Perils of The Booming Hospitality Industry
In a world with fast-growing sectors, travel and tourism is booming at an indescribable pace. The year 2017 witnessed record bookings, making the sector account for around 10% of global GDP. Many hoteliers worldwide easily reached their targets and generated more revenue than previous years. The increasing number of travelers not just offers new opportunities to brands and independent hotels to earn more, but it also leads to tough competition among hotels.
While some hoteliers are still enjoying their past year’s success, many have set targets for this year. I believe hotels that have prepared themselves for future challenges are going to perform well this year. This is because 2018 will be tougher for hospitality industry than previous years, although traveler numbers are going to rise this year too. Hotels will have to focus on improving their services, while keeping a close eye on competitors.
If you think these are only perils of the growing hospitality industry, there are new players who have entered the sector to compete with hotels. They are short-term lodging service providers and service apartments. Although they are new in the sector, they are going to be a threat to hotels. I have studied the growth of Airbnb and found that the short-term lodging service provider, which offers accommodation facilities including apartments, holiday cottages, homestays and others, have experienced a splendid growth in the recent time. There are high chances that many like Airbnb will emerge and compete with renowned named of the hospitality industry.
Apart from Airbnb-like competitors, hotels currently experiencing new heights of success may observe revenue drop due to the entry of new hotels this year. Many modern-age guests do not go after big brands or famous independent hotels due to their reputation in the past. They choose a hotel if they find it suitable and equipped with modern facilities. The Internet and several effective online marketing tools enable hotels of all kinds to impress people online through their offers and services, and convert them into their guests.
I have studied PWC report and some other researches of last few years which indicate how immensely hotel room numbers have grown in India, the United Kingdom and the US. For 2016, a PWC had claimed that 16,500 rooms will be added in the US. The numbers were expected to grow 7-9% for India and 1.4% for the US in 2016. If we consider figures for 2016, they show that the expectations were pretty accurate. Many new hotels observed new trends in hospitality industry and tried taking advantage of it, resulting in thin fair-share for hotels.
Traveler numbers are rising, then why hospitality industry is still competitive? It is not just because hotel numbers are rising, but because hotels have ditched traditional methods of catering and added flexibility in their services. When it is about accommodation booking, hotels have started offering rooms on the basis of time, instead of rooms for nights. This trend has affected accommodation trends of all types of hotels. Apart from that, hotels have been using new techniques and online marketing tools to stay ahead in competition. They observe their competitors and design strategies to overcome them.
All these developing trends in the hospitality industry give a clear indication that 2018 and upcoming years are going to be tough for hoteliers who have to work hard and smart to achieve their objective and generate more revenue than their competitors. For that, hoteliers should make the most of digital marketing and collaborate with marketers to develop new strategies to gain attention of travelers of all generations and turn them into guests for a long time.