Digital Marketing

The current hotel scenario: competition, boom and marketing

The international hotel industry is anything but friendly. For a long time, there was almost no innovation in this field, but the advent of the technology-driven, on-demand economy has drastically changed that. The arrival of Airbnb on the scene was an indicator of this change, along with the rise of boutique hotels. Soon, even traditional restaurant chains began to experiment, grow, acquire, and consequently innovate intensely.

This brings us to the current hotel scene. Although it remains a brutal, uncompromising and fiercely competitive industry, the road to success is now multifaceted. There is no one-size-fits-all formula and hotels no longer have to subscribe to hard and fast rules. Technology plays the role of a great equalizer, giving even the smallest player a fighting chance to survive.

RISE

Around the world, the travel, tourism and hospitality sectors remain key to economic development and job creation. In this economy where transportation has become more affordable and country borders are blurring, it is fair to assume that travel and tourism will remain a dominant sector for the near and distant future.

Consider these statistics:

  • In 2016, travel and tourism contributed US$7.6 trillion to the global economy and created 292 million jobs.
  • This income generation comprises 10.2 percent of world GDP.
  • 1 in 10 of all jobs can be attributed to the travel and tourism industry.
  • At 77 percent, leisure travel made up a portion of people’s spending. By comparison, corporate and business travel accounted for the remaining 23 percent.
  • Domestic travel (at 72 percent) was higher than international travel.
  • The total contribution to GDP increased by 3.1% in 2016.
  • By 2027, this sector is likely to account for 11.4% of global GDP and will generate more than 380 million jobs worldwide. Of course, this indicates that this sector will outperform the world economy.

There is no doubt that companies like Airbnb are going head-to-head with hotels in certain market segments. This implies that part of the business may be additive, as travelers are taking more trips (and also longer ones) than they would without the option. The bottom line, however, is that private accommodations have altered consumer expectations on a fundamental level, redefining what and where a hotel is.

COMPETITION

Competition in the hospitality industry is the result of two aspects:

  • technological adaptation
  • Change customer profile

Technological Adaptation

As I said before, technology has leveled the playing field and has contributed to various facets of the industry, including branding, communication, and outreach. In particular, three particular tendencies are

will reshape the hotel industry in the years to come. Let’s look at each of them individually.

A mobile first approach

In emerging markets around the world, one billion people are expected to connect to the Internet worldwide. Most of these will be customers who will experience their entire guest lifecycle on their smartphones. Hotel and travel businesses have no choice but to invest in mobile-friendly and mobile-first guest retention and loyalty strategies.

In any case, customers are always looking for that ‘personalized’ experience and leveraging innovative mobile technology in the way that AirBnb and Uber have done will be key when it comes to differentiation and brand experience. Hotels will need to offer booking functionalities, lightning-fast operations and other touchpoints for the entire customer journey on mobile phones for the convenience of their customers.

connectivity

As Internet access becomes nearly limitless for digital natives and non-natives alike, connectivity is poised to increase. Additionally, with the proliferation of connected devices and wearable devices on the market, hotels will need to innovate in new ways to interact and engage with the consumer. Virtual reality tours, augmented reality interactions, robotics and artificial intelligence will drive the market and prepare it for other travel experiences that can be offered indirectly.

Machine Learning, Big Data and Analytics

Leveraging big data enables the creation and curation of a highly personalized experience for each type of consumer. Many marketing campaigns can be seamlessly leveraged and monitored against hard numbers for growth and further optimization.

It also speeds up existing processes like customer service, feedback collection, email automation, and customer engagement. In addition, it can also facilitate the expansion and reduction of the business in accordance with the objectives of the company.

Change customer profiles and brand experience

The tourism industry is witnessing a change in the psychographic and demographic profiles of travelers. Along with Gen X travelers is a new influx of millennials, whose expectations and lifestyle are setting entirely different standards for industry performance.

Customer experience is currently the most dominant brand differentiator. It will also drive customer loyalty and referrals and hotels will be needed to synthesize loyalty schemes more specific, personalized and intricate than ever before.

This personalization and differentiation also extends to the types of experiences you create. The concept of ‘home away from home’ ends with the homogenization of luxury, which was the previously tested paradigm.

Now, to provide unmatched service, rooting the hotel in its local climate while also providing experiences beyond the conventional hotel space has become an important factor. The age-old demand for organic food and sustainable options also creates more vulnerabilities when it comes to risks and food safety, which must be monitored by hotel owners.

Travel brands have also lagged behind non-travel brands that have pampered customers by providing higher levels of service. Amazon, Starbucks, and Uber are a few names that millennials hold in high regard, and the competition will only intensify as customers begin to expect the same from all service providers, especially the hospitality industry.

Marketing

This brings us to the last point: marketing for this new age consumer. Hospitality sales, such as they are, are different from other consumer goods. This is because both tangible and intangible products must be sold by the player. Success, then, depends more on the provision of marketing “services” than simply getting the consumer to buy what is on offer. It is important to create the right brand image that encourages trust and, even more so, conversions.

A consistent brand identity also becomes more important as customers have multiple fronts on which they can interact with your brand. Your active presence on social media becomes very important as a portal for customer engagement.

Customers can also research and evaluate it better thanks to portals such as TripAdvisor and Yelp. Reviews and recommendations from a friend or influencer suddenly become very important determinants of sales growth. In addition to providing a steady stream of income, repeat customers can become influencers in their own right.

Taking advantage of all the tools and technologies that come with digital marketing is not only the need of the moment, but it is much cheaper and adjusts to the preferences of the client. Email and content marketing are now closely related to SEO and brand visibility on the web. Most of these marketing efforts are dedicated to carefully creating, curating, and maintaining brand identity and image. Continually engaging customers with new age marketing best practices, as well as providing invaluable experience, will be what takes you above and beyond your competition.

The sector is extremely profitable at the moment and is poised for immense growth and favorable amounts of investment. Whether you are an existing player that is not performing very well, or a new player looking to make a significant dent in the industry, keeping all of these points in mind will give you a significant advantage over your competition.

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