Andrew Robb, the Minister for Trade (whose portfolio covers tourism) recently spoke at the TAA Conference on the future for the Tourism Industry. He touched on a number of topics but two evergreen perennials of tourism and hospitality events tended to dominate: staff costs and the need to encourage people to make a career in tourism.
I’ve written on this subject previously in this blog. But given the perennial nature of this topic I thought it might be worth revisiting.
The first thing that strikes me is that these two issues are frequently aired together, but scarcely anyone seems to have spotted the potential disconnect between the two. Or if they have spotted the elephant in the room, they haven’t acknowledged it. (One brave exception was a hospitality panellist at a TTF Conference in Sydney a couple of years ago – to the stunned silence of the room.)
The Key Is To Talk Productivity Rather Than Wages
One of the reasons young people don’t want to come into hospitality on a long term basis is that competitively speaking it is poorly paid. The mining boom exacerbated this but the problem existed before that and will exist after it. So whilst we can improve our cost competitiveness by lowering award or penalty rates, any straightforward reduction that is likely to be electorally achievable is neither going to make us fully competitive with other destinations in our region nor is it make a career in tourism or hospitality more attractive.
As a result we need to think more innovatively about how to raise our competitiveness at the same time. This isn’t a unique problem to Australia – almost all advanced economies with strong welfare systems face the same challenges. I’m not saying ignore it (countries like France with high levels of youth unemployment demonstrate the drawback of that) but we need to look at the structure of schemes as well.
The current structure militates against older workers coming back into the industry to take front line jobs and we need to think about addressing it. But we also need to deal with the culture that doesn’t value the live skills and experience older workers can bring with it. Studies in call centres in the UK demonstrated that whilst older workers had a lower throughput of queries, they got better outcomes in terms of customer satisfaction with flow on effects to
But beyond this, I still think we aren’t looking consistently enough at other tools to raise productivity. In my earlier blog piece, I mentioned the opportunities that technology can deliver to free staff up to work productively – but I see far less discussion on this issue. Incidentally, this is something which is much more fully within the industry’s control than penalty rates.
Not all productivity gains have to be technology driven. When staying in China last year I came across an offer made by Starwood Hotels that really impressed me via their Green Choice program. Focused on being a green deal, it offered me a coffee voucher for use in the hotel in exchange for not having my room serviced every day. It got me to thinking – did I really need it serviced (actually no – it meant I could get my head down on some much needed work without being interrupted). Besides reducing the environmental impact, if properly promoted it cut the requirement for cleaning staff – and promoted traffic to the restaurant. Because once there I used my ‘saving’ to have something with my drink.
I’m not claiming these are definitive answers to the challenges of competitiveness we face. But I am saying we need to be debating them and sharing best practice on innovation more often. What if we made it a rule to devote as many column inches, conference time and industry focus to these issues as to staff costs and tourism careers? I’d be willing to bet we’d end up in a lot better position...
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