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Tourism, hospitality & leisure
After several years of healthy growth, 2009 is expected to be much tougher for the tourism, hospitality and leisure (THL) industry. The economic downturn leads to rising unemployment, fewer investments and has placed the nation’s economy at or near recession – leaving fewer discretionary euro’s available for consumers’ leisure travel and other forms of entertainment. Corporations, meanwhile, are implementing cost-cutting measures such as reducing employee air travel and scaling back or eliminating group meetings at convention hotels and destination resorts.
With economic conditions becoming more challenging by the day, building brand value is more important than ever. The competition for customers and market share is expected to intensify in 2009; therefore, the ability of a hotel, restaurant and cruise line or vacation destination to crisply define and consistently deliver on a distinct brand promise can help to increase demand and build customer loyalty. The hotel sector, particularly high-end properties, generally has been effective at building brand value, although companies still could make an effort to learn more about their visitors’ needs and preferences and, thus, deliver an even better customer experience. The airline sector, due to significant cost increases, appears to be doing less to build brand loyalty. Airlines’ practices of cutting flights, adding extra-baggage and additional surcharges, and failing to treat frequent flyers differently from occasional travelers, are eroding both their brand value and their customers’ brand experience. All companies need to make their customers feel special, particularly when there is more competition for fewer discretionary euro’s.
The quest by THL companies to increase demand and brand loyalty requires heavier investments in marketing and sales, which may appear to fly in the face of cost-cutting mandates imposed during tough economic times. Deloitte’s 2008 publication, Weathering the Economic Storm, How Hospitality Companies can Thrive in Challenging Times, explains how strengthening the marketing and sales functions could reduce the financial burdens of hospitality companies and lead to stronger customer relationships in the long run.
