Hospitality Industry Review & Update

Hospitality Industry Review & Update

In 2011, the latest UNWTO World Tourism Barometer recorded a 4% increase in tourist arrivals over the previous year, taking the total to 980 million. 503 million or over 50% of international tourists made their way to Europe; Asia and the Pacific received 216 million tourists, while the Americas saw 156 million arrivals in all. Africa received 50 million people and the Middle East, 55 million, with destinations such as Saudi Arabia, Oman and the UAE seeing steady growth.

In 2012, the total number of arrivals is expected to have touched the 1 billion mark. That’s one-seventh of the planet’s entire population on the move!

But that’s not where it stops: by 2030, international tourist arrivals are forecast to reach 1.8 billion.

Industry trends

The travel and tourism industry is pegged to add over 70 million jobs through the next decade, supporting a total of 328 million jobs – or 10% of the world’s workforce. Two-thirds of those jobs will be created in Asia, where finding, training, developing, and retaining talent is already a challenge.

Hosting this humongous number of tourists is lucrative business, which is why the hospitality industry too is growing exponentially. Not limited to hotels, restaurants and meeting venues, the hospitality boom offers multiple options to the customer, creating tough competition for the players. The focus now is on creating and managing a talent pool that delivers superior customer engagement and personalized experiences.

Post 2009, business travel has been on an upswing, and is expected to outpace growth in leisure travel between 2011 and 2016. China and India will lead in domestic business travel even as China tops in international business arrivals. Not surprisingly, both countries are experiencing rapid growth in hotels and the overall hospitality industry. By virtue of being an international business hub, the US still stays in the top five for demand growth, especially among high-spending business travelers, which will cause the industry to grow every year right till 2016.

Profiles in demand

Across the world, there is growing demand for skilled, experienced hospitality professionals with a focus on delivering outstanding customer experiences. In Asia and the Middle East, especially, expat hoteliers and chefs are valued highly for their exposure to and experience of, catering to vibrant markets in the West. Salaries can range from mid-range to very high, depending on individual candidate profile as well as the caliber of the establishment.

Job role US average salary
Hotel general manager $149K
Meeting and convention planner $60K
Maitre d’ $28K – $45K
Executive chef $46K
Gaming dealer at casino $15K

Opportunities, everywhere

In a recent interview, Adam Weissenberg, vice chairman and US Travel, Hospitality and Leisure leader, Deloitte LLP, advised hoteliers to focus on under-utilized markets like Burma, Cambodia and Vietnam, as well as other high-potential countries that have well-developed infrastructure – such as Turkey, UAE and South Korea.

Further, he pointed to the emergence of new potential market opportunities, especially in gaming. Legalised gambling in countries like Japan and Vietnam now present new opportunities, even as Asian countries such as Taiwan, Philippines and South Korea follow Macau and build casino resorts to position themselves as popular gaming destinations. For jobseekers too, these countries present interesting opportunities for career growth.

Middle East

If you are looking for an exciting – and well-paying – opportunity in the hospitality industry, you definitely need to put the Middle East on your radar. The construction boom in Dubai, Saudi Arabia and the UAE is paralleled only by the growth in tourism, hotels and hospitality there.

The UNWTO states that the number of travelers in the Middle East has more than doubled, from 24.1 million in 2000 to 60.3 million in 2010. Dubai alone welcomed 10 million visitors last year and looks to host 20 million visitors by 2020. With 95% of its population comprising expats, Dubai is fast turning into an international hub for skilled hospitality professionals.

US

Travel and tourism is a top 10 industry in the US, and provides one-eighth of all jobs. Through 2013, the industry added approximately 55K jobs per month, and the country is looking at a 30% increase in international arrivals through 2018. Even the food and beverages sector is on a roll, with 75K new jobs created in June 2013 alone.

A sub-set of travel and tourism, the hospitality industry employs 12.4 million people in the US. Between 2004 and 2014, the industry is slated to grow by 17%, adding over 2.2 million new jobs to the workforce.

PricewaterhouseCoopers recently released a report showing that the lodging sector will continue to outperform in 2014 and 2015 on the back of robust booking trend and a solid travel and tourism market. According to STR Global data, the US hotel industry is expected to perform well in 2014, across all 3 key indicators of occupancy level, Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR). With a 4.6% rise in ADR, RevPAR will grow by 6% next year. 2014 will mark the fifth consecutive year of positive RevPAR growth for the industry.

Going forward, high-priced segments are expected to be the major drivers of growth. The spotlight is on large, full-service lodging properties that offer additional services like casinos or convention centers. Professionals with advanced training and education in hospitality management will be in demand at luxury hotels, resorts and other premium properties.

Asia-Pacific

The World Travel and Tourism Council (WTTC) has named India and China the fastest growing tourism industries for the next 10 to 15 years. Both Starwood and Marriott generate their second largest revenue stream from China.

In a survey, 69% of hospitality professionals in APAC reported a pay hike in 2012-13. The average industry salary across Asia Pacific was US $65K. The skills shortage in the region means that people with specialist skills command higher salaries and perks, even though the majority of survey respondents received just 1 to 5% increment in salary.

In Indonesia, the economic boom sparked a 118% growth in average salaries in hospitality, followed closely by India at 113% growth and the Philippines at 51%. At $100K, the best average salaries in dollar terms were paid out in Macau, followed by Hong Kong at $81K and Australia at $79K. At $39K, Malaysia had the lowest average salary in the region. Overall, the tone in Asia is one of recruitment.

In Australia, the industry is seasonal but the 6% increase in international travelers is driving growth. The Q3 2013 Careers Hospitality Hiring Report revealed a 29.5% year-on-year increase in investment in new rooms for hotels and resorts across the country.

Europe

Hospitality is a key driver for job creation in Europe. Since 2000, there has been a 7% overall growth in jobs in Europe, as against 29% growth in jobs within this sector. Across the continent, 10 million people are directly employed in hospitality, with a further 6.4 million indirectly connected with the sector. One out of every 13 jobs is connected with hospitality. In countries like Cyprus and Malta, hospitality employs as many as 30% and 20% of the total populace, respectively!

A single euro spent on hospitality results in additional 1.16 euros being invested in the wider economy. The industry employs over 10% of the population in Spain, Portugal, Luxembourg, Ireland, Greece, Croatia, Austria, et al, and had an average annual growth rate of 3.3% from 2000 to 2010.

Current analysis indicates increasing investor interest in the cities of Munich, Frankfurt and Vienna, and in Poland as a whole. Strong hotel investment trends in Paris and London are also projected. In spite of the growth, across Europe, restaurants and hotel staff feature among the top 10 jobs that employers have difficulty in fulfilling.

Latin America

Major players in the hospitality industry are looking at Latin American countries for the next spurt of growth. Brazil and Mexico are high on their radar. With major events like the FIFA World Cup in 2014 and the Summer Olympics in 2016, the Brazilian government is already working on improving the country’s infrastructure. With the increase in tourism, demand for hotel rooms is set to shoot up, thus creating exciting new opportunities for experienced hospitality professionals.

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Sources:

World Travel & Tourism Council

CBSalary.com

The US Bureau of Labor Statistics

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One comment

  1. amardeep singh February 24, 2014 at 10:16 am

    its impressive

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