Five Answers to the Big Hospitality Question: Where Are We Going This Year?
Though it’s still snowing in many parts of the country (or perhaps because it’s still snowing), there’s a whole lot of talk about summer vacation right now. Summertime camps and childcare are being sorted out and weeks are being set aside for travel. When I ask friends what they have planned, it turns out only a few have actually made reservations. Most are still toying with the big question: where are we going?
For hotels and vacation rentals, now is the time, the opportunity to shape the summer season is wide open. It’s worth taking stock: What’s working? What’s not? And what’s happening in the industry that we need to stay attuned to as we aim to capture this business that sits on the horizon? Where are we going?
Trend #1 – As supply increases, hotels and vacation rentals hone their appeal
Most sources are projecting a stable year in hospitality. Rates are expected to increase 3-5% while occupancy will likely decrease about 0.3%. A challenge ahead will be competing in the midst of increased supply, the main culprit in the occupancy decrease. According to Bjorn Hanson, a clinical professor with the NYU Preston Robert Tisch Center for Hospitality and Tourism, the number of new hotel projects being launched is nearly twice that of 2014. This includes several new brands and spinoff brands.
With loyalty becoming more tenuous for many brands as travelers increasingly look for new and unusual experiences, accommodation providers must be clear and must deliver on lifestyle and service. Properties will need to evaluate the market and ensure they have their appeal nailed, from service to amenities, to get in front of travelers who have more and more options for places to stay.
Trend #2 – Hotels and vacation rentals invest in staff
During the last decade, the accommodations industry has spent much time and many dollars looking outward. This is particularly the case when it comes to the topic of OTAs. Third parties have certainly received more than their deserved share of fretting and commissions. While OTAs are clearly still a force to be reckoned with, travelers are also moving toward mobile in droves. And with the shift to mobile has come an increase in phone calls direct from mobile search to the property, a boon for properties since direct bookings bring in 9-18% more revenue than third-party reservations  and the voice channel brings $3 for every $1 of revenue generated online.
As a result, years of investing so many dollars into the online channel will start to shift back to an investment in staff training for reservations and guest service. Some of this investment will undoubtedly include technology that supports staff communication and coaching.
Trend #3 – Guest service goes mobile
Not that long ago, when we talked about using mobile to enhance the guest experience, the conversation went to mobile push marketing or giving guests the ability to text for an extra pillow. The conversation in 2017 will instead focus on a holistic look at how mobile can improve the guest experience. This includes consideration of how guests use mobile devices—such as serving the guest via mobile app starting at the booking and following them throughout the stay—as well as how properties can use mobile tools to improve their ability to communicate with guests (e.g., using cloud-based PMS platforms to streamline requests throughout the property).
Trend #4 – Increased focus on technology integration and consolidation in 2017
While full technology integration and consolidation will take time, hotels and vacation rentals should be on the lookout for systems and platforms that allow them to more efficiently manage disparate technologies. Data should be readily available across different levels of the organization without a multitude of apps and interfaces. A piece of guest data that is input by a reservations agent should be readily accessible to marketing, for instance. Perhaps also to housekeeping, who can then use that information to improve the guest’s stay.
Trend #5 – Guest acquisition costs come into focus
For many hotels and vacation rentals, guest acquisition costs are a guessing game. No method has been put in place to parse out commission costs into the appropriate P&L categories, for instance, or to adequately incorporate fees that show up in the sales and marketing budget. As a result, few in hospitality have a real understanding of the cost of their channels, yet this information is essential to making informed decisions about where to invest in marketing, where to invest in training and design, and so forth. Tech companies, such as Kalibri Labs, are launching software to track guest acquisition costs; however, to our point about integration and consolidation, we’re hopeful it won’t create yet another silo of data for properties to manage.
Most hotels and vacation rentals created budgets and outlined sales and marketing plans months ago. It’s time to check in. Ask your teams the following questions. Are our strategies in line with where the industry is going this year? Will we be able to adopt technologies and training that reflect our guest’s desires across the whole life cycle? If the answers don’t align, then it is time to revise and reissue those strategies, and that’s okay. A savvy team ebbs and flows accordingly, and your guests will likely experience the benefits of your flexibility and desire to accommodate them along the way.
 10 Hotel Trends That Will Shape Guest Experience in 2017. Skift. Jan 2017.
 Just the Facts, Ma’am: Direct Bookings Are 9% More Profitable for Hotels. Hotel-Online.com. May 2016.