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Hospitality

Millennials Seek the Often-Elusive Unique Guest Experience

According to speakers at the recent Seattle Hospitality on the Horizon event, Millennial travelers will soon “be in the driver seat” when it comes to hoteliers meeting their needs. Rather than focusing on the acquisition of things, this demographic has a different need: they want truly authentic experiences from hotel brands.

This shift into today’s “experience economy” comes with both challenges and opportunities for hoteliers. For example, in terms of challenges, most Millennials seek travel recommendations from their peers. In addition, the idea of “a unique experience” changes very rapidly based on fast-moving trends that are often cultivated through social media.

When it comes to opportunities, Millennials seek information from a mobile environment. This is pushing many hoteliers to enhance their brands in this arena. For example, Hilton Hotels & Resorts recently launched a mobile campaign featuring an interactive 360° video that takes the viewer on a virtual vacation.

Though the core challenge will be determining where the next unique experience will be. At one time Austin, Texas, was a prime destination for all things hip and cool. However, due to the increasing popularity of South by Southwest, this once popular destination for hipsters across the planet has become generic to some. The same could be said about Nashville and other U.S. cities that have thriving music scenes.

Hotel brands need to be on the forefront of the next cool destination. Being ahead of the curve when it comes to Millennial traveler trends is not an easy task. It also comes with the risk of investing in properties in cities that may not end up being cultural destinations for young people.

Providing the “experience of place” is the new thing in the hotel arena. Hopefully, today’s brands can develop the right strategies to entice Millennials with lasting, unique experiences. This will take the combination of the right guest-pleasing technologies with the core tenet of real estate success: location, location, location.

One Hotel Brand Aims to Meet the Needs of the “Curious Traveler”

In an effort to understand what’s driving purchasing behavior among experienced, upscale travelers, The Leading Hotels of the World (LHW) recently implemented an ambitious research effort called “The Curious Traveler” trend study.

The study found that this special segment of traveler relies on his or her own devices, and relishes the process to explore a destination in a spontaneous way.

According to the survey, “Curious Travelers are taking almost eight leisure trips a year, and while American travelers take the least amount of vacation time compared to other markets in this study, they are the most likely to visit new destinations when they travel overseas…. The Curious Traveler has a strong sense of self. They trust their judgment as much, if not more, than the opinions of others.”

Skift Magazine recently interviewed Shannon Knapp, CMO of LHW, about this study, which also found that:

  • 79 percent of Curious Travelers feel that travel is an essential part of life
  • 30 percent of Curious Travelers intend to take more trips in 2016 versus 12 percent who plan to take fewer
  • 78 percent express interest in exploring a destination’s hidden gems
  • 54 percent look for unique and different travel adventures
  • Only 32 percent seek the “hottest/trendiest” spots
  • The Curious Traveler will spend 7 percent more on hotel accommodations per night this year than they did in 2015 ($419 per night/$390 per night)

This research came about after Knapp led a full brand update for LWH, which aimed to “break through” with this audience of travelers. The new study has allowed LWH to delve deeper into the specific motivations and travel behaviors to best serve these guests.

According to Knapp, the “Curious Travelers” are the real trendsetters and they prefer to follow their own path and thrive in cultural immersion. By ignoring the common tourist destinations, and “living like a local,” this audience is challenging hotel brands to deliver authentic travel experiences.

Offering this level of personalization can be overwhelming. By truly aiming for “the authentic,” LWH will be able to blaze a long trail of true brand loyalty with a special group of travelers.

 

Hotel Guest Personalization Leads to Enhanced Business Growth

The concept of guest personalization is nearly ubiquitous in today’s hospitality arena. While many hoteliers have been using the term “guest personalization” throughout their public relations and marketing efforts, there are some brands that are actually bringing this idea to life.

For example, the new Renaissance New York Midtown Hotel offers a team of lifestyle concierges with hyper-local knowledge. They work with guests to curate a continuously changing database of detailed information on events, restaurants, shopping venues, shows, and other local discoveries near the hotel.

The hotel even offers a “Navigator Table,” located in the lobby where guests can interact with these lifestyle concierges for personalized recommendations.

Along these same lines, many hoteliers have been enhancing their loyalty programs to focus on the next-generation travelers. As highlighted in this recent Hospitality Technology article, the future of loyalty programs will be all about hyper personalization, programs that reflect the spirit of the brand, ease-of-use and more enticing rewards.

All of these enhancements to guest personalization are certainly laudable, but come with challenges. For example, the Renaissance will most likely find it difficult to scale out this lifestyle concierge offering to smaller markets throughout the U.S.

In addition, for next-generation loyalty programs to truly come to life, hotel brands need fully interoperable data systems that allow any front-line worker to access guest preference information. This is a challenge that many other industry sectors are also trying to overcome, which is all about freeing the data from legacy systems to make it truly actionable.

To monetize guest personalization, hoteliers require instant access to data, and need to have their staff trained on using this information. The hotel arena is taking steps in the right direction, but genuine personalization requires major shifts in innovation and hotel personnel – where real-time data makes it possible to please the guest during all points of their stay.

 

OTA Shunning Loyalty Program a Missed Opportunity?

In today’s hospitality arena, one of the hottest buzzwords is “guest loyalty.” Many large hoteliers and OTAs are bringing this concept to life through multiple channels when it comes to their guest loyalty programs.

However, the largest OTA has decided to change tack by shunning its loyalty program.

According to this recent Skift article, the Booking.com unit of Priceline is now aiming to create a great user experience for site visitors and app users instead of paying them to be loyal. The strategy behind this decision is that it can be costly to compensate customers through loyalty programs when they could become repeat customers and be loyal anyway.

While this is an unconventional approach, does this present a missed opportunity for Booking.com?

For example, the OTA could have branded this in a way that would have appealed to millennials and, for lack of a better term, hipsters. The new way to brand this could have been the “Anti-Loyalty Program,” which offers an ironic twist and could actually enhance loyalty.

However, the most significant missed opportunity is that there is no demonstration of value or reciprocation to the consumers. Booking.com could have created a customized dashboard or a calculator for guests that show them the savings they are achieving without the use of an actual loyalty program.

With mobility continuing to gain momentum, Booking.com is basing this approach on the belief that once customers use its app, the company doesn’t necessarily have to reacquire these users again through advertising, loyalty programs or other incentives.

This strategy could certainly pay off. But there are many inherent risks that come with this effort (or lack of effort). Without any direct reciprocation to the guest, Booking.com may have to re-change its tack and launch a comprehensive loyalty program.

HFTP DC Chapter Hosting State of Hospitality in the DC Metro Region Event

American Hotel & Lodging Association (AH&LA) Leader to Provide Keynote Address

The Greater D.C. Hotel Chapter of Hospitality Financial and Technology Professionals (HFTP) is hosting an educational and networking event on the state of the hospitality sector in the D.C. metro region on April 21, 2016.

The event titled, “The State of the Hospitality Industry & Its Impact on the DC/VA/MD Region,” will feature a keynote address by Matt MacLaren, Esq., Senior Vice President of Member Relations at AH&LA.

The presentation will provide a preview of the upcoming AH&LA Legislative Action Summit, which aims to unite the lodging industry on the most impactful advocacy issues. These include moving the needle on technology and distribution issues, as well as leveling the playing field with short-term online rentals, and much more.

“The hospitality sector in the D.C. metro region is undergoing a significant transformation where the intersection of technology and increased demand is creating enhanced growth opportunities for area hotels,” said Diann Turner, President of the HFTP Washington, D.C. Chapter and Director of Business Development for Netlink Resource Group. “Matt’s insights will help regional hoteliers gain an understanding of legislative opportunities that will directly impact their businesses.”

The event will take place at the Hilton Alexandria Old Town, 1767 King Street, Alexandria, Virginia, from 5:30 p.m. to 8:00 p.m. on April 21, 2016. The cost to attend is $40 for members and $45 for non-members. To register email hftpdc@gmail.com.  Please RSVP by April 15, 2016.

HFTP is a global professional association for financial and technology personnel working in hotels, clubs, and other hospitality-related businesses. Founded in 1952, HFTP provides first-class educational events, networking, certifications and resources to over 5,000 members worldwide.

Headquartered in Washington D.C., AH&LA provides focused advocacy, communications support, and educational resources for an industry of more than 53,000 lodging properties.

The OTA Battle Heats Up: Expedia Fights Back Against Marriott and Hilton

With two major hotel brands making efforts to enhance direct guest bookings, one Online Travel Agency (OTA) has decided to fight back.

Expedia’s CEO Dara Khosrowshahi recently spoke at a recent investor day in New York City, and proclaimed that Marriott and Hilton will likely lose share in the Expedia marketplace if they don’t provide their best prices and availability.

Khosrowshahi also stated that hotels fall to lower positions in Expedia’s sort order and their conversions decline when properties or brands don’t aggressively engage on Expedia sites. He even went on to say that there are plenty of rival brands ready to gain share.

According to this recent Skift Magazine article, Marriott is taking the high-road based on this comment from a spokesperson for the international brand, “we have great relationships with our OTA partners and will continue to work with intermediaries in mutually beneficial relationships that enable us to achieve our strategic objectives. We realize that customers today have a choice of booking channel at their fingertips so our goal is to offer a portfolio of direct and indirect booking channels for our guests.”

With investor pressure always being high, it’s natural for Expedia to respond to this new “direct booking” trend. The challenge is that guests are already overwhelmed with multiple channels for booking. While many search for hotels based on price, if they are loyal to a brand they may be more apt to cut through the clutter and book directly.

Conversely, when there is no direct channel for getting the best rate, the guest needs to do all of the legwork. This is very similar to the rise of movie streaming services. Most consumers have to figure out whether or not Netflix, Hulu or Amazon Prime actually have the movies they want to watch. As a result, the consumer experiences undo friction.

Ultimately, the guest could lose in the scenario. Perhaps the OTAs and the major hotel brands should put the guest first in this “booking battle” and let the loyalty happen naturally?

This will most likely not happen. Though one thing is for sure … this battle is far from being over and the ultimate outcomes will be very interesting.

 

Stop Clicking Around: Hilton’s New Ad Campaign Pushes for Direct Bookings

Hilton Worldwide recently made a significant marketing investment to combat the rise of guest bookings from third-party distribution channels. The hospitality leader has launched an advertising campaign based on the concept of “Stop Clicking Around.”

With this campaign, Hilton is aiming to recapture booking commissions that go towards online travel agencies (OTAs), which can range from 10 to 30 percent. According to a recent Skift article, the campaign promotes how guests can get the lowest rates possible by booking direct, as well as incentivizes guests to become Hilton HHonors members.

Watch the advertisement here:

The campaign takes a smart and fresh approach by telling a great story – with an iconic song – in 30 seconds. When compared to other major hospitality providers that are more risk-averse with their brands, this is a highly creative way to convey a message that could ultimately generate more revenue.

A Cautionary Tale for Hoteliers: Pay Attention to the Terms and Conditions of an Acquired Service Provider

Leading booking site Trivago is making waves in the hospitality industry with the news of its majority ownership stake in Base7booking, a cloud-based property management system.

As highlighted in this recent Skift article, this move means Trivago can get deep into the business-to-business side of the hotel business – allowing hotel brands to manage daily operations, run reports, send invoices and enhance their digital and email marketing.

On the surface, this seems like a very viable strategy for Trivago. However, for hoteliers who are already using Base7booking as their Property Management System (PMS), what happens when Trivago gets access to guest booking data?   Since Trivago is an Online Travel Agency (OTA), will they use this data to divert direct bookings from hotel brands?

This certainly remains to be seen, but it should be a cautionary tale for all major hospitality providers. The lesson being that everyone should fully know the contractual terms and conditions of a technology provider in the event that a potential competitor acquires them.

Of course, it is not clear if this will actually happen with this particular acquisition. But when looking at other industries, this is a common phenomenon. For example, in the healthcare arena, you often see device manufacturers acquiring billing platforms, which will go directly to the consumers (cutting out the distribution channel).

Investors and the public markets need to see year-over-year growth and a return-on-their-investment, drivers for companies like Trivago expanding its footprint.

While this type of business expansion is understandable, it can put a hotelier in a risky position, which is why knowing all of the contractual terms and conditions with your partners is vital.

 

Simplified Web Presences for Hotels: A Shorter Path to Booking?

In today’s information-crowded Internet, a smart strategy for increasing guest bookings is for hotels to offer more simplified websites.

The Ritz-Carlton hotel group recently captured the attention of Skift Magazine with the re-launch of its website, which was noted as “style over substance.” The publication felt the new website forgoes experiential travel content and does not offer an exciting brand experience.

However, there may be a good reason for this. The more simplified approach could be aimed at enhancing direct booking. The reality is that most guests research 6-8 hotels before the finally book, and the path of least resistance may ultimately be the winner.

Of course, there is always the challenge of who owns and manages the booking engine on the backend, and keeping these processes more simplified and streamlined. But the guest-facing booking experience is the vital last mile in gaining more conversions.

Perhaps the Ritz-Carlton hotel group understands how the average guest is bombarded all the time with information, offers and other content. As a result, many people experience “cognitive overload” from today’s digital world.

The best way to reduce information overload is to make it easier for the guest. The Ritz-Carlton is paving a new road for enhancing the guest experience? As they say, less is more.

 

Pulling Back the Curtain on the “Unique” Hotel Experience

Delivering a “unique and personalized guest experience” has become a ubiquitous public relations message for virtually every hotel brand. However, the big question is: can hoteliers actually deliver on this promise?

The Managing Editor of HotelNewsNow.com put the concept to the test by engaging with a hotel brand with a special request via Twitter for her upcoming stay there. In addition, she also asked a different hotel to “treat her husband well” during his upcoming stay prior to their wedding.

What were the outcomes of both of these efforts? Unfortunately, neither of her requests were fulfilled. Why? The tools and innovations for delivering a unique guest experience are simply not yet in place.

For example, today’s cloud-based property management systems (PMS) would have to somehow deliver a guest request from a remote call-center directly to the front desk in time to meet the request. While this is certainly possible, technologically speaking, it often does not happen this way.

Hoteliers also face a work culture challenge. For example, many front-line employees are not incentivized to go the extra mile to please guests. Much of this comes from hotel brands considering themselves to be “concrete boxes in the sky,” as opposed to providers of specialized travel experiences.

Much like the Managing Editor of HotelNewsNow.com, other travelers will eventually figure out that hotels cannot deliver on this brand promise. When this happens, the best approach is admit to the inability to execute, and even poke fun of yourself and the industry at large – much like Southwest Airlines is known for doing.

Of course, the best solution would be to implement a cultural and technological transformation that will allow hoteliers to provide a truly personalized and unique experience. This can include developing comprehensive guest profiles, directly engaging with them at the start of their day, surprising them with unsolicited offers, and following up with them post-stay.

When this happens, hotel brands will win the hearts and minds, and long-term loyalty, from a very wide variety of guests.