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Tourism Development in the Middle East: Scenarios and Wildcards 2030
• Scenario thinking
• Major issue no. 1: workforce
• ...
Scenario thinking
• “Strategy as Planning” – Strategic thinking used to be defined by
variables under control of the compa...
We used to think of the business environment as a “Surprise-free” future.
Future Proofing your Business
Scenario thinking
• From forecasts to scenarios
• Forecasting: quantitative estimate of the future outcomes of current
dev...
Scenario thinking
In 1967, Shell launched Management by Objectives, “Unified Planning
Machinery”.
In 1968, “the cobbleston...
Scenario thinking
Future Proofing your Business
The first scenarios were ready in 1972. It's noteworthy that among eight
s...
Scenario thinking
“What if”:
Learn to think the
unthinkable as an
organisation.
Future Proofing your Business
Future Proofing your Business
Future Proofing your Business
Future Proofing your Business
Scenario thinking
“Wildcards”:
Low probability, high
impact.
Future Proofing your Business
Scenario thinking “Scenario cross”
Future Proofing your Business
Scenario thinking “Morphological scenarios”
Future Proofing your Business
Scenario thinking “Strategic Foresight Framework”
Future Proofing your Business
Major issue no. 1: Workforce
Anticipated workforce growth:
• Dubai: 277,000 new jobs for Expo 2020 (of which 110,000 touri...
Workforce - Plausible effects and complications:
• Countries of origin will experience economic growth
• Recruitment will ...
Workforce - How to anticipate this scenario?
• Human capital will constitute a larger share of your budget
• Staff-guest r...
Major issue no.2: Regional competition
• Projected total growth ME: 101 million (2020) and 149 million
(2030) internationa...
Regional competition - Plausible effects and complications:
• Comparable proposition in different destinations
• Unmanaged...
Regional competition - How to anticipate this scenario?
• Differentiate:
– Coordination at destination level: integrate de...
Major issue no. 3: Future consumer behavior
Socio-economic, cultural and technological developments will change
the:
• who...
How will the guest shop in the future?
Future Proofing your Business
Will a traveling middle class emerge?
Future Proofing your Business
In which technology should you invest?
• New technologies may solve a number of problems,
Future Proofing your Business
• ...
In which technology should you invest?
Future Proofing your Business
Likelihood of Choosing Hotel With Robot by Age
In which technology should you invest?
Future Proofing your Business
“Most customers these days demonstrate a huge — and i...
In which technology should you invest?
• The goal is to make your guests’ life easier.
• Avoid an “arms race”; remember th...
What can you do with this information?
• Do not just consider current trends but also uncertainties that will
shape the fu...
Dr. Jeroen Oskam
Research Centre Hotelschool The Hague
research@hotelschool.nl
Graciëlla Karijomedjo
European Tourism Futu...
Ahic 2015 Oskam Karijomedjo
Ahic 2015 Oskam Karijomedjo
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Ahic 2015 Oskam Karijomedjo

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Future Proofing Your Business. Tourism Development In The Middle East

Oskam, Jeroen and Karijomedjo, Graciella (2015). Future Proofing Your Business. Tourism Development in the Middle East: Scenarios and Wildcards 2030. Arabian Hotel Investment Conference, May 7.

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Ahic 2015 Oskam Karijomedjo

  1. 1. Tourism Development in the Middle East: Scenarios and Wildcards 2030 • Scenario thinking • Major issue no. 1: workforce • Major issue no. 2: regional competition • Major issue no. 3: future consumer behavior • What can you do with this? Future Proofing your Business
  2. 2. Scenario thinking • “Strategy as Planning” – Strategic thinking used to be defined by variables under control of the company. • A company’s chess play determined by the variables of its own operations, its customers and its competitors. • “Deliberately choosing a different set of activities to deliver a unique mix of value”(Porter) Future Proofing your Business
  3. 3. We used to think of the business environment as a “Surprise-free” future. Future Proofing your Business
  4. 4. Scenario thinking • From forecasts to scenarios • Forecasting: quantitative estimate of the future outcomes of current developments • Scenarios as “an internally consistent view of what the future might turn out to be” (Porter). • “a well-worked answer to the question: ‘What can conceivably happen?’” (Lindgren and Bandhold). • “Future memory” (De Geus). Future Proofing your Business
  5. 5. Scenario thinking In 1967, Shell launched Management by Objectives, “Unified Planning Machinery”. In 1968, “the cobblestones of Paris were flying through the air”. A short time later the Club of Rome published its report on “The Limits of Growth.” Shell’s specialised system of was not capable of providing answers to questions about society's long-term natural resource decisions. Shell responded well to the challenge. Top management created a new, independent planning outfit to begin studying the company's social environment. Future Proofing your Business
  6. 6. Scenario thinking Future Proofing your Business The first scenarios were ready in 1972. It's noteworthy that among eight scenarios presented that year, there was one which concerned a crisis in the supply of oil. This scenario examined a world in which the price of a barrel of oil four years hence, in 1976, would be $8. It was a wildly unlikely scenario at the time. In those days, the limits of a whole generation of oil managers’ known world were defined by the price of a barrel of oil from Kuwait , C.I.F. Rotterdam that was $1.85 in 1972, down from $2.25 in 1951. In 1972, many Shell managers could not believe that a world of $8.-/bbl oil was even imaginable. They could not get themselves to start contemplating what action to take in response to the $8 a barrel scenario. “ ”
  7. 7. Scenario thinking “What if”: Learn to think the unthinkable as an organisation. Future Proofing your Business
  8. 8. Future Proofing your Business
  9. 9. Future Proofing your Business
  10. 10. Future Proofing your Business Scenario thinking “Wildcards”: Low probability, high impact.
  11. 11. Future Proofing your Business
  12. 12. Scenario thinking “Scenario cross” Future Proofing your Business
  13. 13. Scenario thinking “Morphological scenarios” Future Proofing your Business
  14. 14. Scenario thinking “Strategic Foresight Framework” Future Proofing your Business
  15. 15. Major issue no. 1: Workforce Anticipated workforce growth: • Dubai: 277,000 new jobs for Expo 2020 (of which 110,000 tourism) • Qatar: from 25,000 to 127,000 tourism jobs in 2030 • Abu Dhabi: 180,000 in 2015 to 383,000 total jobs in 2030 • KSA: 1.7 million new tourism jobs in 2020 (currently 751,000) • Oman: 72,000 in 2013 to 116,000 tourism jobs in 2024 Future Proofing your Business
  16. 16. Workforce - Plausible effects and complications: • Countries of origin will experience economic growth • Recruitment will become expensive and more difficult • Wage inflation • Increasing staff turnover • Quality of service issues • Shift from qualitative scarcity to quantitative scarcity Future Proofing your Business
  17. 17. Workforce - How to anticipate this scenario? • Human capital will constitute a larger share of your budget • Staff-guest ratio will be critical • Guest acceptance of automation and robotization • ROI 5 star hotels vs. 3 star hotels • Maximize flexibility in concept design Future Proofing your Business
  18. 18. Major issue no.2: Regional competition • Projected total growth ME: 101 million (2020) and 149 million (2030) international tourist arrivals • Dubai: 20 million (2020) • Abu Dhabi: 4.9 million (2020); 7.9 million (2030) • Qatar: 2.8-3.1 million (2020); 6.7-7.4 million (2030) • Oman: 4 million (2020) • KSA: 43 million (2020) • Bahrain: 12.2 million (2020) • Kuwait: 5.9 million (2020) Future Proofing your Business
  19. 19. Regional competition - Plausible effects and complications: • Comparable proposition in different destinations • Unmanaged differentiation imposed by visitors’ preferences • Negative price spiral & cannibalisation • Market volatility Future Proofing your Business
  20. 20. Regional competition - How to anticipate this scenario? • Differentiate: – Coordination at destination level: integrate destination branding in entire “guest journey” – Emphasize e.g. cultural heritage and other destination features • Coordinate: – Coordination & collaboration between destinations – Regional tourism authority or platform – Joint promotion & events • Adjust expectations Future Proofing your Business
  21. 21. Major issue no. 3: Future consumer behavior Socio-economic, cultural and technological developments will change the: • who, • why, • when, • where and • what of future hotel guests Future Proofing your Business
  22. 22. How will the guest shop in the future? Future Proofing your Business
  23. 23. Will a traveling middle class emerge? Future Proofing your Business
  24. 24. In which technology should you invest? • New technologies may solve a number of problems, Future Proofing your Business • but it may also mainly serve for branding purposes.
  25. 25. In which technology should you invest? Future Proofing your Business Likelihood of Choosing Hotel With Robot by Age
  26. 26. In which technology should you invest? Future Proofing your Business “Most customers these days demonstrate a huge — and increasing — appetite for self-service, yet most companies run their operations as if customers prefer to interact with them live.”
  27. 27. In which technology should you invest? • The goal is to make your guests’ life easier. • Avoid an “arms race”; remember the amenity wars (1990 and 2005)! • In-room or “on-guest” entertainment (BYOD)? Guests especially expect good connectivity. • Don’t try to be a technology supplier. Be a technology facilitator. Future Proofing your Business
  28. 28. What can you do with this information? • Do not just consider current trends but also uncertainties that will shape the future • Make your strategy resilient by developing action plans for different scenarios • Develop a future memory for plausible contingencies that may affect your business • The future tourist is a moving target, closely monitor developments that will determine his long term behavior • Avoid a technology “arms race”: become a connectivity facilitator, not a technology supplier Future Proofing your Business
  29. 29. Dr. Jeroen Oskam Research Centre Hotelschool The Hague research@hotelschool.nl Graciëlla Karijomedjo European Tourism Futures Institute info@etfi.eu | www.etfi.eu Future Proofing your Business

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