TRENDS FOR 2018 – WHERE ARE WE HEADED?

With a 19,000 room increase in the UK expected and uncertainty over Brexit, alongside predictions from PwC for growth next year, forecasts are turbulent and unclear for 2018. DEBORAH HEATHER, director of Quality in Tourism takes a frank look at next year’s trend predictions and explores what hotels can expect in the future. [divider style="solid" top="20" bottom="20"] With breaking news that a ‘divorce bill’ has been agreed for Brexit, for a currently undisclosed amount, there is quiet speculation about the long-term effects on the UK hospitality industry. Will the weak pound continue to herald intrinsic growth and success for hotels, or will increased competition and staffing issues ring the death knoll for inefficient businesses? There is a very interesting mood in the UK hospitality industry and we’re seeing very different reactions from businesses. On the one hand, my assessors are reporting an era of unprecedented innovation, with diversification, specialisation and renewed customer focus from many businesses, while on the other, reports of a dull complacency abound. It is truly unique and promises an interesting marketplace for the coming years. Some businesses are slipping into the easy trap of blaming a turbulent market for poor or sub-par performance, doing what they’ve always done, but no longer getting what they have always got. Consumer demands are changing, and some businesses are failing to acknowledge this change. It’s truly astounding. One colleague made an interesting statement during our discussion the other day stating that although we face unprecedented challenges and new frontiers, there is no point complaining about it; all businesses have to find a way to succeed despite these challenges. This sentiment I can truly get behind. What remains is to see whether hotels can and will get on the self-improvement bandwagon, or whether they will naively expect to perform based on historic heights. Years ago, many hoteliers wanted or chose to ignore TripAdvisor, dubbing it a ‘flash in the pan’ or passing fad. Yet now, TripAdvisor boasts status as one of the leading online travel agents, with thousands of reviews and experiences being added every day. Now, despite supporting, or at least recognising the penetration of the site within the market, still hoteliers continue to ignore what it represents – raw data which can contribute to their continued and progressive improvement. At an industry event a few weeks ago, I started a lively discussion with a small group of hoteliers to uncover exactly what they do with these reviews. Comments ranged from their process to reply to the negatives, to their use of positive comments on promotional materials, but not one identified how they specifically analyse what this feedback is telling them or seek to shore up the positives and adapt with the negatives. TripAdvisor is a feedback goldmine, with your actual customers volunteering their experiences, and yet it’s largely viewed as nothing more than user-generated stars that support sales. Reflecting on this year, it has also been clearly typified by growing concern over the sharing economy, and the impact this has on consumer demand and sales. Interestingly, this competition is being viewed in a like-for-like manner; true people are renting out their rooms to make money and compete with hotels, but what we are forgetting is that we are in a service industry, built on more than just the bedstead and mattress. I understand that the sharing economy is definitely impacting on the bottom line, but as an industry, we’re approaching this as a hostile enemy and not as a different market. First off, much of the buying process is different, and second, there is so much more that we do as an industry which the sharing economy doesn’t. Our staff are there when things go wrong, offering dedicated support, we are legally compliant and safe as businesses, we offer a personalised, personal service which the sharing economy spouts, but frequently does not deliver, and these are all things with which we can continue to attract guests. According to PwC, hotel performance is set to remain positive in 2018, with year-on-year occupancy growth of 2.3% forecast, and average daily rates due to increase by 2.2% in 2018 to £148. The addition of 19,000 new bedrooms into the market will have an impact, not on the performance of the whole market but largely on the performance of individual establishments. Specific global and national trends will also have their own impact on the UK market, including: Technological advances: hotels need to work out what their specific customers want and how they can and will deliver on this. Things like online check-in and live AI chat are both in demand from some consumer subsets, and it remains to be seen how and when this can and should be adopted in the marketplace. Interestingly, some larger hotel groups have been investing in technological advances and have had a mixed reception from guests. It is clear that investment is necessary, but this investment should be considered in conjunction with the specific target audience and their wants and needs. There has been a lot of wasted investment to date on cool systems that deliver very little for the guest needs. Of course the trend does not just have to be about consumer-facing technology; it can also be about operations and performance advances too. This year alone, Avvio has launched an AI-powered booking engine, while WorldHotels has piloted keyless entry to your bedroom using your mobile phones. Wireless charging is on the up with consumers and self-directed scheduling (being free to do what you want when you want) is now more mainstream. These advances do of course need to happen, but not at the expense of the guest experience and adding self-check-in for example should not mean a staff-free reception desk; consumers still enjoy and crave the personal interactions a lot of the time. Environmental and ethical decision-making: consumers are becoming more conscious than ever and are demanding greater transparency from the businesses they approach. Environmentally-friendly practices and commitments are benefiting businesses, not only from a consumer perspective but also by supporting and reducing operational costs. This trend is no longer just about the environment though with consumers now largely apathetic about the ‘green-washing’ of recent years; human trafficking and modern slavery is a growing consumer and government concern, as is full sustainability, not just in terms of the environment, but also in terms of the people you employ, the toxicity and providence of the food you serve and the maintenance processes and practices to maintain and improve efficiency. Even more challenging is the shift in expectation from your individual business to your full supply chain, with potential guests now judging businesses on the basis of the suppliers they use and the sub-contractors they employ. In part, addressing this trend is about having formalised policies and practices in place, and in part it is about adopting greater transparency and storytelling with your customer to demonstrate these commitments. Mintel predicts that in 2018, consumers will start demanding ‘full disclosure’, requiring comprehensive transparency on our business practices. This does not mean hotels have to disclose every minor detail, but they should be assessing, categorising and detailing these processes and practices, working with suppliers to do the same, and sure as anything should be prepared and equipped to answer detailed questions on it. The personalised approach: increasingly, reports are emerging to quantify the cataclysmic shift in consumer behaviours. Gone are the days when we could assign specific behaviours and practices to certain demographics and ages, and dawning is an era where we are celebrating the individual, encouraging personal introspection and expecting a unique and personalised service. This shift is spilling over into our industry, with potential guests anticipating that hotels can and will cater to all their changing needs. This is a challenge in itself and I do not envy businesses the reality of trying to personalise everything to their individual customers, but at least some adaptations are easily made. Asking customers a bit more about themselves during the sales process will help to underpin the personal experience, shifting from just ‘business or leisure’ to understanding key objectives for their stay and buying decisions for selecting you. Technology will be key to securing and analysing this data, so it may be time to consider an upgrade from the traditional CRM database onto more sophisticated platforms. Increase in travel pricing, and in expectations: Aside from the uncertainty of Brexit, globally, there is an economic boom happening and consumers are not only feeling more affluent, but are also accepting the necessary rise in prices from inflation. This means that they are and will be prepared to pay more, but will also expect more in return. Personalised trips will form part of this; unique and local experiences will too. Now it is about focussing on experience and continuing to build on the trends we have been seeing for the last five years. Trends are just that - simplified patterns and predictions based on previous and expected behaviours. Looking through the list above, there are some really weighty issues pending and I anticipate that many businesses will struggle to succeed adopting them all. Instead, I will return to my earlier point that now is a time to listen to your current and future guests, and to enter a period of continuous reinvestment to build on and cement your successes. Many of the businesses that we are assessing are flourishing, not because they follow all the trends, but precisely because they don’t. They are simply re-evaluating their businesses, and doing things differently in a bid to create a unique, covetable experience. That more than anything will shore up future performance and success, and I for one am excited about the prospects of a varied, unique and innovative marketplace, should businesses choose to challenge themselves. Quality in Tourism is launching a new series of industry standards and assessments for 2018, focussing on guest experience rather than traditional facilities standards. Watch out for the January issue when we’ll be taking a look at the new approach and looking at what this means for traditional star grading.