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WORLD TOURISM FORUM LUCERNEc/o Hochschule Luzern, Institute of Tourism, Rsslimatte 48, P.O. Box 2940, 6002 Lucerne, Switzerlandtel +41 41 228 99 80, fax +41 41 228 41 44, [email protected], www.wtflucerne.org

World Tourism Forum Lucerne 2013

1st Think Tank

16-17 April 2013

Supported by

Content

Summary / Conclusions page 2-3

Press release page 4-5

Impressions page 6-8

List of participants page 9-10

Situation and Trends page 11

Debate page 12-14

Presentation Dr Michael Frenzel page 15-22
mailto:[email protected],mailto:[email protected],


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Summary

The World Tourism Forum Lucerne Think Tank gathered a representative group of lead-

ers and movers & shapers from across the sector, to reflect on the big pervasive chal-

lenges for the industry and out of the box game-changing ways to address them. It

was light on paper but long on creative exchange, with Chatham House Rules. The value

was generally acknowledged in the exchange itself: shared brainstorming and cross fer-

tilization of ideas. The session was moderated by Professor Geoffrey Lipman and the list

of participants can be found on pages 9-10.

There was general agreement with the broad situation analysis (see page 11) the

macro challenges are disruptive economics, technology (e.g. Apple travel app to cover

our full value chain), communications, geographic market shift, consumer changes (e.g.

customisation, experiences, ageing), regulatory war on airlines and other adverse, dy-

namic socio-politico governance conditions. Our sector is affected by everything, we

are behind the curve, comparatively slow to change from traditional systems and struc-

tures, dependent on big infrastructural frameworks/constraints, with massive numbers

of new wired customers.

We need to be agile and alert in responding to key influencing factors by:

Fully understanding our dynamic opportunity/risk situation changes are com-

plex, fast and inter-connected. Hyper-connectivity brings hyper-opportunities,

but also hyper-vulnerability.

Evaluating objectively and with enough granularity the results that our own andother sectors research and experience shows.

Cautioning against over-simplistic reliance on the BRICS who will have their own

adaptation challenges

Adjusting quickly/nimbly to capitalise on our potential as a job creator/ devel-

opment catalyst, We should do this in ways that put yield on the same page as

numbers, and green on the same page as growth.

Against this background, we took a deep dive into the interrelated pivotal issues of

Hyper-connectivity and Bridging the Silos (seepages 12-14).

Conclusions

We face Hyper-change: Hyper-connectivity and Hyper-fragmentation - the trends will

not reverse. We must focus on those elements we can influence/control.

The most challenging issues are:

Truly put customers and communities as the vectors of decision making and en-

gage them more intelligently and collaboratively.

Look for smarter (green) growth, in a resource constrained world with more and

more demand from huge numbers of increasingly techno-savvy, environmentally

aware customers.

Convince governments of the sectors scope/value and supportive politico-

economic policies - particularly for finance and security/immigration ministries.


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The Think Tank has been a valuable forum for exchange. We need to continue this gen-uine multi-interest, informed, objective exchange. World Tourism Forum Lucerne was

urged to continue this initiative and the Secretary-General of UNWTO was asked to host

a stakeholders meeting to consider further the question of bridging the silos, with spe-

cific focus on aligned advocacy and securing equitable development funding for tourism

at its intersection with the MDGs/poverty and green economy.


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Press release

Smarter customer focused strategies needed for Travel & Tourism in ahyper-connected world First World Tourism Forum Lucerne Think Tank

Lucerne, 1 May 2013 - If the Travel and Tourism Industry is to reach its full potential to cre-

ate jobs, boost economies and promote sustainable growth it needs disruptive new strate-

gies and it has to move fast to implement them. This was the overriding conclusion of the 25

industry leaders who gathered in Lucerne, Switzerland, for the first annual Think Tank held

during the World Tourism Forum Lucerne.

The Think Tank report, released today, noted that the future is one of hyper-change: hyper-connectivity and hyper-fragmentation - the trends will not reverse. We must focus on those

elements we can influence/control.

The Think Tank identified the key actions as to:

Truly put customers and communities as the vectors of decision making and engage them

more intelligently and collaboratively.

Look for smarter (green) growth, in a resource constrained world with more and more de-

mand from huge numbers of increasingly techno-savvy, environmentally aware customers

Convince governments of the sectors scope/value and supportive politico-economic poli-

cies - particularly for finance and security/immigration ministries.

Its Moderator Professor Geoffrey Lipman, who presented the report at the Forum, said theThink Tank concluded that Travel and Tourism is so interconnected with other sectors like,manufacturing, services, telecommunications and construction that it is affected by every-thing. We are behind the curve in our response, comparatively slow to change from tradi-tional systems and structures, dependent on big infrastructural frameworks/constraints, withmassive numbers of new wired travellers We have to become more customer and commu-nity focused and we have to change faster. The report should be required reading for publicand private sector policymakers

Other main conclusions were the urgent need to:

Fully understanding the dynamic opportunity/risk situation changes are complex, fast and

inter-connected. Hyper-connectivity brings hyper-opportunities, but also hyper-vulnerability. Evaluate objectively and with enough granularity the results that our own and other sectors

research and experience shows.

Beware over-simplistic reliance on the BRICS who will have their own adaptation challeng-

es

Adjust quickly/nimbly to capitalise on our potential as a job creator/ development catalyst.

We should do this in ways that put yield on the same page as numbers, and green on the

same page as growth.

Professor Martin Barth the Forums Managing Director said that the Think Tank was a great

experiment and a great success. Mixing industry leaders, ministers with young movers &

shapers, with enough time for a serious debate created a powerful dynamism, serious de-bate and some new solution oriented ideas. We plan to continue the experiment in the com-

ing years.


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Abou t the Worl d Touri sm Forum Lucerne

The World Tourism Forum Lucerne is a professional interdisciplinary platform which offers decision-makers

in business, government, science and finance an overview of current topics and trends in the tourism indus-

try. It is the only international platform where leading decision makers and emerging young talents in the

industry have the opportunity to interact as part of a next generation programme. The World Tourism Forum

Lucerne is supported by an international Advisory Board under the chairmanship of Reto Wittwer (President

and CEO, Kempinski Hotels). The next World Tourism Forum Lucerne will take place in early 2015.

www.wtflucerne.org

For further information:

Contact: Media Office:World Tourism Forum Lucerne Primus Communications

Professor Martin Barth, General Manager Sabine Biedermann, Deputy Managing Director

T: +41 41 228 99 80 T: +41 44 421 41 21

M: +41 79 602 30 40 M: +41 78 628 10 28

[email protected] [email protected]
http://www.wtflucerne.org/mailto:[email protected]:[email protected]:[email protected]:[email protected]://www.wtflucerne.org/


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Impressions


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List of participants

Last Name

First

Name Function Company Country Email-Address

Barth Martin General Manager World Tourism Forum Lucerne Switzerland [email protected] Jessica Young mover & shaper TUI AG Germany [email protected]

Chiesa Thea

Director, Head of Aviation, Travel and Tourism

Industries World Economic Forum (WEF) Switzerland [email protected]

Craigs Martin CEO Pacific Asia Travel Association (PATA) Thailand [email protected]

Frenzel Michael

Chairman of the supervisory board TUI & Chairman

of the World Travel & Tourism Council (WTTC) TUI AG Germany [email protected]

George Ryan Young mover & shaper Simpleview USA [email protected]

Goldin Ian Director Oxford Martin School University of Oxford

United King-

dom [email protected]

Guevara

Manzo Gloria Industry expert and former Minister of Tourism Mexico [email protected]

Kafarov Oleg Young mover & shaper Jumeirah Group

United Arab

Emirates [email protected]

Kefalogianni Olga Minister of Tourism Ministry of Tourism, Greece Greece [email protected]

Kilbourn Frank Chairman of the Board South African Tourism Board (SAT) South Africa [email protected]

King Tom Senior Vice President British Airways

United King-


Lipman Geoffrey

President International Council of Tourism Partners

Chair of greenearth.travel Belgium [email protected]

Mathis Pascal Young mover & shaper GetYourGuide Switzerland [email protected]

Mayer Nicolas Industry Leader Lodging & Tourism Clients PricewaterhouseCoopers Switzerland [email protected]

Mendiratta Anita Moderator World Tourism Forum Lucerne CACHET Consulting South Africa [email protected]
mailto:[email protected]:[email protected]:[email protected]


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Poonoosamy Vijay Vice President International & Public Affairs Etihad Airways

United Arab

Emirates [email protected]

Rifai Taleb D. Secretary-General UNWTO World Tourism Organization Spain [email protected]

Rodrigues

Chris-

topher Chairman VisitBritain

United King-


Schmid Jrg Director Switzerland Tourism Switzerland [email protected]

St.Ange Alain Minister of Tourism Ministry of Tourism & Culture, Seychelles Seychelles [email protected]

Tae Eunji Knowledge Network Coordinator UNWTO World Tourism Organization Spain [email protected]

Van

Schalkwyk Marthinus Minister of Tourism

Ministry of Tourism, Republic of South

Africa South Africa [email protected]

Vorster Shaun Special Advisor to the Minister

Ministry of Tourism, Republic of South

Africa South Africa [email protected]

Windmuller Tom Senior Vice President

International Air Transport Association

(IATA) Canada [email protected]

Wittwer Reto President & CEO Kempinski Hotels S.A. Switzerland [email protected]


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Situation & Trends

General

Politics gridlocked: Economics volatile: Regionalism stronger: Glocalization trending

Mega Crisis increasingly likely: nature / man-made: Climate Change hits weather

Interdependence and supply chain globalization increases vulnerability

Street democracy grows with unemployment and fundamentalism big factors

China led BRICS boom: Developing strengthen: OECD crawls & Europe drags

Trade, led by Services grows steadily: centre shifts east: South ~ South escalates

Africa grows on China resource sales + health / education / infrastructure paradigms

Oil politics shifts - Russia key player and US moves to energy independence

Climate realities increasingly impact policies particularly taxes and infrastructure

Demographic shifts intensify more dependant older + out of work younger

Urbanization intractable with growing allocation of resources & new-tech focus.

Communications, social media , mobile revolutions change work and leisure patterns

Green Growth gathers momentum with increasing climate adaptation funding

Social entrepreneurship/internet finance/alternative markets shift investment patterns

PPPs / IGO reform/tough anti-corruption norms create cleaner market framework

Sector

Sluggish development based on austerity economies and slim margins

More/deeper consolidations plus more low cost initiatives across the sector

BRICS drive growth: sheer numbers from China/India/Brazil changing the game.

Domestic and Regional markets take on new importance

Mega-hub, airports and carriers in Gulf will be a global game-changer

Jobs, & impact numbers get more scrutiny from governments and NGOs

Industry coalitions strengthen: increasing political focus: target borders & taxes

Sport/Culture/Entertainment/Tourism coalescence:

Aviation/tourism/environment policies more aligned: strong focus on cleantech.

Congestion becomes major issue at borders, airports and on roads.

Demands for smart skies & bio fuel grow as carbon taxes hit transport sector

Political/policy conflicts spur re-evaluation of aviation/tourism in trade & climate talks

Smart visas demand upgrades in processes and technology.

Shifting focus towards green growth driven by regulation, funds & public awareness

Market for green solutions will trump government and industry standard setting


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Debate

Hyper-connectivity

This session led by Dr Michael Frenzel (see his presentation on pages 15-22), looked at

the positive and negative impacts of increasing linkages - electronic, physical, opera-

tional and institutional - it pointed to the inevitability, the challenges and the massive

opportunities. It suggested the principal directions that the industry and its stakeholders

should be seeking.

There are many fundamental aspects of connectivity aviation hubs; intra-sectoral

connectivity between air, rail and road; regional and development linkages; computer

and internet connectivity; business connectivity and commercial links, as well as peopleto people connections. There is the whole travel and tourism value chain and its reliance

on seamless connectivity for product, experience, promotion, payment and operational

dimensions. There is the growing reality of 24/7 connection, multimedia and above all

mobile connectivity. All of this driving the mega-trends of globalising, digitalising, com-

moditising and popularising. The connectivity driven opportunities are huge, but so are

the risks.

Dr Frenzel stressed inter alia:

The emergence of digital natives connected everywhere to everything

The wants/needs of the zapping generation will be determinants Accelerating pace of connectivity + shift to mobile & tablets + local sensing

The disruptive impacts and the winners ability to anticipate/adapt

Videoconferencing/holographics to change business travel and perhaps leisure

The changing use of websites with peer review rivalling search

Digital is pivotal to customer contact and to create new business opportunity

Real experiences shared as they happen: twitter is king - short, sharp, precise

Big data adds a huge new potential

Everyone is empowered, but no one is in charge

Risk is heightened because of cyber-attacks and system interdependencies in the

cloud-based economy

Hyper-connectivity must also serve society:speeding flows, encouraging mobility,

boosting education & supporting sustainability

There was strong support for the analysis with the following issues noted:

Different solutions are required for different types of customers and their needs

New demographics and 2 billion extra urbanizing consumers to be factored in now

Customers want ease and satisfaction they know they have options

Real experiences are becoming the status symbols of the future and customers a shar-

ing these constantly

They want experiences and collaboration to find, enjoy, share

Margins are too thin across the sector There will be much more consolidation. Business models must change radically -

adapting processes for digital linkage.

Technology is making entry barriers in our industry diluted, attacking profitability

zones, disrupting business models of our industry, changing job descriptions


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Risks include cloud disruption, reputational, trust in data security We can and must learn to adapt faster take advantage of other sectors skills

Beware relying on China - numbers are huge, but near neighbours get the bulk

Overcapacity in austerity age; is new growth in right place to help?

Asia/Africa/M.East/Latin America will be epicentre of new growth triangle

Supply side: Europe as museum vs. contemporary culture

Content will be king it is controllable, but only to a degree no full product line

Kids are connecting from birth, talk a new language, live virtually & hardly write

Carbon issue will be solved over time but at big cost, taxes and regulatory jungle,

with possible consumer behavioural change

Growth will have to be smarter to meet evolving environment/climate norms

Nations will continue to struggle to adapt and to keep tourism leadership

Europes future is bleak for next 5 years; Russia also challenged; slow-down looming

in some emerging markets

Bridging the Silos

This session, led by Marthinus van Schalkwyk, explored the consequences of frag-

mented policymaking in a transversal sector like travel and tourism, that links to

transport, heritage, infrastructure, security, employment, energy, environment and

taxation strategies, at local, national, regional and international levels.

The intervention covered a line of thinking he has been articulating for some time that

the most interrelated elements of the Travel and Tourism sector both public and pri-

vate sector - must have a far greater degree of policy and strategy alignment if we areto play the leading edge socio-economic role that the sector is capable of.

Minister van Schalkwyk made the following specific points:

The government/citizen relationship will revolutionise with hyper-connectivity

Personal digital identities in the travel and tourism value chain will change the tradi-

tional division of labour between ICAO and UNWTO

Two most prominent sets of silos: Tourism and Aviation; Tourism and Development

Global socio-economic and climate challenges demand system linkages

National/international recognition of travellers to intensify as systems integrate

South - South intersects will become of greater significanceA billion middle class Africans lifted from poverty will be a major new influence

Travel & Tourism cant take advantage with traditional policy silo blockages

Government and Sector structures will need big changes to function well

Multilateral institutions face increasing challenges in coping with complexity

Minilateral and Regional frameworks will strengthen and integrate; G210 is key

Tourism institutional linkages need better structures and a coordinated voice

Aviation is a particularly important case in point as a key driver for the sector

Archaic legal regimes urgently need modernization to align with value chains, e.g. Chi-

cago Convention bilateralism

Tourism Development Financing needs a big rethink; Total ODA is $130 billion with on-

ly some 0.09% for Tourism; that for sector that contributes 9% to global GDP


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There was strong support for the analysis with the following issues noted:

Key challenges of policy inadequacy, conflict and duplication noted

Not just tourism but in related sectors transport, security, environment, trade

Statistics, standards and policy inconsistency recognized

Tourism Ministers often not in Cabinet and short duration position

Green Growth needs open cross -sector interfaces with strategic mind-set

Taxes will increase - creative thoughtful solutions needed for fair treatment

The T20 approach needs to be continued and extended at least to Transport

Other sectors well-organized; tourism preaches to itself

In formalising informal travel and tourism coalition, more bureaucracy isnt needed

but some formalised rotating as organisational principle useful.Focus at strategic level, separate from operational. Beware old boys syndrome - there

are new audiences

Coalition initiative needs thinking through for hyper connected era

One voice perhaps means coordinated messaging on selected key issues

One single objective: not always single voice, but many voices in diverse world, one

message! Multiple voices with one message

Top level messaging necessary, but what about base of the pyramid

Lobbying and advocacy on behalf of the industry, ministers are isolated in their coun-

tries, lonely ministers syndrome

Need clear strategic focus e.g. ATAG (Air Transport Action Group)

WTTC and TERN (Tourism Emergency Response Network) good examples of usefulcross industry action

New ICAO/UNWTO relationship is an important element

WEF cross-industry linkages should be recognized and factored in

Think Tank useful strategy platform need to take it forward unbureaucratically


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Presentation Dr Michael Frenzel


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