Key trends to watch out for in the hospitality industry
The past year and a half has been a tumultuous time for the travel and hospitality industry, more so for the latter. All indications are that the hotel industry has rebounded from the depths of the Covid-19 pandemic. The U.S. hotel occupancy is returning to pre-pandemic 2019 levels this summer. This is good news as the industry grew significantly through 2019, it was the pandemic that had set the hotel industry back by 10 years. As we approach 2022, there are many critical elements in this recovery that we must keep track. It includes a missing vital part of the hotel business i.e., corporate travelers as well as the current challenge with workforce availability.
The recently held 43rd Annual NYU International Hospitality Industry Investment Conference in New York hosted by the NYU School of Professional Studies Jonathan M. Tisch Center of Hospitality included a session on key trends shaping the hospitality industry. The speakers included the CEOs of major hospitality chains including Marriott International, Accor, IHG Hotels & Resorts, Hyatt Hotels Corporation who spoke about how they and the industry at large are bracing the current challenges and getting ready for the future.
Here are a few prominent hospitality trends and observations that emerged from the discussion.
Leisure is soaring high: As travel is opening in most parts of the world, leisure travel is soaring high. In fact, the line between business and leisure is blurring, giving rise to a new trend of B-leisure where consumers are combining their business and leisure trips to avail maximum value from the plan.
Real-time visibility into booking data: Hotels are keeping a hawk’s eye on the booking data, as the demand can fluctuate at a rapid pace depending on number of Covid cases and news of new variants. These have an immediate impact on bookings—to the extent that the demand variation is happening on a weekly basis.
Home sharing trend: Most hotel owners had embarked on this trend long back following the Airbnb suit. However, now with safety playing a key role in decision making, consumers are preferring to opt for homes customized for their requirements instead of hotel suites. Hilton had started with 3000 listings and now has about 30,000 listings of homes in all category stays.
Re-imagining guest services: Safety of guests has become the highest priority and consumers are using services in ways that allows them to keep physical contact at a minimum. Guest services are becoming innovative, and hoteliers have to invest in reimagining how to deliver these services in new ways.
Investment in digital technologies: With all the negative impact on the industry, a silver lining has emerged for the players in technology space. Covid has served as an accelerator in adoption of digital technologies. Mobile check ins, digital key, order from table, and many more such contactless services are enabled using digital. These measures have also increased productivity for owners and enhanced customer experience.
The sustainability imperative: Imparting sustainability in the way hotels run is no more a “good to have”. It’s now an imperative that most organizations are adopting. Hoteliers who are explicit in sharing their commitment and curating careful measures in imparting sustainability in their offerings will have an edge over others. It’s not just a tick in the box anymore as guests are now looking for hotel owners aligned to sustainable initiatives.
Employment challenges and opportunities: One of the most visible impacts of the pandemic has been on the employment front with great talent leaving their past employers and in some cases the industry itself. With the rise in seasonal demand and revenge travel, the human side of the growth is posing challenges in terms of manpower to serve the spikes in demand. Hoteliers are therefore opening doors to hiring resources from other industries and even providing opportunities to underprivileged communities.
Overall, the CEOs of the global hotel chains are optimistic while being vigilant about the progress on the vaccination front in multiple countries and the emerging virus variants. The underlying thought is that laws of economics will take over and the industry will witness overall recovery faster than most of expected a few months into the pandemic. The cautionary tale for the near future is that the massive and even irrecoverable losses that the industry went through would invariably lead to increased costs for consumers and inefficiencies in delivery of services given the talent crunch. With the looming challenges, hospitality owners have no choice but to reimagine the traditional business models, supporting IT infrastructure, and operations in ways that least affect consumer expectations.
In the past, the right pricing strategy was critical to success in the industry with larger players dominating the market. Post pandemic there is no single winning formula which will make the industry open to potentially new players and innovative strategies. Optimism and intelligent consumer engagement are the keys to staying the course in an industry that was once growing faster than the GDP during the pre-pandemic times.