The nature of representation is changing but the philosophy behind it hasn’t, says Geoff Andrew, CEO, Worldhotels, who tells Raini Hamdi why representation has a future despite the onslaught of OTAs, sharing economy and new soft brands
What is the future of representation?
When people talk of representation, it conjures up an old-fashioned way of doing business and some have made it their mission to reinvent the word. But I think it’s exactly what we do. A hotel is under more competitive pressure right now with the chains getting bigger, OTAs getting a larger share and margins being squeezed as acquisitions outstrip room revenue growth. Hotels need representation more than ever.
Hotels need the sales reach into international markets which they could hardly afford and definitely can’t now. The nature of sales however is changing. It’s not the traditional us visiting the agents or getting RFPs; much of sales has moved online and we have had to move with it.
The idea of how you represent a hotel is also changing. We’ve become a hospitality services company. For example, we launched a Why? programme over a year ago. It forces hotels to answer a fundamental question: Why do you exist? Why should anyone stay with you versus the other hotel next door? One of the services we offer is helping a hotel to stand out in the crowd. We can also help them balance their distribution on OTAs versus their own websites.
So we put them through a whole workshop covering not just sales and marketing but all the way to service delivery. Hotels that have taken this see material changes in the way they are being reviewed online. They get higher rankings on TripAdvisor or Booking.com and this isn’t just marketing but revenue. A Cornell research shows every point you gain on one of these sites is worth 5.5 per cent in terms of your ability to drive rate up without losing volume. You can’t dismiss OTAs but if you’re working with them, at least do the best you can and try to get your visibility up.
Then we work with them on how they can get more business directly, which involves a full audit of the hotel website, booking engine, strategy to improve traffic and conversion on the website. Online is so important that we’re putting more resources in helping hotels in that area of sales. Worldhotels now has a digital account manager and experts who do the audits. We’re trying to fill the need the hotel has in terms of competing. It’s a tough world. The nature of representation is changing but the fundamental philosophy – how do we best represent your property and help you achieve the optimum in roomnights and at the right rate? – hasn’t changed. I’ve been in the business for 30 years. I started with Utell, I know how it works, and that the philosophy hasn’t changed.
What is the impact of hotel chains launching soft brands to get independent hotels into their fold?
We battle with owners who say we’re going to Hilton, Hyatt, etc, whereas before they didn’t necessarily want the big brands. But now those chains are offering soft brands – it’s ridiculously expensive but hey they got them. And of course at the other end is to pick up a tech-and-plug and you have a channel manager; it is so simple to pick up OTA business these days. We still occupy the middle ground, from hard branding on the one end to simple plug-in on the other.
The battle is the quality of service you deliver. Some hotels think they’ve figured out the technology but often they haven’t figured out the sales. It’s great to have an engine, but if you aren’t pushing business through that engine, you’re doing only half the work.
Do you consider chains your competition now rather than the other representation companies?
There are still a number of us. There are opportunities for hotels to stay independent, so while the other representation companies are still competitors they are also partners. We are all trying to protect the individual ideal against the encroachment of the big boys.
It’s going to be down to who’s giving the best value at the right price. We think the combined organisation with ALHI (Associated Luxury Hotels International, whose parent Associated Luxury Hotels bought Worldhotels in February from Boston-based private equity firm Battery Ventures) is going to give us an edge in a number of areas that will sit well with some hotels. Relais & Chateaux for instance has a certain profile; they have an F&B niche. We have done well in city hotels, even though we have resorts. Our sweet spot is business travel although we also have a lot of leisure.
How is the new parent good for you and your members?
ALHI is a good fit as they also deal with independents and are hotel people (ALHI describes itself as a global sales organisation dedicated to the meeting and incentive marketplace, handling global sales services for over 250 luxury level hotels and resorts primarily in the US.) Battery Ventures was more technology focussed; they had sold Trust and Nexus to Sabre and we didn’t fit in with their strategy.
Already, ALHI is generating leads for us. They have clients that they can’t place in their own portfolio so they pass those leads to us. As well, ALHI has a programme called Global Luxury Alliance and we’ve picked 50 or so of our hotels that fit the criteria to join this alliance so they will now benefit from the resources and expertise of ALHI’s sales team.
What’s the criteria?
They have to be luxury, upper end members, and if they have meeting facilities and are in destinations ALHI believes has the demand, we put out an invitation to them.
But all this gets bigger than meetings and incentives. Between us, we have 150-odd sales people and 600 hotels. One of the things we’re looking at is what services can we add that will benefit both organisations and members? Within the parent group, we’re evolving some ideas, for example, enlarging our loyalty programme Peak Points to potentially include ALHI hotels. We want to strengthen our proposition to give members more than what they were getting before, while ALHI is looking for a way to broaden their offerings to their hotels and their global footprint.
You were appointed CEO of Worldhotels last December. What is your mission?
To strengthen the brand. I see our World Luxury collection becoming a bigger element of what we do. I also see us developing a stronger meetings portfolio because of the opportunity we now have. I see our loyalty programme becoming a massive plus for our hotels.
Our mission has always been empowering true independence. So the question we always ask is what services do our hotels need in order to be successful? New services which we are not thinking of at the moment will emerge as we partner ALHI; the scale we have now will help us to accelerate this much faster than before.