More than 600 professionals gathered in the meeting rooms at the Bristol Hotel this 17 and 18 March to learn from three detailed analyses of market trends, based on sector studies by MKG Hospitality, conferences by four international figures from the tourism, economic, luxury and online sales sectors, and six panels as well as a master class on the major themes of the hotel industry such as : "Do franchiser-franchisee and investor-manager relationships grow complicated in a context of a reinforced digital economy?"
Christophe Alaux, COO France, Accor :
The relationship between franchisers and franchisees is changing over time. While digital resources lie at the center of debate today, the challenges of the hotel industry cannot be reduced to the simple subject of distribution. It is nonetheless necessary to admit that we did not see OTAs coming and that they have done a remarkable job in just five years. Nonetheless, the customers belong to the hotels while the OTAs are only distributors. Each must stick to his territory. If a guest arrives through an indirect channel once it is not a problem, but if he returns a second time through this same channel then that is a problem. It is time to stop saying that the lowest rates are through OTAs and have hotels sell via their own web sites. Recently we reduced the hotel industry to BtoC, while there are many other sources of revenues such as BtoB and catering.
Loïc Giroud, COO, Sogepar Group:
In recent years brands have undergone banalization. Before, standardized brands were developed as a benchmark for quality for customers, and the higher the prices meant the higher the product quality. Today, this is no longer true and independent hotels are able to offer quality service for a reasonable price. The challenge is now to stand out on the market. As far as concerns the choice of partner, I believe that loyalty to a particular franchiser pays off and that it is possible to be more efficient with an actor-partner of long date. This is very important to us for our development with Louvre Hotels Group. Our loyalty to the group is historic since we began with the Campanile brand. Our primary expectations as a franchisee are the brand's distribution and strength. Exchanges between franchisers and franchisees are now closer and more professional; to have a quality relationship it is important to be efficient.
Olivier Carvin, Président Maranatha:
Today, changes in the hotel industry are taking place with respect to OTAs and relations with brands. We are multi-brand and nearly half of our supply is unbranded. I believe that the right strategy for a franchiser to adopt today is diversification in order to avoid being dependent on the policy of a single hotel group. The franchiser must go where it sees an advantage and must be free to choose the brand that is appropriate for each of its products and their location. When you develop a property, it is important to know whether it will be operated under a brand or launched alone. The priority remains the customers, and what they want first and foremost is a good service quality-price ratio. Today we have a price policy and everyone is looking for the lowest price. Customer satisfaction is an incontestable lever for hoteliers and our priority must be to work on this, especially in the current battle with the OTAs. To counter online agencies, our presence on Internet must be 100%.
Olivier Cohn, CEO Best Western France :
Relationships between franchisees and franchisers -or associates to cooperators for Best Western- are changing. Hoteliers have expectations regarding distribution, but also regarding subjects such as customer satisfaction and the strength of the brand. As far as OTAs are concerned, we have adopted a specific strategy: we do not partner with them unless it is in our best interest in terms of profitability. Few people expected OTAs to move so quickly in terms of catchment of hotel customers, and today we must adapt. Nonetheless, the sector's response cannot be limited to buying keywords on Google: it must include developing customer loyalty and satisfaction. We must work on this so that they generate turnover. A one-point increase in customer satisfaction on TripAdvisor corresponds on average to 12% additional revenues. Finally, I prefer our members to be faithful to the chain, but it is sometimes good to go see what is going on elsewhere, and having a varied portfolio is an advantage for an investor.
Olivier Pelat, president Europequipements:
My only obsession with my franchiser is the OTAs. As a promoter, I am well positioned to know that sprucing things up doesn't cost more, but when it comes to daily rates, it means we can sell better. Moreover, I think that loyalty towards a franchiser always pays off, even if we have all already thought about creating our own strong brand. The franchiser can bring us a real added value such as the support needed for exporting our business abroad. We can expect this from the franchiser and it is something we would be unable to do alone. In terms of financing hotel projects, the term of debt has gotten longer over the years. It used to be 10 to 12 years, while today it runs 15 to 20 years. This is something to consider in franchiser-franchisee relations because until the end of the term of debt you don't earn anything.
The relationship between franchisers and franchisees is changing over time. While digital resources lie at the center of debate today, the challenges of the hotel industry cannot be reduced to the simple subject of distribution. It is nonetheless necessary to admit that we did not see OTAs coming and that they have done a remarkable job in just five years. Nonetheless, the customers belong to the hotels while the OTAs are only distributors. Each must stick to his territory. If a guest arrives through an indirect channel once it is not a problem, but if he returns a second time through this same channel then that is a problem. It is time to stop saying that the lowest rates are through OTAs and have hotels sell via their own web sites. Recently we reduced the hotel industry to BtoC, while there are many other sources of revenues such as BtoB and catering.
Loïc Giroud, COO, Sogepar Group:
In recent years brands have undergone banalization. Before, standardized brands were developed as a benchmark for quality for customers, and the higher the prices meant the higher the product quality. Today, this is no longer true and independent hotels are able to offer quality service for a reasonable price. The challenge is now to stand out on the market. As far as concerns the choice of partner, I believe that loyalty to a particular franchiser pays off and that it is possible to be more efficient with an actor-partner of long date. This is very important to us for our development with Louvre Hotels Group. Our loyalty to the group is historic since we began with the Campanile brand. Our primary expectations as a franchisee are the brand's distribution and strength. Exchanges between franchisers and franchisees are now closer and more professional; to have a quality relationship it is important to be efficient.
Olivier Carvin, Président Maranatha:
Today, changes in the hotel industry are taking place with respect to OTAs and relations with brands. We are multi-brand and nearly half of our supply is unbranded. I believe that the right strategy for a franchiser to adopt today is diversification in order to avoid being dependent on the policy of a single hotel group. The franchiser must go where it sees an advantage and must be free to choose the brand that is appropriate for each of its products and their location. When you develop a property, it is important to know whether it will be operated under a brand or launched alone. The priority remains the customers, and what they want first and foremost is a good service quality-price ratio. Today we have a price policy and everyone is looking for the lowest price. Customer satisfaction is an incontestable lever for hoteliers and our priority must be to work on this, especially in the current battle with the OTAs. To counter online agencies, our presence on Internet must be 100%.
Olivier Cohn, CEO Best Western France :
Relationships between franchisees and franchisers -or associates to cooperators for Best Western- are changing. Hoteliers have expectations regarding distribution, but also regarding subjects such as customer satisfaction and the strength of the brand. As far as OTAs are concerned, we have adopted a specific strategy: we do not partner with them unless it is in our best interest in terms of profitability. Few people expected OTAs to move so quickly in terms of catchment of hotel customers, and today we must adapt. Nonetheless, the sector's response cannot be limited to buying keywords on Google: it must include developing customer loyalty and satisfaction. We must work on this so that they generate turnover. A one-point increase in customer satisfaction on TripAdvisor corresponds on average to 12% additional revenues. Finally, I prefer our members to be faithful to the chain, but it is sometimes good to go see what is going on elsewhere, and having a varied portfolio is an advantage for an investor.
Olivier Pelat, president Europequipements:
My only obsession with my franchiser is the OTAs. As a promoter, I am well positioned to know that sprucing things up doesn't cost more, but when it comes to daily rates, it means we can sell better. Moreover, I think that loyalty towards a franchiser always pays off, even if we have all already thought about creating our own strong brand. The franchiser can bring us a real added value such as the support needed for exporting our business abroad. We can expect this from the franchiser and it is something we would be unable to do alone. In terms of financing hotel projects, the term of debt has gotten longer over the years. It used to be 10 to 12 years, while today it runs 15 to 20 years. This is something to consider in franchiser-franchisee relations because until the end of the term of debt you don't earn anything.
