Count on cruises to steal hotel guests in 2022

cruisesHeading into the new decade, hotels cannot simply look at STR reports to evaluate where they stand in their competitive set. They need to look at alternate accommodations and, many cases, cruise lines. As this latter sector was utterly devasted by the pandemic, they were forced to make a hard pivot, and the groundwork of this severe adaptation may come to impact your hotel’s revenues come it starts to bear fruit in 2022.

As one half of Hotel Mogel Consulting – for an example that shows how this transition may occur – Larry here is easing into his mid-60s. Even prior to the pandemic, he felt it was about time he started seriously considering a cruise or two for his vacation in lieu of staying at a series of hotels. The rationale was both for the convenience factor as well as for the hotel consultancy insofar as understanding where properties can emulate cruise lines to improve performance. Thus, in the summer of 2019 his first voyage was a jaunt through the Baltics followed by a two-week trek in the winter of 2019 through Central America.

Flash forward two years. Coming out of the pandemic and into the new decade, cruise lines may be perceived as the safer option for older travelers because they are taking quite draconian measures to transform their ships into water-bound bubbles. While the new safety protocols vary by company, the overall approach is one of absolute control over who boards the ship and scrupulous sanitization, thereby raising the guest confidence level far above what hotels can ever ascertain.

Now, to grasp why cruise lines are a danger for traditional hotels in the near future, you must also look at their inherent value proposition, for which many factors are near-impossible for hotels to replicate:

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  • Convenience. Cruise lines let you visit numerous places without the hassle of planning the itinerary yourself or bouncing from guestroom to guestroom and securing all the additional forms of transportation. Many travelers have a strong distaste for living out of a suitcase. A cruise means unpacking just once.
  • Entertainment. The variety of onboard dining outlets, shops, shows, facilities and other interactive experiences is insurmountably greater than almost any individual, land-based property save for only the largest of casinos.
  • Cost. Even though he was doing luxury cruises, a quick apples-to-apples comparison for doing similar trips with only hotels at a comparable pricing tier resulted in significantly more spent for the latter when everything was added up.
  • Service. Within the scale of these ships as well as several other market forces, cruise lines can afford to have more personalization technology deployment and a much higher staff-to-guest ratio, both of which inevitably lead to better service delivery.

And the reason why cruise lines matter more so now than ever before for hotels can be summed up in three words – aging baby boomers. We’re at a tipping point where most boomers are empty nesters who are easing into retirement. This means they have more time on their hands as well as more disposable savings built up from decades of hard work in their careers.

Moreover, there’s a bit of boomer #FOMO (fear of missing out) at play here whereby, as they retire and have spent the last year holed up due to the pandemic, members of this age group have quickly realized their own mortality and now want to experience the innumerous beauties of the world as soon as possible. Lastly, and building upon the fading vitality component, there is a threshold age for which personal travel insurance becomes disdainfully high, with the chaperoned nature of cruises offering a means by which to extend one’s sightseeing lifespan.

While developing strategies to shift your hospitality brand’s appeal to a younger audience is subject of another article and something we work strategically with our consulting practice’s hotel clients to solve, there are still a few big takeaways from the success of cruise lines that you can apply to your property.

To sum them up, here are five trends for you to consider:

  1. Fully planned and exclusive daytime excursions. Remove the pain of guests having to map out their daily itineraries by setting up programs that do this for them in as safe a manner as possible. This can be done on a one-on-one basis or you can partner with a local operator. Key here is to ensure that your guests actually know that these services are available!
  2. Living like a local. This is one of the main value propositions for home sharing accommodations, but it applies to cruises as well. When passengers disembark, they are likely given a few hours or, at most, one full day to explore a city or area – hardly enough to get a true sense of what makes the region special. In the new decade, authenticity is the new luxury. This is an irreplaceable advantage for hotels in that you can build neighborhood partners and experiences, so guests get a true flavor of how locals live.
  3. Travel coordination assistance. The biggest gripes of moving from hotel to hotel are schlepping your own bags, arranging your transportation, unpacking then repacking and having to check-in at each individual property. It’s exhausting. Hotels that develop contactless travel assistance programs to thereby imbue more of that convenience factor will see huge gains in overall satisfaction, loyalty and word of mouth.
  4. Tour group contracts. Building upon the idea of heightened convenience, you might want to look into some options regarding partnerships with tour operators or nearby hotels, so you are more inclusive for those guests who are booking through third-party guided travel companies.
  5. Medical tourism. As the population ages, so too does its demand for wellness resorts and all other health-minded value-adds. There’s something to be said about planting yourself in a far-off, singular destination and committing yourself to a specific regimen designed to boost one’s physical fitness and mental acuity. There’s no reason why your property can’t start building programs related to this, even at the urban or select service levels.
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