Talk to large recruitment agencies about consultancy in the tourism,ob opportunities are on the increase. Mary Huntington tours the sector. travel and leisure sector and you would suppose that it is a very small market in which nothing much is happening. Indeed, they suggest that it is one which has shrunk quite markedly in recent years. But if you scratch beneath the surface, you find a thriving sector which is destined for growth.
Hugh Cade, partner in charge of Deloitte & Touche’s hospitality, travel and leisure practice, estimates that the consultancy market is worth between #12m and #15m a year, with his firm pulling in #3m of that. “Other big five firms probably do about #6m between them and smaller niche players account for the remainder,” he says.
Such specialists range BDO Hospitality Consulting and Pannell Kerr Forster to more consultative firms like Managing the Service Business.
The sector is defined in different ways, but it covers areas such as hotels, restaurants, catering, tourism, travel, theme parks, time share, resorts, sport, health clubs, conference centres, heritage and venues generally, in both the public and private sectors, in the UK and abroad.
Deloitte & Touche’s Cade says his practice earns about 40 percent of its fees outside the UK and is very busy. “So far, the downturn has not affected business,” he adds. “We do a lot of financial and market feasibility studies for project startups and other projects include merger and acquisition work in conjunction with our corporate finance people, process reengineering and refinancing, and property-based work for theme parks, hotels, restaurants, museums, cinemas and football clubs.”
Ex-Arthur Andersen consultant Paul Gascoigne is a founder member of newcomer HL Morgan Kai, which takes a different tack, providing business support to the European leisure and entertainment sector and specialist service lines such as rights management. “This is a market based very much on the mass population’s discretionary spend,” says Gascoigne. “For example, football clubs are competing against UCI Warner cinema complexes for the money in people’s pockets.” He estimates that the UK market is worth about #70bn a year, representing over 12 percent of all consumer spending.
“And the battle is being fought all over Europe. We are doing a lot of work in Italy and Germany: the cultural backgrounds are different but the competitive forces are just as severe.”
BDO Hospitality Consulting, which broke away from BDO Stoy Hayward through a management buy-out in January, has a very specific niche in the hotels, tourism and leisure. “This is set to be the world’s largest industrial sector in terms of the revenue it generates,” says joint MD Jonathan Langston.
“Hoteliers and developers are always looking for new development opportunities.” But he says that the economic crisis in the Far East has affected tourism on a general level and people investing overseas.
Langston has taken on four people this year as part of a rolling programme while Deloitte’s Cade has recruited five people in the last few months, taking his team’s headcount to 23. Both firms use smaller recruitment agencies, like FM Recruitment, Profile and Humana, which specialise in the hospitality and leisure area. “If we advertise directly we get 600 replies, 599 of which are not suitable,” says Cade.
MD of FM Recruitment Howard Field says it is a very dynamic marketplace and has become more buoyant in the last year. “More consultancies are competing in the sector while existing players are strengthening their teams.”
There is constant demand for staff, says Field, who worked for sector specialist Horwath Consulting before setting up FM Recruitment, but it varies in terms of level. The primary demand though, he says, is for graduates with good degrees in subjects such as hotel and catering management, tourism and leisure management. “Increasingly they must have a second European language, be able to demonstrate articulacy, numeracy and literacy – and be computer literate.” Ideally, candidates will have had some industry experience, demonstrate managerial skills, analytical ability and some financial exposure. An industry-related MBA is also useful. He cites Surrey and Oxford Brookes universities as particularly attractive sources.
“Another very popular one is the IMHI programme jointly run by Cornell University in the US and the French management school ESSEC,” he says.
“The qualification – a Masters in International Hospitality Management – is highly relevant for consultancies as it brings together relevant academic knowledge, languages and, importantly, international exposure.”
Cade agrees with Field’s criteria, adding: “I would look for another qualification as well, in accountancy or personnel, for example, and I favour experience at the coalface.” He does not necessarily look for consulting experience because training courses can develop those skills, but he does get a mix of people from other consultancies.
As the sector is becoming more popular with the larger firms, opportunities do arise for experienced consultants. For example, Arthur Andersen’s development of a dedicated consultancy capability in 1997 saw the defection of some key players from Pannell Kerr Forster although the latter still has a team of over 20 people; KPMG’s practice has grown from 12 to 21 in the last two years; Arthur D Little has been developing its European practice; and one of the big five is poised to establish a European presence soon.
Says Katherine Girshon, senior consultant in the ADL’s travel, tourism and hospitality practice: “Most of us have joined in the last couple of years either from other consultancies or from the travel industry.” Like many of the big firms’ practices, ADL’s core team is quite small, relying on functional specialists from the rest of the firm as and when needed.
It works predominantly on strategy and customer management for airlines, cruise lines, hotel groups and tour operators, says Girshon, and is a growing area within ADL. “We recruit at a variety of levels and there is no shortage of people applying.”
According to Field, consultants move through networking in what is quite a close industry; and through intermediaries like himself. “It is important that anyone who wants to move identifies a rationale for doing so,” he says. Salaries, for example, do vary. “The niche firms are generally looking for people from industry and do not have the same payscales as ADL, for instance.”
But, he adds, with several new teams in the market, competition for staff is keener and salaries are coming into line. Mary Huntington is a freelance journalist
Next month: internal consulting
Holiday snaps: KPMG’s William Barny welcomes you to the world of hospitality William Barny joined KPMG’s travel, leisure and tourism practice in 1987, after working as a marketing manager with Forte Hotels and taking an MBA at the London Business School. Now he is director in charge of the hotel and hospitality industries.
Since he joined KPMG his work has evolved from public sector assignments, developing tourism and hotels, to advising hotel groups on new projects, management contracts, internal issues, benchmarking and operational performance, to due diligence work for mergers and acquisitions and IT strategy.
“We are very busy,” says Barny. “The sector is struggling with the combination of Y2K, the Euro, technology investment costs and massive consolidations among both airlines and tour operators, which are partly due to those costs.”
The practice also acts as a vanguard for a phalanx of specific process, functional and software skills within KPMG, says Barny. “We are tasked with managing targets, delivering work to establish our reputation and provide industry input for people doing Oracle, SAP, Emu across a wide range of industries.” A recent project which has given him considerable satisfaction involved looking at the potential for upgrading a development in Spain, on behalf of a US group. “We demonstrated our ability to put together a multinational, multilingual team with a strong local presence, and perform on a global operation,” he says.
He stresses the need to keep things in perspective when dealing with clients who may be 8,000 miles away. “As we are a discretionary spend we have to deliver to get paid and get more work, and we have to make sure clients do not develop unrealistic expectations.” Barny sees alliances and consolidation, branding and technology as burning issues for the industry. “They all point at the consumer and how to get access to customers,” he says. But, he warns, “if you don’t look after staff you won’t look after the customers – that is true of any business.”
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