With customers becoming increasingly well-informed, having multiple sources of information and being very demanding about their online experience, hoteliers are still struggling to provide the right response. Amadeus surveyed 140 industry experts to identify the major trends in hospitality distribution.
The hotel industry, a sector in the process of consolidation
Marriott’s takeover of Starwood, AccorHotels’ offensive on the luxury sector…the last few years have seen the industry consolidate in significant proportions. This ends up posing challenges in commercial terms: how can small players exist in the face of large players and, above all, how can they succeed in differentiating themselves in a largely crowded landscape.
As far as differentiation is concerned, the human factor is the lever that is most emphasized.
But technology follows closely behind, confirming that while it plays a vital role in the customer experience, at the end of the day there are customers who go into hotels and deal with humans. Strangely, only 4% see price as a lever for success. This can be explained by the fact that nobody wants to get into a price war, which seems rather logical, but also because the margins are largely pulled down by Booking et al. and that the hoteliers have no more room for maneuver on this side.
As for the future of small players, opinions are divided.
Overall, smaller players are seen as having a better ability to provide attentive service, but the market and customer expectations are broad enough that there is room for everyone. On the other hand, it is surprising to see that for 24% of respondents, small hotels will serve as fertile ground for startups and innovation, whereas experience shows that in terms of innovation, it is rather the large hoteiers that have invested massively in digital technology and labs.
In the end, we don’t really learn anything new: the small ones will have to play on the excellence of the relationship, the big ones on the diversity of the offer and all will have to play the innovation card.
The challenge of personalization for the hotel industry
Not surprisingly, the hotel industry is not immune to the current trend: personalization. The challenge is both to know the customer and to have enough usable data about him. What is quite simple for a small hotel, whose core business is (or should be) personalized relations, becomes more complex for large groups that have volatile and multi-faceted customers: the same customer may be a business traveller one day, a tourist the next. Here we learn that, like the airlines, hotels have difficulty with the “market of one” customer, who must be known individually and not as a member of a segment.
This logically opens the door to the discussion about data use and privacy.
Interesting figures in the context of the GDPR implementation in Europe. 50% of the experts think it is important to let the customer choose the data they share…which means 50% think the opposite. They’re going to have a hard time in the European market…13% actually think that the notion of privacy is over. The good news for the customer is that 42% think the opposite.
Here we have an “industrial” view of the issue and it is sure that professionals see with interest the use they could make of customer data, the debate being more about “how far to go”. Mais l’industrie ferait mieux de ne pas regarder que son nombril et de s’interroger sur le niveau d’acceptabilité pour le client. 26% of professionals believe that customers are happy to share their data if they get something of value in return…and they are quite optimistic. A recent Odoxa-Emakina study from May 2018 indeed shows that French consumers overwhelmingly reject marketing personalization done through data. To offer them “something” of value, it will be necessary to dig a little and go beyond offers and personalized newsletters. If this study only concerns France, I am not sure that the customer’s attitude on the subject differs much in other countries.
When we talk about personalization, we also talk about offers adapted to certain segments. And there, without surprise, they come up with the millenials!
Is a specific approach needed for Millenials? At TravelGuys we are more than skeptical on the subject and the example of Air France, which has royally screwed up on the so-called millenial-but-not-so-much-but-not-really positioning of Joon will not make us change our mind.
Millenials are more demanding. So be it. But this is not enough to make it a separate category. If the experience is good it will be good for everyone, if it is bad the millenials will be the first to complain. Instead of focusing on one generation, hoteliers and carriers would do well to simply raise their overall standards and stop settling for “good enough.
The hotel industry must innovate
The final conclusion of the study: the hotel industry must innovate if it does not want to continue to be challenged by start-ups.
But if it is easy for Marriott or AccorHotels to create labs, launch experiments and make partnerships with innovative players when they don’t simply buy them, the challenge is of a different nature for smaller players. However, their smaller size is also a factor of agility that should allow them to decide and deploy their initiatives, mainly digital, more quickly.
The participants in the study identify 5 areas in which it will be important to innovate.
Personalization comes first but, let’s repeat it, in our opinion there is a huge gap between the dreams of marketing departments and what is acceptable to the customer. Voice interfaces come second and blockchain, a more “expert” and new subject, is left behind. As for chatbots, if only 7% of the participants see them as a subject of innovation, I think it’s because, even for a rather conservative industry, the issue is already behind us.
Consolidation, personalization, innovation…a study that doesn’t tell us much except that the hotel industry faces exactly the same challenges as any other business sector and gets excited by the same trends.
In front of this industrial vision, we would have liked to have the customer’s vision which, in my opinion, can differ significantly on certain points.
Photo Credit: Hotel deals fromRawpixel.com via Shutterstock
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