Les Roches Alumni gathered at August’s reunion to hear a fascinating insight into the future of the hospitality industry by Ted Tang, CEO of Leading Hotels of the World. Ted’s talk combined facts, opinion and eye-opening predictions for the next 40 years in global hospitality. Here are 5 of the big ones:
1. Investors will continue to shape the industry
On the topic of modern hotel ownership, Ted gave detailed insight into how the new breed of owners have redefined the structure and direction of the hotel industry. “The hotel industry is transforming into two different industries that are related but very different.”
“A hospitality asset is our expression of hospitality to the guest, whereas the hotel real estate businesses see each a hotel as a financial asset based on the returns it produces. This has had a tremendous impact on everything in our business, the service we deliver, the career paths we follow – they now all stem from investment objectives.”
“Many of the financial investors look at a holding period of 3-5 years or 5-7 years, anything that falls outside of that investment period isn’t important, such as maintenance, training and development.”
2. The booking experiences will be personalised to each traveler
“I’ve been in the industry for about 40 years and as I look back, two things have changed the most: the ownership and the distribution”, Ted said.
From toll free calls in the 60’s to directories and the global distribution systems of airlines and travel agents, Ted discussed how making a reservation has completely changed.
“Probably the biggest change came with the internet in late 90’s and early 2000’s. It changed the game, putting price transparency in front of everyone, you can look at availability, rates and reviews, it was the democratisation of hotel distribution.”
In the future, levels of personalisation will lead to a complete flip of the booking experience – it will be ‘here’s what I’m looking for, make me an offer’.
3. Employees will be replaced by contractors
On employment, Ted gave an eye-opening opinion on how he sees the future of human resources and employment. “I believe employment as we know it today is going to shrink significantly. It’s going to be replaced by another form of contribution, of labour”, he said.
“It’s already happening, but I think it will accelerate. 25% to 30% of employees will change to independent contractors, working for themselves. The daily routines are being replaced with artificial intelligence, machine learning, robotics, much of the work we see today is being replaced, however new work is being created.”
4. Business traveller demands will shift
In line with a global movement towards contracting, self-employment and the gig economy, Ted made it clear that the new workforce will significantly change business travel. “A big portion of hotel business is business travellers and business travellers have one thing in common, they’re reimbursed by their companies”, he said.
“When business travellers are travelling on their own money, there’s going to be a fundamental shift in demand to ‘good enough’ rooms, because it’s not going to be a reimbursable expense.”
5. ‘Good enough’ will be the new norm
As more business travellers are self-employed and with more leisure travellers geared to value, Ted discussed how a ‘good enough’ proposition will continue to grow in hospitality. “Chains will offer more compact hotel rooms with a large social space, reallocating the square footage out of the room and into communal areas.”
Giving examples, Ted showed how the needs of modern guests have shifted from wanting a large room, to instead wanting spacious and convenient areas to co-work and socialise. For leisure guests, the room will increasingly be a base from which to explore the real reason why they’re in town.
The industry needs continuous learning
Ted concluded with his biggest concern for the hospitality industry, tempered by the innovation shown by innovative educational institutions such as Les Roches. “I have concerns that we are very rooted in the past, we’re not a great industry when it comes to continuous learning, so I’m delighted to hear Les Roches is looking at how we continue to deliver education throughout a career.”
Grab a coffee and spend 45 minutes listing to this priceless insight. It might just shape your future career.