Science behind the latest hospitality trends
Science behind the latest hospitality trends
03 SEPTEMBER 2015 6:13 AM
These trends are changing the industry as we know it, and if you continue to only focus on the art you will be missing out on capturing more business and increasing profitability.
The hospitality industry has been evolving into a much more scientific industry for several years.  The combined impact of shifting demographics and new technologies are the primary catalysts for this metamorphosis. The Internet provides consumers an opportunity to think of hotels as commodities, but there are ways to mitigate that for more sophisticated operators.  The latest trends in the hotel industry have helped shape the way we operate and market our hotel products, thus causing the industry to transform from an art to a science.
Some of these trends in 2015 follow: 
Millennials have become the fastest growing customer segment within the hospitality industry. Lobby bars and hotel restaurants are wide open with combination work, play and eat/drink spaces designed with this millennial customer in mind, one who is a “party of one” but “hanging out together.” Millennials also have no problem speaking up. If what they are seeking is not handled to their liking, they will turn to Twitter, Facebook, Yelp or TripAdvisor to voice their complaints. 
International visitors are making a significant impact on the hospitality industry. International leisure travel has increased markedly due to the visa waiver program introduced in 2012 and this is moving more international tourists to travel to the United States. With the new 10-year visa agreement between the United States and China signed recently, we will be getting more than our fair share of Chinese travelers. 
Booking more profitable business is critical as more revenues result from strong increases in occupancy levels, average rates and revenue per available room. This may suggest more profits, but the growth in distribution costs as well as other operating costs such as health care and minimum wage increases can stunt profit growth. While the revenues are coming first and foremost from RevPAR growth, there are additional ways to increase both revenue and net income. 
One way to improve net income is by less reliance on the online travel agencies. By directing guests to your hotel's website and telephones, the savings are abundant. The digital distribution costs are soaring and the number of players entering the market to compete with OTAs is rapidly rising. Hence, you need a strategy in place to earn the repeat business of every single guest and get them to book direct next time. Think incentives!
Innovative technology, mobile check-in, and seamless connectivity across platforms and devices are no longer the future; they are the present. Today, mobile apps are being used as everything from a digital concierge to accessing big data. Geo-location can make it easy to sell guests something that is right in front of them. 
The sharing economy is a new reality hoteliers are still grasping to embrace. Over the past few months we have seen jurisdictions attempt to regulate all of these sharing-economy concepts. The San Francisco City Council implemented new legislation providing a legal avenue for Airbnb as well as numerous jurisdictions weighing in on the vacation/home rental concept. Further, cities all over the world are dealing with Uber, Lyft and Sidecar and their impact at airports as well as the negative impact on taxis.
Real-time marketing and providing content on an ongoing basis will dominate the industry.  Although it would be unwise to discount the impact of traditional marketing, real-time marketing must take place on a regular basis and incorporate guest-generated content, especially via social media. This must be a crucial component of the marketing mix. In addition, Facebook pages need to take advantage of custom apps that can highlight a hotel’s unique features, characteristics, and charm. Video campaigns on social media, when done properly, are proving to be successful for hoteliers looking to generate guest engagement.
The growth of mobile is a game changer in that the amount of time between looking, booking and staying is reduced. And everyone has a phone that doubles as a camera for instant social media “Kodak” moments. Anyone attending a conference today will be exposed to the trends of personalization, big data, omni-channel/multichannel campaign management, marketing automation and location-based services. Measurement of all of these will dictate what gets utilized.
Transitioning to a science
It is crucial that you understand the latest trends that are driving the hospitality industry. These trends are changing the industry as we know it, and if you continue to only focus on the art you will be missing out on capturing more business and increasing your profitability. There will always be a place for great customer service, but today’s travelers require both great service and current technology. 
And that assumes you have succeeded in getting the guest to your door.
As president and founder of hotel management and consulting firm R.A. Rauch & Associates, Robert A. Rauch, CHA, is an internationally acclaimed hotelier with over 35 years of industry experience. Widely recognized as the “Hotel Guru," Rauch expounds upon insights and trends in the hospitality industry in his blog and “Hospitality Innsights” e-newsletter. He has been directly involved in developing several leading brand hotels, some of which the firm still owns and manages, and is a Faculty Associate at Arizona State University, where he teaches Entrepreneurial Recreation and Tourism. Contact him at 
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