The Future of Hotels
Over the past four years, the natural movement of society, impacts on travel and opinions of the roles have reshaped how hotels are viewed and the trajectory that the industry is on. In order for hotels to stay relevant, an appealing career path and successful within the current financial climate, we need to start looking to the future and adapting to the needs and wants of the upcoming generations.
Attending the Asia Pacific Hotel Industry Conference and Exhibition (AHICE) in Adelaide last week, it was inspiring to see a specific portion of the conference dedicated to Young Hoteliers. Throughout these panel conversations and key note speeches, common themes arose in regards to what the future of the industry expected moving forward and the path in which they see hotels taking when considering the evolution of technology, consumer trends and perspectives on travel.
Environmental Social Governance (ESG):
Within the last decade, there as been a monumental shift in thought around our impact on the environment, a company’s carbon footprint, the ability to connect with community and give opportunities to a diverse pool of people. It was clear when listening to The Owner’s Outlook panel, that hotel groups can often be selected to run their hotels due to the impact said hotel groups have on environmental initiatives and community involvement. Even more recently, ESG is now becoming a large percentage of a hotel’s yearly KPI to ensure processes are being implemented and targets reached in order to meet the expected standard.
“The question on whether investors would pay a premium for a more sustainable hotels comes up again and again. But the real question to ask is ‘will I still have a buyer for my hotel when I decide to sell it, will I still be able to get finance for it if it doesn’t have certain credentials? Will I still have a buyer?’ We are starting to see institutional investors not proceed with acquisitions because they do not meet their ESG criteria,” Rekha Toora — Senior Vice President, hotel capital markets at JLL said.
Workforce diversity, equity and inclusion (DEI) has emerged as a critical issue for hospitality companies, who are already facing high turnover rates. Hotels are rethinking how to engage and promote employees traditionally overrepresented in low-paying, low-skill jobs. Upskilling these employees and creating new pathways for advancement are ESG priorities directly tied to business strategy and performance.
Artificial Intelligence (AI):
As we’ve come to experience very recently with the introduction of ChatGPT, AI can perform at levels that we had not yet thought possible. Within the hotel industry, a lot of this technology is beginning to role out to assist with ease and accuracy of operations but the question remains; is AI right for the hotel industry, one that prides itself on the human connection?
The future of the industry seems to believe it is, but only when utilised correctly. Looking at consumer trends, the average time of check in at a midscale hotel is 6 minutes. This includes obtaining information, providing security information, making payment, receiving information of the hotel and being provided with keys. The feedback from consumers, especially those travelling for business, is to minimise this interaction time and have the access provided at the click of a finger. We refer back to the statement regarding being utilised correctly whereas this works well for corporates for a quick check in however those travelling on leisure want that authentic experience in the location they travel, they want to hear all the wonderful things to do in the hotel and once a connection with a staff member is established, they want this continued during their stay. A self check in kiosk or self check in app works perfectly for those on business as it allows them to skip this, it’s all about providing the consumer with options.
The key area in which AI should be utilised is in the back end reporting and logistic analysis of the industry. Night Audit reporting becoming automated removed the requirement for a staff member to work 11pm-7am. It frees up more payroll and either is moved to a more guest facing role, or the expense is allocated to another area of the hotel to improve guest satisfaction. Not only does this assist from a guest perspective, it is more appealing to owner’s as a managing company to have this as an option as it is financially smarter long term and it is more appealing to staff as the expectation of working odd hours is removed.
Loyalty:
Besides the word “hotels”, loyalty was the next most spoken word at AHICE 2023. Consumer trends point towards the expectation of value and appreciation for loyalty to a brand. Gone are the days of guests being surprised when a bottle of wine is in their room to congratulate them on a birthday or guests being overwhelmed when given a complimentary upgrade. Now, this is all an expectation and one that has been set by hotels to prove why consumers should stay loyal to them.
When you talk about the global companies of hotels, each drive their loyalty programs and highlight the benefits of returning. From a consumer side, it looks great! Free upgrades, drink vouchers, dining credits and all whilst earning points to spend at hotels. From an operators side, it’s all about building a base business, having direct channel bookings and being the preferred provider of accomodation anywhere in the world. Not only is it about being preferred accomodation, but everything a consumer does will soon end up revolving around their preferred hotel brand.
Taking Accor for example; your holiday starts with a transfer booked with Accor points to the Airport. Once you have arrived at the airport, you check in to the QANTAS Lounge and fly business class to Paris using Accor Points. Another Accor booked transfer straight to an Accor branded hotel. Whilst in Paris, you want to attend the Olympics and these tickets are purchased using Accor points as Accor is a major sponsor of the event. You then wish to go watch a concert of your favourite artist, again, purchased with Accor points.. I think you get the picture, loyalty is everything and hotel brands are making it more appealing than ever to become a member with the program.
From an employee and talent standpoint, hotel brands treat them with just as high level of importance as the consumer. Staff rates, friends and family rates, mental health programs, development opportunities, training courses and mentor programs are all examples of how brands are enticing good talent to work for them. This again, is an appealing gesture to any owner as the cost of turnover, onboarding and recruiting is reduced should the average tenure increase year on year.
Opportunity and a Voice:
The key takeaway from the Young Hotel Forum was the craving for opportunity and a voice. It is a huge misconception that the youth of the industry struggle to understand the future of the industry due to having not been exposed to a “normal operating period”. What this upcoming generation has experienced over the last four years provides every reason why they should be listened to more than ever. Having been through the highs of the 2019 influx of tourism then being hit by the weather disasters of fires and floods in 2020 along with the obvious COVID pandemic and now seeing through the recovery, this generation has experienced more dips and rises, struggles and accomplishments than one would have previously.
The future is about providing an opportunity for the youth to show their skill set and provide them with a platform to raise their voice. Opportunities to take risk in roles they may not quite be ready or qualified for, opportunities to experience conferences like AHICE and be in the room with the leaders of the industry and then not only attending but putting them on stage to provide a perspective and inspire not only their generation but those 20 years ahead of them.
We need to begin thinking differently about how we go about relationship building, operating and running our industry and it takes a fresh set of eyes but also an open mind from those already there, to make good become great and expectations to be exceeded.
I feel inspired and motivated for what is to come within the industry and hearing perspectives and opinions of our industry only excites me for the possibility in what can be achieved. This industry should no longer be seen as a “summer job” or a “whilst I study career”. We are and have been building something special and the future of hotels looks brighter than ever.
