Hospitality Growth Opportunities
The hospitality sector is steadily recovering, with hotels estimated to book 1.3 billion rooms in 2023, and business travel is expected to reach 98% of its pre-pandemic levels by year-end. Despite the challenges faced in the hospitality industry, professionals in this field are known for their resilience and creativity. To boost your business, here are some Hospitality Growth Opportunities to consider
Evolving Expenditure Patterns
Recent surveys indicate that 49% of travellers plan to indulge in holiday spending habits more.
43% of travellers plan to spend more on their trips than the previous year.
78% of respondents said they plan to spend their disposable income on holidays.
43% want to balance value and luxury.
75% of business travellers will spend more on their trips than the previous year, suggesting a growing demand for high-quality accommodations and services. This aligns with the fact that 63% of business travellers plan to stay in higher-end hotels.
50% of business travellers seek a seamless booking experience and user-friendly communication channels.
Culture and experience play a significant role in travellers’ decision-making process, with 88% wanting to explore local culture and environments during their stay.
Recommendations also hold considerable weight, as 64% of consumers are likelier to recommend a brand based on a positive experience. Wellbeing and the creation of memorable experiences are essential decision drivers for travellers.
76% of travellers said that family experience was either an essential or high priority for travel. 72% said that making memories with their family is a significant factor in why they travel. Offering family-friendly amenities, activities, and multi-generational entertainment can attract this segment.
88% of hotel guests consider the staff one of the top reasons for a repeat visit – so make sure your team leaves a positive first, last and lasting impression!
The rise of digital nomadism presents a unique opportunity for the hospitality industry. More people are working remotely from anywhere worldwide, embracing a location-independent lifestyle.
By transforming underused spaces into coworking hubs and offering amenities that cater to the needs of digital nomads, hotels can tap into this growing market segment.
Recent research shows that digital nomadism is rising, with more people working remotely from anywhere worldwide.
10 Cities Popular Digital Nomads
- Budapest is considered one of the best European cities for digital nomads. It offers an affordable cost of living, work-friendly cafes, wellness opportunities, and green spaces.
- Sofia, Bulgaria: Sofia is a popular city for digital nomads in Bulgaria. It offers a low cost of living and has a growing startup scene.
- Dubai is a global business hub with a growing digital nomad community. It offers a modern infrastructure, excellent connectivity, and a cosmopolitan lifestyle.
- Chiang Mai is known for its affordable living costs, excellent infrastructure, and an extensive community of digital nomads. It offers a mix of modern comforts and traditional Thai culture.
- Kuala Lumpur provides a low cost of living, a multicultural environment, and a developing startup ecosystem. The city has good internet connectivity and a range of coworking spaces.
- Tokyo is a tech hub with a fast and reliable internet connection. Despite being relatively expensive, it offers a unique blend of modern technology, traditional culture, and excellent infrastructure.
- Buenos Aires is known for its rich culture, vibrant nightlife, and affordable cost of living. It also offers reliable internet connectivity and a robust digital nomad community.
- Portland, Oregon, offers a vibrant tech and startup scene, excellent internet connectivity, and a laid-back lifestyle.
- With its affordable cost of living and growing entrepreneurial scene, Adelaide is an emerging destination for digital nomads. It offers good internet connectivity and a range of coworking spaces.
- Auckland is the largest city in New Zealand, home to a vibrant coworking community. It offers a range of coworking spaces across the city.
If you’re looking to cater to digital nomads, you need to provide them with amenities and services catering to their technological needs. 91% of Gen Zers consider technology a significant factor in choosing where to work.
By offering high-speed internet, comfortable workspaces, and convenient access to power outlets, hotels can attract and retain digital nomad guests.
Business travel is expected to reach 98% of its 2019 volume by the end of the year. This resurgence in business travel is expected to accompany increased bleisure travel (business + leisure).
To enhance the experience of business travellers, hotels can provide flexible check-in options, mobile check-in services, and streamlined processes that prioritise convenience.
Forbes has identified several cities as top cultural destinations in 2023, including Edinburgh, Lisbon, Tokyo, Dublin, and New York. These cities boast a rich heritage, vibrant arts scenes, and a plethora of cultural attractions that make them must-visit destinations for travellers.
The increasing desire for local experiences has prompted businesses to cater to this demand by providing authentic experiences through local products and opportunities for participation in local activities, allowing travellers to immerse themselves in the local culture and gain a deeper understanding of the destinations they visit.
Europe is at the forefront of the growing trend of train travel, with the introduction of new overnight train routes, offering a convenient and comfortable way for travellers to explore the continent and experience its diverse cultures. If your venue is near a picturesque railway, then make sure this is mentioned in your marketing campaigns.
Hotels are adopting digital solutions to improve operational efficiency, automate tasks, and elevate the guest experience.
Mobile apps have become essential tools, offering contactless check-in and checkout features, automatic language translation, and personalised recommendations for local experiences. Chatbots are being utilised to respond quickly to customer enquiries.
Voice search is increasingly common, requiring businesses to structure website content for better visibility in voice search results. Voice control can also enhance the guest experience in hotel rooms. Chatbots have helped deliver swift responses to customer inquiries.
Virtual reality tours allow potential guests to experience hotel surroundings from their homes, helping them make informed decisions about visiting. When Radisson started giving virtual tours, it boosted its click rate by 279%.
Artificial Intelligence improves customer service through chatbots and voice-controlled services. Augmented reality enhances real-world environments with graphical overlays.
Digital marketing is targeted towards mobile devices for easy access and bookings. The metaverse, using virtual reality and augmented reality, is an emerging trend in the industry. Automation requires a strong data function and the ability to gather, store, analyse, and interpret quality data. Harnessing customer data can provide invaluable insights and support the automation of repetitive tasks. By 2028, global smart hospitality revenue will surge by 28% to $58 billion.
The integration of technology and digital solutions not only improves operational efficiency but also enhances the guest experience, ultimately driving revenue growth.
Food & Drink Offerings
Food and beverage offerings play a crucial role in the hospitality industry. The trend towards healthy and organic food and drinks has gained momentum in recent years, with travellers seeking options that align with their dietary preferences and values.
Local ingredients and sustainability have become significant factors in consumer decision-making. Offering zero-proof cocktails and “zero-kilometre food,” which emphasises locally sourced ingredients, can attract travellers who prioritise ethical choices and sustainable practices.
Restaurants have adapted to the changing circumstances by offering extras such as candles, free food, or QR codes with Spotify playlists to enhance the dining experience at home. However, it is crucial to address the ethical disposal of packaging to minimise environmental impact.
Implementing sustainable packaging solutions, such as biodegradable or recyclable materials, can help mitigate the adverse effects of increased delivery services on the environment.
Personalisation across touchpoints is vital as customers increasingly seek tailored experiences. Companies that invest in personalised customer experiences witness 40% higher revenue than their competitors.
83% of consumers are willing to share their data for a more personalised and customised experience.
By incorporating these additional research findings, we further strengthen the understanding of buyer behaviour in the hospitality industry. Integrating contactless payment systems, mobile check-in services, and personalised touchpoints based on customer data showcases the industry’s commitment to meeting travellers’ evolving needs and preferences.
These insights provide valuable information on the increasing focus on wellbeing, the significance of family experiences, and the impact of staff-guest interactions on guest satisfaction.
By adopting eco-friendly practices, such as reducing carbon emissions and promoting ethical choices. Integrating sustainable strategies has been proven to boost engagement and deliver higher profits. For example, Hilton reduced carbon emissions across all properties by 43%, showcasing the positive impact of sustainability initiatives.
44% of consumers try to make purchases from socially and environmentally conscious companies. A Cornell University’s Center for Hospitality Research study found that sustainability strategies can increase engagement, leading to up to 21% higher business profits.
Not only are consumers prioritising sustainability, but travellers also emphasise this aspect when making purchasing choices. 4 out of 5 travellers consider sustainability an important factor in their decision-making process.
In addition to reducing carbon emissions, the hospitality industry is exploring innovative approaches to sustainability. For example, using green hydrogen in transportation and using bamboo for building structures are gaining traction, as are wooden key cards.
Consumers are increasingly drawn to companies that align with their values, and sustainable practices are becoming a key differentiating factor in the market.
Hospitality Growth Opportunities
Key opportunities for growth in the hospitality sector:
Integration of Robots
Using robots in hotels and restaurants presents a unique opportunity to streamline operations, reduce close contact, and enhance security. By employing robots for tasks such as room service, cleaning, and customer service, establishments can improve efficiency and provide guests with a seamless and personalised experience.
Health and Wellbeing Trends
With the increasing dominance of the Millennial and Generation Z demographic cohorts, there is a growing demand for health and wellbeing experiences. Hotels and restaurants can cater to this trend by offering classes on meditation, yoga, tai chi, pilates, and other activities. By providing these services, establishments can meet the health-related concerns of their guests and differentiate themselves from competitors.
Cultural Exploration Opportunities
Collaborating with local experience providers allows hospitality businesses to offer unique cultural exploration opportunities to their guests. By aligning with local partners, establishments can provide authentic and immersive experiences, attracting travellers who seek to engage with the local community.
Targeted Package Deals
Hotels and restaurants can create package deals for a fixed fee to attract specific customer profile segments. By tailoring these offerings to meet their target audience’s unique needs and preferences, establishments can increase customer satisfaction and loyalty.
Embracing Digital Technologies
Upgrading from legacy systems to data-led digital technologies can significantly improve hotel operations and elevate the guest experience. By implementing advanced technologies such as data analytics, artificial Intelligence, and automation, establishments can streamline processes, personalise services, and optimise resource allocation.
Transformation of Spaces
Lobbies and underused spaces within hotels can be transformed into remote and coworking hubs. This generates additional revenue sources and serves the local community’s needs. Hotels can attract remote workers and provide a unique value proposition by offering well-designed workspaces.
Targeting the Local Market
Hotels can tap into the local market during the low season by offering experiential staycations. By curating unique experiences and promoting them to the local community, establishments can attract a steady flow of customers, ensuring business sustainability even during off-peak periods.
Tailored Family Experience Packages
By leveraging customer data, hotels can create tailored family experience packages. These packages cater to families’ needs and preferences, providing a comprehensive and enjoyable stay. By offering personalised services and amenities, establishments can foster customer loyalty and increase customer satisfaction.
Challenges Confronting the Industry
Sustainability and Net-Zero Targets
75% of hoteliers are under pressure to meet sustainability targets. With the global focus on environmental issues growing, hotels are increasingly adopting eco-friendly practices, such as waste reduction, energy conservation, and implementing renewable energy sources.
Digital Skills Gap
42% of hoteliers need help finding qualified, skilled staff with digital competencies.
Hotel brands should invest in training programs and partner with educational institutions and subject matter experts to bridge this skills gap and equip their workforce with digital skills.
Hoteliers face higher expenses for essential items such as food, cleaning supplies, and linens., with commodity prices rising by 29% since 2019. To manage this challenge, hoteliers should explore cost-saving measures, renegotiate contracts with suppliers, and implement more efficient inventory management systems.
Meeting Guest Demands
Meeting the ever-changing needs of modern guests is also a challenge for hoteliers, with 57% stating that they need help to meet them. Today’s guests expect seamless experiences and personalised services throughout their stay.
As consumer preferences and behaviours evolve, hoteliers must stay agile and adapt their offerings accordingly. This requires regularly monitoring market trends, conducting consumer research, and enriching their marketing segment data.
The future of the hospitality industry is bright, with significant growth opportunities on the horizon.
To capitalise on this growth, businesses must focus on upskilling their teams, preventing burnout, and adopting a mobile-first approach to communication and operations. Building strong customer relationships and prioritising guest wellbeing will be crucial for delivering exceptional experiences.
The future of hotels will witness the removal of every single guest’s pain point. Check-in lines will be eliminated, and more flexible options for check-in will be available, making the process more convenient for guests. Hotels will use data to customise the guest experience, tailoring aspects such as light intensity, coffee options, and amenities to individual preferences.
The rise of travellers from developing markets necessitates the adoption of mobile apps with automatic language translation capabilities; this will enable hotels to cater to diverse guests and enhance their overall experience.
Hotels must offer unique and non-replicable experiences to appeal to the younger generation. Integrating local elements and reflecting the environment and location is vital in attracting this demographic.
Guest wellbeing will also be prioritised, with hotels emphasising wellness experiences like spas and incorporating light and technology in guest rooms. Virtual reality and immersive technologies will enable guests to preview and test their spaces before arrival, enhancing the overall experience and reducing potential dissatisfaction.
Sustainability will continue to be a significant factor for guests, with hotels focusing on environmentally friendly materials, food processing, and overall environmental respect.
The future of the hospitality industry holds exciting prospects. By embracing emerging trends, adopting innovative technologies, and prioritising guest satisfaction and wellbeing, businesses can navigate the end of the industry and ensure long-term success.
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Last Updated on 20 November 2023 by Dawn Gribble