Tourism & HospiTaliTy

downtuRn

Survival Strategies in the

continue into 2009, affecting how and where people travel. as per a recent survey of frequent travellers, most of them expect to spend less on travel in 2009. From a corporate perspective, companies will continue to look for ways to cut corners – including business travel – to improve their bottom line in the tough times. however, taking a longer view, human interaction remains important and business executives will still need to meet in person to make decisions. On the whole, tourism and hospitality companies can expect to be under continued stress in 2009, but with innovative and costeffective programmes the sector should be able to increase customer loyalty and drive demand. The areas that present both a challenge and opportunity to the sector (as per a recent study of a major international accounting firm) are as under:
Human ResouRce management

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march 2009

Kapilkumar Kumra analyses the ongoing trends within the tourism and hospitality sector of the Middle East and suggest strategies that can help survive in the present downturn.

In any services sector company, human resource is the key factor. The challenge for tourism and hospitality companies is to retain quality employees. While the economic downturn is likely to reduce turnover in 2009 because fewer job opportunities will be available, attracting and retaining highquality employees will remain a long-term issue, particularly for companies looking to staff properties at large distances far from major cities. additionally, expatriate labour remains one of the major issues that directly impacts the sector in the region.
Building BRand image

he tourism and hospitality sector in the middle East has grown faster than any other region with the number of travellers increasing by 11.3 mn to 52.9 mn in 2008. Last year, the region achieved the highest average room rate of US$215 and occupancy rate of 68 per cent in the world. The aforesaid exceptional results in 2008 were mainly due to the strong performance of the sector during the first nine months of the year. By September, the region was no more insulated from the global events and business suffered with
B.I.G

heavy discounting from travel and tourism companies in the region. after years of healthy growth, 2009 is expected to be much tougher for the tourism and hospitality sector. The combination of oil price decline, credit crunch and rising unemployment has placed the region’s economy under severe stress – leaving fewer discretionary funds available for consumers’ travel and entertainment. The corporate sector is cutting cost by reducing employee travel and meetings in hotels and resorts. Economic difficulties are expected to

With economic conditions becoming more challenging by the day, building brand value is more important than ever. The competition for customers and market share is expected to intensify in 2009; therefore, the ability of a hotel or resort to deliver on a brand promise can assist in improving demand and increasing customer loyalty. The hotel sector, particularly high-end properties, generally has been effective at building brand value, although companies could still make an effort to learn more about their visitors’ needs and preferences and, thus, deliver an even better customer experience. The airline sector, due to significant cost increases, appears to be doing less to build brand loyalty. airlines’ practices of cutting flights, adding extra-baggage and additional surcharges, and failing to treat frequent fly...Read more in BIG MARCH 2009 Issue