Hospitality Paradigm

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.

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.

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.

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.

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.

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.

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.