Financial Times

“You did it your way” before – Tourism Industry and it is time to do it again your way, without looking for an extended hand of a Minister, the Tourist Board or others, all of whom are engaged in their own games of power play. With or without the Tourism Act amended or not, with or without the new Tourism Authority – You, the young and capable leadership of the sector can do it again, provided you are together, looking ahead, and thinking outside the box. Remember the dark days after the airport attack; togetherness and collective strategic action paved the way ahead.

Hospitality 2010 – “Four Mega – Trends to shape the Future Financial Success” states the June 2006 report from Deloitte and New York University. It answers the question ‘how many drivers of change are there in our industry?’ With – ‘Far too Many.’ It goes on to state that the hospitality industry will need to address four transformative issues over the next three to five years, including brand, emerging markets, human assets and technology. These factors are expected to be key drivers in determining winners and losers through 2010 and beyond, and are likely to impact shareholder value states the report. The report shows how individual hospitality enterprises address several key intertwining trends that greatly affect the ability to seize these opportunities and achieve financial success.

Brand is expected to surpass location as the deciding factor in hotel choices, according to the report which said, “Today, virtually all travellers consider location to be extremely influential in hotel choices, compared with slightly more than half being influenced by Brand”. “Customers expect the brand promise to cover every interaction with the organization – pre stay, stay and post stay.” “If the hotel gets it right, they can expect improved customer loyalty, and guests who are loyal to their preferred brand are likely to stay more and spend more”. “We estimate that an upscale hotel chain has 200 million guest touch points annually, creating challenges in consistent delivery of the brand promise, customer relationship management and talent management”.

“In China, India and the Gulf States, both domestic and international travel is booming, due to lower air fares and emerging middle classes keen to travel for the first time. Between India and China a total of 35,000 additional hotel rooms will be required to reach the same penetration as in the developed countries, and the majority of these will be positioned in the economy and mid- market segments and these new markets pose unique challenges in politics and ownership, as well as in recruiting, training and retention of local staff,” says the report that predicts the travel and tourism spend in the US, both domestic and outbound, to increase from $830 million to a staggering $1.6 trillion by 2015 leaving room for growth, particularly at the luxury end of the market.

It also predicts that the “Aging Consumers will change the game” with baby boomers bringing a huge demographic change in the US and Europe with enormous amounts of disposable income. They are expected to live longer, be more active, travel more and desire new experiences both in terms of cultural and event based tourism. “The percentage of the population aged 65 and over in Europe is projected to increase from 15% in 2000 to nearly 25% by 2015 and increased travel by the ‘silver’ segment is likely to maintain Europe’s position as the number one tourism exporting region, delivering some 730 million travelers,” says the spokesperson who goes on to state “in addition to addressing the needs of aging consumers/travellers, the hospitality industry will need to address talent management issues, as aging population hampers the ability to find sufficient staff in some regions”.

The report also points out that “the industry is historically in the lowest quartile of technology spending within consumer businesses; however, all the executives interviewed expect to increase IT investments, particularly in reservations, distribution, loyalty programmes, and customer relationship management. In the US and Western Europe, more people relied on the Internet for travel information last year than relied on friends and acquaintances, posing significant challenges and opportunities for industry. In addition more demanding customers have come to expect more personalized service, and in the future hospitality suppliers will need to consider online room selection and check-in, personalized bed (variable firmness), and personalized in room food and beverage offering.”

It sums up as “historically, the airline industry has led the way in loyalty programmes, with travellers showing greater preferences for airline miles more than hotel points and making conscious decisions to fly the same carrier despite inconvenient schedules”. All the CEO’s interviewed for the report had said that they plan to spend more on IT and pursue efforts to interact direct with guests to maximize revenue and avoid merchant intermediary costs, which can be as high as 25% of room revenue.