Comment | Wednesday, 20 May 2009

Adding value to the hospitality product

Julian Zarb

Last week, the Prime Minister made reference to the recent Harmonized index of Consumer Prices (HICP) and showed a genuine concern for the results reflected in the hospitality, recreation and culture sectors where there were sharp increases of 11.7 per cent and 3.8 per cent respectively. In those sectors that reflect a more social aspect, such as Housing, Water and Electricity and Gas - a 3.3 per cent drop was reflected. In this week’s article I would like to reflect on these results and on the possible causes for such changes during a time when we really need to be adding value and not pricing to our hospitality and tourism product.
When we take a look at the hospitality increases, the HICP reports that this was due to the fact that there were seasonal price increases in accommodation services. Perhaps a clear example of how the industry is reacting to low occupancy from the international tourism markets can be seen in the way they are trying to supplement a gap in business through an increase in domestic tourism promotional campaigns – the question is, are these sustainable? I was recently speaking to some hoteliers who actually admitted that they registered an increase in business on the local scene from food and beverage and accommodation, over the Easter period despite the fact that they had increased their prices from 2008. We need to look into the feasibility of such price adjustments and see just how we can make adjustments. This is not done by passing any increases on to the client but rather by reviewing our management processes and cost control strategies. I admit, it is all too easy to hike up prices and then blame it on the cost of living increases and additional costs of raw material, but are we using those SMART factors we all speak about during seminars, fora and workshops? So step one entails being action driven, and not reactive.
On the other hand, we also need to be creative and innovative in our product offering. With over thirty years of experience in the hospitality and tourism industry both in Malta and in the UK, I have accumulated a portfolio of experiences (indeed this is an ongoing process and we can never say we have gained enough experience in this field) to understand that what we are offering our clients in Malta and Gozo lacks the finesse, the authenticity and the uniqueness we need to create that “wow” factor. Speaking for myself, and I am sure that others will also agree here, I have given up searching for the ideal venue for real value for money and I prefer to organise my dinner parties or luncheons at home. I admit, is this really being loyal to the industry I love and support so much? But then, why can’t we get it right? Is it perhaps because we try to adopt ideas that have been a success in other locations abroad without thinking about the way these should be adapted to the local environment? Is it because we tend to complicate our product instead of following the simple method and the more unique experience? On a recent day-visit to Gozo, I dined in a very simple and quaint restaurant in one of the more typical villages, it was, for us anyway, one of the best experiences of uniqueness and value for money we have ever had over these last few years.
In a nutshell then, adding value to the hospitality and tourism product need not mean increased prices but rather a matter of being creative, innovative and using the simple method to manage this industry by using SMART factors.


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20 May 2009

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