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Top 10 Hospitality Industry Trends for 2013



By Robert A. Rauch, CHA
November 28, 2012

The upcoming year is projected to be a better and brighter one for the hospitality industry, but what are the new factors driving the market in 2013? The landscape is evolving quickly as content marketing replaces advertising campaigns, mobile merges even more with social networks and travelers are open to spending more on getaways that are worth it.

To understand the market and to help hoteliers capitalize on what’s to come, Robert Rauch, otherwise known as the HOTEL GURU and president of R.A. Rauch & Associates, the leading San Diego-based hospitality management company, has compiled his list of Top 10 Hospitality Industry Trends for 2013.

If you cover finance, RAR just refinanced a hotel at under four percent interest. We can share those trends with you as well.
 
Increase in Travel’s Personal Value
Despite the recent years of a contentious and challenging economic climate, we’re seeing the revival of the most powerful motivation for traveling -- the emotional connection between vacations and quality of life. According to the MMGY Global/Harrison Group 2012 Portrait of American Travelers, a nationally-representative survey of 2,527 U.S. households, the number of overnight leisure trips is almost equal to that of last year, however the drivers of these vacations are changing. Cost-effective “staycations” and other money-saving getaways that emerged in the midst of the recession have weakened. This year, expect a boost in travel spending due to a renewed belief in quality experiences that are worth the splurge.

Photo-Sharing Will Dominate

Photo-sharing sites like Pinterest and Instagram saw their coming of age this year. By curating cool content through images, the Pinterest provides a powerful way to visually communicate lifestyle messages exuding from brands in the hospitality business. With the highly anticipated Pinterest API coming soon, hotels will be presented a unique opportunity to curate, collect and highlight the very best of the pinning service through their own digital channels. Copycats are bound to arise, but 2013 will certainly provide us with new players on this field.

Increased Relationship Building with Meeting Planners via Social Media
More and more, meeting planners are utilizing social media to research, compare and read reviews of hotels and conference centers. Plus, they are using social networks to strengthen professional relationships like the rest of us. Hotels should designate a sales team member to oversee the property’s LinkedIn profile and engage the entire sales team to actively connect with planners online on a daily basis. Consider a separate customer service-focused Twitter account to manage questions or issues during conferences. Use your hotel blog to write about meeting ideas. Most importantly, monitor and answer review sites like TripAdvisor, because just like leisure travelers, planners are pouring over former guests’ reviews to see if they want their attendees staying with you.

Expect More International Visitors
The globalization of travel will be a massive force in 2013. Average rates and occupancy levels in the US are likely to increase over the next few years for a very new reason – the new Discover America campaign. China is ramping up to send about 100 million leisure tourists into the international market every year. If the U.S. gets its typical share, that will mean an additional 10 million visitors from China alone.

The average Chinese leisure traveler spends a week in the U.S. That means an additional 70 million room nights in a market where prices are already rising due to growing domestic demand. And that doesn’t count growth from other inbound markets, such as Brazil and India.

Content Marketing Will Replace Traditional Advertising
Traditional advertising is rapidly losing out as hotel marketing professionals begin to realize the advantages and effectiveness of content marketing. Marketing’s new mantra of “Brands must now acts as publishers,” has arrived in part because of social media and its potential to engage in meaningful conversations with their loyal fan base and potential clients alike. In short, content marketing is the new advertising. By investing in the sharpest media tools like blogs, social media, newsletters, webinars, ebooks, photo-sharing, or videos and shared media, you’ll drastically reduce the hefty investments in traditional paid media.

A Second Look at Refinancing
When moving from your business plan to your actual budget, remember that while a zero-based budget is time consuming, it will save you tens of thousands of dollars on your bottom line. Each dollar on the bottom line increases the value of your asset by about $16 depending on capitalization rates. So a savings of $60,000 means an increase in value of about $1 million.

If refinancing is an option, remember that interest rates are unbelievably low right now and that debt is actually available! As a matter of fact, though it is limited, there is even some new development activity in the pipeline. While there is still some economic uncertainty, this industry is cyclical and we are already in the fourth inning of the recovery. Look back and remember 1996-2000 and 2004-2008. Compare them to 2012-2016. The money is made in the middle innings and we are there.

Renewed Focus on Property Websites
Direct bookings are king. And, finding ways of encouraging direct bookings will be one of the most important parts of a marketing director’s job in 2013.  In 2010, American hotels spent an estimated $2.7 billion on OTA commissions. Now, as those rates rise and rate parity restrictions tighten, hotels are looking at any and all ways to increase direct bookings through their websites. To achieve this, hotel Web sites must find compelling ways to convey the advantages of going through them, rather than the OTA’s.  Today’s hotel website needs fresh content, constantly updated promotions and rich media.
 
Guests Will Crave Homegrown Food, Not Celebrity Chefs
Traveling foodies have driven hotel culinary offerings these past few years, with celebrity chefs creating meals like pieces of carefully crafted art. In 2013, expect planners and leisure guests to turn their attention and palate to the food itself, rather than the name behind the menu. Travelers and planners will be seeking F&B options that are healthy, organic, locally-sourced and adaptable for dietary restrictions. F&B directors should reevaluate where their ingredients are coming from, and highly consider procuring from local farmers and vendors if they’re not already.  Showcasing where your food is coming from will allow guests to connect more with the property, the restaurant and their experience overall.

Social Media and Mobile Will Be Inseparable
Social media and mobile already live in symbiosis and this year we will continue to see them merge. Now, people can create social media updates from their phone, while tagging friends or checking in. Mobile has allowed social media to truly become real time. In North America, 2013 will mark the first year that online access is greater from mobile devices than desktop or laptop. Smart hotel marketers should keep their eye out for authentic ways to make use of emerging social/mobile applications in 2013.

More Unrehearsed Marketing Videos
Video is one of the most effective ways to make an impact on web visitors and the opportunities to use videos are endless. In 2013, video is predicted to be an even more vital element in a hotel marketer’s arsenal with more and more people viewing and sharing videos online and especially on their mobile devices. These videos can strengthen your organic SEO efforts and your video doesn’t have to “go viral” to be effective. Film interesting content, such as your destination, or nearby attractions, cool amenities, and in a variety of formats such as demos, reviews, interviews, etc.

In Closing
Remember that our industry is now more of a science than an art…great stewardship of your properties will reward you in the millions over the next few years. This will include digital marketing, social media marketing, revenue management, distribution channel management and mobile web marketing. May the wind be at your back and the occupancy, rate, net income and values make you happy this coming year and for many years to come!

About the author:
Robert A. Rauch is president of R. A. Rauch & Associates, Inc and is a nationally recognized hotelier serving clients in all facets of the industry. Rauch has more than 35 years of hospitality-related management experience and his company currently manages and operates the Homewood Suites by Hilton San Diego/Del Mar, Hilton Garden Inn San Diego/Del Mar, the historic El Cordova Hotel in Coronado, and the Quality Inn & Suites Garden of the Gods in Colorado Springs. He also manages the oceanfront Pantai Inn, Southern California’s only Indonesian-inspired hotel property and Pacific View Inn, a recently acquired hotel also on the Pacific Ocean in San Diego’s Pacific Beach.

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Contact:

Robert A. Rauch, CHA
858-523-0590
rauch@hotelguru.com
www.hotelguru.com

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Also See: Trends in the U.S. Lodging Industry: 2011 Q3 Update / Robert Rauch, CHA / October 2011

The “W” Hotel Is the Talk du Jour / Bob Rauch / June 2009

Sunstone Hotel Investors Attribute Size of Mortgage, Recession and Competition As Reasons to Walk Away from Ownership of W San Diego / June 2009
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