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Hotel Consortia internationalization and professionalization, but decreasing supply

In 2013, the room supply of voluntary hotel networks once again shrank slightly in France, as well as in the rest of Europe. While the different chains talk about adding members to their portfolios, then can not always compensate for the void left by properties that exited. Competition has pushed consortia to develop their distribution tools, narrowing the gap against hotel chains.

The share of voluntary chains in the French hotel supply remains unchanged and was still around 30% as of January 2014. However trend of a contracting domestic supply, observed over several years, means consortia supply actually decreased in 2013. It corresponds to the clean-up carried out by the different brands, that are parting with properties that are underperforming or too far from brand standards but also to hotel closings especially in rural areas due to lack of profitability, driving down the number of partners.

On the European scale, the voluntary network supply is yet supported by the international ambitions of the different chains present on the continent. Among them, Logis continued its European development plan in 2013 with the opening of a new destination, Portugal. International markets nevertheless represent only 5 % of the group’s total supply, with Spain topping the list (40 hotels and restaurants), Belgium (26 properties), Italy (23 properties), the Netherlands (18 properties), Germany (12 properties), Luxemburg (10 properties), Andorra (3 properties), and finally Portugal. Logis intends to continue its efforts in 2014, especially accelerating development in Italy and Spain, which should respectively have 30 and 60 locations by the end of the year. The network also has plans for its other markets: in its priority destinations, 31 properties in Belgium, and the less developed markets, 25 in the Netherlands, 15 in Germany and 11 in Luxemburg. This internationalisation however does not fully compensate for the decrease in their French supply (-93 hotels and -3,8% in number of rooms).

While they do not compensate for lost rooms, 38 new members of Châteaux & Hôtels Collection joined the network’s in France and Europe. The chain has added six new properties abroad to its collection, including five in its second favorite market, Italy, and one in Amsterdam. French supply is however stongly down in 2014. Moreover, Châteaux & Hôtels Collection has announced the opening of its capital to its members and its employees for spring 2014. This paradigm shift is its strategy for 2016, based on a stronger involvement of its members in the development of its network and the desire to permanently align the interests of participants with those of the brand. Network internationalization is also on the agenda for Small Luxury Hotels of the World, which achieved very good results in 2013, with an increase by 12% of its turnover and 8% of its volume of overnight stays. Over the period, the chain welcomed 55 new members, including 29 in Europe, the Middle East and Africa. 

2013 was also a good year for Preferred Hotel Group, which posted a 14% increase in the turnover of its member hotels and 20% of its number of overnight stays. In terms of development, the company welcomed 126 new members in the world over the year and established its brands in Vietnam and Burma, as well as in emerging cities such as St. Petersburg, Russia. Its presence has also been significantly enhanced in the Spanish and Colombian markets.

International properties represent nearly 50% of the development of the Spanish Hotusa Group. Of the 103 new members to the network during the first months of 2013, 53 were located outside Spain in countries such as France, Italy, the United Kingdom, the Netherlands, Turkey, Austria, the Czech Republic, Portugal, Belgium, and Russia.
But diversification also involves segmentation for Hotusa, which recently presented four new brands. Two of them are for members of the independent hotel networks, Aqualis Hotels and Homeout Places by Keytel, while the other two are for to its properties it operates (owned and leased): Ikonik Hotels and TouchHotels. Aqualis Hotels is a brand dedicated to responsible tourism and wellness, which includes hotels with thalassotherapy, balneo therapy and spa centers. Homeout Places by Keytel includes properties that are already members of the network, selected for their location in major international cities and their ability to meet the needs of business travelers. TouchHotels, for properties operated by the group, is an innovative new concept, where new technology is key in adapting each property according to customer needs. Finally, Ikonik Hotels is an innovative and colorful brand, which includes properties created from cargo container and steel structures.

Reinforcing services

Exposed to double competition, from both their direct competitors and franchise networks, consortia are doubling their efforts to make the difference and offer quality services to their members. Brands that seek to develop their online reputations are thus reinforcing their digital strategies. Several have started to overhaul their websites, like the Société Européenne de l’Hôtellerie (SEH), which brings together Inter-Hotel, Relais du Silence, P'ti Dej-Hotel and Qualys-Hotel. The network is on the verge of launching a new website and four brand sites, allowing it to combine its loyalty program and personalized mailings to customers, all available for mobile devices in five different countries. In 2013, SEH has welcomed 50 new members and increased sales by 3.2%. With a new version of, Leading Hotels of the World has also expanded its Internet ing with more advanced features and richer content in a contemporary design. In the digital series, Logis ended 2013 with 4.5 million visitors to its website, 10% more than in 2012.

To compete with other integrated chains and other franchise networks, Logis also played the loyalty card. At the beginning of 2013, it set up their new loyalty program, O'Logis, which was deployed in eight countries and sent to all customers of its hotels and restaurants group, whether business or leisure. The new strategy has paid off a year since its launch, the program has been adopted by 61,000 customers and brought a turnover of 60 million euros to the hotel network, on just over 100 million euros of total sales in 2013 (up 39% compared to the previous year). Six months before the launch of its new loyalty program, IPrefer, Preferred Hotel Group also draws a positive balance, announcing by 23% in sales and 28% in the number of visitors to the dedicated website.

Regaining control of distribution

Strengthening the services they offer to independent hoteliers, through customer loyalty and digital strategy, consortia want enhance the appeal of their the distribution of their member hotels. Distribution tools are an important argument to attract independent hoteliers experiencing difficulties with other sales channels, including online agencies. Like integrated chains, consortia focus on their distribution.
SEH for example chose to connect its properties through GDS, the IT- GDS connectivity module developed by Interface Technologies. Usually not accessible via Amadeus, Sabre, Galileo and Worldspan GDS due to the individual cost of each transaction, independent hotels hitherto deprived of a channel are now by direct connected with some 650,000 travel agents worldwide, as welle as travel managers of large corporate clients.

Small Luxury Hotels of the World makes its distribution an argument for membership. In 2013, the voluntary network was able to improve sales by 54% through its own online reservation system, constituting 37% of its total income. This has been made possible by the 5% increase in the number of visits to the brands website and the number of loyalty program members. Conventional distribution channels (travel agencies and GDS) are also up 9%, representing 52% of total turnover. Worldhotels remarks on the same subject and announced a 60% increase in less than a year, the volume of business done on the reservation site, with 40 % additional overnight stays booked. For the chain, these results should be put to the account of the total site redesign and expansion of its customer awareness through communication campaigns. Worldhotels also shows satisfaction with its accession to Roomkey, which allowed it to recover visitors who left the sites of individual chains.

The multiplication of services offered by voluntary networks and development of franchises by hotel groups further diminish the differences between voluntary and integrated chains each year. Both face the same problems of distribution and customer loyalty in a hotel world heckled by Internet and online agencies.

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