In the 1990’s it was the explosion of franchises, in the 2000’s it was the explosion of online travel agencies and disruptive giant Airbnb (2006). Now, rounding out the 2010’s, the game is getting even more complex for teams across hospitality management, from giant global hotel chains, to independent hotels, to Mom and Pop bed and breakfasts — they’re all vying for airtime on the platform of a million channels.
With a global market up for grabs there is room and revenue enough for everyone, but those with a better understanding of the big picture are more fit to survive the tumultuous times ahead.
In this article, we take a look at the macro elements stewing in the global hospitality hotpot to understand the pros and cons of the times, and how to make the most of the trends in hospitality industry.
6. Marketing Gone Wild
Have you ever checked into a hotel and gotten a cupcake with your face on it? Neither have I, but apparently this is one of the yummier ways in which hotels are trying to stand out in a market saturated with ad spend. In a world where giants Booking.com and Expedia spend an annual combined $3.8 billion USD for keyword searches on Google, it may feel rather overwhelming for an independent hotel. Yet these personal touches can rack up not only the 5-star reviews on Trip Advisor and Instagram shares that can go viral, but word of mouth is still arguably the most powerful marketing there is despite technology. Ultimately, building revenue is about repeat customers and creating advocates — anything viral is just icing on the cupcake.
A few more examples — Test driving a Tesla at Radisson Blu in Norway, Chocolate Milk Happy Hour at Holiday Inn U.S. and Fitness Gear Lending at the Andaz Shanghai.
5. Unbridled Equality and Access in Distribution
While hospitality continues its era of disruption and the difficulty of navigating the space increase, if you need a reason to feel heartened just give yourself a good pep talk and read the perspective of Thomas Magnuson. Despite starting the business with his wife out of their house just 13 years ago, Magnuson Hotels is the fastest growing hotel brand in history. The brand has been a lead innovator in not only keeping afloat in the changing tides of hoteliering in the digital era, but scaling to unbelievable heights in the meantime. He gave this cheer for independents in an interview with industry researchers Euromonitor International:
4. The Sleeping Dragon Awakens — and it Likes to Travel
You can have a local bed and breakfast or an international chain, and you may never have explored the market in China — you may never go to China either, but soon, China is coming to you. China is now the world’s largest source of outbound travelers, a still rapidly growing populace that spent more than $100 billion in 2016 and is spurring changes across the global tourism industry. The number of visitors to the U.S. alone is forecast to rise 15 percent this year, according to the U.S. Commerce Department.
Chinese tourists spent more than $100 billion in 2016
If your jaw isn’t on the floor yet, consider this year’s biggest news from last month — Alibaba and Marriott teaming up. They plan to combine the power of the eCommerce giant and it’s warehouse of data with Marriott’s 6,200 hotel properties. They plan to reduce fees to compete with Airbnb, Priceline and Expedia and attract the up and coming Chinese middle class. When the big guns are going all in to cash in on the Chinese tourism boom, it’s time to start taking notes.
3. Two-fold Localization
Fold 1 — Communication and Presentation
So, if those Chinese travelers were interested in your property, are the resources within your grasp to communicate with them? I’m not saying to spend on translating everything on your site or hiring a staff translator is the way to go, but it may be worth looking at your data and metrics to see where a small investment in localization might pay off in revenue. And not just Chinese. The U.S. market, for example, has a burgeoning Hispanic and Latino population that may be more prone to book if options are en español. There are marketing service companies who specialize just in localization and who can tailor everything from your website content, to graphics and search engine optimization, for a more international audience. Those who know that globalization means more fluency and flexibility in communication and presentation will be able to fair better than those who don’t.
Fold 2 — Experience Catering
The other aspect of localization aside from language comes in the new trend of experiential traveling and immersion. Hotels that can afford to are beginning to not only offer more languages, but change the actual design of their hotels to suit certain markets. If this is out of your reach, the other aspect you can capitalize on is the experience aspect. Online platforms are not just offering bed and breakfasts, but local insider guides and tours for guests to go beyond the typical tourist destinations — something traditional hotel chains have been slow to compete with.
2. Outsourcing and Automation
With all of these hyper-speed changes in the space, how does one keep up? Take some time to look at processes within your property — from cleaning, to bookings, marketing and your own personal to dos. What can you outsource or automate? Is there something you can pay a small amount to outsource that would be worth its weight in gold for your time back? From project management consultants, to software, there are creative and affordable options for all sorts of things, from customer relationship management (CRM) and automated email marketing software, to cleaning and design. These are the tools hotel chains have used to grow, and the difference between RRR (random recurring revenue) and ARR (annual recurring revenue).
1. Real — time data and The Cloud
As the most experienced hoteliers know, price adjustments are key, and being able to read the market and set rates is half of the battle when it comes to revenue. There is a reason so many companies make so much money collecting and selling data, and oft times, the data turns out to be more valuable than the original product. Having access to real-time data takes the guesswork out of planning when you have a read on the markets, in your hand 24/7. And, if you are still running daily operations for your hotel(s) manually, with ledgers and spreadsheets, this is the number one adaptation you need to make — moving to the cloud.
Hotel management and project management software can allow you to spend less time watching bookings, adjusting prices and running events and hotel openings, and more time scaling and finding ways to keep your properties full throughout the year. For example, multinational giant AccorHotels was able to streamline the process of openings and create a template, which they use to open two hotels every three days, with Taskworld.
Have you or your company started adapting to any of these emerging trends? What else are you seeing in the industry that is shaking up the status quo? We would love to hear your thoughts below.