The hotel industry is going through a complete metamorphosis and industry stalwarts say it will look very different in just three years from now.
NB: This is an analysis by Aditya Sanghi, co-founder and CEO of Hotelogix.
Hotels need to find answers to these top five "brand questions" to stay relevant in the coming years:
- What guest segments will be the most valuable to their hotels in the next five years?
- What type of content these guests are looking for and in which way they prefer to consume it?
- Travelling -- business or budget – what experiences are they looking for?
- Are you ready to deliver these experiences in one hotel under the umbrella of one brand? And if that’s not the scenario, can you fragment your brand without diluting its power/value?
- What is the channel to effectively communicate your brand proposition with your customers?
Let’s dive into some of the biggest questions that the industry is facing and what the future business model be like to attract guests of tomorrow in the competing digital world.
Crystal ball-gazing
With the surge of online intermediaries, customers look for the most affordable rooms at the most convenient locations for their trip.
Due to this, hotels face a future in which brand takes a back seat while the choice of customer reigns.
But all is not lost. If the hotels can get their branding right in today’s digital era, they can easily keep their brand value alive, while maintaining and increasing their reach.
Budget travellers first look at OTAs and metasearch sites to get a good deal.
They go through multiple reviews, book their stay, and only then do they notice there’s a brand attached.
There is no second thought that the hotel brand is losing currency in a digital world. With sites like TripAdvisor which give a whole lot of options to explore and make choices from, why should travellers even bother?
In fact, based on a recent Mintel study, only 50% of guests visit a hotel’s website before booking.
If it’s a budget traveller, then the brand is very low on priority, whilst with business travellers there is absolutely no hotel brand visibility before they check-in.
Since business travellers usually book through a third person (usually an office staff), hotels lose a vital channel to communicate their brand message to the guests.
Strategies
To counter this, hotels must develop new touchpoints to communicate effectively with their clientele (guests) through mobile, social media and other online channels.
However, care should be taken with even simple mediums like social media, because negative comments can do lasting harm to a hotel’s reputation and business.
Many hotels, notably independent properties are already using digital footprint to support their branding efforts.
Their websites mostly contain well-crafted content about local/touristy destinations, places to eat and things to do along with video testimonials.
The hotel brand gets stronger when guests share this content on social platforms.
Over time, hotel owners learn what content is likely to appeal to their guests and on which platform they like reading about it the most.
Going forward, a guest’s perception of a hotel’s service and facilities will be the primary influencer in their choices.
Guest experience, whether good or bad, will affect the brand’s image and guests are likely to be more vocal on social media.
Although hotel experience already plays a vital role in brand communication, this is going to become more popular with time.
Ducks in a row
In the future, the most successful brands will be those that can anticipate guests’ needs and deliver on them accordingly.
Someone booking Ritz Carlton or Hyatt clearly know what the brand stands for and what value they’ll get.
Many small and mid-sized hotel properties are creating distinctive experiences that will resonate with their target audience.
They are carving a niche for themselves by leveraging on their service such as homely stay, home away from home, better security, giving guests an authentic experience of the city they visit, and many more incentives.
The B&B segment also needs to be creative and look for ways that will improve the guest experience and convert lookers into bookers easily.
They need to ensure, be it their guest’s stay experience or interaction with the staff, every aspect of the hotel should be consistent with their brand.
The pattern of guest behaviour has led many hotel chains to develop a whole new portfolio of brands with a distinctive select that has led to brand fragmentation.
By 2020, hotels will still be able to use their brands to influence their guests provided they truly understand and capitalise on the needs of the individual market segment.
It will not be about luxury but bespoke experiences.
Branding will get more creative as the next generation of travellers wants convenience and experience.
This will entail hoteliers to create content that is meaningful for their guests, so much so that they can easily relate to that brand.
With technology evolving by the second, hoteliers must keep up to meet the challenges involved in delivering customised experiences to their target audience whilst keeping the brand momentum alive.
NB: This is an analysis by Aditya Sanghi, co-founder and CEO of Hotelogix.
NB2:Hotels pool image via FreeImages.