The hotel industry has survived the global recession and come out of it triumphant. It has shown positive signs of growth since 2010. However, the hotel industry performance has historically been cyclic in nature.
Checking in to innovation in the hotel industry
The hotel industry has survived the global recession and come out of it triumphant. It has shown positive signs of growth since 2010. However, the hotel industry performance has historically been cyclic in nature. A long period of growth (10 years) is usually followed by a deep slide, according to a Deloitte report. Which means a downturn is imminent. Already, as per a survey by HVS Global Hospitality Services, the national hotel occupancy in the US is expected to dip by half-a-point.
Deloitte says, “brands which fail to innovate will risk market share”. Boutique and niche players like Airbnb, HomeAway, and VRBO have the digital advantage. Plus they don’t usually invest heavily, which cushions them in the event of a market exit. Big and mid-sized hotels face a higher risk. They might have the moolah but not much maneuverability. To survive disruption by digitally native brands, they need to innovate.
Though it calls for a big investment, outcomes on innovation for big and mid-sized hotels are promising.
Innovation leads to increased earnings and greater customer satisfaction, which is what hotels ultimately aim for. It also beefs up the 3 precious Rs for any hospitality establishment — positive reviews on travel sites, more referrals, and a greater number of revisits. Alongside, innovation means hotels receive a brand boost through partnerships and promotions. Along with the guest experience, the employee experience improves greatly as well.
Here are the top innovation trends mostly started by niche hotels that bigger properties are waking up to.
Technology is the prime driver of innovation in hotels. It has transformed the guest experience altogether. Here’s a scenario that’s more likely than not: Instead of picking up a brochure, your guests check out a property online through a VR walkthrough. On visiting the hotel, they are greeted on their smartphones for a frictionless and frontdesk-less check-in experience. While the hotel app has all the vital information, their queries are addressed by its chatbot. Once they enter their rooms using biometrics, they see everything is connected via IoT, the next big thing in hospitality – so they can control the temperature, turn on/ off lights, play music etc. using their smart devices. A robot knocks on the door and delivers them fresh linen. What’s more, their mirror doubles up as an interactive information kiosk displaying outside temperature, playing news and videos, and the like. Checking out? Your guests can forget cash and pay using bitcoins. Thanks to mind-bending technology like AI and cloud-based services, the future of hotels is already here.
Hoteliers have realized the value of minimalism in design. They are ditching garish colours and ornate interiors in favour of millennial-friendly minimalist tones and simpler and smaller spaces that’s cost-effective in real estate. And not to forget, using more natural lighting that has a greener footprint and adds to positivity. The concept of spaces is also undergoing a transformation. Multi-function spaces are rising in popularity where, say, a lobby co-exists with a waiting lounge, a bar, and a workstation, and seamlessly opens up to an exterior garden. Hotels are also coming up with ‘rooms‘ spread out in different locations in a city (for example, Six Senses in Bhutan has lodges spread out in different parts of a valley). Optimum utilization of spaces is the new cool.
In the world of Big Data, nothing is impossible. Customers leave behind a highly potent data trail from the moment they decide to book a hotel till days after checking out from one. Thanks to insightful data analysis of customer feedback, transactions, and even local data like weather and flights, hotels are predicting guest preferences and procuring services based on those – a vital ingredient for ensuring repeat visits from guests. From optimal room pricing and loyalty programs to temperature, food, and music preferences, guests can go in for a completely personalized experience at hotels today. Properties are even going the extra mile to create private experiences for guests after consultation with their dieticians, healthcare specialists, and even private chefs. In India, The Postcard Hotel is changing the name of the game. There are no check-in or check-out times for their luxury travellers, and breakfast is all-day. Moreover, guests are offered personalized experiences like 3 am sunrise viewing, living next to a 350-year-old chapel, and so on. Clearly, the days of templated services are numbered.
Local experiences are also on an upswing. Inspired by the popularity of Airbnb, hotels are scrambling to gain attention from a volume of visitors who want to experience destinations like a local. So properties are tying up with homebuilders, local cabs, restaurants, food delivery apps, booking sites, and entertainment zones to offer snappy somethings — like wine tasting, distillery visits, crafts workshops, shopping district trips, and so on — for the discerning traveller. That’s not all. Other marketing innovations include selling hotel-branded products to guests for branding boost and a better recall value. While New York’s The Mark hotel sells in-house jumpers, Tokyo’s Hotel Koe houses a bakery and clothing store on each floor.
Millennials form more than one-third of the world’s hotel guests today. Hotels, therefore, are catering to this growing number by offering services that resonate well with them. Think BnB options, vacation rentals, weekend packages, cost-effective plans, bleisure stays, pet-friendly options, easier cancellation and refund policies — the list goes on. Two growing millennial trends that hotels are capitalizing on are going eco-friendly and staying fit. So hotels are banning plastics, expanding their green cover, and designing smart spaces that consume less electricity. While jacuzzi, gym, spa, sauna, and yoga spaces are commonplace, special lighting that boosts sleep, immunity, and energy levels, and vitamin-treated showers are gaining ground. These apart, according to an Oracle report, millennials are extensively using their smart devices to interact with hotels. Properties that fail to realize the millennial guest’s ability to make or break its business will inevitably fail to stay in the race.
Last but surely not the least, the scales are tipping in the favour of hotel employees. The customer is still the king. But the industry is realizing that employees — the hotels’ very own brand ambassadors — are the kingmakers. Keeping them engaged and motivated results in higher productivity and retention and better customer service. Forrester predicts, employee experience will take centre stage in 2019. Already, hoteliers are taking cue and rolling out the red carpet experience for their workforce. Employees are getting trained to handle customer services better, and empowered to ideate and voice out their opinions. Hotels are also ensuring in-hotel and frontline workers stay highly connected in an open and transparent way through internal communication apps. Moreover, rewards-based programs and fun experiences are also keeping hotel staff happy.
The innovation roadmap is different for different properties. It’s not a one-size-fits-all formula. While some hotels might have the expertise to make a digital dash and embrace new-age technology, others might want to focus on a marketing and branding overhaul. Any innovation investment needs to be cost-effective and give a great return. On the other hand, it should be one that can help hotels scale in the future or fail fast with. However, one thing is certain. If a global slowdown of the hotel industry is on the cards, the only way to keep the business alive and kicking is to innovate, and keep innovating.