Foreign Perspectives

Archive for the ‘Business’ Category

What’s very striking is the sharp cut-off in guests at the end of the main European holiday season over here.

You can find that you’re completely full one day and then there’s next to nobody for the following week. That’s reflected in the strategies that the various tourist related businesses follow over here with pretty much everything closing down by the second week in September even though there are still quite a reasonable number of tourists still around by that time. Some hotels take the close down even more seriously and don’t reopen until June the following year which, of course, is reflected in the very sharp price increases that you find once you’re in the main holiday season: in some cases hotels double their prices.

We’re still in the completely full stage at the moment and it’s not until well into next week that we get a bit of a rest before the photojournalism festival in Perpignan fills us up again.

Unless you’re planning on putting the cash under the mattress, you’re going to need another bank or building society to put your money in when you take it out of the Northern Rock etc., but which one?

Many people will just look up the best buy tables and find that ICICI bank is right up there and move it right over. Somehow I’m not totally sure that putting your life savings in an Indian bank is such a good move. Next choice would be West Bromwich though that’s a fairly small building society, whether they could cope with the arrival of massive numbers of customers is another matter. Bank of Scotland seems the best bet to me with 6% from £5000 although that limits you to 4 withdrawals per year before the rate drops substantially.

But if you’re looking for absolute security, there’s only one choice: National Savings. 4.1 % from £5000 on their Investment Account, 5.15% from £50,000 on their Easy Access account. Deposits with them are effectively deposits in the Bank of England which can’t go bust. You can open these in the Post Office or online (note: these accounts are not the same as the Post Office savings account).

Although you’re getting a product from a restaurant, restaurants are very much in the service sector and therefore “value” is judged largely on service criteria which are generally a little peculiar.

For example, whilst you can obviously tell that, say, a brick is of higher quality than another brick at the same price through such things as the material used, how well it’s finished, and so on, for services it’s often the case that people will value a more expensive “product” more simply because it is more expensive. Thus, when people are considering two restaurants that seem otherwise similar they may well go to the one with the higher prices on the basis that they’re getting better quality, at least until they’ve had the chance to actually try out the offering.

In France, the two way pull between people wanting to get good value whilst they also get good food has a peculiar effect. Typically you’ll see extremely low “menu” prices which are there to pull in the customers yet when they get inside, anything deviating at all from that menu can result in a total bill that’s substantially more than the menu price. Locally we find that people assume that lowish prices are low simply because the restaurant is using pre-heated food (very common locally) so if they want a decent meal they avoid anywhere with prices that seem “too low” which, of course, has the effect that quite ordinary restaurants end up having to charge what would be very much over the top prices elsewhere just to indicate that they are cooking the food fresh.

Ironically, those high prices don’t produce the high level of service that you’d expect elsewhere so in practice it’s actually quite poor value on offer in comparison to comparable restaurants elsewhere. Having said that, low service levels are generally the norm in France so in comparison to other comparable French businesses they’re fine.

One of the hassles in the hotel trade is that people seem to be booking their holidays later every year so it’s really hard to plan.

For example, a week ago we had hardly anyone booked for the coming week yet now we’re virtually full. Not only that but several of the bookings which are filling us up aren’t the overnight stays that you normally expect from late bookings but quite chunky ones of three days to a week.

Now obviously we don’t want to be running out of stuff but on the other hand we don’t want to have massive stocks of perishables that we’d end up throwing out. Therefore, we find ourselves needing to do a spot of restocking tomorrow (it’s a public holiday today so that’s out).

The other problem that exists locally is that many hotels close very promptly for the year in just a few weeks or so. That’s handy for us since we stay open but I suspect that there’s a lot of last minute attempted booking going on that just ain’t happening because the hotels being sought are closed (although, funnily enough, not all are closed on the reservation systems, so beware!).

As I’m sure you noticed, all kinds of shops were stacked high with various satellite navigation units last year now that the prices have fallen into the “impulse buy” area.

The impact of that is now being felt locally in a big way in terms of the sheer number of cars going along roads that were never intended for the level of traffic that they get now. What’s also apparent is that the effect of so many people using GPS on their holidays is changing the places where they are staying.

Interestingly, in our area the effect seems to have been to send people along the old highways rather than the new ones. Since the construction of the new motorways, the majority of traffic has gone along them but now people appear to be returning to the old routes and finding that many of the hotels that formerly lived on the passing trade have long since closed down.

We’re at the very end of one of those old routes ourselves and are finding that each morning is starting with a series of panic phonecalls from various hotel owners further along the route looking for accommodation for their departing guests (or, in some cases, overflow from double bookings). For example, this morning we’d several separate calls from different hotels in a town about 45 minutes drive from us. Along that route you’ll pass around half a dozen hotels that have closed down over the years since the motorway was built which gives some idea of the traffic that this road used to have. Unfortunately, with the construction of the motorway, development of our road stopped and therefore it’s not really up to the volume of traffic that it’s starting to get (ie missing passing places and so on).

As part of the planning for the extra traffic that’s been building up (largely courtesy of GPS I suspect), they’re building a bypass for the village just beside us. However, I wonder if it would be a lot more economic to pay TomTom et al to remove the village from the routes it plans? Certainly, it’s never going to be economic to build a bypass for all the little villages that are going to be affected by GPS routing.