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Futurecasting 2020: What’s Ahead For Hospitality?
By OTA Insight
Wednesday, 15th January 2020
 

2019 has seen yet another year of fast-moving market developments in the travel and hospitality industry: There have been old players crashing out, new players cashing in, and a whole host of novel trends and opportunities for hoteliers to get excited about, prepare to counter, and potentially exploit in order to boost or protect revenue.

It’s tough to single out the most significant forecasts for next year, but we’re confident that the developments below will be ones for hoteliers to keep an eye on in 2020.

Personalisation presses ahead

First up, an uptick in attribute-based selling (ABS) is very much on the cards. We recently wrote about it on our blog, speculating that the functionality is going to fundamentally change the way that travellers search for and book hotels. The process will become much more targeted, and hoteliers will be focused on finding more ways of more meaningfully comparing their rooms’ rates with those of their competitors.

ABS and, more generally, personalisation will have a huge role to play next year, shown in how much the topic has been discussed by travel industry leaders at a variety of events in 2019. Personalisation is a newer facet of the user experience that hotels are keen to improve and excel in. Having a handle on the user experience and responding to it is not only an important way hotels can remain competitive against OTAs in terms of customer acquisition, but it takes into consideration the consumers of the future.

New travellers, new rules

The millennial traveller gaining even more prominence in the minds of hoteliers is our second 2020 prediction. Most commentators suggest a general economic global downturn is imminent, which is likely to coincide with the cyclical downturns we’re used to experiencing in travel and hospitality. The millennial traveller could be an equaliser in this downturn. Generationally, they have shrunk the world and will continue to drive travel demand, although they will be very interested in value-based pricing. Provided the industry can continue to deliver unique experiences, they will be able to create demand from the millennial traveller through their social presence.

The millennial traveller may also have an effect on direct booking trends in 2020. This year saw evidence that the perseverance of hotels in continuing to use loyalty programs to draw in customers has paid off. These results are borne out in a global survey conducted by Criteo, showing that 82% of senior travellers confirm choosing a specific brand because of a loyalty program; however, amongst millennials, this falls nearer to 60%.

Opt-outs from a hotel’s loyalty program amongst this millennial group tend to be due to receiving too many emails. This means that in order for hoteliers to take advantage of a demographic who are going to be spending the most money in the coming years, they will need to adjust how they communicate and which channels they use, in order to draw in a crowd that, with the relevant experiences and offers available, can become brand-loyal.

Rate parity and end-to-end races

But there are other changes coming to hotelier revenue and profit. The issue of parity isn’t going away, and it’s a racing certainty that another “rogue” OTA will rise to take Amoma’s crown. In fact, several will be competing for the title. We recently tapped into some of our data analysis work to speculate on who it might be. Before 2020 is out, we’re likely to know who to watch, and hoteliers will be as eager as ever to adopt technological solutions to monitor and take action on these issues.

OTAs and newer, disruptive market players will also be making waves in the travel landscape. Airbnb spoke earlier this year of their ambitions to become an end-to-end provider, whilst 2020 looks set to be a race between Booking and Expedia to deliver the connected experience, extending to flights, experiences and rental car options - all reliant on large amounts of customer data acquisition.

The coming year also looks set to bring about more collaboration between hotels and OTAs with Marriott signing a deal with Expedia that gives the OTA exclusive distribution rights for the hotel chain’s wholesale and promotional room rates, availability and content to third-party travel providers such as bedbanks. This signals an interesting chapter in the distribution landscape as former opposing forces within the industry seek to create something new.

Mobile moves

Mobile booking started to gain more traction this year, albeit with some market-specific differences in enthusiasm that marketers should take heed of. Super apps such as WeChat and Grab have been key players in Asia, with WeChat’s popularity driving trust between consumers and payment systems. Grab, initially a taxi booking app who then entered the travel industry with hotel bookings powered by Agoda and Booking. has shown the potential for apps to play a real role in the customer journey and the race to go end-to-end.

Earlier this month Google continued their steps so join the super app space with the announcement of Google Maps looking to gradually offer users the possibility to not only guide but also purchase the transport services to move from A to B. The seamless connection and in-built customer familiarity with Google Pay provides the perfect ground for a frictionless experience that will surely start to see more services bundled into the app.

In light of this transition, hoteliers will find themselves needing to be on top of their rates for both desktop and mobile booking, perhaps seeking to look at mobile offers specifically so they can take advantage of this fast-moving trend.

Growing technology

We’ll also see further developments in Big Data and AI. Reflected at events this year, such as HITEC Minneapolis, travel experts spoke of leveraging advanced technology to best serve connected travellers who are demanding more high-quality digital and mobile experiences with real-time responses. In 2020 the growing adoption of devices like Google Home and Alexa means that guests will be increasingly using voice commands to search for rooms.

This will impact hotels’ SEO and marketing strategy as they become additional channels that rates are being displayed on, ones that need to be considered in terms of parity. Another progression in Big Data is the emergence of predictive analysis.

Predictive analysis uses many techniques from data mining, statistics, modelling, machine learning, and artificial intelligence to analyse current data and make predictions about the future. This is likely to make waves in 2020 as hoteliers will be keen to start looking at ways of harnessing multiple sources of disparate types of data to draw inferences and make predictions about factors such as demand.

Want to learn more about parity? Watch our webinar, The real rate parity problem no one is talking about.

Request a demo of Parity Insight and see how you can manage and track your parity performance

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