Dear Investors,
How will be the future’s Hotels?
I’ve made many international trips in my life, and I always find very fascinating the hotel industry.
In this piece you will know not only how this industry is changing due to the pandemic and behavior’s customers, but you will know how the hotels of the future will potentially be.
And as Financial enthusiastic like we are,
you will see even a financial picture about the numbers, the revenues and the trends that we might have over the years in this industry.
Understanding hospitality industry statistics allows you to properly equip yourself to handle your changed client needs for your business to grow rapidly in this new environment.
They will help you know what you need to do to succeed and come up with strategies to take your business to the next level.
Deloitte thinks that uncertainty as to the exact trends will shape the hotel of the future.
They even assume that hotel design is set to continue prioritizing sustainability, technology, authenticity and personalization.
In addition, the latest trends, innovations and changes in the tourism industry are challenging hotels.
This comprime to move beyond brand identity and extend and deepen their relationships with travelers.
Technology innovations, growing environmental and sustainability priorities, changing customer demands and preferences.
New competitive challenges are pushing hotels to offer increasingly personal, uniquely tailored experiences for every guest on every visit.
Transition to the hotel of the future
During the transition to the hotel of the future, luxury resorts will need to reconsider the required resources (space, people, brand, services).
Sure even capabilities (technology, human capital, user experience, operations, business models) as well as the optimal way to utilize them.
The decision of implementing specific design elements either during the initial development or during the next scheduled renovation could be what differentiates a resort from the competition and a key aspect in providing exceptional guest experience in the future.
Changing consumer preferences
The global middle class has expanded over the last decade with growth primarily driven by emerging markets in Asia and Africa, resulting in changes in its geographical structure.
These new travel markets have their own demands, preferences and behaviors.
Personalization
Today’s hyper-connected consumer landscape enables customers to choose and purchase a plethora of goods and services either at a physical location or via digital devices and have those delivered to them almost instantly.
Within that context, the demand for personalized travel services and experiences is rising.
Current state of the hospitality industry
- 3% of meetings and events will return in 2022, and 86.9% will return by 2023. (Knowland)
- The most significant trends in the hotel market are the use of near-field communication (NFC) technology, infrared technologies, and robots. (Hospitality Global Market Report 2022)
Digital transformation
Hoteliers need to embrace digital transformation to deliver exceptional, highly personalized and seamless guest experiences.
Providing such experiences along with authentic hospitality across the entirety of the customer journey and all customer touchpoints, physical and / or digital, is crucial in order to attract guests and retain their loyalty.
Sustainability
All aspects of sustainability (environmental, economic, cultural, social & entrepreneurship), are becoming increasingly important for travelers.
Key stakeholders’ market share and consumer influence
Similar to the different growth rates in different areas in the same hospitality industry, not all players in the industry saw the same changes or are seeing the same growth rate.
This is due to size, services, products and way of doing business.
The statistics below highlight these differences.
- Airbnb revenues increased by 76.6% from 2020 to $48.9 billion. (All the Rooms)
- The average Airbnb occupancy rate globally in 2020 was 17.4%. (All the Rooms)
- com is the most valuable travel and tourism brand in the world, with a brand value of $8.9B. (Hotel Tech Report)
- Hilton is the most valuable hotel brand in the world, with a brand value of $7.6B in 2021, although the Wyndam group has the most properties. (Hotel Tech Report)
Domestic vs. international travel
The pandemic reduced the desire to travel to foreign lands and raised the interest in domestic travel and tourism, among other changes.
The statistics below help to better understand the “new traveler”.
- International travelers accounted for 15% of total U.S. travel spending in 2019 before the pandemic began, but just 6% in 2020. (WTTC)
- Global business travel will fully recover by 2024.
Important Considerations
By EHL Insights the hospitality industry is a vast sector with many different categories that include recreation, lodging, entertainment, food and beverage.
The statistics below indicate just how impressive the current and future growth rates are.
The global hospitality market is expected to grow from $3,952.87 billion in 2021 to $4,548.42 billion in 2022 at a compound annual growth rate (CAGR) of 15.1% due to the removal of restrictive COVID-19 measures.
It is expected to reach $6,715.27 billion in 2026 at a CAGR of 10.2%. (Hospitality Global market report 2022).
International tourism demand
As Deloitte remind us, life and international tourism demand enter the “new normal” and we emerge from the intensity of the COVID-19 pandemic, consumer preferences will alter.
According to Deloitte, the hotel of the future will have to offer memorable experiences tailored to the expectations of every guest.