The fall of Thomas Cook marks the end of an era
To have a deep vision of the present and future of the industry after the bankruptcy of the British giant, we have interviewed Pablo Delgado, CEO of Mirai and professor at JSF Travel & Tourism Business School
Today we speak with Pablo Delgado, CEO of Mirai, an expert in technology and hotel distribution, with whom we deal with the challenges of the new scenario of current tourist distribution. Pablo is a professor at JSF Travel & Tourism Business School where he participates this year as director and professor of the Cancun and Tenerife editions of the Optimizing Distribution Strategies in Travel & Tourism program, on hotel distribution that JSF organizes between October and November.
How do you think hotels should act in the present situation?
The fall of Thomas Cook marks the end of an era and confirms that hotels must redefine their distribution model much more according to the year 2020. A faster adaptation to digitalization is necessary and to know how to function successfully in a totally online environment. Living in past models is no longer sustainable, so traditional intermediaries must demonstrate that their value proposition is still valid so as not to be the following. If they do they will add up and stay.
So the challenge is to adapt and diversify?
The main hotel challenge is to understand what is happening and why. The traditional marketing model was based on the fact that there were others who understood and solved that problem for them, doing a great business and deserved it. But technology has radically transformed customer habits, and the model based on others understanding it for you is no longer enough. It has lasted a lot in fact. The hotelier has the obligation to understand well what happens, choose the most appropriate operators and adapted to the current distribution context and bet on a certain diversification to avoid risks such as Thomas Cook.
And what to do with the controversial price parity?
Disparities are not something new and have always existed. Instead, the Internet has put them at the touch of a click and thus generated a chaos in the distribution. But it is not the parity between channels the problem since customers are used to seeing that the same can cost differently depending on where you buy it. On the other hand, as clients, we still have a hard time understanding how the direct channel has a worse price than many OTAs and this is a big problem. First of profitability and then of image and to the hotels that will never have the credibility necessary to create a link with the client.
The first requirement to promote direct sales and to create loyalty programs and other various strategies is to regain control of the price. Many hotels create great direct selling strategies that only end in cost and frustration being their mistake not to regain control of the price before.
The great difficulty of controlling the price is that you question your relationships with the distribution and in many cases we talk about relationships of years and even friendship. Recovering control of your distribution is not an easy and much less friendly job and hence its problem. As it is not and on top of it is uncomfortable, many begin ignoring it. The paper endures everything as they say.
How is the new scenario affecting people and the way teams work?
This new environment demands new professional profiles especially in relation to new technologies. In the hotel industry there is a lot of talent in operations, the hotel business and increasingly in revenue management. On the other hand, there is a great shortage of distribution knowledge and the loss that this generates is incalculable. Recall that the distribution cost has the same weight in the GOP as the ADR and occupation variables. Instead, the cost is the great forgotten. For this reason, a lot of talent is needed in the plots of online sales, distribution, digital marketing or traffic capture and more “small” or “smart” data analysis than “big data”. This for many is a complete recycling since they are completely new skills in many cases, but it is key to understanding the ecosystem and better face the current transformation of the sector.
JSF Travel & Tourism Business School programs run by Pablo Delgado are held from October 29-31 in Cancun, and November 25-27 in Tenerife. To delve into the content, registration and programming, you can access the programs through the JSF website: www.jsftraveltourism.com. Those interested can request enrollment in the program by sending an email to email@example.com.