Revenue Management in the Value Chain War
The Lone Ranger and the Herd Mentality
By Mario Candeias General Manager, Espinas Hotels | September 27, 2015
In the globalized world of today, with information at the tip of everyone's finger, there are millions of examples for any statement of any sort one wants to defend or argue about. Visionaries that went broke. Fools that succeeded, due to a fortunate twist of events. Players that went down and rebound. Players that didn't rebound. Others that were never down. Well, you name it and a story will pop up that will suit your purposes, whether you are in a conference room trying to sell your new product, or you are a keynote speaker wanting to evangelize your audience or even, for example, if you are writing an article for the global hotel and tourism community.
So, no point in bringing you more Steve Jobs or Warren Buffett success stories. They are out there in abundance and the trained mind should be fed up with them by now, despite their obvious educational value. Nonetheless, people who see what others don't, when others don't, tend to be the key disruptors, innovators and progress inducers. Risk takers with strong will. Better informed. Prone to action on their own, Never taking the words of others as final. Thinking by themselves, avoiding following the herd. We need a lot of those in the Tourism Industry at present; Lone Rangers who can spearhead the industry in the permanent fight for value creation.
The Industry has been experiencing great business years. More tourists, more average spend per capita, meaning more OCC and ADR in hotels, more hotels in the development pipeline, more and different distribution, and intensified air wars. Lower oil costs, a stronger dollar, favorable regional situations (ex: devalued Euro), growing middle classes, democratized airlift, improved regulatory framework, better awareness to manage and induce new Tourism flows by National Tourism Offices, all good fundamentals for our industry in the developed world and will help to deliver continued growth.
But growth induces change and change induces growth for the ones who better adapt to it.
The online world brought abundant change, from Distribution to Online Reputation. Some fortunes have been made with the reengineering in the way people "buy" Tourism. There's been a huge fight between mass global distributors and smaller merchant model players, the latter suffering the most.
As to the hotel industry, it seems that the actual status quo of OTA dominance is generally accepted. There's this herd mentality that keeps telling us of new paradigms as if new always means more. We are learning now that it actually means less for the existing players and more for the new players.