As 2019 draws to a close, Nick Wyatt, head of R&A for Travel and Tourism at data and analytics company GlobalData, shares four key trends that will shape the lodging industry in 2020, ranging from sustainability to a push for direct bookings.
A Push for Direct Bookings
“The relationship between hotels and online travel agents (OTAs), such as Expedia, is both symbiotic and problematic. On one hand, OTAs help fill bed spaces, but on the other, they command commission rates,” Wyatt explained.
“Smaller, independent operators have little bargaining power, but the likes of Marriott have started to negotiate hard in a bid to reduce these rates,” Wyatt continued. “Leading hotel chains have invested great amounts into loyalty schemes such as Hilton Honors and Marriott Bonvoy, and they see this as a way to attract not only repeat custom but also direct bookings. These are now being marketed in high profile ad campaigns and additional tiers are being introduced so that more people can participate. Hotel chains will intensify efforts to encourage direct bookings as a way to maximize profits.”
Hotels’ efforts to operate more sustainably will grow in 2020, according to GlobalData. “Sustainability is a watchword in the tourism industry as a whole at the moment. Hotels are a less obvious target for ire than airlines, but they have certainly not escaped scrutiny,” Wyatt said. “So far, the most prominent actions have concerned single-use plastics. Marriott has plans to stop providing toiletries in single-use plastic containers by the end of next year and IHG plans to achieve the same goal by 2021. This is just the start and we will see more hotels making these changes and taking other steps such as doing more to reduce water use. This could come in the form of additional loyalty points and IHG’s Holiday Inn Express brand already uses this system in some areas.”
“Accommodation sharing is no longer a fad; it is a core part of the lodging industry,” Wyatt said. “Many travelers are looking for greater flexibility, convenience, and value. Accommodation sharing offers this and with Airbnb now tapping into the experiences market, its influence is likely to grow. Hotel chains have cottoned on and after establishing Homes & Villas this year, Marriott will see next year as the year to really push its accommodation sharing offering as it looks to mitigate the impact of Airbnb.”
“Personalization has gone beyond being important; it’s borderline essential. Guests don’t want to be seen as just a number, they want a personal touch. Hotels must not lose sight of the fact that they are in the hospitality industry and personalizing somebody’s stay is a great way to demonstrate their commitment to hospitality,” Wyatt explained.
“Hilton’s Connected Room is a fantastic example of a hotel chain leveraging technology to personalize a guest’s stay and Marriott has launched a platform that gives employees access to a ‘360 degree view’ of each individual guest by tracking their interaction both before and during their stay,” Wyatt added. “Greater personalization is increasingly demanded by guests and hotels will continue to invest in technologies that help them better understand a guest’s needs.”