Hospitality Industry: Seven Key Drivers For Success

According to Deloitte report entitled, Hospitality 2015, the seven key drivers in determining success through 2015 and beyond are:

Mid-Market, Economy - Branded Products

In the emerging markets, the rise of the middle classes will create new demand for both leisure and business hospitality. The greatest future potential in these markets will lie in developing mid-market and economy-branded products aimed at the domestic traveler. By 2015, China and India will have absolute year-on-year tourism growth greater than the United Kingdom, France or Japan.

Baby Boomers And Middle Class

By 2015, U.S. boomers are forecasted to account for 60 percent of the nation’s wealth and 40 percent of spending. U.S. baby boomers will drive growth in hospitality in the leisure sector. The key to attracting boomers is appealing to their ‘forever young’ attitude and desire for experiential travel. The middle classes of China and India will also create changes as their travel patterns evolve from domestic to regional to international. India alone is forecasted to have 50 million outbound tourists by 2020

Ability To Harness Social Media

The growth of social media, the new form of communication and feedback is good news for consumers, and offers both threats and opportunities for operators. The most successful brands will be those that embrace and learn to harness social media rather than underestimate or fight against its influence.

Strategy To Retain Critical Employees

An average hotelier spends 33 percent of revenues on labor costs, but employee turnover in the industry is as high as 31 percent. Operators need robust strategic plans to retain their critical employees and manage turnover.

Investing In Technology

Hospitality companies must invest in technology. The battle to drive bookings through proprietary websites will continue, but all major operators will also develop applications and websites for mobile devices to meet consumer demands.

Implementing Sustainable Practices

Rising populations and increasingly scarce resources will provide a challenging business environment in which sustainability will need to be embedded within all facets of the hospitality industry.

Managing Crisis

The key to the hospitality industry’s survival of unpredictable shocks and minimizing their impact is to establish appropriate responses, protocols and risk management programs. Operators also need to capitalize on new opportunities that may present themselves in challenging times.