Appendix A: 55 Trends Shaping the Future of the Hospitality Industry, and the World

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Assessment: Internet growth will continue until essentially no one in the world lacks easy access to e-mail and the Web, about 30 years by our best estimate.

Implications: Americans will continue to dominate the Internet so long as they produce a substantial majority of Web pages—but that is not likely to be very long.

Analysts believe that Internet growth will not accelerate again until broadband service becomes less expensive and more widely available. This is a matter of government policy as much as of technology or basic costs.

Demands that the United States relinquish control of the Internet to an international body can only gain broader support and grow more emphatic as Americans make up a smaller part of the Internet population.

B2B sales on the Internet are dramatically reducing business expenses throughout the Internet-connected world, while giving suppliers access to customers they could never have reached by traditional means.

The Internet has made it much easier and cheaper to set up a profitable business. An online marketing site can be set up with just a few minutes’ work at a cost of much less than $100. This is fostering a new generation of entrepreneurs.

Internet-based outsourcing to other countries has only just begun. Growth in this field will accelerate again as overseas service firms polish their English, French, and German and find even more business functions they can take on.

Cultural, political, and social isolation has become almost impossible for countries interested in economic development. Even China’s attempts to filter the Internet and shield its population from outside influences have been undermined by hackers elsewhere, who provide ways to penetrate the barriers.

Implications for hospitality and travel: Continued growth of the Internet will continue to bring these industries the same benefits others enjoy—lower business expenses, greater efficiency, and easier access to customers even for the smallest operators. Online marketing will grow even more significant for destinations as China and India grow more prosperous and travel-prone.

Social networking sites like Facebook, MySpace, and Twitter are one of the hottest online phenomena of recent years. Now hospitality and travel firms are getting into the act. KLM, one of the earliest adopters and still among the most impressive, offers its customers three invitation-only communities where they can meet like-minded colleagues, one for people doing business in China, one for Africa hands, and one for golfers. Fliers can make contacts, meet offline at club events sponsored by the airline, and set up their own real-world meetings. Forty percent of users have been logging in an average of once a month, which KLM rates as a success. Similar offerings are available from a growing host of specialty sites. Virgin America even put a social networking system into seat-back computers to help people connect with fellow passengers.

Internet savants also are starting to talk about the “semantic Web,” a natural-language interface to the Net’s vast stores of information. Picture a Web site where you can ask for “a week for two in South America next February. We want to explore a rain forest but spend at least three days on the beach at a luxury resort. We can spend $2,500 each, including air fare from Miami.” By 2012, travel sites will be able to understand the question, search their databases, offer a choice of vacation plans, and make reservations as soon as the customers make their decision.
39. Technology is creating a knowledge-dependent global society.

More and more businesses, and entire industries, are based on the production and exchange of information and ideas rather than exclusively on manufactured goods or other tangible products. At the same time, manufacturers and sellers of physical products are able to capture and analyze much more information about buyers’ needs and preferences, making the selling process more efficient and effective. The number of Internet users in the United States more than doubled between 2000 and 2007, to nearly 231 million, or 69 percent of the population. Yet the percent of the population online has remained almost unchanged since 2004. And while the percentage of Internet users in China is smaller than in the U.S., the number of users there passed the U.S. early in 2008.

Assessment: This trend will not reach even its half-way mark until the rural populations of China and India gain modern educations and easy access to the Web.

Implications: This trend is raising the level of education required for a productive role in today’s workforce. For many workers, the opportunity for training thus is becoming one of the most desirable benefits any job can offer.

Even entry-level workers and those in formerly unskilled positions require a growing level of education. For a good career in almost any field, computer competence is mandatory.

Knowledge workers are generally better paid than less skilled workers, and their proliferation may raise overall prosperity.

However, data and communications technologies also are exposing workers in the developed world to competition from low-wage countries. It is not yet clear at what pay level these competing forces will balance.

This trend also is enlarging the income gap between well educated workers and those with a high school degree or less. That gap will continue to grow.

In ten years, most digital devices will combine multimedia communication functions and real-time voice translation, so that conversations originating in one of seven or eight common languages can be heard in any of the others. These technologies will enable even more people to become knowledge workers or, at least, knowledge-enhanced workers.

Telecommuting will make many companies more efficient, cutting their expenses in the process. New technologies create new industries, jobs, and career paths, which can bring new income to developing countries. An example is the transfer of functions such as technical support, and more recently R&D, to Asian divisions and service firms.

For some developing countries, computer skills are making it faster and easier to create wealth than a manufacturing economy ever could. India, for example, is rapidly growing a middle class, largely on the strength of its computer and telecom industries. Other lands will follow its example.

Implications for hospitality and travel: For both marketing and management, this trend is changing all segments of hospitality and travel. Online sales have grown into a major outlet for airlines and hotels, severely eroding the market for travel agencies. This trend will accelerate in the years ahead, as Generation X and—especially—the Millennials bring their computer skills to travel shopping. Within five years even the cruise industry, which has been committed to sales through travel agencies, will be substantially dependent on Internet sales.

This also levels the field for smaller and less well known destinations, which now can get their message to potential guests on the same basis as larger operators. As a result, we will see a steady proliferation of small travel businesses throughout the world for at least the next 20 years.

In hospitality management, the greatest technological change in the next five years will be the arrival of RFID—radio frequency identification—chips. Combining a small piece of computer memory with a tiny radio transmitter, RFID chips can remotely identify and track whatever object they are attached to. This dramatically reduces the manpower required for inventory and order functions and cuts inventory requirements. Just-in-time ordering will streamline procedures for hotels, restaurants, cruiselines, and most other hospitality and travel operations.

Information technologies also are raising the level of technical skill required for many hospitality-industry functions.

Cruise ships today require complete network management staffs for their Internet systems as well as for vessel controls, and crews tech-savvy enough to help guests with onboard computers, HDTV, and other increasingly complicated hardware.

Directory: ~fdemicco -> Resources -> Entries -> 2009

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