Transforming the Hotel Industry and Its Implications for Small and Medium Hotels

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The example is Mauritius, but this scenario is true for numerous regions. With an average occupancy rate of 48% during peak season, small and medium hotels (SMHs) in Mauritius are no longer competitive as compared to large hotels (LHs). SMHs are challenged to survive in a market where competing solely on price no longer guarantees sustainability for the future. At the end of this article download the PDF for a detailed report by the University of Mauritius.

Small and medium sized hotels in Mauritius must adopt innovative business models in order to regain a foothold in the country’s changing accommodation marketplace, according to a new study published in the Pertanika Journal of Social Sciences and Humanities.

Mauritius is an African island nation in the Indian Ocean, more than 1,000 kilometers east of Madagascar. Tourism is expected to grow significantly on the tropical island in 2018, as the government aims for an annual target of 2 million visitors, up from 1.32 million visitors in 2017. Hotels form a vital sector of the economy, with large impacts on business development, job creation and the inflow of foreign currency

The sector is also exposed to the impacts of transformations in the global travel industry, especially disruptive business models such as Airbnb and advances in communication technologies. For instance, millennials have a greater expectation of high-end technology guest experience in accommodations as compared to repeat tourists. Large hotels have clear innovation strategies to meet modern travelers’ expectations, while small and medium hotels have been slow to transform their businesses.

“With an average annual occupancy rate of 48 per cent during the peak season, small and medium hotels are no longer competitive, in comparison with the large hotels in Mauritius,” elaborates Vijayelaksmee Goorah of the Open University of Mauritius in Réduit, Moka. Goorah co-authored the paper examining the impacts of business model transformations on the country’s smaller hotels with colleague Shireen Panchoo of Mauritius’ University of Technology in Pointe aux Sables.

Using literature reviews, structured and semi-structured interviews, as well as questionnaires, the study sought to identify weaknesses in the current business models of small and medium hotels and highlight the innovations necessary to secure a more promising future.

“These hotels are in a good position to rethink their facilities and services to appeal to certain guest demographics, such as older travelers or long-stay business travelers,” says Goorah. “And by creating unique offerings targeting new customer segments, such as visitors from China, they can attract a new clientele.”

This approach, however, require smaller-scale hoteliers to reach out to potential partner organizations and to consider seeking funding support from government. Digital platforms are also identified as a means of connecting with new clients and strengthening relationships with customers.

Click here to read the PDF report.

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Juergen Thomas Steinmetz has continuously worked in the travel and tourism industry since he was a teenager in Germany (1979), beginning as a travel agent up through today as a publisher of eTurboNews (eTN), one of the world’s most influential and most-read travel and tourism publications. He is also Chairman of ICTP. His experiences include working and collaborating with various national tourism offices and non-governmental organizations, as well as private and non-profit organizations, and in planning, implementing, and quality control of a range of travel and tourism-related activities and programs, including tourism policies and legislation. His major strengths include a vast knowledge of travel and tourism from the point of view of a successful private enterprise owner, superb networking skills, strong leadership, excellent communication skills, strong team player, attention to detail, dutiful respect for compliance in all regulated environments, and advisory skills in both political and non-political arenas with respect to tourism programs, policies, and legislation. He has a thorough knowledge of current industry practices and trends and is a computer and Internet junkie.