Accelerating Trends Drive Increased Customer Focus

May 5, 2022 | Chris Crowley, Chief Revenue Officer at Duetto

Eight key megatrends that are shaping the new look of hospitality have accelerated in impact since the pandemic. Understanding, embracing, and operationalizing these megatrends is crucial if players in the hospitality industry are to survive and excel going forward.

Sustainability has expanded to encompass workforce talent management and inclusion. For example, some companies are setting carbon allowances rather than travel allowances, whereby once an employee has reached their carbon limit, their business travel is done. Karen Hutchings, Travel, Meetings & Events Leader at Ernst & Young (EY) explained to us during our Revenue Strategy Forum in London in late 2021 that pre-COVID she managed US$2.1 billion in travel spend and approximately $400 million in meetings and events spend. Now, EY has a new goal: to cut business travel carbon emissions by 35% by 2025.

Digital transition has massively scaled up. Companies are rapidly adopting the cloud and embracing connected digital solutions. The use of mobile wallets and mobile payments - along with other contactless tech - is enhancing customer experiences and helping businesses also deal with staffing challenges. As new tech- and analytics-first players are helping re-shape the industry, technologies such as blockchain are fast-forwarding what’s possible from a digital perspective. For example, California-based Winding Tree is an Ethereum-based decentralized travel marketplace that effectively removes the global distribution system (GDS) from bookings. Now, anyone can sell an air ticket. We will see more of this.

Data fluidity is also top of mind for hotels, who need the agility to pre-emptively predict and intelligently respond to quick-twitch consumer trends and other shifts. Easy-to-digest visual data analysis is key, but the infrastructure - clean, normalized, real-time data that flows securely through connected systems and is platform agnostic - needs to be in place before any analysis is truly actionable. Ultimately, data fluidity at the business level empowers customer experience, as users can log in with one profile and book a hotel, reserve a table, or book an excursion.

Inter-modality feeds off data fluidity inasmuch you can package up different pieces of the travel vertical that used to be sold separately. For example, you can buy an air ticket and a train ticket at the same time, in the same transaction. Or you book your hotel and your restaurant reservation at the same time with the same profile paying with the same saved credit card details. The digital transition enables all of this because it allows almost anybody to sell almost anything. What’s more, it’s fast, efficient, and safe for the consumer.

Hybridity will continue to increase. Early in the pandemic, it was easy to assume that the change in the workforce would be temporary. This is not correct. How we work and how we do things outside of work have evolved in new and often dramatic ways. The emergence of the “digital nomad” shows us that work and leisure can interoperate, and this goes beyond the ‘bleisure’ market whereby someone might add on a couple of days of leisure time to a work trip. Boundaries have become opaque; weekends can now start on Thursday and run until Monday while working holidays can last for many months.

Agile working practices. As with hybridity, we are seeing a blurring between agile working practices and more traditional ways of looking at business. People are picking and choosing the bits that they need to make their business work and to respond to what is going on around them. And this is driving people towards more cloud-based solutions because we need more flexible engagement.

Regional realignment. There’s been a profound shift from global city center travel to local markets. While I think this is temporary, we are going to see it continue this year. Europe will focus on Europe, Asia focusing on Asia, the Americas focusing on the Americas, because of the perceived risk of global travel: people don’t want to travel far away from home for work and potentially get stranded by a lockdown.

Fragmentation. The days of the ‘cookie cutter’ hotel room are numbered. Legacy hospitality models no longer apply today. We're seeing it in the tech stacks in the big brands, and we are seeing it across the industry. Habits are changing, both in terms of what the customer wants and in what the hospitality industry is providing. We are seeing more lifestyle hotels, more resorts, and alternative accommodations and these are thriving. There is no longer a one size fits all solution.

And overarching to all these themes we are going to see a big re-engagement with the customer this year, both through the use of technology in terms of marketing, personalized offers, and driving loyalty via the evolution of Customer Data Platforms and in renewed interest and appreciation in direct bookings and an increasing crossover between leisure and business travel. Segmentation as we know it is now out of the window. The customer sits in a segment of one.

Most important is making travel easy, efficient, and fluid for the guest. After two years of disruption, the customer is looking for a stress-feel travel solution bespoke to their individual needs, and with the built-in flexibility to change, amend, or cancel as needed. While technology is stepping up, humanity is also going to be a big factor in the future of travel.

Companies who put the customer journey first and foremost and work back from that will be the ones to succeed. And that is why we should re-name 2022 ‘The year of the customer.’

Learn how hotel revenue leaders like you are planning to optimize their business mix in the year ahead. Download our latest Special Report, Re-booting Revenue: Refreshing Strategies for 2022 and beyond.


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