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.

1. THE HOSPITALITY
INDUSTRY

2. 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.

3. 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.

4. What is it defined as?
It is in Service Industry,
Including,
Lodging
Restaurants
Convention centers
Theme parks
Cruise lines
IRS, and
Others ( Transportation, Shopping )

5. 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

6. Its magnitude!
A Multi Billion Dollar Business.
Many Learning Centers
Needs Of Trained Professionals.
Changing Landscape Of
Entertainment,
Restaurants, Bars And Others.

7. 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

8. 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.

9. However……..
However…..
there are
many
challenges

10. 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.

11. 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?

12. 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)

13. 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.

14. 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?

15. 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.

16. 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.

17. 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.

18. 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.

19. 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.

20. 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

21. 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

22. 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

23. 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.

24. 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.

25. 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.

26. 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.

27. 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.

28. 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

29. 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.

30. 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

31. 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.

32. 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.

33. 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.

34. 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.

35. 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.

36. Praba