Preparing and testing future scenarios allows your leisure and hospitality organisation to respond more effectively to greater uncertainty into the next 10–20 years.
In 2023, we shared our WTW Leisure and Hospitality Futures Report, commissioned to understand the risks, mega trends and strategic issues likely to affect trading for the leisure and hospitality (L&H) sector over the next 10 years.
WTW partnered with Mack Institute’s Collaborative Innovation Program (CIP) at the Wharton School, University of Pennsylvania, and forward thinking inc. to analyse the dramatically changing conditions and the equally profound responses of the sector to emerging trends.
Successfully exploring these emerging risks and developing your organisation’s response can give key teams the ‘muscle memory’ of working together to address new, complex and inter-related risks. By deploying narrative ‘storylines’ that weave together risks and trends, you can connect risks and opportunities you might otherwise have considered in isolation.
This process of developing nuanced storylines and scenarios is about identifying who should be involved in your response and the breadth of capabilities you can bring to interrogate and effectively respond to complex risks. This process can take time and needs to be nurtured and constantly refreshed to be effective. But the potential rewards, in terms of enduring resilience and competitive advantage, should outweigh this time investment.
So your leisure and hospitality can outsmart the uncertainties of the next year, next decade and beyond, this insight offers a headline framework for more effective scenario planning.
01
Do you test combinations? What risks have emerged already and what ones should you test, both in isolation and in combination?
02
Do you have disaster recovery and risk management plans that are fit-for-purpose in a polycrises (where more than one event happens simultaneously)?
03
How liquid is your business and what would a sharp shock do to your financial gearing? Has your business model changed recently? Can you put numbers against the point where your financial resilience would be under pressure?
04
What are your core objectives and what is stopping you from achieving them? How are you quantifying and monitoring resilience?
05
What could drive this damage and how could that impact revenues? What might you do to mitigate this?
Once you delve into these questions, you can start to build-out broader scenario sets and understand the potential impact of these scenarios. You can then work with internal or external insurance and risk experts to explore your options for mitigating, reducing or transferring risk.
Actions to address the impact of more nuanced scenarios that connect risk areas include:
Getting your preparation and testing of scenario mapped out allows you to switch from a ‘prepare for one’ approach to ‘prepare for all’ stance. This will give you the agility and collective memory that allows you to activate a robust framework as new risk impacts emerge. It’s this discipline and collaboration that could characterise the most successful leisure and hospitality businesses into their enduring future.
For a smarter way to navigate the emerging and increasingly inter-related risks impacting the leisure and hospitality sector, get in touch.
