By Larry and Adam Mogelonsky
Last week we looked at some immediate trends that hoteliers should consider for the rest of 2022 as each property contends with the reopening and the huge swell of incoming travel encapsulated by the buzzy term ‘Revenge Travel 2.0’. All operators have to be ready to pivot on a dime, especially with the headache of labor shortages, but that doesn’t mean you can ignore what the years ahead will bring. In fact, if you don’t then you may find your business left behind by all the forces at play.
What we stress from firsthand experience through our hotel asset management consultancy is that all the long-term trends can’t be solved in a day and thus require discipline and due process. Clearly not an exhaustive list of futurist concepts that might or might not come to affect the hotel industry, besides these four broad trends listed below, you should also pay attention to the overarching cultural narratives – the zeitgeist if you will – and not fight each as they take hold of the terrain.
Start by putting the customer first and reverse-engineer your product to fit your customer’s present or future needs. Consider what each trend implies and how each will come to change what your customers want or what your customers perceive as beneficial to their lives. Then it’s a matter of that aforementioned discipline and due process. With the right structure for your team to constantly chisel away at these visionary projects, you may find that you are able to, in a word, ‘leapfrog’ the competition by being early adopters for trends that everyone somehow all of a sudden seems to crave.
1. Technological and data consolidation. Hotel tech stacks are complex, with many prominent vendors now overlapping in features and capabilities. This will only progress even further until the point where all a hotel will need is a PMS with a holistic operations management system that sits on top of it as well as a customer data platform (CDP) to amalgamate everything CRM-related and all other disparate touchpoints in the value chain. Now is the time to start mapping out how to get to as simple or streamlined a tech stack as possible so as to make these systems easier to use for managers, have better data on your guests, and reduce SaaS expenses. By planning this out now, a key objective will be to steadily increase the productivity of each employee so that all this data consolidation not only heightens the guest experience but allows you to develop a better product without marginal labor requirements.
2. Experiential and transformational hotels. Heads in beds is a recipe for commoditization which unavoidably leads to more price elasticity and reduced rates all around as guests have fewer emotional reasons to select your brand over the nearest low-balling competitor. A prominent solution is to give guests an immutable justification for choosing your property over any other. What elevates your branding and property theme? What makes your hotel’s onsite experience irreplaceable? The tactics toward this are manifold such as having fantastic facilities, unique guestroom amenities or creating the best social atmosphere around. Coming out of the pandemic, people will want to stay at hotels that offer an exceptional or unforgettable experience, and they’ll be willing to pay a premium rate for the opportunity. Moreover, guests will want to be ‘transformed’ by their hotel stays – that is, leaving a property feeling better than when they arrived – and the tools to accomplish this are as manifold as the description implies.
3. Climate change and sustainability. As weird weather and natural disasters increase around the world at a regular chip, companies in every industry will be called upon to do their part. While this may be easy to dismiss right now – unless you’re operating a hotel in, say, New Orleans where you’re living on borrowed time before the levees break again – there will come a time when your tax bill goes up precipitously due to new ‘carbon offset’ inclusions. Moreover, guests (particularly the more socially conscious ones in younger generations) are becoming increasingly sensitive to this issue and are voting with their wallets for businesses that show that they care.
4. Blockchains and cryptocurrencies. There’s a lot of hype here and perhaps a huge economic bubble waiting to burst, but that doesn’t mean this technology won’t have enduring utilities over the long run. Will guests expect to be able to pay for their stays in bitcoin or ether within the next few years? Probably not, but maybe by 2030. Either way, this space is snowballing, so at the very least you must learn about how blockchains work as well as some of their most common applications such as smart contracts, nonfungible tokens (NFTs) or the buzzy metaverse. Specific to NFTs, there are lots of opportunities for hotels to fundraise or reinvent their loyalty programs by offering tradeable platform exclusives. Ideas abound in this space, and the first step is to get caught up on the theory and all the acronyms.
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Editor’s note: To discuss business challenges or speaking engagements please contact Larry or Adam directly.