Trends to further shape the hotel and hospitality industry
OPPORTUNITIES for growth have never been more open for the hotel and hospitality industry than today.
The internet has provided a global medium for tourism promotions capturing markets much more than mainstream media could reach. The promos encourage not only trips to tourist destinations abroad, but also checking out local attractions. Thus, the now trendy staycation, or spending vacation in one’s home country, which has given domestic travel a much- needed boost.
Such developments mean one good thing: an increased need for hotels. Amid the boom, however, the hotel industry faces a number of challenges.
STR Inc., a data company based in the United States, formerly known as Smith Travel Research, has presented new studies on factors that will affect the viability of the industries such as the hospitality business.
STR measures the growth of the hospitality in seven segments, which includes independent properties. For this year, STR expects to see growth in each category, except occupancy, which will most likely experience a minor decline. STR points to increased supply of hotels as the cause of the decline, rather than a decrease in the number of travelers.
The following are other trends that STR predicts will affect the hotel and hospitality industry for the rest of 2018 and in the coming years.
Activities and guest experience
A swirl in activities, predicted in 2017, has been carried over to 2018. Last year, more than a handful of startups took in more than $ 200 million in funding and massive players integrated their activities and tours segments into their rewards programs.
The activities promos, which include everything from tours to bike rentals, is a multi- billion dollar segment of the hospitality industry that no individual company or entity controls. STR said the current market is so fragmented that no “go- to” site exists to plan a trip beyond where travelers are physically staying. There are also hundreds of different ways to find activities, depending on where one is traveling or the type of experiences a traveler seeks.
STR added that the current state of the market means that every player in the hospitality industry is itching to grab this ancillary revenue. Players, from individual properties to other third- party companies, have a massive opportunity to capture travelers’ attention and money.
Meanwhile, STR sees two opportunities in the activities market. First, connecting travelers to activities they know they already want to do like visiting a theme park or joining a sporting event. Second, connecting travelers to entirely new experiences they do not know about. Often these types of activities are unique to the destination and require knowledge of the local area and culture.
Bitcoin
STR added that it is hard to ignore the hype around Bitcoin since it had made massive waves in the final months of 2017. If Bitcoin and digital assets cryptocurrencies become more prevalent in day-to-day life, it might be time to start looking for a payment processor that accepts bitcoin or other new- age currency types. Stripe, for example, has already enabled their payment processor to accept bitcoin and Square is testing it with some users.
Bitcoin may be booming right now, but it is a completely unprecedented form of money that may or may not sustain its viability. Only time will tell if it will become a stable form of currency.
Overlap of vacation rentals and general lodging
The websites created for vacation rentals will start to show traditional accommodations and website created for traditional accommodations
will start to show vacation rentals. Powerhouses like Airbnb now allow non- vacation rental properties on their site. Other vacation rental sites like VRBO and HomeAway will cross- post listing on larger, non- specific OTAs.
STR also sees traditional hotel companies building and purchasing properties to rent them out as vacation rentals. The idea of hotels moving into the vacation rental space does not feel like a huge stretch because they have had timeshares or similar programs for decades.
As the idea of vacation rentals becomes more mainstream, STR expects more consumers to flock
to the idea of alternative accommodations. Just like hotels and other traditional properties, vacation rentals come in all shapes, sizes, and price points.
Overtourism
Overtourism affects cities across the world in big ways, according to STR. The most noticeable problems with tourism include stress on the local infrastructure, traffic, and environmental impacts. European cities like Amsterdam and Barcelona are two of the most affected and have felt the bane of overtourism.
But what solutions are there to overtourism? Limiting transportation options, increasing prices, marketing, and collaboration between key stakeholders are among Skift’s top ways to control overtourism. And in many cases, the solution seems to be to attract the right type of travelers— those who will stay longer and spend more money at the destination— as opposed to tourists, like those going on a luxury cruise, who may only pop into a popular city for a few hours, congesting the city without contributing much to the local economy.
Technology in properties
Technology and hospitality have a lot of different facets. One is technology being used to run the property, and then there is the technology that guests interact with ( tablets, TVs, speakers, etc).
On- property technology
As for traveler- facing, on- property technology, STR has seen hundreds of different ideas tested. From tablets in rooms to giant touchscreen computers in the lobby, many properties want to offer a tech- forward experience, but somehow many miss the mark. The problem, however, is that most of the technology used up to this point are clunky and in addition to whatever device travelers already have.
The technology that will survive and thrive in 2018 will be those that act as companions to travelers’ existing devices. For example, a portable hotspot enables guests to use their own devices while they’re not on the property. An in- room tablet that only works during the time at the property is far less useful, even for those who hang around all day.
Data protection
Big data has been a buzzword for years now, but STR sees new solutions reaching small to medium- sized businesses. Taking control of one’s data is the first step to creating better strategies for everything from staffing to rate management. In today’s world where nearly everything happens online, it’s essential to take a look at the data that matters most to one’s business.