Say hello to 2017 as we look back at 2016
Wednesday, December 07, 2016
In just a few weeks, we are going to welcome a new year. What shall we expect for 2017? Will it be a prosperous year for the hospitality and tourism industry? Or, shall we show more concerns?
I wish I were a fortuneteller. Then, I could easily provide some "yes" or "no" answers.
If we carefully put our thoughts together, however, we could still get a good idea of what the future is ahead of us. Let's begin with a review of the key events and discussions in 2016, because quite a few of those incidents were expected to have long-term effects on the hospitality and tourism industry.
Impacts from the major events in 2016
There were several surprising, if not revolutionary, changes in 2016 that need our special attention as we enter 2017. Here are some examples:
- Donald Trump will officially become the 45th president of the United States after the inauguration on Jan. 20. I do not believe his presidency or his comments about illegal immigrants will stop people from traveling to the U.S., but his foreign policies — such as tighter border controls and new regulations or procedures of handing visas for temporary visitors — might have a negative impact. Meanwhile, Trump's infrastructure plan may boost the travel and tourism industry, providing easier, faster and safer access to a destination.
- A growing number of terrorist attacks in Europe have made (or soon will make) it more difficult to travel from one country to another in Europe. Those tragic events also put people in great concern of their safety when traveling inside of Europe.
- Brexit is probably the most shocking news in 2016 for Europeans. This past weekend, Italian voters rejected a batch of reforms, and the resounding defeat has led to the resignation of Prime Minister Matteo Renzi. Now, there is a strong chance Italy will become the second country to separate from the European Union (EU). The collapse of EU would make it more difficult to travel in Europe. The positive spin of Brexit is that the value of the pound is at a historic low, making a trip to Britain a great bargain.
- President Barack Obama's visit to Cuba helps to spur travel to the country.
- The U.S. dollar remained strong in 2016, and this trend will probably continue in 2017. We can expect a more diverse mix of international travelers visiting the U.S. as the number of visitors from Canada and Mexico drops. Meanwhile, more Americans are expected to travel overseas.
- Travelers have been taking more road trips in recent years due to low gas prices. Last week, however, the Organization of the Petroleum Exporting Countries (OPEC) reached an agreement to cut production, which may lead to higher gas prices in the future.
- The possible recession as well as the rising minimum wages will continue pushing hospitality businesses to optimize efficiency in operations. More restaurants and hotels are rolling out new concepts, such as automatic service and no-tipping policies.
The evolving competitive landscape
2016 has been an exciting year for many hoteliers. Marriott and Starwood completed a merger and became the biggest hotel chain in the world. Yet the competition is just going to get tougher. For example:
- More hotels are luring travelers with local flavors.
- Hotels are reinventing their loyalty programs to win travelers, as reflected in 2016's top travel reward programs.
- Room-sharing websites, such as Airbnb, have become a big threat to hotels, even though some believe Airbnb's negative impact remains negligible.
- As hotels continue to fight with online travel agents (OTAs) using book-direct campaigns, we need to pay close attention to the possibility of Airbnb and OTAs working together against hotels.
- Electronic word of mouth (eWOM) and online reviews deserve continuous attention from businesses. I am going to share the results of my research on online reviews as soon as my papers become available on the journals' websites.
Travelers want more authentic experiences
In 2016, I also shared a few discussions about new hotel and travel trends. Today's travelers want to gain more authentic experience in a tourist destination. They want to try local flavors, demand efficient service with the aid of technology, stay healthy and practice sustainability.
Above is a highlight of the key events of 2016, as reflected in my discussions over the year. Do you recall any big events in 2016 that I missed? How would they impact the future of hospitality and tourism business?
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