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Innovation the cure for hotel industry challenges

Wednesday July 17 2019

Tourists enjoy the sun at a beach hotel sea front

Tourists enjoy the sun at a beach hotel sea front on January 14, 2018. PHOTO | KEVIN ODIT | NATION MEDIA GROUP 

BOBBY KAMANI
By BOBBY KAMANI
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The ever-growing internet penetration in Kenya has had an impact on the hotel industry, particularly in the manner in which rooms are booked, which has seen the emergence of online travel agencies.

This channel of booking rooms is critical to the industry in addition to facilitating a more diversified customer base. These agencies also offer a great marketing platform for hotels.

ROOM BOOKINGS

Whereas many hoteliers hold the opinion that the agents’ fees charged are too high, a lot has been achieved. In recent times, ceding to demand from hotels, the agents have rationalised distribution costs through relatively more reasonable commission rates and innovative offerings such as “Zero-Cost Rate” and “Pay at Hotel” schemes.

Hotels and online travel agents are likely to continue their marriage of convenience: The former relying on the latter for distribution and marketing and the agents banking on hotels for inventory.

However, hotels need to focus on yielding all channels of room bookings, especially from conventional domestic and international travel agents, employing revenue management strategies and appropriate technology.

This development is particularly important in addressing challenges in the hotel industry, particularly with the high staff attrition and talent crunch.

The average annual employee attrition in Kenyan hotels stands at approximately 30 per cent. While this is comparable to other industries (20-30 per cent), combined with inadequate stream of new talent graduating from hospitality colleges, it has largely contributed to the talent crunch faced by the hospitality and tourism sector today.

Hotel stakeholders are concerned that increase in room supply and numerous opportunities in parallel sectors that offer better work-life balance and remuneration are resulting in professionals shifting from the industry.

Supply of hotel rooms is outpacing talent, which is a serious issue. From investing in skills development to improving human resource practices that make working in the hotel industry better in terms of engagement, career advancement and work-life-balance, efforts need to be made to bridge this gap.

SKILLS DEVELOPMENT

For highly capital-intensive real estate developments like hotels, the yield per square foot needs to be optimal. Thus, if the food and beverage outlets recommended, branded and managed by the hotel operator do not deliver the expected return, they should have the right to look outside and get high-street brands and experts to manage them.

Food and beverage service is not necessarily a stronghold of every hotel brand. Owners should, therefore, not be tied down to one option when the performance of a key revenue department is suboptimal.

In Kenya, food and beverage occupies a sizeable portion of the hotel’s real estate and contributes 30-50 per cent of the top line on average. Owners need to understand the pros and cons of this alternative.

The industry should also take a leaf from New Age service businesses to improve safety and efficiency. Sharing-service companies like Uber and Airbnb have two-way ratings;: Customers rate them but they also rate their customers.

Such innovations are critical for the hotel industry of the future.

Mr Kamani is the managing director of Diani Reef Beach Resort & Spa. [email protected]

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