Consumers are shaping the hospitality industry

As the UK’s fourth largest industry, hospitality has boomed in recent years. However, from digitisation to GDPR and Brexit, the challenges facing the sector keep coming.

A strong economy, rising consumer purchasing power, and digital innovation have helped to fuel record growth. Yet the number one challenge remains; to deliver quality, value and innovation to meet the growing consumer expectations.

Today’s consumers are digitally active and expect a highly personalised, multichannel service from brands. But they remain cautious with their expenditure during this period of continued economic uncertainty. The impact of Brexit; a transient workforce; market disruptors and digitisation are driving businesses to adapt to new ways of working.

Customer experience meets consumer expectation

In the hospitality industry, “experience is the product”. The ability to deliver an excellent customer experience is crucial to success; and the industry has grown on these foundations. Yet what happens when hospitality customers constantly change their definition of an excellent experience? How can hospitality  eaders keep abreast of changing expectations?

Delivering personalised experiences is no longer about real world interactions, but includes the digital world too. This requires an agile mindset and flexible structure to keep pace with increasing demands. So although technology is a driving force behind change, it’s not the whole story. If you look deeper you’ll see that it is consumer demand that’s really changing the face of hospitality. It’s consumer needs that dictate new and innovative services, to create better and more desirable experiences overall.

New technology

Of course, as noted above technology is a key factor. In a classic case of supply and demand, the availability of technology and apps has fed the demand for their implementation. This brings further challenges for the industry, as more resources are required to develop, finance and implement new tech. As noted by Deloitte, the changes in hospitality technology in a decade are remarkable. It’s easy to overlook just how much technology has shaped the hospitality industry in a relatively short period.

“In 2009, the first hotel and airline apps were just hitting the market. Instagram and iPads didn’t exist. Most travellers scoured newspapers and magazines for vacation rentals. Taxis were hailed by hand, and small luxury hotels were among the only businesses that could attempt to create a personalized experience for every guest.”

Also on the rise is the use of augmented-hospitality technology. This enables staff to deliver quality service levels at scale, through concierge-bots and self-serve technology (for ordering room service or taxis for example).

However, the Drivers of Change in Hospitality report from Amadeus and InterContinental Hotels Group (IHG), found that despite these advances human interaction is “still valued”, with 63% of global hotel guests preferring to speak to staff rather than using self-service tools.

Evolving services

New business models are evolving to accommodate consumers who seek added personalisation, convenience and authenticity.

• Personalised offers

With increasing levels of customer data and insight organisations can offer more customised offers and options.

Restaurants and leisure providers are utilising customer data; enabling more relevant, flexible offers based on buying behaviour. Location data also enables local offers and geo targeting.

Hotels may offer personalised options for in-room services; such as swapping a desk for a yoga mat, streaming own content through in-room TVs, or requesting a room on a specific floor or with a particular view. In fact, the Drivers of Change in Hospitality report found that the majority of consumers (61%) would prefer rooms to be priced to allow them to add bespoke in-room and service options.

• Authentic experiences

Another key expectation shaping the industry is the need for authenticity. Younger generations are embracing travel that gives a ‘real’ feel for the area, driving home sharing services like Airbnb and Couchsurfing. These are ideal for visitors to immerse themselves into the culture and feel of their destination, enabling a more authentic experience.

Hotels can also deliver on authenticity. Consumers expect locally sourced food and drinks, which showcase the best of the location, to advice on how to get off the beaten track. This highlights how consumers are shaping the industry. In a study by Airbnb, over 70% of Millennials surveyed said that travel is an integral part of who they are as a person. By monitoring consumer expectations, it pays for hospitality industry to keep one step ahead.

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