The global hospitality sector is set to experience a record breaking year in 2016. Hotel metrics like occupancy levels, RevPar and ADR values are lining up to break previous records and the forecast for the year is healthy according to leading hospitality research firm – STR. In addition, a recent research by Killarney Hotels indicates that the global hotel industry revenue might reach $550 billion US dollars by December this year.
There are three key business, technology and hotel marketing trends set to impact the industry in 2016-17:
- Rise of the millennial traveler will be witnessed in 2016, as the foremost consumer group who are not only more demanding, but also a highly educated set of patrons.
- The increased use of technology will be closely accompanied by an increased use of mobile devices and apps to enable a personalized hotel guest service. Price transparency will also follow suite.
- Lastly, the emergence of a new class of consumers might surface this year.
Millennials: The educated and demanding travelers
There is a growing breed of educated and demanding travelers who know what to expect before they arrive at their destination. Millennials tend to have all their research done as far as traveling in the web 2.0 world is concerned. Their progressive groundwork will revolve around learning what their peers have to say (in terms of online reviews on metasearch sites) about the place they plan to book.
Use of technology to ensure best price and price transparency
Technology is at the heart of this change. Consumers are more educated, and at the same time technology is emerging in the dynamic markets. This is an era of unprecedented change and of extraordinary opportunities, with a new breed of customers to be catered towards.
This increased use of technology will continue to be the most important trend in the future. Use of hand-held devices for booking travel is fast picking up pace. As browser technology is built into all internet enabled PDAs with no wireless network speed limitations, consumers can book a trip as soon as he or she sees an advertisement anywhere on the go. With convenience a high priority, not only will they want to confirm a booking via SMS, but will also be delighted to receive a barcode via SMS, which will act as their virtual room key.
The technology platforms used by hospitality entities is fast adapting each time, without the need for data to be reused or for any other significant human intervention. Consumers will now be more reliant on technologies that are mobile-based. This will render complete price data ‘on the go’ and book while ‘on the move’.
Additionally, 2016 will witness the rise of more budget hotels, as the low cost carrier (LCC) model takes off. LCCs will enable a new class of first time travellers, for whom travel has previously been unattainable.
Consequently, the nature of customer interaction will vary from one region to another, but the technology driving hospitality industry will surely inspire better conversations regardless of location or language. Besides, customer engagement and personalization will touch points as custom-made gifts to high value guests. Hence, the entire industry is bound to witness unprecedented growth (in terms of like occupancy levels, RevPar and ADR) and profit margins this year, and it will be leveraged by the beneficiaries like consumers and hotels, across the globe.
About the author
Bhanu Chopra is the CEO of RateGain, a hospitality software-as-a-service business he founded in 2004. Today, RateGain is a leader in hospitality and travel technology solutions for revenue management decision support using scientiﬁc pricing methodologies, rate intelligence, seamless electronic distribution and brand engagement. RateGain has over 12,000 global clients who maximize their revenue everyday using over 200 million rate notiﬁcations and half a billion inventory updates each year that RateGain facilitates. RateGain’s clients include independent hotels, chains and brands, e-retail clients like online travel agents, wholesalers, tour operators, car-rental agencies, airlines and cruise lines. RateGain has 550+ employees based across various oﬃces in the UK, US, India, Spain, Brazil, UAE and Thailand.
Bhanu has a master degree from Indiana University Bloomington in Finance and Computer Science. He started his career at Deloitte Consulting serving several Fortune 500 companies by helping them with their ERP, SAP, systems integration and overall IT strategy. Prior to setting up RateGain, he also co-founded Riv Consulting, a company that helped organizations with systems integration on CRM software like Broad VISION. A highly sought-after speaker, he has spoken at various HSMAI events, The Hotel Technology Conference, the China Low Cost Airline Summit, Independent Hotel Show, etc. He has also been proﬁled on the Young Turks program of CNBCTV18 is a contributor to publications like ‘Entrepreneur’ and ‘The Economic Times’.