The 1918 pandemic (coupled with the end of the First World War) ushered in the Roaring '20s when pent-up demand and a sense of possibility pushed the global economy to new heights. If the adage “history repeats itself” holds, then we’ll see a similar spike in global activity after a year of quarantine, isolation and social distancing. Forecasts look strong: UCLA predicts a 6% jump in the U.S. economy in the latter half of 2021, with 3% quarterly growth until 2023. Meanwhile, in China, there could be 8.4% growth in 2021, and the OECD forecasts 4.2% growth worldwide in the year ahead. It’s shaping up to be a big year for travel. Yet, that's against a backdrop of potentially permanent shifts in business demand.
So what can hotels do to make sure they are prepared for a busy summer and lay a foundation to serve new segments should business travel remain depressed into 2022 - and potentially beyond?
Here are three big ideas shaping hospitality in the year ahead.
1. Collabotels: Redefine “business travel” for work-from-anywhere
The pandemic has reshaped business travel. Businesses have adapted to using technology to conduct internal meetings, meet with customers and connect with prospects - three common reasons for business travel. Will this demand return? The outlook is sobering: IdeaWorks estimates that airline business trips will drop between 19% to 36%. Even at the low end, the drop in business travel could be catastrophic for hotels reliant on corporate business.
Hotels can prepare for this potential outcome by redefining the business travel segment to include a new type of business traveler: the remote worker, or locals that can work away from the office either part-time or full-time. This “work-from-anywhere” ethos was previously limited to the digital nomad niche, with brands like Selina and Accor moving early to combine co-working and hospitality. Now, with 47% of U.S. professionals saying that their companies will support remote work post-pandemic, the hybrid workplace is mainstream. To best serve the remote worker segment, hotels must reposition themselves as “collaborative hotels.” Collabotels are satellite spokes of the workplace, primed for deep work and conveniently located near workers’ homes.
In this view, spaces must be built around collaboration and connection. Remote workers seek quiet space to work solo, and remote teams want creative spaces for 1:1 collaboration during quarterly off-sites.
2. Loyalty+: Offer perfect perks to your best customers
Technology won’t replace leisure travel. The more technology we use, the more we want to escape and have some time away! In this respect, the rise of technology usage on the business side may result in more vacation trips - and opportunities to replace lost business travel with leisure. To succeed, you’ve got to outmaneuver competitors with better loyalty and perfect perks for your best customers. Leverage your data-savvy and build a basket of perks customized based on each guest’s CRM profile.
By catering to individual preferences, you'll maintain competitiveness - vital when cut-throat rates erode guest loyalty as hotels scramble for market share in the early part of recovery. There’s also an exciting opportunity to rethink loyalty in a world with fewer business trips - and the points that they generate for travelers. Loyalty will become more nuanced and less transactional.
Successful hotels will personalize, engage and drive demand at every touch point to convert one-time bookers into frequent guests. Personalized perks and targeted offers will differentiate the out-performers from the pack in 2021.
3. Subscriptions: Pilot new lines of business
The road to recovery will be rocky and uneven. Look for new business lines that diversify your revenue streams and bolster your bottom line. Chris Anderson, senior Asia editor at Linkedin News, sees 2021 as an inflection point where travel “goes the way of Netflix” and offers subscriptions in earnest. Of course, memberships and subscriptions in travel are nothing new. Travel clubs like Inspirato have traded a monthly subscription fee for exclusive access to hotels and experiences.
But the pandemic has laid bare the importance of revenue diversity as a resilience builder. There are a few ways to build subscriptions into your business:
Partnerships: Costco’s yearly private jet subscription is an excellent example of how a business can partner with another service provider to serve its customers better.
Perks: Newly launched during the pandemic, Tripadvisor Plus is a $99/month subscription that layers discounts and exclusive perks onto Tripadvisor bookings.
Access: Selina now offers the Nomad Passport, a prepaid package for 30 days of travel, and CoLive, a monthly subscription to stay anywhere.
To align with the hybrid workplace, one idea is a subscription-based membership for remote workers. This demographic is lucrative in both its size (more locals than tourists in most locales) and interest: 77% of remote workers would consider a monthly “work from hotel” subscription depending on price. When brainstorming subscription ideas, focus on value. What can you offer that provides the most value to your best guests? The more you connect the value provided and your guest’s needs, the greater the likelihood of success. Mine those overlaps!
Flexibility above all else
If the pandemic has taught us anything, it’s that flexibility is paramount. Guests expect it, staff crave it and business demands it. Flexibility is what gives hoteliers resilience and the ability to adapt to change quickly. The most inflexible among us were the first to lose in this hyper-dynamic environment.
As your hotel looks to capitalize on emerging opportunities in 2021, infuse flexibility in every decision so that you can prepare for the challenges ahead. This wild ride continues!
About the author... Michael Bennett is the chief marketing officer at Cendy