First approach to develop The Cloud Business in Italian Hospitality Market

1. Public HSIA:
A Strategy for Business
Development in Italy
for The Cloud
HOTELS AND CONFERENCE CENTERS
Danilo Molaschi
Munich October 19th 2010

2. Danilo Molaschi Public HSIA: A Strategy for The
Cloud in Italy
2
The Italian Market in facts
900.561
566.483
307.510
26.568
ROOMS AVG/GRHOTELSCAT
…22.660TOTAL
31,917.7223 stars
66,54.6234 stars
84,33155 stars
Source: www.federalberghi.it

3. Danilo Molaschi Public HSIA: A Strategy for The
Cloud in Italy
3
Market Structure
• Property structure is mainly “family owned/managed”
little “chains” (average 3-5 properties)
• Few important Italian Chains (ATAhotels, Starhotels,
UNA…) with an average of 20/30 properties
• Weak penetration of big International Chains (the major
parts of their brands are in franchising)
• Most important properties are run by established
operators for long period contracts (3-5-7 years)
• Remarkable presence of “self-managed” and “box-
solutions” in big hotels (opportunity)
• Trend is to give the service free to guest

4. Danilo Molaschi Public HSIA: A Strategy for The
Cloud in Italy
4
Is the Italian Market Valuable?
• Yes, of course…
– A big Country with many hotels and many big
cities (second only to US per number of rooms – 2004 Data)
– Stable market (fragmented properties,
personal references, fidelity to providers)
– Important congress and meetings activities
– Massive usage of smartphones and personal
mobile communication devices
– Many Big Operators are interested in

5. Danilo Molaschi Public HSIA: A Strategy for The
Cloud in Italy
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The Main Operators
3 and 4 starsGuglielmo
Web-Hotel
…
Box Solutions
Chains
Big 4 and 5 stars
Some big 3 stars
Vodafone
Telecom Italia (sell 3rd
parties solutions)
Telco
Chains
Big 4 and 5 stars
Some big 3 stars
Swisscom
Hi-Port
I-Bahn
Operators
Chains
Big 4 and 5 stars
Quadriga
VDA
Otrum/Locatel/Acentic
TV Providers

6. Is The Cloud thinking of being
in the Competition?

7. Danilo Molaschi Public HSIA: A Strategy for The
Cloud in Italy
7
Suggested Strategies
Acquire a company with a good customer
base and get a remarkable presence in
the market
Acquisition
Cross-selling with operators that are
complementary with The Cloud (Local TV
Operators or Technological Suppliers)
Partnership
Local activity focused on big italian chains
and “concentric expansion” on brands
that are already customers abroad
Top Down
Start up a local commercial activity
focused on opportunities due to local
market knowledge
Bottom Up

8. Danilo Molaschi Public HSIA: A Strategy for The
Cloud in Italy
8
Strategy Analisys – Bottom Up
• PROS
– Little investment
• Sales are optimised
• Direct Marketing
• No structure required
– Organic Growth
– Easy to step back
– Diversification of
customer base
• CONS
– Slow progress
• Mature market
• Unknown Brand
• Big competition
– Big Numbers, Low
Revenues
• Some new customers
could be not strategic

9. Danilo Molaschi Public HSIA: A Strategy for The
Cloud in Italy
9
Strategy Analisys – Top Down
• PROS
– Little investment
• Sales are optimised
• Direct Marketing
• No structure required
– Organic Growth
– Little Numbers, Big
Revenues
– Optimization of
customer base
• CONS
– Slow progress
• Mature market
• Unknown Brand
• Big competition
– Not effective in the
actual market structure
• International Chains in
Franchising
• Fragmented properties

10. Danilo Molaschi Public HSIA: A Strategy for The
Cloud in Italy
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Strategy Analisys – Partnership
• PROS
– Very Little investment
• Need only a local person
to control the sales activity
– Optimised Growth
• Based on Partner’s
customer base and targets
– Optimised market scouting
• The brand is not
“exposed”
– Cross Selling Opportunities
• CONS
– Second Hand Control
– Exclusivity transfer
• It’s not easy to play both
with direct sales and
partnership’s indirect sales
– Results are depending on
Partner’s success

11. Danilo Molaschi Public HSIA: A Strategy for The
Cloud in Italy
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Strategy Analisys – Acquisition
• PROS
– Rapid Progress
• Depending on how big is
the customer base
– Optimised Investment
• What you pay is what you
get
• Structure to be decided on
the go
– Strategic Advantage
• No visibility from
competitors
– Effective Strategy for
mature markets
• CONS
– Remarkable Investment
– Specific Due Diligence
• Require the assistance of
experitise in the evaluation
of the customer base and
existing contracts
– No step back allowed

12. Danilo Molaschi Public HSIA: A Strategy for The
Cloud in Italy
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Conclusions
• Italian Market is valuable for wi-fi solution providers and
operators…
– Many and remarkable venues (hotels, congress centres…)
– Massive usage of devices
• It is a mature market with big competition
– New operators are not likely to take italian market “by storm”,
especially in the high quality segment
• Fragmented properties structure require an optimised
investment (no footprint bombing)
– Competitors have to face slow and organic growth perspective
– On the other hand this market is stable and operators can easily
defend their position

13. Danilo Molaschi Public HSIA: A Strategy for The
Cloud in Italy
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My proposal in four steps
1. Choose a strategy (among the suggested, or a
combination of them, or another one)
2. Start exploring the market with a local
person and with a short-term perspective
(six months to one year)
3. Define objectives to control the progress
4. Do the right thing when you are sure (as
soon as possible take the ultimate decision)

14. Danilo Molaschi Public HSIA: A Strategy for The
Cloud in Italy
14
Last but not least
• I have a proposal also for developing the
other 2 segments of hospitality in which
The Cloud is involved:
• RECREATION AND STADIA
• PERMANENT EVENT VALUES
• In this case the Top Down Strategy seems
to be the most viable…

15. Thanks for your attention
To start up this proposal, please get in touch…
Danilo Molaschi
+39 348 104 37 49
danilo_molaschi@yahoo.it