CHAPTER 2:

MEETING GUEST
EXPECTATIONS THROUGH
PLANNING
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WHAT THE FUTURE MAY

HOLD
Lat, Bernard
Tallada, Selwyn Mathew
“ The organization must try to assess the
uncertain future in terms of potential changes
in demographics, technology, social
expectations, economic forces, competitors,
other relevant groups (suppliers of resources,
capital, and labor), and surprise factors.
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Changing Demographics

Assessing future demographic trends and their

effects may require both qualitative and
quantitative forecasts. Hospitality organizations
already know a lot about their future guests since
so many of them are already here.
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Generations X and Y

Many future market opportunities can be identified by

reviewing information already known about baby boomers and
the Generation X and Generation Y segments of the
population. "Generation X is the 46 million Americans aged 18-
29." (20) According to Business Week in 1992, Members of
Generation Y, now in grade school, will be the "youth quake" in
the early twenty-first century.
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Demographic Implications

These statistics have several implications for all organizations

serving the public; some of them will have special impact on the
labor-intensive hospitality industry. With dollars for education
under pressure as aging baby boomers press for allocation of
more government dollars to their growing health-care and
retirement needs, agile hospitality companies can define
themselves as white knights to schools and their students by
finding innovative ways to promote their products and services
while helping schools achieve their educational mission.
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Generation Y in the Workforce

The characteristics of Generation Y also have important

implications for managing the workforce of hospitality
organizations. The divergence between the haves and the have-
nots in this Information Age is already wide among today's
school children, who will be the workers of tomorrow. It can be
seen even at the elementary-school level where those children
who have access to computers are educationally outstripping
those who don't.
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Changing Technology

Several developments, other than the population trends that

are changing the workforce and customer base, will affect the
strategies of hospitality organizations. Dramatic changes in
technology will continue to have a major influence on both
individual organizations and entire industries. Many
demographic trends shift slowly. Because changes in
technology, especially information technology, occur so rapidly,
they and their impact are difficult to forecast.
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Changing Social Expectations

Another factor in the long look around is society's changing

expectations for all its institutions, including those in the
hospitality industry. Some expectations wind up in the
political process and result in new laws, rules, or
regulations. Others are expressed through trade
associations that monitor industry behavior and activist
groups that identify and oversee industry practices.
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Changing Economic Forces

Many environmental factors already covered have an

economic aspect. Economics is such an important issue,
however, that it deserves special discussion. The
organization must consider the effects of governmental
economic policies on its suppliers of capital, the ability of its
customers to buy the service, and competitors' ability to
compete. It must also consider in its strategic planning
process numerous other economic factors as well.
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Changing Competitors

An organization has existing competitors,

potential competitors, and indirect competitors
that offer customers a substitute or alternative
service. These competitors can be local, national,
or even international.
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Changes in Other Relevant Groups

In addition to the various factors and groups we

have already discussed, several other groups in
the organization's external environment must be
included in any environmental forecast: the
suppliers of resources, capital, and labor.
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Resource Suppliers

One important group is the resource suppliers of raw

material, capital, and labor. When Red Lobster adds a new
seafood item to its menu, it must first check to be sure its
demand doesn't exhaust the world's supply of that item.
Because Red Lobster has so many restaurants, adding or
removing a menu item can have a major impact on the
supply of that product.
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Capital Suppliers

A second major interested group is the suppliers of capital.

As the capital market becomes more global and the
availability of electronic transfers makes movement of
capital easier and quicker, the organization may need to
spend more time forecasting the availability of capital for
its business and industry.
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The Impact of Change on Strategic Premises

All these changes will have varying effects on the

organization. But not all factors are equal in either their
impact on the organization or in terms of our ability to
forecast them fully. Some are predictable and simple, such
as the estimate of teenagers available for work in ten years.
Since they have all been born already, predicting the
number available in ten years is a straightforward
calculation
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Strategic Premises

The hospitality organization draws conclusions about the

future of its industry and market from its environmental
assessment, then uses them to make the assumptions,
called strategic premises, on which the service plan is
based. Premises are educated guesses.
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Strategic Premises

1. People wanted 2. People were fed 3. People were trying to

choices. They were up with poor adjust to a newer, more
tired of living in a quality. He saw a complicated way of life.
prepackaged world; big interest in Older people were looking
they wanted some things that were for relief from the many
influence over the fresh and natural. social and political changes
products they were occurring during the 1960s,
buying in the and young people were
marketplace, and looking for changes that
they wanted they could handle.
something new.
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Strategic Premises

4. People were on the move. Any business had to

accommodate this restless mobility.

5. People were ready for an upscale hamburger place.

He felt that many people had grown up loving
hamburgers but were not satisfied with the product
generally available at fast food outlets.
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Strategic Premises: Theme Parks

At the Park, a major theme park industry journal, offers

several interesting forecasts. Any theme park organization
believing them to be accurate could use them as premises
on which to base strategic plans.
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Strategic Premises: Theme Parks

1. There will be more parks, but they will be smaller. These

will be niche parks appealing to specific market segments,
close to population centers, and they may well include
sophisticated, high-technology entertainment attractions.

2. Immigration trends will create more demand for ethnic-

themed parks.
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Strategic Premises: Theme Parks

3. More competition and more investment opportunities will

be outside the United States. Tourists from all over the world
visit our theme parks.
4. The customer base will get progressively older.

5. Cultural attractions such as museums, historical sites,

aquariums, and symphony orchestras will either learn how to
enter the entertainment business to compete or lose their
public support and funding.
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Strategic Premises: Theme Parks

6. The growth and availability of virtual-reality technology will

change the experiences that customers seek and expect from
attractions.
7. More emphasis will be placed on personal safety and
security, because customers will expect and demand it.

8. The role of theme parks in affirming and teaching our

cultural heritage, beliefs, and values will continue to expand.
Theme parks define a view of culture and to some extent teach
guests what the culture is all about.
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Strategic Premises: Theme Parks

9. Technology will continue to change the way in which the

theme park experience is enjoyed, but the fundamental
premise of a theme park or any service organization will
not change.
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