rohit talwar - hotels 2020 keynote to hotel investment conference - london 07 09 11

Hotels 2020 -Rethinking Hotel

Strategies, Business

Models and Investment

Propositions

Hotel Investment Conference

London – September 7th 2011

Rohit Talwar

CEO Fast Future Research

[email protected]

Hotels 2020 – Objectives

• Identify key drivers of change

for the globally branded hotel

sector over the next decade

• Examine the implications for:

– Hotel strategy – Hotel strategy

– Brand portfolio

– Business models

– Customer targeting

– Innovation

Hotels 2020 – Research Methods

• Expert Interviews

• Desk Research

• Global Survey• Global Survey

• Workshops (Delhi, Dubai)

Growth is no Longer a ‘Given’-

-Thinking is Back in Fashion

Transformational Change?

It’s Only Just Begun

Demographic Destinies 2 billion more people in 40 years –

Demographics is Driving Economics

1998

448 691 5231739

344

1998

729

4157

1030

585

Source : United Nations2010 2050

Reorientation of Global Markets

Today - US – 3 Seats per head / China 0.3 / India 0.1

Asia – a third of all flyers (2013) and travel spend (2020)

Heavy investment in emerging tourism markets will widen traveller

choice, increase competition and potentially drive down prices and

profit margins across the spectrum of hotels

21

58

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40

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60

70

Strongly agree Agree Disagree Strongly disagree593 Respondents

Tomorrow’s Traveler - Demographics

• Over 60’s in developed economies to rise from 22-33% from 2009 and 2050.

• In developing world, from 9 to 20%20%

• Global retirement market 2010-2020 could grow from $28 - $46 Tn

• Global middle class could rise from 430M to 1.2 Bn (2000 –2030)

Life Redefined –Lifespans are Increasing

Under 50’s have 90% chance of living to 100.

Aubrey de Grey suggests we could live to 500 or 1000we could live to 500 or 1000

What are the health, consumption and resource implications?

What kind of opportunities will be created?

• By 2020, Asian

consumers could account

for over 40% of global

middle class consumption

• By 2014 female wealth

Tomorrow’s Traveler –Spending Patterns

• By 2014 female wealth

could reach $18 trillion

• Females could control

70% of global consumer

spending

The Asian middle classes will make up the largest share of international travel

21

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Traveller Behaviours

� Too Busy To Care

� Complex Lives, PressurisedFinances

� Craving Simplicity

� Wealthy and Hard to Please

Hotels will increasingly consider factors such as cost of servicing, level of spend and average length of stay when targeting potential customers

in different geographic markets

593 Respondents

39

58

30

0

10

20

30

40

50

60

70

Strongly agree Agree Disagree Strongly disagree

Sustainability

Environmental considerations will play an increasing role in the choice of business and leisure hotels. 606 Respondents

Hotel 1000 Seattle – Guest Sensors

Crowne Plaza Copenhagen Towers –Solar Power, Geothermal Well, Eco-rooms

• Number of mobile subscribers could rise from 4Bn to 5Bn 2009-2015

• Mobile data traffic to rise 300-fold by 2015 (Nokia).

• By 2020 the range and nature

Tomorrow’s Traveler – Technology

• By 2020 the range and nature of interaction technologies / customer ‘touch points’ will expand dramatically.

• ‘Go nowhere’ gamers

• Personal genetic profiles

Traveler motivations will become increasingly fragmented and diverse and harder to segment into clearly definable customer groupings

604 Respondents

Customers will increasingly use social media and collective intelligence travel services (like Dopplr) to

define the desired ‘product’ for a temporary self-forming group.

601 Respondents

45 45

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0

0

5

10

15

20

25

30

35

40

45

50


Hotels will need to develop strong social media 'listening skills' to understand how customer needs and perceptions of brands and service quality are truly evolving and to develop service propositions, marketing messages, and pricing solutions that reflect the needs of an increasingly

diverse customer base.

54

42

4

0

0

10

20

30

40

50

60


Technology and Connectivity DriversHotels will increasingly look to new technologies to

drastically increase efficiency, reduce costs, personalise the customer experience and improve service.

605 Respondents

54

41

41

0

10

20

30

40

50

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Hotel Technology Development Roadmap to 2020

Widespread Now Widespread by 2015 Widespread by 2020

Relationship Management1.67 billion web users

Rise of social meeting

Travel planning

Tablet computers

Wireless broadband

Virtual Travel

Dominance of online bookings

Evolution of Customer

Relationship Management

(CRM)

High bandwidth wireless

broadband

Speech Recognition and

5 billion web users

Intelligent Agents / Software

Assistant

Semantic Web

Intelligent Web

Immersive Web (Use of web

technology to deliver Speech Recognition and

Language Translation in daily

use

technology to deliver

sensation, experience and

emotion)

Personal Technology

Augmented Reality (figure 3) Explosion Of Personal Display

Devices

Mind Control Headsets (figure

4)

4G Phones

Intelligent Interfaces

5G Phones

Gesture Interfaces (figure 5)

Heads Up Displays (figure 6)



Guestroom Functionality

Centralized and

personalized control of

media, lighting and

temperature

3D TV

Multimedia Beds

IP Telephony

IPTV

Smartphone Room

4D TV

Sensor-Based Room

Management

Personal Robots

Smartphone Room

Access

In Room Concierge

Meeting Support

Video Conferencing /

Tele-presence

Virtual Meetings And

Hybrid Events


Guest ServicesSelf Service Kiosks

3D Displays

Interactive Displays

Interactive Surfaces

Near Field Communication

(NFC)

Quick-Response (QR) Codes

Touchable Holographs

Haptics Technology (allowing

users to physically ''feel'

virtual objects on a computer)


Business Operations And Management

Cloud Computing Biometrics (E.G. Voice /

Facial Recognition)

RFID

Data Security Ambient Intelligence

Hybrid Platforms

Monitoring And Surveillance

Knowledge Mining

Predictive Analytics

Sensor Networks

Swarm Intelligence

(Analyzing Group Behavior)

Remote Sensing Security

Crowd Farming

Thought Control - Today

Personalization

Augmented Reality

Data Immersion / Heads up

Ambient Intelligence

Opportunities and Implications

• Developing strategy in an uncertain world• Management of the brand portfolio• Evolution of business and revenue models• Location • Categorization in the era of personalisation.

By 2020 By 2020 globalglobal hotel groups will increasingly seek to cover hotel groups will increasingly seek to cover

the full spectrum from budget through to luxury and the full spectrum from budget through to luxury and

heritage propertiesheritage properties

606 Respondents

Hotel groups and owners may increasingly seek to co-locate different categories of hotel from budget to luxury in a

common location with shared catering and leisure facilities for use by all guests

598 Respondents

By 2020 a new category of co-branded and co-designed ‘signature’ properties will emerge within hotel chain portfolios, providing

differentiation and opening up ancillary revenue stream options

By 2020 a new category of co-branded and co-designed

‘signature’ properties will emerge within hotel chain

portfolios, providing differentiation and opening up ancillary

revenue stream options

590 Respondents

22

57

19

2

0

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30

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By 2020 we will see the emergence of a new breed of unbranded hotel group, offering 'white label solutions'- including sophisticated marketing, very high standards of service and advanced technology support while

allowing owners to develop their own brands

595 Respondents

The emergence of invitation-only hotels’ by 2020The emergence of invitation-only hotels’ by 2020

587 Respondents

By 2020 hotels will increasingly experiment with a range of

business models

602 Respondents

Hotels will use discount offers to capture a share of pre- and post-trip travel spend e.g. purchase of luggage, clothing,

transportation, insurance, duty free etc.

610 Respondents

Hotels will create their own catalogues of branded amenities, clothing, furniture and decorations

610 Respondents

Hotels will increasingly provide additional business services e.g. translation, access to legal and accounting advice,

secretarial support, company formation, organization of small meetings, etc

610 Respondents

PricingIn a highly automated world, there will be a range of customers at every price point who are willing to pay for personal service

610 Respondents

Hotel Categorization may Need to Evolve to Focus More on Service Than Facilities

Segmentation

71% agreed that

‘traveler motivations will

become increasingly

fragmented and diverse

and harder to segment

into clearly definable

customer groupings’.

Hotel guests will expect their stay to be personalized around a set of choices they make at the time of

booking or prior to arrival

42

50

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The Emergence of Personalized Service Spectrums

86% agreed that by 2020,

personalization will have been

embraced wholeheartedly by

the sector and that ‘customers

will have the ability to choose

the size of room, type of bed,

amenities, audio-visual

facilities, business equipment,

etc. on booking and pay

accordingly’.

What’s in the Service Spectrum?

• Customer

Relationship /

Communications

• Customer Journey –

• Food and Beverages

• Technology, Media

and

Telecommunications• Customer Journey –

Core Processes

• Staff and Service

• The Bedroom

Environment

Telecommunications

• Hotel Services and

Facilities

• Pricing

Customer Journey – Core Processes

Staff and Service Highly trained staff backed up by technology will be key to delivering

personalized service and experiences

605 Respondents

The Bedroom Environment

Food and Beverages

Technology, Media and Telecommunications

Mapping a Path to 2020Strategic Management Imperatives

Horizon scanning Scenario based planning Anticipation

Open processes Rapid implementation Tomorrow’s workforce

Hotels 2020 Hotels 2020 –– Key Characteristics of Key Characteristics of Successful Players in Tomorrow’s Successful Players in Tomorrow’s

WorldWorld

1.Deep understanding of an increasingly

geographically, financially, generationally and attitudinally diverse and evolving customer base

• Growth from emerging

markets

• Evolving demands of an

aging population

• Rising disparity and

continued uncertainty in

developed economies

• Augmented reality creates

digital overlay’s on the ‘real’

world

2. Immersive, tactile and multi-dimensional

technology interfaces

© 2010 Amadeus IT Group

SA

• 3D projection and gesture

interfaces will change how

we view and interact with

information

• Potential to capture more of total trip spending

3. Continuous search for ancillary revenues

© 2

010

Am

adeu

s IT

Gro

up S

A

• Identification of new streams and merchandising opportunities

96% believe that in the face of intense global competition, the hotel industry will develop a strong focus on strategy

4. Open, listening, collaborative and experimental

approach to innovation

© 2010 Amadeus IT Group

SA

strong focus on strategy and innovation –adopting approaches such as crowd sourcing and open innovation to generate new ideas.

• Prepare for a range of possible scenarios

5. An organization capable of surviving and

thriving in turbulence and uncertainty

• Tolerance of uncertainty becomes a core competence

Hotels 2020: Conclusion

• The hotel of the future will be a living laboratory

– Constant experimentation and experimentation and innovation

– Every interaction a potential source of insight and ideas

Hotels 2020 – Beyond Segmentation

Thank You

Fast Future –Hotel and Meetings Industry Services

• Briefings and workshops for executive management and boards of hotels, venues, CVB’s and associations

• Customised research on trends, technologies and new marketsand new markets

• Development of strategies and business plans

• ‘Deep dives’ on key trends and technology developments

• Consultancy and workshop facilitation on innovation and new business models

62

Fast Future • Research, consulting, speaking, leadership

• 5-20 year horizon - focus on ideas, developments, people, trends and forces shaping the future

• Clients

– Industry Associations – ICCA, ASAE, PCMA, MPI

– Corporates - GE, Nokia, Pepsi, IBM, Intel, Samsung, GSK, SAP, Orange, O2, E&Y, KPMG, Amadeus, Sabre, Travelport, Travelex, ING, Santander, Barclays, Citibank, DeutscheBankSantander, Barclays, Citibank, DeutscheBank

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Adelaide, Qatar, QEIICC

– Hotels - Accor Group, Preferred,

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• Global strategic foresight study to help the meetings industry prepare for

the decade ahead - Industry-wide sponsors

• Multiple outputs Nov 2009 – December 2011

• Current studies on future strategies for venues and destinations

Convention 2020

Rohit Talwar• Global futurist and founder of Fast Future Research.

• Award winning speaker on future insights and strategic

innovation – addressing leadership audiences in 40 countries on

5 continents

• Author of Designing Your Future – Published 08/2008

• Profiled by UK’s Independent Newspaper as one of the Top 10

Global Future Thinkers

• Led futures research, scenario planning and strategic

consultancy projects for clients in telecommunications, consultancy projects for clients in telecommunications,

technology, pharmaceuticals, banking, travel and tourism,

environment, food and government sectors

• Clients include 3M, BBC, BT, BAe, Bayer, Chloride, DTC De

Beers, DHL, EADS, Electrolux, E&Y, GE, Hoover, Hyundai, IBM,

ING, Intel, KPMG, M&S, Nakheel, Nokia, Nomura, Novartis,

OECD, Orange, Panasonic, Pfizer, PwC, Samsung, Shell,

Siemens, Symbian, Yell , numerous international associations

and governments agencies in the US, UK, Finland, Dubai,

Nigeria, Saudi Arabia and Singapore.

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Designing Your FutureKey Trends, Challenges and Choices Facing

Association and Nonprofit Leaders

leaders

• Strategic decision making

framework

• Scenarios for 2012

• Key futures tools and techniques

• Published August 2008

• Price £49.95 / €54.95/ $69.95

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Accelerated Scenario Planning, Timelining & Future Mapping

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Example Projects• Public and private client research e.g. :

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– Scenario Projects – Migration 2030, Future of Narcotics, Chemical Sector, Family 2030– Scenario Projects – Migration 2030, Future of Narcotics, Chemical Sector, Family 2030

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