Global Megatrends Revolutionizing the Tourism Industry at the Dawn of the Third Millennium
> The cruise industry will experience explosive growth.
> An older, better-educated population in Europe and North America will increasingly seek ecotourism and cultural travel products.
> “Slow cities” and “slow food” trends will expand from Italy to much of Europe.
> London, New York, Sydney and Dubai will be the leading tourism poles through the end of the decade.
> Non-residents will pay significantly higher entry fees to tourist attractions than those paid by locals (Venice, Petra, Bath, etc.).
> Tourism Satellite Accounting will be adopted by several developing countries but ignored by the U.S., China, Japan, Russia and most Western European countries.
> Prayer rooms and compasses will be installed on most passenger aircraft serving the Islamic world.
> Antarctica will become an ecotourism tourism destination complete with hotels, restaurants and full-service tours.
> Shopping, from mega-malls to folk craft centers, will increasingly become a critical feature for tourism destinations.
> Rides on private spacecraft will become a recreational outing for the wealthy.
> Mega-resorts (Las Vegas, Orlando, Sun City, etc.) will do what no one thought possible: get bigger.
> Cruise ships will sell condominiums, becoming ocean-going resorts.
> In spite of organized international efforts to fight them, sex and drug-focused tourism will flourish.
> Airlines, travel agents and tour operators will ally themselves with financial institutions to offer consumer travel loans.
> Western tourists will shun countries with immense tourism potential but “rogue” leaders (Zimbabwe, Libya, Iran, North Korea, etc.).
> MGM Mirage will beat out rivals Hilton, Harrah's and Bally's to become the undisputed leader of the casino industry.
> National economies in Cuba, Egypt, Spain and Thailand will become dangerously dependent on tourism.
> “Rave” tourists will travel further abroad in search of the perfect party (BringItOn! Travel, Like Hiptrips, Experienceibiza, etc.).
> Enormous infrastructure projects will significantly expand automobile-accessible tourism options (Channel Tunnel car lane, Bahrain-Qatar causeway, etc.).
> China will be the first country to receive 100 million international arrivals in a 12-month period, sometime around 2018 – France will follow within 2-3 years.
Product & Service Trends
> Hotel rooms, increasingly equipped as offices with full-size desks, computers and advanced communications technologies, will minimize the need for business centers.
> Expansion of Europe's high-speed train network will eliminate short haul flights.
> Hotel meeting and dining areas will be designed less formally in an attempt to attract the casual business traveler.
> Small super-luxury boutique inns will take market share from Four Seasons, Ritz Carlton and Fairmont.
> Hub airports will install capsule-cocoon hotels in terminal facilities.
> Hotel and restaurant facilities will be designed for an aging population with lower rise steps, more handrails and wider doors.
> Travel guidebooks will become highly specialized and more frequently consulted – primarily on the web.
> The distinction between business and leisure hotels will erode as business clients seek fitness and entertainment activities and vacation guests demand advanced telecommunications IT.
> “100% Satisfaction Guaranteed” will replace “Let the Buyer Beware”.
> Growth in demand for home food delivery will outpace all other food service segments.
> An aging population and growing infatuation with healthful living will bring a wave of European holistic spas and 'health-tels' to North America and Asia.
> A new wave of budget conference & exhibition hotels will be built to meet the convention needs of cost conscious companies.
> European and Japanese new-build hotels will be obliged to design larger guest rooms closer to North American standards.
> Restaurant groups will operate F&B outlets wherever people gather (Laundromat bars, espresso counters at service stations, etc.).
> Center-city urban resorts will challenge sun, sand & sea vacation villages in the leisure market.
> Credit card check-in/check-out, F&B vending machines, self-cleaning bathrooms and self-serve laundries will eliminate most human contact in budget hotels.
> Luxury resorts that once shunned children will welcome them with an expanded array of activities and tailored dining options.
Investment & Finance
> Hotel real estate assets will be increasingly concentrated in the portfolios of fewer investors, particularly private equity funds.
> Intense competition for hotel operating contracts will push management fees as low as 1% of gross, 5% of IBFC and $4 per reservation.
> Airlines will continue to rack up significant losses as they struggle to deal with high fuel costs, new security requirements, an onslaught of no-frills carriers and brutal competition from 'open skies' agreements.
> Following the big American sell off of the 1980s and 1990s, hotel companies will be repatriated to the U.S. (Westin, Ramada, Renaissance, etc.).
> Airline alliances of the 20th century will evolve into acquisitions as weaker players struggle to survive (Air France-KLM, American-TWA, etc.).
> By the end of the decade, a score of management companies will control the world inventory of branded hotel rooms.
> Hotel feasibility studies will become an unprofitable commodity for hospitality consulting firms.
> Hotel operating companies will sell their remaining equity in real estate to free up capital for expansion of management contracts.
> Per room hotel acquisitions in Europe will reach stratospheric new records (i.e. Savoy Group).
> Franchising will experience explosive growth as hotel companies strategically reposition to get out of the hotel business and into the business of hotels (i.e. Radisson, Choice, Cendant, Holiday Inn, etc.).
> Fewer new-build hotels in Europe and North America, more existing property renovations.
> Critical shortages of skilled staff will encourage hospitality corporations to develop or outsource proprietary training centers.
> The introduction of new technologies in the upscale tourism industry will not replace the human element in service delivery – to the contrary, it will gain importance.
> Unionized hotel and restaurant workforces will trade scheduling and task flexibility for job security and quality-of-life benefits.
> Tourism and hotel management schools will move out of the classroom and out of the library, onto the web and into the field.
> Powerful unions, a shorter workweek and reluctance to taper social benefits will maintain Europe's standing as the world's most expensive tourism destination.
> Middle Eastern countries enforcing employment quotas for nationals will experience reduced productivity and higher labor costs.
> Airline employees will accept significant wage and benefit cuts to prevent their employers from going bankrupt.
> The Internet will become the dominant distribution channel for all travel and tourism products eliminating most intermediaries.
> Understanding customers as people – their likes, dislikes, habits, interests and hobbies – will become critical to establishing competitive advantage in hospitality marketing.
> Customer retention will replace customer acquisition as travel agencies' strategic objective.
> Homogenization of airline services will render them commodities while lodging products will continue to focus on differentiation.
> Data warehousing and data mining will provide one-to-one and relationship-marketing opportunities never imagined.
> Print media advertising will move onto the Web.
> Increasingly value-conscious customers will demand more and better product information.
> Consumers will increasingly expect to negotiate hotel and airline rates.
> Cross-sector strategic alliances between food service, lodging, travel and entertainment companies will prove to be effective marketing formats.
> Better understanding of psychographic consumer behavior will lead to more precise identification of customer segments and sub-segments.
> As marketers increasingly distinguish between loyalty and satisfaction, frequent use programs will become more elaborate.
> Hotel revenue management systems will become more sophisticated and be relocated from the reservations department to sales & marketing.
> Revenue management tactics will be applied to pricing in restaurants, amusement parks, golf courses, tour buses, cinemas, convention centers and sports stadiums.
> Hotel companies' PMS standardization will result in the transfer of database and data warehousing responsibilities to CRS for greater operational and marketing efficiency.
> Market share and product profitability will be replaced by customer share and customer profitability as measures of marketing effectiveness in the hotel industry.
Safety & Security
> Consumers will systematically consult travel health sites before checking ticket or room availability.
> Security concerns in the Holy Land encourage religious tourists to make pilgrimages to sites in Ethiopia, Cuba, Greece, Italy and Morocco.
> Crime and terrorism will render some traditional tourist destinations unsellable.
> Customer credit cards will replace coded key cards in most hotels.
> Guest room safes will be enlarged to accommodate standard laptop computers.
> International hotel companies will refuse management contracts and franchises for hotels without in-room sprinkler systems.
> Terrorism fears will keep Israel, Indonesia, Iraq and India off the mainstream tourist circuit for the foreseeable future.
> Advanced encryption technology will make on-line payment genuinely secure.
Financial Management & Cost Control
> Zero-based budgeting will become the industry norm.
> GOPAR will replace RevPAR as the standard measure of hotel sales profitability.
> Speech recognition technology will lower staffing levels and operating costs in CRS call centers.
> To improve energy and water conservation, hotels will install usage meters and levy charges for consumption.
> Deregulation of the global telecommunications market will benefit the hospitality industry more than the deregulation of the airline markets.
> As hotel reservations made through global distribution systems diminish, GDS will exploit communications advances to reduce fees and costs.
> While hotel and café guests will increasingly expect wireless Internet access, other factors will encourage hospitality operators to invest in it – serving as a platform for mobile point-of-sales, reducing cable costs and more efficient restaurant table auditing.
Tourism Control Intelligence
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