Traditionally, typical travel-related companies, such as airlines, cruise lines, buses, or trains, focused only on taking people from point A to B.

Currently, there is a greater emphasis on the traveler’s experience. Safety and fuel efficiency are top priorities at the airline level. But, the in-flight experience for passengers looks more focused.

Seats are getting better. Airlines are also working to improve the servicescape. These are the factors that influence how you feel, breathe, sleep, and digest.

Airlines are emphasizing the importance of the passenger experience with meaningful changes. They are looking for an onboard lighting solution to help passengers cope with jet lag. Travelers are unable to stand often, and food is difficult to digest. Airlines are now considering thoughtful meal options to help you feel better while traveling and avoid getting overstuffed.

Are you curious about these changes? Passengers arriving for a trip or in transit between two aircraft can use the new Changi Airport terminal in Singapore. This enhancement also attempts to appeal to the local community. As a result, they’ve created a one-stop shopping, entertainment, and event destination for all travelers. Airports, for instance, are no longer only concerned with safety and efficiency. They want to make a lasting impression on visitors.

Just like some people have their own private planes, other people have their own private yachts. If you want a taste of that life but you don’t have the funds to buy a yacht, there is technology that can help you including apps like GetMyBoat and YachtLife. There is a way for you to taste that life at sea.

When we think of cruise lines, there’s quite a difference between the Caribbean cruise that you might be familiar with and a river cruise. Caribbean cruises are extremely popular. So popular that some cruise lines now have their own islands. Royal Caribbean, for example, has developed an island that is called CocoCay. Cruises arrive there, the passengers disembark for the day, nobody stays there at night, and everyone goes back on the ship.

It’s a clever business model because all the money that is spent on that island goes straight back to the cruise line. There is no escaping the cruise line entertainment or food. It’s a great way to make sure that all the spending stays within the company.

Another type of cruise that has gained in popularity is river cruises. You might have seen these boats. They look quite different. Rather than the very high ships, they are flatter. They have large windows on the side, when people lie in bed, they can see the shoreline go past. It’s a really popular model in Europe and is now developing in other continents around the world.

When we think about how cruise lines make money, particularly the mass cruises like, Royal Caribbean, a lot of it actually doesn’t come from the price you pay for your room. A lot of it comes from other activities and most importantly, the casino. Because the ship is in international waters, casinos can operate freely on board. That’s one of the biggest money generators for the company as well as retail, food, and beverages. You can think of it as a modern version of the riverboats that went down the Mississippi that also had casinos on them.

Technology has transformed the way we travel. If we think about it, we use technology from the moment we leave until the moment we return. When you think about what inspires you to travel, many of us will say it’s because of Facebook or Instagram. We will think of these destination accounts, such as beautiful destinations that show inspiring photographs of places we’d love to travel to.
Once we’ve been inspired, we have to plan our trip. We might use the airline or travel agent apps, but also apps such as TripIt, that provide all that information in one clear package so that we know where we’re going and where need to be. When we book for the best price, we might use price comparison websites like Trivago. This is a very interesting model because a price comparison website doesn’t book a room for you. It only gives you price comparisons. You have to click on the company you want to book with.
So, how does Trivago make money? Well, every time you click, it receives a commission from the person that completes your booking. After returning from the trip, we might leave a review. Travel reviews are incredibly important because they have a great influence on future travelers.
TripAdvisor is by far the largest travel review app and has recently moved into providing travel bookings. Technology surrounds the whole wheel of travel, as we call it, and is with us almost every step of the way. The way technology has transformed the travel industry means that there are now more professional opportunities for people that we didn’t see in the past. For example, how Instagram influences our travel decisions. There are influencers there that get paid for posting certain photos, ads, and videos about properties and destinations.
Google Guides is also a great way for people to review and influence other people’s traveling. Another area where technology has helped people in developing their own business ideas and becoming a part of a community is reviews. Google Local Guides is an excellent example of how people leave reviews that influence where other people go. And that might lead to professional opportunities down the line. Someone might hire you based on the reviews you have written.

The face of the traveler has changed. When I was learning about tourism about 15-20 years ago, we thought of the visitor very often as a Western tourist. That has definitely changed: The largest traveler group nowadays is the Chinese people.

So, we need to think about cultural differences and how we welcome people from all over the world in their most preferred way. For example, Chinese visitors have requirements in terms of language.

In some destinations, we might have Chinese signage or Chinese-trained hospitality workers that make people feel more welcome and at home.

Another good example is the growth of what we call “halal tourism”. These are visitors from Muslim countries that also have certain requirements. For example, they may require halal food, and they may prefer to be in destinations where alcohol is more controlled. They may also want prayer items in their hotel rooms that they could use.

There are businesses that are very clever at adapting to those particular markets. For example, there’s a Kempinski Hotel in Munich, where they have a lot of visitors from the Arab Peninsula. They wanted to offer their visitors a nonalcoholic welcome cocktail that looked like champagne.
Therefore, they developed a special date wine — a halal-certified date wine that looks like champagne — that has the taste profile their visitors like. It has a celebratory edge to it that doesn’t feel like juice; It feels like a real glass of celebration and champagne.

In the past, restaurant owners who wanted their children to go into the family business often sent them to business school.

“Get a business degree,” common thinking went. “It will help the business grow.”

But make no mistake—the hospitality industry is different than other business areas.

Today, hospitality education—including NYU School—offers students the chance to earn degrees in a wide range of related subjects. They can complete a hospitality degree in concept development, for example, or asset management, where they can learn how to manage a physical location.

The only thing we haven’t developed yet at NYU—and hopefully, we will in the future—is formal culinary training. But this element of hospitality education is coming. At good schools across the country, chefs are earning bachelor’s degrees as they are being trained.

Those chefs are coming into their kitchens not only with a wonderful creative spirit, but they’re also understanding clean foods better. They understand the entire food supply chain. They know how to work with purveyors, how to buy food from small farms or small suppliers, and that the consumer wants their food from within a 100-mile radius, eating fresh food while reducing their carbon footprint.

Then there are the nuances of customer service within the hospitality industry. Marketing a restaurant is different than general marketing, for example. Today, it is important to build rapport with restaurant guests, through both social media and a genuine brand. This is true, whether your guests connect with the ethnicity of your menu or the history of your restaurant.

It’s important for a restaurant developer to understand how the concept dictates every aspect of the dining experience. For example, the concept dictates the menu; the menu dictates the kitchen; the kitchen dictates the staffing and the aesthetics of the dining room and service efficiency. Furthermore, social media and ordering logistics—whether ordering ahead or ordering for delivery—can help or hurt a restaurant, depending on the business concept and organization.

Did you know? When a customer sits down at a restaurant with a smartphone, there is usually a delay in ordering by up to 18 minutes.

Why does this matter?

If, as a restaurant owner, you want to turn a table two or three times a night and each guest takes an extra 18 minutes to order, you’ve lost an entire hour. This challenge arises when guests decide to look at their phones, instead of looking at the menu.

These are just a few of the details that help graduates of professional hospitality degrees to understand the nuances of the industry. They have more direct, specific knowledge than they would have gained through a general business degree. Students are graduating from online hospitality education programs with degrees in hospitality, hotel operations or restaurant operations. These graduates are able to jump in with both feet and adapt more quickly to a changing landscape.

Let’s take a closer look at the true sentiment to success for restaurants in the hospitality industry: cash flow and creating a business that’s profitable.
One of the things that come out of professionalizing the industry, is people get into the restaurant business to run it as a business. There’s a lot of romance in the restaurant business. We all love eating food, preparing Grandma’s recipes, and we all like to entertain our friends. Who doesn’t like to have a beer with their buddy? There are lots of wonderful romantic aspects of the restaurant business.

However, unless you are someone who has lots of money and just needs a restaurant to be entertained, we want to be profitable. To be profitable, you must establish clear budget accounts. You must make sure that there is a cash flow analysis. That you will have cash when it comes time to pay the food bill, that you will have cash when it comes time to pay for salaries of your laborers. So cash flow is important. That comes off your budget and your profit-and-loss statement every month.

A good restaurateur must establish food costs and the pricing of their menu items. They make sure they are producing a profit revenue that will bring profit to the bottom line. It has to pay all of its bills. That’s your cash flow. It needs to leave something at the end for the owner.

Many restaurateurs overspend and over-design. They find themselves in debt before they get started, and they are never able to fully catch up. So you must look at those numbers every month and make sure that you are trending to profitable revenue.

Food cost becomes important. If your food cost is too high and your cost of the item to the consumer is too low, you’re giving food away. You’re not making enough money.

On the other hand, if your food cost is too low and your price to the consumer is too high, you’re stealing from the consumer. So you need to find a middle ground on your pricing. You need to compete in the marketplace and you need to produce enough revenue to pay your bills and have some money left over for the owner.

For the first three years of a restaurant, a lot of that profit you make is going to be put right back into the restaurant. You’ll look at different food products, maybe changing the to-go items, mounting a catering campaign, or getting involved in alcohol.

So you must reinvest in your restaurant product. The success of any restaurant-when I ask a student, the answer they give me is typical: good food, great service, beautiful dining room, good marketing. Well, they are all important. However, the main ingredient of any restaurant that makes it most successful is positive cash flow.

The airline industry deals with a lot of challenges.

For example, airlines have to set themselves apart from one another. Only two major players produce airframes: Airbus and Boeing. All of the big airlines by the same equipment.

As a result, airlines have to get creative. Some set themselves apart with business class innovations. Turkish Airlines, for instance, has a chef on board who prepares excellent meals.

Other airlines use loyalty programs. For instance, American Airlines has the American AAdvantage program. They sell points that people can use to buy a house, get a loan, use a credit card, or send flowers. In fact, American Airlines sometimes makes more money by selling loyalty points than booking seats.

The other challenge, of course, is earning enough revenue. When airlines used central reservation systems, some airlines made more money moving reservations than actually flying people.

Amadeus and Apollo, for instance, made most of their money this way. This method gets challenging because it depends on the airline’s load-in factor, or the amount of seats sold per flight. Some airlines would need to sell 90% of seats before making any profit.

Airlines also face timing challenges. For example, 2008 saw more business class carriers. However, the timing didn’t work because of the great recession.

These days, we have low-cost carriers like Southwest Air and JetBlue. They fly from point A to point B rather than through a hub. Low-cost airlines only make money when the plane is in the air. When the plane stays at the gate, it doesn’t produce revenue.

This strategy comes with its own challenges. For instance, if you’re going to a destination, you may not find direct flights. Not only does this add to your travel time, but it also comes with the risk of delayed flights. Many of these low-cost carriers have added more direct flights as a result, so they can save time.

Standardized equipment and operating procedures help, too. They don’t have to train their captains with several airplane types. They also strip down the service, and they charge extra for luggage.

We sat down with experts to discuss the interesting components of the cruise line industry and what makes it a unique sector within the hospitality industry.

Cruise lines are a very interesting business because a new ship could cost $1 billion. For instance, the Norwegian cruise line has ordered six new ships called Leonardo class ships. The only thing they said was, it’s going to have a passenger capacity of 3,300 people, but what concept should they be?

They announced this in 2017, and the first ship will sail in 2022, so we have a five-year time difference. You have to predict: how is the market? What are the consumer needs? What are the trends? What is the competition doing? Because when a ship is being built it’s hard to change. You can maneuver a few things in terms of the restaurant concepts and services, but it’s pretty much set.

Cruise lines have to look into the future and predict. But it’s an interesting business, because it is a substitute for staying in a resort, and it has advantages.

In a resort in Florida, you go to Orlando and you stay in Orlando. You could visit some of the attractions there. But with the cruise line, you can visit several countries and several ports and do excursions. Today’s cruise lines are a destination by themselves. It’s similar to Las Vegas. Big casinos are destinations by themselves, but they have advantages.

Their advantages include lower labor costs because most of the employees come from countries like the Philippines, and they get paid competitive rates in terms of what they could earn in the Philippines. Resorts pay higher rates in the United States because of the minimum wage and all these things. They have an advantage in terms of their labor costs.

They can also source cheaper food because they buy in quantity for big cruise lines. Carnival Cruise Line has 103 ships, Royal Caribbean has 60, and the Norwegian cruise line has 25. These three companies control about 75% of the global cruise market. It’s an interesting business in terms of economics and offering their best guests more options.

The Norwegian cruise line is an interesting company because they’re using a concept called Free at Sea. So if you buy a higher level cabin, let’s say with a balcony, you can choose from up to six different Free at Sea. It could be a free bar, free specialty dining, a free excursion, free Wi-Fi, or it could be that two more people can stay free in the cabin. All of this is factored into the pricing, but it adds value and adds loyalty.

Some attractions can become destinations in their own right. In Orlando, Florida, we think about theme parks and resort hotels. Disney World is an attraction in its own right with its accommodation facilities and services. It’s almost detached from the rest of Orlando, existing as a destination within a destination.
Atlantis, for example, is a hotel resort company that includes everything for the visitor, from accommodation to restaurants, water parks, and zoos. Because everything is in one place, guests rarely feel the need to leave the bubble to experience anything in its immediate surroundings.
The inner harbor in Baltimore is another example of a tourist bubble. It’s a beautiful development equipped with a stadium, hotels, entertainment, retail, and restaurants. Still, in many ways, it feels detached from the rest of the city. You can almost draw a physical border between the tourism development and the rest of the city. That’s what we would call a “tourism bubble”.
Other great examples of tourism bubbles focus on families. Here, you’re thinking of theme parks, resorts but also examples like Disney Cruises and Disney Islands. A cruise is more like a floating tourist bubble, but it functions in the same way. Everything is on board, from accommodation to food, beverage, and entertainment. You can even visit places along the way, but if you never leave the ship, you still won’t be bored for a single moment.
So, on one hand, we have tourist bubbles, which often mean there is a physical demarcation between the tourist area and the non-tourist area. In large cities, you’ll often find tourism precincts. They’re a little different since they’re areas where tourism services are concentrated, but that physical demarcation isn’t as clearly defined.
Times Square is perhaps the most famous example. A tourism precinct has softer edges. It flows more naturally into the surrounding area.

The back of house of a restaurant operation is like a manufacturing section. This is where culinarians perform. In the back of house you have several roles that make the kitchen hum, including:
* Executive chef
* Sous-chef
* Line cooks
* Grill cooks
* Utility team

Everyone likes to be romantic when they talk about their food, but the back of house is like a manufacturer. It might seem unromantic but the stark reality is that raw materials come in the back door of a restaurant.

From vegetables, meats, to fish, everything comes in a raw state. It is butchered, sliced, and diced by the team in the kitchen. Then just like you take raw materials to build a car, the materials are manufactured into a wonderful meal that leaves the kitchen. Ideally, it’s beautifully plated and at the right temperature, ready to impress the guest receiving the meal at their table.

The kitchen, or the manufacturing team, is the back of house. These are the people who we call culinarians – ones who are preparing all the food.

There are also a lot of utility jobs in a restaurant. There is someone to clean the restrooms and someone to make sure that the plates, flatware, and glasses are sanitized and clean. These types of jobs are also part of the back of house function.

Hidden in between back of house and front of house, there are lots of jobs in the restaurant industry. It might be easier to say front of house and back of house, but there are lots of professional jobs in between as well.

Many professional jobs that are also now part of the restaurant industry. Restaurateurs need to make sure they have a good attorney and good accountants. They may even need consultants who help them navigate city codes and health departments, to make sure that they can get their certificates in a timely way.

Restaurant operations are complex, and there are many back of house functions that help bring the food and beverage operations to life.