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Top Hospitality Trends for 2015

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The Indian populace has been evolving steadily and the pockets of disposable income have been shifting to accommodate leisure travel. The Millennials are dictating the spending habits in the market and are not weary of spending a little extra on small creature comforts. That being the domestic scenario, the travel and tourism sector is doing quite well roping in foreign tourists as well as investments. Between April 2000 to August 2014, the sector attracted US$ 7.4 billion of FDI and Foreign Tourist Arrivals witnessed a growth of 12.9% between July 2013 and July 2014.

While the numbers depict a solid growth in the sector, the paradigm shift that should be expected in the coming year is the rise of the consumer-led brand focus. The year will mark a change in the perception of luxury from product design to experience, making it all the more important for industry operators to identify and leverage consumer behaviour trends in the hospitality market for the year 2015.

Here is our assessment of the top hospitality trends for 2015 that are going to dominate the Indian traveler’s:

Everything Online

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The most significant development in 2015 is going to be the increased use of internet, particularly social media, and technology by consumers while taking decisions pertaining to their travel itinerary.

The fascination of the millennial with their digital devices is not a mystery. 2014 marked the e-commerce boom in India. It seems even those less trusting of the faceless internet; trust it with their money now. The convenience is unquestionable. In a survey by Google and Ipsos MediaCT, 70% respondents claimed to begin researching online before deciding where or how they want to travel. More and more Indians are looking up to the internet to find new experiences to enjoy.

Users are looking for smoother interfaces to identify new travel locations and make bookings.

What it means for the hotels:

Hotels need to point out the local attractions and evolve from accommodation providers to tourism promoters online. Moreover, they must optimize their online assets to be found easily online. Presence on social media platforms can be a great way to stay in touch and inform guests about upcoming events, offers and packages. Presence on Meta-search engines and OTAs is a must. To avoid losing revenue in the form of commission to OTAs, a strong integrated marketing approach must be taken and used with a versatile and user-friendly booking engine. Cloud-based software such as Djubo, a channel manager andcentralized hotel reservation system, allows a hotel’s revenue managers to identify online channels that deliver the most value.

Thus, 2015 is the year when even independent hotels must utilize online resources to gain market share and enhance user experience.

Digital Transparency

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With large capital infusions by hoteliers into new properties, at almost every price level, in the recent years has led to a situation where the supply exceeds the demand and shifted the pricing power to the consumer.

With competitively priced rooms in every market segment, the choice of a hotel boils down to the service. And how does one learn about the level of service without even visiting the establishment even once? By simply experiencing it vicariously through other’s reviews.

The internet has left no dearth of platforms, from social media to blogs, for consumers to voice their opinions. Reviews from meta search engines like TripAdvisor and Online Travel Agencies (OTAs) like MakeMyTrip are a decisive factor while making hotel purchases and often trump price. In a research study by SAS, it was revealed that a negative review, more often than not, removes the hotel from a consumer’s consideration set.

People are no more silent about a bad experience. They lash out and without mercy. Online opinions by guests play a very important role in guiding purchase behavior within their circles of influence. From aggregated ratings to extensive review, a single disappointed guest could result in a butterfly effect that could lead to a lot of lost sales for hotels. The hotel managers need to be on their toes and be prepared to deliver beyond a guest’s expectations.

What it means for the hotels:

This might seem like an unenthusiastic take on things, but it also has a flipside. This essentially means that now the only thing that hotels need to focus on is, hospitality and guests will automatically provide you with the marketing you craved for. Even budget level hotels like The Lemon Tree and Keys have fun zones complete with pool tables, electronic dartboards and gaming consoles to enhance the guest experience.

Rise of the Meta Search

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The desire for instant gratification of the Millennials has spawned a new breed of web properties that cater to their need for instant and more efficient ways to access information. These digital properties are meta search engines. Meta search engines like Google Hotel Finder, TripAdvisor, Kayak & Trivago offer users the ability to take informed decisions on booking hotel rooms without having to jump around from one hotel’s website to another. This functionality although was partially fulfilled by OTA websites, was not as immersive and informative. These meta search engines offer real time room availability and pricing from multiple sources along with pictures and detailed information about the hotels.

The popularity of meta search engines becomes quite evident with just one visit to TripAdvisor’s website. More than 190 million reviews left by users, showcases their belief in the platform. The TripAdvisor family of apps have had 150 million downloads and the sources at TripAdvisor inform that the website receives 315 million unique monthly visitors. TripAdvisor today has gained a reputation as the world’s largest, most recognized and most trusted travel brand.

More and more people in India are shifting over to meta search engines rather than OTAs for booking hotels. In fact, the web traffic, from desktops only, on Tripadvisor.in jumped from 5.8 million in January 2014 to 7.4 million in May 2014.

What it means for the hotels:

Hotels need to get on to meta search. Fast. Really Fast. They need upgrade their pages with the latest information and make their page visually appealing. The hotels should also focus on getting more guest reviews onto their pages if they want to get some of that slice of web traffic. What’s better is that the hotel gets direct bookings from their own booking engine, thereby creating an opportunity to build a relationship with the guest through email marketing and customer relationship building campaigns.

Search of an Experience

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As we discussed above, the modern day consumers are all about instant gratification. They don’t wait and plan. They just go. No time to stop and think. And once again aiding this obsession is the power of online information. The year should see a significant rise in the number of people who spontaneously decide to vacation and select destinations on the go.

As the meaning of competitive advantage undergoes a change this year, a new opportunity has come up for the Davids of the accommodation industry to beat the Goliaths.

While earlier large marketing budgets decided which hotel offered a richer experience, today it is not the case. Today the consumers tell the story in their own words and there are always prospective guests listening.

The availability of the wide choice in the travel market has resulted in travelers, even business travelers, wanting an experience rather than accommodation. Travelers today do not shy away from smaller independent properties for the sake of experiencing something new. The popularity of Airbnb is a testament to this fact.

What it means for the hotels:

As more and more purchase decisions become instantaneous, it is important to have your product in the center of a consumer’s choice. This means once again to maintain a continuous online presence on a variety of platform and showcase the unique experience a hotel provides.

Offline Means Off

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The woes of the traditional offline travel agents are going to continue. According to Internet and Mobile Association of India (IAMAI) and IMRB, the air tickets booked online in April 2014 were 1.78 million compared to 0.78 million in the corresponding month last year registering 110 percent growth. Another survey by MakeMyTrip revealed that 97% Indians preferred booking hotels online.

The travel agents had their moment in the pre-internet days. The ease of booking flights and hotels without any intervention is more convenient to the modern day traveler.

What it means for the hotels:

Hotels now need to focus on improving their position and ranking on OTAs. Revenue Managers must learn to leverage technology to build an online presence and use sophisticated tools to counter the rate parity observed on OTAs in order to maximize revenues.

Going Mobile

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The desktop, the laptop and now smartphones. The power to the consumers seems to be increasing inversely to the package size. Every user with a smartphone in their hands has access to a rich world of information. With just a few taps, the modern day traveler can compare rates and amenities offered by hundreds of properties. One can locate rooms as per their needs, compare them for the lowest rates and book one for themselves on the ride from their home to the airport. Mobile bookings also facilitate the urge of the modern day consumers for instant access to information and unplanned travel. In a statement by MakeMyTrip, it said that one-third of their online monthly unique visitors came from mobile and constituted 24% of all online transaction.  Mobile bookings will see a jump in the year and may even surpass online bookings from other devices.

Bookings are just a part of the story though. Hotels are also using mobile devices to enhance the guest experience during the stay. The Starwood Hotels have been testing Apple iWatch’s functionality to implement keyless entry for guests in their hotels. Hyatt

What it means for the hotels:

Hotels need to develop mobile-friendly websites and booking engines if they want to stay in control of their direct bookings. Other opportunities exist in creating previously unavailable levels of engagement, touchpoints and service by development of intuitive and innovative mobile applications.

Healthy Holidays

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There is a marked rise in concern regarding health in India. 2015 should bring with it a wave of health conscious travelers. From guests who need their morning yogurt to travelers wanting to get away from the unhealthy lifestyle. The health-mania is sure to affect the hotels and they need to be ready to cater to them. While most large chains that cater to international travelers carry an option of healthy food items, the smaller independent hotels need to put it into consideration as well. The health bug is not limited to high roughage meals and low-calorie drinks. Ganga Kinare, an independent hotel in Rishikesh, hosts the annual International Yoga Festival held there. It sees participation from over 200 participants around the globe. Thereby, seamlessly transforming from a boutique hotel to a health retreat and providing its guests a unique healthy experience.

What it means for the hotels:

Hotels must think in more holistic terms about their guests. They must understand that enjoyment means different things for different people. Not all people want to have a lazy holiday. Organize health-focused events and incorporate healthy menu items to cover your entire guest base. No one should feel left out. In the war for market share, every guest’s loyalty earned is a battle won.

 

Let’s Gear Up for the New Year Ahead

So, all in all, the New Year will bring in a lot of new technology to be adopted. Most of the trends pivot around the increased proliferation of internet and technology in India and so must be embraced by hoteliers as well. It’s no longer about just the product, price, service or feature on offer. Rather it is about building a rapport and trust with the new generation customer in a world that is always-on and always connected.

Chime in and share your take on what the new year is going to bring in for the hospitality industry.

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