The State and Evolution of Hospitality Industry Education
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1 The State and Evolution of Hospitality Industry Education Michael D. Johnson Dean and E.M. Statler Professor Cornell School of Hotel Administration South American Hotel & Tourism Investment Conference 2010 Cartagena, Columbia September 27,
2 Agenda 2 The State of Hospitality Education The Evolution of the Industry and Hospitality Education Segmenting the Hospitality Education Market The School of Hotel Administration at a Glance Learning on the Job: The Path to Leadership
3 The State of Hospitality Education 3 Hospitality Education began in the U.S. and Europe, where the market today is more mature. The U.S. market: Hospitalityschools.com directory includes 198 hospitality schools in the US alone. Campusexplorer.com search identified 319 hospitality management colleges and programs in the US. Gradschools.com directory includes 227 Master Degree programs in the US. elearners.com lists 23 online hospitality degree programs in the US.
4 The State of Hospitality Education 4 The number of schools and programs abroad is less clear given its rapid growth and evolution. Hospitalityschools.com lists 50 programs outside the U.S., but omits growth markets in China, India, Central and South America, and the Middle East. Rapid development of Chinese schools, along with the one-child policy, is shifting demand for education to domestic programs. Word of Mouth: There are 1,000 new hospitality programs in China alone. India will continue to export demand for hospitality education.
5 The Evolution: Growth of an Industry 5 When SHA started in 1922, hospitality was comprised of a highly fragmented set of individual businesses. First with hotels, and more recently with restaurants, t and now with gaming and other sectors, hospitality has become a more and more concentrated industry. As a result, the industry s educational needs have shifted and segmented.
6 Segmenting the Hospitality Education Market 6 Cornell Hospitality Leadership Emphasis: Place students on a path to hospitality leadership that extends well beyond their formal education. Hospitality Management Emphasis: Provide thorough training in operations and the business education required to become a successful manager. Hospitality Training i Emphasis: Provide thorough training in operations and front- line service management to staff a global industry.
7 Cornell SHA at a Glance 7 Degree programs: Bachelor of Science Master of Management in Hospitality Master of Science Program Ph.D. Program Culinary Institute of America Alliance (BS and AOS) Cornell-Nanyang Institute (MMH) Non-Degree programs: Professional Development Program General Managers Program Custom Programs Centers, Institutes and other Programs: Center for Hospitality Research Pillsbury Institute for Hospitality Entrepreneurship Center for Real Estate Finance Minor in Real Estate for Cornell University Hotel Leadership Development Program ecornell: Online learning suite of programs Blended Technology-Based Learning programs offered globally
8 Learning on the Job: The Path to Leadership 8 For students on the path to leadership, learning continues on the job. Three experiences are essential to becoming a critical thinker and business leader in today s global economy: Manage in more than one company. Manage in more than one industry. Manage in more than one culture.
9 Why more than one company? 9 Students today should experience how different competitors, with different business models, view and run their businesses. It is critical to the gestalt, or understanding of the whole business. Even in the same industry, or within similar market segments, business models vary substantially. Example: Should you own the hotel, operate the hotel, finance the hotel, and/or be a third-party service provider?
10 Owner-Operator Models 10 At its core, the hotel industry is about operational excellence and managing g real estate assets, with many different business models therein. The Owner Model: E.g., REIT (Real Estate Investment Trust) or Private Equity models. It s about asset management and timing the market. The Operator Model: Operating excellence (E.g., Four Seasons) It s about the brands and the fees they generate. The Owner/Operator: It s about attention to detail on a smaller scale.
11 Real Estate Emotions-Opportunity st Half nd Half
12 Sunstone Snares South Beach s Royal Palm Hotel Kris Hudson, WSJ August 18, Art Buser, president and chief executive of Sunstone Hotel Investors Inc., has said in recent months that the real estate investment trust will shift to offense after punting several underwater hotels back to lenders in the past year. On Monday, Sunstone prevailed at a foreclosure auction to buy the iconic but troubled Royal Palm Resort Hotel on Miami s ritzy Collins Avenue for net consideration of $117 million. The price amounts to $286,000 for each of the Royal Palm s 409 rooms. The deal signals a shift for Sunstone, which has forfeited several hotels to lenders in recent months after deeming them worth less than their mortgage balances. It intends to conduct a comprehensive renovation of the Royal Palm, but it didn t disclose an estimated cost or scope of that work.
13 Why more than one industry? 13 Hospitality is really a collection of multiple industries, all of which provide opportunities to learn and require a service orientation. It is myopic to expect that all of the innovations and strategic thinking will emerge from within any one industry. What lessons can be learned from: Commodity chemicals? Consumer packaged goods? Ecommerce? Financial i services? Retailing?
14 Why more than one culture? 14 Employment opportunities will be global, and require us to understand and embrace different business philosophies. Major growth markets for hospitality today include China, India, parts of Central and South America, and the Middle East. Europe will continue to be a major player, albeit with more mature competition and established competitors.
15 Interstate China 15 A joint venture agreement between Interstate Hotels & Resorts and Shanghai Jin Jiang International Hotels to create a platform for third-party hotel management in China. We believe e this will be a milestone in the development elopment of the services sector in Shanghai and China. Interstate will be the first independent hotel management company in China, which will give it a competitive advantage over companies that follow in its footsteps. We expect the Sino/U.S. collaboration will be mutually beneficial to both parties. Mr. Yu Minliang, Chairman of Jin Jiang Hotels
16 Develop your critical thinking! 16 These learning experiences are essential to developing critical thinking skills and becoming a better leader. Critical thinking involves: Asking the right questions. Gathering the right information. Coming to logical conclusions on sound criteria. Considering other models and challenging g assumptions. Working and communicating effectively with others to solve complex problems.
17 Conclusions 17 While hospitality education in the U.S. and Europe is more mature, the global l market is growing rapidly. As the global market evolves, so will its educational needs. There is no one model! Programs today vary categorically in their emphasis on training, management, and leadership. Increasingly, the path to hospitality leadership involves learning to manage and lead across multiple companies, industries, and cultures.
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