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
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.