The international hospitality industry is anything but kind. For a long time, there has been almost no innovation in this field, but the arrival of a technology-driven on-demand economy has radically changed this. The appearance of Airbnb on the scene was an indicator of this change, along with the rise of boutique hotels. Soon even traditional restaurant chains have begun to experiment, grow, acquire and, consequently, innovate intensely.
This brings us to the current scenario of hospitality. Although it continues to be a brutal, adamant and highly competitive industry, the path to success is now multi-faceted. There is no valid formula for all and hotels no longer have to adhere to rigid and fast rules. Technology has the role of a great equalizer, giving even the smallest player the chance to fight to survive.
Around the world, the travel, tourism and hospitality sectors remain a key to economic development and job creation. In this economy where transport has become more accessible and the borders of the countries are blurred, it is safe to assume that travel and tourism will remain a dominant sector for future neighbors and far.
Consider these statistics:
- In 2016 Travel & Tourism contributed 7.6 trillion US dollars to the global economy and supported 292 million jobs.
- This revenue generation includes 10.2 percent of world GDP.
- 1 in 10 of all jobs can be attributed to the travel and tourism sector.
- With 77%, pleasure trips constituted a part of people's expenses. By comparison, business and work travel accounted for the remainder of 23%.
- Domestic travel (72%) was higher than international travel.
- In 2016 the entire contribution to GDP was increased by 3.1%.
- By 2027, this sector will probably represent 11.4 percent of global GDP and will support more than 380 million jobs globally. Obviously, this indicates that this sector will exceed the global economy.
There is no doubt that companies like Airbnb are in direct competition with hotels in certain market segments. This implies that part of the business can be additive, as travelers are making more trips (and even longer) than they would do without the option. However, what is important is that private accommodation has changed consumer expectations to a fundamental level, redefining what and where a hotel is located.
Competition in the hospitality industry is the result of two aspects:
- Technological adaptation
- Changing the customer profile
As I said before, technology has leveled the playing field and contributed to various facets of the industry, including branding, communication and awareness. In particular, three particular trends are
reshaping the hospitality industry in the coming years. Let's take a look at each of them individually.
A mobile-first approach
In emerging markets around the world, 1 billion people should be online globally. Most of these will be customers who will experience the entire life cycle of guests on their smartphones. Hospitality and travel companies have no choice but to invest in loyalty and retention strategies for mobile and first-time guests.
In any case, customers are always looking for this & # 39; custom & # 39; The experience and enhancement of innovative mobile technology such as AirBnb and Uber will be fundamental for differentiation and brand experience. Hotels will have to offer booking capabilities, lightning speed operations and other points of contact for the entire customer journey on mobile phones for the convenience of their customers.
With almost unlimited Internet access for both digital natives and non-natives, connectivity is set to increase. Furthermore, with the proliferation of connected devices and wearable devices on the market, hotels will have to become innovative when it comes to new ways of interacting and interacting with the consumer. Virtual reality tours, augmented reality interactions, robotics and artificial intelligence will guide the market and prepare it for other travel experiences that can be delivered by proxy.
Machine learning, big data and analysis
Drawing on big data it is possible to create and take care of a widely customized experience for every type of consumer. Many marketing campaigns can be exploited without problems and monitored taking into account the tangible numbers for growth and further optimization.
In addition, it accelerates existing processes such as customer service, feedback collection, email automation and customer engagement. Moreover, it can also facilitate the upscaling and downsizing of the business based on the objectives of the company.
Modification of customer profiles and brand experience
The tourism industry is seeing a change in the psychographic and demographic profiles of travelers. Together with the travelers of Gen X, c & # 39; is a new influx of millennials, whose expectations and lifestyle are establishing completely different standards for the performance of the sector.
The customer experience is currently the most dominant brand differentiator. It will also promote customer loyalty and referrals and hotels will be needed to synthesize more targeted, personalized and intricate loyalty schemes than ever.
This personalization and differentiation also extends to the kind of experiences you create. The home away from home & # 39; the concept eliminates the homogenization of luxury, which was the previously tested paradigm.
Now, to provide unparalleled service, rooting the hotel in its local climate and at the same time offering experiences beyond conventional hotel space, has become an important factor. The millennial demand for organic food and sustainable options also creates greater vulnerabilities in terms of risks and food security, which must be monitored by hotel owners.
Even travel brands have been left behind by non-travel brands that have spoiled customers by providing higher service levels. Amazon, Starbucks and Uber are some of the names that millennials hold in high regard, and the competition will intensify only when customers begin to expect the same from all service providers, in particular the protagonists of the hospitality industry.
This brings us to the last point: marketing for this new consumer. Hospitality sales, as they are, are different from other consumer goods. This is because both the material and the intangible product must be sold by the player. Success therefore depends more on the provision of marketing services & # 39; rather than simply pushing the consumer to buy what you are offering. It is important to create the right brand image that encourages trust and also conversions.
A consistent brand identity also becomes more important as customers have different fronts on which they can bind your brand. Your active presence on social media becomes very important as a portal for customer engagement.
Customers can also research and evaluate themselves better thanks to portals like TripAdvisor and Yelp. The reviews and recommendations of a friend or an influencer suddenly become decisive factors for sales growth. In addition to providing a stable revenue stream, regular customers can become full-fledged influencers.
Taking advantage of all the tools and technologies that come from digital marketing is not only the need for now, it is also much cheaper and more suited to customer preferences. Email and content marketing are now intimately linked to SEO and brand visibility on the web. Most of these marketing efforts are aimed at creating, caring for and carefully maintaining the identity and brand image. Continually engaging customers with the new age's best marketing practices, as well as providing an invaluable experience, will be what takes you beyond the competition.
The sector is extremely profitable at this point, and is ready for an immense growth and favorable amounts of investment. If you are an existing player who is not doing very well, or a new player trying to hit the industry, keeping all these points in mind will give you a significant advantage over the competition.