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#GLF18 | MKG Insight: How to enhance a holiday experience with products, service & destination?

Vanguélis Panayotis, CEO of MKG Consulting, explained the importance of capitalizing on the experience related to the tourism product, commercial accommodations or destination. The correlation between the level of satisfaction of an accommodation and its revenue makes it possible to understand that the traveler is no longer attached to the hotel alone, but to all its related and complementary activities.

"Let's talk about destinations and I suggest we take a little look back. Take Montreux. The arrival of the train, the funicular that goes up to Glion, the bankruptcy of the bank of Montreux, the creation of the Tourist Office and the Jazz festival are all significant events in terms of the evolution of overnight stays and the number of hotels. What's in it for us?

The emergence of a category of tourists.  At the time, only the high bourgeoisie had the opportunity to travel. In the post-industrialization periods of cities, they sought fresh air in Cherbourg or in the countryside. Thus, the emergence of transportation enabled the development of tourism."

"Nowadays, the phenomena are a little different. Four to five years ago: 50% of the world's population lived in cities. We no longer need just a few train lines, but planes and even low-cost airlines. All of this has altered the paradigm of destinations.

If we look at the satisfaction rate of Lisbon and Budapest, which were among the new surprises in recent years, their online reputations were extremely strong. Over the last two years, Lisbon reported +24% RevPAR and Budapest around +20%. Finally, the triptych of the appeal of the destination, the quality of the assets and eventually the brand, created value in terms of RevPAR and revenue growth. Destinations go up and down. They come and go. And their attractiveness is now a real growth factor for performance indicators.

To promote New York, they capitalize on the historical values of emigrants, how the city was founded, on the multi-culturalism and the multitude of experiences available in an urban destination. What you have not missed is that it’s a distributor that promotes the destination.

Today, this prism of destination has become extremely important. There were destinations, where for the destination to exist there needed to be a Hilton! If there was a Hilton downtown then the destination was positioned on the world map. Today, destinations radiate in many ways and operators who want to be in destinations that offer RevPAR and growth.

Choice's initiatives with Travel Top 6 and Booking’s with its tourist guides allow travellers to seek inspiration for an escapade. They will be able to be inspired by knowledge and know how to find the right deals. We are in a logic of holistic experience. We're looking for a whole experience. You can no longer fragment your travel experience. 

There was a shift from the standardized product to the experience. From the moment we move on to the experience, the accommodation product will be extremely important, but the context of the destination is just as strong.

People want local experience. Which is counterintuitive, though. People who live in urban environments: what will they look for next? When you're Parisian and you go to London. When you're Londoners and you go to New York. When you're from Berlin and you go to Barcelona. What are you going to find? An international airport, convention and conference center, bus or subway transfer, local bistro, pizzeria, etc.

Urban tourism is the vibrant side of cities and capitals. The multi-experience side that that is lived and relived. We seek something specific to cities, but with a local touch. Thus, the new concepts will fit into the dynamics and vibration of the city in order to concur with and contribute to the attractiveness of the whole destination.

Today, things are becoming more and more complex. The development of the city break was born with the generation of Erasmus. For example, I go to London to see my friend who is doing an internship. At the same time, I'm going to take the opportunity to eat at a restaurant and go out. If I have a relative who lives there, I'll go visit them. A multitude of diverse experiences need to be compacted into a much smaller number of days. In recent years, 4.4 million young people have done their studies and/or their internships away from home, which necessarily encouraged trips by family and friends. Small streams make great rivers and that is why it is increasingly complex to understand travelers’ expectations.

A few years ago, we were talking about hotel walls. It was said that in the traveler’s mind, the hotel business is a B2B term. People look for accommodations and some kind of experience, regardless of the name of the product or concept. What interests them is the experience related to this product.

This desire that we had, to reassure ourselves, to compartmentalize the subjects, to say that we must stay in commercial accommodations was not necessarily the right approach. We have to de-compartmentalize all of this! Not only in our organizations, but also in our perception of the product and the experience.

The destination is a holistic approach so a place you will love to visit, is a great place to work, study, play and travel. Because all of this is going to be brought together you will want to visit a city. Because the city is perfect for living there, it will shine and create appeal. The person who seeks fundamental things the day to day and in life, and also in travel, will try to find familiar markers as well as this little local touch.”

"Mr. Dupont flies with AirFrance, Lufthansa or easyJet depending on his needs, he will travel in a more or less statutory car using Uber or G7, he will stay in hotels and live more or less different experiences.

After travelling with AirFrance or another airline, he will be offered to dematerialize 100% of check-in and check-out. He will create his ticket with his phone, he will receive information messages, he will arrive directly at the gateway and board. In his parallel universes, Mr. Dupont lives his experiences in a transversal way.

Hoteliers know how to make good hotel rooms, work on the product and design, but the automobile industry even researches the slamming of doors to create signatures. They go much further to create their brands. Even museums, with their shops stigmatized as soporific and archaic, are now making 100% immersive experiences.”

"All this hybrid logic is becoming extremely important. The Zoku concept even reflects on the clientele mix. They need extended stay to create a place to live and animate the common areas. It is a comprehensive experience approach that does not focus on 1 or 2 nights. The product alone will not be enough to create experience. Moreover, Ritz Carlson Cruises show that a luxury brand in terms of accommodations, stay and leisure is no longer only related to a hotel. It declines its know-how and its experience in the cruise sector."

"Another important thing is the relationship between a hotel's level of satisfaction and its revenue: how does a hotel with a very high RevPAR score perform in its market? All hotels that have an NSS higher than 60 for lifestyle products, have a RevPAR that is 30% higher than the competition. In terms of income generation, this is not a mantra.

That being said, lifestyle represents only 0.7% of the supply in Paris. It's the kiss in the schoolyard: everyone talks about it, but nobody has done it. It's emerging. In France, it represents only 0.4%. These are things that are moving, that are very visible and very attractive."

"For now, it is the players coming from outside the sector who manage to reinvent our industry at its best. These are places of urban life. The real estate companies that invest in urban centers, will influence yields per square meter. How will we create an activity, multiply living spaces and make them as profitable as possible?

What sticks with us? First, there are societal changes. We are not living a digital revolution, we are living a societal revolution. We see that we are now in an urban world, a world that seeks different types of experiences. We see that we will try to fit a multitude of experiences into less time. So, the urban environment is well suited to having an extremely rich and multiple experience.

We are looking for new things and above all, will the hotel of tomorrow look like the hotel of fifteen-twenty years ago? Or are we going to jump straight into this completely hybrid logic? That's the client's perspective. That's how the customer sees hotel products."

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