Prospects brighten as hospitality stands at the cusp of change

Even in a growing market, continuous service innovation and improvement are vital to maintaining competitiveness and guest satisfaction. By being proactive and adaptable, hotels can enjoy the benefits of a growing market and position themselves strategically for long-term success and resilience

The global hospitality market is anticipated to rise at a considerable rate during the forecast period, between 2024 and 2031. In 2022, the market grew at a steady rate and with the rising adoption of strategies by key players, the market is expected to rise over the projected horizon.

The global hospitality market size was valued at $ 3950000 million in 2021 and is expected to expand at a CAGR of 10.62% during the forecast period, reaching $ 7239000 million by 2027.

Hospitality comprise commercial establishments that provide security, comfort and a short-term rest or sleeping space. The hotel industry covers accommodation and catering services. It includes businesses that provide accommodation, prepare meals, snacks and drinks for immediate consumption. It includes accommodation and food service agencies because these two activities are usually combined in the same institution.

The hospitality industry started shifting towards electronic reservations before making a reservation over the Internet was possible. Pre-Internet, only GDS reservations were 100% electronic. The conversion from handling bookings manually to digital automation has been slow. 30-40 years later, less than 60% of hotel bookings are made electronically, indicating the slowness of the industry's digital transformation. However, this trend, even if it is slow, is not just a fleeting phase; it's a fundamental change in how consumers interact with travel and accommodation services. The share of electronic reservations will continue to grow. The question is whether Online Travel Agencies (OTAs) will primarily capture this growth or if hotels can leverage their booking engines to claim a larger slice.

Hotels should offer compelling reasons for guests to book directly to reduce OTA dependence. This can include exclusive offers, loyalty rewards, or personalized packages not available through OTAs.

Hotels should allocate resources to digital marketing campaigns that drive traffic to their booking platforms. This includes SEO, content marketing, and targeted social media campaigns.

Hotels must develop a comprehensive approach to calculating and controlling Customer Acquisition Costs. This involves analyzing all channels and strategies for acquiring bookings and optimizing them for cost efficiency.

Despite staffing challenges, investing in training staff to capture and utilize guest data effectively is crucial. This data can be instrumental in crafting customized guest experiences and targeting marketing efforts more accurately.

Automating certain operations can help manage guest data more effectively and offset staffing shortages.

Regular updates and improvements to the hotel's online booking system ensure a seamless, user-friendly experience that can compete with OTAs.

Encourage guests to book directly for their next stay through follow-up communications and special return offers.

By adopting these actions, hotels can lessen their dependence on OTAs and gain greater control over their bookings and customer relationships. This proactive approach is essential for thriving in an increasingly digital marketplace. The cost of doing nothing is becoming more dependent on bookings through OTAs at a higher expense and lower profits.

In the current hospitality landscape, guests significantly influence hotel marketing through online platforms. Their role extends beyond being consumers to becoming active promoters (or detractors) of the brand. This influence manifests in various forms: online reviews on TripAdvisor, social media posts, blog entries, and word-of-mouth recommendations. Positive experiences shared by guests can enhance a hotel's reputation, attract new customers, and increase trust in the brand. Conversely, negative experiences can harm a hotel's image and deter potential guests.

Hotels might gradually shift their marketing strategies to post more often on social media to compete with and offset guest-generated content. The truth comes from the hotel, not the guests, who are not always right, which some hotels point out in their response to guest reviews.

Better data analytics tools and strategies could help hotels identify and target specific market segments more effectively.

Acknowledging and adapting to emerging trends like bleisure travel could open up new revenue streams and differentiate a hotel in a competitive market.

Continual innovation in services: Even in a growing market, continuous service innovation and improvement are vital to maintaining competitiveness and guest satisfaction.

By being proactive and adaptable, hotels can enjoy the benefits of a growing market and position themselves strategically for long-term success and resilience.

There are numerous predictions and trends for 2024, and AI and sustainability are expected to be the key drivers of growth in several industries. AI has the potential to enhance the performance of hotels in several ways. However, it requires high-quality data, which is currently unavailable in most hotels, to work effectively. Online Travel Agencies (OTAs) are expected to take the lead in the application of AI, making hotels even more reliant on third-party channels for their revenue.

As we look towards 2024, the hospitality industry stands on the cusp of significant changes and opportunities.