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The impact of global trends on hospitality industry

Cathy Enzfull professor in strategy and The Lewis G. Professor of Innovation and Dynamic Management at the School of Hotel Administration at Cornell University has been doing some thinking on this topic, and gave us these 10 trends for our Analytic Hospitality Executives to focus on.

With the rise of millennial consumers businesses will need to be more transparent and tech savvy, with a strong focus on empathy and customer connection. Technology is essential for this demographic and they will expect technology to power check-in, payment, eating, and shopping.

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They will also actively engage in social media like Twitter, Yelp, Facebook, and TripAdvisor to complain. Millennials will expect a deeper link between tourism services and how they manage their everyday lives.

Culture buffs, LGBT and multi-generational travelers are looking for unique and novel experiences.

However, don't count out the aging baby boomers that are living longer, are rethinking how to define retirement, and placing their energy in more creative pursuits. Political Tensions and Terrorism — Around the world citizens have responded to increased government involvement with distrust and have begun to challenge entrenched political parties.

Punishing economic policies and austerity measures along with ethnic, cultural and religious tensions have resulted in the rise in civil unrest.

A megatrend found in Europe and likely to spread is the rise in populist movements that seek to regain national identity. The ability to efficiently deliver social services will be an ongoing challenge for governments. Countries and states with ethnic and religious tensions along with poor governance, and weak economies will breed terrorism.

Transnational and free-wheeling terrorism enabled by information technology will replace state-supported political terrorism.

The effects of globalization on the hospitality industry

In spite of collective actions to prevent, protect, and respond to terrorism, the threat will remain high in Europe and the US. Deepening Income Inequality and the Working Poor — Inequality tops the list of economic trends to watch with the US viewed as the most unequal of the world's rich nations. Many predict that Asia will be the region most affected by deepening income inequality in 2015.

Middle-income groups in many advanced economies are shrinking. Consumers struggle to pay down debt because their inflation-adjusted incomes have fallen since the 2007-09 recession. Monitoring and adjusting your health will become more important as technology moves onto the body and consumers take greater control of their health. Tracking internal biochemistry and personal fitness data will result in more engaged and empowered personal health, and telehealth remote consultation will allow for higher quality and more personalized care.

You can also expect to see more advanced devices to help people stay healthy and connect with their doctors, like devices worn on the ear due to the proximity to the temporal artery. The privacy and security of health records will become increasingly important in 2015 as medical records and online patient portals expand.

The West Africa Ebola outbreak raises new challenges in managing infection and healthy living while traveling will require more innovative wellness options. Air purification, energizing lighting, a yoga space, in-room exercise equipment, and vitamin infused shower water are just the start.

Technology Driven Self-Sufficient Travelers - Innovative technologies on a mobile platform will be expected as more individuals rely on digital concierge services. Mobile check-in and seamless connectivity across platforms and devices is now expected. With geo-location software easily available, selling locally with a focus on content marketing is expected.

Connectivity is key as more individuals are relying on information delivered through social software from virtual networks. Technology is better and smarter, and more integrated user experiences are likely.

  1. At Aria Resort and Casino in Las Vegas, guests are issued high-tech cards that detect their presence and unlock the door before they even reach it. Interested in learning more about the hospitality industry?
  2. The privacy and security of health records will become increasingly important in 2015 as medical records and online patient portals expand.
  3. It is important for hotels, tourist attractions, and restaurants to continually improve their products and services — with the most progressive gaining an edge over the competition. Overall the global economy is taking longer to recuperate from the financial problems of the last decade.
  4. Influx of international visitors International leisure travel is on the rise—Dubai International Airport has become the busiest airport in the world.

The smartphone is essential equipment for almost all employees, making it a potential tool for HR training and other workplace uses.

Sustainability and Resource Constraints — Eco-friendly practices are becoming the norm, and most hotels must have an attractive "green policy", as travelers expect hotels to have some type of environmental program in place, while few are still willing to pay more for eco-features. Critical resources such as water and power are under increasing strain leading to price increases, volatility and even shortages.

Global warming and energy use are affecting how we consume and live on a societal scale.

Top 10 Global Trends that will Impact Hospitality in 2015

Renewable energy resource and innovative projects will shape the future of resource use, while regional tensions over water will be heightened in 2015. Falling oil prices, show how easy resource constrains can change, with a dampening effect on the power of countries such as Russia and Iran, while lowering prices for jet fuel, impacting growth in air travel, even as airlines acquire new fuel-efficient jets from Boeing and Airbus and replace old fleets.

Disruption and the Sharing Economy - Emerging new business models including peer-to-peer networks life Airbnb, Uber, and Lyft, multi-sided platforms such as Google and eBay, or free business models such as Skype and Flickr will change the business landscape. As peer-to-peer networks expand and grow they will become more professional and pose stronger direct competition to traditional travel services.

Further, the growing popularity of meta search engines from big players like Google and Microsoft and the rapid growth of firms like Kayak may alter the user experience, define the mobile experience, lead to consolidation and impact partnerships with OTAs and hotels.

As OTAs consolidate and expand their relationship with customers the costs of distribution will become increasing critical. A Global Worldview — Increasing similarity and connectedness between nations, companies, and individuals. The globalized economy will be a net contributor to increased political stability in the world, although its benefits will not be universal. Continued transparency in global financial systems and free capital flows is likely.

The global market for skilled and trained employees will grow while countries with aging populations will require immigrants to fill entry jobs. Expect more human migration. The travel industry is among the largest and fastest-growing industries worldwide, forecasted to support 328 million jobs, or 10 percent of the workforce, by 2022 according to the World Travel and Tourism Council.

In general, passport holders in North America and Europe have the most freedom of travel, while passport holders in Africa, the Middle East and South Asia have the least. Chinese tourists still encounter difficulty traveling abroad with only 50 countries and territories offering visa-free or visa on arrival access for this group of travelers. Fewer People and More Data - Will staff be needed to clean rooms and provide concierge services?

As more travelers prefer technology to human beings, bypassing the front-desk, using a digital concierge, and saying good bye to bellmen and other traditional positions could be in your future.

Rethinking how to communication with guest will mean using more data and fewer staff. Recommendation engines will allow guests to obtain "good service" on an array of travel needs once handled by the hotel.

Group planners will also expect easy online planning capabilities and fast rates. While a help yourself model will focus on technology to drive service, staff will need to be better able to create and execute on a "new" model of service. Europe appears to be in an economic rut, Japan's recovery is faltering again, and China while high compared to other nations looks to have its slowest growth since 1990. The US may be the most likely to power world growth in 2015.

Emerging markets are challenged with inflation if they seek to grow as fast as they have the impact of global trends on hospitality industry the past. Brazil will be challenged by slow growth and high inflation, while South and East Asia as well as much of Arica are projected to experience the strongest growth. Overall the global economy is taking longer to recuperate from the financial problems of the last decade. So, what do you think? Are these ten forces impacting your business today?

We'd love to hear your thoughts about where the impacts will be and how you plan to deal with them. In our next post, we'll provide additional diverse perspectives from the research faculty from the CHR, and include some insight into the research projects we can expect from them in 2015. View Source About SAS SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions, SAS helps customers at more than 65,000 sites improve performance and the impact of global trends on hospitality industry value by making better decisions faster.

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