The Hospitality Industry Moving into 2021
During this time of uncertainty, we’ve spoken to a number of marketers in a variety of industries including Restaurants, B2B, IT and Services, and Entertainment. We’ve also discussed ecommerce and paid media trends with marketing leaders as reliance on digital marketing efforts increase.
Marketers in all fields are innovating in new ways. Given strict travel measures, the hospitality industry has had to get creative and remain optimistic to keep their industry alive.
Del Ross, the Chief Revenue Officer at Hotel Effectiveness, shared that “The hospitality industry has been devastated by COVID-19 and continues to be the slowest-recovering sector of the economy. As a result, hotel owners are scrambling to find new ways to attract travelers and better programs, processes, and technologies to improve operating margins and stabilize cash flows in the face of uncertainty.”
This led us to ask marketing experts in the hospitality industry the following questions:
What innovative changes are happening in the hospitality business?
What changes will remain permanent in a post-COVID world?
Have you partnered with competitors or other industries to continue operations?
What are the top trends you have noticed going into 2021 within the hospitality industry?
What's a non-hospitality focused brand that can teach your industry something new?
#1 - What innovative changes are happening in the hospitality business?
Technological Advancements
Hospitality, as Del Ross explained, is an “ancient industry” set in their ways. The virus, however, has led to technological advancements. Ross continued, “Mundane operations like housekeeping and maintenance have been almost untouched by technology - until now. The pressure to break even and to survive is forcing veteran operators to re-examine these long-established areas of business, and they are finding improvements nearly everywhere they look.”
Such improvements include contactless options. Deborah Cohen, CMP, Director of Meetings and Conventions Marketing at Discover Puerto Rico, shared that “Contactless options are indeed the way of the future. Examples include: replacing physical menus, touchless payments, app-specialized ordering, mobile room keys, providing arriving guests with QR codes (airports), implementing contactless check-in at hotel properties and more.”
Like the restaurant and most other industries, sanitation and cleanliness protocols have spiked. Manoj Jasra, the Chief Marketing and Digital Officer for Northland Properties, stated that the focus around health and sanitation has gone to higher levels, “this includes new air filtration systems, elevated sanitization procedures, UV lights, and in some cases, the integration of robots to automate cleaning. Ultimately all of this is to build consumer confidence and trust.”
Cohen cited some advanced cleaning methods her hotels have implemented during this time: “The Hyatt Regency Grand Reserve, for example, quickly implemented UV light purifying air conditioning units at the start of the pandemic to safeguard guests. In addition, many of our hotels have earned an Island-specific health and safety certification. Our Puerto Rico Convention Center has implemented VenueShield through ASM Global and recently received the GBAC star facility rating.”
“Adversity breeds innovation.”
Staff Management Informed by Data
Del Ross noted that technological advancements have also influenced staff operations. “From scheduling to team communications to compensation strategies, staff management is being informed by predictive data algorithms translated into powerful but easy-to-use mobile applications, resulting in dynamic decision-making, increased productivity, and empowered leadership. In the near term, these innovations are providing sustenance during the crisis. In the future, the sustained benefits will produce a much more robust and profitable business model for the good of all stakeholders - owners, operators, guests and staff.”
Repositioning to “Staycations”
The hospitality industry is trying to cater to the public that is locked inside their homes for days on end by offering new services and repositioning themselves. Jasra shared, “With border closures and reduced travel, driving demand is also a major challenge, so we are seeing hotels attempt to drive regional demand through staycations, converting rooms to offices (with the perks of fitness, room service, and pools), as well as packaging their products with other brands and local attractions.”
Hybrid Meeting Options
Since the hospitality industry thrives from hosting conferences and events, hotels have had to pivot quickly to make safe and effective options for their audience. Karina Anthony, the Marketing Director at Meet AC, shared, “The hospitality industry is quickly trying to advance their technologies as well as processes and procedures for safely holding meetings and events. Virtual Reality, digital assets such as videos, digitally produced documents and social media, teleconferencing and upholding the highest of cleaning protocols will remain permanent within the industry.”
“Hybrid meeting options have emerged since COVID’s start and are undoubtedly here to stay. Given the global pandemic, this dynamic gives meeting planners the ability to reach both an in-person and a virtual audience at once, and create the unity we are craving.”
Deborah Cohen explained how the Puerto Rico Convention Center is making this change work. “This 600,000-square-foot venue remains the most technologically-advanced in the Caribbean, and with innovative video conferencing capabilities has further enhanced its offerings amid COVID, reacting quickly to the needs of the present day. Broadcast Studio capabilities are possible in a variety of rooms, including 15 meeting rooms or 29 break-out rooms; among them are live streaming, video broadcast, interactive video editing and a variety of dynamic backdrops (panels, monitors, LED walls).”
“I recently attended a virtual Marketing Summit and the ease of which I was able to gather information without having to travel was extremely convenient. There is certainly a benefit to hybrid events moving forward.”
Read Related - CMO Spotlight | Kristie Goshow - Preferred Hotels + Resorts
#2 - What changes will remain permanent in a post-COVID world?
Proactive data analysis of consumer behavior, sanitation procedures, and e-commerce adoption are all operational changes that will remain post-covid as the hospitality industry continues to gain consumer trust back.
Because the world is unpredictable, consumer behavior is unpredictable. Marketers need to constantly analyze trends instead of taking a passive approach to data.
Ross shared, “Travel volume was very predictable before COVID19. Most marketing was based upon a simple, passive strategy of being present in the information channels used by shoppers and relying on organic conversion. Today's successful hospitality marketers have to be much more aggressive - seeking out new sources of demand and using proactive, ‘push’ tactics to shift share from the competition by pursuing customers who do not shop but think they already know where to buy. These new tactics are essential for survival today, but the masters of this approach will take this new competency into the post-recovery period to become market leaders with substantial barriers to entry against future competition.”
Jasra added, “Without a doubt, elevated health & sanitization practices will remain top of mind for consumers permanently. Additionally, the adoption of self-service and e-commerce (which have seen years of progress in a matter of months) will also be core to hospitality businesses. Consumers will prefer touchless check-in / check-out as well as digital support/concierge through the device of their choice.”
#3 - Have you partnered with competitors or other industries to continue operations?
In order to get through this challenging time, companies are leaning on current partnerships, and even other hotel associations, to better serve their customers and employees.
Integration Partnerships
Del Ross with Hotel Effectiveness shared that the “Hotel technology companies depend upon integration and extensible systems to function in any market. In today's challenging conditions, integration partnerships represent opportunities to collaborate throughout the customer lifecycle, and companies with the strongest and broadest integration footprint are advantaged against their standalone competitors and substitutes. Hotel Effectiveness has a broad and deep set of integration relationships, enabling the dynamic flow of data across systems which makes complex decision-making both fully informed and effortless. Operating at the intersection of property management system ‘operational’ data and human capital management ‘payroll’ data, we ensure that the investment in each day's largest expense area - labor - is perfectly aligned with the requirements of the business.”
Hotel Associations
Manoj Jasra with Northland Properties stated that “From a competition perspective, the hotel associations have come together to make sure we lobby the government appropriately to support our industry (including thousands of employees) which has been significantly impacted by COVID.”
He continued, “We have connected with regional and national brands in Canada for partnership opportunities to help drive business through high value offers that are mutually beneficial.”
Current Partnerships
Karina Anthony with Meet AC explained their use of current partnerships to enhance their marketing mix. “We have been fortunate to continue operations throughout this trying time. Since Meet AC’s inception in 2014, we have been growing our digital footprint to serve relevant Atlantic City content to the industry. Our Marketing Team has compiled a library of videos to showcase a variety of Atlantic City experiences to meeting planners and most recently utilized virtual reality (VR) to allow planners to tour the city from their homes or offices when they are unable to make the trip to Atlantic City.”
#4 - What are the top trends you have noticed going into 2021 within the hospitality industry?
Measurable Results
Del Ross points out that guessing and leaving decisions up to chance will no longer be tolerated moving forward. “Replacing old ways of working with new ones will be deferred unless the change results in immediate, measurable benefit. 18 months ago, strategic investments in technology could be made simply based upon a strong belief that they would pay off. Today, the only new investments will be ‘sure things’ backed by performance guarantees and safeguard,” he stated.
“Hospitality sales can no longer be passive. Inbound opportunities will be scarce, while aggressive and well-designed outbound efforts can provide both near-term sustenance and long-term sources of new business. Marketing will continue to prioritize tactical demand generation over brand awareness, but effective tactics which expand reach and diversify the addressable audience will dominate old-school go to market approaches.”
Third Party Management
“Third party management will be re-invented,” Ross shared. “With most legacy management contracts based upon some kind of profit-sharing program, companies that won't or cannot innovate their operating and financial structures will be eliminated and the more nimble players with the potential for scale will thrive.”
“Productivity and efficiency benchmarking will become standard practices, and the top-performing managers will be those who understand how to optimise profitability without sacrificing quality or asset sustainability.”
Re-engaging Consumers
Jasra mentioned several methods marketers are leveraging to engage customers in 2021. Some of these include:
Loyalty platforms
Frictionless digital experiences throughout a consumer's journey
Creative content and experiences that go beyond traditional advertising
Leveraging Virtual
Between VR methods and hosting virtual events, hospitality is leaning into utilizing the digital landscape to continue to serve their consumers.
Anthony shared, “Virtual Reality is a trend that might have intimidated some a few years ago however now it is a necessity within the hospitality industry. Destinations and hotels need a way to showcase their offerings and available space in a creative way. Meet AC signed on with the company YouVisit in 2017 and we were one of the first Destination Marketing Organizations to utilize this service and have since expanded our platform several times to include virtual journeys of surfing in the Atlantic Ocean, riding the third tallest Observation Wheel in the United States, strolling the world-famous Atlantic City Boardwalk and more.”
She continued, “Virtual Conferences and Summits are trending currently and I believe that will evolve into hybrid events once the country begins opening up and loosening restrictions. Virtual events are a less expensive and convenient alternative to in-person conferences, and while they cannot replace the value of face to face meetings, they offer a wealth of information right at your computer.”
Sustainable Efforts
Anthony mentioned how the last year has shined a light on the importance of the environment and how companies need to do their due diligence to be mindful.
“Sustainability along with corporate social responsibility (CSR) will always be at the forefront of the hospitality industry, and the global pandemic has opened our eyes to how we see our environment. Bringing a mindful approach to meetings and events may result in smaller meetings, outdoor meetings where applicable, sourcing local products and waste reduction.”
Remote Work + Domestic Travel
Now that people are working from home, traveling or treating oneself to a “staycation” or even a vacation somewhere nearby is becoming more common. “The concept of ‘workcations’ and ‘schoolcations’ has risen amid this new lifestyle. Recent Destinations Analysts research shows that 60% of American travelers report they can work remotely. Additionally, their research showed that 52.2% of those interested in schoolcations reported some likelihood to take one this Fall, and 46.0% of those interested in workcations said they were likely to actually take one in these coming months,” shared Cohen.
“As a U.S. territory, Puerto Rico offers U.S. citizens a seamless remote work alternative for those who are able to work remote, with the opportunity to indulge in an tropical getaway while continuing their day-to-day deliverables, all while experiencing a different culture without the need of applying for a visa or currency exchange,” she stated.
Choosing to travel to somewhere like Puerto Rico, according to Cohen, is safe and easy. “Travelers looking for a change of scenery while working remotely, have direct access to nonstop flights from key markets including Orlando, Miami, New York, Boston, Atlanta, Philadelphia, among others. Puerto Rico offers a plethora of activities, where social distancing can be practiced, to recharge and break up the monotony that working from “home” has created. Travelers are permitted to arrive at the Island with all the necessary requirements included in the outlined travel guidelines. Those arriving in Puerto Rico must fill out a Travel Declaration Form through the Puerto Rico Health Department’s online portal, get a molecular COVID-19 test (nasal or throat swab) no more than 72 hours prior to visiting the Island and show proof of a negative result. Masks are required throughout the Island as well, which demonstrates the health and safety precautions taken by health officials to keep everyone safe.”
Since “international” travel may be scary for some consumers, some hospitality brands are focusing on domestic travel. This means domestic travel is increasing. Cohen stated, “Domestic travel has become increasingly popular this year due to travel restrictions, with pent up wanderlusters opting for a getaway that doesn’t require a passport. Per The Points Guy, domestic travel accounts for about 90% of travel in the United States at the moment.”
Increased Cleanliness Standards
Hospitality brands are increasing cleaning protocols and even offering exclusive packages to make guests feel safe. Some implementations include a WTTC’s Safe Travels Stamp. The Safe Travels stamp is the world’s first ever global safety and hygiene stamp for Travel & Tourism, designed specifically to address COVID-19 and similar outbreaks.
“In light of the global pandemic, privacy and cleanliness have become the new luxury with travelers prioritizing cleanliness and exclusive amenities more than ever and they are willing to pay more for privacy and distancing. ”
Cohen shared that “The stamp will allow travelers and other Travel and Tourism stakeholders to recognize destination authorities and companies around the world that have implemented health and hygiene protocols that are aligned with WTTC’s Safe Travels Protocols.”
#5 - What's a non-hospitality focused brand that can teach your industry something new?
“Hospitality leaders should study and replicate the marketing, operations, and financial leadership models of successful retailers and adapt the strategies and tactics used to the unique dynamics of our industry. ”
“Consumer goods retailing remains the most brutally competitive industry and a massive source of inspiration for hospitality. Margins were razor-thin for retailers before COVID-19, and the crisis has eliminated mediocrity from this sector,” Ross shared. “Companies worth emulating include the obvious candidates like Amazon, Walmart & Costco, but niche players like LuluLemon Athletica, Quidsi, and Zumiez are disrupting the edges of retail and always represent the source of each new wave of marketing.”
While most things seem uncertain at this time, the hospitality industry is not giving up and putting their best foot forward to adapt and serve their customers by providing safe, technological advancements and alternative options.
For more on the hospitality industry, check out our conversation with Kristie Goshow, the CMO of Preferred Hotels and Resorts. Read the full recap here.