Global Megatrends and Industry Division H
Updated: Sep 1
Industry Division H is about accommodation and food services industry. Think hotels, youth hostels, resorts and camping grounds. And add in restaurants, takeaway (or, depending where you are from, take-out, carry-out, to-go or grab-n-go) and catering services. Its an industry that is associated with holidays, social gatherings and so on. While the service being offered hasn’t changed, that is transient accommodation and food that prepared outside the home, the manner in which it is and the necessary supporting structures have.
And this article is an exploration on this very thing. Specifically, what could happen in with respect to accommodation and food services over the next 10 or so years? From an individual perspective (eg. career prospects) and from an organisational perspective (eg. business prospects) it’s a look at what is likely to change as time progresses. These are Insights from a futurist on this industry – a perspective on what could be.
As with other articles exploring the future for different Industry divisions, the focus is just on the impact of two global megatrends – computerisation and climate change. There are other global megatrends that could be considered, societal and demographic for example. But they may not have the same level of impact on this industry as the two canvassed (eg. with respect to demography, in 1950 there were only two cities with a population of greater than 10 million. Today that number is 28 megacities, and is expected to rise to 40 by 2030 – with a total of 630 million people living in those 40 megacities).
About the global megatrend of climate change
We are well aware of the macro changes that climate change has wrought so far – rising ocean temperatures, greater number of hot days, lengthening of summer time, and so on. But what of regional change? Examples of observed change at a regional level is the northward boundary shift of the frost-free zone in North America and across Asia.
It goes without saying that unless we drastically and systematically reduce the volume of global GHG emissions (currently sitting at about 50 billion tonnes of CO2e annually), then temperatures will continue to rise, precipitation will continue to rise in intensity, ocean levels will continue to rise, and environmental system tipping points may well be breached (eg. about 150m people could be living below the high tide line by 2050 – with obvious economic impacts)
About the global megatrend of computerisation
One of the flow-on effects of the increasing processing power of computer chips has been upon telecommunications. For the faster the computer processor, the more data it can handle for any period of time. This means that for every passing year telecommunication networks can transfer and deliver more data, quicker than in prior years.
When 1G, the first generation mobile network, was launched in 1979 it had a 2.4Kbps (2,400 bits of data could be transmitted or received every second). 2G came along in 1991 and had a bandwidth of about 100Kps (about 40 times faster than its predecessor). 3G was launched in Japan in 2001, again with a step increase in bandwidth to about 4Mbps (4 million bits per second, or another 40 times improvement).
As 3G improved and gained traction, audio and then video streaming services became viable (as video needs a bandwidth of about 5Mbps, 3G was the platform that made mobile video possible).
In recent years we have seen 4G and 5G go live, with 6G on the horizon. 4G arrived in 2009 in Norway. Speeds of about 100Mbps (25 times better than 3G) are experienced by users moving around and up to 1Gbps for stationary users (250 times better than 3G). 5G, which has been under development since 2008 and is now being rolled out, has a theoretical speed of 20Gps. And then there’s 6G. Currently there are claims that the speed of this technology, available by 2030, could be up to 1Tbps (1 Tera bits per second, or one trillion ).
With these speeds, uses and applications requiring higher bandwidth become feasible as we approach 2030 – perhaps immersive holograms, drone traffic management for cities and data rich smart city technologies
The impact of these two influences
What of the impact of climate change megatrend upon accommodation and food services?
For accommodation there are three areas of impact: location, construction and operation. For food services there are two: ingredients and operations
Accommodation is but one component of the global tourism industry worth about $2 trillion annually (pre-pandemic). However, recreational and to a lesser extent business, travelers select accommodation based on what is available to see at the accommodation’s location. With climate change already affecting some tourism destinations (eg. European Alps, The Dead Sea, The Great Barrier Reef, Venice, Victoria Falls), visitor numbers will continue to be affected.
With climate consciousness rising among the general public, sustainable and low-carbon construction and operational practices of accommodation facilities will become more important. Government climate-related laws and regulations, as well as insurance concerns, will also play their part in shaping what is built and how it is run.
With respect to food services, the obvious climate change impact will be upon the range of ingredients and their sourcing. With notions such as 100 mile food and 20 minute neighbourhoods, what may be acceptable to customers in terms of suppliers will continue to evolve. Three other forces that weigh upon ingredient selection are the availability of plant-based meat alternatives, the impact of weather events and climate trends upon regional agriculture and concerns about waste (eg. single use plastic and food waste)
And just like accommodation, sustainability and decarbonisation efforts will continue to shape the operation of food services.
The other global megatrend to analyse is that of computerisation.
Information technology has affected every part of the guest cycle for all types of accommodation (eg. hotels, resorts, hostels and camping grounds). From marketing channels and the locations that are available, to the way nights are booked. From the services available during the stay, to post-stay follow-up. In recent years, internet-based platforms have driven competition by first making pricing from market participants widely available (eg. Expedia and Booking.com, and then offering non-standard accommodation properties (eg. Airbnb and Vrbo).
Like with other industries, computing is used to improve the efficiency of operational aspects of accommodation as well as opening up new income streams. For example, digitisation of operations enables more data to be collected – location of staff, guests and inventory plus the collection of information from social media flows and internal network usage. (eg. video streaming services, internet site visits, etc). It also facilitates touchless operations through motion sensors to voice activated appliances. On the other hand digitalisation creates new value – through say self-service, predictive analytics, and reduction in manual processing.
On the risk side, though, is the honeypot of sensitive and financial data that this technology creates. The potential for crippling cyber-crime will only rise.
In a similar manner, food services have been affected.
Marketing channels, table booking, takeaway food options, and so on have all been affected. Technology has facilitated the rise of dark kitchens as well as food ordering and delivery platforms. And it has improved the visibility into, and the efficiency of, the business of catering, restaurant and café operators.
And the trend will continue – a smattering of restaurants and catering services are experimenting with robots in the kitchen and unique customer centric menu options become a possibility. 3D printing of food will create points of difference. And just like other forms of manufacturing – data from the ubiquitous presence of sensors will inform operational decisions.
So we can see that for the global megatrends of climate change and computerisation the impact upon the accommodation and food services industry will be felt for the foreseeable future. Climate change will primarily be felt in terms of what is on offer, whereas computerisation will mainly have an impact upon the efficiency of all operations.
What are your prospects
From the preceding, and from a career perspective, there are several observations that can be made:
If you are more the “get it done” type: you’ll have to be comfortable with having more information at your fingertips and using software to get your job done
If you are more the “thinking” type: there’ll be more data and a greater need to analyse data from a systems perspective in order to manage operations, customers and regulations
If you are more the “creative” type: you’ll have richer data sets of customers and climate that enable exploration of ways to keep current
If you are more the “helper” type: you’ll be needed to maintain and advance the people and digital skills of those in this everchanging industry
If you are more the “leader” type: you’ll need to be very comfortable with leading people in an industry that is increasingly become climate conscious
If you are more the “structure” type: you’ll be faced with not only changing trading rules and regulations, but also changing market dynamics
Overall, from a career perspective, in the years ahead you’ll need to comfortable with an industry that in many ways is being significantly challenged by these two global megatrends. Reputation is key, how you do things will be forever updated.
And from a business perspective, like with other industries, when it comes to responding to climate change it is all about mitigation (ie. shifting focus to reduce risk) and resilience (ie. fortification to handle risk). And, when it comes to computerisation, its all about automation and using data. So, for those operating within this industry, likely business prospects are along the following lines:
Mitigation: modify range of services and food offered
Resilience: develop local relationships, de-concentrate supply lines
Automation: increasing digital augmentation or substitution of most aspects of operations
Data analysis: expand data sources, timely responses to newly discovered value in data
Overall, and quite obviously, for businesses there are both risks to be aware of and opportunities to exploit in the change that is happening.
The accommodation and food services industry, like all other sectors of any economy, is being affected by the global megatrends of climate change and computerisation. Climate change will continue to influence services and products that are offered as well as the buildings from which businesses operate. Increasingly important will be the analysis and use of data to maintain viability.
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