How Innovation Strengthens the Hotel Portfolio

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"The worst thing you can do as an entrepreneur in a crisis is to do nothing. But right now it's important to be active and to invest."</div>
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Erich Falkensteiner
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After the first part of the in-depth interview focused on Erich Falkensteiner as a person and his company(ies), the second part deals with COVID-19. In an interview with Joachim Leiter from ADDITIVE, the entrepreneur looks back on the challenges of the past year and talks about how Falkensteiner Hotels and Residences are dealing with the pandemic.

<h3 class="interview-question">On the current extraordinary situation due to the COVID 19 pandemic: What should hotels focus on in times of crisis? How are you dealing with the current situation?</h3>
Unfortunately, many hoteliers are doing the following: Bury their heads in the sand, cut costs and remain in a state of shock. We are trying to do the opposite. For example, we invested in TV advertising in Austria for the first time in the challenging year 2020. On the one hand, we were accommodated in terms of price due to the current situation, but the main reason for us was: when others just stop advertising, you get more visibility and increase brand awareness.In Austria, we have a supported brand awareness of 89% and according to the ranking of the magazine Gewinn, we are the up-and-comer of the year as the most valuable brand - we are currently ranked 26th, and we are talking about all brands here, not only from the tourism industry. We continue this "against-the-current-thinking" in the investment area as well: when the pandemic started, we decided to rebuild the Ehrenburgerhof. As soon as the worst waves of the pandemic are over, we will be ready with a new product.

<h3 class="interview-question">And everyone was immediately sold on the project? After all, this is a high-priced product for the guest...</h3>
This is only possible if you, as a hotelier, present your financial partners with a concept that you, as an entrepreneur, stand behind 100% and can remove all uncertainties and questions from the discussion.I have clear answers to the question of why we can charge 600€ for the room: We did a market analysis of our competitors, they charge an average of 620€. In the Family Resort Lido (note: see cover picture) we will start with about 540€ in the first year, but we also offer an interactive hotel roof with ski slope, ice skating rink, bobby car track and and and an extraordinary water world. I have no doubt that guests will come. The final reason for the investment is that if tourism doesn't work in South Tyrol, it won't work anywhere else. The country is located in the middle of Europe, it is down-to-earth, nature-oriented, in short: the most beautiful country in the world, which also offers top employees. I am convinced that our concept will be accepted.

<div class="article_quote"><div class="article_quote_contain"><div class="article_quote_quote">"In a time like this, it's important to take employees with you, keep them informed and never leave them in the dark."</div><div class="article_quote_name u-text-style-main">Erich Falkensteiner</div></div></div>

<h3 class="interview-question">Speaking of employees, how did you handle this important issue during the COVID 19 crisis?</h3>
We have more than 2,000 employees, so apart from cushioning measures such as short-time work and wage compensation, you first have to survive as a company. From the very beginning, we kept our employees informed in a continuous, transparent and, above all, proactive manner through all possible channels, including many, many online meetings. In a time like this, it's important to take employees with you, keep them informed and never leave them in the dark.

Tourismus im Wandel

<h3 class="interview-question">In your opinion, will COVID-19 really change tourism in the long term, as many have predicted?</h3>
Certain things will certainly change, such as the pricing of destinations. The airline industry will probably need another two years to recover and reorganize. The airlines will certainly not repeat the mistake they made 10 years ago, which was to engage in a price war. There will probably be a new price league, in the future you will no longer fly to Mallorca for 100€, but for 400€.Secondly, the world of travel distribution will change. The big tour operators are already losers and some of them have disappeared from the market. The share of bookings through tour operators has dropped from 10-15% to 5%, and direct bookings will become even more dominant in the future. For this, a hotel needs a strong brand and good distribution – then the guest will book directly at the hotel.

<div class="article_quote"><div class="article_quote_contain"><div class="article_quote_quote">"Direct bookings will become even more dominant in the future. For this, a hotel needs a strong brand and good distribution – then the guest will book directly at the hotel.."</div><div class="article_quote_name u-text-style-main">Erich Falkensteiner</div></div></div>

<h3 class="interview-question">So does sustainability play a role?</h3>
In my humble opinion, tourism will become more sustainable. There will be less air travel, digitalization will continue, distribution channels will change. I think we will see a resurgence of the summer visitor, who prefers destinations close to home. A three-day shopping trip to Dubai now has a rather negative connotation and certainly doesn't bring any recognition in today's society. While this is a sustainability issue, it is not a direct effect of the Corona pandemic. It accelerated a lot of things, but it did not fundamentally change them.

‍Part three of the in-depth interview with Erich Falkensteiner provides insights into the topic of digitalization in the hotel industry as well as online marketing in the vacation hotel industry.