The international hospitality market is anything but kind. For a very long time, there was next to no innovation in this field, but the advent of technology-fueled on-demand economy has radically changed that. Airbnb’s appearance on the scene was a sign of the change, along with the development of boutique hotels. Soon, even conventional restaurant chains started experimenting, growing, acquiring and by consequence, innovating intensely.
This brings us to the current hospitality scenario. Even though it has been a barbarous, unyielding, and fiercely competitive industry, the path to success is currently multifaceted. There isn’t a single formula that applies to all and hotels no longer have to register to hard and fast rules. Technology plays the role of a grand equalizer, giving even the smallest player a fighting chance to live.
Around the world, the tourism, travel, and hospitality sectors remain a key for economic development and job creation. In this market where transportation has become more economical and country borders are blurring, it’s fair to suppose that travel and tourism will remain a dominant sector for the near, and much, futures.
In 2016, Travel & Tourism contributed US$7.6 trillion to the global economy and encouraged 292 million jobs.
This revenue generation comprises 10.2 per cent of the world’s GDP.
1 in 10 of all jobs can be attributed to the Travel & Tourism Industry.
At 77 percent, leisure travel made up a chunk of people’s spending. In comparison, corporate and business travel accounted for the remainder of 23 percent.
Domestic travel (at 72 per cent) was higher than global travel.
The entire contribution to the GDP was fostered by 3.1percent in 2016.
By 2027, this industry is very likely to account for 11.4 percent of the global GDP, and will support more than 380 million jobs globally.
There’s little doubt that companies like Airbnb are competing head-to-head with resorts in certain sections of the market. This implies that a part of the business may be additive, as travelers are taking more trips (and longer ones, too) than they would without the option. However, what is important is that private accommodations have altered consumer expectations on a fundamental level, by redefining what and where a hotel is.
Changing customer profile
As I said before, technology has leveled the playing area, and contributed to various aspects of the industry, such as branding, communication, and outreach. In particular, three particular trends are
Going to reshape the hospitality industry in the coming years. Let’s look at each on them individually.
A Mobile-First Approach
In emerging markets around the globe, 1 billion people are expected to come online globally. The majority of these will be customers who will experience their entire guest lifecycle on their smartphones. Hospitality and travel companies have no choice but to invest in mobile friendly and mobile-first guest engagement and retention strategies.
Regardless, customers are constantly looking for that’personalized’ expertise and leveraging innovative mobile tech the way AirBnb and Uber have will be key when it comes to brand differentiation and expertise. Hotels will have to offer booking functionalities, lightning quick operations, and other touchpoints for the whole customer journey on cellular phones for the convenience of their customers.
With internet access becoming almost limitless to digital natives and non-natives alike, connectivity is simply poised to increase. Besides, with the proliferation of connected devices and wearables in the market, hotels will have to find innovative when it comes to new ways of interacting and engaging with the consumer.
Machine Learning, Big Data and Analytics
Tapping into big data allows for the creation and curation of an extensively personalized experience for each and every type of consumer. A whole lot of marketing campaigns can be leveraged seamlessly, and tracked keeping tangible numbers in mind for expansion and further optimization.
It also speeds up existing processes such as customer support, feedback collection, email automation, and customer engagement. What’s more, it may also ease upscaling and downsizing the company according to business goals.
Changing customer profiles and brand experience
The tourism sector is witnessing a change in the psychographic and demographic profiles of travelers. Along with Gen X travelers, there’s a new influx of millennials, whose expectations and lifestyle are setting entirely different standards for industry performance.
Customer experience is currently the most dominant brand differentiator. It will also drive customer loyalty and referrals and hotels will be needed to synthesize more targeted, personalized, and intricate loyalty schemes than ever before.
This personalization and differentiation also extends to the kinds of experiences that you produce.
Now, to offer unmatched service, rooting the resort in its local climate while also giving experiences beyond the traditional hotel space, is becoming an important factor. The millennial demand for organic food and sustainable options also generates more vulnerabilities in regards to risks and food safety, which has to be monitored by resort owners.
Travel brands have also been left behind by non-travel brands that have pampered the clients by supplying heightened levels of support. Amazon, Starbucks, and Uber are a few names that millennials hold in high regard, and competition is only going to intensify as customers start to expect the same from every service provider, especially the hospitality industry participant.
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Hospitality earnings, as it is, are distinct from other consumer products. This is because both the tangible and the intangible products have to be offered by the player. Success, then, hinges more on providing marketing’services’ instead of simply prodding the consumer into buying what you are offering. It’s important to create the right brand image that encourages trust, and moreover, conversions.
A consistent brand identity also becomes more important as customers have a lot of fronts on which they can engage your brand. Your active existence on social media becomes very significant as a portal for customer engagement.
Customers may also research and evaluate you thanks to portals such as TripAdvisor and Yelp. Along with providing steady revenue flow, repeat clients can become influencers in their own right.
Leveraging all of the tools and technologies that have digital marketing is not only the need of the hour, it’s much more economical and fine-tuned to customer preferences. Content and email advertising are now intimately tied in with SEO, and brand visibility across the net. Most of these marketing efforts go into carefully creating, curating, and maintaining brand identity and image. Continuously engaging the customers with new-age best marketing practices, along with providing a priceless experience will be what takes you above and beyond your competition.
The sector is extremely profitable at this time, and is poised for immense growth and positive amounts of investment. If you are an existing player that is not performing very well, or a new player looking to make a significant dent in the business, keeping all these points in mind will give you significant edge over your competitors.