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.
The Hotel Business Review articles are free to read on a weekly basis, but you must purchase a subscription to access
our library archives. We have more than 5000 best practice articles on hotel management and operations, so our
knowledge bank is an excellent investment! Subscribe today and access the articles in our archives.