EHL Institutional Visibility asked its 200-strong faculty members what the most newsworthy event was in 2023. In no particular order, this is what they said.
One of the biggest acquisitions in the fast food industry occurred when Subway, the almost 60-year old family-owned company, put itself up for sale for $10 billion in February. Six months later, Roark Capital, a private equity firm, offered $9.6 billion, conditional on regulatory approvals and some cash flow targets to be reached in the coming two years. Subway was one of dying breed: a family-run multinational F&B company.
Dr. Cédric Poretti, Associate Professor of Accounting
Louis Vuitton named rapper and music producer Pharrell Williams as the new Men’s Creative Director, which is quite special and significant for 2023. For over two decades, Pharrell Williams has been known and celebrated throughout hip-hop, pop and has even made music for some of Disney’s most successful films (Minions). This follows the rather unsuccessful hook-up between Adidas and Kanye West. Both partnerships are clear examples of the spending power and influence of Urban culture in the world of luxury.
Madafi Long Pierre, Lecturer in Business Communication
In June, Park Hotels & Resorts decided to stop paying their mortgage and give up equity ownership in two major San Francisco hotels – Hilton San Francisco Union Square (some 1,921 rooms!) and Parc 55. Giving up ownership in these trophy assets was a remarkable step, yet a sound financial decision, as the hotels were essentially worth less than their mortgages. The revenue per available room of the two hotels was down about 50% from 2019 levels. For comparison, Park's hotels in New York were expected to be down 2% or less this year, compared to 2019. Around the globe, businesses continue to desert city centers. The severe impact of the pandemic on San Francisco's hotel sector was one of the main causes, alongside a raft of other woes, of the decision. A staggering 30% of the homeless population in the United States lives in California.
Dr. René-Ojas Woltering, Associate Professor of Real Estate Finance
In January, Accor Group announced it had commissioned the construction of the Orient Express Silenseas, a cruiseship that it is expecting to launch in 2026. So what’s the big news? The “sailing ship” is an environmentally-friendly three-masted schooner. Generally, cruise ships are associated with pollution and overcrowding (see Venice) rather than a sustainable vacation.
Dr. Alessandro Inversini, Associate Professor of Marketing
In September, the EU parliament voted to promote the use of Sustainable Aviation Fuels and synthetic fuel. In 2050, jet fuel will consist of 70% of SAF and 30% kerosene. Corn-based ethanol is being used as an SAF, but corn requires copious amounts of water. Nevertheless, the Parliament’s decision seems like good news for the environment!
Igor Sekulic, Lecturer in Business Communication
The arrival of Chat Generative Pre-trained Transformer (A.K.A. ChatGPT) is reshaping life as we know it – or at least how we read and write. Its launch on November 30, 2022 paled in comparison to the impact it had in 2023, when it took the world by storm. The technology could be transformative across all industries, including hospitality. While it is unlikely that a gourmet chef will be using an AI-related recipe, repetitive back office hospitality jobs like staff timetables, replying to online reviews, revenue management tasks are already greatly benefiting from AI assistance - leaving the taskforce freer to concentrate on real life service and personalization.
Ian Millar, Senior Lecturer of Business Creativity
Chinese tourism in most destinations around the world has dried up. Pre-covid, China ranked #1 in terms of outbound tourism spending (Chinese travelling abroad). Although the Chinese government eased its zero-Covid policy in early 2023, it will take time for people to want to travel abroad again. Today, it ranks ninth in Switzerland, for instance. The precipitous drop stems from myriad factors: geopolitical turmoil, domestic economic slowdown, delays in visa processing, lingering Covid fears, and a property crisis. Outbound tourism in 2023 is estimated to be about half of 2019 levels.
Dr. Yong Chen, Associate Professor of Economics
Inching towards the 10% mark, inflation in the European Union was cause for concern in 2023. Cost increases for hotels and restaurants was a solid 10%, which forced many establishments to increase their rates and prices.
Dr. Thomas Davoine, Assistant Professor of Economics
On January 1, 2023 Cristiano Ronaldo agreed to play for the Saudi Arabian football team Al Naser for a reported annual salary of some $200 million, making the Portuguese striker the highest paid athlete in the world. Critics call the practice of spending lavishly on sports (e.g., Olympic Games, football World Cup) to distract from poor human rights record “sportswashing”. Countries around the globe, particularly in the Middle East (e.g., Qatar) are betting heavily that sports will attract tourism dollars and diversified economic development.
Eric Doerr, Senior Lecturer in Service and F&B
The pioneering peer-to-peer rental agency faced headwinds from multiple directions in 2023. With affordable housing increasingly rare and the hotel lobby in an uproar, more and more cities are banning or restricting P2P platforms. Owners are struggling to rent out their units and putting them back on the long-term rental market. And tourists are fed up with unpleasant experiences, exorbitant cleaning fees, among other issues. In a candid interview in October, AirBnB CEO Brian Chesky stated "We need to get our house in order".
Dr. Cindy Heo, Associate Professor of Revenue Management
Overtourism has reached new heights (or lows) and spawned the term “revenge tourism”. Post-pandemic, the world is unleashing its pent-up wanderlust and bursting travel budgets. Tourists are on the move again… and with a vengeance!
Tourists behaving badly – Gondola tips over in Venice because tourists wouldn’t sit down and stop taking selfies.