Do you want to dance with me?
The quest for future success in
the international hotel industry
An expedition in Africa
By Jan Jansen
Do you want to dance with me? (2)
Success
Success is achieved by gaining and sustaining
competitive advantage on lucrative locations.
International hotel sector = highly competitive
Leading question:
How do I outperform my direct competitors
on the short and long run?
Do you want to dance with me? (3)
Answer:
What?
-low-cost
-differentiation
How?
-assets
-capabilities
Sustainable competitive
advantage and superior
performance.
With whom?
-partnerships
-stakeholder management
Company
DNA
Do you want to dance with me? (4)
What?
What is the product / service concept I have to implement?
• Low cost concept
– Price is the leading element in service design
(Ibis, Formule1, Motel6)
• Differentiation concept
– Offering ‘new’ experiences (Okura)
– Offering ‘new’ locations (Four Seasons)
In the hotel sector, both concepts are not mutually exclusive. The hotel
products become a commodity in which price will be the decisive factor .
Do you want to dance with me? (5)
How?
What are my unique assets and capabilities?
Assets
• Location
• Brand / Reputation
• Economies of scale
• Expertise
• Human resources
• Technology / IT
• Loyalty program
Capabilities
• Environmental
adaptability
• Organizational
learning
• Innovative strengths
• Strategic alignment
Do you want to dance with me? (6)
With whom?
With whom do I need to collaborate?
• Strategic partnerships
– The number and strength of strategic partnerships
(airlines, car rental companies, customer reservation
systems)
• Stakeholder management
– Analysis of and collaboration with direct and indirect
stakeholders (developers, government, local
communities)
– Obtaining the ‘license to operate’
Do you want to dance with me? (7)
Company DNA
What is the context my company emerged in?
• Home country culture
– Language
– Values, rituals, heroes and symbols
• Home country institutions
– Societal norms or ‘rules of the game’
– Political and juridical framework
What is the way of doing business I am used to?
(an interfering variable that cannot be easily modified)
Do you want to dance with me? (8)
The key to (future) success (1)
• Conrad Hilton:
“Location, location, location”
• Gérard Pélisson (Accor):
“Offering good value for money”
Do you want to dance with me? (9)
The key to (future) success (2)
Operational (existing hotels)
• Creating brand awareness and
emotional appeal
• Strategic alignment
Strategic (new hotels)
• Stakeholder management /
Corporate citizenship
Do you want to dance with me? (10)
Model for value creation
Classic
Contemporary
Tourist
Guest satisfaction
Host Community
Sustainability
Tourist
Guest satisfaction
Business
Profit
Host Community
Sustainability
Business
Profit
Do you want to dance with me? (11)
Africa is promising
Opportunities
• Tourism is emerging
• Demand > supply
• Rich of natural
resources
• Relative low
competition
• Many ‘locations’
Threats
• Weak tourism
infrastructure
• Low amount of
educated and skilled
employees
• High political and
economic volatility
After the U.A.E., Eastern Europe and China, multinational hotel corporations
have identified Africa as being a lucrative market that needs to be developed.
Do you want to dance with me? (12)
Hotel Presidente: Angola
Website:
• 5 star hotel
• 196 rooms
• 26 floors
• elevators (!)
• doctor on call (!)
Average Daily Rate: 303 USD
Average Daily Rate
Amsterdam 2006:
200 USD
Do you want to dance with me? (13)
Stakeholder management (1)
Africa is a promising tourist destination
BUT
It needs to be developed
SO
Multinational hotel corporations have to collaborate
with multiple stakeholders.
Do you want to dance with me? (14)
Stakeholder management (2)
Traditional approach:
“What is in for me …”
Corporate community approach:
“What is in for me AND the community …”
The multinational hotel corporation has to be aware about
its role in the economic, societal and environmental
development and preservation of local communities.
Then, and only then, it will gain and sustain
competitiveness and be granted with the most lucrative
locations.
Do you want to dance with me? (15)
Stakeholder management (3)
Africa: enduring relationships are more
important than contractual agreements.
Invest in trust and mutual understanding:
- Developers / investors
- (Local) governments
- Citizens
- NGOs
Do you want to dance with me? (16)
Rezidor Hotel Group (1)
•
•
•
Hotel management company: “asset light”
Five operating brands in different
segments
300 hotels / 45.000 rooms
Vision
“we manage brands, people, relationships
and other peoples’ properties”
Do you want to dance with me? (17)
Rezidor Hotel Group (2)
• Focus on Africa for future development in
cooperation with Nordic Fund.
• ‘Responsible Business Program’
Employees
Customers
Environment
Investors
HOTEL
Government
Suppliers
Community
Do you want to dance with me? (18)
Rezidor Hotel Group (3)
Investors
-High ROI
Community
-Local employment
-Community involvement
Government
-Regulatory compliance
Team work: License to Operate
Do you want to dance with me? (19)
Do you want to dance with me?
The ‘good’ hotel is invited to develop new
properties in promising markets.
Reputation ↑
-Guests
Access to the
capital market ↑
Likelihood
future
expansion ↑
-Employees
-Suppliers
Demand for
hotel rooms ↑
Contribution to local
development ↑
Operational costs ↓
-Lower employee turnover
-Strategic alignment
Do you want to dance with me? (20)
Thank you for your attention.