Internet Travel Monitor - Marketing, Research & Tech

April 18, 2018

Hoteliers Share Insights on the Industry's Future

Seamless integration of personal tastes and technology, blurring lines between different parties in the industry and increased use of data are all expected to meaningfully change how hotels operate.

The hotel industry is going through a period of dynamic change, according to a panel of experts who spoke at the recent Hunter Hotel Conference.

According to panelists at the “Looking forward… The hotel of the future” session, a shift in consumer behavior makes it difficult to predict exactly what the industry will be like in a matter of decades.

“I’m excited that we don’t know what the industry will look like in 35 years,” said Jonathan Wilson, VP of product innovation and brand services for Hilton. Hilton is “about to be 100 years (old), and we constantly look back and talk about innovations. But those happened over a very long period of time. But compare that with how much the industry has changed just in the last three years.”

Heather Balsley, SVP of global marketing mainstream brands for InterContinental Hotels Group, agreed that the shift in the landscape has been remarkably fast.

“What’s happened over the last three to five years, and what we expect over the next two or three, are unlike what we’ve seen in this industry before,” she said.

But Stephen Jennings, U.S. leader for hospitality at Deloitte, said this should be taken as a good change, because most innovation is helpful for the hotel industry and travel in general “unless we envision ‘Star Trek’ technology like teleporters.’

More connections

Wilson said one of the changes he expects to continue in the hotel industry is a move toward more personalization—fueled in large part by technology—that will make each stay tailored to guests’ needs, wants and tastes. He said this will all be controlled easily from personal devices.

As you walk in the room, “you’ll have the temperature you like, streaming music you like,” he said. “The TV will be on with your Netflix account. It will all be seamless. You’ll even be able to control the room’s colors every stay. It’s an impactful change.”

Balsley noted it will be increasingly key for companies like IHG and Hilton to invest in technology as guests grow to expect that sort of seamless integration.

She said the companies poised to succeed will be the ones that “combine scale to invest in technology but stay agile to keep moving and keep their pulse on customers, on the changing needs of owners and operators, and bring this service-driven industry to life in a capital-intensive industry.”

Increasing use of data

Any revenue manager can tell you that data already plays a huge role in the day-to-day operations across the hotel industry, but data usage is only expected to get deeper and broader, according to panelists.

Balsley said data now “drives all marketing decisions” and is vital to “stay ahead of what customers need.”

Jennings described the future use of data to predict guest behaviors and reach them with marketing message as “‘Minority Report’ on steroids.”

“We are going to have billboards talking to us,” he said. “It’s hard to fathom how that all is going to feel, but it seems pretty likely that those kinds of things are really important.”

A different role in communities

Jennings said a hotel’s fundamental place in cities and neighborhoods will likely change.

“The traditional boxes and walls of those boxes are going to have to break down,” he said. “There are more platforms for (connectivity) in communities, and it will be important to use that physical real estate (to bring locals in).”

Klaus Kohlmayr, chief evangelist for Ideas Revenue Solutions, noted that the growth in alternative-accommodation platforms like Airbnb could spur a fundamental reimagining of what constitutes a hotel. He said using technology to centralize systems, services and amenities could allow hoteliers to scatter room supply in small numbers across an entire city instead of just in a centralized cluster.

“Imagine having 200 units spread across a city managed from a central location,” he said. “That’s the future of hotels and how it becomes a hub.”

Continued consolidation and blurred lines

Balsley noted the “trends point to more consolidation” in the hotel industry, which she tied back to the importance of scale for things like distribution and investment in innovation.

She said large hotel companies need to accept the fact that there is a continued influx of brands on the market, but that doesn’t mean they can’t be successful.

“The challenge for all of us is to keep the big-power brands relevant and growing,” she said. “It’s daunting, and it depends on how you stay on top of trends and stay relevant to guests.”

Jennings said industry watchers can “reasonably expect the brand phenomenon to continue.” But he noted some of the traditionally well-delineated roles within the industry—from brands to operators to third parties—will begin bleeding from one to the other.

“When you look at technology platforms, (online travel agencies), owner groups, those traditional nice tight lines won’t hold well,” Jennings said, while noting that change “will take a while.”

Human connections still key

Human-to-human interaction is still the fundamental building block of hospitality, and Balsley said anyone who assumes that will change even amid the tsunami of innovation will be mistaken.

“So what’s really exciting is how technology takes the burden of transactions off hotel teams,” she said. “That allows them to spend more time with our guests. Technology also gives guests the perception of service and seamless experience. What was once delivered by people can now be delivered by tech.”

She said one thing that “nobody has nailed yet” is how to best leverage technology as a training tool for staff.

“There is huge, untapped potential there,” she said.

Wilson said the focus on people is what will continue to differentiate his company and other traditional hotel companies from services like Airbnb, noting that Hilton’s goal is to be “the most hospitable business in the world.”

“Airbnb is fundamentally a lodging company,” he said. “Disney fundamentally is an entertainment company. Hilton is fundamentally a hospitality company.”

Copyright 2018 STR, Inc. All rights reserved. From By Sean McCracken.
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