Contemporary Issues In The Hospitality Industry – Megatrend Of Millennial

Description and explanation of the megatrend

Discuss about the Contemporary issues in the hospitality industry.

A global demographic megatrend is the most apparent issue throughout the world. It is a mega issue because of higher numbers of mid as well as low-income nations are facing slow growth of population, and other countries, on the other hand, are experiencing increasing growth.  Major global demographic trends at the international level are increasing population, rising life expectancy, changes in demography and urbanization that impact the type of customers and guests, where they travel, where they say and what kind of services they need and the activities they want to get involved in. One of the major challenges is of the Millennials; this megatrend is selected as it is so diversified that implementing conventional demographic segmentation is highly complex to forecast the customer behaviour. The challenge is apparently obvious for hoteliers, such as how they communicate their value to the millennial consumers by making use of reliable and straightforward demographic segmentation methods. From the past two decades, the globe has gone through massive changes in context with redefined cultural and societal expectancies. Millennial can be stated as those who accept new normals and retain trends which allow them to build their own lifestyle. New ways have been generated by social media for this generation, which can be an opportunity for the hoteliers to address and respond to this megatrend issue.

One megatrend which has been selected is the changes in segmentation that is new power segment of Millennial. It shows the changes in demand of people with the changes in the segmentation. Since, every customer group, their age and demands affects the industry and forces them to change according to the needs of customers. It can be explained as; the Millenials are the rapidly growing customer segment within the hospitality sector (Dogru, Mody & Leonardi, 2018). Further by considering the increase of millennial consumers, hospitality firms are required to be technology driven and highly transparent, with giving strong consideration to customer relationships. Technology is the most vital aspect of this global demographic, and it is expected by the technology to drive payment, GPS, navigations and check-in experiences. This customer segment is actively involved in using social media sites to provide feedback, suggestions and reviews. Millennial expect an in-depth link between tourism services and their conduct towards everyday lives. Recently, the face of the hospitality industry has gone through an enormous transformation, due to the increasing technological advancement as well as the customer behaviour (Mlli?evi?, 2016).

Issues related with this Megatrend

The Millennial generation has been rapidly driving the hospitality industry with strong force and swap and is demanding the hotel on a global basis to implement newer ways and view to involve with the customer and separate the conventional norms of operating and functioning. Most of the leisure travellers are considered as millennial, further technology has assisted them in incorporating several aspects of their regular lives, and as a consequence, their individual and external lives are separated. Millennialis, the group of the people that dominate the hospitality industry internationally. They are to wanting to discover and make an investment on travelling for higher experience (Abeyratne, 2017). Hence, it is essential for the hospitality industry to deliver the requirement and interpret what are their needs and needs so that hotels will need come forward with updated and current trends.

These customer segments expect higher digitalization further travellers earn more control over the actions and are highly engaged in the travel planning process at their individual pace. The automatic bookings to the check-ins and come up with own devices entertainment platforms (Jasonos & McCormick, 2017). Further, these changes come up with various opportunities, threats and challenges due to the global requirements to the mew sources and shifts of demand. The options for Millennial to opt them for extremely low as compared to their competitors who are known about the fact and are active at responding to the currents trends and technology thereby it is not effective for their business too.

In context with the rapid increase on the impact and issues related with the Millennial and the changing priorities of the fluctuating customer segment, hotels are required to implement strategies to appeal target customer segment and their needs accordingly (Neuhofer& Buhalis, 2014). It is expected that millennial will rule the purchases in the hospitality industry by 2020. Since brands make a comparison for profit margins from the traveller generation, it is significant to assess the development facts that are valued by Millennial; digital facilities, attractive design and customized user experience.

Economical: This megatrend can affect the economy in a direct and indirect manner, such as it can create job opportunities and can drive the employment rate of the economy. In addition to this, this can create a better impact on GDP if effectively addressed (Wan & Law, 2017). In regards to the millennial group, this can create youth awareness and opportunities while ensuring that

Environmental: Millennial believe in green and ecological practices so that hotels can provide minimum damage with its environment. This customer segment prefers hotels to be sustainable and reduce wastage and environmental harm (Lopes, 2016). These environment aspects can create a positive and negative impact on the customer retain, so it is essential to keep the customer and environment safe and healthy.

Economical

Social and Cultural: Socio culture affects the hospitality sectors by customer segment groups, their morals and values. These can affect negatively if the hotels do not value the cultural and social aspects and avoid the norms of society (Jones, Hillier& Comfort, 2016). For the positive handling of social and cultural aspects, hotels must amend their strategies and should value their culture and society and must provide the services according to the requirement of customers while taking feedbacks on a regular basis.

Technological: Millennial group are striving for the hi-tech experience. For the hotel industry, they can offer free Wi-Fi, check-in and payment options to attract these groups. Technology and digital media play a key role in the present era and are also one of the biggest challenges if not addressed effectively. These are the strongest force a hospitality firm can consider, innovative techniques on digital devices are expected as those aspects on which these customer group highly rely (Schuckert, Liu& Law, 2015). So it is essential for the hospitality industry to get better, smarter and highly integrated in terms of technology use.

Legal: Legal factors intensely affect the hotel industry, and the main barriers are severe policies and regulations which can create an adverse impact on the functions of hotels. To avoid such issues, hotels must comply with legal standards and policies and work in a viable and fair manner and be adhered to legal practices.  

Operational: Business operations must set in a way that does not seem traditional to the new targeted millennial groups. Operators are required to manage the offset between enabling devices so as to ensure non-disruption of customer service and experience (Leung, Xue & Bai, 2015). Operational activities must be aligned and balanced as per the demands and requirements of customers for ensuring seamless flow of operations.

Business management: Since millennials are interested in contemporary, challenging and useful work, for this aspect business management must be updated with latest trends and effective management so that the generation can take benefit of offerings, ongoing feedbacks with daily preferred input (Mariani, Buhalis, Longhi& Vitouladiti, 2014).

There are several threats and opportunities present in the hospitality sector.  The threats comprise of fear of substitution, this threat arises when hotels fail to deliver the customer needs in an effective way or not effective at technological and innovation or lack any other aspect, and then they can face replacement fear (Ryan, 2015). Their customer will shift to other competitors, thereby declining sales and market position. Another threat is that there would be a loss of customer if the hotel is not capable of catering the current trends and technologies. Since, in the hospitality industry, there are intense competitions which also stand as a major threat, this fierce competition act as a main barrier as the customer will have various options to choose from. Political unrest, severe policies and regulation for the hotel industry to conduct on a global basis is also another threat which hospitality sector face in the present era (Roblek, Stok & Mesko, 2016). Economic conditions such as low income, employment and GDP rate also affects the sales and marketing of hospitality business, as the customer will not get attracted by the economy of the country and thereby avoid visiting in the same.

Environmental

Regardless of these major threats, there are several opportunities emerging in the hospitality industry. Hospitality sector can go for technological advancement on an ongoing basis to provide their customer up-to-date and hi-tech offerings. Along with this, business policies must be according to current market trends and technologies; this will also help the hotels in attaining a competitive edge. Further, there must be upgraded business policies for contemporary customer segment so that the fear of substitution and loss of customer can be eliminated and the business is able to retain the customer for a longer period (Köseoglu, Ross & Okumus, 2016.  There is also an opportunity of improvising business image, so as to retain trust, customer relationship and building long-term value and stability. With the improvisation in the business image, hotels will be able to gain more profitability which driving their performance globally. The main opportunity to attain competitive edge while retaining customers would be providing unique customer experiences and satisfaction through quality offerings at reasonable prices. By considering environmental concerns and conducting sustainable practices, the industry will be able to gain competitive advantage. In addition, the industry must aim to protect the environment and must go green.

By considering above analysis, the hospitality industry is required to consider threats and opportunities assessed from the identified megatrend. If these threats and opportunities are not taken into account by sector, they can suffer from a major loss in terms of image, customer and profitability. By implying with this aspects, that means addressing threats, and capitalizing opportunities hotels will be able to ensure long-term success. If these threats and opportunities are overlooked by the hotels, then the industry will experience enormous challenges and loss as services are updated and user-friendly (Nieves, Quintana & Osorio, 2016).For the business management, customer segment expects hospitality industry to be qualities and knowledge, with skilled staff and make use of high tech equipment alongside. In additions, hospitality industry must pay attention towards health and safety, as today generation prefer healthy and as per their diet food, so the industry must consider full hygiene and health concerns in their servings. If the industry did not imply with threats and opportunities, they would experience competitive lack, political pressure, low customer grasp, lack of trust and relationship with customers. So it is vital for the hospitality sector to spot opportunities and eliminate the threat in a best possible manner. There is the presence of opportunity in every context, but the most important thing is to spot and implement.

Social and Cultural

From technological to environmental, their existing opportunities and threats must be considered otherwise the industry would go from enormous sufferings. In a situation where the industry is not complying with the given opportunities and threats, and is based on old concepts or has not upgraded its policies on a timely basis then it would also be a challenge which further makes the survival of business hard.

Companies are required to describe their strategies in the basis of personality traits and conduct of global demographic, i.e., that they travel a lot and are premature adopters of technological aspects such as personalized communication and are impulsive. On the basis of the study, it also recommended that hotels must please this customer segment with facilitated check-ins and unique experiences at the most affordable prices. In exchange, the greatly satisfied customer group with do promotion of their business on digital channels and word-of-mouth alongside. Moreover, the hospitality industry is required in responding to these changes by ensuring their provided products and services are updated and user-friendly.For the business management, customer segment expects hospitality industry to be qualities and knowledge, with skilled staff and make use of high tech equipment alongside. In additions, hospitality industry must pay attention towards health and safety, as today generation prefer healthy and as per their diet food, so the industry must consider full hygiene and health concerns in their servings.

Rapidly, customer segments are expecting innovation solutions and options to stay, travel and eat. Further, it is suggested that industry must assess healthy food options, current global trends and technologies. Seamless connection around all platform and methods is another key aspect; hotel industry is now providing check-ins and digital services to provide the high-tech user experience. It is also essential that industry considers the safe environment and sustainable practices, as eco-friendly conduct is now turning out to be an obligatory norm, and properties are concentrated on water shortage and renewable energy resources. Further, the industry is required to install the updated system so that the A/C and lights automatically gets switched off when the checkout is made by guests thereby saving electricity.

For addressing threats and capitalizing opportunities, the industry is required to implement right technology and tools. It is essential for the industry to spot and analyze feedbacks to make improvement in customer experience; they must also trace and monitor their daily performance. Moreover, the industry must highly concentrate on the customer segment that is most beneficial for them, and the resources and offerings must be allocated accordingly.  It is essential for the industry to make a technological advance on a continuous basis to eliminate the fear of replacement and the fear of loss of a customer. With the technological advancement, the industry must able to gain a higher competitive advantage while standing apart from the rivalry. It is also recommended for the industry to comply and adhere to political and legal aspects so that their trading is under the rules and regulation of government. From the above readings, it is suggested that the industry must capitalize the opportunities by adopting updated policies and protocols so as they can make sure that their business is running seamlessly and effectively. They must begin to improvise their business image in every term such as they must provide discounts, bonus and extra services to guests to keep them happy. Moreover, it is essential to treat guests in a great manner to ensure customer satisfaction and a great experience. The business image can be improvised through various ways

Technological

Customer experience and satisfaction is the key aspect of the hospitality industry to keep in mind, as this will create an impression upon customers and forces customers to visit the same offerer again and again. Customer satisfaction can be derived from if hospitality industry is technology driven and provides products and services according to the needs of customers. It is significant for the industry to take environmental measures into account; this can help industry from retaining a customer by using sustainable practices. Industry must make optimum utilization of available resources, preventing wastage, while keeping the environment safe and clean as more as possible.

Conclusion

The present study shows that the megatrend issue of global demographic of changing segmentation is required to be considered by the hospitality industry. Further, the major concern must be given towards millennial due to their more travelling sessions and tours. These customer segments are more technologically advanced and prefer hi-tech innovations with more sustainable practices.  For resolving the current issue, the company must follow the recommendations provided and must conquer the issues by providing latest updated tools and creations according to latest trends to keep the customers satisfied and earn long-term success

References

Abeyratne, R. (2017). Millennials and Disruptive Innovation. In Megatrends and Air Transport (pp. 201-211). Springer, Cham.

Dogru, T., Mody, M., & Leonardi, C. (2018). Blockchain Technology & its Implications for the Hospitality Industry.

Jasonos, M., & McCormick, R. (2017). Technology Integration for Restaurants & Hospitality Industry in the Year 2025.

Jones, P., Hillier, D., & Comfort, D. (2016). Sustainability in the hospitality industry: Some personal reflections on corporate challenges and research agendas. International Journal of Contemporary Hospitality Management, 28(1), 36-67.

Köseoglu, M. A., Ross, G., & Okumus, F. (2016). Competitive intelligence practices in hotels. International Journal of Hospitality Management, 53, 161-172.

Leung, X. Y., Xue, L., & Bai, B. (2015). Internet marketing research in hospitality and tourism: a review and journal preferences. International Journal of Contemporary Hospitality Management, 27(7), 1556-1572.

Lopes, M. (2016). The hospitality industry (Doctoral dissertation).

Mariani, M. M., Buhalis, D., Longhi, C., & Vitouladiti, O. (2014). Managing change in tourism destinations: Key issues and current trends. Journal of Destination Marketing & Management, 2(4), 269-272.

Mlli?evi?, S. (2016). Innovation in the function of growth and development of tourism industry in tourism market. Megatrend revija, 13(1), 147-158.

Neuhofer, B., & Buhalis, D. (2014). Issues, challenges and trends for technology enhanced tourism experiences. The Routledge Handbook of Tourism Marketing.

Nieves, J., Quintana, A., & Osorio, J. (2016). Organizational knowledge, dynamic capabilities and innovation in the hotel industry. Tourism and Hospitality Research, 16(2), 158-171.

Roblek, V., Stok, Z. M., & Mesko, M. (2016, January). Complexity of a sharing economy for tourism and hospitality. In Faculty of Tourism and Hospitality Management in Opatija. Biennial International Congress. Tourism & Hospitality Industry(p. 374). University of Rijeka, Faculty of Tourism & Hospitality Management.

Ryan, C. (2015). Trends in hospitality management research: a personal reflection. International Journal of Contemporary Hospitality Management, 27(3), 340-361.

Schuckert, M., Liu, X., & Law, R. (2015). Hospitality and tourism online reviews: Recent trends and future directions. Journal of Travel & Tourism Marketing, 32(5), 608-621.

Wan, S., & Law, R. (2017). Leveraging online reviews in the hotel industry. In Analytics in smart tourism design (pp. 235-252). Springer, Cham.

Order an Essay Now & Get These Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order