THT3112 Global Tourism and Hospitality Futures

Tourism/Hospitality Futures Scenario report & Reflective Report

Title: Hotel industry future scenario Reflective Report

Executive Summary:

This reflective study, which incorporates a variety of secondary sources, considers the
influence, consequences, and relevance of six CSIRO megatrends in the hotel industry
associated with the tourism and hospitality sector. The six megatrends’ analysis of the hotel
industry as a component of the tourist and hospitality sectors will be evidenced, along with
the key forces impacting the hotel industry’s future. Additionally, the political, socio-cultural,
and socio-economic influences for the global tourism and hospitality industry will be
explored with a further analysis of key drivers that impact the megatrends in the hotel
industry. Furthermore, this report will discuss the link between tourism and the hotel sector in
terms of commodity culture and media culture. By analysing the CSIRO study, it is clear that
the hotel business, a major subset of the tourist and hospitality industries, is influenced in part
by the six megatrends indicated. This reflective report also includes recommendations for the
hotel industry’s development efforts to contribute to Australia’s brighter future in this field.
 I. Introduction:

An overview of the six megatrends in tourism and hospitality:

Megatrends can lead to a worldwide influence, reshaping the business landscape of every
industry; thus, businesses within all industries should understand the origins and impacts of
megatrends to make more informed business decisions. The CSIRO of Australia is a leader in
the study of megatrends data, which will significantly assist Australian businesses over the
next decade to twenty years, particularly linked with the tourist and hospitality industries
during the COVID-19 era (Donnellan, 2021). Overall, CSIRO outlined the general trend that
the world economy will shift from west to east and north to south, aging populations will
pose more challenges, and we will continue making connections online (Palmer, 2012).

According to CSIRO, six megatrends are named as: “The Silk Highway”, “More from Less”,
“Going, going…gone?”, “Forever Young”, “Virtually here”, and “Great Expectations”
(Hajkowicz et al., 2012) (picture 1).

Picture 1: Our Future World: Global megatrends (Hajkowicz et al., 2012).

To begin with, “The Silk Highway” megatrend establishes new cultural links with Australia,
where visitors from Asia with new ideas and concepts will exert a rising effect on the
Australian economy and culture and the global economy is shifting from the North to the
South and the West to the East (Hajkowicz et al., 2012). Besides the contemporary influence
of COVID-19 crisis, rapid economic growth associated with the development of the middle
class is projected to propel the tourism and hospitality to the greatest level in the future as the
middle-class demographic is expected to peak at 4.9 billion by 2030 (Tutek et al., 2015).
COVID-19’s phases witnessed a decline in need for natural resources on the earth due to the
reduction of transit and commerce in all business fields; therefore, an increase in all sectors
through scientific and technical innovation by adapting new technologies as the aim of the
trend “More from Less” is essential (Hajkowicz, 2021). The “More from Less” megatrend in
Australia’s tourism and hospitality industry is evaluated as a part of environmental
sustainability; in the future, tourists prefer spending time on hotels and places with the
balance of innovate services and eco-friendly staying environment to protect the earth’s
limited natural resources (Tutek et al., 2015). The megatrend “Going, going...gone?”
encompasses biodiversity resources as the risk of extinction is critical due to the rapid
industrialisation in urban centres and strong population growth, resulting in the extermination
of natural habitats and leading to ecosystem imbalance (Hajkowicz et al., 2012). “Forever
Young” megatrend has a significant change, leading to a huge impact on the demographic of
future visitors (picture 2); silver-haired tourists, representing for aging population worldwide,
are considered the treasured resources for Australia’s tourism and hospitality industry as they
are active visitors and willing to spend more on international trips (Tutek et al., 2015;
Hajkowicz, 2021). “Virtually here” is a vital element contributing to the development of
tourists’ increasing numbers in the future of Australia’s tourism and hospitality industry. The
development of new technologies and platforms has enabled the organisation of a virtual
event in which individuals can interact and information can be exchanged; Gen Y and Z
visitors are technology groups, so they prefer technological applications and digital programs
for their communication and trips’ experience (Tutek et al., 2015). Lastly, customers
nowadays have great expectations for non-material and personal experiences, rather than
tangible goods, which is referenced to as “Great Expectations”; meanwhile, customers also
prefer optimism when it comes to social interpersonal interactions and relationships

(Hajkowicz et al., 2012).

 Picture 2: Tourism Megatrends (Tutek et al., 2015).

This reflection analysis, formed by the wide range of secondary resources, examines the
implications and significance of tourism and hospitality industry megatrends. This report will
provide an understanding of the hotel industry’s megatrends as a subset of the tourism and
hospitality industries and major forces influencing the hotel industry’s future. Additionally,
the political, sociocultural, and economic implications on the global tourism sector and the
unique possibilities and difficulties that megatrends may present to the hotel industry will
also be discussed. Additionally, this report will give information on the relationship between
the tourism and hotel industry in commodity culture and media culture. Through analysing
CSIRO’s report, it is recognised that the hotel industry – a sector of tourism and hospitality
industry – is partly impacted by the six mentioned megatrends. This reflective report also
mentions recommendations related to the hotel industry’s marketing contributing to
Australia’s better future.

Body:

Part A: The mega-trends in hotel industry analysis:

“More from Less”

“More from Less” megatrend requires the hotel industry with specific actions, which benefits
the contemporary natural resources shortage as future demographic growth is creating
pressure on the demand by 2030; however, the current hotel industry causes serious waste of
natural resources, especially water waste, as hotels provides an unlimited water source for
customers. By 2030, most hotels will apply the water recycling process to serve other
purposes, use energy conservation techniques, and minimise water usage within hotel rooms.
“Going, going...gone?”

Besides, current statistics elucidate that the hotel industry significantly contributes to the
increase of greenhouse gases and climate changes as 5% of worldwide carbon emission is
generated from the hotel industry through temperature regulation devices in hotel rooms
(Scott et al., 2008) (picture 3). Hence, the “Going, going...gone?” megatrend forecast that by
the year 2030, the newest trend in the hotel industry is the eco-friendly-hotel or the “green
hotel”, which will continue to develop in the nearest future (Erdem & Tetik, 2013). Green
alternatives will become more prevalent as a result of growing demand from eco-conscious
visitors who, according to surveys, are prepared to pay a premium for green hotel services
(Tutek et al., 2015).

Picture 3: Hotels’ energy end-users (REST, 2005).

“The Silk Highway”

The building of economic trade between different countries is becoming more powerful under
the description of “The Silk Highway” megatrend, the world economy will shift from the
West to the East and from the North to the South, so it is noticed that new markets, new trade
relations, new investment in the hotel industry and new cultural ties to Australia will increase
(Hajkowicz et al., 2012). The future of the hotel industry in 2030 will be positive with many
new tourist and investment flows with the rapid growth of Asian travellers and the worldwide
middle class after the COVID-19 period, which leads to an outstanding outcome of hotel
industry future development in broadening hotel chains (Jones, 2006).
“Forever Young”

The ageing population rise and the attractiveness of silver-haired visitors in 2030 alter the
demographic focus of the hotel industry (Tutek et al., 2015). Extended life expectancy shifts
the hotel industry’s attention to active older people while the number of children declines. As
a result, service styles and customer demands are anticipated to change in 2030 to adapt to
new customer targets and change hotel design and environment (Research and Markets,
2021). Hotels will become more flexible and expand their offer to meet labour market
demands, especially amidst the COVID-19 pandemic; meanwhile, hotel market pricing will
fluctuate.

“Virtually here”

By 2030, the hotel industry will increase the application of virtual management, especially
amid the COVID-19 epidemic, as hotels reduce human direct interaction services, replaced
by the internet integrated management systems with Artificial Intelligence or Robotics usage
(Jones, 2006). Hotels will maximise the use of technology through applications that allow
hotels to manage the work schedule of all employees with considerable efficiency and
accuracy gains; for example, the voice control system for both hotel and customer will be
widely applied, associated with online access services for room booking, getting information
and performing related transactions (Terry & Lorden, 2016).

“Great Expectations”

In the future, the hotel industry will move its emphasis to the customer experience element
through the use of science and technology, making it easier to understand customer
experience demands (Hajkowicz et al., 2012). For instance, hotels will expand the number of
self-service options available to guests throughout their stay, therefore boosting the positive
experience factor and personalising the guest experience process at the hotel (Jones, 2006).
By 2030, the hotel business will place a more considerable emphasis on customer
expectations for services, experiences, and interpersonal interactions, while simultaneously
placing a stronger focus on the rising relevance of ethical aspects of service.

Part B: Key drivers that impact the hotel industry megatrends, accompanied with
global tourism and hospitality industry markets.
Key drivers that affect tourism and hospitality industry markets in general and hotel industry
megatrends are categorised into five factors. The following part will discuss four main factors
– political factor, socio-cultural factor, socio-economic factor, and environmental factor,
which bring profound impacts on the development and performance of the hotel industry,
associated with tourism and hospitality industry markets.

B1. Political factor:

Political factor affects the global tourism and hotel markets. As economic and governance
systems become more connected and complex due to globalisation, the demand for “Virtually
here” with advanced technology and special techniques contributes to a future preparedness
that appears to be stronger than at any point in history (Scott & Gossling, 2015). Several
significant political changes have eased cross-border travel restrictions; meanwhile, the
political interest in tracking people’s movements across international borders makes it more
realistic to track international tourist arrivals, which creates tourism opportunities, being a
significant innovation in several regions of the world, and contributes to the growth of
tourism and hospitality markets in the future (Scott & Gossling, 2015). International tourist
flows may alter in the future due to political changes, resulting in an influence on the tourism
and hospitality businesses.

Political factor also influences megatrends within the hotel industry as promoting the tourism
growth agenda to the world’s political and business policies have the potential to double the
number of international tourists by 2030 and 2050, which is connected to “The Silk
Highway” megatrend, creating benefits such as a rich source of development for the hotel
industry in particular, and the tourism and hospitality industry in general (Scott & Gossling,
2015). Additionally, governmental initiatives such as decreasing global crime rates and
minimising hazards for visitors in the hotel industry would benefit the hotel industry by
providing a more secure environment.

B2. Socio-cultural factor:

Socio-cultural factor impacts global tourism and hospitality industry markets. From a cultural
perspective, tourists prefer the link between tourism and culture because tourist sites reflect
the culture of each different tourist destination, making it attractive to tourists. Tourists
increasingly tend to enjoy personal experiences through understanding the culture of different
places, and the places that meet the needs of visitors’ experience will develop significantly;
this is associated with the “Great Expectation” megatrend, which is having a significant
influence and positive change on the future of global tourism and hospitality industry markets
(Sigala 2017). Additionally, the socio-cultural factor affects the tourism and hospitality
industries by enticing tourists through the human culture of the tourist site. For example, a
place where highly hospitable locals will influence its hospitality fields, helping to create and
sustain the tourism and hospitality industry markets (Nair & Choudhary, 2019).

Socio-cultural factor also affects the hotel industry megatrends. Palmer (2012) mentions that
people’s will shift their focus to an increase on the values of individuals with the adoption of
lasted technology, along with cultural entertainment and hospitality as a combination of
“Great Expectation” and “Virtually here” megatrends. Socio-cultural factor makes hotels
emphasise appropriate cultural services, concepts and technology applications as these points
can be impacted and changed by individuals’ culture, which has a relationship with “Virtually
here” megatrend through the impact on technology and digitalisation usage within the hotel
industry (Sun et al., 2020). Each demographic group, such as hair-silvered tourists,
generation Y, and generation Z, tend to choose a different culture, linked with the “Forever
Young” megatrend, which may lead to changes in hotel industry concepts based on cultural
differences the future for further adaptation.

B3. Socio-economic factor:

Socio-economic factor has a strong influence on the global tourism and hospitality markets.
The socio-economic factor is separated into four components, which are accessibility,
accommodation, amenity provision, and ancillary services (Andrianto & Sugiama, 2016).
Firstly, the tourist and hospitality attractions should be put amongst ways of transportation in
the accessibility section because, with a distant area, the tourism and hospitality business
cannot thrive, affecting the market industry. Accommodation is also critical since it benefits
travellers in various ways with countries’ incomes from the field, which can enhance tourism
and hospitality industry markets (Treiblmaier, 2018). Maintaining the sites and making
diverse hospitality activities available can also contribute to the tourist and hospitality
industry markets’ growth. Besides, ancillary services are also classified as a socio-economic
factor, including the development of banking and finance, which also brings advantages for
the tourism and hospitality industry markets (Katircioglu et al., 2017).
Besides, socio-economic factor also holds a significant influence on hotel industry
megatrends. Global income, an essential element of socio-economic factor, directly impact
“The Silk Highway” megatrend within the hotel industry as this contributes to the
effectiveness of the hotel industry gathering from this megatrend. Sustainable in the hotel
industry is associated with economic sustainability and vice versa (Tutek et al., 2015); hence,
a decrease in worldwide income distribution is forecasted by 2035, which means that the
hotel industry can be beneficial from this socio-economic element and “The Silk Highway”
megatrend in the hotel industry is promoted. Moreover, Rossenfeld (2017) predicts that
economic factors will bring numerous benefits to hotel industry megatrends because
beneficial economic factors include near-record low unemployment and strong job growth
has resulted in a dramatic increase in tourism and hotel spending in both generation Y,
generation Z, and silver-haired tourists, seen as a lever that has a positive effect on “Forever
Young” megatrend with active tourists from all age groups.

B4. Environmental factor:

Environmental factors may influence the hotel industry megatrends, including favourable
climate and a beautiful scene, partly determining the hotel industry’s success with both pros
and cons besides the influences of megatrends. Additionally, the strong operation of the
tourism industry is still causing adverse effects on the environment due to the quantity of
CO2 emitted by hotel operations, contributing to climate change and the glasshouse effect
(Leyva & Parra, 2021). Thus, the above issue makes the expansion of eco-friendly hotel
chains face a barrier, partly affecting the “Going, going...gone?” megatrend.

Part C: Opportunities and challenges:

C1. Opportunities from the megatrends on hotel industry:

“The Silk Highway”, “Forever Young”, and “Virtually here” are three main megatrends that
bring salient opportunities for the hotel industry. “The Silk Highway” megatrend predicts that
the trend of Asian tourists on the move increases sharply; specifically, the flow of Chinese
tourists to Europe, America, and Australia will continually increase sharply because the
middle class in China is expanding, bringing significant benefits to the world’s hotel industry
in general and Australia’s hotel industry in particular (Ghella, 2020). Figures have shown that
within the next decade, the number of households earning at least US$100,000 annually will
increase by 30 million, increasing the wealth of the tourism and hospitality market as people
choose to travel more than before, leading to higher spending and promoting hotel industry
development (Ghella, 2020).

Moreover, “Forever Young” megatrend predicts that the age of customers in the future hotel
industry will have a positive change with a large number of young customers, including
generation Z and millennials, who are currently the top potential customers for the
development of the hotel industry, and silver-hair tourists (Tutek et al., 2015). Although the
hotel industry is heavily affected by COVID-19, the figures indicate that youthful travellers
currently make 320 trips, and the number of silver-haired tourists will increase by 21% by
2050, increasing the development of the hotel industry (Ghella, 2020; Tutek et al., 2015). In
the future, the number mentioned above will increase rapidly in the new normal status and
after the pandemic, proving the beneficial impact and potential opportunities of the “Forever
Young” megatrend on the hotel industry. Furthermore, generation Z and Y value and support
technological advancement and digitalisation, so with the ideas of the “Virtually here”
megatrend, particularly in the context of COVID-19, the application of digital contactless
approaches, positive internet interaction and services, or automated robots in the hotel
industry will raise customer expectations and levels of attention, thereby accelerating the
hotel industry’s opportunities for growth (Mijinke, 2021).

C2. Challenges from the megatrends on hotel industry:

Along with possibilities created by megatrends in the hotel industry, threats have emerged.
The confluence of megatrends such as “Forever Young” and “The Silk Highway,” which
increase the number of prospective hotel guests from diverse demographics, also creates
environmental difficulties due to increased power and heat use. Climate change, greenhouse
gases, global warming, and other related issues are the drawbacks of massive growth in the
number of hotel tourists in the future according to megatrends, with approximately 8% of
environmental problems from the hotel industry, which directly affect the sustainability of
hotel industry (Supansa, 2015). Without sustainability, a hotel cannot fully stand amidst the
high level of hotel industry market’s competition; meanwhile, the ecosystem also cannot
support and provide sources for the hotel industry in the future, hurting the future economy of
the hotel industry because of the reduction in tourists (Bauscher Hepp, 2018; Strayer
University, 2007). Hence, these downsides directly hinder the most need in the hotel industry,
so the hotel industry should emphasise “More from Less” and “Going, going…gone?”
megatrends, accompanied with other megatrends to maintain sustainability for future
development.

Furthermore, the remarkable advancement of technology and digitalisation in the “Virtually

here” megatrend within the hotel industry may cause cybersecurity and virtual crimes
(Hajkowicz et al., 2012), threatening customers’ security and credibility of hotels. It can
create opportunities for individuals to attack online forms of transactions and hotel bookings,
putting guests and hotels at risk of property, causing a bad reputation for hotels on the market
(Social Tables, 2017). Individuals can also use the internet and technology virtual application
with the hotel’s loose cybersecurity to eavesdrop or steal hotel guests’ information, affecting
the hotels’ reputation in the market industry (Social Tables, 2017). Consequently, the hotel
industry should be vigilant, limit disregard for cybersecurity and invest more in this area.

Part D: Relationships between tourism industry, hotel industry, commodity culture, and
media culture:

The link between tourism, the hotel industry, commodity culture, and media culture, is
critical in today’s market due to tight association factors. The tourist sector supplies the hotel
industry and vice versa; both industries are influenced by commodity culture and media
culture as a component of their growth. Numerous tourist sites are located in distant towns,
and there is no efficient tourism service plan in place; nonetheless, the scenic beauty and
culture of these locations serve as assets for the tourism sector, resulting in the growth of the
hotel business. The growth of the hotel industry’s high level of customer service satisfaction
in tourist locations also results in a significant increase in future guests and a stable number
of returning tourists. Numerous governments integrate advertising for such destinations with
cultural promotion, bridging the relationship between media culture, commodity culture,
hotel industry, and tourism industry.

II. Recommendation for hotel industry:

The hotel industry should continue to mitigate megatrend-related threats, such as lack of
cybersecurity and sustainability, along with environmental issues such as global warming and
climate change. The proposed solutions include a proactive focus on environmental
protection measures such as limiting and controlling energy consumption in hotels, gradually
transitioning to “green hotels” and “eco-friendly hotels” through the use of green fuels and
materials; meanwhile, the hotel industry should also promote a green campaign as a global
marketing strategy to attract a large number of hotel guests. Additionally, together with
technology and digitalisation applications, cybersecurity must be strengthened to protect the
hotel industry’s reputation and customers’ safety.

III. Conclusion:

The report’s study of six CSIRO megatrends in the hotel industry will be the possible future
development directions for the hotel sector. The hotel industry will be the highest potential
for growth in the 21st century since it is the prospective spearhead of the tourist industry. The
hotel industry impresses in the market because of the megatrends towards “green hotels” and
“eco-friendly hotels” with strong responsibility towards the environment, accompanied by
advancement in technology application, focus on personal experiences, promote
sustainability, and source potential visitors from all ages around the world. Besides the
opportunities for future expansion brought by megatrends to the hotel industry, it still faces
challenges. Based on the discussion above and the recommendations outlined, the hotel
industry will improve its chances of growth and ensure future success.
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