Presentation sharing the findings of the Hotels 2020 study focusing on hotel strategies and innovations in an era of personalization and rapid change.

1. Hotels 2020 -
Rethinking Hotel
Strategies, Business
Models and Investment
Propositions
Hotel Investment Conference
London – September 7th 2011
Rohit Talwar
CEO Fast Future Research
rohit@fastfuture.com

2. Hotels 2020 – Objectives
• Identify key drivers of change
for the globally branded hotel
sector over the next decade
• Examine the implications for:
– Hotel strategy
– Brand portfolio
– Business models
– Customer targeting
– Innovation

3. Hotels 2020 – Research Methods
• Expert Interviews
• Desk Research
• Global Survey
• Workshops (Delhi, Dubai)

4. Growth is no Longer a ‘Given’

5. Thinking is Back in Fashion

6. Transformational Change?
It’s Only Just Begun

7. Demographic Destinies
2 billion more people in 40 years –
Demographics is Driving Economics
448 739 691 5231
344
1998 4157
729 1030
585
2010 2050 Source : United Nations

8. Reorientation of Global Markets
Today - US – 3 Seats per head / China 0.3 / India 0.1
Asia – a third of all flyers (2013) and travel spend (2020)

9. Heavy investment in emerging tourism markets will widen traveller
choice, increase competition and potentially drive down prices and
profit margins across the spectrum of hotels
70
58
60
50
40
30
21 20
20
10
1
0
593 Respondents Strongly agree Agree Disagree Strongly disagree

10. Tomorrow’s Traveler - Demographics
• Over 60’s in developed
economies to rise from 22-
33% from 2009 and 2050.
• In developing world, from 9 to
20%
• Global retirement market
2010-2020 could grow from
$28 - $46 Tn
• Global middle class could rise
from 430M to 1.2 Bn (2000 –
2030)

11. Life Redefined –
Lifespans are Increasing
Under 50’s have 90%
chance of living to 100.
Aubrey de Grey suggests
we could live to 500 or 1000
What are the health,
consumption and resource
implications?
What kind of opportunities
will be created?

12. Tomorrow’s Traveler –
Spending Patterns
• By 2020, Asian
consumers could account
for over 40% of global
middle class consumption
• By 2014 female wealth
could reach $18 trillion
• Females could control
70% of global consumer
spending

13. The Asian middle classes will make up the largest
share of international travel
60
54
50
40
30
25
21
20
10
1
0
600 Respondents Strongly agree Agree Disagree Strongly disagree

14. Traveller Behaviours
Too Busy To Care
Complex Lives, Pressurised
Finances
Craving Simplicity
Wealthy and Hard to Please

15. Hotels will increasingly consider factors such as cost of servicing, level
of spend and average length of stay when targeting potential customers
in different geographic markets
70
58
60
50
39
40
30
20
10
593 Respondents 0
3
0
Strongly agree Agree Disagree Strongly disagree

16. Sustainability
Environmental considerations will play an increasing role in
the choice of business and leisure hotels. 606 Respondents

17. Hotel 1000 Seattle – Guest Sensors

18. Crowne Plaza Copenhagen Towers –
Solar Power, Geothermal Well, Eco-rooms

19. Tomorrow’s Traveler – Technology
• Number of mobile subscribers
could rise from 4Bn to 5Bn
2009-2015
• Mobile data traffic to rise 300-
fold by 2015 (Nokia).
• By 2020 the range and nature
of interaction technologies /
customer ‘touch points’ will
expand dramatically.
• ‘Go nowhere’ gamers
• Personal genetic profiles

20. Traveler motivations will become increasingly fragmented and diverse
and harder to segment into clearly definable customer groupings
604 Respondents

21. Customers will increasingly use social media and
collective intelligence travel services (like Dopplr) to
define the desired ‘product’ for a temporary self-
forming group.
50
45 45
45
40
35
30
25
20
15
9
10
5
0
0
601 Respondents Strongly agree Agree Disagree Strongly disagree

22. Hotels will need to develop strong social media 'listening skills' to
understand how customer needs and perceptions of brands and service
quality are truly evolving and to develop service propositions, marketing
messages, and pricing solutions that reflect the needs of an increasingly
diverse customer base.
60
54
50
42
40
30
20
10
4
0
0
597 Respondents Strongly agree Agree Disagree Strongly disagree

23. Technology and Connectivity Drivers
Hotels will increasingly look to new technologies to
drastically increase efficiency, reduce costs, personalise the
customer experience and improve service.
60
54
50
41
40
30
20
10
4
1
0
605 Respondents Strongly agree Agree Disagree Strongly disagree

24. Hotel Technology Development
Roadmap to 2020
Widespread Now Widespread by 2015 Widespread by 2020
Relationship Management
1.67 billion web users Dominance of online bookings 5 billion web users
Rise of social meeting Evolution of Customer Intelligent Agents / Software
Travel planning Relationship Management Assistant
Tablet computers (CRM) Semantic Web
Wireless broadband High bandwidth wireless Intelligent Web
Virtual Travel broadband Immersive Web (Use of web
Speech Recognition and technology to deliver
Language Translation in daily sensation, experience and
use emotion)
Personal Technology
Augmented Reality (figure 3) Explosion Of Personal Display 5G Phones
Devices Gesture Interfaces (figure 5)
Mind Control Headsets (figure Heads Up Displays (figure 6)
4)
4G Phones
Intelligent Interfaces

25. Hotel Technology Development
Roadmap to 2020
Widespread Now Widespread by 2015 Widespread by 2020
Guestroom Functionality
Centralized and 3D TV 4D TV
personalized control of Multimedia Beds Sensor-Based Room
media, lighting and IP Telephony Management
temperature IPTV Personal Robots
Smartphone Room
Access
In Room Concierge
Meeting Support
Video Conferencing /
Tele-presence
Virtual Meetings And
Hybrid Events

26. Hotel Technology Development
Roadmap to 2020
Widespread Now Widespread by 2015 Widespread by 2020
Guest Services
Self Service Kiosks Interactive Displays Touchable Holographs
3D Displays Interactive Surfaces Haptics Technology (allowing
Near Field Communication users to physically ''feel'
(NFC) virtual objects on a computer)
Quick-Response (QR) Codes
Business Operations And Management
Cloud Computing Biometrics (E.G. Voice /
Facial Recognition)
RFID
Data Security Ambient Intelligence Sensor Networks
Hybrid Platforms Swarm Intelligence
Monitoring And Surveillance (Analyzing Group Behavior)
Knowledge Mining Remote Sensing Security
Predictive Analytics Crowd Farming

27. Thought Control - Today

28. Personalization

29. Augmented Reality

30. Data Immersion / Heads up

31. Ambient Intelligence

32. Opportunities and Implications
• Developing strategy in an uncertain world
• Management of the brand portfolio
• Evolution of business and revenue models
• Location
• Categorization in the era of personalisation.

33. By 2020 global hotel groups will increasingly seek to cover
the full spectrum from budget through to luxury and
heritage properties
606 Respondents

34. Hotel groups and owners may increasingly seek to co-locate
different categories of hotel from budget to luxury in a
common location with shared catering and leisure facilities
for use by all guests
598 Respondents

35. By 2020 a new category of co-branded and co-designed
‘signature’ properties will emerge within hotel chain
portfolios, providing differentiation and opening up ancillary
revenue stream options
By 2020 a new category of co-branded and co-designed ‘signature’
properties will emerge within hotel chain portfolios, providing
differentiation and opening up ancillary revenue stream options
60 57
50
40
30
22
19
20
10
2
0
590 Respondents Strongly agree Agree Disagree Strongly disagree

36. By 2020 we will see the emergence of a new breed of unbranded hotel
group, offering 'white label solutions'- including sophisticated marketing,
very high standards of service and advanced technology support while
allowing owners to develop their own brands
595 Respondents

37. The emergence of invitation-only hotels’ by 2020
The emergence of invitation-only hotels’ by 2020
587 Respondents

38. By 2020 hotels will increasingly experiment with a range of
business models
602 Respondents

39. Hotels will use discount offers to capture a share of pre- and
post-trip travel spend e.g. purchase of luggage, clothing,
transportation, insurance, duty free etc.
610 Respondents

40. Hotels will create their own catalogues of branded amenities,
clothing, furniture and decorations
610 Respondents

41. Hotels will increasingly provide additional business services
e.g. translation, access to legal and accounting advice,
secretarial support, company formation, organization of small
meetings, etc
610 Respondents

42. Pricing
In a highly automated world, there will be a range of customers at
every price point who are willing to pay for personal service
610 Respondents

43. Hotel Categorization may Need to Evolve to Focus
More on Service Than Facilities

44. Segmentation
71% agreed that
‘traveler motivations will
become increasingly
fragmented and diverse
and harder to segment
into clearly definable
customer groupings’.

45. Hotel guests will expect their stay to be personalized
around a set of choices they make at the time of
booking or prior to arrival
60
50
50
42
40
30
20
10 7
1
0
602 Respondents Strongly agree Agree Disagree Strongly disagree

46. The Emergence of Personalized
Service Spectrums
86% agreed that by 2020,
personalization will have been
embraced wholeheartedly by
the sector and that ‘customers
will have the ability to choose
the size of room, type of bed,
amenities, audio-visual
facilities, business equipment,
etc. on booking and pay
accordingly’.

47. What’s in the Service Spectrum?
• Customer • Food and Beverages
Relationship / • Technology, Media
Communications and
• Customer Journey – Telecommunications
Core Processes • Hotel Services and
• Staff and Service Facilities
• The Bedroom • Pricing
Environment

48. Customer Journey – Core Processes

49. Staff and Service
Highly trained staff backed up by technology will be key to delivering
personalized service and experiences
605 Respondents

50. The Bedroom Environment

51. Food and Beverages

52. Technology, Media and
Telecommunications

53. Mapping a Path to 2020
Strategic Management Imperatives
Horizon scanning Scenario based planning Anticipation
Open processes Rapid implementation Tomorrow’s workforce

54. Hotels 2020 – Key Characteristics of
Successful Players in Tomorrow’s
World

55. 1. Deep understanding of an increasingly
geographically, financially, generationally and
attitudinally diverse and evolving customer base
• Growth from emerging
markets
• Evolving demands of an
aging population
• Rising disparity and
continued uncertainty in
developed economies

56. 2. Immersive, tactile and multi-dimensional
technology interfaces
• Augmented reality creates
digital overlay’s on the ‘real’
world
• 3D projection and gesture
interfaces will change how
we view and interact with
© 2010 Amadeus IT Group
information
SA

57. 3. Continuous search for ancillary revenues
• Potential to capture
more of total trip
spending
• Identification of new
streams and
merchandising
© 2010 Amadeus IT Group SA
opportunities

58. 4. Open, listening, collaborative and experimental
approach to innovation
96% believe that in the
face of intense global
competition, the hotel
industry will develop a
strong focus on strategy
and innovation –
adopting approaches
such as crowd sourcing
© 2010 Amadeus IT Group
and open innovation to
generate new ideas.
SA

59. 5. An organization capable of surviving and
thriving in turbulence and uncertainty
• Prepare for a
range of possible
scenarios
• Tolerance of
uncertainty
becomes a core
competence

60. Hotels 2020: Conclusion
• The hotel of the future
will be a living
laboratory
– Constant
experimentation and
innovation
– Every interaction a
potential source of
insight and ideas

61. Hotels 2020 – Beyond Segmentation
Thank You

62. Fast Future –
Hotel and Meetings Industry Services
• Briefings and workshops for executive
management and boards of hotels, venues,
CVB’s and associations
• Customised research on trends, technologies
and new markets
• Development of strategies and business plans
• ‘Deep dives’ on key trends and technology
developments
• Consultancy and workshop facilitation on
innovation and new business models
62

63. Fast Future
• Research, consulting, speaking, leadership
• 5-20 year horizon - focus on ideas, developments,
people, trends and forces shaping the future
• Clients
– Industry Associations – ICCA, ASAE, PCMA, MPI
– Corporates - GE, Nokia, Pepsi, IBM, Intel,
Samsung, GSK, SAP, Orange, O2, E&Y, KPMG,
Amadeus, Sabre, Travelport, Travelex, ING,
Santander, Barclays, Citibank, DeutscheBank
– Governments - Dubai, Finland, Nigeria,
Singapore, UK, US
– Convention Bureaus – Seoul, Sydney, London,
San Francisco, Toronto, Abu Dhabi, Durban,
Athens, Slovenia, Copenhagen
– Convention Centres – Melbourne,
Adelaide, Qatar, QEIICC
– Hotels - Accor Group, Preferred,
– Intercontinental
– Congrex, Kenes
– Aeroports de Paris / Schiphol Group

64. Convention 2020
• Global strategic foresight study to help the meetings industry prepare for
the decade ahead - Industry-wide sponsors
• Multiple outputs Nov 2009 – December 2011
• Current studies on future strategies for venues and destinations

65. Rohit Talwar
• Global futurist and founder of Fast Future Research.
• Award winning speaker on future insights and strategic
innovation – addressing leadership audiences in 40 countries on
5 continents
• Author of Designing Your Future – Published 08/2008
• Profiled by UK’s Independent Newspaper as one of the Top 10
Global Future Thinkers
• Led futures research, scenario planning and strategic
consultancy projects for clients in telecommunications,
technology, pharmaceuticals, banking, travel and tourism,
environment, food and government sectors
• Clients include 3M, BBC, BT, BAe, Bayer, Chloride, DTC De
Beers, DHL, EADS, Electrolux, E&Y, GE, Hoover, Hyundai, IBM,
ING, Intel, KPMG, M&S, Nakheel, Nokia, Nomura, Novartis,
OECD, Orange, Panasonic, Pfizer, PwC, Samsung, Shell,
Siemens, Symbian, Yell , numerous international associations
and governments agencies in the US, UK, Finland, Dubai,
Nigeria, Saudi Arabia and Singapore.
• To receive Fast Future’s newsletters please email
rohit@fastfuture.com

66. Designing Your Future
Key Trends, Challenges and Choices Facing
Association and Nonprofit Leaders
• 50 key trends
• 100 emerging trends
• 10 major patterns of change
• Key challenges and choices for
leaders
• Strategic decision making
framework
• Scenarios for 2012
• Key futures tools and techniques
• Published August 2008
• Price £49.95 / €54.95/ $69.95
• Email invoice request to
rohit@fastfuture.com

67. Our Services
Bespoke research; Identification &
Analysis of Future Trends, Drivers &
Shocks
Public Speaking, In-
Company Briefings, Accelerated Scenario
Seminars and Planning, Timelining &
Workshops Future Mapping
Personal Futuring for
Leaders and Leadership Expert Consultations &
Teams Futures Think Tanks
Identification of
Design & Facilitation of Opportunities for
Innovation, Incubation Innovation and Strategic
& Venturing
Programmes Strategy Creation & Investment
Development of
Implementation
Roadmaps

68. Example Projects
• Public and private client research e.g. :
– Convention 2020 – the Future of Business Events
– Future Convention Cities Initiative – Maximising Long-term Economic Impact of Events
– One Step Beyond – Future trends and challenges for the events industry
– Hotels 2020: Beyond Segmentation – Future Hotel Strategies
– The Future of Travel and Tourism in the Middle East – a Vision to 2020
– Future of Travel and Tourism Investment in Saudi Arabia
– Aviation and Airports e.g. Aviation 2030
– Scenario Projects – Migration 2030, Future of Narcotics, Chemical Sector, Family 2030
– Scenarios for the global economy for 2030 and the implications for migration
– Designing Your Future (Published August 2008) – book written for the American Society
of Association Executives & The Center for Association Leadership
– Global Economies – e.g. The Future of China – the Path to 2020
– The Shape of Jobs to Come – Emerging Science and Technology Sectors and Careers
– Winning in India and China
• Strategic advice to industry players
• Confidential advisory and coaching services to CEOs and top teams
• Public speaking at public conferences and in-company events
• Future thinking workshops and retreats

69. Example Clients

70. Source Page p.1
Page
2. http://www.townhousecompany.com/wmslib/Gallery_Bonham/Bon-Check-In-700x500.jpg
3. http://www.b2binternational.com/b2b-blog/images/focusgroupidea.jpg
4. http://www.piperreport.com/archives/Images/Medicare%20PFFS%20Plans.jpg
5. http://www.einstein.yu.edu/iphs/images/think_tank.jpg
6. http://creativeclass.typepad.com/thecreativityexchange/images/2007/12/01/global.jpg
7. http://www.un.org/esa/population/unpop.htm
8. http://www.surfersvillage.com/gal/pictures/1215airplanes.jpg
9. http://images.businessweek.com/ss/08/03/0312_tata/image/indian_hotels.jpg
10. http://www.debtsmart.com/adrates/demographic.jpg
11. http://www.ted.com/index.php/talks/aubrey_de_grey_says_we_can_avoid_aging.html
12. http://www.jasonkolb.com/photos/uncategorized/2008/01/26/locked_up_dollar.jpg
13. http://images.forbestraveler.com/media/photos/inspirations/jets-planes/asian-airlines-08-g.jpg
14. http://www.maskworld.com/pix/costumes/large/91099-urlauber-fat-suit-tourist-fat-suit.jpg
15. http://cdn.picapp.com/ftp/Images/d/1/9/1/Messy_hotel_room_2845.jpg?adImageId=7865525&imageId=5090493
16. http://www.borev.net/imf.jpg
17. http://www.worldmate.com/travelog/wp-content/uploads/2010/07/hotel-1000.png
18. Clockwise
1. http://www.greenlaunches.com/awareness-and-hype/burn-your-fat-and-generate-electricity-with-exercise-bikes-in-scandinavian-hotel.php
2. http://images.citybreak.com/Image.aspx?imageid=148802
3. http://images.gizmag.com/hero/crowne-plaza-energy-bike.jpg
19. http://aitechnologies.net/images/globe.jpg
20. http://the-investors-club.com/wp-content/uploads/2008/12/market-segmentation.jpg
21. http://gadgetheat.com/wp-content/uploads/2008/05/surf-chair.jpg
22. http://blog.navigationarts.com/wp-content/uploads/2010/08/Social-Chartlong.jpg
27. http://dustinkirk.com/blogpicsBig/Emotiv_Headset.jpg
28. Left to right
1. http://farm1.static.flickr.com/194/472097903_b781a0f4f8.jpg?v=0
2. http://www.treehugger.com/files/2010/10/on-demand-3d-printing-cut-waste-increase-efficiency.php
29. http://www.image-acquire.com/wp-content/uploads/2010/05/500x_firstforbes.jpg
30. http://images.gizmag.com/hero/frog2020.jpg
31. http://www.limsi.fr/~jps/enseignement/examsma/2004/BHATTI/images/mb_ubicom2.jpg
32. http://www.hoteliermiddleeast.com/pictures/gallery/Stock/Dollars-web.jpg
33. http://www.flickr.com/photos/honeybeejen/3602924960/
70

71. Image Sources p.2
34. http://www.hotels.com/3/hotelimages/s/082000/082704A.jpg
35. http://images.watoday.com.au/2010/04/28/1388729/Armani_Hotel_Dubai__24_-600x400.jpg
36. http://www.dailydanny.com/?p=1563
37. http://www.cmt.com/sitewide/assets/img/franchiselogos/invitation_only-430x250.jpg
38. http://www.winnersedgetrading.com/wp-content/uploads/2010/04/080809_australian_dollar_1.jpg
39. http://www.placesfacts.com/images/dubai-duty-free1.jpg
40. http://interior.ihouse-designs.com/category/bedroom/page/2/
43. http://www.oxci.co.uk/blog/wp-content/uploads/2010/03/The-Beauty-of-Service.jpg
44. http://www.tbs.cz/intensive-programmes?kap=1
45. http://gadgetheat.com/wp-content/uploads/2008/05/surf-chair.jpg
46. http://cdn0.lostateminor.com/wp-content/uploads/2008/06/hotel-tomo.jpg
47. http://www.blogcdn.com/news.bigdownload.com/media/2009/05/mcp.jpg
48. http://www.blogcdn.com/www.engadget.com/media/2010/11/10x11026b3245tabloy.jpg
49. http://www.calico.ie/blog/uploaded_images/Geminoid11-703111.jpg
50. http://news.architecture.sk/uploaded_images/2010/08/hotel-seven-02.jpg
51. http://farm4.static.flickr.com/3390/3622133284_ab93d5a8fd.jpg
52. Left to right
1. http://cdn.slashgear.com/wp-content/uploads/2010/01/3D_01.jpg
2. http://www.logitech.com/repository/142/jpg/786.1.0.jpg
53. Clockwise
1. http://www.sro.hse.gov.uk//article_images/working%20with%20future(2).jpg
2. http://www.microsoft.com/education/highered/whitepapers/scenario/figure1.aspx
3. http://rtmulcahy.wordpress.com/2007/08/17/anticipation/
4. http://www.macforensicslab.com/ProductsAndServices/index.php?main_page=index&cPath=5_24
5. http://28thamendment.wordpress.com/2010/03/
6. http://pacificxanh.files.wordpress.com/2010/08/schoolgirls.jpg
71