What is Behind the Gyrations of the World Economy and Where is It Going?

If Wishes were Horses, Beggars Would Ride. Of the Economy & Rabbit Holes

By Steven Ferry Chairman, International Institute of Modern Butlers | March 18, 2012

Being asked to state accurately the condition of the world’s economy during calm times is difficult enough; predicting where it might go next is pushing the envelope of possibilities. But trying to state and predict the condition of today’s and tomorrow’s straining yacht in the thirty foot swells of today’s economy is as adventurous as navigating the real thing. At the risk of turning turtle in the explaining—if someone stands up to say something and is not willing to make a fool of himself, he is probably too timid to be standing there in the first place—I offer the below, simply because in any activity, if one cannot see ahead, one is sailing blind and liable to hit the rocks.

After my last article on the economy, Don’t Just Sit There, many hoteliers around the world commented on the apparent inadequacies of fixing the global financial system by issuing more credit to failed institutions while withholding it from the real economy. The continued contagion of the real economy by financial sector excesses has continued to result in wobbliness for the productive side of the economies in the US and Europe, and by extension, the rest of the world.

So where is the economy heading: onto the rocks and whirlpools or across a vast ocean at breakneck speed, the wind filling the sails? And what can we expect in the service industries in particular, for owners, operators, and employees of hospitality venues, for guests, both the wealthy and economy-minded, and closer to home, for those in my profession of butlers, and their employers who need the wherewithal to support their lifestyles?

Certainly, some 2012 predictions for hospitality offer grounds for cautious optimism — a PricewaterhouseCoopers report shows 2011 to have been a good year for occupancy in the US, up at 60.1%, RevPAR increasing by 8.2, and ADR growing by 3.7%. Based on a predicted increase in business travel and group bookings, 2012 looks to be another good year, with occupancy predicted at 60.9%, ADR growth at 5.1% and RevPAR growth at 6.5%.

The World Economic Forum weighed in recently with the findings of a Marriott International survey showing that, in the opinions of opinion leaders, international travel stimulates the economy and we should do more of it. In concrete terms, international arrivals have doubled in the past decade and the UN World Tourism Organization predicts it will increase to one billion this year. The World Travel & Tourism Council (WTTC) predicts an extra 69-million net jobs in the industry by 2021, 80% of which will be in Asia, Latin America, the Middle East, and Africa. In the US, one job is created for every 35 international visitors. WTTC also estimates worldwide GDP increases for the industry will rise by 4.2% annually to $9.226 trillion by 2021.

Certainly in the butler-training field, a small niche I have some familiarity with, there is much demand in the Far East and some in the West to support the general notion that things are improving.

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Coming up in February 2018...

Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.