Developing Leader for Change & Innovation in Tourism

1. Developing Leader for Change & Innovation in Tourism 28th June 2010

2. Future Industry Trends, Creative Thinking and Innovation Tom Baum PhD University of Strathclyde, Glasgow

3. Key Concepts and Learning 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 3

4. Programme Overview SESSION 1 Tourism – a future scan: utilizing the tools SESSION 2 Finding and applying creative/ innovative solutions 4

5. Thinking about the future….. And learning from the past

6. 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

7. 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…….

8. Maybe…..

10. David L. Edgell Sr., PhD Professor of Tourism, East Carolina University Ex-US Department of Commerce responsible for Travel and Tourism Annual reportTEN IMPORTANT WORLD TOURISM ISSUES 2011

11. 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

12. 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

13. 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

14. 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

15. Climate change impacts – source markets and at home • Rising sea levels • Worldwide recession and lower spending visitors • Understanding the tourists of 2015 and 2010 – Gen Y • New competing markets – Libya • Increasingly demanding customers

16. 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

17. What is required is a strategic approach to the identification and analysis of future trends……

18. The Goal:To increase awareness about the organisation, its environment and the future. The future Strategic options (Exploring our future possibilities) Scenarios (Imagining the future) Increasing awareness The business ecosystem The organisation Co-evolution (Discovering our place & relationships)

19. Malta 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?

20. 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?

21. The environment Governments Standards bodies New entrants Competitors Supplier’s suppliers Customer’s customers Suppliers Customers Malta/ Organisation Substitutes Stakeholders International law An Ecosystem for Malta or your organisation

22. 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? • Porter’s Five Forces

24. Strategic options“Our 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

25. Scenario PLANNING“Imagining the future” • Identify key driving forces • Choose most uncertain/most significant • Develop alternatives • ‘Flesh out’ with narrative

26. 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

27. EU Project Comprehensive sectoral analysis of emerging competencies and economic activities in the European Union

28. 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

29. Classification of drivers IMPORTANT • The ageing population • Economic development and globalisation • ICT and digitalisation • New lifestyles and consumer trends (eg. concerns about health and environment, convenience etc.) 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

30. 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

31. 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.

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

33. Driver: Increased use of ICT For the customers it means greater possibilities in finding Hotels and restaurants and catering establishments online, and the ability to be pickier. 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. The increased use of ICT and the internet has had, and still has, a great impact on the Hotels and restaurants sector.

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

35. SWOT analysis

36. 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?

37. 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.

38. 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

39. 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

40. The Marco Polo Scenario

41. The Body Shop Scenario

42. The Sunny Beach Scenario

43. The Ascetism Scenario

44. The Marco Polo ScenarioThe Body Shop Scenario The Sunny Beach ScenarioThe Ascetism Scenario • Malta’s future? • What needs to be done? • How would you and your business cope with each of these?

45. Strategic tools to enable us to more effective analyse and respond to external change in hospitality and tourism – here we’ve used A. PEST B. SWOT

46. What is PEST Analysis? • This analysis is essential for an organization before beginning its marketing process • Consists of internal environment and external environment

48. SUMMARY

49. Role of PEST • Helps Assess the market including Competitors from the stand point of a Particular Business. • PEST is relevant for any type of Business large, small & medium.

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