7 Hotel Trends to Watch in 2020
2020 Promises to be characterized by increasingly tech-savvy consumers with a strong appetite for optimized travel and hotel experiences. In fact, research by Hospitality Tech News shows that 83% of all trips were booked online in 2019.
Headwinds from economic and political uncertainty in 2019 are also expected to impact the travel industry in 2020, but not in the way many would expect. Customers are living for the moment, booking each trip as if it was their last.
Here are the top 7 hotel industry trends to watch in 2020:
1. The Demand for Personalized Travel Search and Booking Experiences will Continue
Personalization is all the rage in the travel industry, and hotels are certainly not exempt from this demand. A recent report by Google and Phocuswright reveals that nearly six in 10 travelers said that brands should tailor information based on their personal preferences or past behaviors.
Personalization of the traveler and guest experience has been shown to substantially improve ROI for hoteliers and associated travel businesses. If you tailor your information and overall trip experience based on personal preferences or past behavior, the same study shows that 76% of travelers may be more likely to sign up for your brand’s loyalty program. In addition, 36% would pay more in return for receiving more tailored information and experiences.
Many hotels have embedded personalization into their website and booking engine, delivering personalized messages in dynamic widgets and enhanced unavailability messages highlighting best offers based on the guest’s previous searches and booking behaviors.
In our own research of over 1,900 service users, personalized messaging in widgets has been shown to lift reduce abandonment rates and lift direct bookings by up to 60%.
2. Hotels Will Continue to Focus on Generating Direct Reservations
Our research shows that 87% of hotel guests will visit a hotel website before making a reservation. This ties in with the information-hungry customer, who wants to proactively experience first-hand what they are buying into before making a full commitment. This will continue in 2020, and hoteliers will (or should) adapt to consumer behavior in this regard.
There will be two things you need to ensure in order to optimize for direct: 1. A great website with visually-appealing content and clear communication of your best offers, and 2. A great booking engine with optimized load speed and listed prices that match those in the payment stage.
You can find out more about optimizing your website and booking engine for direct by checking out our 5 Digital Marketing Strategies for Hotels in 2020.
3. Hoteliers Invest In Overcoming Potential Economic Headwinds in 2020
As predictions of economic recession and hotel slowdown loom over the industry, hoteliers must invest in the implementation of strategies to weather the potential headwinds.
According to research by the data intelligence firm STR, the current cycle has continued virtually unabated since March 2010. However, September 2019 was the second month this year when RevPAR results turned negative, as increased supply outpaced demand.
Furthermore, PWC reports deceleration in the USA, with, for example, Q3 RevPAR growth at less 1%, the lowest figure since the industry began to recover from the 2008 economic crisis.
The industry has enjoyed a boom over the last 20 years, which has lead to some measure of complacency and a lack of foresight to invest in the hard times. While it is impossible to predict the future with absolute certainty, there is certainly something to be said of having a solid contingency plan in place.
Below are some of the strategies which smart hoteliers will be implementing in 2020:
- A greater focus on focus on smart distribution changes and management
- More pricing flexibility
- The efficiency in changing business processes through the assistance of technology, and educating staff in these processes
- Recognizing the increased sophistication in both distribution and technology
With ADR and occupancy currently at a peak, it’s important that hoteliers proactively strategize and implement measures to increase GOP. The first step would be to lower distribution costs, particularly with 3rd party channels and OTAs. This can be achieved by optimizing online presence and the guests’ booking process to maximize direct revenue.
4. Travelers Will Continue to Seek User-Generated Content about Destinations and Hotels
With millions of travelers eager to share holiday snaps and travel experiences online, social media channels such as Facebook and Instagram have become holiday browsing hotspots to inspire travelers worldwide. Research by Global Web Index shows that user-generated content on social media significantly influences holiday-planning activities.
There’s no shortage of user-generated content (UGC) on social media to keep friends and family updated. According to the 2019 study, two-thirds of users say they post about their holiday on social media, with 4 in 10 posting whilst on holiday.
This, in turn, is continuing to have an impact on travelers’ decisions on holidays and destinations. Consumers are actually more likely to discover travel destinations through the content their peers share on social media – whether that’s photos/videos (37%) or recommendations (32%) – than they are via branded travel ads (24%).
Instagram naturally complements the travel industry, and the hashtag #travel has been featured in over 400 million posts and #hotel in nearly 30 million posts. Facebook, however, is still the leading social platform for the majority of travelers to share content when they are on holiday – at 58% compared to Instagram at 43%.
5. Environmental Sustainability Will Become a Top Priority for Hotels
Although the global tourism boom has substantially benefited both established and emerging economies, hotspots are still struggling under the weight of ‘overcrowded tourism’. This growing threat has already caused significant damage to both local environments and communities.
Tourists are responsible for large quantities of single-use plastics that pollute beaches and threaten wildlife, and souvenir hunters have been known to break off pieces of endangered coral to keep as memorabilia.
The current spotlight on climate change has made travelers and hotel guests increasingly aware of environmental responsibility and sustainability. Research published in the Hotel Market Travel Report reveals that 60% of travelers who are loyal to a hotel brand say that the brand’s corporate responsibility is a key factor in their loyalty.
We expect hotels to adapt to this shift in consumer behavior by clearly demonstrating their commitment to the environment both online and offline. Many hotels have now implemented policies where a percentage of room fees will be donated to specific environmental causes, which in turn incentivizes the environmentally-conscious consumer to book.
6. Sun and Luxury is Great, But Travellers Will Demand More Enriching Experiences in 2020
Because traveling is now far more accessible than it used to be, thanks to the rise of digital, budget airlines and other measures, hoteliers must diversify their content and services to resonate with a wide range of different travel personalities and appetites.
Research by Global Web Index shows that 50% of travelers want to learn about and experience the history and culture of destinations they visit. This also means that travelers themselves will be more inclined to share content that authentically reflects the destinations they visit.
7. Google will Continue to Disrupt the OTA Market
This year, Google caused quite a stir across the online travel industry, and this will only continue in 2020. Increasing customer acquisition costs from Google are bound to have a ripple effect across independent hotels globally. Bidding directly on Google will likely become difficult for independent hotels and OTA commissions are predicted to soar to pass through the extra costs.
Some experts predict a massive shift where OTAs will no longer be the dominant reservation channel. Up until now, Google has predominantly operated as an ad agency, generating clicks and driving traffic which then converts into transactions for companies on the search engine.
The silver lining is that in parallel with paid advertising, Google has been strengthening their Google My Business tools to give visibility to the business owners. Now more than ever, Hoteliers will need to invest in smart online solutions to both level the distribution playing field and generate the best possible return on investment.
Is Your Hotel Ready to Adapt to Change in 2020?
Change is inevitable, and rather than resist, the industry must adapt. This is, of course, if you want to remain competitive. You can increase the visibility of your property through a range of digital tools and engaging with customers on social channels. However, you must also ensure the overall experience is optimized to meet diverse traveler demands.
From our point of view, educational support for our clients and partners will be high on the agenda in 2020. This will empower hoteliers to effectively implement smart digital marketing and merchandising strategies, develop a deeper understanding of diverse guest behaviors and trends, as well as achieve long-term organic growth independent of third party channels.
Many fall into the trap of focusing on sales without enough investment toward generating demand. However, in today’s ever-changing hotel landscape, hoteliers risk falling behind if they do not expand their knowledge of the customer and utilize the resources available to optimize their experiences. Therefore, learning and growing should never stop.