2018 travel and hospitality industry outlook

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2018 travel,Phoenix and hospitality,rising industrysector. The oilfield services outlook,transforms again,Introduction and market outlook 3. Hospitality Hurdles on the track to growth 5,Airlines Investing in the future of flight 6. Restaurants Driving success in a new era of competition 8. Building bigger ecosystems Unlocking the power of adjacent spaces 10. The path forward Data centric personalization 12,The battle for the customer 14. Ground transportation Implications far beyond travel 16. The human element of the travel experience 17,2018 travel and hospitality industry outlook.
Introduction and market outlook, Global travel industry gross bookings reached 1 6 trillion in 2017 making it one of. the largest and fastest growing sectors in the world 1 Factoring in indirect economic. contributions travel and tourism now accounts for a staggering 10 2 percent of. global GDP 2, A strengthening global economy lies at the Figure 1 Global international departures 1996 2015. heart of industry growth Each year the,global traveler pool is flooded with millions. of new consumers from both emerging 1 6,and developed markets many with rising 1 4. disposable incomes and a newfound ability,to experience the world A sleeping giant has 1 2.
truly awakened the impact of which cannot 1 0,be underestimated. Over the past two decades the number of 0 6,international travel departures across the. globe has more than doubled from roughly,600 million to 1 3 billion see figure 1 3 0 2. Many travelers from emerging countries,are leaving domestic borders for the very. first time injecting billions of dollars of new 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2015. growth into the travel economy and helping, the industry outpace global GDP 4 Growth Source World Bank.
appears poised to continue lifting the,industry to new heights in 2018 and beyond. The US travel market is among the leading,beneficiaries of a swelling global traveler. pool Over the past 20 years international,arrivals into the United States grew 72. percent from 55 million to 76 million 5 In,combination with other key growth drivers. this influx of spending drove the total US,market comprised of six segments including.
airlines lodging car rental cruise rail and,travel packaging to hit a record 353 billion. in 2017 6 Strong five percent growth is,forecasted for 2018 setting the industry on. course to hit a record breaking 370 billion,by year s end 7. 2018 travel and hospitality industry outlook, Key US travel industry growth drivers for 2018 Mitigate risk plan for success. Healthy economic indicators for consumer spending While the stage seems set for a successful year ahead 2017 was a. Current signals coming from the US economy indicate continued stark reminder of the vulnerability of our large but delicate travel. growth which is projected to sustain a rate of 2 0 2 5 percent ecosystem From severe hurricanes wildfires and earthquakes. throughout 2018 8 Consumers are a key source of that strength wreaking havoc in the United States Mexico and the Caribbean. They continue to benefit from a strengthening labor market low to senseless and horrific attacks in Barcelona and Las Vegas. inflation and rising incomes Unemployment hit a record low of external events have the potential to cause a ripple effect of. 4 2 percent in 2017 with an average of about 148 000 jobs added disturbances across the industry Unwilling to sacrifice coveted. every month over the past year 9 Households are also enjoying getaways travelers along with the broader industry have proven. rising wealth due to increasing housing prices and robust stock to be extremely resilient through trying times Unfortunate events. markets These trends helped elevate consumer confidence that occasionally shock the industry are often countered with. and despite some uncertainty in the geopolitical and economic consumers strong desire to experience the world and create. policymaking arenas should help spur strong travel spending meaningful memories with friends and family However given the. throughout 2018 unpredictability faced by travel brands strategic enterprise risk. management ERM must be inextricably linked with long term. Intense airline competition Intense competition from low. growth strategies with vigilance around evolving high profile forms. cost carriers and international airlines along with low fuel prices. of risk such as cybersecurity and food safety, will likely continue to drive down fares in 2018 While a challenge.
for traditional airlines seeking larger margins low fares may. Innovation will inevitably spark growth and change across the sector. drive spending across other travel segments such as hotels and. in 2018 Established industry players should stay nimble alert and. restaurants as great deals on airfare often entice travelers to. perhaps even a bit daring Travel growth continues to attract waves. take trips, of hopeful startups each armed with bold ideas on how to change. Healthy corporate travel demand Strong economies drive the status quo The flood of capital investment into innovation. business activity 2018 is forecasted to be a robust year for across the global travel ecosystem should not be taken lightly Over. corporate travel spending Pending global uncertainties corporate the past two years travel startups raised a cumulative 30 billion in. travel is expected to surge 6 1 percent its highest rate of growth funding almost totaling the amount raised over the past 10 years 12. since 2011 10 The potential for one of these companies to completely change. industry dynamics is likely not a matter of if but a matter of when. Spending shift from products to experiences Travel is. We already have examples to point to in ground transportation and. outpacing demand for goods Historical personal consumption. hospitality, expenditure PCE data reveals spending on durable goods. including cars sofas refrigerators household appliances and. other typical mainstays of consumer life has been dropping for. a little over a decade Even clothing and apparel spend is dipping. Instead experiential spending on recreation travel and eating out. is trending up 11,2018 travel and hospitality industry outlook. Hospitality Hurdles on the track, While strong post recession gains appear to be cooling off the hotel Breathing life into the midscale experience. sector is projected to sustain strong 5 6 percent growth throughout While the outlook for the hotel industry is generally positive. 2018 setting up the industry to hit a record breaking 170 billion in brands who fail to innovate risk losing market share With just a. gross bookings 13 Healthy business and leisure demand is helping few swipes in a travel app today s consumers can compare more. the industry achieve strong fundamentals including peaking average hotel and private accommodation options than ever before Along. daily rates ADR 2 4 percent 2017 YTD October and revenue per with unprecedented choice however comes unprecedented. available room RevPAR 3 0 percent 2017 YTD October Hovering expectations and a traveler that does not favor run of the mill. around 66 percent occupancy seems to have hit a peak 14 hotel experiences With hotel reviews and virtual tours at their. fingertips travelers can easily sniff out big box properties that fail. Some industry analysts however consider the prolonged strength to offer something truly unique and memorable. of the hotel sector to be a cause for concern Historically hotel. performance has proven to be cyclic with long runs of growth often Hoteliers are quickly becoming more experience driven but most. followed by intense downturns With the last down cycle occurring are concentrating innovation up market leaving the midscale. in 2010 some speculate soft market conditions to be imminent segment in desperate need of an experiential face lift If there is one. particularly because cycles generally occur every 10 years However segment that should capture the attention of hotel developers in. despite pockets of uncertainty those bullish on future hotel 2018 it is midscale hotels Forward thinking hotel brands are already. performance seem to outnumber industry detractors taking advantage of the opportunity to deliver travelers some of the. look feel and experience of a pricey lifestyle hotel in an affordable. While positive signals continue to emanate from the broader hotel package Breathing new life into the midscale experience can. industry some local markets may continue to face significant hurdles include modern design aesthetics better technology for connected. in 2018 In New York and Chicago for example hotels are struggling travelers innovation around F B and reimagined communal. to drive up room rates in a market flooded with new supply In fact spaces Midscale hotels are also attractive from an investment angle. since 2008 the number of hotels in New York City has grown 55 Compared to upscale and luxury hotels midscale properties are. percent to 634 properties and 115 000 rooms 15 Already competing cheaper to develop and do not require large staffs to operate. with a rise in private accommodation rentals hoteliers aiming to. keep their properties full must offer attractive rates These local Midscale competition is poised to heat up in 2018 Awareness of. market conditions are weakening growth and in order to cope the opportunity is growing and forward thinking hotel chains are. with the oversupply issue some hoteliers are resorting to cutbacks launching new brands with increased cadence A strong construction. around service maintenance and even lobbying with city officials for pipeline in the midscale segment suggests more value driven. property tax reform lifestyle brands will hit the market in 2018. 2018 travel and hospitality industry outlook,Airlines Investing in the future of flight.
In 2018 airlines have the opportunity to take progressive steps overcrowding and poor integration they are often disrupted by. toward defining the next generation of air travel Airlines are leaving weather and equipment failure Complex logistics have made it. behind a decade where losses surpassed roughly 50 billion 16 Now difficult for airlines to implement technology upgrades Case in point. bolstered by low fuel prices tighter capacity new merchandizing Some airlines are still running on legacy systems that are 10 or even. strategies and industry consolidation the six biggest US carriers are 20 years old. turning things around posting a consecutive run of annual profits. US carriers should seize the opportunity of the upswing and that A confluence of emerging technologies can unlock incredible. begins with investment in critical infrastructure and technology that solutions for airlines specifically around pain points such as. has been sorely lacking given recent industry pressures security checkpoints baggage systems route optimization helping. consumers navigate busy airports and mitigating the impact of. Many airlines are taking steps in the right direction On the weather delays and equipment failure Consider the following. infrastructure side large US carriers are announcing significant scenario that showcases the potential impact technologies like the. airport investments and fleet expansions that are critical to Internet of Things IoT robotics 3D printing asset tracking and. capitalize on rising travel demand Carriers are also upgrading fleets smart workforces can have to relieve pain points around aircraft. with sorely needed amenities to meet rising flyer expectations malfunctions18. including new seats satellite Wi Fi service larger overhead bins. In air detection and notification Mid flight an IoT connected. and power for devices A competitive aircraft leasing market will. aircraft part recognizes it is not functioning properly The aircraft. likely continue to grant carriers easier access to attractive aircraft. sends a message to the ground about the malfunctioning part for. financing enabling fleet growth and expansion in 2018. repair upon arrival, Air traffic reform will likely continue to be a key infrastructure The on demand supply chain The part used in the repair will need. debate throughout the year with enormous implications for the to be replaced upon landing so before arrival a 3D printer at the. industry Proponents to privatize air traffic control argue that budget arrival airport receives a signal to print the part. uncertainty in Washington limits the FAA s ability to keep pace with. The connected autonomous tarmac The printed part must be. technology upgrades such as satellite based navigation and digital. delivered to the arrival gate An autonomous vehicle picks it up and. communications that can drastically improve route optimization. makes a delivery, in an increasingly crowded sky A pocket of detractors however is. pushing back arguing that privatization would allow a corporate The connected employee The mechanic uses heads up display. monopoly of the nation s skies heavily influenced by the major eyeglasses to reference documents from the cloud Using a. airlines borescope connected to a wireless tablet the mechanic streams. live video to a remote engineer allowing the repair and inspection. The next generation of airline technology to benefit from the engineer s authority. The curb to gate to destination experience needs an extreme. makeover When it comes to customer satisfaction the airline Instead of this aircraft being taken out of service frustrating travelers. 2018 travel and hospitality industry outlook Key US travel industry growth drivers for 2018 Healthy economic indicators for consumer spending Current signals coming from the US economy indicate continued growth which is projected to sustain a rate of 2 0 2 5 percent throughout 2018 8 Consumers are a key source of that strength

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