As markets get complex, hoteliers call for simplicity
As markets get complex, hoteliers call for simplicity
10 MAY 2017 8:31 AM

In hotel markets seeking increased diversification and new guest bases, hoteliers have to work harder to eradicate noise, confusion and ownership worry through clear messaging, the right technology and better analyses of data.

DUBAI, United Arab Emirates—Amid all the noise of increased supply, economic diversification and enthusiastic government tourism strategies, hoteliers in the Middle East hotel industry must stay laser-focused on guest needs, sources said.

Destinations, choices and guests are becoming more complicated in terms of what they deliver, the number of them and what they demand, according to panelists at an Arabian Hotel Investment Conference session titled “Catalysts of change.” But, they said, that just means hoteliers and owners have to further simplify their messages and products.

It starts with knowing the customer, and at the root of that is technology, they said.

“We know at the moment that our margins are under pressure, as costs have soared, so the trick is how to personalize and extract data in an intelligent way. … Disruptive is that customers have such a huge scope of how and where they can choose. We need to increase our knowledge as to how customers look at travel as a whole, the way he prepares, dreams and chooses,” said Stefan Leser, group CEO of Jumeirah Group.

“How do we make sure we embrace technology, separate the noise and stay true to what we want to deliver? I cannot add to the frenzy. My role as CEO is that I have to make the calls as to where the true impact lies, and as an industry we do tend to underestimate (technology’s) impact and overestimate its time of arrival,” he said.

Alex Kyriakidis, president and managing director, Middle East and Africa, at Marriott International, said hoteliers need to know what they can’t afford not to spend as much as they need to know what they should spend on guest amenities.

“We have to be wise in an era of chaos and focus on maximum value. Loyalty members do tell us what they want, and for owners we enhance margin through global tech services in such areas as human resources, procurement and sales,” Kyriakidis said.

Owners are just as keen as hoteliers in mapping simpler, more focused futures, panelists said.

“Ecosystems have three dimensions—the journey, the experience and operational efficiencies. Our challenges are to leverage data to provide seamless experiences in mixed-use properties and to understand the shelf life of technology that has millions invested in it,” said Robert Welanetz, CEO of Majid Al Futtaim Properties.

“We relish hotels being part of our mixed-use developments as (hotels’) standards are at the highest level of all the different components,” he said, adding that as an active owner-investor he was comforted by what he heard from operators at the conference.

“There is a lot to sort out,” Welanetz said. “In demographics, travelers are starting earlier, living longer and being truly global, and they all come with nuances.”

The operators said branding is at the center of the conversation.

“If we do not meet the brand promise to the customer, we fail,” Kyriakidis said.

“There can be no friction, as we have to deliver that personalization,” said Steven Daines, CEO of the Africa and Middle East region, HotelServices, and CEO of new businesses at AccorHotels.

“The brand as a sharp profile is a clear promise, but brands never replace the human part. I see the potential of technology as an aid to commercialization and to send the right messages,” said Olivier Harnisch, CEO of Emaar Hospitality Group.

Too much of everything?
All the large hotel firms might have brand portfolios they believe they can contain and control, but for some smaller concerns, all those collected brands do cause confusion in the marketplace, some of the panelists said.

Leser said his firm will never have scale, and he thinks there are “absolute irrelevant brands out there.”

“You have (to) be critical of yourself as to what it is you can deliver. Is it possible to sustain 30 or so brands, and do they really have 30, or is it more like five or less as far as the customer is concerned? We have to have this conservation, as we all can lose a little credibility over the issue,” Leser said.

Harnisch said one way to clear up how guests perceive brands is to abandon the idea of distinct generations that supposedly have different ways of looking at the market.

“Generation Y has an affinity for technology and authenticity, but which generation does not want those?” he said.

Kyriakidis said while it was important to look at brands through the lens of customers, it’s equally important to convince owners that, in his case, Marriott was outperforming the competition.

“It is owners that we ask for more capital to stay ahead of the competition,” he said. “The answer there always lies in the share price.”

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