We take a look at the growth of major trends and the single most important explosion poised to hit hospitality in 2016.
Yesterday we found out that the ruffled feathers at Booking.com were last year’s biggest news story –we’re glad last week’s analysis of the biggest trends of 2015 was spot on. So what’s next?
The Trends
Familiar faces, new competition
Remember when Google was ‘just’ a search engine. Remember when Uber was ‘just’ a service for booking taxis?
Google’s move into direct hotel booking was an important development last year. Now it has been revealed that Uber Travel is also set to join the crowded metasearch market. The travel industry is growing fast and is an increasingly major part of people’s lifestyles and aspirations, so it’s no surprise that tech companies of this stature want a piece of the action. Keep an eye on the horizon for both Google and Uber staking their claims powerfully this year. The failure of Amazon Destinations to make an impression in 2015 shows that it isn’t easy, but the other tech giants have the benefit of an example to build on.
The ‘sharing economy’: boundaries blurring
Airbnb. So quickly and widely spread an idea doesn’t even need explaining. However, experts are divided on how much of a threat this poses to traditional hotels. Deloitte’s Simon Oaten has pointed out that even if the so-called sharing economy initially facilitates the entry of individual hosts to the market, the sharing marketplace is likely to become increasingly professionalised over time. It will therefore morph into a more conventional distribution channel for assets and services. ‘Professional’ hosts with multiple properties already constitute a large proportion of Airbnb’s revenue and as the sharing economy becomes more integrated into the mainstream, this is likely to continue. In 2016 we anticipate more hotels and professional hosts using Airbnb to market their services.
Consolidation continues
The autumn saw a wave of M&A activity in the hotel industry and it’s not over yet. The likes of IHG and Hyatt were linked with Starwood before Marriott’s purchase in October and may still be looking to expand if the opportunity arises. The dynamic becomes more interesting with the potential of a lot of Chinese money looking for a home; the US was a particularly popular destination for Chinese investors last year. Record occupancy rates and RevPAR have made this a prime time for consolidation and we expect that this will continue this year.
Power to guests
The proliferation of mobile devices and growth of travel apps means that it has become ever easier for hoteliers to give guests the service they want, when they want it. With three quarters of travellers now seeing their smartphone as an important part of their travel experience, we’re expecting hotels to continue coming up with innovative ways to smooth their customers’ experience. We’ve already seen hotels begin to use wearable technology to their advantage and more exploration of the possibilities is likely to follow.
The Explosion
The Disintermediation Drive
Most of the trends we’re watching are pretty steady; the odd major movement, but nothing too sudden. But when it comes to the drive for direct relationships between hotels and guests, the temperature is rising quickly and is set to reach boiling point this year.
In 2015 we saw hotels fare poorly when it came to close relationships with guests. This phenomenon is a spin off of disintermediation created when guests book hotels through non-direct channels. The fight back against this picked up last year, from Marriott’s #itpaystobookdirect to Hotrec's Book Direct campaign kicking off in December. Hotels have a growing set of tools at their disposal to show bookers the advantages of booking direct. Combine this with the authorities’ responses and increasing numbers of travellers wising up to the best deals, and you'll notice a groundswell is forming.
Keep your ears pricked for the explosion.
