BU L7 The Tourism and Hospitality Industries
Introduction
Tourism is the combination of economic, social and cultural phenomena which encompasses the interrelationship among institutional, geographical and humans which allows the movements of people across the globe within and outside of the native country. The components of the tourism system are attraction, accommodation, accessibility, amenities and activities which entail lodging, food and beverages, destination travelling, adventure, exploration and recreation. In this report, the in-depth analysis of Scandic hotels in Nordic countries regarding technology and innovation, market range, key players, external environment, and crisis management with a futuristic overview will be discussed briefly.
Exploration of the smart technology and innovations in Scandic hotels
Scandic hotels incorporate different technologies in the business operation for increased accessibility and customer satisfaction through smart engagement with the hotel rooms, and other services as well as travel and tourism. Mobile lifts for wheelchaired guests, vibrating fire alarm clocks for impaired hearing people, braille hotel factsheets for blinds, and non-allergenic garnishes are used in foods for allergic people (Referred to Appendix 1). Technological innovations are paving the exotic experiences for the customer in all stages of travel where smart environments are transforming the tourism ecosystem with structures, management, strategy, marketing and competitiveness (Buhalis 2019). Scandic hotels use the software of Microsoft 365, Customer relationship management (CRM), Human Capital Management (HCM), infrastructure as a service (IaaS), IT Service Management (ITSM) and Platform as a Service (PaaS) to innovatively engage with the customers. The development and growth of the tourism industry are highly contributed through information and communication technology to become connected with customers from global spheres through digital marketing campaigns (Maurer 2021). Further, Scandic hotels and its employees are using On-Prem and cloud applications to coordinate the tourism services and it is also keen to invest in the latest technologies such as AI, IoT, machine learning, automation, blockchain, Cloud-based ERP and autonomous databases.
Figure 1: CRM software usability in the Tourism industry
(Source: Maurer 2021)
Furthermore, the use of technological emergence has greatly influenced business affairs in the hospitality and tourism industry where internal applications and business partner systems remain interconnected and interoperable to offer an agile hospitality ecosystem (Buhalis and Leung 2018).
Analysing the market range attracted by Scandic hotels
Scandic hotels are one of the largest hotel operators in the Nordic countries of Sweden, Finland, Denmark and others which consist of about 280 hotels along with 58,000 rooms in operation as well as under development across six countries (Scandic hotelsgroup.com 2022). Nordic countries refer to northern islands in the Scandinavian language and remain at the northernmost habitable places on earth with its exclusive locations and extraordinary environments that welcome folks from all around the globe each year. These countries also offer splendid natural phenomena of Aurora Borealis which has captivated the people for millennia. The Scandic hotels are popular for attracting corporate customers as well as leisure travellers which also witnessed a high share of repetitive customers where business travellers accounted for around 70% of the revenue income for the hotel group (Scandic hotelsgroup.com, 2022). The customers are primarily domestically based as well as experiencing the flocking of international customers from Russia, Germany, the UK and the USA. On a different note, personalization in products and services derives the co-creation of value and willingness to pay for the guests which is developed through the customer purchase behaviour and expectations for personalisation.
The Nordic hotels are attracting the markets for all kinds of tourists in the hotels and avail state-of-the-art services to accommodate with exclusivity. Family explorers, budget adventurers’ relaxation seekers, relation seekers, delight seeker and must-have customers are the different types of tourists engaged with the hospitality and tourism industry and revenue managers are developing effective pricing strategies for all kinds of customers (Tomczyk et al. 2022). The market attracted by the Scandic hotels is generally middle and upper-income group people from the international customer base where it gave exclusive accommodation for the business person with rooms for meetings and conferences.
Key-players analysis within the market
Scandic hotels is a multinational hotel chain which provides accommodation and dining services to its customers in the Nordic nations and five cities in the European mainland and is headquartered in Stockholm. The key players within the market identified as the competitors of the Scandic hotel are the Regent Hotels & Resorts, TFE hotels, Hersha hospitality trust, Airbnb, Dalata hotel groups, Rixos hotels, choice hotels, stay app and Marriott. These are the potential market players in the Nordic areas to help the tourists with accommodation services and make a profit share through availing customer needs and preferences. Scandic hotel groups are facing tough market competition from the above-mentioned competitors in attracting the customer base largely to actualise the market revenue extraordinarily. The company revenue is majorly earned through restaurants, rooms and conferences which competitively advance the organisation over its competitors. Key market players are also engaged in active marketing and adopting of technologies and innovations to exceed the customer footfall compared to the Scandic hotels and developed contemporary strategies to gain market superiority.
The elementary approach of the external environment and management during a crisis
Porter’s five forces analysis
Bargaining power of suppliers
The bargaining power of suppliers is evaluated as moderate in response to the hospitality industry player Scandic hotel chain where suppliers of raw materials for food and beverages, building materials, as well as technology are highly available in the market. The Scandic hotel has to coordinate with a multi-supplier group to build smart and exclusive accommodations for its customers aligning with quality materials and technology. It may be argued that the relationship quality between suppliers with the hotel mediates the quality performances from the supplier through supply chain integration (Le et al. 2021). Scandic hotel has maintained an effective relationship with its suppliers to mediate the business operation in a healthy manner to accommodate the amenities and smart ecosystem in its hotels for the customers.
Bargaining power of buyers
The bargaining power of buyers in the Hotel Industry is evaluated as low and customers have to pay as per chartered amount to avail the accommodation in Scandic hotels in both online and offline bookings. The customers may compare the pricing strategy with its competitor to gain the market trending pricing for booking accommodation both for domestic and international tourists. The Scandic hotel chains are largely dominated by business professionals for their state-of-the-art accommodation in corporate affairs in the hotels. It has been evident that the emergence of information and communication technology has highly altered the individual perception of the availability of technology and the internet to connect the home while experiencing the destination helped tourists to adopt the pricing strategies (Fan et al. 219).
Figure 2: porter five forces analysis
(Source: Le et al. 2021)
Market rivalry
Market rivalry is evaluated as high in the Nordic countries for the Scandic hotel where availability of other hotel chains and groups are competitively operating to gain the market return with high revenues through customer satisfaction. The market is full of close competitors of Regent hotel and resorts, TEF hotels, Marriott international’s, Airbnb and others and continues eating the market share from the Scandic hotel in terms of profit. It may be stated that the sharing economy innovations for accommodation in Airbnb pose a strong threat to the existing hotel industry in the Nordic region and the hotel industry also trying out the changing market trend and technological emergence to gain sustainable competitive advantage in the hospitality industry (Savolainen 2018).
Threats of substitutes
Threats of substitutes are accounted as high for the Scandic hotel due to the emergence of home-sharing innovations as well as the high availability of substitute accommodations in the market. Substitute products though not equally perfect for the corporate personnel in conferencing or meeting where the travellers coming to explore destinations prefer the low-cost sharing accommodation and thus Scandic hotels lose the potential customer. Other competitors rather than home sharing business Airbnb also confidently market the accommodation, amenities and accessibility to draw the footfall of customers from domestic as well as the international market. Thus the high threat from the substitutes immensely motivated the Scandic hotel to modernise its business operation to offer flexible leisure as well as corporate work in its hotels with next-gen facilities to attract the customer effectively.
Threats of new entrants
The threat of new entrants remains low for Scandic hotels in the market operation due to its required investment and business relationship with the suppliers and marketing efforts. The new entrants have to accommodate its operation through cognizance and marketing effectiveness in comparison with the Scandic hotel which is already established and made its name through business engagement and corporate decision-making of mergers with international business players.
Crisis management and Resilience
Crisis management is highly required for businesses to become responsive during crises and make business operations consistent where the hospitality industry institution Scandic hotel also faces a crisis in the recent Covid-19 period. A crisis is inevitable and uncertain and thus organisations built the crisis management strategy with resiliency to actively mitigate the vulnerabilities of crisis and aptly made strong businesses through the crisis. Covid-19 has witnessed the complete closure of both domestic and international transport and has adversely affected the hospitality industry in the Scandic hotels too. Real-time response is an effective and integrated strategy which helps policy makers and tourism managers to build destination resilience through interconnectivity, emerging and smart intelligence and growing interoperability (Bethune et al. 2022). Crisis management in the hospitality industry largely comprises the preparedness, response, recovery, mitigation and prevention strategies to become resilient and actively operative by discarding the business vulnerability. Unexpected Covid-19 pandemic outbreaks, terrorist attacks, rising sea levels, and landslides are the main reasons behind the crises in the hospitality industry and therefore crisis management and building resiliency are significant for responding immediately to crises and enabling to address potential long-term challenges. On a specific note, real-time services are effective in dynamic engagement with the connected consumers by integrating the technologies of real-time consumer intelligence, artificial intelligence, and dynamic big data mining and contextualise to enable the transformation of service co-creation through mobilisation of resources (Buhalis and Sinatra 2019).
Figure 3: Crisis management
(Source: Bethune et al. 2022)
Stakeholders’ engagement during the crisis is significant to build resilience in the hospitality industry comprising both the internal and external stakeholders as investors, shareholders, regulatory authorities, board of management and employees to satisfy customer expectations. The hospitality industry is highly required of resilience building and crisis management where crises eventually stalled the business operation of hospitality management during the Covid-19 outbreak with full-scale adversities. Employee health and well-being, customer engagement, maintaining hygiene, and relationships with suppliers are crucially blocked at the point of Covid-19 when smart technologies came as saviours to lead through the crisis. Corporate decision-making, direction and investment in the health and well-being of employees are potentially helping the Scandic hotels to build resilience and improve in the post covid era to deliver effective business processes. Building smart hotels, building a Scandic e-commerce platform, marketing with minimum budget, and influencer and social media marketing are taken to deal with crises in Scandic hotels for building resilience to biome highly responsive in market operation (Zhang 2021).
Analysis of the impacts of Covid-19 pandemic within the tourism and hospitality sector
Health
The tourism and hospitality industry was the most afflicted sector at the time of the Covid -19 invasion with the largest threat to global health conditions (Kumar 2020). Precisely lump sum numbers of fatal scenarios in travel and tourism on an international basis that denotes the health impact of the pandemic. The quarantine and lockdown phases have also impacted the tourism and hospitality industry with the factor of health scenarios. Most of the travellers have initiated plan cancellations for the perils in health that also influenced the travel and hospitality sector negatively.
Economic
The fall of Gross Domestic Product as a consequence of the massive spread of this pandemic and the subsequent lowering in the per capita income of different countries are also major impacts on the hospitality and tourism industry. The government of Indonesia went through an enormous loss of $500 million during that period pandemic surrounding the tourism and hospitality sector (Dinarto et al. 2020). The revenue and supply chains in the tourism sector are yielded from the economic shortcoming raised by the pandemic situation along with the closing of the hotels and theme parks that impacted the income and economic scenario in both the tourism and hospitality industry.
Socio-cultural
The values, beliefs, and cultural ideologies that are held by society changed overnight when the pandemic occurred and given the socio cultural impact of the pandemic on the tourism industry (Üngüren and Güçlü 2021). The socio-cultural constraints of racism and xenophobia also took place at the time of the Covid-19 surge and the global tourism and hospitality industry was also unable to escape. The thought of contagious transmission made people afraid to make proceedings or mix socially on which the tourism and hospitality industry leans on, thus lockdown and social distance affected the socio-cultural side of the tourism and hospitality sector.
Environmental
Animals like pangolins were one of the biggest carriers of the virus that is responsible for Covid-19 and that gives a deep impact towards environmental sustainability towards the willing visitors resulting in restrictions in the tourism and travel industry (Refer to Appendix 2). The discarding of disinfectants, gloves and masks along with disposable waste from medical organisations are also some of the environmental impacts towards the tourism and hospitality industry. The factor of reduced economic scenarios has brought major impacts on the hospitality industry revolving around the lessening of tourists and travellers.
Evaluating the effectiveness of innovation and smartness for the resilient recovery of the tourism and hospitality industry
Innovation and smartness are already paving the way for the resilient recovery of the world business as well as the tourism and hospitality industry with emergent technologies with increased connectivity and interoperability. The stakeholder’s engagement through technological tools and artefacts significantly influenced the hospitality industry through self-services and innovative customer engagement to build smart ecosystem-based tourism. Social media applications and destination website presence propel the e-destination approach to improve the tourism and hospitality industries’ operation to make recovery through making connectivity with global populations (Buhalis and Wagner 2013). The Scandic hotel has adopted the latest technologies by purchasing the software of CRM, HCM, Iaas, ITSM and PaaS to recover through smartness and innovations to engage with customers and make growth through transparent end-to-end visibility in stakeholder engagement and decision making.
Technological integration and the use of big data analytics are helping the business operation to effectively direct the business process through data-driven decision-making in marketing accuracy and developing interconnected business frameworks (Buhalis and Volchek 2021). The intra-process communication, flexible interoperability, employee adaptability and customer convenience helped the Scandic hotel to recover through the menace of Covid-19. Specifically, communications among the stakeholders during and after the crisis are effective to develop the resiliency strategy by the leadership and management through the decision making and employee adaptability. Building a smart ecosystem in the hospitality industry is the grace of technology and innovation which helped the hospitality and tourism industry to effectively recover from the crisis at different times. The self-services hotel rooms, contact-free equipment, regular health and hygiene examination and prevention protocols, medical assistance with AI and automation-enabled services less harming for the customer and build confidence in the customers which is experienced through repetitive transactions.
Futuristic overview of Scandic hotels from realistic emergence in the global market
Scandic hotel is confidently operating in the Nordic countries and is eyed for making a presence in other European cities to expand globally and maximise profit generation with customer satisfaction and employee adaptability of technology for smart services. In the coming future, the influence of globalisation and technological emergence will become the more significant aspect for the Scandic hotel to adopt and reflect for availing the smart services for increasing customer convenience and satisfaction with the use of social media and influencer marketing. The company is planning to adopt different technological innovations such as cloud ERP, AI, machine learning, robotics, IoT and automation to coordinate the services through technological means to develop the customer experience in an exclusive way. On the other hand, Big data analytics and data mining help the organisation to effectively acknowledge the potential customers from the global sphere and do marketing of the Scandic hotel to attract the customers and enjoy high footfall of customers. These technological incorporations along with online recruitment and HRM process will help the organisation to build a sustainable competitive advantage on or before 2030 as a futuristic overview. Training and development of employees, better legislation and regulation, successful e-business models, and improved online access are the futuristic trends for an improved business portfolio for the hospitality and tourism industry a better perspective (Costa et al. 2013).
The conceptual framework has been done stating the coordination of independent and dependent variables of the management of the crisis and proper resilience. The utilisation of another set of independent variables may also be done for the empowerment of organisational recovery of Scandic hotels by the year 2030 with the support of technologies and smart approach of the TFE hotels, resorts and Regent hotels. The resilience of the smart narrative of technical orientation may also be achieved from the learning of post Covid-19 situation along with the external environment of Scandic hotels analysed from porter’s five forces consolidated with the independent factors of technical innovations (Refer to Appendix 3)
Conclusion
From the above report, it may be concluded that the usage of smart technologies and innovations in the Scandic group of hotels was explored. The analysis of attracting market range by Scandic hotels and key players of the market was also done followed by the environmental analysis by Porter’s five forces. The management of the crisis and obtaining resilience was explained with the effective need for smart and innovative technology in the tourism industry consolidated with the impact of Covid-19 in the tourism industry.
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