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New Deloitte Report Maps Climate Change’s Triple Threat to Travel Industry

Deloitte + Skift

September 6th, 2024 at 10:00 AM EDT

A growing wave of environmental pressures is pushing the travel industry toward rapid transformation. Deloitte's latest report offers insights into how companies can adapt or risk extinction in an increasingly eco-conscious market.

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Navigating the implications of climate change will likely be among the travel industry’s biggest challenges in the coming decade. A combination of escalating environmental regulations, rising consumer and corporate demand for sustainability, and travel destinations’ increasing vulnerability to extreme weather call for greater strategic attention to environmental impact.

For an industry on the brink of significant change, climate-related pressures are among three major concerns leaders must contend with, according to a new Deloitte report that also highlights the potential of artificial intelligence along with big shifts in the demographic makeup of the traveling public. 

Younger, tech-savvy, and socially conscious generations are set to surpass boomers in terms of spending and influence within the industry. While boomers remain a lucrative demographic, they are beginning to age out of frequent travel. Interest in sustainable travel is consequently growing as millennials and Gen Z become dominant consumer groups. More young travelers say they seek lower-emission flights and hotels with sustainability certifications. They demand not just promises but precise, actionable commitments to sustainability that can guide their travel decisions. Compared to older generations, Gen Z and millennials are more likely to reward the brands that earn their trust with their approach to sustainability.

Regulatory pressures add another layer of complexity. A few notable laws have been enacted or proposed to address the travel industry’s carbon footprint. Popular support for such regulations will likely grow, posing hurdles for travel companies’ day-to-day operations.

Additionally, the physical reality of climate change directly impacts the viability of some travel destinations. Increasingly frequent and severe weather events, such as heat waves and hurricanes, are forcing the industry to rethink traditional travel seasons and how they prioritize traditionally popular destinations. 

As these factors converge, travel companies face an imperative to innovate and develop resilient strategies to withstand these pressures and secure a competitive advantage in the evolving market. 

A new report by Deloitte provides key observations into how travel companies can navigate this new reality. As the landscape shifts, the industry’s ability to pivot to a sustainable tourism model will likely dictate its future success and relevance in an increasingly conscientious market. 

This report from Deloitte provides a comprehensive analysis of the travel industry’s evolving landscape, with actionable insights for industry leaders on navigating climate-related pressures to ensure long-term sustainability, customer loyalty, and competitive advantage. The report also explores how exponential technology like AI and demographic changes are shaping new opportunities.

In this report, you’ll find:

• An analysis of the environmental challenges facing the travel industry.
• Insights into growing regulatory pressures and their implications on industry practices.
• A look at travelers’ shifting priorities and the role of brand trust in capturing the younger travel market.
• How climate change is affecting the viability and appeal of travel destinations, with rising temperatures, extreme weather events, and shorter seasons altering travel patterns.
• Strategies for travel brands to respond to climate change, with actionable insights on adopting long-term solutions.
• Other major changes affecting the travel industry such as technological advancements and demographic shifts.

This content was created collaboratively by Deloitte and Skift’s branded content studio, SkiftX .

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Tags: climate change , deloitte , SkiftX Creative Studio , SkiftX Showcase: Consulting , SkiftX Showcase: Hospitality , strategy , sustainable tourism

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Deloitte’s 2024 travel industry outlook: Unpack the biggest travel trends for the year ahead

After more than two years of consistent year-over-year gains, leisure travel may have tapped all its pent-up demand from the peak pandemic years. Is US travel demand due for a correction? Our 2024 travel industry outlook explores signals of the strength of travel demand.

Even during times of financial anxiety, travel has held a consistent share of Americans’ wallets. Enthusiasm for in-destination activities, growing interest in more diverse destinations, and the return of baby boomers in greater numbers add to the positive indicators for travel. And workplace flexibility appears poised to further buoy demand.

Despite this optimistic outlook, could an economic downturn shift travel behaviors? Travel frequency and certain indulgences may see a decline, but if higher-income groups are relatively insulated from economic headwinds, higher-end travel products could have a better year than budget ones. On the corporate side, many decision-makers in the coming year will seek a delicate balance between conservative budgeting and pursuing the strategic benefits that travel can support.

• Suppliers find ways to touch up the travel experience. High interest rates and elevated costs of some goods can make it difficult to update, let alone upgrade, hotels. And some of airlines’ biggest challenges have stemmed from weather events and staffing matters not entirely in their control. Still, airlines and hospitality providers know they need to improve the experiences they offer or risk losing travelers’ attention.
• The corporate comeback continues, but gains decelerate. While trips to build client relationships and support team collaboration remain key to business success, costs are a significant concern. Amid these efforts at prudent budgeting, US corporate travel spend is still likely to finally pass the pre-pandemic line within the next year.
• More trips or longer trips? Travelers choose their own adventure. One of the most lasting effects of the pandemic has been a shift in how white-collar work gets done. Remote and hybrid arrangements appear to be here to stay, and the share of travelers who plan to work on their longest leisure trips has surged. In addition to adding and extending trips, this laptop lugger behavior also has an impact on travelers’ in-destination needs and preferences.
• Marketing spend shifts to account for changes in platforms and demographics. As travel demand has returned and shown continued resilience to economic anxiety, the industry’s marketing spend has trended up, and travel providers have ridden a wave of pent-up demand. But as travel growth slows, there will be a greater need for more targeted marketing and for travel providers to build new strategies for a changing landscape.
• Gen AI: Behind the scenes and front and center. Gen AI is already influencing travel, with call center efficiencies the most widely reported benefit. In the coming year, expect it to influence the industry in major ways. More visible applications (new options for discovery, shopping, booking) will garner much of the attention, but less visible applications might actually be more influential. Promising use cases for travel providers include advertising strategy, marketing content, and personalization.

Vicky Karantzavelou

Vicky  is the co-founder of TravelDailyNews Media Network where she is the  Editor-in Chief . She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.

She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.

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WTTC and TRIP.COM Group Global Traveller Report Reveals Shift Towards Sustainable Travel

Travellers set to splurge on international travel this year “Demand for travel is now stronger than ever” says WTTC President & CEO Julia Simpson  

Madrid, Spain: A major new report by World Travel & Tourism Council ( WTTC ) and Trip.com Group , together with Deloitte, reveals a heightened appetite for sustainable tourism amongst consumers, with 69% of travellers actively seeking sustainable travel options 1 . In this follow-up report, WTTC joined forces again with leading global travel service provider, Trip.com Group and its major consumer brands Trip.com, Ctrip and Skyscanner, with additional data sourced from Deloitte, to analyse the trends that shaped the Travel & Tourism sector last year and will continue to do so over 2023. The report, “A world in motion: shifting consumer travel trends in 2022 and beyond”, shows that sustainability is a key element of the travel agenda, with travellers eager to reduce their carbon footprint and support sustainable tourism.  According to a survey included in the report, three quarters of travellers are considering travelling more sustainably in the future 1  and nearly 60% have chosen more sustainable travel options in the last couple of years 1 . Another survey also found that around three quarters of high-end travellers are willing to pay extra to make their trips more sustainable 2 . Last year, following more than two years of travel disruption, travellers made clear their wanderlust is very much alive, with a 109% increase of international overnight arrivals, compared to 2021. According to the report, last year consumers were willing to stretch their budget for their holiday plans, with 86% of travellers planning on spending the same amount or more on international travel than in 20193, with U.S. tourists leading the list as big spenders 4 .  But 2023 is looking even better in terms of travellers’ spend. Despite concerns about inflation and the cost-of-living crisis around the world, nearly a third (31%) of travellers said they intend to spend more on international travel this year than in 2022 3 .  Additionally, according to Deloitte’s ‘Global State of the Consumer Tracker’, last year more than half (53%) of global consumers surveyed during the summer said they plan to stay in a hotel over the following three months 4 . Julia Simpson, WTTC President & CEO, said: “The demand for travel is now stronger than ever and our report shows that this year we will see a significant bounce back. 2023 is set to be a very strong year for Travel & Tourism. “Sustainability is top of travellers’ agenda, and consumers highlight the value they put on protecting nature and travelling responsibly.” Jane Sun, Trip.com Group CEO, said: “Travel & Tourism is a powerful force in driving the global economy, creating jobs, stimulating economic growth, and lifting communities out of poverty. “The Asia-Pacific Region, with its rapidly growing middle-class and dynamic economies, is well-positioned to capitalise on the growth of the industry and take its place as a leader in the global tourism economy. “I’m optimistic about the positive momentum for the global resumption and growth of travel in 2023, primarily driven by mainland Chinese consumers, which will help accelerate worldwide recovery and development.” Scott Rosenberger, Global Transportation, Hospitality & Services Sector leader, Deloitte Global: “Travel is rebounding from the pandemic while innovating and meeting the demands of more modern alternative travel-types, sustainable travel, luxury travel, and much more.  “Even the rise in inflation-driven financial concerns is not slowing the pace; incredibly travel is being prioritized and flexible/remote work arrangements are creating new opportunities. We are actively engaging with our clients as they embrace these new trends and create memorable experiences for consumers.” Other findings revealed in the report include: •    2022 sun and sea package holiday sales are estimated to be up 75% compared to the previous year 5 •    Last year during the summer, international arrivals in European sun and beach desti-nations were just 15% below 2019 levels 6 •    According to WTTC’s recent ‘Cities Economic Impact Research’, in 2022 visits to major cities are expected to see a 58% year-on-year increase, less than 14% below 2019 levels •    Luxury holidays will prove particularly popular, with sales of luxury hotels expected to reach $92 billion by 2025 (compared to $76 billion in 2019) 5 •    In a survey, nearly 60% of travellers said they were either already paying to offset their carbon emissions or considering it if the price was right 1 To access more information and read the report in full, please click here . Downloand press release Notes to editor:

1 Trip.com  2 Virtuoso 3 Skyscanner 4 Deloitte 5 Euromonitor 6 ForwardKeys

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Deloitte and World Travel & Tourism Council to create travel and tourism report

Big four consulting firm  Deloitte and the World Travel & Tourism Council (WTTC) have announced a collaborative effort to usher in digital transformation and its associated “work and workforce shifts” – as well as the effects those shifts may have on public policy. 

The collaboration will come in the form of a report, entitled “The Future of Work in Travel & Tourism.” It will focus on best practices and public policy recommendations, which will enable businesses within the travel and tourism sector to make success-driving decisions in the coming years. 

"As a trusted leader and recognized organization within the travel and tourism sector globally, WTTC is an ideal research partner to explore industry challenges, and help organizations sustain growth in the golden age of travel," Guy Langford, Deloitte US’s transportation, hospitality and services industry leader, said.

“‘The Future of Work in Travel & Tourism’ report will allow us to rethink how work and workforces enabled by digital transformations can enhance customer experiences across a number of industries including hotels, cruises, airlines, transportation and restaurants – all supported by the collaboration and coordination of public and private sectors.”

The travel and tourism sector currently accounts for one in 10 – or 319 million – jobs worldwide, and makes up 10.4% ($8.8 trillion) of global GDP, meaning its economic impact is invaluable on both an individual and a global scale. The rise of digitization, however, means travel and tourism businesses must evolve and transform, leveraging new technologies and paying close attention to business models that are able to effectively attract the best talent. This change, Deloitte believes, calls for a reimagining of how the sector operates. “The Future of Work in Travel & Tourism” will provide advice and recommendations that will support such change. 

"With one in five of all new jobs created in the last five years coming from travel and tourism – and 100 million jobs expected to be created by the sector worldwide in the coming decade – it is vital that our sector is fully prepared to make the most of this opportunity,” Gloria Guevara, WTTC president and CEO, said. “This means that we must understand the roles which people will be performing across our sector; the influence of technology in enhancing the way that companies work with consumers; and the importance of government policy to facilitate best practice and innovation across the sector. We look forward to working with Deloitte on this crucial piece of work." 

Deloitte and the WTTC plan to unveil the report at 2020’s WTTC Global Summit, which will be held in San Juan, Puerto Rico, in April. 

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The future of tourism: Bridging the labor gap, enhancing customer experience

As travel resumes and builds momentum, it’s becoming clear that tourism is resilient—there is an enduring desire to travel. Against all odds, international tourism rebounded in 2022: visitor numbers to Europe and the Middle East climbed to around 80 percent of 2019 levels, and the Americas recovered about 65 percent of prepandemic visitors 1 “Tourism set to return to pre-pandemic levels in some regions in 2023,” United Nations World Tourism Organization (UNWTO), January 17, 2023. —a number made more significant because it was reached without travelers from China, which had the world’s largest outbound travel market before the pandemic. 2 “ Outlook for China tourism 2023: Light at the end of the tunnel ,” McKinsey, May 9, 2023.

Recovery and growth are likely to continue. According to estimates from the World Tourism Organization (UNWTO) for 2023, international tourist arrivals could reach 80 to 95 percent of prepandemic levels depending on the extent of the economic slowdown, travel recovery in Asia–Pacific, and geopolitical tensions, among other factors. 3 “Tourism set to return to pre-pandemic levels in some regions in 2023,” United Nations World Tourism Organization (UNWTO), January 17, 2023. Similarly, the World Travel & Tourism Council (WTTC) forecasts that by the end of 2023, nearly half of the 185 countries in which the organization conducts research will have either recovered to prepandemic levels or be within 95 percent of full recovery. 4 “Global travel and tourism catapults into 2023 says WTTC,” World Travel & Tourism Council (WTTC), April 26, 2023.

Longer-term forecasts also point to optimism for the decade ahead. Travel and tourism GDP is predicted to grow, on average, at 5.8 percent a year between 2022 and 2032, outpacing the growth of the overall economy at an expected 2.7 percent a year. 5 Travel & Tourism economic impact 2022 , WTTC, August 2022.

So, is it all systems go for travel and tourism? Not really. The industry continues to face a prolonged and widespread labor shortage. After losing 62 million travel and tourism jobs in 2020, labor supply and demand remain out of balance. 6 “WTTC research reveals Travel & Tourism’s slow recovery is hitting jobs and growth worldwide,” World Travel & Tourism Council, October 6, 2021. Today, in the European Union, 11 percent of tourism jobs are likely to go unfilled; in the United States, that figure is 7 percent. 7 Travel & Tourism economic impact 2022 : Staff shortages, WTTC, August 2022.

There has been an exodus of tourism staff, particularly from customer-facing roles, to other sectors, and there is no sign that the industry will be able to bring all these people back. 8 Travel & Tourism economic impact 2022 : Staff shortages, WTTC, August 2022. Hotels, restaurants, cruises, airports, and airlines face staff shortages that can translate into operational, reputational, and financial difficulties. If unaddressed, these shortages may constrain the industry’s growth trajectory.

The current labor shortage may have its roots in factors related to the nature of work in the industry. Chronic workplace challenges, coupled with the effects of COVID-19, have culminated in an industry struggling to rebuild its workforce. Generally, tourism-related jobs are largely informal, partly due to high seasonality and weak regulation. And conditions such as excessively long working hours, low wages, a high turnover rate, and a lack of social protection tend to be most pronounced in an informal economy. Additionally, shift work, night work, and temporary or part-time employment are common in tourism.

The industry may need to revisit some fundamentals to build a far more sustainable future: either make the industry more attractive to talent (and put conditions in place to retain staff for longer periods) or improve products, services, and processes so that they complement existing staffing needs or solve existing pain points.

One solution could be to build a workforce with the mix of digital and interpersonal skills needed to keep up with travelers’ fast-changing requirements. The industry could make the most of available technology to provide customers with a digitally enhanced experience, resolve staff shortages, and improve working conditions.

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Complementing concierges with chatbots.

The pace of technological change has redefined customer expectations. Technology-driven services are often at customers’ fingertips, with no queues or waiting times. By contrast, the airport and airline disruption widely reported in the press over the summer of 2022 points to customers not receiving this same level of digital innovation when traveling.

Imagine the following travel experience: it’s 2035 and you start your long-awaited honeymoon to a tropical island. A virtual tour operator and a destination travel specialist booked your trip for you; you connected via videoconference to make your plans. Your itinerary was chosen with the support of generative AI , which analyzed your preferences, recommended personalized travel packages, and made real-time adjustments based on your feedback.

Before leaving home, you check in online and QR code your luggage. You travel to the airport by self-driving cab. After dropping off your luggage at the self-service counter, you pass through security and the biometric check. You access the premier lounge with the QR code on the airline’s loyalty card and help yourself to a glass of wine and a sandwich. After your flight, a prebooked, self-driving cab takes you to the resort. No need to check in—that was completed online ahead of time (including picking your room and making sure that the hotel’s virtual concierge arranged for red roses and a bottle of champagne to be delivered).

While your luggage is brought to the room by a baggage robot, your personal digital concierge presents the honeymoon itinerary with all the requested bookings. For the romantic dinner on the first night, you order your food via the restaurant app on the table and settle the bill likewise. So far, you’ve had very little human interaction. But at dinner, the sommelier chats with you in person about the wine. The next day, your sightseeing is made easier by the hotel app and digital guide—and you don’t get lost! With the aid of holographic technology, the virtual tour guide brings historical figures to life and takes your sightseeing experience to a whole new level. Then, as arranged, a local citizen meets you and takes you to their home to enjoy a local family dinner. The trip is seamless, there are no holdups or snags.

This scenario features less human interaction than a traditional trip—but it flows smoothly due to the underlying technology. The human interactions that do take place are authentic, meaningful, and add a special touch to the experience. This may be a far-fetched example, but the essence of the scenario is clear: use technology to ease typical travel pain points such as queues, misunderstandings, or misinformation, and elevate the quality of human interaction.

Travel with less human interaction may be considered a disruptive idea, as many travelers rely on and enjoy the human connection, the “service with a smile.” This will always be the case, but perhaps the time is right to think about bringing a digital experience into the mix. The industry may not need to depend exclusively on human beings to serve its customers. Perhaps the future of travel is physical, but digitally enhanced (and with a smile!).

Digital solutions are on the rise and can help bridge the labor gap

Digital innovation is improving customer experience across multiple industries. Car-sharing apps have overcome service-counter waiting times and endless paperwork that travelers traditionally had to cope with when renting a car. The same applies to time-consuming hotel check-in, check-out, and payment processes that can annoy weary customers. These pain points can be removed. For instance, in China, the Huazhu Hotels Group installed self-check-in kiosks that enable guests to check in or out in under 30 seconds. 9 “Huazhu Group targets lifestyle market opportunities,” ChinaTravelNews, May 27, 2021.

Technology meets hospitality

In 2019, Alibaba opened its FlyZoo Hotel in Huangzhou, described as a “290-room ultra-modern boutique, where technology meets hospitality.” 1 “Chinese e-commerce giant Alibaba has a hotel run almost entirely by robots that can serve food and fetch toiletries—take a look inside,” Business Insider, October 21, 2019; “FlyZoo Hotel: The hotel of the future or just more technology hype?,” Hotel Technology News, March 2019. The hotel was the first of its kind that instead of relying on traditional check-in and key card processes, allowed guests to manage reservations and make payments entirely from a mobile app, to check-in using self-service kiosks, and enter their rooms using facial-recognition technology.

The hotel is run almost entirely by robots that serve food and fetch toiletries and other sundries as needed. Each guest room has a voice-activated smart assistant to help guests with a variety of tasks, from adjusting the temperature, lights, curtains, and the TV to playing music and answering simple questions about the hotel and surroundings.

The hotel was developed by the company’s online travel platform, Fliggy, in tandem with Alibaba’s AI Labs and Alibaba Cloud technology with the goal of “leveraging cutting-edge tech to help transform the hospitality industry, one that keeps the sector current with the digital era we’re living in,” according to the company.

Adoption of some digitally enhanced services was accelerated during the pandemic in the quest for safer, contactless solutions. During the Winter Olympics in Beijing, a restaurant designed to keep physical contact to a minimum used a track system on the ceiling to deliver meals directly from the kitchen to the table. 10 “This Beijing Winter Games restaurant uses ceiling-based tracks,” Trendhunter, January 26, 2022. Customers around the world have become familiar with restaurants using apps to display menus, take orders, and accept payment, as well as hotels using robots to deliver luggage and room service (see sidebar “Technology meets hospitality”). Similarly, theme parks, cinemas, stadiums, and concert halls are deploying digital solutions such as facial recognition to optimize entrance control. Shanghai Disneyland, for example, offers annual pass holders the option to choose facial recognition to facilitate park entry. 11 “Facial recognition park entry,” Shanghai Disney Resort website.

Automation and digitization can also free up staff from attending to repetitive functions that could be handled more efficiently via an app and instead reserve the human touch for roles where staff can add the most value. For instance, technology can help customer-facing staff to provide a more personalized service. By accessing data analytics, frontline staff can have guests’ details and preferences at their fingertips. A trainee can become an experienced concierge in a short time, with the help of technology.

Apps and in-room tech: Unused market potential

According to Skift Research calculations, total revenue generated by guest apps and in-room technology in 2019 was approximately $293 million, including proprietary apps by hotel brands as well as third-party vendors. 1 “Hotel tech benchmark: Guest-facing technology 2022,” Skift Research, November 2022. The relatively low market penetration rate of this kind of tech points to around $2.4 billion in untapped revenue potential (exhibit).

Even though guest-facing technology is available—the kind that can facilitate contactless interactions and offer travelers convenience and personalized service—the industry is only beginning to explore its potential. A report by Skift Research shows that the hotel industry, in particular, has not tapped into tech’s potential. Only 11 percent of hotels and 25 percent of hotel rooms worldwide are supported by a hotel app or use in-room technology, and only 3 percent of hotels offer keyless entry. 12 “Hotel tech benchmark: Guest-facing technology 2022,” Skift Research, November 2022. Of the five types of technology examined (guest apps and in-room tech; virtual concierge; guest messaging and chatbots; digital check-in and kiosks; and keyless entry), all have relatively low market-penetration rates (see sidebar “Apps and in-room tech: Unused market potential”).

While apps, digitization, and new technology may be the answer to offering better customer experience, there is also the possibility that tourism may face competition from technological advances, particularly virtual experiences. Museums, attractions, and historical sites can be made interactive and, in some cases, more lifelike, through AR/VR technology that can enhance the physical travel experience by reconstructing historical places or events.

Up until now, tourism, arguably, was one of a few sectors that could not easily be replaced by tech. It was not possible to replicate the physical experience of traveling to another place. With the emerging metaverse , this might change. Travelers could potentially enjoy an event or experience from their sofa without any logistical snags, and without the commitment to traveling to another country for any length of time. For example, Google offers virtual tours of the Pyramids of Meroë in Sudan via an immersive online experience available in a range of languages. 13 Mariam Khaled Dabboussi, “Step into the Meroë pyramids with Google,” Google, May 17, 2022. And a crypto banking group, The BCB Group, has created a metaverse city that includes representations of some of the most visited destinations in the world, such as the Great Wall of China and the Statue of Liberty. According to BCB, the total cost of flights, transfers, and entry for all these landmarks would come to $7,600—while a virtual trip would cost just over $2. 14 “What impact can the Metaverse have on the travel industry?,” Middle East Economy, July 29, 2022.

The metaverse holds potential for business travel, too—the meeting, incentives, conferences, and exhibitions (MICE) sector in particular. Participants could take part in activities in the same immersive space while connecting from anywhere, dramatically reducing travel, venue, catering, and other costs. 15 “ Tourism in the metaverse: Can travel go virtual? ,” McKinsey, May 4, 2023.

The allure and convenience of such digital experiences make offering seamless, customer-centric travel and tourism in the real world all the more pressing.

Three innovations to solve hotel staffing shortages

Is the future contactless.

Given the advances in technology, and the many digital innovations and applications that already exist, there is potential for businesses across the travel and tourism spectrum to cope with labor shortages while improving customer experience. Process automation and digitization can also add to process efficiency. Taken together, a combination of outsourcing, remote work, and digital solutions can help to retain existing staff and reduce dependency on roles that employers are struggling to fill (exhibit).

Depending on the customer service approach and direct contact need, we estimate that the travel and tourism industry would be able to cope with a structural labor shortage of around 10 to 15 percent in the long run by operating more flexibly and increasing digital and automated efficiency—while offering the remaining staff an improved total work package.

Outsourcing and remote work could also help resolve the labor shortage

While COVID-19 pushed organizations in a wide variety of sectors to embrace remote work, there are many hospitality roles that rely on direct physical services that cannot be performed remotely, such as laundry, cleaning, maintenance, and facility management. If faced with staff shortages, these roles could be outsourced to third-party professional service providers, and existing staff could be reskilled to take up new positions.

In McKinsey’s experience, the total service cost of this type of work in a typical hotel can make up 10 percent of total operating costs. Most often, these roles are not guest facing. A professional and digital-based solution might become an integrated part of a third-party service for hotels looking to outsource this type of work.

One of the lessons learned in the aftermath of COVID-19 is that many tourism employees moved to similar positions in other sectors because they were disillusioned by working conditions in the industry . Specialist multisector companies have been able to shuffle their staff away from tourism to other sectors that offer steady employment or more regular working hours compared with the long hours and seasonal nature of work in tourism.

The remaining travel and tourism staff may be looking for more flexibility or the option to work from home. This can be an effective solution for retaining employees. For example, a travel agent with specific destination expertise could work from home or be consulted on an needs basis.

In instances where remote work or outsourcing is not viable, there are other solutions that the hospitality industry can explore to improve operational effectiveness as well as employee satisfaction. A more agile staffing model  can better match available labor with peaks and troughs in daily, or even hourly, demand. This could involve combining similar roles or cross-training staff so that they can switch roles. Redesigned roles could potentially improve employee satisfaction by empowering staff to explore new career paths within the hotel’s operations. Combined roles build skills across disciplines—for example, supporting a housekeeper to train and become proficient in other maintenance areas, or a front-desk associate to build managerial skills.

Where management or ownership is shared across properties, roles could be staffed to cover a network of sites, rather than individual hotels. By applying a combination of these approaches, hotels could reduce the number of staff hours needed to keep operations running at the same standard. 16 “ Three innovations to solve hotel staffing shortages ,” McKinsey, April 3, 2023.

Taken together, operational adjustments combined with greater use of technology could provide the tourism industry with a way of overcoming staffing challenges and giving customers the seamless digitally enhanced experiences they expect in other aspects of daily life.

In an industry facing a labor shortage, there are opportunities for tech innovations that can help travel and tourism businesses do more with less, while ensuring that remaining staff are engaged and motivated to stay in the industry. For travelers, this could mean fewer friendly faces, but more meaningful experiences and interactions.

Urs Binggeli is a senior expert in McKinsey’s Zurich office, Zi Chen is a capabilities and insights specialist in the Shanghai office, Steffen Köpke is a capabilities and insights expert in the Düsseldorf office, and Jackey Yu is a partner in the Hong Kong office.

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HTI Conference’s partner  Deloitte  works with both private and public-sector entities involved in health tourism sector. Deloitte identifies, analyses and continually monitors changes at PESTL levels, which may dramatically impact the developmental direction of the health tourism sector on a global level, but also case based i.e. on specific markets (country level). Deloitte’s forecasts of the most important trends as well as suggested problem-solving solutions are based on continuous and thorough demographic, economic and political analyses. This is key to all stakeholders in the health tourism sector – it is fundamental in understanding and creating innovative solutions in challenging markets, such as the health tourism market.

Global healthcare spending is projected to increase at an annual rate of 4.1% in the period 2017-2021, up from just 1.3% in the period 2012-2016. Aging and growing populations, developing market expansion, clinical and technological advances, and rising labor costs will drive spending growth.

Deloitte analyses the evolution of a “smart healthcare” strategy whose implementation will depend on the agility of the current healthcare system . Healthcare sector stakeholders are already pursuing improvements in current healthcare systems across the globe by introducing new cost reduction measures such as developing alternative staffing models, shifting patients to outpatient services and reducing administrative and supply costs.

Technological development rapidly impacts organizational structures and business processes in both healthcare and health tourism sectors but also impacts behaviour of individuals towards their health status, which then leads to significant changes in relationships physician-patient, as well as in patient-system procedures. According to Deloitte’s 2017 Survey on US Health Care Consumers, personalized care from their providers – including clear communication and sensitivity – represents a top health care priority for Survey participants.

Technological development, however, also results in new challenges. Digital healthcare technology solutions addressing better diagnostics and more personalized therapeutic tools are leading to challenges of personal data protection. Cybersecurity and data risk management continue to be front and centre issues, especially with patients who are taking more active control of their health state, i.e. requiring access and reliability of their personal data. Furthermore, service providers will have to adopt new strategies – linking talent and technology as to achieve system efficiency and satisfy client needs.

Other findings and details of Deloitte’s new  2018 Global health care outlook report can be found here   as well as  infographics .

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