“Not again. Not another depressing COVID-19 business analysis!”. In case you reacted to the title in this way, this article is written for you. As a business veteran in the tourism, travel, and hospitality experience industry including the development of destinations, leisure venues, and commercial properties, I have always tried to capture the industry intellectually, consistently taking the customer experience perspective, long before I was confronted with the harsh realities of the pandemic. Even more so, I am trying to look under the surface of the obvious at the beginning of this new era after the comfort zone of decades of growth and prosperity. For many industries, in terms of future market shares in supply and demand, cards are being re-shuffled.
As the summer travel season is starting in some parts of the world, the managers of destinations and service providers are trying to surpass each other´s marketing efforts with the same narrative: “We are open for business again”. This is an attempt to nurture the illusion that nothing has changed, and that the virus is gone, except with the ramped-up emphasis on safety, hygiene, and sanitation. Even then, reopening attempts are a minor step. Recovery is a long journey in unchartered waters where previous navigation routines might be misleading.
Now, much has been said and written about the consequences in this context and I am not going to say the same things again. However, I would like to emphasize the consequences in required core competencies that could potentially lead to different approaches in the human resource and management sector, most particularly in the selection and hiring of new team members or managers and in the leadership qualities required to gain competitive advantages.
If you have been observing the current communication within the business community, no matter what industry, the narrative is mostly about re-opening and restoration. My radar certainly does not detect everything published on the subject, but if a company would step up and state that “this is what we have learned and this is what we are going to do differently now” (beyond health prevention and hygiene measures), I would find that most refreshing.
Haven´t we all heard a hundred times that people make the difference? The travel, tourism, hospitality and related industries certainly are a people business, as they provide experiences for travelers, visitors or guests, using the skills of many trained service providers. Although digitalization plays an increasingly dominating role in those sectors, the actual experience people pay for is not happening in cyber space. It is real, involving human encounters and traveler or hospitality concepts that actual people have created and are executing.
However, after decades of growth, Covid-19 certainly was more than the blow of a temporary lock-down. It most probably will be a substantial rib in the fabric of the industry and a game-changer.
In October 2019, I published an article on the developments in the global hospitality industry, as seen from the perspectives of hotel guests, but in particular from the perspectives of real estate owners and investors. That article obviously hit a nerve.
Now, with the focus on changes in needed core competencies and leadership, this article is the next chapter in a Post-COVID-19 global tourism or hospitality story.
Over the decades, the increase of hotel concepts and labels from global hotel system providers based on asset-light strategies, the business with income generated primarily from management and royalty fees, grew as the preferred business model. It worked so well that the franchise salespeople of large hotel groups (which I prefer to name hotel system providers – HSP) were called “developers”. However, many of these “developers” had never actually sweated through the journey and pitfalls of taking a greenfield concept to a viable traveler, guest, or visitor experience, with all the steps needed along the way. These HSP-companies no longer served the needs of hotel guests, as their revenue was coming from hotel owners and operators. Therefore, starting out in hospitality management and ending in labeling or franchise sales, they might have lost sight of customer needs. Over more than 20 years, the hotel giants like Marriott, Accor, Hilton, IHG and some of their followers have consistently created a generation of executives of which a vast majority has never been exposed to any other strategy or business model than selling services and labels to real estate owners and operators. Some are sharper, some are more aggressive, but when these managers move on to a competitor, the business approach leading to an asset-light strategy is the same. That is why these corporations struggle when it comes to real substantial innovation, strategic shifts, or disruption. Rolling out a new campaign or another segment label is the foreseeable reaction.
I suggest you do a little test here: Find a recent promotional add or clip of one of these corporations and, in your imagination, simply replace the logo with a competitor´s logo. Does it generate the same level of credibility or does it even make a difference?
As these practices came to a state of saturation already before the pandemic (for reasons I tried to elaborate here), we will most probably see a shift in the type of investments made in the foreseeable future. Investors will be less focused on a property (hospitality, leisure, retail, etc.) and may start taking a closer look at other opportunities, e.g. in medical, health, pharmacy, MedTech, FinTech etc… Alternatively, opportunistic investors will get involved in distressed properties and take advantage of the situation by negotiating new terms and conditions against operators, also protecting themselves from a similar crisis in the future. I sincerely hope that this will be temporary, and I strongly believe that tourism and related investments will reach interesting returns again, but we must all agree that this will not be tomorrow and probably not in 2021 either. Just as most businesspeople, including myself, could never have imagined before a global lock-down of the world´s travel and tourism sector, there is an increasing number of people today who can imagine this happening again.
The interesting observation in the current Covid-19 reopening phase is that most of the global hotel system providers were demonstrating their usual reactions of rolling out new promotion campaigns, focusing on hygiene, safety, and sanitation on an international scale. We can certainly agree that these aspects will be more and more at the forefront of concerns when going places (along the entire visitor journey, not just in hotels alone). However, unless you have to travel, these efforts are not the driving motivator for traveling. It seems that the global hotel system giants are now replacing the concept of hospitality with “hospitalization”. The practical issues, however, e.g. what will be offered instead of the buffet breakfast or the kind of entertainment in lively bars and how these can still be enjoyable experiences, are left unanswered and subject to the individual hoteliers. What we know is that all operational processes, from luggage handling to F&B to cleaning rooms, gyms and pool areas, etc. need highly cost-effective scrutiny while initial demand is slowly building up primarily from domestic travelers, making hotels which depend on international source markets suffer severely. Because it is foreseeable that business will be primarily local (although distributed globally mainly by OTAs) in the times ahead, the competitor is the property down the road or the real fact-based value proposition and not another “brand” (should that ever have been the case anyway). The old saying “all business is local” has suddenly regained importance in this new light.
Consequently, taking safety and hygiene as given elements, individual hospitality talent will make the difference in creating rewarding guest experiences and not the evangelists of corporate procedure manuals. Technocratic guidelines on how to provide memorable hospitality experiences were weak already before the pandemic. Now, hoteliers not only need to reinvent many of their offerings, they also need to develop new approaches designed to regain and retain guests (other than the known loyalty programs) and this requires a new breed of talent, especially if the hoteliers were used to following and implementing technocratic brand standards until now. Although not all destinations and hotels were doing well at their respective categories over the last 20 years of growth and prosperity, recovery, disruption, and turn-around competencies or relevant experience were in demand only as exceptions. Now, they are the rule of the day.
A well-managed hotel, similar to well-organized travel and other service providers, normally flourishes with the success of a popular destination. Only very few hotels and resorts on the planet have the reputation and strength to attract travelers purely based on the guest experience they can provide.
The concept of delivering the best possible visitor experience remains essential. Hotel managers want their guests to have a memorable experience from the moment they arrive. Nobody wants to step into a nightmare immediately outside hotels or to have unexpected difficulties getting there.
I recently published an article on consequences for travel destinations and their governance, management and development strategies in Pre- and Post-COVID-19 times (see here). I invite you to read the article and consider the following reflections on needed core competencies in the Post-COVID-19 period as a continuing guide for destination management or even re-development strategies.
In a nutshell, decades of growth due mostly to external factors, which were taken for granted, have spoiled many travel destinations and made tourism officials focus mainly on promotion – as well as on self-praise efforts to a certain extent – while neglecting a continuous improvement of the visitor experience. These days, tourism and travel destinations worldwide are in a serious state of crisis, one that nobody has ever experienced before. Especially after decades of growth and “gold rush” times, there is little to no human capital with much experience or accomplishments in recovery, turn-around and restructuring. It all starts with the people in charge, those who have access to the resources and give directions. The “pure promoter” profile of management has become obsolete, almost within weeks.
Consequences for Recruiting, Selection, and Leadership
Thinking positively, I am convinced that a hiring wave will follow the disastrous consequences of lockdowns and redundancies which probably hit the travel, hospitality, and tourism industry harder than any other sector. This extreme situation is the result of the fact that you cannot store service, travel, or accommodation capacities and that supply, as well as demand, will still be limited for quite some time. The question seems to be, whether the period ahead needs the same type of people and competencies we have seen in decades of continuous growth – occasionally paired with management negligence in anticipated comfort zones.
As a seasoned “firefighter” through my work in the relevant industries with executive experience and insights collected through assignments on 4 continents, I have developed my own strategy in selecting and hiring key talent at both line and management levels. In 25 years of having influence in the selection and hiring processes for several hundreds of people, I can count on the fingers of one hand the candidates who did not work out. Then again, my practice is quite different to the mainstream methods and relatively timeconsuming, although for my assignments, it always paid off. In reviewing CVs, I look at whether they tell a story (not necessarily whether the candidates have done exactly the same job or task as the position calls for), I talk with as many candidates as possible, especially when it comes to those who would have direct reporting positions, preferring long lists instead of shortlists, as documents seldom tell you enough about entrepreneurship, strategic or social intelligence, analytical skills, the candidate´s ability to formulate complex scenarios in clear sentences, the balance between task- and result- orientation, problem-solving skills, potential, loyalty, spirit, honesty, integrity, reliability, ego control, structured approach to managing situations, drive, ambition … and having a sense of humor. Documents tell you about the previous technical experience, which becomes less relevant after a few months of orientation anyway. Personality and attitude remain relevant assets through the whole employment history.
When the sun is out and the sea is calm, most people look good in keeping a steady course. Stormy weather and navigating in unchartered waters bring up true talents and resilient attitudes – or uncover fatal gaps. Top executives not only need to fill boxes with people for jobs to be done, but they are also the curators of the company spirit and values – in one way or another, make or break. Along with discipline, a lasting cohesive positive spirit will be key in the critical times on the horizon.
Having said that, from my perspective, I have realized what decades of comfort zones and natural growth in this industry have done to recruitment and selection practices. When new recruiting waves should emphasize the spotting and onboarding of currently required competencies, it might be reasonable to rethink common habits in recruiting, selection and leadership.
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