One of the items in the ten-point socio-economic agenda of the Duterte administration speaks of the development of rural tourism, a variant of ecotourism that gives "the country experience." As more and more tourists are lured to the beauty of our countryside related jobs and livelihood should also filter down to rural people.
This new thrust looms as the country's tourism industry is improving. In 2015, international tourist arrivals in the country reached a record 5.4 million. There were also more than 50 million domestic tourists. These numbers are expected to improve in the coming years. While improving infrastructure like airports and roads is seen as the key that can unlock our country's potential for growth in tourism, another less obvious key is providing hotels to give the distinct Philippine experience.
The P&A Grant Thornton Hotel Survey 2016 has found that tourists constitute almost four-fifth (79 percent) of the total guests in hotels outside Metro Manila. This finding should encourage all hotel operators, especially those outside Metro Manila, to prepare to welcome tourists to their hotels. Grant Thornton in its thought leadership article, "Hotels 2020: Welcoming tomorrow's guests" identified four key themes, which those in the tourism industry should reflect on as we move towards 2020.
Our hotels should start embracing personalization as "wired" or digitally enabled tourists expect hotels to give them even more personalized services. Smart mobile devices present a major opportunity for hotels to personalize customer's experience. With millennials as a key target segment, personalization will grow hugely over the next few years. Hotels will benefit in personalizing services from guests' booking experience to their in-room preferences for lighting, temperature and refreshments. Survey results from the Hotels 2020 article revealed that 46 percent of the millennials agree that being able to check in or out using a mobile device would motivate them to return. This is very relevant to the Philippines where 40 percent of the population in 2015 was smartphone users, and it is expected to grow to 70 percent by 2018.
Hotels should take a new approach on acquiring data and talents. Grant Thornton survey also revealed that almost 90 percent of enterprises across sectors believe that data analytics will redefine the hotel industry by 2017. Yet most hotels seem to move too slowly or are simply not ready for the digital era and data-centric business. They must go with the digital flow. In particular, they must think about the talents they need to recruit, like data scientists, sensor specialists, social media experts and other digitally-inclined people. The hospitality industry can draw them from the talent pool of the BPO industry and technology companies here and abroad.
Hotels should persist in keeping their brands relevant. Travelers and commercial bookers rely heavily on online travel agencies and meta-search engines, and hotel brands have become less visible during the booking process than they used to be. In 2020, we believe the smart hotels will find new ways to use their brand messaging and the distinct experiences they provide to connect with individual consumer niches. In the case of the Philippines, much of the branding and the distinct experience will shine through because of the distinct Filipino hospitality and excellent customer service. Philippine hotels should continue refining on this distinction to keep their branding relevant.
Finally, hotels should rethink their business model. Some hotels have been largely dismissive of the threat posed by their rivals from the sharing economy. For example, in the later part of 2014, Airbnb, a rival from the global sharing economy, had already become the world's largest online market enabling people to list, find and rent vacation homes with more than 1.5 million listings. To compete in 2020, hotel groups need to reassess their underlying business models and ask fundamental questions about how they operate. In a word: innovate. This means taking proactive steps to introduce more innovative pricing and collaborating with strategic partners. For Philippine hotels, this may also mean offering tailored, destination-integrated experiences, which will help tourists better appreciate the destinations and have a truly delightful and meaningful stay.
Philippine hotels located in tourist destinations like Boracay and Palawan need not focus too much on innovation though because the biggest draw are the destinations themselves. The Duterte administration's thrust for rural tourism should heed this.
Still, the global hotel industry is going through a period of unprecedented changes and will appear very different in 2020 from what it is today. For the Philippines to remain competitive and relevant in the hotel industry, the hotels in the country should innovate and even revolutionize to better welcome tomorrow's tourists to the country.
Nelson Dinio is the Head of Business Development and Japan Desk of P&A Grant Thornton. P&A Grant Thornton is one of the leading Audit, Tax, Advisory, and Outsourcing firm in the Philippines, with 21 Partners and over 700 staff members
As appeared in Manila Times dated July 13, 2016