Recovering From Paris’s Price War

Cyril Guersan joined Warwick Hotels & Resorts in Paris in 2014 as a revenue analyst. He soon became a junior yield manager and today is Area Yield Manager Paris, in charge of the Warwick Paris and Hotel Westminster.   

Cyril has managed revenue through some of the most difficult times in Paris’s recent history. Here, he talks to us about the challenges the market has faced, how dropping price is never the right solution, and the growing importance of guest reviews. 

Cyril GuersanQ: You’ve been with Warwick Hotels for more than four years. What have been the biggest changes you have seen in the market during that time? And how have you adapted in your role to accommodate those changes?

Guersan: 2015 was a strong year thanks to the Middle East market. However, the end of that same year changed things completely due to the awful terrorist attacks on Paris on November 13, 2015. Since then, the hospitality industry has been doing its best to recover. Our strategy was to secure repeat guests by delivering the unique service they expect.

2016 and 2017 were directly impacted by the 2015 events. Hotels acted in a way to secure revenue and control costs. Unfortunately, some dropped their rates, thinking they would steal clients from the lower category of hotels. A real price war began even though we knew it was not the solution to get more revenues, given the absence of demand. 2017 saw a recovery in terms of occupancy, but the average rate was still hurt. 

Finally, 2018 was the year of the full recovery! Hotels were able to optimize their average rate and we were working with a healthy market demand. It enabled us to gain confidence and plan strategies to optimize RevPAR.

Q: 2017 marked a record year for hotel arrivals with Greater Paris totalling 23.6 million arrivals. What do you think was behind this growth?

Guersan: We have to keep in mind that Paris had been hurt by the terrorist attacks of 2015. With terror being present, the city was not a top destination for either tourists or business travellers. 2017 marked the time when both tourists and business travellers came back to the city. Paris is one of the most beautiful cities of the world. Its attractiveness is again at a high point, especially after been named the city to welcome the 2024 Olympic Games.

Q: STR has predicted that RevPAR and occupancies will continue to increase. Is this something you are seeing in your hotels?

Guersan: We registered positive results and a notable performance in 2018 thanks to a healthy market, until the “yellow vests” demonstrations in December 2018. The hotels of the city were impacted by a lack of occupancy. Nevertheless, no one is actually dropping rates, which is a positive. We keep on being cautious and delivering a positive message to our clients and partners.

Q: With traveller confidence returning to the city, what inbound markets and segments are showing most promise?

Guersan: The usual markets, such as the US, UK or Japan, are constantly coming to their favourite destinations. The markets that show most promise for the future are the BRICSAM countries (Brazil, Russia, India, China, South Africa and Mexico). We visit these markets a few times a year. Each market is unique, and the sales department works alongside the yield department to offer tailored deals in order to secure closeness and confidence with our new partners.

Q: What are the biggest challenges of channel management you face right now?

Guersan: OTAs undercut hotels and will tend to continue even more while their market is adding new partners into the game. I’m thinking of Airbnb particularly. They are a serious actor that both hotels and OTAs have to take into account. Their new platform inviting guests to book a private room that is located inside a boutique hotel is easy to use, modern and any app-savvy tourist will be keen to use it.

Q: What tactics are you using to drive more direct business?

Guersan: One of the best ways to drive more direct business is guest reviews. Its impact is significant on a long-term basis. TripAdvisor is an index that most of the clients or clients-to-be look at and take into account to make their decision. Then, on a distribution point of view, packages can be designed to attract the client to book their room via our booking engine or via telephone. Special attention, special rates and above all a special recognition are a few aspects that urge clients to come back via direct. 

Q: What role has technology played in this?  

Guersan: Technology such as PMS systems, RMS, and others are key-tools to a yield manager: they bring data that enables us to act with knowledge. We are able to monitor market segments and act in a way to attract them at the right time and benefit from it. Both the client and the hotelier are winners: they receive what they didn’t expect, and we receive what we planned to gain.

Q: What was the driver behind investing in a revenue strategy platform? 

Guersan: A revenue strategy system is vital for any services structure that wants to generate incremental revenues. At Warwick Hotels & Resorts we have used such a system for more than a decade. From pricing rules creation to pricing recommendations, through creating automatic alerts and providing dashboards and analysis; Duetto listens to our feedback and tends to constantly develop new functionalities towards our needs. 

Q: How has the system helped deliver positive business outcomes?

Guersan: It has helped us understand segment patterns and booking patterns, which are essential to building a strategy. Without it our pricing structure and the whole sales and revenue strategy would be basic and behind the market. 

Sarah McCay Tams, Director of Content, EMEA

Sarah joined Duetto in 2015 as a contributing editor covering Europe, Middle East & Africa (EMEA). In 2017, she was promoted to Director of Content, EMEA. An experienced B2B travel industry journalist, Sarah spent 14 years working in the Middle East, most notably as senior editor – hospitality for ITP Publishing Group in Dubai, where she headed up the editorial teams on Hotelier Middle East, Caterer Middle East and Arabian Travel News. Sarah is now based back in the UK.

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