IN­SIGHTS

Inside Franchise Business - - Contents -

Tourism growth has given a leg-up to the ac­com­mo­da­tion and travel in­dus­tries, as well as the econ­omy, and now the tech­nolo­gies that have been help­ing the leisure trav­eller are scal­ing up to dis­rupt the busi­ness travel in­dus­try.

Aus­tralia’s ac­com­mo­da­tion sec­tor is buoy­ant, thanks to a boost in num­bers of Asian tourists, the pop­u­lar­ity of ser­viced apart­ments, and a rel­a­tively weak dol­lar mak­ing the coun­try a pop­u­lar tourist des­ti­na­tion.

This is the con­clu­sion of a Bankwest over­view of the ac­com­mo­da­tion in­dus­try as part of its se­ries. The re­port found that of the in­dus­try's five sub-classes (ho­tels/ re­sorts, mo­tels, ser­viced apart­ments, car­a­van parks/camp­ing grounds/hol­i­day houses, flats/hos­tels), the ser­viced apart­ments seg­ment is set to grow the fastest over the next five years, av­er­ag­ing an­nual growth of 3 per cent.

Bankwest ex­ec­u­tive GM for busi­ness bank­ing, Sinead Tay­lor, says the re­port iden­ti­fies im­por­tant driv­ers be­hind the in­dus­try’s suc­cesses.

“Two key in­flu­en­tial fac­tors are the rel­a­tively weak Aus­tralian dol­lar, cou­pled with the digi­ti­sa­tion of the in­dus­try, lead­ing to a huge va­ri­ety of on­line book­ing web­sites; to­gether these el­e­ments have cre­ated a sig­nif­i­cant boost for the in­ter­na­tional tourism in­dus­try,” she says.

The ho­tels/re­sorts seg­ment is also ex­pect­ing rel­a­tively high rev­enue growth of 10.3 per cent over the next five years, tak­ing rev­enue from $7.7 bil­lion to $8.6 bil­lion.

De­spite New Zealan­ders still be­ing the most com­mon vis­i­tors to Aus­tralia’s shores ( 1,203,000 last year), in­creas­ing eco­nomic pros­per­ity in China and In­dia has seen the num­ber of these vis­i­tors for the 12 months to the end of June last rise by 22.6 and 9.7 per cent re­spec­tively.

The growth in dig­i­tal ac­com­mo­da­tion ser­vices is also cre­at­ing a more dis­cern­ing con­sumer, in­clud­ing in­creased “savvi­ness” around price and lo­ca­tion.

“Ac­com­mo­da­tion com­par­i­son sites like Ho­tels.com and Tri­vago al­low those hunt­ing for ac­com­mo­da­tion to com­pare costs at the click of a but­ton, while on­line ac­com­mo­da­tion-shar­ing ser­vices like AirBNB chal­lenge tra­di­tional sec­tors, es­pe­cially mo­tels, hol­i­day houses, flats and hos­tels.”

The ac­com­mo­da­tion in­dus­try is a sig­nif­i­cant con­trib­u­tor to the Aus­tralian econ­omy, pro­vid­ing em­ploy­ment for more than 116,000 in­di­vid­u­als and gen­er­at­ing more than $17 bil­lion in rev­enue an­nu­ally.

RIPE FOR AU­TO­MA­TION

Busi­ness travel is ripe for a shake-up, agrees anal­y­sis firm Euromon­i­tor, and per­fect for con­ver­sion to a highly au­to­mated process.

TripAd­vi­sor CEO Stephen Kaufer has al­ready said the fre­quency of busi­ness travel makes it par­tic­u­larly suit­able for au­to­ma­tion.

Al­ready the work­place is in flux with many jobs sus­cep­ti­ble to au­to­ma­tion, a trend that is dis­rupt­ing the travel in­dus­try.

And the trav­eller pro­file is chang­ing. Ex­pect to see greater di­ver­si­fi­ca­tion of na­tion­al­ity, age and gen­der among busi­ness trav­ellers, and a ubiq­ui­tous Gen Y de­mand for dig­i­tal con­nec­tiv­ity.

The con­nected world that has in­flu­enced the leisure con­sumer’s travel-book­ing habits will be repli­cated in the busi­ness travel world. For starters, the smart­phone has been a game-changer for busi­ness travel, says Euromon­i­tor.

A Global Busi­ness Travel As­so­ci­a­tion (GBTA) sur­vey has shown that 64 per cent of global busi­ness trav­ellers check their itin­er­ary de­tails while on the road, and the rate is higher among mil­len­ni­als - 77 per cent. For these and other trav­ellers, lack of Wi-Fi ac­cess is listed as the most frus­trat­ing el­e­ment of ho­tel ac­com­mo­da­tion.

Real-time ser­vices plus pay­ments and loy­alty will be key, and companies of­fer­ing SaaS (soft­ware as a ser­vice) are find­ing a space in the mar­ket. Tools such as trip-plan­ning apps are mak­ing in­te­gra­tion eas­ier.

Yet it is im­por­tant to keep the fo­cus on pro­vid­ing an en­hanced, seam­less user ex­pe­ri­ence and not be­come se­duced by the myr­iad of new tech­nolo­gies. And as the pro­cesses be­come yet more au­to­mated, the ser­vice will need to be­come more cus­tomised, That will ex­tend to unique pric­ing and pay­ments, sug­gests Euromon­i­tor.

Tra­di­tional cor­po­rate-travel man­age­ment companies are find­ing it hard to stay ahead of the com­pe­ti­tion, sug­gests Euromon­i­tor. “Ex­pe­dia has piv­oted its huge in­ven­tory, built orig­i­nally for the leisure mar­ket, and cre­ated its Egen­cia cor­po­rate-travel man­age­ment brand. Es­sen­tially, Egen­cia is lever­ag­ing the same itin­er­ary but tai­lored to the cor­po­rate mar­ket.”

Many other leisure brands have em­u­lated this, tak­ing their leisure in­ven­tory and de­vel­op­ing a “for busi­ness” ap­proach. AirBNB, Uber and low-cost air­lines such as EasyJet and Ryanair in the UK have built a core busi­ness around au­tomat­ing the ex­pense-man­age­ment process and in­te­grat­ing it with travel man­age­ment, us­ing cloud tech­nol­ogy for big and small busi­nesses to cap­ture book­ings made out­side the travel-man­age­ment sys­tem.

Mil­len­ni­als will be in­flu­enc­ing the ac­com­mo­da­tion mar­ket, too. They are the largest work­ing co­hort and are keen users of shar­ing econ­omy brands.

AirBNB has been tar­get­ing the busi­ness-travel mar­ket for three years and has in­te­grated ex­pense re­ports with Con­cur’s TripLink pro­gram. Now it has in­te­grated with Amer­i­can Ex­press, among oth­ers, and al­lows Delta and Qan­tas fre­quent fly­ers to redeem points.

In­no­vate or die needs to be the mantra for travel agen­cies work­ing in the busi­ness arena.

The con­nected world that has in­flu­enced the leisure con­sumer’s travel-book­ing habits will be repli­cated in the busi­ness

travel world.

HO­TELS OF THE FU­TURE

Semi-au­to­mated check-in has been par­tic­u­larly rel­e­vant in the bud­get mar­ket­place, and ho­tels are look­ing for ways to im­prove the ex­pe­ri­ence.

On the global front, IHG’s lux­ury brand In­terCon­ti­nen­tal is de­vis­ing a fu­tur­is­tic ho­tel room us­ing vir­tual re­al­ity and the tal­ents of fu­tur­ol­o­gist Faith Pop­corn. What does it look like? Think re­mote shared experiences, cus­tomised wardrobes, 3D print­ers and a gam­ing en­vi­ron­ment for fan­tasy es­capes.

Also adding dig­i­tal in­no­va­tions, the Mar­riott’s Re­nais­sance New York Mid­town of­fers dig­i­tal cor­ri­dors and a vir­tual concierge, a multi-sen­sory dig­i­tal ex­pe­ri­ence pro­vid­ing real-time art and lo­cal in­for­ma­tion.

Other in­no­va­tions in the ho­tel arena in­clude bio­met­ric check-in, fin­ger­print or retina scans for room en­try, a room key app, smart mir­rors that ad­just the light and con­nect to the in­ter­net, and con­sumer ge­nomics and DNA pro­fil­ing to de­liver a cus­tomised ex­pe­ri­ence.

In­te­gra­tion of au­to­mated sys­tems will con­tinue and brands will seek a di­rect con­nec­tion with the con­sumer. Euromon­i­tor pre­dicts a clut­tered space that will be ul­ti­mately dom­i­nated by the giants of the dig­i­tal world, Ama­zon, Ap­ple, Face­book, Google and WeChat.

Au­to­ma­tion from back­end to front desk and the user ex­pe­ri­ence will suit the travel in­dus­try, says Euromon­i­tor. In­ter­est­ingly, the newer ser­viced apart­ments and stu­dio-styled ho­tel rooms that fo­cus on pro­vid­ing con­nec­tiv­ity and not room ser­vice, restau­rants or a mini bar, look to be the fu­ture. The tasks at great­est risk from au­to­ma­tion in­clude food prepa­ra­tion, cook­ing and ser­vice, says the re­port.

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