Reflections: David McMillan

By Staff -- HOTELS Magazine, 8/1/2006

David McMillan, CEO, International Hotel & Restaurant Association

Mass travel was born post-World War II, but it wasn’t until 20 years later in the mid-1960s that air travel took baby boomers far and wide. At that time, European managers dominated the global hotel industry. Soon the brands were born, and American travelers followed their expansion worldwide, seeking home comforts and familiarity. Within the industry, sales and marketing skills were weak, as supply was barely keeping up with demand. Institutional design prevailed, and owners were not involved.

Moving on to the 1980s and 1990s, the world was changing as the Iron Curtain fell, China reformed and a middle class began to emerge in India. Eastern Europeans and Asians flowed into the hospitality workforce, while the American market matured, and guests began to seek unique hotels and adventure destinations. This resulted in a gradual deterioration of the old brands and the first wave of the new limited-service hotels and “character” hotels, as well as new alternatives to boring hotel dining. In developed countries, staff and skill shortages became an issue, even as employees began to be referred to as“associates” and “cast members.” The various downturns became upswings and bred productivity and innovation, such as lobbies becoming bars.

The new millennium was marked by the rise of new technology and new brands to replace the old. Tired brands were either renovated or engulfed by holding companies. Owning customers through loyalty programs became a critical strategy, and the business underwent a shift as bricks were separated from brains with management contracts favored to owning real estate. At the same time, owner participation has become widespread.

Today, the world continues to change with former communist states embracing tourism, and Asian hotel management exploding. Low-cost air carriers are opening new destinations, and travelers today are more savvy, with the Internet providing them the power of information. At the same time, new travelers are entering the market with the rise of domestic and outbound tourism in China, in turn giving rise to Chinese brands. Older, institutional brands are diversifying with new fashion and lifestyle concepts, and the ideas of social responsibility, community involvement and energy efficiency have finally taken hold as important business concepts. Hospitality has become a global, multicultural, sustainable entertainment industry. Not only is the whole world watching, but the whole world is participating.