COVID-19 was and continues to be, an extreme event that forced the hospitality and tourism industries to shut down overnight. Millions of jobs were lost, and well-known brands suffered setbacks. Many businesses were permanently closed. On the other hand, the pandemic provided us with an opportunity to examine various factors influencing the growth of the hospitality and tourism industries.
The recent talk with Nicole Philips, Director of the MSc in Real Estate, Finance, and Hotel Development at Glion Institute of Higher Education in Switzerland, patiently explained the three key factors influencing the growth of the hospitality and tourism industry.
Nicole cites a recent Sommet Education, Switzerland, publication, The State of Hospitality 2022, and says, “When we think about the growth of hospitality and tourism or any industry for that matter, the discussion often becomes a macro-economic one.” The State of Hospitality 2022 contains some insightful analysis of contextual economic and financial data on spending, growth, resilience, investment, and emerging jobs. And, having worked in the industry for over 25 years, including 16 years as VP International Hotel Development Planning at Marriott International, there are three factors that, in my opinion, will have a general impact on the industry’s growth.”
Supply and demand in the economy
The economic cycle, particularly in terms of supply and demand and the value of money, is clearly a major factor in growth. We saw how, during the pandemic, demand for hospitality and tourism dropped dramatically, and how, now that things are opening up all over the world, it is rising again. During the recession, the situation was similar. Of course, some countries may still see some local effects as a result of factors such as changes in labor markets and consumer travel habits – but in general, when economic conditions are favorable, people want to travel. Hospitality and tourism professionals must understand where the growth is, which destinations people are visiting, why they are visiting (primarily for business or pleasure), and how to respond to it.
Development is an investment in the future.
Although COVID-19 spelled doom and forced the closure of hospitality and tourism overnight, the industry should always have a longer-term eye on growth, which helps it to mitigate short-term market fluctuations. At Marriott International, assisted in the company’s expansion into Europe, the Middle East, and Africa. On a daily basis, the customer would never see this activity, but important roles exist in fields such as international hotel development and asset management, real estate investment, and investment strategies and financing. They discuss topics like business and financial analytics, mergers and acquisitions, portfolio valuations, and private equity. Where a forward-thinking business strategy and supporting operational roles are in place and well-executed, hospitality and tourism thrive.
People and talent are other important factor that either promotes or inhibits growth. The State of Hospitality 2022 highlights the sector’s current employment and skill shortages, as well as initiatives in place to fill these gaps. As a result, the role of education and training providers in addressing these issues is critical.
At Glion, we are sensitive to the current generation’s ability to learn and unlearn, as well as their ability to learn something new quickly, which means they can constantly reinvent themselves. Our responsibility as educators is to provide students with the foundation they need to thrive in the face of adversity. Historically, the hospitality and tourism industries have not always led the way and innovated. It requires smart people who are ahead of the curve, as well as leaders who can come up with new ideas.
Photo by Godson Bright