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Hospitality 2015: Tourism, Hospitality, and Leisure Trends

Contents

Emerging markets in the hospitality industry

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Expand contractions globally hitting the road? The new middle class in China and India 2 • How big is the opportunity? • Turning consumers into customers • Constraints and considerations • Deloitte’s emerging markets framework 3 5 6 7

Sustainability in thehospitality industry For consumers, sustainability and luxury are becoming a single value proposition, increasingly powered by social media • Who cares about sustainability? Everyone, really? • Step 1: Leverage consumer sentiment • Step 2: Engage guests and consumers • Step 3: Leverage social networks to communicate • Step 4: Create a special customer experience • Step 5: Use a solid framework tokeep sustainability alive • Conclusions Brand building and beyond: Using social media strategically What could be more hospitable than using social media to reach out to everyone: customers, employees, recruits, and the public at large? • Why does social media matter? • Social media in the hospitality industry today • Social media done “right”: Views of the “should be” state • Social media: Anenterprise framework

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Contacts References and further reading

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Emerging markets in the hospitality industry

Hospitality 2015: Tourism, hospitality and leisure trends

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Who’s hitting the road? The new middle class in China and India.

For the past several years, companies in the hospitality industry have counted on theburgeoning baby boomer generation to fuel growth in expenditures on leisure and travel. A safe bet, everyone agrees.
Now, a second demographic trend has the potential to bump up spending: the quickly growing middle class in China and India, newcomers to leisure travel and a potentially huge (and untapped) group of customers for hospitality companies. In the past, investment in emerging markets hasfocused on upscale, luxury hotels for well-heeled tourists. But the new middle class opens up the door for the development of mid-market, budget properties in virtually virgin territories. What’s an enterprising hospitality company to do? The same fundamental building blocks used for making sound investments — and then realizing a sufficient and sustainable return — apply when considering expansion inemerging markets: 1) identify practical opportunities, including the partners and structures most likely to plant a solid footprint; 2) understand consumers, what they want, and how to reach them; and 3) anticipate challenges, from regulations to infrastructure. An understanding of these fundamentals can create a context for informed decisions about emerging market strategies and objectives. Wherewill your business be in 2015?

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1. How big is the opportunity?

The growing size of the middle class — forecasted to exceed 600 million people for India and even more for China4 — has led to an increase in domestic travel in these countries. In China, domestic tourism grew by 30 percent from 2005 to 2007 (Chart B).5 In India, domestic travel increased by 15.5 percent in 2009 (Chart C)6and Based on original Deloitte1 research,2 we expect China and international tourism is expected to quadruple by 2015.7 India to experience growth in leisure tourism spending Of course, while middle-class tourists might like to travel comparable to or greater than that for many mature markets as much as the wealthy, their budgets are relatively 3 through 2015 (chart A). modest; hence, the boomingopportunity for hotels in the mid-scale-to-budget spectrum. Growth in the hospitality Chart A: Projected Leisure tourism spending: 2011-2015 industry in China and India, especially at mid-market levels, has also been fueled by recent international events, such 2000 as the 2010 Commonwealth Games in Delhi and the 2008 Olympics in Beijing. What’s the expected growth rate for tourism spending in...