March 2, 2024

Travel is back, but not the same as before

Philippe Garnier, Founder of WPW Performance Consulting, encourages the travel industry to stop comparing itself to 2019

WPW Performance Consulting specialises in hotel distribution, luxury sales and travel technology. Prior To WPW Performance Consulting, Philippe Garnier was IHG’s VP Third Party Distribution from 2018 to 2022, and he has been working in the hotel and hospitality industry since 2003. ITB Berlin News spoke with him in an exclusive interview about his impressions of the industry at the moment as well as his predictions for the future.

Do you think travel is back to where it was before the pandemic?
Focusing on hotels, you could say that business has changed in three main ways: Firstly, the three traditional segments (business, leisure and groups) have evolved both in their nature and in their relative importance in the business mix. Secondly, ancillary revenue streams are growing, and hotels are not always well equipped to deliver on them. Finally, technology development is essential, however at a time when margins are under pressure, it is hard to finance technology and to implement it while minimising disruption to your existing business.  

The travel industry remains one of the world’s largest employers and all of us who are lucky enough to be involved in it should contribute to its growth and sustainability.

What has changed in terms of business segments in the industry?
One of the consequences of the pandemic has been a surge of leisure travel and a change in working patterns. Even though many businesses try to get staff back in offices, it seems that most employees who can prefer a blend of working at home and working in an office. In turn, this has an impact on business travel: companies’ travel budgets have durably been cut, which accounts for fewer business trips. Travellers who blend work from office and work from home have created a new category “work from hotel” or “bleisure” where a business trip can be extended for a few days to enjoy the destination and work from there. On the groups side, an exciting development is that many hotel brands are on the verge of enabling guests to book group bedrooms as well as meeting rooms online. 

Is it hard to capture ancillary revenue?
If guests blend business and leisure during a hotel stay, chances are that they will be more receptive to additional services such as spa, golf, excursions etc. However, hotels occasionally find it difficult to deliver; hotels have struggled to hire back to full staffing levels which may result in some services not being available. Furthermore, some of the ancillary services may not be directly controlled by the hotel but rather managed by a third party. Lastly, there is complexity in integrating the booking capability of ancillary services with some hotel property management systems or central reservation systems.

Can hotels use technology to innovate faster?
As a hotel chain CIO, you typically have two objectives. The first is to maintain your existing infrastructure in a stable condition so it can support your business without interruption; one of the best ways to do this would be to never innovate! The second objective is to innovate and implement new functionalities to keep a competitive edge. 

One of the best ways to do this would be not to be encumbered by legacy systems! With constrained resources in staff and budgets, it takes an incredible amount of discipline to successfully implement technology projects, especially when everyone is already thinking of the next big thing such as AI. 

As much as it’s easy to agree that AI will have an impact on the hotel business, it is hard to tell what this will be.  Seven years ago, many were convinced that voice assistants such as Alexa would be the preferred medium to book travel, and yet this hasn’t happened. 

Are you confident about the future?
The world is complex in 2024 and it is easy to find reasons to be concerned about the future. That said, I am truly impressed at the resourcefulness and innovations of all the players I interact with. The travel industry remains one of the world’s largest employers and all of us who are lucky enough to be involved in it should contribute to its growth and sustainability. 

ITB BERLIN is a great place to meet new people and learn new things

Philippe Garnier did not hold back in his enthusiasm for ITB Berlin, praising both the show’s size and diverse scope. He emphasised that one of the highlights is “to engage with existing and former colleagues and hear updates on their lives and their businesses”, maintaining that this is not only pleasant and productive, but also essential for the industry’s international community: “This makes us feel connected and reinforces our sense of belonging.”

The advantage to a show like ITB Berlin with its wide range of destinations is that even as an industry professional, there is always something new to learn about and spark your curiosity. Philippe Garnier suggested everyone should stop at a stand representing a business or region they are not familiar with. Even if doesn’t seem like an immediate business opportunity, genuine curiosity is often rewarded in ways that are hard to predict. He cited a chance encounter he made in 2008 which led to a sustained business and long-lasting friendship: “We were faced with a business and technology problem we could not solve. A small startup came to our booth, we gave them a chance, our business problem was addressed, and this contract helped the company get to the scale of their ambitions. This is why I’m convinced that being curious, open minded and willing to learn is personally fulfilling but that it also leads to good business. Isn’t this what ITB is all about?”