The hospitality industry has undergone a seismic transformation over the last years. This period of change is set to continue through 2023, with shifts in demographics and technology, and the post-pandemic transition to a new normal all playing decisive roles. As a hotel management company with clients around the world, we have seen these trends in the tourism and hospitality industry take shape and evolve.
Join us in this guide to these current and future trends in hospitality, including what businesses can expect and how to proactively take action to future-proof their success.
To maintain competitiveness, forward-thinking hospitality businesses are transitioning beyond the traditional model of merely offering “a place to stay” with the usual add-ons of breakfast and so forth. These traditional elements will persist, however, they will be housed within a broader focus on the overall guest experience.
In a post-pandemic world, guests will place much greater focus on their health and wellbeing. Establishments that can anticipate and meet these health-related concerns will position themselves for greater success. Of course, this relates to high standards of hygiene but also to a greater focus on both physical and psychological well being. For instance, you could consider offering classes on meditation, yoga, tai chi, pilates and other such activities. They can also introduce a greater range of vegetarian and vegan options.
What is crucial however, is to not treat these areas as an afterthought or as an inconvenience. These are reflective of the modern and fast-moving hospitality market. Moreover, with the increasing dominance of the Millennial and Generation Z demographic cohorts, such trends are only set to increase.
Local Experiences and Cultural Exploration
48.5% of people who travel do so “to open my mind to new cultures and experience”. With this in mind, all types of hospitality businesses, B&Bs, guest houses, and short-stay apartment complexes can take advantage. They can align with local experience providers that complement their own. For instance, a a countryside hospitality venture may wish to partner with local companies that offer activities to do with the great outdoors. Similarly, a city centre guest house could partner with local museums, walking tour guides and so forth, to offer an all-in-one deal. They could also make it exclusive to their guests to make it that much more special.
Another option is to provide such experience and cultural exploration in-house. This would involve more work and commitment rather than forming alliances with specialist third-party providers. However, it enables establishments to keep all services consistently on brand, guarantees customer experience control, and can generate more avenues for revenue.
Packaging it up
Whether it is wellbeing and health or experience and culture, or both, business growth can be driven by designing packages to target distinct customer profile segments. According to the Simplicity Index, “64% of consumers are more likely to recommend a brand because of a simple experience”, demonstrating the benefits of marketing a distilled customer service offering.
Offering package deals for a fixed fee enables to target market where customers desire more specialized stays. For instance, a choosing to offer a wellbeing and digital detox getaway or a city centre culture vulture experience. Such package deals could include room, breakfast and dinner, and activities in the area, all of which could tie into the overarching experiential theme.
Personalization Across Far More Touch Points
The days of one-size-fits-all offerings are declining. Customers are increasingly demanding of experiences that meet their specific and even idiosyncratic wants. And the hospitality businesses that are able to embrace this changing market trend rather than treat it with reticence will win business and guest loyalty.
Generic offerings simply don’t cut it anymore to make your property stand out. It is possible to analyze the customer journey from initial booking all the way through to after checkout. A deep recreation of a typical customer journey reveals the incredible number of touchpoints that are personalizable, and which offer an opportunity to provide a bespoke service.
Just a few examples include:
Either calling or emailing each guest with a personalized message after booking, rather than a generic automated email, asking for preference requests. This personal touch can make an important difference. Automated personalized guest communication is also a possibility, but requires a capable CRM system to be in place along with efforts of the staff to carefully gather and record valuable guest information.
Making an even better first impression by asking what the guest’s favourite drink is upon check-in, which can then be delivered to their room as a complementary welcome gift.
Introducing an extra moment of appreciation, Sending a staff member to the guest’s room, or following up a different moment after check-in to see if everything is to their liking.
Training all client-facing employees, including front desk, food and drink staff, and activity sales employees in upselling and cross-selling is another way to drive customer engagement as well as revenue. It is a relatively inexpensive investment that can produce high ROI. Importantly though, employees should be well-versed in upselling or cross-selling to enhance the customer experience with personalized offerings without veering into pushy territory, which can have the opposite effect.
Success with automation is impossible without a strong data function. This means the ability to gather, store, analyze, and interpret quality data to drive business performance. In order to achieve this, there are two options: enter the highly competitive skilled data science professional recruitment market as well as invest in the requisite technology stack and design a data management workflow or experts that provide hotel consulting services.
Harnessing the power of customer data can provide invaluable insights to inform key decision-making. Moreover, it can also support all departments with data-driven automation of repetitive, time-consuming tasks. This can also help address staff shortages faced in hospitality, seasonal fluctuations, and the pressing current issues of inflation and rising wages.
Streamlining the Guest Experience in 2022 and 2023
By focusing on ways to improve hotel operations in an all-encompassing approach, hotels can elevate the guest experience to an unprecedented level. This involves all aspects that form part of the overarching operational function. For instance, upgrading from legacy systems to data-led, digital technologies, and empowering employees with results-focused training on customer experience delivery, hyper-personalized sales (food and drink, spa services, activities, room upgrades, repeat stays), and technology use.
Properties can also integrate customer experience elements that are relatively new to market to offer guests something fresh, new, and convenient. An example is to offer an optional contactless check-in and checkout, which allows guests to bypass the traditional method of going to the front desk. Such integrations can also indirectly impress guests by conveying that they are ahead of the technology trend curve and embraces the change that improves the guest experience.
Reimaging Hospitality Spaces for the New Working World
Lobbies and underused spaces such as conference rooms or even entire floors that are left dormant in low season periods can suddenly take on a new lease of life. As a result, it is possible to generate new revenue sources, strengthen competitiveness, modernize their brand appeal, and serve the community with a much-needed amenity.
As discussed previously, offering professional working spaces can also tie into overall guest package offers. It enables hospitality businesses to cater to different types of professional clients. From travelling business people to digital nomads, and from local freelancers or even small startups who want a space to work out of, there are various buyer personas that establishments can target. Don´t forget about the rooms either. As a great example shown in the below image, Zoku offers guests both public spaces as well as space inside of the room to comfortably get some work done.
Zoku Aparthotels Amsterdam, reimaging hospitality spaces for the new working world
Growing Non-Core Markets Trends
Depending on the market of the destination, the “bread and butter” income for hotels can come predominantly from people visiting from out of town or the country. However, there is a growing shift away from viewing hotels primarily as merely somewhere to stay to a place that offers a unique, memorable experience. With this in mind, hospitality managers can supplement their main revenue driver – guests visiting from elsewhere on vacation or for business trips – by targeting ancillary markets.
The Local Market for Staycations in Hospitality and Tourism
In the past it sometimes made little sense to target the local market. After all, if people live in the area, why on earth would they want to stay in a local establishment? The trend has shifted as this is no longer the case and the reason is because hospitality businesses are moving beyond merely viewing their main business unit as somewhere to stay overnight.
Targeting the local area with experiential staycations, whether for individuals, couples, or families, is a potentially highly lucrative business driver. Between 2020 and 2021, staycation bookings rose 18%. Getting the experience right leads to a 14% price premium in the hotel industry, according to PwC. Additionally, in the low season, it is the local mark that can sustain a business in hospitality.
In one hospitality survey, 76.2% of respondents said that family experience was either an essential or high priority. In the same survey, 72.1% said that “spending time with family and making memories with them is important to why they travel”. This sort of market feedback can direct a property´s strategy by creating all-new experiential packages for families.
Proactive properties are already harnessing their customer data to understand how best to design family packages that go much further than the traditional and somewhat dated one-size-fits-all approach.
“…go much further than the traditional and somewhat dated one-size-fits-all approach…”
The market is more demanding now. Parents increasingly want experiences that corresponds to their specific needs and wants. Those who can meet this demand will be best-positioned to thrive (read more on making your hotel family friendly).
These are just two examples of how you can diversify your overall business strategy. Depending on so many variables, such as a location, type of hospitality business, product suite, and so forth, there are many possible ancillary markets that establishments can grow. In addition to generating more revenue sources, doing so also protects them from the market downside risk of being overly reliant on their core business driver.
Of course, it requires more work, especially in the beginning, but there is a significant potential reward for the hotels ready and willing to invest the time and resources.
Hotels can learn a great deal from how AirBnB engages customers. The company understands that experience is the primary driverof customer impression. Its purchase of Trip4Real enabled the company to combine its primary business – apartments and rooms for rent around the world – with perfectly complementary experiential activities, which customers can book directly all within the AirBnB app or via the company’s website.
The focus on experience runs through everything AirBnB does. Even their slogan communicates it: “Belong everywhere”. The implicit message is that not only with AirBnB can you stay anywhere in the world, but they allow you to fully immerse yourself in any country, culture, way of life. In other words, you can live an unforgettable experience.
AirBnB also promotes easy, convenient customer service access throughout the user interface. Guests can contact their accommodation hosts easily before, during and after their stay. This human touch elevates the guest experience.
The review system is also an important feature, helping entrench bonds between host and guest and, by extension, generating a positive impression of AirBnB for making it all possible. All in all, what it adds up to is a feeling of community, rather than a generic transactional system of booking and paying through a corporate online interface.
Tapping Into the Top Trends in Hospitality for 2022 and 2023
The changes to the hospitality industry may understandably seem overwhelming at times, given how broad they are and the speed with which they are taking place. However, with the right approach, hospitality managers can make the requisite changes to operations in order to take full advantage for commercial success. What is clear is that it will be the proactive managers and businesses, open to and embracing of change, with an intuitive understanding of how these hospitality trends represent unprecedented opportunities for business growth, who stand to benefit the most.
These 2022 and 2023 trends are driven by demographic movements, advancement in hospitality technology, and the importance of the mentality and approach from upper management. By designing a new, broad strategy that encompasses all aspects of hospitality for the modern market, and a willingness to evolve beyond traditional methods whose effectiveness is on the wane, properties can chart a robust, successful path forward. As a hotel management company, we have seen that failing to do so, and continuing by “sticking with what we know”, hospitality businesses may run a serious risk of falling behind their competitors, which can quickly transform into an existential threat.