Lausanne Report – Outlook 2030 exposes different scenarios for the hospitality industry to respond to challenges ahead, providing thought leadership, promoting creative thinking and worldwide benchmarking. It paints an ambitious view of our future and identifies key trends and drivers of the global hospitality sector to support its future development. In the Lausanne Report, from an array of possible future scenarios we have chosen the most striking ones to build our theses. At the end of this shaking year, one of the fundamental questions will be if the globalization process will continue or will it assist to a new segmentation? In one of the thesis of our Lausanne Report we propose you to think about the following question: Will globalization fragment or consolidate the hospitality industry?

Is small is beautiful?

Technologies and societal changes may push the consolidated hospitality segment to split again, while the fragmented hospitality segment stays fragmented (Europe?). Consolidation by vertical integration of hotel chains can lay the foundation for future disintegration, given that hotel chains return to their core business. For instance, substantial investments in a distribution platform (internal OTA), and expanding this tool by attracting other brands harbors the risk of an eventual spin-off of the platform. Former Cendant Corporation yet again serves as a good example for post-merger spin-offs. The company simultaneously ventured into diverse travel and hospitality-related segments and services such as casinos, real estate, travel distribution, hospitality, and vehicle rental companies. Later, Cendant had to spin off each ­operation separately being unable to compete successfully. Accor also ventured into various hospita­lity segments, including economy brands. M&A activities were followed by a refocus on the core business and sub­sequent sale of companies and participations such as Edenred, Wagons Lits, etc.

Independence day

Independent hotels and hotel groups – owned and managed by themselves – are the best representatives of a fragmented hospitality industry. Their independence may ultimately make them more agile, more authentic and give them a better reputation.Independent hotels in a fragmented market profit from their agility to adapt and react to guests’ wishes and needs. They have more freedom and flexibility than standardized branded hotels, which are bound to centralized corporate policies. The absence of in-depth management structures will provide more incentives to explore niche markets and specialize in boutique hotels, health hotels, aparthotels, theme hotels, etc. Independent hotels will also develop new hospitality offerings via peer-to-peer platforms (e.g. services for Airbnb apartments such as F&B, laundry or cleaning). Authenticity and specialization can be significant advantages for independent hotels when competing with chains. The focus of individual hotels is to provide a customized experience to their guests that matches their special demands and lifestyles. A smart focus on attractive niches is key.

The «Allmend principle»

The digital environment will become increasingly complex and force hotel operators to act. When collaborating, individual hoteliers in various regions maximize their opportunities to increase profits and to protect their businesses. Collaborations must ensue in both the digital and physical market place. Building attractive clusters for high-quality destinations requires private-public partnerships and competent leadership. Exclusive reservation platforms alongside regional tourist associations to consolidate all room inventories on a single regional or national booking portal (e.g. MySwitzerland) would eliminate OTA commissions, strengthen marketing efforts and serve as a firewall against OTAs as well as international competitors.

Individual hoteliers need to collaborate to extend their services and offerings around communal assets in order to create a once-in-a-lifetime guest experience. The focus on authenticity will generate additional business opportunities and boost profitability. Any collaboration on the physical market place could adopt the «Allmend principle». This concept – originating from the custom of Swiss farming villages sending all livestock to municipal summer alps – essentially means sharing natural assets; local authorities give their citizens the right to commercially use communal assets (e.g. the Swiss Alps, forests, lakes, alpine meadows, etc.).

(This article is a plagiarism on Lausanne Report. If you do not like the “plagiarism”, go to our original text in http://info.ehl.edu/hospitality-industry-trends. Stay in tune with the future of hospitality at the next think-tank “Window 2 the future”, April 2018 and take a look to www.lhcconsulting.com to see more about us.)

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Ray Inius Director Business Development at Lausanne Hospitality Consulting

Prof. Dr Ray F. Iunius is the author of various academic and professional articles published by journals in the management of services, technology, and innovation. He is also the author of a number of books such as « Industrie de l’accueil », « Hôtellerie de Luxe », « La gestion des spas », “Un Hôtel, un modèle ?” in de Boeck editions and co-author of the “Lausanne Report on the future of Hospitality Industry.”

He is the founder of the Ecole hôtelière de Lausanne Institute of Technology and Entrepreneurship (EHLITE), the Institute for Innovation and Entrepreneurship (INTEHL), the Students Business Projects (SBP), the EHLITE magazine, and the Chair of Innovation Paul Dubrule.

Ray earns a BSc, MS and PhD in Technical Sciences from the University of Transylvania Brasov and an MBA and PhD from the Faculty of Business and Economics (HEC) of the Lausanne University. He is currently Director of Business Development at Lausanne Hospitality Consulting, an Ecole hôtelière de Lausanne and Swiss Hotel Association company.