For 5 years, the economic health of the hospitality sector has never been better; the demand has been growing, the offer has been increasing, and the KPIs of most of the hotels have been improving year after year.  In November 2015, Marriott International acquired Starwood Hotels and Resorts, leading the trend of major mergers within the hospitality industry. Looking ahead to 2017, Millennials represent the crucial consumer group. These guests, ages 20 to 35, will replace baby boomers, who currently hold that distinction. This shift in consumer segmentation means a shift in consumers’ habits, which are moving towards increased technology, mobile devices, and customized experiences.

Discontinuous economic growth, a new wave of mergers, and the rise of Millennials demonstrate that the hospitality sector is evolving. These new trends require that hotel management evolve alongside them but also offer several opportunities. What will 2016 be made of? What are the trends that a hotel should adopt to lead and transform the hospitality industry?

 

 

PREDICTED BUSINESS TRENDS

Looking at the business trends that will shape our world in 2016, the growth of the sharing economy remains the centerpiece of this conversation.

The increased presence and success of disruptive players urge the hospitality industry to innovate and offer new experiences to their guests. Behind the sharing economy, we find the ideas of community, human connections, and customization. By using a P2P network, guests might be looking for a more flexible experience in their booking. And by choosing from a wide offer of specific spaces, guests are expressing their need for an intimate stay that fits their tastes. So hotels should answer those needs as well.

Nevertheless, Rafat Ali, CEO of Skift—a travel intelligence media company, stated that new players such as Airbnb should not be seen as a threat to traditional hotels, similar to the taxi companies’ initial reaction to Uber as a threat. He suggests that Airbnb could be leveraged by hotel groups as a new distribution channel that will replace OTAs.

 

PREDICTED TECHNOLOGY TRENDS

2016 reaches a new step into mobile usage. Seventy-five percent of travelers say that mobile is crucial and 1 out of 3 travelers tends to use their smartphones more when they travel. Thus, developing mobile content and mobile services has never been more important. Mobile apps like e-checking and e-menu bring a huge value-added for all customers.

Another trend growing in 2016 is the multiplication of Ad blockers. The growth of Ad blocking services skyrocketed to 41% in the past 12 months. This means that hotels will have to find other methods to drive traffic to their website and engage guests in ways that suite their fast-paced needs. A few strategies for accomplishing these goals could be to focus on retaining visitors rather than driving them to the website, to work with influencers through product reviews, or to create more human-centered content to appeal to visitors using less traditional techniques.

Finally, a final strategy would incorporate screen devices. Our experience of the world is now viewed primarily using multiscreen, which includes consuming content on smartphones, computers, tablets. The challenge behind this multiscreen-verse lies in cross device tracking so that multi-device strategy still allows for an easy overview of marketing outcomes.

 

PREDICTED MARKETING TRENDS 

A first trend is about real time. Indeed, more than 50% of hotel bookings now take place online. To optimize the occupancy rate, real time offers that are displayed on the mobile app or on a website is key. Real-time pricing and room availability updates will help to target the available demand.

A second trend is to think beyond the classical Search Engine Optimization strategy. When 30% to 40% of hotel revenue comes from organic traffic, you cannot close your eyes to building more SEO efficiency. You must instead go beyond the basic hotel information and provide more valuable information to the guests. That information could be related to the surroundings of the hotel: local info, POI, neighborhood description, etc. in order to empower a guest who is now looking to discover the local culture.

A third trend comes from the rise of User Generated Content (UGC). In the hospitality industry UGC refers to online reviews about hotel experiences. More than 50% of the online bookings are made based on a recommendation; this means the impact of reviews can be huge for the business. Managing reviews must be both reactive and proactive, responding to reviews on one hand and engaging guests into the brand equity on the other hand.

 

THE RISE OF MILLENNIALS: ENGAGING THIS NEW TARGET

As Millennials will become the most important consumer group in 2017, we have one last year of opportunity to prepare for this new target’s specific needs. As Peter Yesawich, vice-chairman of MMGY Global, has noted, “there will be a lot of roadkill” among the older brands. Millennials are definitely shaping the most disruptive trends in the hospitality industry and traditional hotel groups will have to face these new ways of offering a genuine experience to their young guests.

 

 

2016 is a key year to take advantage of technological opportunities in order to prepare for the shift in customer demands. The challenge is to think forward to 2017 by leveraging both the favorable business trends and the digital innovations in order to meet these newcomers’ basic needs and loftiest dreams.

 

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Daylighted is a startup company located in San Francisco, CA, founded in 2013 by Alex Cammarano, Elisabeth Mouchy, and Alban Dumouilla. Daylighted provides a contemporary portfolio of thousands of images, videos and animated art. Daylighted plans to bring the artistic diaspora to even more spaces, beginning with high-end venues— because art should be everywhere.

Visit www.daylighted.com to browse collections, view featured artwork and to receive more information.

 

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