The hotel sector is transforming as a result of a significant shift in the purchasing and decision-making power of the world. Being ready for these inescapable shifts is the only way to continue being successful in this sector. What then is planned for the hospitality industry in the next 5 years? We’ll demonstrate.
The future of hotels is sustainability, according to millennials
In the U.S. workforce as of 2019, Millennials have surpassed Baby Boomers. They will rule until well beyond 2034 when Generation Z will be completely employable (peaking at around 78 million). We as a sector therefore cannot ignore them. And now they’re putting pressure on hotels to go green.
Millennials are twice as likely to support brands that are good managers of environmental and social concerns, and they expect firms to not just manage their effect but to express it, according to Diana Verde Nieto, co-founder, and CEO of Positive Luxury.
Professionals in hotel sales and catering now need to broaden their interactions with millennial visitors on several different levels. They are putting their attention on:
- eliminating single-use plastics from their dining areas and restaurants;
- monitoring water use;
- and purchasing food from nearby farmers.
In order to provide a more comprehensive visitor experience, experts advise beginning construction on more efficient multipurpose rooms that encourage health and well-being as soon as possible (if you haven’t already). Even though it may take some time to complete, these interior design improvements will be worthwhile in around 15 years.
Hospitality professionals must have a global perspective
Events are frequently planned locally, but the hospitality sector needs to start thinking globally. According to studies on the hotel industry worldwide, demand for emerging tourist sites that earlier generations of tourists hadn’t even thought about is predicted to rise significantly (like Central & South America and Canada).
Low unemployment rates and post-recession spending have increased demand for international travel, prompting major carriers like American Airlines to launch more direct flight routes to foreign nations. This year, the airline added a nonstop service between Newark and Cape Town, and it has aspirations to grow much more in the future.
Businesses (in any field) just can’t afford to ignore the effects of globalization, according to economists. In the next years, maintaining rapid worldwide expansion will likely depend on having both regional management teams and a centralized supervision hub.
Events and meetings don’t have to be local anymore because attendees are more willing than ever to travel, and international venues are vying for more group business. Major city properties will begin to broaden their comp sets internationally. Events that previously stuck to top cities like New York, L.A., Berlin, and Hong Kong are now making friends with new markets.
Old threats will inspire fresh ideas
More than 4 million properties are now available for guests to stay on Airbnb, and the travel giant just announced a deal with Century 21 that would formally bring it into the real estate market as a builder and seller of homes. Previously, hoteliers saw businesses like Airbnb as a danger. However, circumstances are evolving in their favor.
What’s really occurring is that hoteliers are being pressured by Airbnb and other competitors to embrace better practices, such as developing more inventive and distinctive homes that depart significantly from the standard hotel environment. The success of Marriott’s Moxy hotel is a fantastic illustration of what to expect in the upcoming years.
Hotels are anticipated to continue expanding into home sharing as Airbnb expands into hotels, creating greater prospects for financial success. In particular, as compared to privately owned rentals, which are frequently hit or miss (or downright creepy all around), staying in affordable apartments that are regulated and owned by a corporate body has several advantages.
Homesharing is here to stay, and hoteliers need to accept that. But there’s no need to worry about it. Services like Airbnb that collaborate with hotels can actually give your group sales strategy more flexibility or, depending on where you are, create the path for your own improved versions of their goods.
The business between a more leisure-focused Airbnb and hoteliers turning to home-sharing as an overflow option to accommodate group demand will become more evenly distributed over the next five years. Hoteliers will soon discover the advantages of being able to do what Airbnb does “only better” as they continue to enter this new industry.
The peak is still to come as demand is continuously rising
Hotel owners want to know if demand will keep rising. Unanimously, the response is yes! Act aggressively. Continue your forward motion. Jim Chu, Global Head of Development & Owner Relations, Hyatt Hotels Corp., comments that we have never had this level of demand from all sides. The Hyatt brand, which recently released its fourth-quarter earnings for 2018, reported a robust net growth of 13.6%. It is well-versed in both long-term stability and explosive expansion.
Future trends in hospitality remain largely favorable, even though Deloitte forecasts some expected industry growing pains in the following couple of years. A fairly healthy 74% of rooms are occupied, and daily accommodation prices are currently $130. Reinvesting in new construction and renovations has already begun to pay off for hotels as they work to maintain their competitiveness for years to come.
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