Abstract
The objective of the paper is to discuss as to why the hospitality industry must respond in time to the changing global trends. The purpose is to evaluate new developments and discuss the emerging challenges for the tourism sector, and what steps should the hospitality industry take in order to act proactively to the meet the new demands of the industry. Organizations must develop their capacities at global level to deal effectively with the emerging global trends.
Introduction
The business world of the hospitality industry is changing at bullet-train speed. Technology is advancing at a fast pace, and as compared to other sectors and industries, the tourism and hospitality industry is one of the fastest growing one. The relatively lower costs of travel along with the process of globalization have benefited the sector and thenumber of local and international tourist arrivals have increased phenomenally in the past decade. The hotel, catering and tourism industry have shown a growth that is faster than global GDP in real terms.
According to a McKinsey survey, majority of world executives feel that it is increasingly important to develop corporate strategies according to the changing global social, environmental, and business trends. This is even more important for the companies that cater to consumer segments in emerging markets, such as tourism and hospitality. Companies that fail to act on time and respond to the new trends will face a shortage of skills and resources. Thus, it is very essential to realize the importance of global trends and the need to addressing them successfully.
The Global trends
The number of consumers in emerging economies is growing at a fast rate. It is essential for any global business to realize this trend, and take the right steps in time to bring in a positive result. However, surveys show that very few companies act proactively and do not develop the right strategic moves to take full advantage of the opportunities created by the trends. Moreover, there is a growing middle-income segment, for which one needs to create lower-cost products (Stephenson, 2008) or services. Why most companies fail to respond to the new trends could be due to lack of information, resources and skills.
More than 70 percent of the executives realize the importance of understanding the new trends in developing corporate strategies. The knowledge and technology related to emerging markets and trends are most significant. A couple of the significant and emerging trends include the growing numbers of consumers, faster pace of technological innovation, higher availability of information, rising constraints on the use and availability of natural resources, etc. The adoption of progressively scientific techniques can help to manage the shift of economic activity within regions and for positive growths.
There exists a vast difference between realizing the significance to trends and taking active steps to approach them. When executives were asked about the actions taken so far to address the new trends, most of them displayed a dissatisfaction over the impact of the steps in improving profits. Many executives also suggest uncertainty that stems out from the lack of skills or resources rewired to respond to a particular trend. In many cases not taking any action can lead a company into a vicious circle, leading to a negative impact on their company’s profits. Majority of the companies are not cashing in on the full opportunities (Stephenson, 2008) presented by the trends. When inspired companies take timely action on the emerging trends and addressed the growing demands, they contribute to the society as well as create a positive image of their company.
Understanding the Tourism and hospitality businesses The tourism and hospitality sector are in the frontline of economy of any country, catering to both domestic and overseas consumers. There are continual changes in the demands and expectations of both national and international customers. The sphere of hospitality and tourism is made up of a number of industry participants and includes accommodation, restaurants, bars, business events, tour operations, tour guiding, cultural tourism, parks and resorts, etc. The hospitality industry shares many of the service providers in the tourism. Generally speaking, the industries are classified according to the products or services provided but, tourism is defined by the consumer of the product or service.
Adjusting to The changing trends One of the major trends seen in the hospitality industry is a significant rise in the number of consumers and the sector makes for more than a third of total global trade. During the past decades, the number of international tourists has risen faster than global GDP. There are numerous global trends that are impacting the hotel industry directly or indirectly. Proactive management, awareness and action on these global trends can raise the company value and reputation. Before one plans a strategy, it is essential to get aware on the current trends in the hospitality industry. The nature of the global economy is getting increasingly transparent (Lucas, 1993) with the faster movement of people, information and capital across national borders. The hospitality and tourism sector is one of the focal point of globalization and undoubtedly one of the largest traders of foreign currency. The industry not only brings the nations closer but also offers a chance for the countries facing trade imbalances to close the gap with the help of tourism and hospitality hat is rapidly evolving global marketplace. The hospitality industry makes the core of the international business and thus must be well prepared to meet the needs of the evolving environment. The hotel operations have to compete at local and international level. While it is easier to identify the different aspects of globalization, it is difficult to understand the underlying current and future trends.
Any company or brand in the hospitality industry can be in trouble if it is unaware of potential trends and how these can affect hotel operations and bottom line. There are sectors that understand how global trends can affect the company, but do not have the required resource and skills to deal with the global trend management. If the hospitality companies believe that they can maintain a competitive edge in the market without acknowledging the essentials of the current trends, need to plan their strategies. The hospitality businesses will have to think globally if they are serious about surviving the tough global competition. The sheer size of the vast tourism and hospitality sector and ever changing dynamics of this arena only add to the complexities. Companies that are unprepared to meet the competition at a global level are sure to be left behind. Along with recognizing the emerging trends in the segment, the hospitality industry needs to work on international expansion with brand positioning. It should employ certain Sales and marketing strategies (Anonymous, 2009) that capture global economies of scale and follow global delivery of services efficiently. Use of the world capital markets and cross-border employee training is an essential aspect. Relaxed limitations on foreign travel, improved internal infrastructure and higher incomes are giving a boost to the hospitality and tourism sector.
A growing concern among workers in the hospitality industry is employment insecurity, and this is because of the frequent changes in ownership that is focused on short-term performance demands. The industry will need maximum flexibility (Nejdet, 2010) for restructuring and outsourcing that is required due to fast changing ownerships. Often, the values articulated by global chains do not get transferred into practical applications at local level. Constant recognition of current agreements and restructuring of the workplace can turn these trends into positive outcomes with securing investments and jobs. It is clear that the industry is getting increasingly comprehensive in terms of products and services offers to its consumers. Many hotels are already evolved into complex and multi-activity resorts within which traditional hospitality. The ownership and management are located within one company, and these aspects are influencing the workplace.
As the majority of travelers and hotel users visit the internet exclusively when planning a tour, an adequate infrastructure for high-speed Information and communications technologies have become vital for the tourism industry. This allows for an effective customer–management relations and takes care of a variety of operations such as selection, ordering, tracking, payment and reporting with one tool. Management and workforces within tourism companies need to work with new technologies and these trends create a need for multitasking skills. There is a need to make needed adjustments to training programs in addition to traditional tasks. The development of ICTs has steered into demand and supply changes supply as the customer looks for flexible and individualized options. A consequence of the higher ICT use is the personalized tourism behavior. Social media platforms like Facebook, Twitter, blogs are an important part of hospitality and tourism industry. The adoption of social networks has led to an enhanced
(Lim, 2010) awareness among consumers and changing role of travel agents and reservation departments forever. While there is a significant growth of new web-based competitors, one sees a decline in employment within these areas. One major consequence of these developments is the changing role of travel agents and reservation departments.
Geotourism is a fast emerging sector in the tourism, and the travelers today are choosing more out-of-the-way destinations and focusing on cultural resources. According to a study, the future of the tourism and hospitality industry will depend on climate and environmental conditions. This will create a dramatic effect on the competitiveness of climate-sensitive (Carlson, 2012) destinations. The rising sea level, floods, earthquakes, for instance, can result in the loss of tourism infrastructure and damage the industry and its employment. People choose their travel destinations keeping these factors in mind. Moreover, customers are becoming increasingly concerned about the environment, and are particularly looking for sustainable travel packages that include recognition of environmental issues. The tourism resorts need to take these aspects into consideration more than others, as these could seriously influence the industry. The travel industry has learned some difficult lessons in recent times that they need better preparations to deal with earthquakes, hurricanes, tsunamis, as well as terrorist attacks.
The traveler of today may be rich on cash but is short on time. He is looking for instant and easy information and has no patience or time to find the most preferred restaurants and best lodging, or go through tons of brochures and websites. Hospitality and tourism industry should offer easier trip planning services.
When one looks at the global population, it is ageing, and there is a substantial shift towards older ages. This leads to a decrease of the proportion of younger people that makes for most of the working-age population. This is a noteworthy issue for the many sectors within tourism and hospitality that traditionally relies on the younger age group for their workforce needs. As a result of projected participation rates, of the current workforce, the tourism and hospitality sectors will have to surge their share of total national employment to meet the labor demands ( Spencer & Crick, 2011). Already, many companies in this sector are struggling to find suitable employees to sustain their business. The leading industry stakeholders need to invest training and workforce development. Some of the more aged people might move in the industry for good work opportunities, but it should be kept in mind that most of the work is very demanding and require extra effort and energy. The key areas to address by the industry are to understand the needs of their workforce and place systems continuous improvements and developments of the industry. They should offer greater value proposition so as to attract the right workforce team and attract more workers to the sector. The industry should attract more workers to the sector and retain employees through better communication. At present, there is an inconsistency between the requisite supply of skilled labor to the tourism and hospitality industries and that which is being supplied. Both quality and the quantity of supply needs to be addressed by the industry.
The hospitality market should watch out for the millennials who are all set to take the market by storm. A Millennial is anyone born between 1980 and 2000, and it is this group that will become the core customer group for travel in the coming years. The hotel companies should directly start implementing strategies to attract these consumers and be ready to offer innovative experiences. The model for a sustained competitive advantage has changed forever in a world that is highly demanding and ever-connected. It is much more than a product, price, service, but markets are going to be based more on a trusted relationship.
Conclusion
Dynamic change is nothing new to the hospitality industry, and all its sectors are dynamic and subject to constant change. The rise of economy brands, the creation of the standardized chain hotels and other aspects make the industry is no different from other consumer economy sectors. However, changes have become principally important over the past decade and were leaving significant implications for workplace practices. There is an increased focus on financial and operational competitiveness within the multinational sector. There are some strategic recommendations to stimulate the tourism and hospitality industry. The promotions are best left to the private sector with decades of experience. Improved infrastructure and visa services can support and promote tourism. Hospitality industry should make target marketing efforts (Anica et al, 2013) to reach travelers in far out areas by building brand awareness. Any fears and concerns, particularly of international travelers need to be addressed in time.
The customer expectations from the hotel industry are changing, particularly with exposure to overseas destinations. They expect the same level of services and technology (Rishi & Gaur, 2012) experienced overseas, and it can be a challenge for some businesses to meet those expectations. An increasing number of hotels are already modernizing their services and using mobile technology in their services. They are seeking ways to engage social networking sites and effective communication skills to improve their tourism and hospitality services. The rising consumer awareness and an increase in his expectations about quality and getting value for money services is forcing the hospitality industry to change its ways.
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