Hospitality: Re-imaging Progress, the Many Faces of the New Industry

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Tuesday, May 04, 2021   /05:10 AM  / By Proshare Research / Header Image Credit: EcoGraphics


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The new business realities of tomorrow would require major mental maps to shift business paradigms towards restrategizing, reimaging, and rethinking operating activities, especially for service sector enterprises. Managements and corporate boards need to integrate technology into their business plans and make the customer's service delivery journey the center of business strategy.

 

Chief executive officers of service companies can no longer hide behind their chief technology officers (CTOs) to mask their ignorance of how technology will reinvent their businesses. Chief executives of hospitality companies must unlearn, learn, and relearn the basic frameworks and platforms upon which their digital future will rest. While the CTO may understand the nuts and bolts of technology, the CEO must understand the strategic imperatives of technology in a quickly changing service delivery ecosystem. 

 

For example, what roles could unstructured supplementary service data (USSD) play in assisting hotels provide digital register of riskless payments services to customers? Customers could simply enter a USSD code and pay for the hotel's sauna service, gym facility, and perhaps food service such as a buffet lunch. Customers could also use codes on their mobile devices to access bespoke services and pay for such services as secretarial support services or meeting room services, possibilities are limited only by the imagination. 

 

Hotels could enter into co-opetition arrangements with other hotels to provide customers with a national travel tour vacation experience for families at group tour discount rates with price flexibility based on time of year. Service delivery experiences for customers can be made 'fungible' or flexible such that it is designed to meet the specific demand expectation of the particular customer. By taking advantage of machine learning (ML) and artificial intelligence (AI) hotels can provide experiential journeys tailored to customers' preferences. Indeed, going forward, the difference between sustainable hotel operations and those of their unsustainable counterparts who get caught with their trousers around their ankles when the next disruption occurs would be the integration of technology that is responsive, predictive, and corrective.

 

The new business realities would need to filter out old biases and set new agenda (see Illustration 14).

 

Illustration 14: The Business Transformation Filter

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Recommendation-Getting the Government to Give a COVID-Jab

At the heart of the recovery of the hospitality sector is government support. The fiscal authorities need to give the sector a shot in the arm to enable it to recover from a nightmare operating season in 2020. Given the importance of the hospitality business to the overall economy, it is vital that the government supports the sector to trigger a quick rebound. Some policies that could help jumpstart a gradual recovery of patronage, earnings, and cash flows include but are not limited to the following:

  • Refinancing of existing loan obligations through the Bank of Industry at a 5% lending rate.
  • Suspension of some tax obligations for two years.
  • Creating a window to help players in the sector access the official exchange rate to meet FX obligations.
  • Direct government bailout targeted at reducing the sectors debt overhang.
  • Large expenditure on vaccines to hasten inoculation and restore confidence in the economy.
  • Improving the national image by tightening security and strengthening health and other social infrastructure. A reduction in country risk assessment would strongly lead to the influx of business travellers and holidaymakers into the country and improve the hospitality sector revenue outlook and free operating cash flows. Investors in the sector would likely see improved returns on equity (ROE) and earnings per share (EPS).




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Downloadable Version of Proshare Confidential: Hospitality Post-COVID-19: Making the Future Count

1.      Full Report: Hospitality Post-COVID-19: Making the Future Count - Apr 23, 2021

2. Executive Summary: Hospitality Post-COVID-19: Making the Future Count - Apr 23, 2021


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Related Links

  1. Hospitality: The Future is Now
  2. Dissecting the Financial Results of Companies in Nigeria's Hospitality Sector - TOURIST
  3. Dissecting the Financial Results of Companies in Nigeria’s Hospitality Sector – IKEJAHOTEL
  4. Dissecting the Financial Results of Companies in Nigeria's Hospitality Sector - CAPHOTEL
  5. Dissecting the Financial Results of Companies in Nigeria's Hospitality Sector - TRANSCOHOT
  6. Hotels - A Peep into Performance
  7. Hospitality: COVID-19 Related Policy Shifts
  8. Hospitality Before and After - The Unmaking of Hotels
  9. Hospitality: A Post-COVID-19 Reality
  10. Hospitality Post-COVID-19: Making the Future Count

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