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NEWS & FEATURES |
2004 Newsmakers' Event Hospitality Industry: How did the survivors survive? 3RD ANNUAL NEWSMAKERS' PANEL - MAY 12, 2004 Press release Contact: Peter Craddick Tel: 212-877-9106 Email: craddick@ix.netcom.com May 19th, 2004 New York – Changing tastes in the luxury market, a growing Gen-X presence and increased use of the Internet to book travel are three trends that will shape the future of the hospitality industry, according to a panel of industry experts who debated these issues and more at the Third Annual Newsmaker Event on May 12, 2004, according to the event’s sponsor, ESSEC Alumni USA, the alumni association of the Ecole Supérieure des Sciences Economiques et Commerciales, one of France’s oldest and most prestigious business schools. Held at New York City’s Four Seasons Hotel, the event, entitled “The Hospitality Industry: How The Survivors Survive,” featured a probing look at the present state and future of the global hospitality industry by four distinguished experts, including: Panelists: Mark Abramson, Bear Stearns, Senior Managing Director - Head of Global Hotels & Gaminf Research Team Daniel Boulud, Daniel, Chef Owner Bjorn Hanson, PhD, PriceWaterhouseCoopers, Global Hospitality Industry Managing Partner, Hospitality & Leisure Practice Jacques Stern, Accor, Group Chief Financial Officer Moderator: Malcom Noden, Cornell School of Hotel Administration, Cornell University - Visiting Senior Lecturer "The hospitality industry has gone through a time of upheaval during the past few years as concerns about terrorism, security, and global health crises like SARS have taken their toll by forcing the traveling public to reevaluate their needs and desires in light of safety issues,” said Anne de Louvigny Stone, president of ESSEC Alumni USA. “But as our panelists discussed, this is an industry of enormous flexibility, and one that needed to adapt to change to ensure not just continued success, but its very survival.” Among the more interesting observations were comments by Daniel Boulud, who said that although he has made his name in creating luxury dining experience, changing tastes in the luxury market since 9/11 are creating downward pressure on the high-end market, while exerting upscale pressure on more modest offerings "Even people who can afford to eat in an upscale restaurant don’t want to every day," he said. "People want to be in jeans and eat with their fingers.” Another unexpected trend included the changing demographics of the traveling public. Bjorn Hanson noted that for the past 20 years, the hospitality industry has been expecting Baby Boomers (39 to 58 year-olds) to be the dominant economic force, spending leisure time traveling as they enter peak earning years and retirement. However, Gen-Xers (24 to 38 year-old) have started to appear as the dominant demand segment across Europe and North America. In 2003, he said, Gen-Xers spent 9.7 percent more on travel than Baby Boomers, and by 2007 there will likely be more occupied room nights by Gen-Xers than other demographic groups. Regarding the Internet as distribution channel for lodging, the panelists agreed that it is changing the industry, but not necessarily at the pace some had predicted. While online merchants like Priceline and Expedia have created more transparency, enabled comparison shopping and generally forced prices down, hotels were able to recoup revenues by saving on travel agent commissions, hotel brand reservation fees and credit card commissions. In fact, Jacques Stern commented that some 80 percent of reservations for Accor’s hotel brands are made on Accor web sites, and combined with its relationship with Expedia, which is commission based, the impact of the Internet has proven very beneficial for Accor. Marc Abramson of Bear Stearns noted that the actual penetration of the Internet into the overall distribution pipeline is smaller than it appears, and said, “The Internet gets a lot of press and discussion, and the absolute numbers appear big, but in relation to other distribution channels, it is really quite small.” Other topics under discussion included the growth of time-shares, and the impact of line extensions by leading luxury goods providers such as Versace, Bulgari and Armani into the luxury hotel market. The Business School of the Ecole Supérieure des Sciences Economiques et Commerciales (ESSEC) educates leaders to serve in the business community and public service, and it has done so since 1907. Its intrinsic commitment to innovation and humanism is evident in the heritage of this private institution, which has been, and remains, at the cutting edge of many key issues of business and management education. While the integrated MBA remains the institution's flagship program, the faculty has created an additional 13 Masters of Science and two sector specific graduate programs that include Luxury Brand Management and Hospitality Management, reflecting specific interests and strengths of faculty members. For a complete transcript, please contact: sophiegilhodes@essecusa.com
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