Now trending: keeping up to date

The global luxury hotel market in the US is set to reach $195 billion by 2021. To offer some perspective, that is close to a $50-billion climb from seven years ago.

Star ratings remain a trusted guarantee for the quality of hotels, but are not the only criteria anymore. As clientele are more connected and multicultural, the definition of the ‘hotel experience’ is changing. Guests no longer look only at accessibility and location when choosing where to stay. These days, planning individual experiences and seeking personalised services have grown in importance.

Travellers are also looking at what surrounds the hotel. Shopping and entertainment facilities boost attractiveness, as do opportunities for authentic cultural experiences. To accommodate these needs, hotels might choose to offer individually designed shopping experiences or destination-related travel arrangements that are included in respective room rates. These might take the form of agreements with luxury brands or private jet packages.

In line with today’s revenue management practices, added values lead to a new concept of total guest value (TGV). It includes room revenue and traditional services, as well as specially designed arrangements offered by a hotel.

For luxury hotels, in particular, the aim behind this scheme is to entice, attract and retain wealthy guests through unique arrangements and services, and subsequently create new revenue sources. This is a trend that is becoming vital to luxury hospitality businesses’ success.

Social tip-off

Thanks to the internet, travellers can find out everything they need to know for their next hotel booking with one click. They tend to publish their verdicts and impressions of hotels on social media and review sites. Information has shifted from word of mouth to platforms such as Trip advisor and Holiday check, while bloggers and social influencers such as Luxe Tiffany by Tiffany Dowd carry maximum clout.

With guests being able to access reliable, peer-sourced and real-time information on anything from amenities to complex complaints, digitisation brings danger and opportunity in equal measures. It remains, however, an exciting development for our industry, as it allows us to interact with and record detailed information on our guests’ wishes.

Thanks to social media, we are able to find out a lot about the behaviour and preferences of our customers. As a result, our industry has the advantage of delivering products and services that match these desires. As hoteliers, we have a special ability to trigger feelings of excitement and emotions through experiences that produce lifelong memories.

As hoteliers are challenged to keep their properties and services up to date, they are attracted by a new generation of ultra-high-net- worth individuals, especially from Asia and the Middle East. These moneyed investors look to luxury and high-potential-value hotel properties and chains. Such investments are often in traditional luxury properties in unique locations

Disrupters in the class

Hotels and hotel companies are exposed to various disrupters that usually come from outside the industry. They build on new ideas that reimagine a service or a product in response to client desires and needs. These include OTAs and companies such as Airbnb that have a significant, direct impact on hotels and their business. The future will certainly bring new disrupters.

My advice is to stop worrying too much and instead focus on how to outdo the disrupters. Think of doing something disruptive of your own. Always look at these as new opportunities.

The industry often debates the legal ramifications of disrupters, achieving very little in the process. Meanwhile, disrupters gain market share by addressing service gaps ignored by the hotel industry. Evaluate who the disrupters are and what they are doing better or differently. Look for ways to disrupt the disrupters as soon as they enter the market.

This is not easy to do, but requires adapting many of the existing business models and processes in the industry. Things need to be modernised by using client data to produce targeted and customised offers. We need to move away from traditional thinking, and adapt an agile and competitive mindset. Whether you like it or not, digitisation can no longer be ignored. The world is driven by technology, and digital devices are part of our life. But this doesn’t mean we should forget or underestimate the importance of personal, but discreet, attention towards guests.

Hotels must understand who their customers are, what they expect and what they need. This requires a personalised product that delivers unique experiences and a few ‘wow’ effects to ensure guests feel satisfied that their rates reflect the value they receive.

Having a clear strategy to make smart investments will stand hotels in good stead, as will taking note of key trends.