In this brave new world, instability isn’t just a phase to ride out – it’s the new global operating system. Ian Di Tullio is the Chief Commercial Officer at Minor Hotels
Geopolitical risk has become a constant background sound. It’s the soundtrack to global business – and it’s growing louder.
Boardrooms all over the world are now more concerned about geopolitics than inflation, interest rates or even technological disruption. McKinsey’s data shows that 90% of executives rank geopolitics their top threat to growth.
This is not just a tremor. It’s a seismic shift. Regional conflicts are intensifying around the globe. The global market is volatile because of the elections. In 2024, there will be more than 60 national election results that will redraw the regulatory map. Tariffs are up six-fold since 2017. Trade, data and air rights policies have also been in flux.
This new normal is a challenge for the hospitality sector, which was built on open border and fluid movement. It requires a radical restructuring of strategy and organization. Reacting is not enough. Instead, the real opportunity lies in creating organizations that are resilient and agile, as well as geopolitically fluent. They can not only absorb shocks but also turn them into a competitive advantage.
Geopolitics must no longer be treated as an external noise but incorporated into the core of business.
AN INHOSPITABLE OPERATING ENVIRONMENT
Cultural and political currents have always influenced the hospitality industry, but these forces now drive revenue and guest flow more directly than before.
US travel health has been impacted by diplomatic friction and economic turmoil, which have curtailed demand in 2023 for certain destinations. Conference and incentive groups have increasingly rerouted due to regional instability – an immediate P&L hit that traditional forecasting often misses. Talent deployment faces similar unpredictability. Segmentation by traveller or market size is no longer enough. A geopolitical overlay is required.
These are not hypothetical risks. We’ve seen it all in the past few years – airspace closures to lockdowns, sanctions, and sudden policy reversals – and they hit bottom lines in real time. The traditional forecasting models cannot keep up.
Geopolitics no longer affects our industry, it is at its epicenter. In such an environment, we do not need more predictions, but rather more preparation.
The shift: From Reaction to Fluency
Many companies still view geopolitical risks as if they were weather forecasts, only checking them occasionally in the hope of clear skies. Geopolitical competence must be a core business competency. Not a siloed risk function, not a compliance check – a lens embedded across forecasting, pricing, partnerships, and go-to-market strategy.
McKinsey found that although nearly all executives understand geopolitical risk and are aware of it, only between 13-18% have integrated this into strategic planning. Scenario planning remains fragmented. But geostrategic fluency demands embedding diverse lenses – policy, cultural, economic – into forecasting, go-to-market, pricing, and partnerships.
Slowly, change is taking place. The shift from hedging to embedding is being made. Reactive alerts are being replaced by structures that diffuse threats and harness new geopolitical configurations.
Geopolitical fluency is not a tactic, it’s a strategy. System, playbooks and reflexes which enable you to take decisive action, not only because you anticipated it, but also because you are prepared.
Minor Hotels has made this shift. We’re integrating early-warning signals – visa data, trade patterns, political sentiment – into our commercial planning. We are redesigning our localization strategy. We are learning from those who have done it before us: from Microsoft’s geopolitical decision frameworks to Airbnb’s value-led decision frames.
Lessons from the Frontlines
Over the past decade, I’ve led commercial teams through multiple geopolitical shifts – including the 2017 GCC crisis that saw airspace closures over Qatar, the COVID-19 pandemic, the Israel-Iran escalations, and the recent earthquake in Myanmar and Thailand. These moments changed how we plan, communicate and reallocate our resources.
But we didn’t do this alone. We’ve adapted and studied models from leading industry players:
Microsoft’s early warning system and rapid response
Microsoft’s executive dashboards now include geopolitical warnings. The company uses inputs from their intelligence, policy and risk teams, to flag threats with the same urgency that cybersecurity threats. Inspired by this, Minor has started proactively monitoring visa regimes, regulatory signals, and political sentiment in key regions – with the aim of better anticipating market shifts before they disrupt demand.
Scenario Planning and Governance (Citigroup).
Citigroup relies on geopolitical stress scenarios to test its strategic plans and determine capital allocation. The approach they use helps leaders make informed, fast decisions in times of uncertainty. Minor is still developing its scenario planning, but we are looking at ways to better link regional forecasts with commercial decision cycles.
Airbnb: Values-based decision making
Airbnb has developed an internal framework to operate in politically sensitive areas, while balancing the commercial feasibility of operations with stakeholder expectations and brand integrity. We are reflecting on similar questions at Minor — ensuring that where we operate, and how we show up, aligns with our values.
Here are a few examples that go beyond the hospitality industry, but offer useful guidance for us all. Minor may be aspirational about many of these things, but we are actively building the structures and reflexes necessary to integrate geopolitical savvy into our commercial strategy.
BUILDING BRANDS FITTED FOR A SHIFTING WORD
We won’t go back to stability. The future will bring new shocks – climate displacement, data protectionism, and shifting power blocs. Travel demand will recover, but those who integrate geopolitical structures into their brands will win.
Five imperatives for hospitality leaders
- Build a portfolio that is geo-diverse: Growth is not just a commercial pursuit. It’s also a geopolitical hedge. Develop diverse geo-portfolios in order to balance trade routes, ally blocks, and regulatory systems
- Localize with a sense of urgency: True localization means embedding political and legal adaptation into brand deployment – from R&D and supply chains to ESG and ownership structures. This is crucial not only for brand trust, but also to obtain legal permission.
- Operationalize Crisis Reactions Tariffs, political upheavals, and other factors can cause planning to become unpredictable. Daily crisis rooms and dashboards in real time can help reduce writedowns and preserve customer trust.
- Define red lines You need to know where you’ll and won’t be playing. Align your market entry decisions to your brand values, stakeholder expectations and brand values. Your reputation is a part of your balance.
- Put geopolitics at the top of your agenda Financial models and market predictions should include geostrategic scenario. You’re already behind if you don’t have a geopolitical understanding in your strategy sessions.
The hospitality industry has an edge over other industries: We’re close to our customers, we are embedded in the community. With the right structures, we can turn local strength into global uncertainty.
The Final Word
This isn’t another disruption cycle. It’s a shift to the operating system. The best organizations will not be the ones with the largest budgets but the ones with the sharpest geopolitical sense, the clearest principles and the strongest reflexes.
Geopolitics doesn’t affect the hospitality industry. Our competitive field. Success is not for those who predict the future but rather those who are prepared to thrive.
