Businesses across the hospitality industry, have been diversifying their offerings, and innovating their business strategies in a bid to adapt to the changing landscape of customer demands and desires in 2020. This week we take a look at three interesting adaptations from the hotel industry that we have seen over the past year and expect to grow due to popular demand in 2021, plus how these changes could be applied to your business.
The renewed move towards home sharing
42% of individuals wish to travel more after the pandemic than before, and although the pandemic has shifted the landscape of the hospitality industry, there have been shifts and changes happening for years. A 2018 study by EHL, showed that for hotels, the average price of an Airbnb offer can have an impact on RevPAR. This boiled down to Airbnb property prices having a positive effect on hotel RevPAR: the higher the price of the rentals posted on the platform, the higher the RevPAR of the hotels. The same study found that every increase in the review score of an Airbnb property had a negative impact of -$25.54 on hotel RevPAR for hotels in the area.
Undoubtedly Airbnb has been gaining more traction with travellers of all generations, however they are not unscathed by the events of 2020. Airbnb revenue declined 72% following the coronavirus outbreak and a subsequent cut of 1,800 jobs in May. However, in June, as restrictions were loosened for the first time, Airbnb's gross booking value recorded positive year-to-year growth for the first time since February. With this, over 100,000 new guests in the U.S. used the platform for short-term residential rentals.
Thus, it seems that while hotels have been struggling to recover the booking rates of pre-Covid times, home sharing options are not. Now is the time for hotels to look expand into the home sharing market. Like Airbnb, Marriott Homes & Villas, are doing very well. The allure of a rental home provides customers with a spacious, private alternative to a hotel, and the success of Marriott’s offering shows that customers still want the reliability and consistency of a hospitality brand. The number of listing properties has grown from 2,000 when it started to over 10,000 in 250 markets. They saw a record number of bookings, up 700% from last summer and their revenue increased by more than 800%.
Marriott's Homes and Villas, United States
It seems, therefore, that there is room in the market for hotels to offer home sharing options. Interestingly, 71% of survey participants in the UK said they believed that hotels are still a better value than Airbnb in terms of cleanliness, advertised “authentic” experiences, and location options. In a time when 85% of customers trust hotels, restaurants and bars that have solid health and safety protocols in place, hotels may just have the upper hand over Airbnb in the home sharing arena. There is definitely an advantage for a customer staying in affordable rentals regulated and owned by a corporate entity, rather than the often hit and miss experiences of privately owned places.
Pop-up restaurants in hotel rooms
Another twist on the repurposing concept has been to turn hotel rooms into pop-up restaurants. Stadshotellet in Lidkoping, Sweden, transformed its bedrooms into private dining spaces in a concept named “67 Pop-Up Restaurant”.
Stadshotellet’s general manager Jesper Alfredsson told Forbes that he knew he had to do something different in March 2020 given that business had decreased by 70% compared to the previous year. Coming up with an innovative strategy that would encourage visitors they transformed some of their guest rooms into exclusive dining experiences. Designed for groups of two to twelve, the rooms allowed their customers could enjoy their food in an intimate but safe setting, with orders being placed over the phone to give diners the ease of room service. Once their two and a half hours sitting concludes, the diners can choose to stay overnight if they desire, for an additional fee.
Stadshotellet Lidkoping, in room-dining concept
In a similar vein, the Hotel Ambassador in Zurich, has also created a pop-up dinning concept, with six different exquisite pop-up concepts, distributed over six floors and a total of 47 rooms of the small luxury hotel in Seefeld. Bookings can be made with groups between 4 and 15 people, with flexibility allowed for spontaneous walk-in clients.
Repurposing spaces for co-working
With the rise in the number of people working from home, a travel trend earmarked to take 2021 by storm are vacations mixed with work: “flexications” and “bleisure”. In fact, 55% of customers want to travel for 14 days or more, where services are available for both work and leisure.
Jack Ezon, the founder of Embark Beyond, a luxury travel agency has said that “Global nomadism is going to be a huge theme in 2021. People are going to a destination for a month because they can work and play at the same time.”
17.5% of the bookings at The Betsy Hotel in Miami Beach are for 7 nights or more, a big jump up from the same period in 2020, where stays of that length made up only 8.3% of the bookings. Jonathan Plutzik, The Betsy’s owner, said that this refreshed interest in extended stays seems to be a trend across the generational spectrum. “Families with young children are looking for space: outdoor spaces to be with their kids and space to work remotely,” Jonathan said. “Fifty- and 60-somethings are looking for those things, plus a full-service staff and places to dine and relax outside.”
With this combination some hotel groups like Hoxton and Accor are developing their own coworking concepts. Independent hotels such as Zoku in Amsterdam, or Hotel Schani in Vienna are other great examples of how the convergence of hospitality and coworking spaces can be a recipe for success.
Zoku Living, Amsterdam
This innovation is predicted to attract a younger audience as well as connect hotels with their local communities. Bringing businesses closer to the customers that love them is at the heart of TWISPER’s ethos, and we believe that a successfully run coworking space whether that be in your hotel, restaurant or bar, is a great way to attract new customers and get them returning to your property for a change of scene and a corner of quiet as a welcome change to working from home. The more time people spend on-site at your venue, the more revenue you can look to generate.
Keeping an eye on consumer trends and desires allows for flexibility to adapt to them.
Diversifying revenue streams can provide businesses with both immediate and long-term financial benefit.
Diversifying what you offer, provides potential long-term insulation against unknown external threats that could come in the future.
Making small adaptations to the way you operate can lead to success. Offering faster Wi-Fi, co-working corners, bottomless coffee between certain hours at your hotel bar or restaurant, or running a fun advertising campaign about how the backdrop of your hotel makes a better Zoom background than their virtual beach background all show your customers that you are adapting to fit the changes in their needs and concerns. Just like your hygiene protocols, advertising these adaptations on your online platforms, emails and newsletters to loyal guests, is key, and will show your customers that you understand the market and their needs.
TWISPER is on a mission to bring fairness and positivity back to the hospitality industry. During this unprecedented time, we hope to cast light on the grit, resilience and determination that are an inherent part of the industry. We know that these qualities will lead to recovery and restoration as we look to the future. Subscribe to our newsletter and follow us on Facebook and Instagram to get the latest industry news and TWISPER announcements.