AIRPORTS
IN CONVERSATION… Mike DeNoma
Mike DeNoma is chief executive of GLH Hotels, which owns the Guoman and Thistle Hotels brands, and is launching new brands including Every, Amba and Clermont in London and worldwide. He talks to Tom Otley
have free wifi in every hotel? It’s a joke – you don’t charge for air.
Another example is labour
GATWICK RUNWAY DOMESTIC
FLIGHTS PLEDGE
GATWICK HAS VOWED TO LAUNCH a £20 million fund to support new domestic flights if the airport is allowed to build a second runway.
The Sussex airport announced the plan following criticism
from Flybe’s CEO about its support for regional flights, and a day after Heathrow launched an advertising campaign to promote six regional cities and areas in the UK. Gatwick said that the fund would support flights around the UK for the ten years following the opening of a second runway. It could be used to incentivise airlines to introduce new domestic routes, as well as backing joint marketing campaigns with regional UK tourist boards. The airport also defended its domestic network by
stressing that it currently serves 11 UK destinations, compared to seven from Heathrow.
HEATHROW PLANS LOWER PASSENGER
CHARGES HEATHROW IS PROPOSING TO REDUCE domestic passenger charges by £10 from January 2016, under new proposals announced by the airport. The charge for airlines flying from Heathrow would be
reduced by a third, from £29.99 to £19.59 for passengers flying to UK destinations. Heathrow has also confirmed a £5 departing passenger discount for European destination passengers, from £29.59 to £24.59.
It hopes the proposed reductions, to be introduced on January 1 next year, would make both domestic connectivity and transferring at Heathrow more attractive. The changes follow recommendations made in March by the National Connectivity Task Force, which identified the need to make routes to regional airports more attractive to airlines. Heathrow has seen domestic connectivity fall from 18 routes served in 1990 to seven today.
BUYINGBUSINESSTRAVEL.COM Mike DeNoma
You are in the process of rebranding your hotels from two brands to four. But isn’t branding part of the problem rather than the solution? That’s a brilliant criticism, apart from the results. Look at Amba [Charing Cross] going from number 250 to number four on Trip Advisor. Where’s Mar- riott’s new brand in London ranked, or Shangri-La? If it’s such a beleaguered offer, how can it jump to the top four in the most competitive market in the world? It’s easy to say brands are the problem – but talk to the customer.
So what are you doing that differentiates GLH? We are putting management back into the hotels. Hotels have been de-skilled in the last 20 or 30 years, because if you’re a large brand and you are going to charge a large fee, you have to justify it, and one of the ways is taking the management out and doing it centrally. But that anaesthetised the hotels, and there is some great talent in there, but it’s under-leveraged.
Is there a lack of innovation in the hotel industry? How can any industry be cutting-edge if you don’t
productivity. How can you have an industry where you do not cross-train your staff in the hotels? Labour efficiency [in the hotel industry] isn’t managed anywhere near to as it is in other industries. It’s a great misuse of talent, not to train or multi-skill the staff. The reason is, heads of department aren’t multi- skilled themselves, so they don’t train their staff because they feel their own jobs would be threatened. The metabolic rate of this
industry is glacial, because to get a property approved and built takes years – but the digital world is hugely rapid, so this industry is caught at a crossroads.
How do you see the hotel industry evolving? The pressure from the OTAs [online travel agents] is causing everyone to look at the entire model. The OTAs are taking 25 per cent of the revenue, and the big brands get fees on top. Effectively, hotel owners are paying double commission, which is a challenge the in- dustry has. There are very few industries where that would happen and it puts a lot of pressure on owners, who have the capital at risk. There are probably US$2 trillion worth of hotel assets, and OTAs have less than US$100 billion – maybe less, only tens of billions – and the big brands have a lot less than that, so it’s kind of odd that two of the players with the least amount of capital are getting the biggest return on equity.
BBT MAY/JUNE 2015 9
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