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Challenges and Opportunities in Global Tourism Aichi Shukutoku University Nagoya 25 May 2006 Herman Ehrlich ‘‘If you want to achieve big, you need to dream big’’ Conrad Hilton STRENGTH CREATIVITY SKILL COMPASSION FOCUS INSPIRATION STAMINA Exceed Expectations INTELIGENCE COURAGE

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challenges and opportunities in global tourism

Challenges and Opportunities in Global Tourism

Aichi Shukutoku University

Nagoya 25 May 2006

Herman Ehrlich

if you want to achieve big you need to dream big conrad hilton
‘‘If you want to achieve big, you need to dream big’’ Conrad Hilton

Challenges & Opportunities in Global Tourism

slide3
STRENGTH

CREATIVITY

SKILL

COMPASSION

FOCUS

INSPIRATION

STAMINA

Exceed Expectations

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

Challenges & Opportunities in Global Tourism

slide4
CHALLENGE THE

STATUS QUO

TO GO BEYOND!!!!

Challenges & Opportunities in Global Tourism

presentation outline
Presentation Outline
  • Tourism Explained
  • Facts & Figures in Global Tourism
  • Challenges & Opportunities
  • Hilton Hotels

Challenges & Opportunities in Global Tourism

tourism explained
Tourism Explained

Challenges & Opportunities in Global Tourism

tourism
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 (623’000’000’000)

Challenges & Opportunities in Global Tourism

outbound tourism evolution
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?)

Challenges & Opportunities in Global Tourism

tourism motivation
Tourism motivation
  • Leisure
  • Business
    • Meetings, Incentives, Conventions & Exhibitions (MICE)
    • Independent
  • Government
  • Interest groups

Challenges & Opportunities in Global Tourism

impact drivers on future tourism
Impact drivers on Future Tourism
  • Demographics
  • Politics
  • Economics
      • Industrialized nations
      • Developing nations
      • Emerging economies

Challenges & Opportunities in Global Tourism

slide11
Ski ?
  • Spend
  • Kids
  • Inheritance

Challenges & Opportunities in Global Tourism

travel
Travel
  • Domestic
  • Inter-regional
  • Long-haul

Challenges & Opportunities in Global Tourism

tourism products are perishable
Tourism Products are perishable
  • Short “shelf life”
  • Ketchup bottle principle………

Challenges & Opportunities in Global Tourism

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 @ 4% / 365 =0.66 Yen loss)

20 airplane seats NGO-HKG empty (20 x Y17’000 = Y340’000 loss)

Tourism Products are perishable Tomato Ketchup Bottle Principle

Challenges & Opportunities in Global Tourism

tourism products are perishable15
Tourism Products are perishable
  • Product pricing based on offer and demand (Yield Management, see: Airlines, Hotels, Car rental, Tour products, etc.)

Challenges & Opportunities in Global Tourism

the tourism product
The Tourism product
  • Service delivery (human interaction)
  • Consumer expectations
  • Product standards
  • Consistency

Challenges & Opportunities in Global Tourism

facts and figures in global tourism source united nations world tourism organization imf
Facts and Figuresin Global TourismSource: United Nations - World Tourism Organization & IMF

Challenges & Opportunities in Global Tourism

china excluding hong kong taiwan
China (excluding Hong Kong & Taiwan)

Source International Herald Tribune

Challenges & Opportunities in Global Tourism

slide22

Outbound Tourism by generating region

Challenges & Opportunities in Global Tourism

market share 2004 expenditure
Market Share (2004) (Expenditure)

Challenges & Opportunities in Global Tourism

international tourist arrivals 1950 2020
International tourist arrivals 1950-2020

Challenges & Opportunities in Global Tourism

challenges
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

Challenges & Opportunities in Global Tourism

opportunities
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

Challenges & Opportunities in Global Tourism

opportunities31
Opportunities…
  • Hospitality consolidation (Hilton, Marriott, Starwood, etc.)
  • Resorts
  • Time-share
  • Health care resorts and hotels
  • Cruise line industry
  • Air travel and High speed rail

Challenges & Opportunities in Global Tourism

tourism forecast
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

Challenges & Opportunities in Global Tourism

hilton hotels since 1919
Hilton HotelsSince 1919

Challenges & Opportunities in Global Tourism

slide34

1973 Hilton goes

Online as the most

sophisticated

reservation system

in the industry

1919 Conrad

Hilton purchases

his first hotel in

Texas, USA

1955 The Hilton

Istanbul opens as the

first Turkish hotel to

meet international

standards & is our

longest running

European hotel

1949 The Caribe

Hilton opens, the first

Hilton outside the USA

marking foundation of

Hilton International

1964– Hilton becomes independent company with right to use Hilton name outside USA

1969– John Lennon

& Yoko Ono stage

famous “Bed-in-for

Peace” at Hilton

Amsterdam

1946– Hilton

Hotels Corp. is

listed on New

York Stock

Exchange

1959– Hilton pioneers airport hotels concept with opening of San Francisco Airport Hilton

Challenges & Opportunities in Global Tourism

slide35

1999– Hilton

acquires Stakis Plc

with 54 hotels, 22

casinos and 68

Livingwell Health

Clubs

2002– Launch of Hilton Worldwide Resorts and coral by Hilton, setting new standards in the global resort market

1997 Ladbroke Group

plc and Hilton Hotels

Corp. sign a strategic

Marketing alliance reuniting

The brand after 32 years

1994 Hilton

HHonors Rewards

Exchange is

introduced

2001– Hilton acquires

Scandic Hotels AB with

154 properties in the

Nordic region

2000– Hilton in the

Community

Foundation is

launched

1995– Hilton

Launches

www.hilton.com

1998– New global

brand is launched

Challenges & Opportunities in Global Tourism

slide36

2006 Hilton Hotels Corp. acquires Hilton Group plc reuniting the brand after 40 years

Challenges & Opportunities in Global Tourism

hilton nagoya facts
Hilton Nagoyafacts
  • 1989
  • 500+ employees
  • 2000 people per day visit hotel
  • 50% of resident guests; foreigners
  • King’s, Queen’s, President’s, political- civic leaders and You!

Challenges & Opportunities in Global Tourism

hilton hotels
Hilton Hotels
  • 2800 Hotels
  • 80 Countries

Challenges & Opportunities in Global Tourism

like any other business
….like any other business
  • Finance
  • Human Resources
  • Production
  • Distribution

Challenges & Opportunities in Global Tourism

business cycle
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

Challenges & Opportunities in Global Tourism

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

Challenges & Opportunities in Global Tourism

2 philosophies
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)

Challenges & Opportunities in Global Tourism

how hilton delivers equilibrium

How Hilton delivers Equilibrium

  • Consistency
  • Personalized
  • Hassle-free
  • Inspirational -Hilton Moments
how hilton delivers esprit

How Hilton delivers Esprit

Service (internal & external)

Recognition

Communication (dialogue not monologue)

Product & Process (training & education)

slide45

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

Challenges & Opportunities in Global Tourism

culminating in
Culminating in…..

Balanced Scorecard

“What gets measured, gets done”

Challenges & Opportunities in Global Tourism

education is not optional
Education is not optional

http://www.hilton-university.com/

Challenges & Opportunities in Global Tourism

corporate social responsibility
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

Challenges & Opportunities in Global Tourism

corporate social responsibility49
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.

Challenges & Opportunities in Global Tourism

technology not optional
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)

Challenges & Opportunities in Global Tourism

technology not optional51
Technology not optional…..
  • Molecular processors
  • VoIP (Voice over Internet Protocol)
  • Veritag?
  • Hypersonic travel?
  • Nanotechnology?
  • WiMax (Citywide internet access)
  • What will you invent?

Challenges & Opportunities in Global Tourism

slide52

Challenge the Status Quo

Challenges & Opportunities in Global Tourism