HSC Group: Drive to Excellence

HSC Group is one of the leading consulting groups in today’s Georgian market. The consulting group was founded this year by three enthusiastic and energetic young professionals: Giorgi Dolidze (CEO, co-founder), David Zarnadze (co-founder and lawyer, and Davit Markhulia (co-founder and FCO).

HSC Group aims to offer high-quality service and service packages for small and medium businesses in the field of hospitality. Among the wide range of services that the company offers are: sales/marketing, revenue management, general management, accounting, working standards formation and enforcement, service management, operating for on-line reservation systems (OTA), and legal and financial analyses.

The three founders hope that they’re bringing both fresh perspectives and concrete plans to the Georgian hospitality sector. GEORGIA TODAY talked to Giorgi Dolidze and David Zarnadze to find out more about their activities and the current situation in the sector.

How was HSC Group founded?

Giorgi: Our work meant we often had to travel and visit various hotels at which we interacted with representatives of the hospitality sector. We sensed that there was a problem among Small and Medium Sized Enterprises (SME) to successfully operate in the market and maintain standards, especially in terms of service quality and adequately equipped rooms with the aim of attaining customer satisfaction. We decided to have SME as our target segment, as big businesses such as 5-star hotels do not really face such problems, supported as they are by large international companies. We founded the group in February after a period of market research to confirm our choice. We aim to help the SMEs in the hospitality sector to improve their efficiency of doing business and to meet existing market requirements.

What are your key competencies?

David: Our goal is to offer a professional service mainly to hotels, which allows them to strengthen their position in the market, to remove inefficiencies and to run their business according to modern standards. We provide services such as researching the current position of the hotel, measuring efficiencies, conducting “mystery shopper” studies, assessing the competitive environment, and SWOT analyses of the business, which enable us to suggest effective ways to overcome problems and barriers. We also assist the SME in estimating and developing relationships with partners, refinement of legal and financial activities and other important issues which are essential for the effective operation of the business.

Giorgi: Our core competencies are: operational management, financial management and legal services. When we were thinking about what services to offer, we listed every possible service a hotel might need based on market research. We found out what the market requirements were and came up with 26 types of services that are a perfect fit for them. We have partners and often do outsourcing. We also often have invited trainers.

What are the important challenges that the Georgian hospitality sector is facing today?

Giorgi: Even though the hospitality industry is developing quite dynamically, there are lots of problems, especially for SMEs, for 4- and 3-star hotels.

David: The way the hotel star rating system is regulated is a challenge in itself.

Giorgi: Yes, we actually aim to work with the Georgian government in order to develop a better system for accrediting stars to hotels, as nowadays you can find lots of hotels in Georgia that claim to be 4-star and simply aren’t. The problem is more discernible in the regions, outside of Tbilisi. What would not even be considered a 2-star hotel in Europe claims to be a 4-star in Georgia, and this is not good. Our company does not have only commercial objectives; we want to cooperate with the government in order to improve the existing standards in the hospitality sector. We’ve already had 15 orders from different companies so far, mainly from Tbilisi, but we aim to move beyond and start operating in the regions.

Is the Georgian tax system kind to the hotel business?

David: The Georgian tax system is a field that requires monitoring as our laws change regularly. One of those changes will occur from 2017; there will be some changes to the Georgian tax system which means it will be essential for companies that operate in the hospitality sector to have consultations in order to keep up with the changes.

Tell us about the training you offer hotel staff

David: We’ve had training programs in six hotels already. Our training programs tend to last one month and include training receptionists, house-keepers, and managers to smile, be approachable, and do so in a natural way. We train them in every service that is needed during the customer’s entire journey; basically in every operational, legal and financial activity, such as what packages to offer or how to deal with problematic customers. You’d be surprised the problems that exist in some hotels. There is no e-mail culture whatsoever; in some cases the staff does not even know how to answer phone inquiries.

How do you carry out “mystery shopper” research?

David: This method is stereotypically used in banks, for some reason. It’s a great way to expose problems that exist for the customer in order to improve the system. The method involves a researcher visiting the establishment as a guest and deliberately creating problems or special circumstances that the hotel staff needs to deal with. Based on these observations, and photo and audio reporting of the whole customer journey, concrete suggestions can be made to the visited hotel.

You also help companies to manage social media networks

Giorgi: Yes. Very often, companies do not know how to effectively promote their company, and end up targeting the wrong audience. This is due to the fact that they do not know who are their main audience or customers are. It is possible to effectively manage social media and, (even) with a very low budget, communicate relevant information and ensure maximum exposure.

David: The main platform in that sense is, of course, Facebook, but people from Russia, Kazakhstan, and Ukraine for example, use social network VK (vkontakte) and this should be taken into consideration if the target audience is from those countries.

What are your future plans?

Giorgi: First of all we haven't really invested much in PR and marketing; so far we’ve only developed partnerships based on our personal contacts. The strategy we've been using is mainly word-of-mouth but we do plan to increase our marketing activities. As I said, we plan to work with the Georgian National Tourism Administration to develop interesting projects. We also plan to offer business strategy plans to companies and establish relationships with companies who have the same profiles abroad in order to share even more international experience with local hotels. We also want to start working with restaurants in future. We've worked with standards that need to be maintained in hotel restaurants but we want to expand our work even more in that regard.

Natia Liparteliani