Do you have a Blue Ocean Strategy in your hospitality development projects? - By Jose Ventura

When Dr Chan Kim and Dr Mauborgne's article was unveiled at the Harvard Business Review last year, I thought to myself, 'What will the impact be of creating a Blue Ocean strategy in the Vacation Ownership Industry?' The authors separate the business universe into two Oceans. The Red Ocean represents all industries in existence today - The known Market Place, where competitive rules of the game are well understood and where companies try to outperform their rivals in order to obtain a greater share of the existing demand. A very crowded Ocean full of sharks! The Blue Ocean is the unknown market place, untainted by competition. In this Ocean demand is created instead of fought over!

Well what then is the impact of this Blue Ocean on the Vacation Ownership?

Private Residence Clubs ('PRC') and High-End Fractional Interests ('HFI') are the answer.



Through application of the Six Rules of Demes, your Blue Ocean Strategy could transform your mixed product hospitality development and create a new market where there is ample opportunity for growth, which is both profitable and rapid. Joop Demes, leading hospitality consultant in Africa and the Indian Ocean is the visionary of the industry in this region, His rules are very simple: location, accountable operator, total control of the development, facilities and activities under control or with preference access to project members, reputable exchange company and finally - use of industry specialist companies to design the project.

If your project has all six components, then you will be swimming in the Blue Ocean, far away from the competitors. You will create an uncontested market space, making competition irrelevant, increasing and capturing demand, aligning your company system in pursuit of both differentiation and low cost.



The cognitive balance will be increased by offering a leap in value and pricing, rapidly earning the project a buzz and a loyal following in the market place. Blue and red oceans have always co-existed and always will. Practical reality demands that companies understand the strategic logic of both in order to make the wise choice.

We need to ask ourselves if we are ready for the Blue Ocean Strategy. I will say yes. As long as we follow ground rules and break the paradox of strategy. This being the becalmed and accommodative attitude of sticking with what we know instead of looking for business where there are no competitors. 'Nobody wants to buy a drill; they want to make a hole!' Its up to us to be creative and to know how to generate new needs.

The EMEA region is a perfect example of an area waiting for new creative elements that the hospitality industry has not previously offered. Over time, costs are reduced further as economies of scale kick in, due to high sales volumes that superior value generates.

The Blue Ocean Strategy together with the Six Rules of Demes will position your hospitality development in the right waters, away from the sharks.

*References: Blue Ocean Strategy, W.Chan Kim and Rene Mauborgne, Page 76 Harvard Business Review October 2004

About the Author
Jose Ventura, Managing Director of Pam Golding Leisure, joined the Pam Golding Group in May 2004 after spending several years with some of the leading global Hotels including Hyatt, Ian Schrager Hotels, Marriott, Ritz Carlton and Le Meridien. Jose a Cornell Alumnus, started as a corporate trainee with Hyatt International has worked in London, Marbella, The Middle East, The Netherlands, and Paris. Jose who is fluent in Portuguese, Spanish, French, Italian and English is an Hotelier by nature and has a great knowledge of the international hotel market and resort real estate, both from an operational and marketing point of view.

Pam Golding Leisure (Pty) Ltd
Pam Golding Leisure is the first specialized company in the EMEA Region that consults on demand analysis, product positioning, financial modeling, project management, marketing and sales for Condominium Hotels and Fractional products within the hospitality and leisure industry.

www.pamgolding.co.za/leisure

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