The Hospitality Industry-the trends,
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The Hospitality Industry-the trends,



It is very pertinent and important to note that the hospitality industry is an ever present worldwide phenomenon. Each and every one of us is affected by it. The fast growing Malaysian and world ...

It is very pertinent and important to note that the hospitality industry is an ever present worldwide phenomenon. Each and every one of us is affected by it. The fast growing Malaysian and world economy are highly impacted by it. A prominent hotelier Mr Menon who spoke at a recently at SRIDAYA, an educational institute, shared his views on this industry.



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The Hospitality Industry-the trends, The Hospitality Industry-the trends, Presentation Transcript

  • The Speaker Praba G Menon, a self-made hotelier, grew from the ranks of bus-boy to waiter, and now commands the respect of his fellow associates as the COO of a large hotel chain in Malaysia. He is a well-known and recognised personality of the hospitality industry in Malaysia. Mr. Praba G Menon Chief Operating Officer He is enthusiastic in sharing his views on the opportunities and challenges facing the players, including the customers, in this industry. The industry is ever dynamic and exciting and so will be the talk.
  • The Moderator Anthony and a team of young adventure enthusiasts established AOS in 1976. His first job with AOS was a guide at the age of 17 years old. In 1976, he and a team of enthusiastic adventurers established Asian Overland Services Tours & Travel Sdn Bhd. His immense experiences and tireless efforts to promote eco tourism have been recognized locally and internationally with the numerous awards and accolades received. Mr. Anthony Wong Group Managing Director The Frangipani Langkawi Resorts & Spa As an established and distinguished speaker, Anthony is frequently invited to give talks and seminars on issues of the travel industry, and has featured on local television networks and media on his achievements and views on sustainable tourism. His pet project, The Frangipani Langkawi Resort & Spa is a green hotel and he hopes to make it a showcase and model to encourage other hotels to shift towards greener practices.
  • What is it defined as? It is in Service Industry, Including, Lodging Restaurants Convention centers Theme parks Cruise lines IRS, and Others ( Transportation, Shopping )
  • Top 10 Hospitality Industry Trends-2013 Increase in Traveler’s Personal Value Expect More International Visitors A second look at Refinancing Social Media & Mobile Will Be Inseparable Photo Sharing Will Dominate More Unrehearsed Marketing Videos Renewed Focus on Property Websites Content Marketing Will Replace Traditional Advertising Guests Will Crave Food, Not Celebrity Chefs More Meeting Planner Via Social networks
  • Its magnitude! A Multi Billion Dollar Business. Many Learning Centers Needs Of Trained Professionals. Changing Landscape Of Entertainment, Restaurants, Bars And Others.
  • The Faster Magnitude! Grown very fast, especially in Malaysia. the first hotel about 1957. Then from 1973, grown from a million dollar business to a multi billion dollar business, largely due to the drive by the Government & Private sectors
  • Grown, but…. Our neighbours grew faster. IRS concept is largely becoming popular. Sample IRS in Singapore – South Africa : Disneyworld, etc Then there are new concepts : Home stay Vineyard stays (plantations) Vacation homes Budget airlines have made lodging industry grow.
  • However…….. However….. there are many challenges
  • TOP 4 HOSPITALITY CHALLENGES TODAY High fixed-costs and variable income. Fluctuations in occupancy and room-rate demand Tight cost control. Increasing expectations of Gen-Y Guests excellent service. A hard equation to balance. competitive bar is raised higher: proximity of destinations, and 24hrs a day without break. advantage must be wrung from Technology.
  • Challenge #1 – Guest Profiling Gathering and using Guest preferences and intelligence to, Enable delivery of superior Guest experience. Enable data gathering and profiling Enable the business in making this data available using IT Use Business Intelligence with a twist. But how?
  • Challenge #2 – Social Media Implementing and integrating new customer engagement channels by, Using Social Media with contact centers for optimum efficiency? Monitoring and careful intervention must be a priority for Hotels in 2011 and beyond Looking at what other industries are doing and gain insight. (Data Protection Act)
  • Challenge #3 – The Demanding Customer Having every guest touch point to be a make-or-break experience, be an opportunity to win or lose the repeat business explore how these issues are actually communications-based, and leveraging how technology is to deliver.
  • Challenge #4 – Lowering Cost, Increasing Revenue How to identify new revenue streams? non-room revenue (e.g. banquet, spa, golf, conference rooms, and restaurants) Optimising technology used in staffing levels and the tool they use Changing technology use to streamline for maximum productivity and savings?
  • OTHER ISSUES AND TRENDS Sustainable development calls for green hospitality, labor cost, multicultural issues and higher education. Challenges that facing hospitality will include, operating , marketing issues, technological and economic issues. Identified ten key trends that, We believe will shape the hospitality sector this year and for years to come include, Rapid growth in vacation ownership, integration & globalization, new management.
  • 1. ISSUES IN HOSPITALITY INDUSTRY 1.1 Sustainable Development Calls for Green Hospitality Going green is a white-hot issue in the hospitality-design Working toward a carbon constrained future.
  • How to Sustain Success? The basis of sustainable hospitality operation is expressed as “profits, people, and planet.” thus, a sustainable green hospitality development program becomes economically viable, beneficial to the community and environment.
  • Cost? 1.2 Labor Cost Issues In 2005, labor expenses remained the largest single expense for accounting for 44.6 percent of total operating costs. must be taken seriously by hospitality owners and managers alike labor costs and issues consume a substantial portion of the time and efforts now, union contact negotiations, changes to immigration laws, and proposal to increase the minimum wage, keep hospitality managers are on edge.
  • Human Cost? Labor Is The Biggest Expense In All Categories Of Hotels. Hospitality Developers Cannot Avoid It Hospitality Managers Are Also Aware That Employees Are An Integral Part Of The Lodging Experience. The Interaction Between Hospitality Guests And Employees Has A Dramatic Impact Therefore, A Fine Balance Must Be Drawn Between Cost Controls And Guest Satisfaction.
  • 2. CHALLENGES CONFRONTING THE HOSPITALITY INDUSTRY 2.1 Operating Issues 2.1.1 Labor Shortages Labor shortages and their impact in every geographic location are among the most difficult challenges hospitality expansion is limited by human resources. A shrinking labor force is the number one challenge facing the global hospitality industry
  • Managing Costs? 2.1.2 Cost Containment Hospitalities are increasingly challenged to find ways to reduce costs without sacrificing the quality standards to think about ways to operate more effectively, and to examine possibilities for cost savings
  • The Competition 2.1.3 Increased Competition Hotels everywhere indicate that, their community is overbuilt; there are too many available rooms Competition reduces further the profits generated. Besides. Steep fall in occupancy ratio the global slowdown tight competition among hospitality operators shrinking market Drastic drop in hospitality room rents
  • Price War! The competition in Europe has resulted in low occupancies the average room rate dropped almost 30 percent rooms are now sold not only for less but also bundled with packages, like breakfast, airport transfers or a day’s sightseeing. competition calls for innovation in hospitality industry.
  • How to Market? 2.2 Marketing Issues 2.2.1 Market Segmentation and Overlapping Brands Market Segmentation Is Increasing Brands Overlap Franchisers May Expand Their Number Of Brands Also, The Ability Of Consumers To Differentiate Between Them Decreases.
  • Sophistication of Guests 2.2.2 Increased Guest Sophistication Consumers have become, More sophisticated Specify the types of products and services that they desire. Indicate amenities, including business centers, exercise and recreational facilities, and guestroom innovations they want Despise increase in costs May not appeal to many guests being served by a specific property.
  • Technology Support 2.3 Technological Issues The challenges of keeping up with the fast pace of technology is difficult and expensive. 2.3.1 Interactive Reservation Systems hospitality companies are sometimes criticized for the (alleged) large number of keyboard clicks required to make a reservation. currently 20% of all reservations are made through the Internet If the potential guest cannot book online, a reservation will be made at the competitor's web site.
  • The Internet Hospitality Cannot Afford Not Being Connected. If The Potential Guest Cannot Book Online, A Reservation Will Be Made At The Competitor's Web Site.
  • Innovative Service Expectation 2.3.2 Guest-room Innovations Guests increasingly desire amenities, but expensive to install and implement. Multiple Telephone Lines, Interactive Opportunities For Ordering Room Service, And Guest-room Check-out Are Examples
  • The Economy 2.4 Economic Issues 2.4.1 Dependence upon the Nation’s Economy When nation’s economy is good, Business travel generally increases. Hospitality occupancy rates and rack rates increase, which results in higher profit levels. When the economy slows the reverse is also true, Business travel slows . Then occupancy and rack rates decrease. Discounts to increase occupancy are offered, yield lower revenues and profit decreases.
  • Globalization 2.4.2 Globalization Globalization dramatically, influences the extent of travel affects the economy of the nation, the economies of individual countries, and the world economy plays an increasingly larger role in the financial success of lodging properties. To compete, they must pay closer attention to the trends of globalization. The industry must reflect requirements of the global village the
  • 3. TRENDS IN HOSPITALITY INDUSTRY 3.1 Rapid Growth in Vacation Ownership Vacation ownership is the fastest growing segment Fastest growing sectors of the travel and tourism industry. Hospitality companies are adding brand power to the concept with corporations, and Ever Four Seasons participating in an industry that has grown rapidly in recent years.
  • Vacation Sites 1. Resort Condominiums International (RCI), the largest vacation ownership exchange has more than 2.8 million member families living in 200 countries. three thousand resorts and seven-hundred participating members can exchange vacation intervals for vacations at any participating resort. 2. North America remains the global leader with , nearly half of all the participating resorts and more than 2 million owners. Europe is second with approximately 22 percent of owners worldwide and more than 1,000 resorts. 3. Timeshare resorts are found around the globe in popular vacation areas near beaches, rivers, lakes, and mountains, and even in major cities.
  • Management 3.3 New Management The complex forces of capacity control, safety and security, capital movement, and technology issues The growing complexity of the customer/employee interaction, driven by technology and the information age, will shape human resources needs in the future. The customer, armed with more information, will expect staff to be at least as knowledgeable about the firm’s offerings as they are themselves.
  • The Future Focus This will be difficult in an industry characterized by low-skilled, low-paid personnel and a high degree of cultural and behavioral diversity Visioning the future: major forces driving change in the hospitality seven areas decisive to the future development of the industry. Each is examined to determine the scope and complexity of the issue and the timing of its impact.
  • IN SUMMARY Apart from these challenges, issues and trends, new rules and incentives must be in place to facilitate a green, carbon free environmental properties. Project management advisors/consultants must be proactive in thinking ahead to produce environmentally friendly properties. Does it stop here? No. We have to modernize the future development of the industry.
  • Praba