Photo courtesy: HX: The Hotel Experience
You just can’t catch a break in the hospitality industry. Even at a time when hotel occupancy rates are soaring in many domestic markets, disruptive forces like the sharing economy, the emerging millennial market, and changing tastes in food and beverage are forcing hospitality industry leaders to rethink the way they do business.
That was the theme among many speakers at the recent Hotel Experience trade show held here at the Javits Center.
Here are five big trends that kept coming up on the trade-show floor.
1. The sharing economy strengthens
Dan Berger, CEO of Social Tables, a meeting software developer, predicted that in the future hotels will cater mostly to the luxury and group market, while business and leisure transient travel will migrate to sharing accommodations like Airbnb. PKF Hospitality Consulting president Mark Woodworth agreed that sharing accommodation entrepreneurs present a real threat to traditional hotels. Woodworth said that in some markets significant percentages of Airbnb accommodations already are operated by a small number of professional managers – and are earning much higher revenue than other hosts. “These are sophisticated hosts using tools like yield management, just like hotel companies,” he said.
Hotels can’t wish away Airbnb, said Skift CEO Rafat Ali, “but there is mass denial going on among lodging leaders. Airbnb won’t be as transformative for hotels as Uber has been for the taxi industry, but it may be the next big distribution channel, supplanting OTAs.
2. Legacy hotel brands need to re-create themselves
Peter Yesawich, vice chairman of MMGY Global, said “there will be a lot of roadkill” among older brands, as Millennials are driven less by brand loyalty and more by the search for novelty. Marriott’s Jordan Heitzner, manager of marketing planning, said hotels will have to adapt to sharing and “move away from their traditional focus on consistency to offering different amenities and experiences.” One way to do that is through developing strong connections on social media; “instead of thinking about what services are in the building, maybe they should shift their thinking to what the neighborhood has to offer.”
Ali said “there are younger travelers who wouldn’t be caught dead in a Marriott or Sheraton, and that is why companies like Starwood are for sale. Some hotel brands are hoping that younger travelers will move back to them as they get older but you can’t count on that.”
Millennials simply see hotels differently, said Philippe Cesson, CEO of Cesson 3.0, a social media specialist. For instance, he said, 36% of prefer working in the lobby rather than their rooms.
3. Disruption has come to food and beverage, too
At the session called “Outside of the Box: F&B trends in Lifestyle Hotels,” panelists came up with old rules vs. new rules, as follows:
- Old Rule 1: Hotels are restaurant-centric.
- New Rule 1: Hotels are bar-centric, places where consumers can network and enjoy creative cocktails and craft beers.
- Old Rule 2: The restaurant and bar are in separate rooms.
- New Rule 2: There are no boundaries as to where any public space ends. The lobby might flow into a bar or a restaurant.
- Old Rule 3: Hotels are late adopters of f&b trends.
- New Rule 3: Hotels are becoming early adopters, although they have to be careful because it’s harder to change the culture of a hotel brand than that of a restaurant.
- Old Rule 4: Food is brought to the room or to a restaurant table.
- New Rule 4: Guests are mobile, hitting the grab-and-go to get food for the room or for the plane ride.
- Old Rule 5: Meals are about menus.
- New Rule 5: It’s all about snacking, grazing, and sampling – social dining that caters to specific diets.
Wolfgang Lindlbauer, Marriott’s chief discipline leader for global operations, said the hotel company has been offering up to $50,000 to entrepreneurs in certain markets to develop restaurant concepts at Marriott properties—and the competition has been intense. One result: One London Marriott opened a pop-up bar and dinner “joint” on the roof called RoofNic (roof and picnic) that has been a huge success, with eight-hour lines.
4. Disruption’s next stop: meetings
Dan Berger, CEO of meetings-software developer Social Tables, said:
- The industry’s current processes will be obliterated as event logistics become automated, and event apps disappear, along with paper money, at events.
- Events will be crowdfunded and content will be crowdsourced.
- Instead of content, workshops for exchanging knowledge will be the key component.
- Attendees will meet the right people and no business cards will be exchanged.
- And despite all those f&b trends, f&b will be replaced by more efficient supplements or synthetic alternatives.
5. The good and the bad for travel agents
Yesawich said the “sense of wanderlust among millennials is exponentially greater than the other three generations.”
Moreover, the two groups that have seen the biggest increase in the use of agents have been the affluent and Millennials—two groups that “perceive a value in paying for their time.”