Mobile is still king

Global mobile commerce was up 40% and in 2019, experts predict that 70% of ecommerce sales will come from mobile transactions.
Search engines already favour mobile-friendly sites in their rankings, and search is a critical channel for the hotel sector. It’s increasingly important for brands to localize their mobile site content for specific regional audiences—from providing contact information of local properties in native languages, to offering payment options that reflect the preferences of regional customers.
Hoteliers must also create engaging, authentic in-language digital experiences that will satisfy the expectations of their guests in mobile-dominated markets.

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Hotels to capitalise on Immersive Technology – VR

Opportunities to leverage newer technologies like VR (Virtual Reality) in the hotel industry is the way to go forward. Imagine experiencing glimpses of your holiday experiences or stay at a resort or city hotel from the comfort of a VR room set up in a hotel lobby promoting experiences for different segments, for different hotels in the group and even for the same hotel itself. Locational experiences, adventure sports, relaxational therapies, entertainment and much more can be experienced by potential guests – thus making this a powerful marketing tool using immersive technology.

To understand this better, watch the Cannes 2017 award winning ad-film on how VR Vaccines (Brazil) battled childrens inherent fear of the injection shot.

 

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Vitual Reality for Hotels

Ever-increasing investments in virtual reality technologies have created an opportunity for consumer-focused brands—including hotels—to create distinctive virtual experiences for their guests.

Ecommerce giants like Amazon and Alibaba are already creating immersive VR shopping experiences for their customers, and hotels can (and should!) pay close attention to how consumers respond to the ability to experience brands and their products—and even complete transactions—in virtual environments.

But global brands have an additional challenge: how can they create immersive virtual experiences localized for any global language to serve their international audiences in authentic ways?

The same technologies that allow brands to provide in-language experiences for customers online may soon be capable of translating VR-based experiences, from product voiceovers to text and imagery displayed in virtual worlds. And content translated for central digital channels like websites may someday be easily repurposed for VR environments using the same technology.

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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.

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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.

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China – The Emperor of outbound tourism

In only three decades, the Chinese have gone from easily stereotyped, rube, new tourists to conquerors of the industry. After hundreds of millions of visits and billions of dollars showered around the world, Chinese tourists now hail from the middle, rich and the very rich classes. Fewer travel in groups. Some still enrage destinations with their thoughtlessness. Others are welcomed for their enthusiasm and unique points of view. Above all, the Chinese are changing tourism around the world.

The travel numbers are astonishing. For the fourth year in a row, the Chinese are the world’s biggest group of international travellers, taking 142 million international trips in 2017. In the next decade, that number is projected to jump to 390 million, according to the China Outbound Tourism Research Institute.

And Chinese tourists are the biggest international spenders: $258 billion last year. All this has been accomplished at a time when only 7% of Chinese citizens hold passports. On the inbound side of the equation, China is expected to become the No. 1 travel destination sometime in the next five years, knocking out France and solidifying its dominance over tourism.

Chinese tourists can lift economies seemingly overnight. Chinese visitors to Europe improved the Continent’s trade balance by $4 billion.

Wealthy Chinese shoppers among the haute couture shops of Avenue Montaigne in Paris are a common sight. There is so much money involved in Chinese tourism that Anna Wong of the U.S. Federal Reserve recently warned that what looks like tourist spending overseas might actually be money laundering to conceal asset investments from the Chinese government.

It’s hard to wrap one’s arms around this ever-growing Chinese tourism juggernaut, but its emergence is clearly the most important milestone for the industry since globalization kicked off the modern explosion.

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Pop-up Hotels

Permanence is passé. As any trend-conscious urbanite will attest, bars, restaurants and stores no longer require longevity in order to achieve success. In many cases, the shorter their shelf-life, the more popular they become.

Pop-up outlets have – with a certain irony – turned into one of the more durable trends of the past few years. Typically they give fledgling brands a showcase, maximise cheap rents and offer customers a sense of having bought into something unique. But can the world of short-lease fashion stores and week-long cocktail bars translate into the hotel sector?

Of course it can. The concept of pop-up hotels has become more prevalent in recent times. This is partly due to clever branding (temporary accommodation, after all, being far from a new phenomenon) and partly due to some highly creative advances on the part of providers. In an era when differentiation has become all-important, there’s value in being able to market an overnight stay that doesn’t fit the usual mould.

Pop-up ‘hotels’ tend to fall into one of a few categories. Many are essentially luxury tents, soft-shell spaces erected for a few days at a time in desirable locations and fitted with as many mod cons as can realistically be managed. The ever-more-popular notion of festival ‘glamping’ also fits here.

Other pop-up accommodations are more functional but no less viable, making use of existing structures that are currently empty. These might be anything from shipping containers to untenanted buildings.

The premise behind the idea is simple. When high-rise residential buildings are completed, it can take them up to two years to secure long-term tenants. WhyHotel, which recently secured almost US$4m in seed funding, makes the most of this period by selling as-yet-unfilled units in these new developments as hotel beds.

“We’re on site for guests 24/7,” explains President and Co-founder Bao Vuong. “We generally start by using around 50% of a building’s units, so early on we have by far the predominant number of people in the building. That percentage gradually falls as the months go by, and by about 20% we pull out.”

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The pangs of Over-Tourism

The term “overtourism” is a new one and denotes the phenomenon of a popular destination or sight becoming overrun with tourists in an unsustainable way. We have seen it occur across Asia for much longer than the word has been commonplace, and the reality of it looms large as tourism continues to grow on a global scale. But whose fault is it?

Having acknowledged the issue earlier than most, a British travel company has come up with a list of offenders that includes the expected as well as the unexpected. Those belonging to the former camp include: airlines, which have transformed countless holiday hotspots into honeypots by offering affordable flights without a thought to the environmental costs involved; cruise lines, which have been accused of not only polluting the atmosphere but also giving little – financially or otherwise – to the ports at which they call; tourist boards, which for too long have been concerned with volume over value; and, of course, travellers themselves.

Among the more unusual suspects, however, is the United Nations World Tourism Organisation, nominated for having stated that, “Tourism is not the enemy. Growth is not the enemy, numbers are not the enemy. It’s how we manage growth that matters,” in response to anti-tourism protests in Barcelona, Spain, last year. Arguably, in the case of overtourism, both tourism and growth are the enemy, something that a leading global institution would do well to admit.

The media is also singled out, “mainly because they are resistant to publishing negative stories on their travel pages.” The best beach articles declaring the top 10 Instagram spots are hackneyed, repetitive and guilty of funnelling travellers to the same tiring destinations. Travel publishers, editors and writers could also be pulled up for not acknowledging the issue of overtourism until it becomes impossible to ignore.

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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.

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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.

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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.

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RevPAR growth translated into profits

Hotel profitability is the primary measure of success for hotel owners, managers and operators. However, revenue and top-line data continue to be the focus of the industry.

There is, however, a clear relationship between top-line performance (RevPAR) and overall profitability (gross operating profit per available room). While examining the relationship between revenue growth and profit growth, generally, profit growth tends to be between 1.5 and 2.0 times the growth in revenue. So a 10% increase in revenues equates to a 15%-20% increase in profits (GOPPAR). Currently, with profit margins near peak levels and significant profit growth tough to come by, this ratio tends to be lower than in past years. If we look at individual hotel performance growth, the relationship is immediately apparent.

In addition to looking at percentage growth, we can also examine absolute growth in revenues. GOPPAR is a function of RevPAR growth. The correlation is much higher when looking at absolute RevPAR and GOPPAR growth.

For every rupee increase in RevPAR, full-service hotels see an increase in GOPPAR. There is also a fixed element in this relationship. The constant tells us that for a static RevPAR, GOPPAR actually decreases. This demonstrates the rising levels of operational costs, like labour costs, HLP costs, F&B Costs, R&M Costs, etc.

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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.

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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

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Expected Changes in Biz Travel – 2018

The travel industry is being heavily disrupted – The rise of the sharing economy, changing demographic expectations, big data, political turmoil, AI, and currency shifts are just a few of the many forces that are putting pressure on the industry. Here are some changes we can expect in 2018.

Travel growth expected: According to the Global Business Travel Association report, expected business travel spending is to grow by 6.1 percent in 2018, up from the expected 5.1 percent in 2017 and this optimism in the business travel industry is driven by accelerating global trade, despite echoes of the recession, in recent memory. Growth in manufacturing and in emerging markets is also major factors. There will be an increase in travel costs, with airfares expected to rise by 3.5 percent and hotel prices 3.7 percent.

The sharing economy completes its transition to business mainstream: In 2014, small business owners chose taxis over Uber by a factor of 3 to 1, but by late 2017 that number has flipped, with small businesses choosing Uber over taxis by 3 to 1.

Airbnb may also be approaching saturation. In 2014, small business owners chose hotels over Airbnb by a factor of 16 to 1. By late 2017, that lead is down to 6 to 1.

Clearly, there is some resistance to embracing the sharing economy when it comes to sleeping arrangements, but even those going the hotel route are likely to see changes in a more casual direction. This is part of a larger trend towards the “consumerization” of business, which is likely to become increasingly important for business travel, especially for businesses hoping to hold top talent in recruitment, negotiation, and other travel-heavy positions.

Self-driven cars begin to play a real part: Uber surprised everybody in August of 2016 by launching a fleet of self-driving cars in Pittsburgh. While humans in the driver seat monitored the cars, it was much sooner than anybody thought a major company would be going commercial with self-driving cars, in any capacity.

The gravity of how quickly this shift could take place hit home in late November, with the announcement of a deal that would put 24,000 Volvo self-driving cars in Uber’s fleet. The cars will begin to hit the streets in 2019, but the fact that this major deal was brokered should have important implications for the direction of the business travel over the next year.

AI hits the industry in a big way: While the influence of self-driving cars is more likely to be on the horizon in 2018 than on the front doorstep, the broader world of AI will likely be making a big impact. According to an IBM report, more than a third of travel industry leaders will have four or more cognitive projects underway in 2018, and 41 percent plan to launch a cognitive project. Most of the investment is currently going towards chat bots to assist with customer service, whether in the form of messaging or call centre service.

IBM’s report found that the most cognitive-ready businesses in the industry considered personalization of the traveller experience one of the most important points to focus on. The report stated that an unnamed global airline was investing in a Siri-like AI that would communicate with travellers in natural language to put together a personalized travel plan. That personalization would be bolstered by analysis of interactions with other travellers and large data sets about preferences.

Meanwhile, Quantas Airways is already using self-service tech to cut check-in times by 90 percent, the Watson Virtual Assistant is improving call centre performance, Hipmunk has rolled out an app you can talk to like a person, and Amadeus is building custom offers for people based off of their social media profiles (with permission, it should be noted).

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