Hotels have been on a record-breaking spree – with the hospitality industry valued at almost $1.6 trillion in 2017, and Deloitte projecting 5-6 percent growth throughout 2018.
There’s an age-old saying that a rising tide lifts all ships – but what happens when the tide hospitality falls?
Now is not the time to sit back and enjoy the generous returns – which is why we’re calling out three trends to consider as you shape your strategy for the coming year.
David vs. Goliath vs. AirBnB
There were a number of hospitality mergers and acquisitions in 2017, and in 2018, a lot of thoughts swirled around “what’s next?” We believe the big will continue to get bigger – but this will leave gaps for small and nimble players to focus in on their niches.
“The consolidation we’ve seen will continue. But consumers are also crying out for unique and highly customized travel experiences, and that means smaller, more entrepreneurial, highly specialized, and agile players will emerge.”-Simon Turner, former president of global development at Starwood
And then there is AirBnB, with their ‘will they, won’t they’ IPO, as well as their push into the lucrative luxury market. What makes them such an interesting competitor is their ability to display the agility of a smaller player, but with a war chest equivalent to any in the industry.
To combat these threats, while creating personalized experiences for your customers, you need to also build agile ethos and processes into your organization.
The fight for direct relationships with millennials increases
Having officially overtaken the baby boomers, millennials are a cornerstone to the hospitality industry growth as they continue to seek experiences over physical goods. Many global hotel chains have pivoted to begin building connections with this growing segment – and this is expected to intensify.
The Internet of Things (IoT)
Marriott has its “Internet of Things room” in development – complete with interactive mirrors and personalized digital photo frames to personalize visits and guest services. Thousands of its rooms at Wynn Las Vegas are already voice-activated via Amazon Echo.
IoT is showing no signs of slowing down. The convergence of digital and physical worlds will become even further apparent as your competitors use their healthy margins to make significant investments in digital.
And while it can be tempting to float on the rising tide amongst all this rapid growth, now is not the time to put your feet up.
With new developments in technology and a changing customer base, the ability to adapt and grow with the market is absolutely critical. It’s critical that you work with partners that not only support but champion a growth and innovation mentality, ensuring that when the tide finally falls, you’re not the one left with shrinking returns.
