The quest for future success in the international hotel industry An expedition in Africa Do you want to dance with me? By Jan Jansen

Do you want to dance with me? (2) Success Success is achieved by gaining and sustaining competitive advantage on lucrative locations. International hotel sector = highly competitive Leading question: How do I outperform my direct competitors on the short and long run?

Do you want to dance with me? (3) Answer: Sustainable competitive advantage and superior performance. With whom? -partnerships -stakeholder management How? -assets -capabilities What? -low-cost -differentiation Company DNA

Do you want to dance with me? (4) What? Low cost concept –Price is the leading element in service design (Ibis, Formule1, Motel6) Differentiation concept –Offering ‘new’ experiences (Okura) –Offering ‘new’ locations (Four Seasons) What is the product / service concept I have to implement? In the hotel sector, both concepts are not mutually exclusive. The hotel products become a commodity in which price will be the decisive factor.

Do you want to dance with me? (5) How? Assets Location Brand / Reputation Economies of scale Expertise Human resources Technology / IT Loyalty program Capabilities Environmental adaptability Organizational learning Innovative strengths Strategic alignment What are my unique assets and capabilities?

Do you want to dance with me? (6) With whom? Strategic partnerships –The number and strength of strategic partnerships (airlines, car rental companies, customer reservation systems) Stakeholder management –Analysis of and collaboration with direct and indirect stakeholders (developers, government, local communities) –Obtaining the ‘license to operate’ With whom do I need to collaborate?

Do you want to dance with me? (7) Company DNA What is the context my company emerged in? Home country culture –Language –Values, rituals, heroes and symbols Home country institutions –Societal norms or ‘rules of the game’ –Political and juridical framework What is the way of doing business I am used to? (an interfering variable that cannot be easily modified)

Do you want to dance with me? (8) The key to (future) success (1) Conrad Hilton: “Location, location, location” Gérard Pélisson (Accor): “Offering good value for money”

Do you want to dance with me? (9) The key to (future) success (2) Operational (existing hotels) Creating brand awareness and emotional appeal Strategic alignment Strategic (new hotels) Stakeholder management / Corporate citizenship

Do you want to dance with me? (10) Model for value creation Host Community Sustainability Business Profit Tourist Guest satisfaction Host Community Sustainability Business Profit Tourist Guest satisfaction ClassicContemporary

Do you want to dance with me? (11) Africa is promising Opportunities Tourism is emerging Demand > supply Rich of natural resources Relative low competition Many ‘locations’ Threats Weak tourism infrastructure Low amount of educated and skilled employees High political and economic volatility After the U.A.E., Eastern Europe and China, multinational hotel corporations have identified Africa as being a lucrative market that needs to be developed.

Do you want to dance with me? (12) Hotel Presidente: Angola Website: 5 star hotel 196 rooms 26 floors elevators (!) doctor on call (!) Average Daily Rate: 303 USD Average Daily Rate Amsterdam 2006: 200 USD

Do you want to dance with me? (13) Stakeholder management (1) Africa is a promising tourist destination BUT It needs to be developed SO Multinational hotel corporations have to collaborate with multiple stakeholders.

Do you want to dance with me? (14) Stakeholder management (2) Traditional approach: “What is in for me …” Corporate community approach: “What is in for me AND the community …” The multinational hotel corporation has to be aware about its role in the economic, societal and environmental development and preservation of local communities. Then, and only then, it will gain and sustain competitiveness and be granted with the most lucrative locations.

Do you want to dance with me? (15) Stakeholder management (3) Africa: enduring relationships are more important than contractual agreements. Invest in trust and mutual understanding: -Developers / investors -(Local) governments -Citizens -NGOs

Do you want to dance with me? (16) Rezidor Hotel Group (1) Hotel management company: “asset light” Five operating brands in different segments 300 hotels / rooms Vision “we manage brands, people, relationships and other peoples’ properties”

Do you want to dance with me? (17) Rezidor Hotel Group (2) Focus on Africa for future development in cooperation with Nordic Fund. ‘Responsible Business Program’ HOTEL Environment Employees Suppliers Customers Investors Community Government

Do you want to dance with me? (18) Rezidor Hotel Group (3) Investors -High ROI Community -Local employment -Community involvement Government -Regulatory compliance Team work: License to Operate

Do you want to dance with me? (19) Do you want to dance with me? The ‘good’ hotel is invited to develop new properties in promising markets. Reputation ↑ -Guests -Employees -Suppliers Operational costs ↓ -Lower employee turnover -Strategic alignment Likelihood future expansion ↑ Demand for hotel rooms ↑ Contribution to local development ↑ Access to the capital market ↑

Do you want to dance with me? (20) Thank you for your attention.