Deloitte identifies seven key issues in hospitality industry

In order to reverse the recent downward trend and achieve future growth, the hospitality industry will need to address seven major issues over the next five years, according to new report by Deloitte entitled Hospitality 2015.

According to the report, the key drivers in determining success through 2015 and beyond will be emerging markets, demographics, brand, talent, technology, sustainability and crisis management.

China and India will continue to be the key hospitality markets, and according to the report, by 2015 these countries will have absolute year-on-year tourism growth greater than the United Kingdom, France or Japan.

In 2015 and beyond there will be two key demographic drivers of change in the industry, which will create new patterns of travel and demand in the West, and important new source markets in the East: the ageing baby boomer population, and the emerging middle classes of China and India.

By 2015, US boomers are forecasted to account for 60 per cent of the nation's wealth and 40 per cent of spending. The middle classes of China and India will also create ripples of change far into the future as their travel patterns evolve from domestic to regional to international. India alone is forecasted to have 50 million outbound tourists by 2020.

The growth of social media in the last five years has been staggering, and will continue to grow. This new form of communication and feedback is good news for consumers, and offers both threats and opportunities for operators.

An average hotelier spends 33 per cent of revenues on labor costs, but employee turnover in the industry is as high as 31 per cent. High employee turnover continues to plague the industry and operators need robust strategic plans to retain their critical employees and manage turnover.

According to the report, to be successful in 2015, hospitality companies must invest in technology. The battle to drive bookings through proprietary websites will continue, but all major operators will also develop applications and websites for mobile devices to meet consumer demands.

Raphael Aloisio, Advisory Partner at Deloitte Malta, stresses that "Malta must maintain the pace of international technological advancements by accelerating the investment in IT tools and applications".

Sustainability will become a defining issue for the industry in 2015 and beyond. Rising populations and increasingly scarce resources will provide a challenging business environment in which sustainability will need to be embedded within all facets of the hospitality industry.

According to the report, the key to the hospitality industry's survival of unpredictable shocks and minimising their impact is to establish appropriate responses, protocols and risk management programmes.