The current scenario of the hospitality industry: competition, improvement and marketing

The international hotel industry is anything but friendly. For a long time, there was almost no innovation in this field, but the advent of the technology-driven on-demand economy has dramatically changed that. The appearance of Airbnb on the scene was an indicator of this change, along with the rise of boutique hotels. Soon, even traditional restaurant chains began to experiment, grow, acquire, and consequently innovate intensely.

This brings us to the current hospitality scene. Although it remains a brutal, inflexible and fiercely competitive industry, the road to success is now multifaceted. There is no one-size-fits-all formula, and hotels no longer have to subscribe to hard and fast rules. Technology plays the role of a great equalizer, giving even the smallest player a fighting chance to survive.

RISE

Around the world, the travel, tourism and hospitality sectors remain key to economic development and job creation. In this economy where transportation has become more affordable and borders between countries are blurring, it is fair to assume that travel and tourism will remain a dominant sector for the near and distant future.

Consider these statistics:

  • In 2016, Travel & Tourism contributed US $ 7.6 trillion to the global economy and created 292 million jobs.
  • This income generation included 10.2 percent of world GDP.
  • 1 in 10 of all jobs can be attributed to the travel and tourism industry.
  • At 77 percent, leisure travel accounted for a share of people’s spending. By comparison, corporate and business travel accounted for the remaining 23%.
  • Domestic travel (72 percent) was higher than international travel.
  • The total contribution to GDP increased by 3.1% in 2016.
  • By 2027, this sector is likely to account for 11.4 percent of global GDP and will support more than 380 million jobs worldwide. Of course, this indicates that this sector will outperform the world economy.

There is no doubt that companies like Airbnb are competing head-to-head with hotels in certain market segments. This implies that part of the business may be additive, as travelers are taking more (and longer) trips than they would without the option. What is important, however, is that private accommodations have altered consumer expectations on a fundamental level, redefining what a hotel is and where it is.

COMPETENCE

Competition in the hotel industry is the result of two aspects:

  • Technological adaptation
  • Change customer profile

Technological Adaptation

As I said before, technology has leveled the playing field and contributed to various facets of the industry, including branding, communication, and outreach. In particular, three particular trends are

is going to reshape the hospitality industry for years to come. Let’s look at each of them individually.

A mobile-centric approach

In emerging markets around the world, a billion people are expected to connect globally. Most of them will be customers who will experience the entire life cycle of their guests on their smartphones. Hotel and travel companies have no choice but to invest in guest loyalty and loyalty strategies tailored to mobile devices.

Regardless, customers are always looking for that ‘personalized’ experience and leveraging innovative mobile technology the way AirBnb and Uber have done will be key when it comes to brand differentiation and experience. Hotels will need to offer booking capabilities, lightning-fast operations and other points of contact throughout the customer journey on mobile phones for the convenience of their customers.

Connectivity

With nearly unlimited internet access for digital natives and non-natives alike, connectivity is only set to increase. In addition, with the proliferation of connected devices and wearables in the market, hotels will have to be innovative when it comes to new ways of interacting and interacting with the consumer. Virtual reality tours, augmented reality interactions, robotics, and artificial intelligence will drive the market and prepare it for other travel experiences that can be delivered indirectly.

Machine learning, big data and analytics

Taking advantage of big data allows the creation and curation of a highly personalized experience for each type of consumer. Many marketing campaigns can be seamlessly leveraged and monitored against tangible numbers for growth and further optimization.

It also speeds up existing processes like customer service, feedback gathering, email automation, and customer engagement. In addition, it can also facilitate the expansion and reduction of the size of the business in accordance with the objectives of the company.

Change customer profiles and brand experience

The tourism industry is experiencing a change in the psychographic and demographic profiles of travelers. Along with Gen X travelers, there is a new influx of millennials, whose expectations and lifestyles are setting entirely different standards for industry performance.

Customer experience is currently the most dominant brand differentiator. It will also drive customer and referral loyalty, and hotels will be needed to synthesize loyalty schemes more specific, personalized, and intricate than ever before.

This personalization and differentiation also extends to the types of experiences you create. The concept of “home away from home” eliminates the homogenization of luxury, which was the tried and true paradigm before.

Now, providing unmatched service, rooting the hotel in its local climate and at the same time providing experiences beyond the conventional hotel space, has become an important factor. The millennial demand for organic food and sustainable options also creates more vulnerabilities when it comes to risks and food safety, which need to be monitored by hotel owners.

Travel brands have also been left behind by non-travel brands that have pampered customers by providing high levels of service. Amazon, Starbucks and Uber are some names that millennials hold in high regard, and the competition will only intensify as customers start to expect the same from all service providers, especially from the hotel industry player.

Marketing

This brings us to the last point: marketing for this new age consumer. Hospitality sales, as they stand, are different from other consumer goods. This is because the player must sell both the tangible and intangible products. Success, then, depends more on providing marketing “services” rather than simply pressuring the consumer to buy what you offer. It’s important to create the right brand image that builds trust and conversions, too.

A consistent brand identity also becomes more important as customers have multiple fronts that they can engage your brand on. Your active presence on social media becomes very important as a portal for customer engagement.

Customers can also research and evaluate it better thanks to portals such as TripAdvisor and Yelp. Reviews and recommendations from a friend or influencer suddenly become very important determinants of sales growth. In addition to providing a stable income stream, repeat customers can become influencers in their own right.

Taking advantage of all the tools and technologies that come with digital marketing is not just a necessity of the moment, it is much cheaper and is adjusted to the preferences of the client. Email and content marketing are now closely related to SEO and brand visibility on the web. Most of these marketing efforts are dedicated to carefully creating, selecting, and maintaining brand identity and image. Continually engaging customers with new age marketing best practices, as well as providing invaluable experience, will take you beyond your competition.

The sector is extremely profitable at the moment and is poised for immense growth and favorable amounts of investment. If you are an existing player who is not performing very well, or a new player looking to make a significant dent in the industry, taking all of these points into account will give you a significant advantage over your competition.

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