By Rohit Talwar and Alexandra Whittington

How can the travel, hospitality, and business events sectors envision and prepare for the inevitable surprises of the next five years?

In the face of growing global uncertainty, the next five years could bring a dramatic decline as customers cut back on spending plans. Equally, disruptive new technologies, growth in rapidly developing emerging markets, new industry sectors, and the relentless pursuit of business revenues could see the travel industry break all previous records. For the travel, hospitality, and business events sectors, we can get rightly excited about growth opportunities. The difficulty comes when dealing with uncertainty and trying to cater for a range of possible scenarios from boom to global meltdown.

The harsh reality is that change can happen quickly and leave firms in a state of shock, with demand suddenly nosediving because of broader “unforeseen” factors in the business world. So, what are some of the biggest “inevitable surprises” on the horizon that could hit us any time in the next few years, what could they mean for the firms involved, and how can we prepare for them rather than be blindsided when they hit us? This article describes eight surprise developments that will require a timely response from the travel, hospitality, and events world between now and 2023. Is your organization ready?

Many of the top futurists on LinkedIn and Twitter say that they can “future-proof” your business or confer “strategic foresight” to your planning, which will save you from blindly guessing about the future, as your competitors do. The fact is that no futurist—or any other brand advisor, thought-leader or management consultant—can completely eliminate surprises. However, what futurists can teach clients to do is embrace the unpredictability of the current moment and allow imagination and vision to infuse business planning with greater versatility.

Critically, good futurists can impart some of the core skills required to help managers and leaders spot early signs of possible change and prepare for a range of different paths to the future from the present day. As an example of the practical application of future thinking, this chapter will demonstrate how, in the travel and hospitality industries, surprises do not necessarily mean something negative waits around the corner, but can actually open up a series of opportunities for the more agile and innovative businesses.

A surprise can delight us, like an unexpected party thrown in our honor, or it can frighten us, like suddenly happening upon hazardous road conditions while driving. The future will inevitably serve up both pleasant and unpleasant surprises—but spotting individual future developments themselves is not the most critical task for future-focused leaders. Of course, it depends on the nature of the event, but the most important element of a surprise party, or having to suddenly slam on the brakes, is the quality and timeliness of the response. As futurists, our expertise lies in foresight—not in a precise, fortune-telling way, but as a feel for how conditions are changing, as an ability to explore the different possible scenarios that may play out, and as a well-tuned sensitivity to potential fluctuations in key factors shaping the near- and long-term future.

This chapter presents eight of the biggest potential surprises awaiting in the next few years for the travel, hospitality, and meetings sectors. Even though many of these developments might appear to have a touch of sci-fi about them for those who have not had them on their radar, they are all based on solid evidence we have identified in our latest trend and scenario research.

1. The Rise of Surveillance Capitalism

Much favored by the large technology platforms such as Google and Facebook, this is a business model that seeks to provide services intuitively, based on the observed activities, patterns, and preferences of the customer, as determined through analysis of the data they have provided. Each search we do, each posting we make, and each article or cat picture we “like” generates a wealth of information, which can be mined and interpreted using sophisticated big data analysis tools.

Hence, as a way of providing a service, surveillance capitalism rests on the ability to obtain consent to monitor customers. There is growing awareness that consumer-facing businesses with sophisticated technology infrastructures can amass and interpret a scale of big data that allows them to develop intimate knowledge of us as individuals. The concern is that they will then use those insights to manipulate our behavior into making purchase choices. This concept is known as surveillance capitalism.

Almost every business wants to get closer to their customer, and some mistakenly talk about “owning” them—few of us like the idea of being treated as the possession of those we buy goods and services from. The question is how far business should go in pursuit of deeper customer insight? The situation is changing rapidly in two diametrically opposing directions. Firstly, there are numerous tools and technologies which already allow for the immediate capture and analysis of our individual data and for the subsequent generation of personalized customer responses. These include GPS, sensors, mobile, and biometric recognition, artificial intelligence (AI), and predictive analytics.

For example, HSBC bank has implemented ATMs based on facial recognition, while Citi and Barclay’s increasingly request voiceprints to identify their customers instantaneously and intuitively. There is an implicit expectation that customers appreciate and benefit from the implied surveillance, and as long as transparency and privacy are prioritized, customers seem willing to use such services. In the next five years, it is possible that personal drones, our online “digital twins,” and highly advanced biometrics will be considered essential to providing good customer service. The convenience of voice- or face-based hotel check-out, for example, should strike the right balance between privacy and customization, and avoid the abuse of personal data at all costs.

Concerns over the potential misuse of our data are driving the idea of personal privacy protection. A range of tools are coming to market which would act as intelligent guardians of our data, allowing third parties to only access that which they really need. Such services increasingly question why a meeting organizer or hotel actually needs any of our personal details. A simple numeric identifier could allow us to access the event or a bedroom so long as payment has been made. Such a response to the excesses of surveillance capitalism could seriously undermine the data-centric customer personalization strategies being adopted by many in travel, meetings, and hospitality.

2. Consumerism in Decline?

This potential surprise can be inferred or extrapolated from a range of recent market trends. For example, in the UK, leisure attraction manager Merlin Entertainments has reported a decline in visitor numbers—while the operator of Legoland, the London Eye, and Madame Tussauds attributes some of the decline to recent terror attacks, the bulk is due to longer term tourism trends. In the US, previously stable restaurant chains like Applebee’s are failing, while malls and retail are in general decline, with up to 1,000 stores closing each week and a massive wave of closures executed in 2017 by the likes of Gymboree, Radio Shack, Macy’s, JCPenney, Sears, and Kmart. The closures are not fully covered by increased online sales. In response, analysts and investors are beginning to wonder if encouraging consumerism is perhaps no longer a panacea for a slumping economy.

In part, the trend may be driven by a movement away from ownership towards usership, and a growing preference for experiences over physical goods. However, perhaps a bigger phenomenon is the relative demise in the spending power of the middle classes in many mature economies such as the US and the UK. This relative middle class decline has, in many ways, set the stage for a movement away from consumerism and toward frugalism.

Furthermore, today’s Western Millennials are increasingly characterized as dragged down by debt, constrained by low or no wage growth, concerned over poor job stability, and often left with little disposable income. A simple lack of demand is a key driver of this trend. Another driving force is increasing awareness of the impact of constant consumption on fragile ecological systems. Even when conscious consumers buy, they are doing so sparingly.

The sharing economy is a perfect example of young consumers rejecting mass consumption patterns. There are a number of examples emerging which show how a new generation has eschewed the obsession with ownership, such as co-living, where numerous unrelated individuals share a home in dorm-like settings. Others include the popularity of community resource sharing schemes like Streetbank, and ride sharing, which negates the need to own a car.

For the tourism sector, Airbnb room sharing is a demonstration of how new consumers have rejected exclusivity and the trappings of hotels in favor of modest or practical rooms. In particular, Airbnb speaks to the focus of this consumer segment on experiences over materialism—thus the attractions and services of a hotel can pale in comparison to the potentially authentic experience that a guest room in a private home offers. Being able to cater to this type of consumer, particularly at the same time that the luxury contingent continues to be served, is a surprise development many hospitality outlets may not anticipate as key to competitive survival over the next few years. For the meetings sector, this trend towards cost saving, frugality, and a rejection of the apparently lavish or ostentatious could have a direct impact on delegate willingness to attend events, and their resulting expectations if they do.

3. Artificial Intelligence

A prime contender for the hottest and most hyped technology of the 21st century, AI is penetrating every business sector and laying the foundations for a revolution in the delivery of products and services. We have been using AI for some time in smartphones, aircraft autopilots, GPS, and credit scoring software. The range of applications is now set to explode over the next 18 months. For example, new models like Amazon’s My Mix provide an algorithm to serve as an intelligent personal shopper, suggesting items and curating them like a Pinterest page.

Clearly, it will not be long before companies offer customized shipments of items we might like, because their AI knows our shopping and lifestyle habits. This information will typically be gleaned from analysis of our online behavior and from interactions with the intelligent agents that manage and monitor our lives via our smart mobile devices. The effect would be that subscription boxes become predictive, so that apparently unspoken consumer preferences are seamlessly guiding a range of service and product providers that anticipate, rather than meet, our needs.

In tourism and hospitality, a customer’s preferences for products, services, and desired levels of engagement with humans could be gauged, predicted, and catered for before they arrive at a hotel, for example. Imagine a hotel room stocked with all your favorite toiletries and mini-bar snacks, the right number of towels, and pillows fluffed to the appropriate density. Whether our requirements are met via AI or the human touch, the capacity or inability to personalize with such premium perks could enhance or damage the reputation of a hospitality business. Furthermore, automation can provide specialized moments of customer engagement—such as the perfect choice of fragrances, teas, colors, and dynamically changing electronic wallpaper displays—that hopefully strengthen the relationship.

4. Political Uncertainty

Politics has re-emerged from the shadow of global business—recapturing the media spotlight and engulfing the globe—with unpredictability as the essence of all conceivable geopolitical futures. It is important to consider the impact on destinations: Are we on the verge of experiencing a Brexit/Trump/North Korea/ISIS effect? Could a situation arise where isolationism, terrorism, and hostile political and economic conditions could deter customers from doing business in certain locations? Political uncertainty can paralyze planning, financially, and in terms of company morale.

While some worry that Brexit might drive businesses and visitors away from the UK, there are also policy changes in the US that are expected to deter international visitors to conferences and events. These moves could also lead to some businesses moving offshore to make it easier for their foreign staff to function effectively. Strict travel regulations put the hospitality industry in the middle of a potentially chaotic situation. It may become important for hotels to provide a calm oasis away from the stressful, dangerous, and potentially invasive world of international travel, particularly for meetings that bring participants from all over the world.

Heightened geo-political awareness is of particular importance given the constant flow of projections that suggest that future growth in traveler numbers is likely to come from China, as well as those who practice Islam. These regional shifts in dominant traveler profiles mean that, to stay competitive, the meetings and hospitality sectors will need to take their game to the next level in terms of language skills and cultural sensitivity, encompassing diet, religion, protocols, customs, and practices. However, with the rise of nationalism and increased hostility towards “the other” in some quarters, attempts to cater for certain traveler groups by displaying heightened cultural sensitivity could also be perceived as a controversial and unpatriotic gesture.

5. Retail on the Road

A development that might surprise the hotel industry is seeing cars become a shopping venue. We’ve witnessed the rise of Uber as a new model for thinking about transportation; an entire generation has awakened to the fact that it is not that a car you need, but a ride with a customer-centric booking process. The next evolution will be self-driving taxis and other autonomous vehicles, even potentially personal drones and flying cars. Such an “inevitable surprise” could create newfound chunks of time for companies to interact commercially with people riding in connected cabs and self-driving cars.

Car-sharing and taxi app services free up time for consumers to shop when they would normally be driving (or parking) personal cars. Furthermore, free of fixed transportation expenses and significant differences in the average consumer’s disposable income could be on the horizon. Hospitality can certainly benefit from the funds normally used to purchase a car, gasoline, and insurance suddenly being freed up for travel or room stays and recreational activities in hotels.

6. Digital Currency

A growing number of businesses are now accepting digital currencies and the most prominent among them—Bitcoin and Ether—have seen recent price spikes followed by significant reversals. At the time of writing, Bitcoin is valued at US$18,000 per coin, giving it a market capitalization of US$305 billion, surpassing that of VISA. The next biggest is Ethereum with a market capitalization of US$42 billion.

Bitcoin, Ether, and the other digital currencies offer completely new systems for payments, reservations, and billing that the hospitality industry can benefit from. The basic mechanism bypasses traditional centralized financial clearing and accounting systems and their associated charges. The model enables direct financial flows between buyer and seller with the transaction captured in a distributed and highly encoded, and hence, theoretically immutable ledger of record. So, while the Bitcoin exchanges might get hacked, the transactions records are there as an unchangeable matter of permanent record.

There are larger numbers of Bitcoin owners than ever, and with the current economic uncertainties surrounding banking and finance, there is good reason to think the popularity of digital currencies will continue to grow. The rising adoption of these alternatives to credit cards and cash will require firms to develop new technological capacities around the sales of products and services.

Hotels and meetings will need to cater for customers using digital currency wallets, for example. The fact that most reservation systems are based on credit cards suggests this could be a difficult hurdle. Is it possible to imagine holding a room with Bitcoin? A key twist here is the recognition that blockchain, the decentralized ledger that forms the public database of digital currency transactions, can be used for information transfer activities beyond payments and money transfers.

7. Blockchain

There is so much more to digital currencies than just payments. Indeed, over time, blockchain-based contracts could completely automate the reservation process and be applied to a number of other functions including delivery management, ordering, accounting, and record keeping. Self-executing contracts, also known as “smart contracts,” could revolutionize the monitoring of and payment of service provider obligations and reduce the accounts payable workload (and hence workforce) considerably. As an instant and irrefutable record of transactions, blockchain might serve well for tracking room charges and in-room purchases.

Blockchains can be used to track payments, and can also be applied to confirm inventory, validate documents, verify ownership, and notarize the authenticity of a variety of things. For example, Dubai International Airport is pioneering the use of blockchain for digital passports and others are applying them for everything from verification of academic credentials to the tracking of artworks.

The versatility of blockchain in the hotel and meetings accommodations sector could bring major benefits and cause significant disruption, as it stands to impact the workforce most dramatically. Going a step further, with the amount of blockchain and AI development taking place in the financial and technology sectors today, it’s possible that some organizations could be run entirely on algorithms and blockchain within five years. Such distributed autonomous organizations (DAOs) exist only in the form of software and have literally no employees.

8. Immersive Technologies

Cutting-edge immersive visual technologies like augmented reality (AR) and virtual reality (VR) and shared mobile video content could have a major impact on meetings and hospitality. The ability to record and enhance a range of experiences might compete directly with live meetings and hospitality in the sense that in-company meetings are increasingly virtual and teams, more and more, work remotely.

Whilst there is always likely to be a space for live events, immersive technology will increasingly encroach on the sector’s territory. Evolving from today’s social media, digitally shared video and experiences may constitute the future of many social interactions including work but extending to weddings, family reunions, and other celebrations.

With augmented offerings, it’s not just the visual senses being tempted; soon, brain-computer interfaces could simulate touch, taste, and smell sensations as well. Eventually, digital experiences of food, travel, and even sex could compete with real-life in terms of authenticity and satisfaction. Strong, convincing simulations are something for the hotel world to consider.

Technologies that can create authentic, shared experiences could increasingly become a lower-cost alternative for how people gather in the next five years. If hospitality and meeting providers can utilize these technologies in ways that emphasize the human element, they may find new opportunities for preserving what matters when it comes to meetings and physical travel experiences.

Enhanced awareness of these potential surprises can ensure a timely and effective response, but obviously not everyone outside of the futurist profession knows where and how to look for early signals of surprises on the horizon. Most futurists have a daily practice that involves extensive reading and information gathering on emerging developments, a process known as “horizon scanning.”

Scanning is a research technique that can be applied in any organization; it basically involves building up a wide range of sources of reading material to gain a number of unique, differing, and possibly fringe perspectives on current events, technological developments, and economics, for instance. The information might come from a Twitter feed, a Google alert, or some other form of regularly updated information such as a Facebook group.

Many businesses may feel they cannot devote the time to scanning that a professional futurist might. However, even encouraging staff to allocate five minutes a day to the process can start to build an increasingly rich and diverse set of perspectives on possible changes on the horizon. The important thing is to build a diversity of voices into your organization’s daily information diet.

Diversifying information sources is critical for identifying new developments and growing the “anticipation muscle.” Most importantly, tapping into diverse sources ensures you are attuned to a spectrum of emergent potential surprises in your industry and the broader business environment. Learning to anticipate the future with imagination and an open mind may be the best “future-proofing” money can’t buy.

 

• How could travel sector businesses exploit their wealth of accumulated personal data without overstepping customers’ boundaries?
• What opportunities may arise from the combinatorial effect of these inevitable surprises?
• How might businesses embrace uncertainty and infuse versatility into their planning and strategy processes?

This article is excerpted from The Future Reinvented – Reimagining Life, Society, and Business. You can order the book here.

 

Image: https://pixabay.com/images/id-2405207/ by geralt