions and services to enable growth in peer to peer demand. We have gone from a B2B, to a B2C to a P2P environment, and hotels must embrace these changes.
  2. The surge in artificial inteligence have linked customer relationship management tools and yield management solutions. This delivers unprecedented marketing data. The shift from Big Data to Precision Data may even re-invent our industry.
  3. Content management must evolve and be updated continuously. Live videos and up to date photos, often guest generated and loaded, will be the trend. Obviously firewalls exist and will be applied.
  4. We are already seeing a surge in “data security – compliance – anti-intrusion” protection standards globally. These may impair on how we do business in our hospitality environment.
  5. We have moved into a ‘mobile first’ environment and seen the growth of social media influence. These have given rise to other phenomenon in our environment. Hotel reputation management in real time. Reputation impacts severely on rate plans and booking conversions. Guests do not want to be mixed with, or to be perceived as being part of bad reputation organisations. Another branding head ache!
  6. Technologies have also given rise to what we call ‘crowdsourcing – crowd sales’. Again, this is still poorly understood by the industry. Social media and mobile-data communication drives this growth. Its impacts are not properly measured yet. However hotels are warned.
  7. Hospitality ‘Block Chains’ are seeing the day. Stakeholders are being pulled onto inter-connected supply chains.
  8. Enabled by digital solutions and the cloud, more training and perhaps more business process outsourcing will become the norm.
  9. Change management has become the only ‘constant’ and this will likely drive more staff turnover and burnouts.
  10. The race for “more for less” will grow, complemented with additional pressures from open source financial markets.In a transparent world we can no longer afford to operate in isolation.

System talk to each other, and we are likely to see the emergence of growing networks with ‘value exchange protocols’.

Supply chains will become managed by artificial intelligence and the human role will evolve but remain in control.

Mass collaboration with infinite reproducibility will become the norm, and the hotel industry will not be excluded from this disruptive environment.

Who would have thought that the world’s largest taxi company owns no vehicles (Uber)?
Who would have predicted that the world’s most popular media owner creates no content (Facebook)?
Unreal it may be, but the world’s largest retailer owns no inventory (Alibaba).
Closer to our turf, who would have thought that the world’s largest accommodation provider owns no real estate (Airbnb)?

The management of hotels will be: Reinvented, Simplified and Outsourced in many ways.

Revenue & yield management will be automated with AI.

Reservation platforms will manage distribution and many other operational departments will work with third party support.

Hotels will be owned by investment funds and administered by asset managers, who will perhaps engage with multiple specialists to manage their assets.

Hotel management structures and control will evolve.

Blockchain-Digital enablers will continue changing our world.

They are not disruptive technologies as many may think. They are foundation technologies that will create fresh opportunities for hotels.

Make no mistake, the business of hotel management has evolved, but the basic principles of guest satisfaction remain unchanged.

Together, lets embrace these opportunities !

Author: Philip Taylor CEO

Hospitality-Plus.Travel

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Mauritius B2B Hospitality magazine, a quarterly publication and blog for the industry professionals. Want to reach the hospitality decision makers in Mauritius/Rodrigues? Contact us +230 57 94 64 37 or info@hospitality.mu

20 DEGRES SUD – RELAIS & CHATEAUX 0 170

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L’Explorateur is a real invitation to travel. The crossing begins with the discovery of different at- mospheres. On one side, nestled in the heart of the hotel is the stone terrace close to the pool. On the other side of the sea, you will find the bay of Grand Bay and the horizon where getaway dreams are fed.

We are seduced by the singularity of the place, captivated by the menu, the different flavors, the marriage of fine cuisine facing the sea and local products sublimated by the expertise of a passionate and creative chef.

Hidden behind a large oak door of Pointe aux Canonniers Coastal Road, L’Explorateur is the main restaurant of the 5 stars hotel 20 Degrés Sud. At its head the Chef Sanjeev Purahoo leverages his creativity and worldwide experience to amaze your taste. Let him embark you to a culinary journey with an “A La Carte” menu mixing traditional Mauritian meals, exotic gastronomic or European revisited dishes. Discover Theme Menus every Wednesday evenings : 5 courses following a monthly theme, offering the best of the Chef’s talents.

Try the famous Black Crust Half Cooked Red Tuna, one of the speciality of the house, or the Morel Mushroom Risotto accompa-nied with 24 months refined reggiano parmesan cheese… you’ll be stunned. Another amazing experience : having diner on the Lady Lisbeth, the most ancient motorboat of Mauritius. Get on board and enjoy an aperitif while cruising in Grand Bay’s water, and enjoy a 5 courses menu with your loved one, family or friends…

RESTAURANT REVIEW L’EXPLORATEUR @ 20 DEGRES SUD | GRAND BAIE

FOOD – 5 STARS

SERVICE – 5 STARS

AMBIENCE – 5 STARS

OPENING HOURS Lunch from 12.00 to 2.30pm Dinner from 7.15pm to 9.30pm

Reservation compulsory at 263 5000 or visit www.20degressud.net

BRANDING TWO BRANDS, OR NOT TO BRAND, THAT IS THE QUESTION 0 377

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“Luxury has become an exceptionally difficult territory in which to compete propositionally as well as to make adequate returns.”

Piers Schmidt, Founder of advisory firm Luxury Branding, based in London and Cape Town, explains why two local hotel groups which he has experience of working with have unveiled second brands within days and metres of each other

During September 2018 and within weeks, there were two significant announcements from The Lux Collective and Constance Hospitality Management: the two leading Mauritian hotel groups are to launch second brands – Salt and C Resorts respectively. Intriguingly, the inaugural properties of both debutant marques will be located less than a mile apart at Palmar on the East Coast of Mauritius.

What do these strikingly parallel developments tell us about the state of health and innovation capacity in the island’s hotel groups, a key player in the Travel and Tourism sector, which is forecast to contribute MUR34.7bn or 7.5% of GDP in 2018?

Judging by the recently launched website for the LUX* Collective, the success of LUX* Resorts & Hotels has emboldened Paul Jones to fabricate a house of brands, emulating the established stables managed by the global hospitality behemoths, including Hilton, Hyatt and IHG.

By adopting an opportunistic, multi-brand strategy, has Jones been inspired by the example of the merged Marriott/Starwood supergroup, which now boasts some 30 more or less discrete brands, addressing nine different segments? Or Accor surely the most innovative and dynamic of the big groups today which has overtaken Marriott, the world’s largest hotel group, with no fewer than 40 hospitality propositions of its own?

In addition to its eponymous marque, LUX*, which is now seven years old, and Salt, The Lux Collective will soon be managing two new hotel brands: Tamassa and Socio, about which we are still waiting for further detail. And that’s not to mention the Group’s successful Café LUX* franchise.

CONSOLIDATION VS. INNOVATION

What is going on here? Was it not only a few short years ago that local politicians and commentators were deeply pessimis- tic about the Mauritian tourism industry? In 2012, despite increasing supply, demand was more or less static, growing only 3.7% from 930,500 tourist arrivals in 2008 to 965,400 by the end of that year. A study conducted by the MTPA in 2012 in the is- land’s core market of France critically revealed that Mauritius was “losing its charm among French tourists.” Furthermore, the 2013 Global Travel & Tourism Competitiveness Index saw Mauritius not only yield its number one position in the sub-Saharan regional ranking to Seychelles but fall from 53rd to 58th in the overall table.

In remedy, a rapid diversification from the EURO to BRIC tourists was pursued but even in combination with a welcome liberalisation of air access occupancies hovered stubbornly in the mid-60s. The giddy days of 76%, last enjoyed in 2007 before the Eurozone crisis, seemed like a distant dream. Throughout this period, however, the four largest hotel groups (NMH, Sun, LUX* and Constance) continued to represent around 50% of the entire industry, a consolidation that did little to foster innovation.

During 2011, while we were working together on the development of the LUX* Resorts & Hotels concept and branding, I remarked to Paul Jones that Mauritian hospitality seemed to have gone dormant since I was a regular visitor a decade earlier. In 2002, we had been planning the launch of One&Only Resorts from its mother ship Le Saint Géran and preparing the re-opening of Le Touessrok, two resorts imagined and managed by the legendary South African hotelier Sol Kerzner. Even then, we had to admit, innovation, in the form of Kerzner International, came from an external catalyst.

REDISCOVERING THE MOJO

Fast forward six years and Mauritius hoteliers seem to have rediscovered their mojo. Rates and occupancies are at record levels, debt is back under control and share prices are outperforming the market. Not only can their success be seen domestically as local operators have co-developed hotels and acquired management contracts both within the Indian Ocean (Seychelles, Réunion, Madagascar and Maldives) and further afield in France (Beachcomber andLUX*), Italy, Turkey, China, UAE, Vietnam (LUX*) and Tanzania (Constance).

Until the September announcements from Lux Collective and Constance Hospitality Management, this growth in properties, owned or operated by Mauritian hotel groups, had been derived from one of two models: either by expansion of the house brand (i.e. Beachcomber, LUX*, Constance etc.) or by managing hotels, which failed to meet the ‘luxury’ specifications of those brands as independent properties (e.g. Merville Beach and Tamassa by LUX*).

This was an approach we pioneered with Sugar Beach, La Pirogue and Coco Beach (now Long Beach), the Sun Resorts hotels that were ‘Managed by’ One&Only.

During strategy reviews at One&Only and LUX*, I recall vigorous debate about the most appropriate form of brand architecture to accommodate properties like Sugar Beach and Merville that fell short of the minimum luxury (hardware) standards that had been specified for the house brands.The issue became all the more vexatious given that the service and guest experience in these 3 and 4-star properties was often on a par with that enjoyed in their fancier and more illustrious siblings.

Given these circumstances, there was al- ways the potential to introduce a second tier brand or ‘diffusion line’ under which to house these poorer cousins. Indeed, there were plenty of precedents for this ap- proach: Courtyard by Marriott was an early pioneer of brand extension but from pure- play luxury operators, Evason (Soneva), Angsana (Banyan Tree) and Vivanta (Taj) are prominent examples.

TIME FOR CHANGE

In Mauritius, this strategy met resistance for a variety of reasons. Frequently, Board directors deemed the introduction of a second brand as an unwelcome distraction from management’s proper focus, which was to grow the luxury house brand. Whether this fear was grounded or not, with access to only two or three properties to flag with a second brand, its slight physical presence and modest marketing budget would make it difficult to gain traction. Additionally, we faced an inconvenient truth: Coco Beach and Sugar Beach or Tamassa and Merville Beach were as distinct from one another as they were different from the main lines One&Only or LUX*. Would it be possible to build a credible brand if it was stretched across resorts as diverse as Tamassa and Merville Beach? To this day, the evidence suggests not as LUX* Island Resorts will not only be managing the four brands of its Lux Collective but continues to market and operate Merville Beach and Hotel le Récif in Réunion Island as independent properties. Although I am sure it has little intention of rolling out either of these as a brand, the same assumption applied to Tamassa until recently.

SO, WHAT’S CHANGED? WELL, FOUR THINGS.

First, the increasing need for customer segmentation. In common with the supply side of most industries, the fundamentals of a hotel or resort offering are very similar. The basic accommodations, facilities, food & beverage outlets and those all important immersive experiences are largely the same.

When it comes to demand, however, it is all about horses for courses. There are at least 400 brands of wristwatch available today. Their products perform the same basic function and most of them keep the time as accurately as the next. And yet most of these brands will survive because one man’s Panerai is another’s poison. So, too, with hotels and resorts. There are Aman ‘junkies’ and Four Seasons devotees that would never be seen in the lobby of The Ritz-Carlton. While there is little perceptible difference under the hood between many of the 30 Marriott brands (e.g. The Ritz-Carlton vs. St. Regis), theirs is an exercise in badge engineering.

Closer to home, a loyal client of Prince Maurice would probably feel less comfort- able at LUX* Belle Mare whose own client feels more at home there than at the St. Regis Le Morne. So long as there are sufficient numbers of customers with distinctive tastes and different levels of spending power, producers will be able to slice and dice their offerings ever more thinly to meet the needs and aspirations of precisely defined and deeply understood market segments.

Second, most global hotel companies now employ an asset-light strategy pitching themselves against one another for the same lucrative management contracts. The leading Mauritian hotel groups are no exception. Rather than developing new assets for their own account, groups may even prefer to dispose of their bricks. LUX Island Resorts Limited, for example, off-loaded Tamassa to Grit on a sale and leaseback basis for US$40m in 2016. Going forward, Mauritian operators will also be seeking to grow the distribution of their brands via the acquisition of management contracts, a model that requires no capital outlay and produces attractive annuity income, which is much cherished by stock markets but deceptively difficult to execute.

Here’s the rub, though, and our third driver of change. Owned or not, luxury has become an exceptionally difficult territory inwhich to compete propositionally as well as to make adequate returns. The capital budgets it takes to develop at this level have escalated significantly and the long-term operating costs of luxury hotels are increasingly prohibitive. As a result, there are fewer promoters developing in the luxury segment than previously and yet there is an increasing number of asset-light management companies chasing the same deals.

This double whammy produces a buyers’ market for hotel owners and however at- tractive your Brand Concept, however powerful your sales, distribution and marketing and however impressive the results you are achieving with your owned properties, third-party owners are seeking bulletproof track records achieved on behalf of investors like themselves. They crave the reassurance of a management company that is able to demonstrate repeated and sustained success in relevant markets with equivalent projects. Of equal importance, so do the banks providing the debt portion of their project financing.

In a crowded market for scarce management contracts, small local players, such as those starting to emerge from Mauritius, may still catch the eye of an owners’ representatives and their advisors and this is one of the reasons why one should never discount the value of personal relationships. Nevertheless, as negotiations proceed, it quickly becomes difficult for an ascent and unproven management company to match the metrics and ratios of a Four Seasons (with its mono brand focus) or a Marriott with its reputable stable of thoroughbred brands, each boasting reams of performance data to lend credibility to its projections. And that’s before they even mention the secret sauce, which is their global loyalty programmes.

Fourth, in small destinations, there is market saturation to factor. How many Constance or LUX* resorts can an island sustain? LUX* has three in Mauritius but would it be able to gain Tour Operator support or find even more direct business and airline seats for a fourth in the South? Constance has two resorts in each of Mauritius, Seychelles and Maldives and I know they wouldn’t want yet more rooms in the Maldives, if for no other reason than to hedge their market exposure.

On the other hand, when it comes to risk management, where better to develop more product than in the destinations where you operate successfully already? On that basis, it makes total sense to develop depth in places where you know how to operate and where both consumer and trade trust your reputation in those markets.

It’s to address this quartet of challenges that the international groups have architected carefully, segmented and regulated multi-brand portfolios. And it’s for these same reasons that the Mauritian operators are following suit.

TOWARDS A NEW MODEL OF SISTER BRANDS?

Constance Hospitality Management an- nounced its intention to launch a sister brand to Constance Hotels & Resorts to the European trade in May 2017. The result of more than a year’s development work since then, C Resorts, has been thoughtfully positioned and conceptualised not to cannibalise the Group’s luxury brand. It will offer a distinct proposition designed to appeal to long-haul leisure travellers to largely package tour destinations like Mauritius and Seychelles.

While Salt is also opening its first proof of concept hotel in Mauritius, I believe it won’t be long before we find LUX*’s seasoned sibling sprinkled in less conventional, fly and flop destinations. Salt’s promise of “meaningful” travel experiences designed – in the brand’s own words – for “cultural purists, modern explorers and mindful travellers who travel to satisfy their curiosity and challenge their perception of the world” seems better matched to the more off the beaten track destinations favoured by younger and truly free, independent travellers.

These recent developments are clearly encouraging and we wish both the new ar- rivals every success. One word of caution, however, in closing. In recent months, we have been approached by two internation- al operators whose brand aspirations have got the better of them. These are independent hotel groups both of whom have reached around 20-25 properties open and under management with another 5-10 in their pipelines. Their issue? Too many propositions and too many brands for the number of properties with not enough clear water between them. The resulting confusion in the minds of the consumer and owner communities alike now needs to be undone and the portfolio both simplified and rationalised. Although it makes interesting work for us to untangle the mess, maybe Four Seasons have had it right all along – one brand.

ABOUT PIERS

Piers Schmidt is Founder of Luxury Branding, an advisory firm based in London and Cape Town which assists luxury organisations with elevating service and transforming experiences.