Developing Leader for Change

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Developing Leader for Change Innovation in
Tourism

• 28th June 2010

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Future Industry Trends, Creative Thinking and
Innovation

• Tom Baum PhD
• University of Strathclyde, Glasgow

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INTRODUCTIONS
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Youse (as we say in Glasgow) are .
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. and me

• 30 years in tourism as practitioner, academic,
  researcher and teacher
• Currently Professor in the Strathclyde Business
  School, top-rated in Scotland and top 10 in the
  UK
• On-site experience in over 30 countries
• Special research and development interest in HR/
  work in tourism and in..

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Greatly influenced by.
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Tourism and small island communities

• Particular dynamics of tourism in an island
  context
• The appeal of islands
• Issues of access and supply psychological,
  economic, logistical
• Competitive barriers
• Cultural distinctiveness
• Jurisdictional independence

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• Key Concepts and Learning in this Module
• Understanding future trends and developments in
  international tourism
• Harnessing strategic planning tools as a means of
  maximising the benefits of this understanding
• Planning and implementing creative/ innovative
  strategies and solutions in order to enhance
  business competitiveness

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• Programme Overview
• SESSION 1
• Tourism a future scan utilizing the tools
• SESSION 2
• Finding and applying creative/ innovative
  solutions

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• Thinking about the future.. And learning from
  the past

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The Future

• The future is inherently unpredictable
• The purpose of planning is not to predict the
  future but to increase the possibility space for
  the organisation
• The future is co-created
• We are neither passive victims of forces beyond
  our control nor masters of our destiny

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Wind the clock back 10, even 20, years ..What
we DID NOT know

• List a few ideas/ things/ ways of doing things
  that have entered our lives over the last 10
  years.
• IF you are old enough, do the same for 20 years
  ago.

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Maybe..
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Annual reportTEN IMPORTANT WORLD TOURISM ISSUES
2011

• David L. Edgell Sr., PhD
• Professor of Tourism, East Carolina University
• Ex-US Department of Commerce responsible for
  Travel and Tourism

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• Repercussions from the global economic slowdown
  on tourism
•  Continuous concern for safety and security with
  respect to tourism
•  Significance of sustainability in the
  development and management of tourism
•  Effect on tourism from natural and manmade
  disasters
•  Growth in the use of electronic and other
  technologies in tourism

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• Impact on tourism with the introduction of new
  destinations
• Importance of fuel costs on tourism
• Influence of mega events on tourism
• Using strategic tourism policy and planning tools
  for communities and nations
• Recognition of increased tourism activity in the
  East Asia and Pacific Region

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• Interpreting these in the Maltese context?
• Your main themes
• Access routes and options, all year round
• Fuel price impacting on access
• Market dependence on UK need to develop new
  markets (Far East)
• Develop internal, domestic markets
• Need to develop higher spend niches

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• Creation of a year round destination address
  seasonality
• Need to upgrade product and focus on quality
• Dealing with change and new challenges
• Maximizing Impact
• Monitoring performance
• Managing Information
• Utilise social networks to best effect

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• Climate change impacts source markets and at
  home
• Rising sea levels
• Worldwide recession and lower spending visitors
• Understanding the tourists of 2015 and 2020 Gen
  Y
• New competing markets Libya
• Increasingly demanding customers

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• Development of ecotourism options issue of
  awareness?
• Future of traditional distribution models
  travel agents/ tour operators who will we be
  dealing with?
• Growth in demand for marine tourism

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• What is required is a strategic approach to the
  identification and analysis of future trends

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The GoalTo increase awareness about the
organisation, its environment and the future.
The future
Scenarios (Imagining the future)
Strategic options (Exploring our future
possibilities)
Increasing awareness
The business ecosystem
The organisation
Co-evolution (Discovering our place
relationships)
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Maltas tourism

• Culture
• What are the patterns of thinking behaviour
  which characterise tourism in Malta?
• Is change needed?
• Competencies
• What is tourism in Malta distinctively good at?
• Do these give competitive advantage?
• What needs to be developed?

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Your organisation or area of responsibility

• Culture
• What are the patterns of thinking behaviour
  which characterise your organisation or area of
  responsibility?
• Is change needed?
• Competencies
• What is your organisation or area of
  responsibility distinctively good at?
• Do these give competitive advantage?
• What needs to be developed?

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An Ecosystem for Malta or your organisation
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Mapping the ecosystem

• PEST (Political, Economic, Socio-cultural.
  Technological) plus E - Environmental
• Customers
• Markets
• Competitors who are your main competitors?
• Business or Destination analysis? Competition or
  coopetition?
• Porters Five Forces

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Strategic optionsOur future possibilities

• Key strategic issues
• What are the real areas which affect our
  business?
• (E.g. service, channel, market)
• Formulate key decision areas
• Where do decisions need to be made?
• Create clusters of options
• Discover coherent strategies
• Check against distinctive competencies

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Scenario PLANNINGImagining the future

• Identify key driving forces
• Choose most uncertain/most significant
• Develop alternatives
• Flesh out with narrative

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Planning is not about

• Planning is not about predicting the future
• Planning is not about writing a detailed road map
  into the future
• Planning is not about a few people writing a
  vision statement then getting buy-in from
  everyone else

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EU Project

• Comprehensive sectoral analysis of
• emerging competencies and economic
• activities in the European Union

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Potential of drivers of change

• New lifestyles and consumer trends (eg. concerns
  about health, climate, environment, convenience
  etc.)
• Food prices
• Economic development and globalisation
• ICT and digitalisation
• Strengthened legislation on food safety
• Food technologies Preparation, cooling and
  storing
• The ageing population
• Climate changes

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Classification of drivers
IMPORTANT

• Economic development and globalisation

• The ageing population

• New lifestyles and consumer trends (eg. concerns
  about health and environment, convenience etc.)

• ICT and digitalisation

CERTAIN
UNCERTAIN

• Food prices

• Strengthened legislation on food safety

• Climate changes (actual climate changes will not
  influence the sector much until 2020. In the long
  run climate changes might result in dramatic
  changes in the sector)

• Food technologies Preparation, cooling and
  storing

LESS IMPORTANT
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Main drivers of change

• Main/most important drivers of change
• The ageing population of Europe
• New lifestyles and consumer demands
• Increased use of ICT and the Internet
• General economic development and
  Internationalisation

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Driver an ageing population

• Consumers will be older in the future and older
  tourists require more specialised services, among
  others due to disabilities.
• An ageing population means an ageing workforce.
  This is important in the sector, since its
  workforce today consists mostly of young workers.
  
• When it comes to catering and canteens the ageing
  population will mean a potential growth in their
  integrated services, which increasingly include
  elderly care.

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Driver new lifestyles
Customers are becoming more and more enlightened
and demanding when it comes to health, climate,
environment and politics

• For restaurants, cafés and bars healthy menus and
  traceability of foodstuff as an example -
  becomes more important and require staff to be
  knowledgeable in that aspect

• For hotels it means giving its customers a
  full-time experience including for example spas
  and professional health-guiding

• Within catering, snacking increases while
  simultaneously diminishing the demand for
  traditional heavy lunches

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Driver Increased use of ICT
The increased use of ICT and the internet has
had, and still has, a great impact on the Hotels
and restaurants sector.

• For the companies it means greater possibilities
  to market themselves and to receive customers
  from areas far beyond the neighbourhood.
• In the coming years, supply chains and
  administration will increasingly be handled
  online.

• For the customers it means greater possibilities
  in finding Hotels and restaurants and catering
  establishments online, and the ability to be
  pickier.

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Driver general economic development
The general economic situation is of utmost
importance for the Hotels and restaurants sector,
which is often highly dependent on the tourism
economy.

• Economic development
• When people have more money they tend to spend
  more on travelling and dining out. Also, their
  demands for quality and uniqueness rise.
• An economic recession, on the other hand, will
  result in decreased demand and a higher focus on
  price and value for money.

• Internationalisation
• Internationalisation means increased
  opportunities for attracting new customers from
  outside Europe but also growing competition.
• Internationalisation means a growing dominance of
  big cooperations and international brands and
  chains in the sector.

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SWOT analysis
Strengths Non-substitutable People will never stop travel or eat. An open sector The sector creates job opportunities for young people and for women. Also, people with limited education can get the opportunity to a career. It is a global industry with highly international markets Due to its labour intensive and customer close nature it cannot be exported or outsourced It is a flexible industry which relatively easy handles changes. Opportunities The ageing population could be a boost for the catering sub-sector. Changes in the gender structures, more women entering the labour market means less time to cook at home. The trend of higher demands on quality could add value to the sector. Concerns for climate and health are also trends potentially adding value to products and services. Increased globalisation leading to more international travellers and tourists especially from emerging economies. Being increasingly on the move we need more snacking and take away
Weaknesses High dependency on tourists, which are highly sensitive to political events. High seasonal dependency for most parts of the sector. Tend to be reactive instead of proactive Low productivity Low profit margins and low added value Low levels of skills and educations among employees Reluctance to invest in its employees e.g. training, education, working conditions etc Perceived to be a low status employment sector Low barrier sector- many star ups and failures pressing profit margins (50-60 of all start ups ends as failures after 3 years) Threats The black market is a threat to working conditions, and to the sectors competitiveness when it comes to recruiting skilled staff. The lack of sufficiently skilled personnel jeopardises the quality of the sector. With the climate threat, long distance travelling might decrease. An ageing population makes it even harder to recruit labour The educational system is ageing and might risk the quality of the sector. There is a trend to invest less in food for employees. Terrorism and political unrest
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Questions for discussions

• General comments Do you agree on the drivers
  identified as being the main drivers of change?
• What is the major threat as well as the major
  opportunity for the main sub-sectors of tourism
  in Malta (hotels, travel services, attractions)
  in the coming years?
• What is the major threat as well as the major
  opportunity for YOUR BUSINESS in the coming
  years?

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Crossing drivers of change
Economic growth and globalisation The ongoing
economic crisis is just a minor and short
economic slow down. With such a positive economic
development increased globalisation will follow.
Escapism Consumption is typically driven by the
faster, better, bigger ideology. Climate
problems for example are not seen as a personal
responsibility. The escapists are concerned
about health and the fairness of the world but
tend to escape via wellness and traditional
luxury.
Puritanism Consumers will develop a more puritan
and spiritual approach to consumption. The
personal responsibility concerning for example
health, environment, climate and fair trade is
taken very serious. Saving before spending
becomes more important.
Economic recession and nationalism A recession
will influence the society for the next 10-12
years. It will result in increased nationalism
and regionalism where regions and nations turn
their back to global cooperation concentrating on
their own lack of resources.
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The four scenarios
Continued economic growth and globalisation
Scenario 1 The Marco Polo Scenario
Scenario 3 The Body Shop Scenario
Puritanism
Escapism
Scenario 2 The Sunny Beach Scenario
Scenario 4 The Asceticism Scenario
Economic recession and nationalism
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Characteristics of the four
Continued economic growth and globalisation

• The Marco Polo Scenario
• High individualisation
• Some specialisation possibilities
• Polarisation of the market
• High growth in inbound tourism
• Wellness and traditional luxury

• The Body Shop Scenario
• High individualisation
• Many specialisation possibilities
• Segmentation of the market
• Healthy lifestyle and holidays
• Goodness volunteering, fair trade, organic
  food, etc.

Escapism
Puritanism

• The Sunny Beach Scenario
• Mass produce, economies of scale
• Highly price driven market
• Conformity
• Comfort but no luxury
• Regionalisation of travelling

• The Ascetism Scenario
• Basic living simple holidaying
• Close-to-home tourism
• Experiences healthy, sustainable and cheap
• Food vegetarian, organic, local produce,
  simple

Economic recession and nationalism
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The Marco Polo Scenario
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The Body Shop Scenario
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The Sunny Beach Scenario
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The Ascetism Scenario
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• The Marco Polo Scenario The Body Shop Scenario
• The Sunny Beach Scenario The Ascetism Scenario
• Maltas future?
• What needs to be done?
• How would you and your business cope with each of
  these?

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• Strategic tools to enable us to more effective
  analyse and respond to external change in
  hospitality and tourism here weve used
• A. PEST
• B. SWOT

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What is PEST Analysis?

• This analysis is essential for an organization
  before beginning its marketing process
• Consists of internal environment and external
  environment

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SUMMARY
Political/ Legal Economic Socio-cultural Technological
Environmental regulations and protection Economic growth Income distribution Government research spending
Tax policies Interest rates monetary policies Demographics, Population growth rates, Age distribution Industry focus on technological effort
International trade regulations and restrictions Government spending Labor / social mobility New inventions and development
Contract enforcement law Consumer protection Unemployment policy Lifestyle changes Rate of technology transfer
Employment laws Taxation Work/career and leisure attitudes Entrepreneurial spirit Life cycle and speed of technological obsolescence
Government organization / attitude Exchange rates Education Energy use and costs
Competition regulation Inflation rates Fashion, hypes (Changes in) Information Technology
Political Stability Stage of the business cycle Health consciousness welfare, feelings on safety (Changes in) Internet
Safety regulations Consumer confidence Living conditions (Changes in) Mobile Technology
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Role of PEST

• Helps assess the market including competitors
  from the stand point of a particular business or
  from a destination perspective.
• PEST is relevant for any type of business or
  destination whether large, small medium.

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S.W.O.T. Analysis
Factors Internal to Organization
Strengths
Weakness
Opportunities
Threats
Factors External to Organization
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SWOT

• A SWOT analysis generates information that is
  helpful in matching an organization or groups
  goals, programs, and capacities to the social
  environment in which it operates.
• Factors internal to the firm usually can be
  classified as strengths (S) or weaknesses (W),
  and those external to the firm can be classified
  as opportunities (O) or threats (T).
• It is an instrument within strategic planning.
• When combined with dialogue it is a participatory
  process

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Simple Rules for SWOT Analysis

• Be realistic about the strengths and weaknesses
  of your organization or group.
• Distinguish between where your organization is
  today, and where it could be in the future
• Be specific Avoid gray areas.
• Always analyze in relation to your core mission.
• Keep your SWOT short and simple. Avoid complexity
  and over analysis
• Empower SWOT with a logical conceptual framework.

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Future of Travel Dr Patrick Dixon

• http//www.youtube.com/watch?vL1C1chw1I4U

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Applying Dixon to Malta

• To the destination?
• To your business?

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• Thank You!
• Discussion
• .