Marketing Review - Spring 2008 - (Page 31)

will be there for patrons to see when choosing their meals. And that sausage and pepperoni pizza will have a warning label that could scare the customer into a heart attack. This could easily sink the market for some traditionally popular—but unhealthy—dishes and raise demand for fish (omega-3 fatty acids), cruciferous vegetables (cancer fighters), and other “healthy” alternatives. We can expect significant menu revisions in the next few years. Implications for Travel: The biggest regulatory changes ahead are the global move to biometric passports, prompted largely by Washington’s fear of another major terrorist attack, and—within the U.S.—the REAL ID program.According to plan, anyone seeking to enter the United States— including American citizens who have been out of the country—will need a biometric passport to get in. Countries from Switzerland to Singapore have adopted them in recent years. However, delays in pulling the American program together have forced Washington to waive the scheme for some travelers. Under REAL ID, before granting a driver’s license, states must carry out extensive checks to confirm the applicant’s identity. By 2014, anyone under 50 living in a state that does not provide compliant licenses will be unable to board an airliner or enter a federal building. Those over 50 can fly until 2017. Several states have said they will not comply with the program, and their citizens now face being unable to travel by air. 10) Institions are undergoing a bimodal distribution: The big get bigger, the small survive, and the mid-sized are squeezed out. Economies of scale enable the largest companies to win out over mid-sized competitors, while “boutique” operations can take advantage of niches too small to be efficiently tapped by larger firms. We see the result in a wide range of industries throughout the developed world. In agriculture, banking, auto manufacturing, telecommunications, and many other sectors, the largest firms have been buying up their mid-sized competitors or driving them out of business. At the same time, hundreds or thousands of tiny operators have arisen in each industry to get rich by serving markets beneath the notice of the giants. Implications for Airlines: We expect airlines to continue merging for as long as there are SPRING 2008 • HSMAI MARKETING REVIEW 0 airlines available to do so. At the same time, small startup airlines are appearing almost constantly, taking advantage of routes and other niche opportunities that their predecessors either have not recognized or did not consider sufficiently attractive. In the U.S., Delta and Northwest should be the next major union, as soon as their respective pilots can work out seniority concerns. United and Continental are likely to follow soon after. In Europe, Easy Jet has just completed its acquisition of GB Airways, TUI Travel’s TUIFly is merging with Lufthansa’s Germanwings airline, and KLM has bought Al Italia. Air France wants a piece of the merged Delta/Northwest giant, if U.S. regulators will allow the deal. Implications for Cruises: We have long seen the same trend in this industry. Royal Caribbean and P&O Princess joined forces in 2001. Four years later, diminutive Clipper Cruise Line announced its pending merger with Australia’s Peregrine Adventures. And last year, Royal Caribbean/Celebrity spun off the new, upscale Azamara Cruises to compete with Oceania Cruises. There will be more such examples in the future. Implications for Hotels: Hotel chains have been merging constantly at least since Bowman-Biltmore bought United Hotels back in 1924. There is no sign the dealmaking will stop in the near future. Given the weakness of the dollar, and of the American real estate market, we expect to see a wave of offers by European hospitality firms for their peers in the U.S. Implications for Restaurants: In this aspect, the restaurant industry parallels hotels almost exactly. Mergers and acquisitions, startup and failures, change the industry almost too fast to follow. Implications for Travel: This is truly a universal trend. The implication for travel is the same as for all these sectors: large companies will continue to snap up midsized competitors or, by outcompeting them, drive them out of business. At the same time, new companies will prosper in niche markets. Some will remain small and highly profitable for their owners. Others will grow until they attract the attention of the giants. A very few may become giants themselves. Look for the fastest turnover in the online travel search and marketing operations, where niche startups abound. All segments of travel and hospitality have been in ferment for as long as we can remember. They will remain in ferment long into the future. In Sum Looking at the daily news here in the U.S., it sometimes seems that almost everything has suddenly been transformed. The soaring real estate prices of a year ago are now collapsing. Oil prices are in triple digits. The economy appears to be headed into a recession. The next President is likely to be either an African-American or the wife of a President the Republican House majority once impeached. When Lord Cornwallis surrendered to George Washington at Yorktown his band leader reportedly chose for the occasion a piece called “The World Turned Upside Down.” At times, we can almost hear it playing faintly in the background. And yet, when we look at the trends for hospitality and travel the most striking thing is how little has changed. Computers are making services possible that could not have been offered even a decade ago. Guests want their adventures to be eco-conscious and poverty-friendly. Travelers soon will be arriving en masse from China and India. But the fundamentals remain. Hospitality and travel are about providing impeccable service in the most pleasant, comfortable surroundings that can be offered at a given price point. All else is just a means to that end. Forecast International has omitted one important trend that appeared in previous articles. This is the continuing problem of terrorism. We believe that Muslim extremists will continue to target the hospitality industry (“soft targets”), and particularly Western-owned hotel and restaurant chains in Muslim countries. We omitted terrorism below for two reasons: We have said everything about it that needs to be said. And there is no reason to over-dramatize this issue. True, the world contains many would-be terrorists. Yet, there are only a few hundred of the trained, supremely dangerous variety responsible for the 9/11 attacks. Most are hiding in the back-country of Pakistan, unable to do much harm. For any hotel or restaurant, the consequences of a terrorist attack are horrific. That is why we recommend that operators do their best to improve security. Yet, the chances of being struck by terrorists are considerably slimmer than those of being struck by lightning. It is time to turn our attention to more immediate matters. I 31

Table of Contents Feed for the Digital Edition of Marketing Review - Spring 2008

HSMAI Marketing Review - Spring 2008 Contents COLUMN: The Online Marketer COLUMN: Success Stories COLUMN: Guest Column Ten Trends Now Shaping the Future of Hospitality Turning the 2008 Consumer Tax Rebates into Hospitality and Travel Sales 25 Extraordinary Minds in Hospitality and Travel Sales and Marketing The Lure of Lore: Connecting with Customers Through a Unique Brand Story A Careful Balancing Act A Meaningful Relationship: How Technology Affects the Connection Between Hospitality Marketers and Meeting Planners SPECIAL SECTION: The 2007 HSMAI Adrian Awards Building Five Star Imagery

Marketing Review - Spring 2008

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