Challenges and Opportunities in Global Tourism

1
Challenges and Opportunities in Global Tourism

• Aichi Shukutoku University
• Nagoya 25 May 2006
• Herman Ehrlich

2
If you want to achieve big, you need to dream
big Conrad Hilton
3
Exceed Expectations

• STRENGTH
• CREATIVITY
• SKILL
• COMPASSION
• FOCUS
• INSPIRATION
• STAMINA

• INTELIGENCE
• COURAGE
• INNOVATION
• DETERMINATION
• PIONEERING SPIRIT
• INITIATIVE

4

• CHALLENGE THE
• STATUS QUO
• TO GO BEYOND!!!!

5
Presentation Outline

• Tourism Explained
• Facts Figures in Global Tourism
• Challenges Opportunities
• Hilton Hotels

6
Tourism Explained
7
Tourism

• 12 of World GDP (Gross Domestic Product)
• 200 Million jobs (8 of world total)
• 763m Intl tourism arrivals (2004)
• 623b in global tourism revenues (623000000000)

8
Outbound tourism evolution

• Organized Groups (Japan 1975, Taiwan 1985, China
  2000)
• Travel, Accommodation and Tours organized.
• Organized Individual (Japan 1995, Taiwan 2005,
  China 2020)
• Travel, Accommodation and Tours organized.
• Independent (Japan 2000, Taiwan 2010, China
  2035)
• Travel Accommodation organized
• Independent (Japan 2005, Taiwan 2015, China
  2040)
• Purchased direct by traveler (web?)

9
Tourism motivation

• Leisure
• Business
• Meetings, Incentives, Conventions Exhibitions
  (MICE)
• Independent
• Government
• Interest groups

10
Impact drivers on Future Tourism

• Demographics
• Politics
• Economics
• Industrialized nations
• Developing nations
• Emerging economies

11
Ski ?

• Spend
• Kids
• Inheritance

12
Travel

• Domestic
• Inter-regional
• Long-haul

13
Tourism Products are perishable

• Short shelf life
• Ketchup bottle principle

14
Tourism Products are perishable Tomato Ketchup
Bottle Principle

• If 20 btls. ketchup not sold today.
• Bottles remain on shelf tomorrow.
• Owner loses interest on value of ketchup 20 btls.
  (i.e. 20x Yen 300 _at_ 4 / 365 0.66 Yen loss)

• 20 airplane seats NGO-HKG empty (20 x Y17000
  Y340000 loss)

15
Tourism Products are perishable

• Product pricing based on offer and demand (Yield
  Management, see Airlines, Hotels, Car rental,
  Tour products, etc.)

16
The Tourism product

• Service delivery (human interaction)
• Consumer expectations
• Product standards
• Consistency

17
Facts and Figuresin Global TourismSource
United Nations - World Tourism Organization IMF
18
(No Transcript)
19
(No Transcript)
20
(No Transcript)
21
China (excluding Hong Kong Taiwan)
Source International Herald Tribune
22
Outbound Tourism by generating region
23
(No Transcript)
24
(No Transcript)
25
Market Share (2004) (Expenditure)
26
(No Transcript)
27
International tourist arrivals 1950-2020
28
Challenges Opportunities
29
Challenges

• Safety (Terrorism)
• Travelers assume risk easier
• Impact short lived
• Economic
• Energy prices
• Inflation
• Interest rates
• Health
• Avian influenza with human mutation of H5N1
• Visa procedures and restrictions

30
Opportunities

• Improved prospects from Euro-zone economies
  (Germany in particular)
• Increased disposable income in emerging economies
  from intra-regional middle class market growth
  (China, India etc.)
• Investments by (local) government in
  infrastructure.
• Favorable legislation for tourism

31
Opportunities

• Hospitality consolidation (Hilton, Marriott,
  Starwood, etc.)
• Resorts
• Time-share
• Health care resorts and hotels
• Cruise line industry
• Air travel and High speed rail

32
Tourism Forecast

• Continued Growth forecasts (WTO)
• 4.5 p.a.
• Tourism growth in Asia-Pacific (9) Middle-East
  (8)
• Demographic impact (ageing) industrialized
  nations favorable for tourism

33
Hilton HotelsSince 1919
34
(No Transcript)
35
(No Transcript)
36
(No Transcript)
37
Hilton Nagoya facts

• 1989
• 500 employees
• 2000 people per day visit hotel
• 50 of resident guests foreigners
• Kings, Queens, Presidents, political- civic
  leaders and You!

38
Hilton Hotels

• 2800 Hotels
• 80 Countries

39
.like any other business

• Finance
• Human Resources
• Production
• Distribution

40
Business Cycle

• People -Team members
• Hilton Brand Standards (the expectation)
• The minimum level of service we deliver to guests
  at each key service point.
• Service Standards (deliver the expectation)
• Cost control through productivity, methodology,
  processes, etc.
• Profitability
• Return on investment to shareholders
• Investors confidence Capital for growth

41
4 Core values

• People (employees)
• Quality
• Customers
• Profit
• What gets measured, gets done..
• Balanced scorecard measures across the 4 core
  values.

42
2 Philosophies

• Equilibrium (for guests)
• Put back a little of what life takes out (an
  environment in which guests can relax, refresh
  and rejuvenate, whether on business or leisure)
• Esprit (for employees)
• Only those that feel valued can add value(How
  we behave with each other)

43
How Hilton delivers Equilibrium

• Consistency
• Personalized
• Hassle-free
• Inspirational -Hilton Moments

44
How Hilton delivers Esprit
Service (internal external) Recognition Communic
ation (dialogue not monologue) Product Process
(training education)
45
Hilton Esprit

• Good Induction
• On the job training
• Direct Learning
• Knowledge room
• Hilton University
• Hilton Team Member Committee
• Encourage Self Expression
• Social Activities
• Celebrate success

46
Culminating in..
Balanced Scorecard What gets measured, gets done
47
Education is not optional
http//www.hilton-university.com/
48
Corporate Social Responsibility

• Environmental impact
• Sustainability
• Construction Interior Decoration
• Services (electric power, water, gas, sewage)
• Alternative fuels and methods
• Waste Management
• Environmental conscious vs. cultural traditions

49
Corporate Social Responsibility

• Charity starts at home
• Supporting our community at large
• Children, Aged care, Impaired (Physically and
  Mentally challenged)
• Service organizations
• Roteract, Rotary, Lions, Soroptimist, Kiwanis,
  Red Cross, Salvation Army, Hope Intl.

50
Technology not optional..

• Hilton Enables Guests to Print Airline boarding
  Passes from Hotel Check-in Kiosks
• Hilton Hotels announced that it enables guests to
  print boarding passes for most major airlines at
  check-in/check-out kiosks within the lobbies of
  37 participating Hilton hotels in the USA. (March
  2006)

51
Technology not optional..

• Molecular processors
• VoIP (Voice over Internet Protocol)
• Veritag?
• Hypersonic travel?
• Nanotechnology?
• WiMax (Citywide internet access)
• What will you invent?

52
Challenge the Status Quo