Introduction
The hospitality industry is expanding extremely fast and becoming more complex requiring the industry to come up with trends early and proactive strategies to gain competitive advantage. Uysal and Williams (2013) identified that some enterprises in the industry are leaving important issues, such as foresight, vision, or perspective to chance despite the challenges that seem to be facing them in the 21st century. Companies are currently operating in a world of uncertain economic outlook requiring them to grasp and face up big issues in a rapidly changing world. Companies need to make good decisions to improve the way things are done and treat the future as though it was inevitable. The McKinsey Quarterly (2008) provides a survey on executives from across the world in the efforts to come up with the important issues that companies should be prioritizing. Vaden (2012) reminds executives the importance of self-discipline in achieving true success. He explains that shortcuts and distractions lead to failure in achieving success.
Key Points identified in the McKinsey Quarterly Survey
The survey pointed out global social, environmental, and business trends to be the most supported by executives around the world. So far few companies have acted on these global trends despite the fact that they are aware they have immense positive or negative impact on their profits (The McKinsey Quarterly, 2008).
Strategic Moves that Companies Need to Take Full Advantage of these Trends
- Increase pace on technology innovation
Increasing pace of change of technology and use of latest technology is necessary to increase competitiveness, cut costs, and influence future profits. Adoption of technology is also important in improving health and safety of the environment and preserving natural resources, such as energy (The McKinsey Quarterly, 2008).
- Increase availability and exploitation of knowledge
This can be possible through taking advantage of the increase in global labor and talent markets. Companies need scientific and data-driven management techniques to deal with economic challenges and make decisions that contribute to more opportunities other than risks.
- Take advantage of the growing number of potential consumers in the emerging economies, such as building and expanding operations in emerging markets (The McKinsey Quarterly, 2008).
Reasons Why Some Companies Have Acted and Others Have Not Acted On the Global Trends
- Higher strategic priorities
Scott, Laws, and Boksberger (2013) confirm that all enterprises in the hospitality industry prioritize on profits, competitive advantage, new and existing business opportunities, customer satisfaction, and corporate reputation, especially on usage of natural resources. Yet they have underinvested in these trends. Their actions are based on personal convictions that their decisions have an overall impact on profitability of the business. They delay decisions to act on some trends and prioritize on others.
- Lack of skills and resources to act on these trends
Some companies provide that they do not have sufficient technology and knowledge to act on these trends. Few companies have taken full advantage of the increase in global labor and talent markets. Others claim that they do not have the capital needed to invest adequately on these trends (The McKinsey Quarterly, 2008).
- Some companies have not yet determined whether to address some of these trends
Few companies report to have acquired positive results from some of these trends
Actions that companies must take to address these trends
- Attract and maintain high-skilled knowledge workers from across the globe
- Allocate more resources in research and development, especially on technology and information development
- Increase the focus on intellectual property rights protection and management
- Establishing training and development programs of workers (The McKinsey Quarterly, 2008)
- Focus on expanding business operations to take advantage of the huge potential market in emerging economies
- Focus on lowering costs of operation in emerging markets to deal with the increase in prices of products and services
- Improve skills of managers to deal with diverse cultures of workers, economic uncertainty, and global corporate culture
- Focus on environmental strategies and systems to solve environmental problems, such as use of expertise and resources to constraint on the supply and use of natural resources (The McKinsey Quarterly, 2008)
Why the Hospitality Must Respond To These Trends
The hospitality industry comprises of accommodation, food and beverage, meetings, incentives, conventions, events, clubs, gaming, entertainment, recreation, travel, and tourism sectors (Buhalis & Costa, 2006). The industry mainly provides services that consist of interactions and transactions between the customer and the members of the staff. Customers today have increased demand on unique and memorable experience from the hospitality industry. Customers want to feel that what the industry offers depicts the value for their money. Companies in this industry must, therefore, regularly engage in customer relationships to make profits. Global social, environmental, and business trends provide the hospitality industry with the potential of maximizing on opportunities and minimizing risks associated with management of customer relationships (Uysal & Williams, 2013).
Scott, Laws, and Boksberger (2013) research show that the hospitality industry has become increasingly competitive globally in the recent past as a result of increase in customer demands and service providers in the industry. An enterprise in this industry must provide its value to target customers, motivate purchase, and solve customer problems to survive. Customer value and satisfaction has become the heart of the hospitality industry. Black, Morrison, and Gregersen (2013) point out that those that have become successful are strongly committed and focused on customer relationship. The hospitality industry has increased focus on product distribution to ease the competition. Enterprises are looking for products that they can charge customers to increase their profits.
The industry is working together with researchers and experts to unravel amenities that customers want and use to increase the business profits. Enterprises will need to provide these amenities to remain desirable to customers. For example, the industry must respond to increased in customer demand for healthy living, such as availability of healthy food and gym. The number of tourists in emerging markets is increasing and will be large by 2020. Uysal and Williams (2013) predicts that the number of Chinese tourists will reach more than one hundred million and for Indiana tourists to reach more than fifty million. They will be looking for leisure that reflects prestige, upper-class ambiance, and distinctiveness. Emerging new travel markets will represent an opportunity and challenge for the hospitality industry. Global service providers in this industry must achieve and maintain consistency to benefit from this opportunity (Black, Morrison, & Gregersen, 2013).
The hospitality industry needs training and development programs that enhance the knowledge, skills, and abilities of its managers and workers (Buhalis & Costa, 2006). There is a rapidly growing demand for multi-skilled professionals in the industry. This is mainly because all levels of a service enterprise require all workers and managers to be able to perform all the functions. Services at all levels must meet established standards of performance to maintain customer relationships. The goal of training is to create new habits and knowledge that result to experience. Experience ensures actual performance levels are consistent and the standards of performance maximize customer satisfaction. The hospitality industry involves employees and customers from diverse ethnic, cultural, and religious background. Training helps improve communication and interpersonal skills necessary for quality customer relationships. The industry requires high operational costs which can be minimized with diligent and prudent management. Specific skills are also required to meet occupational and public health and safety standards (Scott, Laws, & Boksberger, 2013).
Technology advances focus on the innovation of products, services, and procedures and how these developments affect the hospitality industry. The industry is having difficulties keeping up with recent changes in technology developments (Uysal & Williams, 2013). The industry needs these changes to reduce costs of operation and improve customer relations. Cloud computing is a new concept in the industry that has the potential of reducing administrative and IT burden and costs on regular upgrading of information. Enterprises in this sector need more comprehensive management of information and view of profitability and faster reporting. The use of mobile devices, such as mobile phones, Smartphone, laptops, and tablets can help improve interaction in the check-in desk. Online reservation has become popular among customers over the years. Companies can provide registration to many clients in a short period of time, provide services to clients at any location, and reduce costs that arise from static reception desks. Data on customer preferences must be available on these devices to capture customer needs and preferences essential for improving profits and sales (Anjana & Sandeep, 2012).
The hospitality industry needs social media to improve profits. A large number of customers today use social media tools, such as Twitter, YouTube, and Facebook as their main source of information on leisure facilities, hotels, and holidays. Enterprises can also use social media to communicate to their customers, such as available promotions and acquire feedback on their services. The hospitality industry needs technology that can account for a global perspective to expand operations in emerging markets, such as international languages, accounting regulations, and working practices in different countries (Black, Morrison, & Gregersen, 2013).
The hospitality industry from architecture, marketing, and engineering should now be concerned on developing new products that have the potential of reducing environmental impact and enhancing sustainability and health. The environment is here to stay and with the increased campaign on environment protection, especially from hospitality industry customers, the industry must respond to this trend (Buhalis & Costa, 2006). There is an increase in popularity on the development of green lodgings and energy saving products, such as solar to attract customers and other stakeholders to associate with the industry (PR, 2014). There are some tourists who are self-conscious about the environment and they would like to associate themselves with environmental friendly institutions. Hotels, motels, and lodges comprise 80% of the hospitality industry which are considered to cause pollution on the environment. According to Black, Morrison, and Gregersen (2013) estimates, hotels emit about 160 to 200 kilograms per square kilometer of carbon dioxide. The hospitality industry needs to be more cautious of their activities and should know how to reduce pollution.
The hospitality industry comprises of strategies that evolve to corporate policies which in turn create guidelines for performance throughout an enterprise (Scott, Laws, and Boksberger, 2013). Some enterprises in this industry have not yet decided whether to incorporate these trends. These trends cannot influence the performance of the sector unless incorporated in the policies. Enterprises must make proactive decision regarding these trends for them to influence their performance. Customer demands are changing rapidly in this sector. Making the best use of these trends is significant in the business (Uysal & Williams, 2013).
Conclusion
Global trends identified by majority of executives to be important in any business include social, environmental, and business trends. Technology is important in reducing costs of operation, improving quality of services, and increasing efficiency of operations in the hospitality industry. The use of social media has become popular among key players in the industry. Social media has proved effective in communication among stakeholders and customers, collecting customer feedbacks, and increase the popularity of enterprises in the hospitality industry. The industry also is keen to ensure that it is environmental friendly by committing and supporting energy conservation and natural resources, for instance the use of solar means to light rooms in the industry.
Companies in this industry need to recognize the importance of these trends and develop strategies that take advantage of them as critical components of strategy development. These trends play a key strategic role in the growth and progression of the industry. The enterprises that will fail to act on them now have difficulties maximizing profits and taking advantage of the increased market share in the future. Future business survival in this industry points to three strategic dimensions that include satisfying customers through customer relationships, destination management, and territory organization, which are well covered in the trends.
References
Anjana, S., & Sandeep, M. (2012). Issues and concerns in technology decisions: the hotel operator's perspective. Worldwide Hospitality and Tourism Themes, 4(2), 174-184.
Black, J., Morrison, A., & Gregersen, H. (2013). Global explorers: the next generation of leaders. Routledge: Routledge.
Buhalis, D. & Costa, C. (2006). Tourism management dynamics. Routledge: Routledge.
PR, N. (2014, August 19). Energy management in the hospitality industry. PR Newswire US.
Scott, N., Laws, E., & Boksberger, P. (2013). Marketing tourism experiences. Taylor & Francis.
The McKinsey Quarterly (2008). How companies act on global trends: a McKinsey global survey. McKinsey Quarterly. Retrieved from http://www.mckinsey.it/storage/first/uploadfile/attach/140144/file/gltr08.pdf
Uysal, M. & Williams, J. (2013). Current issues and development in hospitality and tourism satisfaction. Routledge: Routledge.
Vaden, R. (2012). Take the stairs: 7 steps to achieving true success. Oklahoma City, OK: Perigee Book.
