The Hospitality Industry’s COVID-19 Ultimatum: Evolve or Die

Tourism and hospitality are facing deconstruct. The chaos is being amplified by the rudderless marketing mayhem created by a throng of self-promoting quasi-experts. It’s time for the industry, and all its stakeholders, to create a serious forum of leading thinkers. COVID-19 will either be a catalyst for the rebirth of these industries or the last gasping breath for failed ideas. It’s time to get serious about what sustainable business is.

Yesterday, I wrecked technology service provider Revinate for running a half-hearted campaign of self-promotion during a time of crisis. Today, in fairness to the software provider, I scanned the hospitality sector to find other examples of misdirected posturing. I’ll admit some surprise at having found an entire industry completely oblivious to what is really going on with COVID-19.

Look at this report from Hospitality Net entitled “COVID-19: A stress test for sustainable development in hospitality?” 22 industry experts weigh in on the question, but very few industry experts has the slightest clue what sustainable really means. A collection of professors and tech providers, hotel CEOs and even environmental experts totally miss the most critical moment of the 21st century. Only a couple of the experts HN has assembled seems cognizant that sustainability is not solely an environmental issue.

Wise Assemblages

Franziska Altenrath, who is Co-Founder at procurement innovator TUTAKA, questions the validity and focus of the HN segment too. The former marketing executive of Daimler AG observes:

“Comparing the current Covid-19 crisis to a prospective climate crisis solely on the basis of both being crises does not make sense to me. It is more than obvious that each crisis has its own character, cause, and outcome. It is true that both have a serious impact on the hospitality industry, but, would we call it a crisis otherwise?”

Altenrath (at left) goes on to tell how the hospitality industry is vulnerable and dependent on what she calls “a stable, liberal and healthy world community.” She does not, at any point in her statements, disconnect sustainability from the systematic economy or people. While the rest of the panel dives into “green” buzzwords and the marketing construct of sustainable hospitality, Altenrath’s compass seems to point northward to consumerism overall. Her ideas are a departure, as they should be.

While professors like Jonathan Day at the School of Hospitality and Tourism Management cite others and recite as verbatim the plainly obvious, only a very few industry experts understand that tourism and hospitality will be fundamentally changed by this pandemic. Day writes as if he’s selling an industry-changing college course in Green PR:

“While “covid-19 may be climate change at warp speed” (Wagner, Mar.10, 2020), perhaps the most important thing is to remember that we’ve known about the risk of both climate change and a global pandemic for a long time.”

Meanwhile, Willy Legrand of IUBH International University comes closer than most, by stumbling over the elephant in the Hospitality Net room. He writes as if he’s assumed the lotus position in a fog in incense, about the day after COVID-19. His words are prophetic compared to the others. He claims the industry has:

“A chance to bet for the long-term; set the record straight and have the courage to recognize what must be changed. The Guardian will “no longer accept advertising from oil and gas companies” (29 Jan. 2020). What will our industry change wake up from this current chaotic situation?”

“What” indeed? Competitive advantage is high on the list of positive thinkers in this group. Operating costs and efficiency dominate the advice of others. And then the philosopher king of this group stands up. Jan Hein Simons, who’s the Managing Partner at MRP hotels explodes a reality bomb in the middle of the HN discussion.

“As long as we continue to predominantly focus on the linear economical model of growth (for shareholders), we disregard the fact that our earth is a ‘closed system’ (=circular), in/on which resources are limited and cannot be mined endlessly while many stakeholders are excluded.”

BAM! I have not been dreaming. There are visionaries out there who understand all industries have to change if we are to survive. COVID-19 is the wakeup call, for the world to crack open the next paradigm shift. Business as usual, as my old friend Brian Solis, the Digital Darwinist would say:

“Brands are either part of the conversation or they’re not and as a result, they’re either part of the decision-making cycle or they’re absent from the heart, mind, and actions of the connected customer.”

Make no mistake, the coronavirus pandemic, the economic depression that is happening because of it, have already fundamentally changed our customers – forever. The MRP hotels partner continues with:

“When we actively become sustainable in our approach to life on this world and our sane use of resources, we’ll be glad (and smart) use different yardsticks to measure our success and free up time to avoid pandemics such as Corona.”

Momentum Is Not Perpetual

Consumerism, perhaps even capitalism overall, is simply not sustainable. In fact, the economics of the last two hundred years were never really healthy at all. This New York Times story from the time of the Reagan administration reveals the seesaw battle of systemic futility that keeps modern democracies in limbo. “The Case for Consumerism” puts Reaganomics on trial:

“Mr. Reagan’s regulators have now spent two years dismantling the very regulations that in prior incarnations as corporate lawyers and lobbyists they had opposed. With all the subtlety of Mayor Jane Byrne clearing the snowbound streets of Chicago in an election year, they have set to work plowing up the national framework of consumer regulation. Their deregulatory plows are fueled by an admixture of free-market ideology and corporate sycophancy. Consumers are merely bugs on the windshield.”

The seesaw continues to squeal as President Trump denies the painfully obvious. Climate change, expensive oil, killer diseases, anything not super-consumerist is simply “fake” – the enemy. There are hundreds of scholarly articles about how our current systems are doomed to failure. There’s even a physics equation to show that capitalism is inherently unfair and will produce a world full of ‘sad’ and disgusting inequalities.

Professor Adrian Bejan, who’s 30 books and more than 600 scientific papers, says fluid dynamics can explain how wealth in a free market system, naturally flows from the poorest in the small tributaries to the richest in the wide rivers. And the consolidation effect is about to get a lightning boost once 10,000 companies go bust over the pandemic. This is the quintessential stakeholder moment, that Jan Hein Simons hints at. This crisis is all-encompassing. The World Economic Forum reports:

“COVID-19 reflects a broader trend: more planetary crises are coming. If we muddle through each new crisis while maintaining the same economic model that got us here, future shocks will eventually exceed the capacity of governments, financial institutions, and corporate crisis managers to respond. Indeed, the “coronacrisis” has already done so.”

What this means, or what it should mean, is that individual industries must now consider the global spectrum, the entirety of our system. For it is certain new crisis are on the horizon if we do not.

Existing Means Adapting

Professor John Bellamy Foster wrote recently, “Capitalism Has Failed—What Next?” The piece on what the author called a planetary ecological “death spiral,” describes how the most recent technological paradigm has mutated. He goes on to insist that capitalism must evolve with “the revolutionary reconstitution of society at large and the common ruin of the contending classes.” Take heed, Foster may be a socialist, but this does not negate his arguments. And COVID-19 will either show the final pneumonia rasping breaths of independent hotels and travel entities, or signal a rebirth unparalleled since the dawn of the industrial age. This is my view.

Forbes contributor, Congressman Drew Hansen once said; “Capitalism has generated massive wealth for some, but it’s devastated the planet and has failed to improve human well-being at scale.” While I don’t agree with many of the politician’s views, his assertion that capitalism will starve us to death by 2050 unless it changes, is spot on. And the hospitality industry is at the epicenter of world economies. You don’t have to live in Greece, as I do, to realize this industry cannot go on as it has in the past. The big corporations that dominate our industry see 10 billion souls on Earth by 2050 as a growth potential! This is insanity. Jan Hein Simons says it’s irrational.

So, what’s needed for a rational strategy for going forward? First and foremost, if you are a leader of a business with nothing but self-promotion to contribute, sit in the corner and remain quiet. There is simply too much noise in the room. The elephant is not snoring anymore, and you are echoing the beast’s horrendous roar.

Let the real experts discuss what’s coming, and how best to overcome the pitfalls. When Booking.com emerges ten times more powerful as the dominant OTA, let’s hear ideas on how hoteliers can combat a monopoly. If TUI manages to get the German state to subsidize them, let’s hear discussion on how hoteliers and destinations can push back, against the invisible investor demanding a dividend. There is much to discuss. There are so many stakeholders. A shift in fundamental ideology is needed, clearly. And this can only be achieved in a refined summit atmosphere. We all know COVID-19 altered our universe. But that universe was already deconstructing. We need to evolve or go extinct.