Forecasted Hospitality Trends ~ 2019

Travel Market Report has seen a trend toward more all-inclusive properties; Many resorts have ditched resort credit to bring guests a vacation experience that is truly all-inclusive, including deeply discounted experiences like golf, spa treatments, tours and excursions.

Luxury travellers will rely more on travel agents. Just as 2018 was the year of multigenerational travel, 2019 will be about couples and adults. More hotels are catering to adults in kid-free environments, either by opening adults-only properties or adults-only sections within one property.

Guests are looking for “Insta-worthy experiences” and hotels are delivering. In Antigua, for example, properties are “now including extras like Galley Bay, where you can take a hobie out to explore a shipwreck; or Blue Waters, where they offer a free trip out to the reef for snorkeling; or Curtain Bluff, where they include waterskiing and motorized water sports.”

The trend is toward the unique. Travellers want that local culturally immersive experience nowadays. Everyone has ‘been there, done that’ with the major attractions and sightseeing destinations; people want that true ‘what the locals do and go’ experience. Smaller boutique hotels and even bed-and-breakfasts have become more popular for clients who want that small town, local charm and experience.

Hotels are offering “tours that take guests to authentic and not commercial spots, where they can interact with the grower or the local fisherman. Experiences that are off-the-beaten-path, so that discovery becomes the whole point of the excursion.

Meetings too, are looking for the unique and unusual. Groups are stepping out from traditional setups and layouts to introduce new space distributions and designs. For example, instead of having a U shape or a classroom set-up, clients are looking for a mix of furniture to create different spaces within the same room, and also looking to incorporate healthy choices in coffee breaks.

Bleisure & the Sharing Economy

Business travel within Asia is growing at twice the pace of the rest of the world, and looks set to overtake the top-spending Americas within the next 10 years. There is also a growing trend among corporate travellers to include local leisure activities as part of their working trips.

The rise of Bleisure – combining business and leisure activities into one travel experience – is accompanied by a concurrent growth in popularity for sharing services.

While most Corporate Travellers do not have to pay their business travel, they are just as cost conscious as their leisure travel counterparts, and are interested in getting suggestions that help them save money (34%).

The focus on cost has seen the sharing economy, specifically ride-sharing services like Uber and Grab and home-sharing services like Airbnb and Couch Surfing, being a large part of business travel, even more so than for leisure. The reasons for using sharing services are ease and convenience and better quality and service.

The rise of Bleisure means that business travel behaviours are becoming more aligned to leisure travel, including cost consciousness. Sharing economy providers benefit from this trend thanks to the competitive products, flexibility and convenience they are able to offer and deliver.

Blockchain in Travel

Blockchain enables a community to formulate and implement its own economic rules, hence the rise of crypto currencies like bitcoin, which for the most part sidestep government regulations. This is done in part through the digital tokenization of a commodity, real or virtual, connected to a smart contract that defines when and how value is transferred or realized.

With crypto currencies, the commodity is a financial token whose value is typically measured against government-backed currencies. Hospitality technologies now want to create a token and smart contract linked to a specific room in a specific hotel on a specific date and a platform marketplace where rooms can be bought and sold using an interface similar to what is currently displayed by OTAs.

Although the value will float, it would likely do so with more stability than bitcoin because it is backed by something tangible: a reservation.

Once the room is purchased on the platform, it can be occupied by the buyer or resold, either by a prospective guest whose plans have changed or by a speculator hoping to resell the room at a profit. The speculator can be, as examples, an individual, a meetings or wedding planner, an online or offline travel agency, a tour operator or a festival organizer.

The benefit for hotels is that it frees them from dependency on OTAs and enables them to operate with the same benefits as a vacation club, with income guaranteed for a room that could later be traded, resold or even go unoccupied.

The platform will be enormously disruptive to OTAs and it will free hotels from the temptation to sell inventory at significant discounts to OTAs and will provide flexibility to travellers who might otherwise face losses from cancellation penalties.

This system will reduce the cost to hotel owners from as high as 25% of a room’s rate — an estimate of OTA costs — down to 2.5%.

This platform has the potential to disrupt the hotel brands themselves, and possibly even home-sharing companies like Airbnb, by providing a cheaper form of third-party distribution for owners of hotels and homes/apartments/spare rooms.

Alexa for Hospitality

Alexa for Hospitality is designed to bring Amazon’s voice assistant technology to everything from chain hotels to vacation rentals.

The system can be customized to include key guest information, like checkout time or pool hours; allows guests to request services like housekeeping or room service; and can be configured to control “smart” hotel room functions, like adjusting the thermostat or raising the blinds.

Marriott is Amazon’s launch partner on the new platform, which is notable not only for the potential scale of this rollout, but also because the hotelier had been testing both Siri and Alexa devices ahead of today’s news.

According to Amazon, Marriott International will introduce the new Alexa experience at select properties in Marriott Hotels, Westin Hotels & Resorts, St. Regis Hotels & Resorts, Aloft Hotels, and Autograph Collection Hotels starting this summer.

Fake Hotel Websites Conning Holiday-Makers

The rise of fake hotels is a phenomenon that has left both consumers and OTAs frustrated and out of pocket.

In recent months, the travel industry has witnessed a tidal wave of fake chalet websites, with one website, Alps-stay.com, conning unsuspecting holiday-makers out of tens of thousands of euros.

It’s no wonder fraudsters are targeting consumers booking holidays – hotels in Europe saw an increase in bookings of 6% in 2017 compared to 2016. However, it’s not just consumers suffering the monetary blows, OTAs are too.

How? A fraudster will list a fake hotel and then use stolen credit cards to make a booking via the OTA’s website. The OTA will then receive chargebacks for bookings after making a payment to the fake hotel. By this point, the fraudster will have withdrawn all the funds paid by the OTA and won’t respond to any contact attempts, leaving the OTA with a financial loss.

A new era of digital marketing in travel

Online search is now the first step for a majority of travellers, with some consumers visiting up to 38 sites before booking a ticket. Yet the travel industry must adapt to newer digital marketing strategies to win over potential customers.

The key to success is delivering ultra-precisely targeted content, leveraging personalized re targeting combined with AI and deep learning.

A single customer looking to book a trip can visits hundreds of travel pages each day. The search often takes weeks before the final purchase is made. This means there’s a ton of data flying around that digital marketers need to make sense of.

The number of digital travel touch points grows rapidly, as travellers look for better offers via search engines, booking apps, online travel agencies, and deal sites. However, 39% of leisure travellers and 45% of business travellers believe that they use too many websites to find flights. In addition, 43% of leisure travellers and 51% of business travellers apparently want to spend less time searching for flights.

Airfare, hotel and car rental providers can reduce this overload by serving brand awareness and personalized offers at precisely the right time. This moment is where AI and deep learning can change the game for digital marketers in the travel industry.

The Evolving Travel Agent

A major chunk of revenue continues to come from commissions and service fees. But the source of these commissions has been changing over the years.

When airlines stopped paying high commissions back in the 1990’s, travel agents started to lean heavily on add-on services such as hotel and transport for commissions.

With services such as Airbnb and Uber now available in almost every major city, commissions from these services too are likely to dwindle in future.
At present, travel agents depend on two categories of travelers for their revenue. A good number of corporate business travelers still rely on partner agencies for their tickets.

In the consumer segment, holiday packages and custom itinerary planning services have been taking off with an increase in international holidaying. The drop in commissions is mostly made up for by the corresponding rise in the scale and value of such bookings

Emails are still numero uno

Despite whisperings of its decline in recent years, email remains a growing, go-to channel for marketers. A June 2016 survey of US marketers conducted by the Direct Marketing Association (DMA) and Demand Metric found that email had a median ROI of 122%—more than four times higher than other marketing formats examined, including social media, direct mail and paid search.
Agency professionals and in-house marketers worldwide are in agreement about email’s effectiveness, according to March 2016 polling from Econsultancy. Both groups named email marketing most frequently as a tactic able to provide a strong ROI, at 80% and 73%, respectively. The study also found that while respondents allocated an average of 16% of their overall marketing budget to email for 2016, the program contributed to 23% of total sales, a ratio that indicates email’s positive ROI.

2015 Business Travel Forecast

American Express Global Business Travel has released its annual Business Travel Forecast revealing air, hotel and ground transportation prices are expected to be neutral to slightly higher across all regions in 2015. With new hotel supply limited in many major markets, the slight increases in business travel demand expected should put more pricing power in the hands of hoteliers next year, according to American Express.

Additional global hotel pricing predictions include:

  • In North America, hotel rates are expected to trend upwards, buoyed by favorable economic growth, increasing demand and a lack of new inventory. Additionally, moderate and upscale hotels continue to explore ways to further differentiate themselves from the competition. Amex is forecasting rate growth for mid-range hotels of 3% to 6% and upper-range hotels 3.5% to 7%.
  • Across Europe, the Middle East and Africa, hotel rates are predicted to rise slightly in nearly all countries and categories, as demand steadies. American Express forecasts rate growth for hotels in EMEA at 1% to 6% for mid-range hotels and 0% to 5% for upper-range properties.
  • In Asia Pacific, hotel rates across the region are expected to rise minimally across most categories in the coming year. The forecast for rate growth ranges from 0.8% to 3.5% for mid-range hotels and 0.7% to 3.5% for upper-range hotels.

Hotel Revenue Acquisition Costs

Based on a recent study over 3 years, released by The Hospitality Asset Managers Association (HAMA) it was found that Hotel revenue acquisition costs have far outpaced revenue growth. It specifically looks at both the external costs of brand allocations (for marketing, advertising, major promotions, loyalty programs, national and global sales offices) and third party commissions (for group & transient bookings) as well as the internal costs of marketing and sales programs, including local marketing, sales staffing and other expenses, including reservations staff.

Total customer acquisition costs rose by 23% while brand allocations grew by 37%, and third party commissions by 34%. As a result, properties now control less of their marketing fund (44% vs. 49% in 2009). It is thus critical to understand and then control external costs, including the costs of customer acquisition.

Election Tourism

As election season peaks, tourists are in for a unique experience — be part of a political rally, meet a leader, take part in a heated political discussion in a village chaupal.
It’s the season for “election tourism” as the political climate in a state with the highest number of seats and the most number of PM aspirants heats up. A tour operators’ guild in Gujarat is hard-selling politically-hot places like Varanasi — from where the state’s CM is trying to realize his prime-ministerial dreams — to both foreign and domestic tourists. They have planned circuits with politics thrown in. The Delhi-Lucknow-Varanasi-Delhi circuit has been marked as “Banaras: The heart of elections” and the Lucknow-Ayodhya-Lucknow circuit is named “UP Central.” Varanasi followed by Ayodhya and Lucknow are the hot destinations.
Tourism organizers are booking trips for people, many of them NRIs from the UK to Middle East.
The mystique of India has been peppered with political excitement. And the colour of Indian elections is sure to add to the glamour. Since tourism is all about innovation, this is working and Tour operators have been attracting foreign tourists by projecting the elections in the world’s largest democracy. Their brochures say: “Mere scale of Indian elections is a factor — 814.5 million voters to choose their representatives in 543 constituencies. The colours of Indian elections such as huge public gatherings, diverse ways of electioneering which includes human mascots, singing and dancing groups besides passive means like posters and banners…”
Tourists will be able to be a part of political rallies, interact with leaders in party offices to discuss on party strategy, ideology and mission and also spend nights in villages where political discussions are at a crescendo.
“Indian elections have always fascinated researchers and policy makers from across the world. No wonder it will attract the common man too. Tourism around elections certainly sounds interesting,” said a retired EC official.

2014 wellness trends

Spafinder Wellness 365 has released its annual report of the top 10 spa and wellness trends worldwide. The report is based on ongoing surveys of the 20,000-plus spa, wellness and beauty providers. My personal pick of their top five global spa and wellness trends for 2014 include:

Healthy hotels: In 2014 “healthy hotels” will become a megatrend fulfilling the demand for restorative travel and helping people stay well on the road. Look for hotels to move from healthy as a marketing differentiator to deeper, more multi-faceted and comprehensive programming.

Suspending gravity: There are more weightless stress and mind-melting flotation tanks, chambers and pools at spas. On the fitness front, there is a global craze for aerial and anti-gravity classes and yoga along with new equipment like anti-gravity treadmills.

Natural beauty meets social media: With the growing popularity of social media and “selfies,” people are expected to look their best 24/7 — without the benefit of makeup and blowouts. In 2014, a new clean-beauty era takes shape focusing on the natural and introducing a high-tech, low-risk beauty. Spas will promote this via organic products, science and technology intersecting to deliver results with minimal downtime that are seemingly produced by nature.

Scent with intent: As aromatherapy plays a greater role in the treatment of physical and mental issues, spas have been motivated to re-imagine their approach to craft aromatherapies with intended effects. Spas are now moving away from the generically pleasant treatments and working in tandem with botanists and digital technology to improve effectiveness.

Urban wellness retreats: Look for exciting movement on the destination spa front. A distinct sub-trend is the emerging urban wellness retreat. More destination spas will be reachable by car and train.

What does the Luxury Traveler want?

A survey of more than 1,600 global, discerning travelers conducted by luxury travel website Luxury Link reveals that by no means do the rich want to pay for Wi-Fi. “Must-have” hotel amenities for 2014 include free Wi-Fi (75.7% of respondents), early check-in/late check-out (53.6%) and free daily breakfasts (47.1%).

Croatia and Portugal were tabbed as up-and-coming destinations for 2014, while adventurous and foodie-focused vacations are trending higher, as well. These high-end travelers will not be sitting idle during their 2014 vacations as 46.3% plan to incorporate adventures such as hiking, sailing or scuba-diving into their trips, while 40.7% are foodie-focused, centering travel around fine dining / cooking classes.

It is about time that Indian Hotels stop charging for Wi-Fi and look at how they can offer the luxury traveler safe adventure options in and around Indian resort destinations. With the tremendous cuisine India has to offer, the possibilities are endless.

Travel Trends 2014

Luxury travel agent network Virtuoso has released its annual trend report suggesting that while multigenerational family travel remains the top trend, active and adventure travel is the dominant trend predicted for all travelers in 2014, especially in more exotic destinations.

The 2014 Luxe Report also found that the rise in longer trips (eight days and longer) to international destinations held steady from 2013, and suggests that when necessary, travelers are willing to book lower room categories to stay in nicer hotels. Italy continues its reign as the top destination for international travel in 2014, followed by South Africa, France and Australia. This year, New Zealand makes an appearance on the list as well. Italy remained the chart-topper for families traveling in 2014, with England, Hawaii, Costa Rica and Mexico rounding out the list.

As in past reports, the motivation behind high-end travel continues to be seeking authentic experiences, rest and relaxation and spending time or reconnecting with loved ones. Re-discovering previously visited destinations and exploring new destinations were new additions to the list this year. Not surprisingly, the list mirrored the most popular destinations for romantic travel, which continue to be Italy, French Polynesia, Bali and France. This year the Maldives joined the list of exotic locations.

Celebrate your Successes

A unique way to celebrate and motivate your sales team… here’s an example of the sales team at the Hotel del Coronado outside San Diego which took the art of team bonding to a whole new level when the group jumped out of an airplane to celebrate its June bookings success.

The team exceeded its monthly booking goal by 200% that month, a production level that had not been accomplished since 2005. To celebrate, they all went skydiving.

Vice President, General Manager Andre Zotoff jumps for the sales team.

“I set the goal so high that I never thought that I would actually have to jump out of a perfectly good airplane,” said Cheryl Ferguson, director of sales, who is afraid of heights. “But they are an amazing team and knocked their goals out of the park … so I had to live up to my end of the deal.”

The entire sales team, along with the new Vice President, General Manager Andre Zotoff, and the director of conference services jumped from 13,000 ft (3,962 m) to celebrate the triumph.