Hotel Trend Report – What You Need to Know About 2019
December 4, 2018 2:04pm
Top 10 Hospitality Market Trends
By Robert Rauch
It is time to pick the top ten hospitality industry trends to come next year! Last year, we said that hotel lobbies would become the center of the hotel universe akin to those found in communal work spaces such as WeWork. We went a step further this year as we discuss co-working spaces. In some way, we included some of our previous trend picks like IoT, analytics, social media and reputation management, virtual and augmented reality and robotics. These will each play a role in keeping hoteliers ahead of the curve.
Here are our top ten hospitality industry trends for 2019:
1. Personalization in a GDPR/CCPA/Privacy First World
Following in the footsteps of the European GDPR, California recently passed the CCPA, which is to take effect in 2020. These laws allow for any consumer to request any and all personal data an entity has collected on that consumer without any repercussion from the entity. So how do we personalize? We already know lots about our guests – wi-fi usage, bed preferences, favorite foods and beverages. We must use our Customer Relationship Management software for a strong connection to the guest and assure them the information will never be shared. Establish trust by making our newsletters and websites robust and personalized and then following through with great execution!
2. Co-working space
In response to the sharing economy, a focus on new ways to use public spaces in hotels has become relevant. Millennials are now moving away from the lobby as the sole place to hang out; a co-working space provides a focused, relevant solution to the problem. There is a reason coffee shops are so appealing to work in, and it isn’t just for the coffee. An unconfined, social and relaxing atmosphere helps get things done. This comfortable setting then allows the guests to enjoy other amenities the hotel might have to offer.
3. Customer Acquisition Costs impact asset values
Look no further than reports from Kalibri Labs to see that there can be tremendous savings in watching acquisition costs. The new metrics to watch are COPE (contribution to operating profit and expense) and NIPAR (net income per available room). Capturing revenue from sources that do not require a commission or additional sales expense can add significant dollars to both cash flow and value.
4. Total Revenue Optimization takes revenue management up a notch
We must consider the full lifetime value of a guest via advanced analytics now. With today’s transparency of rates, we need to create deals that stick and identify those who might become lifetime travelers in both the group or transient sectors. Technology makes revenue management very robust as we can track guest habits, interests and preferences as well as reason for travel, booking date, date of last stay and much more.
5. Disruption of Hospitality takes many forms
Disruption is only partly caused by alternative accommodation providers like Airbnb. Technology is pushing disruption much further, specifically the Internet of Things by translating the smart home experience into the hospitality world. OTAs have disrupted our profits dramatically since the beginning of this century and trends have not yet turned enough toward direct bookings. Mobile bookings and use of mobile technology on property has been growing quickly and robotics will continue to grow in importance.
6. Cyber Security scares all smart companies
The responsibility of Cyber Security scares all smart companies, but so should any aspect of risk management. With an increased improvement and dependence on technology comes a greater need to protect that aspect of our business. Good cyber security comes from identifying our own important assets and the weaknesses they possess. Biometric authentication leads our list of cyber tech options. Lastly, good cyber security isn’t just about stopping the threat, but about being able to get back on your feet and recover after a security breach.
7. The Arrival Experience gets a technology makeover
Balancing technological simplicity and usability is essential today. From curbside to roaming associates in the lobby to the front desk or kiosks, not everyone is using a mobile app with digital keys. Get in touch with every guest before their trip (virtual reality might make an impression) and find out how they would like to arrive. Then follow up post-trip and use social media, guest surveys and reputation management efforts aggressively.
8. Subscriptions make personalization approachable
Think about Amazon—we go on their web site and buy from what appears to be millions of choices. Then they ship in two days or less right to your house. And all you need is Amazon Prime. Think Netflix or even Uber or Lyft. Then, make our web sites just as appealing and effective. Voila!
9. Online Learning takes over training
Training manuals have become virtually obsolete, however, do not abandon your crisis management manuals too soon. Webinars rule the day and online learning for degrees, certificates and knowledge are the new masters of the academic universe.
10. Cannabis Tourism goes mainstream
CBD is the main ingredient in some types of treatments and it is not psychoactive. It is the medicinal aspect found in many balms or salves used to ease symptoms of arthritis, sores, and menstrual cramps and other ailments. Sometimes the relief can be provided via massage, a common hotel amenity. But there is also THC, which is challenged by federal laws. Thus, we need to determine how to promote and manage cannabis. Do we allow smoking of cannabis on property in relevant regions?
At this time of year, it is also appropriate to offer all of our friends, colleagues, friendly competitors and the entire industry a happy, healthy holiday season and a Happy New Year! Have a Merry Christmas, Happy Hanukkah or just a season of joy! To a great 2019! Bob
Tags: robert rauch,
robert a. rauch,
hospitality market trends,
Bob serves as CEO and President of RAR Hospitality. He is an internationally recognized hotelier with over 40 years of hospitality-related management experience. Recognized by his “hotel guru,” moniker, Bob shares insights and industry trends at www.hotelguru.com. He has held nearly every position in the hotel business including General Manager of full-service four Diamond hotels for Hilton and Embassy Suites. His education includes a bachelor’s degree in Hotel Administration from Western International University and a master’s degree in Tourism Administration from Arizona State University. He is a Certified Hotel Administrator and has served as chairman of numerous tourism organizations nationally and locally (San Diego and Phoenix) and is editorial advisor and board member for CCR-Magazine and Destination Elite.
Bob has been directly involved in developing several hotels including the Del Mar Marriott, Hilton Hotel Gaslamp Plaza, Hilton Garden Inn Carlsbad, Hilton Hotel Santa Clara and several Marriott resort hotels. In addition to being the “Hotel Guru” he publishes Hospitality Innsights, an electronic newsletter and is a Faculty Associate at Arizona State University where he teaches Hospitality Entrepreneurship.
Contact: Robert Rauch
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