the guest experience - smartbrief guest experience: 2 ... innovations in hotel design are also...
TRANSCRIPT
2
So far, 2014 has been a strong year for the hospitality industry. Hotels are poised to invest in their properties with amenities, services and designs that will attract and retain guests. Staying on top or ahead of these trends will give hoteliers the edge over the competition.
Data from Smith Travel Research (STR) show growth in demand, occupancy,
average daily rate (ADR) and revenue per available room (RevPAR) at hotels
in the United States for the 12 months ended in July 2014. With 6.9 percent
RevPAR growth in 2014, those gains are expected to continue into 2015, the
company said, estimating a 5.2 percent gain next year. It also estimates ADR growth of
4.2 percent in 2014 and 4.4 percent in 2015. Data from August show that U.S. hotel
occupancy is 66 percent, the strongest performance in the last 17 years, STR said.
STR noted in its August 2014 hotel review that none of the top 25 markets recorded an
ADR or RevPAR decrease during the month. And Atlanta; Nashville, Tennessee; Tampa/
St. Petersburg, Florida; and New Orleans saw RevPAR increases of more than 15
percent. Factors such as relatively slow supply growth and rising group business have
contributed to the positive numbers.
When SmartBrief asked hotel professionals whether they felt optimistic about business
in 2015, nearly half said RevPAR will be better than 2014, and 36 percent said they felt
business would be just as good as 2014. Only 9 percent thought it would be worse, with
the rest unsure.
State of the Industry
Are you optimistic about business in 2015?
49%Yes, RevPAR will
be better than 2014No, it will be worsethan 2014
36%
9%
7%Yes, it will be justas good as 2014
I have no idea
* Totals don’t equal 100% due to rounding
3
The next generation of business travelers is the
millennials, a group of 77 million commonly defined as
those born between 1980 and 2000. Because they grew
up in a digital era, they expect to be able to stay
connected wherever they go. Hotels that want to capture this
business are adding tech-forward amenities, including mobile
check-in and the must-have free Wi-Fi.
Another strategy is to capture the attention of millennials through
new experiences. Marriott Hotels in September launched a 4-D
virtual travel experience that uses the cutting-edge Oculus Rift
technology. The immersive experience comes in the form of a virtual
reality booth that “teleports” people to three sites: a freshly designed
Marriott Greatroom lobby, a beach in Hawaii or a London skyscraper.
Users have sensory experiences by actually hearing the buzz of the
lobby, feeling the ocean breeze or seeing the view from the top. The
experience, which launched in New York and travels to cities across
the United States through November 2014 could reach as many as
1 million people.
The idea is to appeal to next-generation travelers who are curious
and respond to experiences such as virtual reality, said Michael Dail,
vice president of brand marketing for Marriott Hotels. The company
worked with the same agency that created a popular virtual reality
experience for the HBO program Game of Thrones. “We love to be the
first to do [a virtual experience] because we’re talking about the
future of travel,” Dail said.
Brands also are actively marketing to millennials at major events
that appeal to their generation, such as South by Southwest and
Comic-Con. Courtyard by Marriott created a mobile activation with
engaging activities at this year’s San Diego Comic-Con dubbed the
Trend 1:
WhatMillennialsWant
4
Courtyard@Super Hero HQ experience. Located at Petco Park, the
event offered attendees free experiences such as makeup
applications from a top Hollywood special FX makeup team, a
costume play contest judged by The Walking Dead actor Norman
Reedus and a lounge in a prototype of the brand’s next-generation
guest room. Anyone could experience the activation, but in a
strategic move, Courtyard offered a “fast pass” to skip lines to select
Marriott Rewards members.
Beyond marketing, innovations in hotel design are also appealing to
millennials, who seek unique experiences rather than cookie-cutter
properties. The new brand 21c Museum Hotels, with three properties
open and two in the pipeline, makes art an integral part of the
experience. At 21c Museum Hotel Louisville, guests can book an
unusual hotel suite called Asleep in the Cyclone. Designed by New
York-based artists Jonah Freeman and Justin Lowe, the basement
hotel room doubles as a site-specific sculptural installation.
Constructed of repurposed barn wood, custom textiles, original
sculptures and other artworks, the room features a domed ceiling
sculpture that recalls the geodesic designs of American architect
Buckminster Fuller and includes multipurpose furniture and surfaces
designed by the artists. Engaging all the senses, the room also
features a selection of records chosen by the artists and a custom-
built cabinet of artistic curiosities.
Commune hotels will launch its first two Tommie brand properties in
2015. Tommie will have a lower price point than its Thompson Hotels
brand but offer amenities important to millennials, such as games
and other social programming in its lounges, self check-in and
communal dining. The brand is trying to emulate a startup company
with youthful energy and innovative ideas.
Most hoteliers have not yet made any changes to specifically target
millennial travelers, according to a recent SmartBrief survey,
although among those who had, upgrading the technology was the
top focus, followed by lobby and room design. When asked which
tech upgrade they specifically wished they had the budget for,
64 percent of respondents said a faster Wi-Fi network.
Have you made any changes to your hotelto specifically target Millennial travelers?
What tech upgrade do you wish you had the budget for?
No, we haven’t focused on millennials as a group
59%
Yes, through lobbyand room design
Faster wi-fi
11%
64%
In-roomentertainment
16%Virtual concierge services
4%
Digital signage
12%Mobile check-in
4%Yes, through better technology
30%
5
Hotels are adapting to cutting-edge payment
technologies driven by the ubiquity of smartphones.
According to a September 2014 report from Nielsen,
171.5 million people in the United States own a
smartphone, or about 71 percent of the population. In particular,
85 percent of millennials 18 to 24 have them. But other age groups
have made the devices an essential part of their lives as well.
About 86 percent of Americans 25 to 34 own them, as do
80 percent of Americans 35 to 44. Research by IHG Rewards Club
revealed that nearly 40 percent of vacationers say their
smartphone is the most important item to take on vacation, and
67 percent use it every day.
One of the biggest announcements to come from Apple’s product
launch event in September 2014 was the company’s mobile-
payment system, Apple Pay. Using near-field communication
technology, the concept allows users to wave their smartphones,
smartwatches or other enabled devices near a hub to have a
transaction recorded.
At the same launch event for Apple Pay, Apple debuted Apple
Watch, a wristwatch that functions as a small computer. Apple was
clearly thinking about its applications in the hospitality industry,
using an example from Starwood Hotels and Resorts to show off
the device’s capabilities. Starwood is creating an app for the watch
that will allow guests at its W Hotels brand to use it as a digital
room key. The function is estimated to be available in spring 2015.
Apple isn’t the only company innovating in this area. Google
introduced its mobile-payment system, Google Wallet, in 2011,
and other companies are experimenting with the concept. While
there are concerns about credit card security and adoption from
businesses, it’s clear that mobile payments are a developing and
potentially huge technology for the hotel industry.
Trend 2:
Apple Pay,Google Walletand OtherMobileAdvancements
6
A nother defining characteristic of millennials is their
social consciousness. The 2014 Millennial Impact Report
by consulting firm Achieve found that 47 percent of
millennials surveyed volunteered for a cause or
nonprofit organization in the past month, and nearly 60 percent
wanted their employers to offer more companywide volunteer
opportunities. This finding is key for hotels that want to appeal to
potential guests as well as potential employees.
Millennials want to feel good about businesses they support,
including the hotels they choose. To register as making a difference,
hotels will have to go beyond offering linen reuse or recycling
programs. Hotels have responded by developing and publicizing
corporate social-responsibility programs.
Many hotels have started coordinating philanthropy or community-
engagement events. According to a SmartBrief survey of lodging
professionals, nearly half of respondents reported developing such
programs on their own, while an additional 29 percent started
initiatives because of brand requirements.
For example, the Westin Beach Resort & Spa designated three
poolside cabanas that benefit nonprofit organizations: The Rock the
Ocean Foundation, the Guy Harvey Ocean Foundation and The Art
Institute of Fort Lauderdale. Each cabana features unique artwork
and décor that reflect the organizations, with a portion of all
proceeds from the cabana rentals are donated to the corresponding
partner.
Another example of property-level philanthropy comes from the
Wyndham Grand Jupiter at Harbourside Place. The resort opens this
fall, but staff already started introducing the property to the local
community through initiatives such as volunteering on Habitat for
Humanity projects.
Trend 3:
Giving BackTrend 4:
CustomizationIs King
Does your hotel coordinate any philanthropy or community engagement events?
Yes, we do it on our own49%
No, but we supportemployees who do
10%
Yes, our brandrequires it
29%No, it’s not partof our mission
12%
7
Today’s hotel guests want personalized experiences. That
will continue into 2015, with some hotels beginning to
offer niche concierges who focus on one specialty.
Perfectly suited for its location, the Epiphany Hotel by
Joie de Vivre in Palo Alto, California, has a dedicated Technology
Concierge in addition to its full-service hotel concierge. The hotel,
which opened in March 2014, offers the service to help guests make
the most of technology offerings, which include a G-Link dock to
stream movies from devices to the in-room television.
Another tech-forward concierge service is Novotel’s Virtual
Concierge. The Accor brand implemented the smartphone app in
2013, allowing guests to access services such as information on
restaurants and cultural activities near the hotel, weather
information, flight schedules and virtual postcards, which have
been popular with guests, who have sent more than 300,000.
Some concierge services cater to a more fun guest experience.
Hotel Vermont in Burlington has a Beer Concierge, who can
provide insight into the area’s craft beer scene, including guided
tours of several local breweries. Other niche concierge programs
include the Constellation Concierge at Montage Deer Valley in
Utah, who guides guests in navigating the stars; and the Sneaker
Concierge at the hip Dream Downtown in New York, who provides
clients access to rare and limited-edition sneakers. The new Gates
in Key West offers an Island Host, a specialist who steers guests to
hot spots for nightlife, culture and wellness. A few properties in
sun-drenched locations even have Tanning Concierges. At the
W Scottsdale, this person can counsel guests before they arrive
on what to pack to either protect them from the sun or help them
get a perfect tan. The concierge can also provide in-room
airbrushing sessions.
The point of these niche positions is to provide custom services
that make guests feel as if they are getting personalized and
unique travel experiences. Any hotel can create such a role by
identifying one of its region’s defining characteristics — beer, sun,
shopping — and designate a knowledgeable employee to assist
guests. Another bonus: Fun and offbeat titles are irresistible
feature stories that can garner properties publicity.
Trend 4:
CustomizationIs King
Have you ever tried o�ering aspecialty suite, with its owndesign and amenities?
Yes, and our guestsloved it
47%No, but wewould like to
10%
Yes, but itdidn’t take o
13%
No, it’s too much eort/expense30%
8
Hotels are constantly inventing ways to make life on the
road easier for business travelers at all price points. A
pilot program between the Cambridge Marriott and the
Massachusetts Institute of Technology called Six Degrees
aims to create networks among hotel guests. Guests who join the
program will have the ability to connect with others based on similar
interests and experiences. For example, runners could connect with
others and plan a morning jog, or alumni of a particular university
could arrange to meet for drinks in the bar. The program, a benefit
for business travelers and solo leisure travelers, tests the notion that
people want to connect with one another.
Recognizing that business travelers are dependent on their devices
— and often travel with more than one smartphone, tablet or laptop
— Marriott has started offering mobile charging stations. Associates
can identify potential users and offer them one of the units from
Kube Systems, which are about the size of a router. The guest can keep it all day (the units
need to be charged in a special base, mitigating the risk of theft). Marriott began rolling out
the initiative in September.
It is part of Marriott’s Travel Brilliantly campaign, which invites guests to brainstorm ideas on
how to make travel better. “We’re not only engaging consumers in what they would want to
see but delivering on those promises,” said Marriott’s Dail. “We’re talking about the future of
travel and how we’re changing the brand.”
Other hotels have developed perks specifically designed for business travelers. Loews Hotels
is offering a program for frequent business travelers called “Wrinkle-Free Travel.” The
complimentary service stores travelers’ toiletries, clothing and shoes until their next stay.
Another perk for luxury guests comes from The St. Regis Atlanta. The property offers a
business-centric room service menu that has amenities such as phone chargers, tailored Sid
Mashburn suits and juice cleanses.
Trend 5:
Customizationfor BusinessTravelers
What guest amenity will you invest in next year?48%
12%
6%
6%
27%All of the above
Digital services like newspapers
iPads/tablets
In-room charging stations for smartphones and tablets
Free Wi-Fi
* Totals don’t equal 100% due to rounding
9
L ooking to build their market share, hotel brands are
revamping their loyalty programs to compete for
customers and retain guests who drive other decisions,
such as where to hold meetings.
Hotel brands should consider the preferences of millennials when
crafting their loyalty programs, said Guy Langford, vice president of
travel, hospitality and leisure at Deloitte. The firm surveyed 3,001
millennial travelers who book 26 room nights or more a year, and
Langford noted that price isn’t the only thing they watch.
“Focus on fostering your fanatics,” Langford recently told Hotel News
Now. “Find out what they want, form a customized guest experience;
fine-tune your offering and feed the virtuous data cycle as the
process of consumption and travel preferences will continue to
constantly change.”
The most recent example of a loyalty-program revamp comes from
Starwood, which in September announced that SPG Pro would
combine three existing programs — Starwood Preferred Planner, Star
Choice and Starwood Pro — into one. It is the largest expansion of its
loyalty program and backed by a $30 million marketing campaign.
The program is notable because it rewards guests for their personal
stays as well as meeting business they drive to Starwood.
“Over 50 percent of our occupancy is driven by SPG members. That
number is even higher in our luxury brands,” said Chris Holdren,
senior vice president of global and digital at Starwood Preferred
Guest. “Through the relationships we’ve built with our most valuable
guests, we continue to learn what’s important to them. One-third of
our elite guests told us they also are responsible for booking
meetings at our hotels.”
Demand for small meetings, those of 50 rooms or less, is growing,
Holdren said. These meetings account for 80 percent of Starwood’s
volume. Because the company’s sales staff often focuses on large
conferences, Starwood is able to extend its sales operations by
offering rewards to loyalty-program members for bringing in
meetings. The bottom-line possibilities are significant. Holdren
noted that a 1 percent share gain would equal $80 million to
Starwood’s revenue.
At the property level, hoteliers are reporting competing trends in
their loyalty programs. One-third of respondents to a recent
SmartBrief poll said they have noticed increased membership in
loyalty programs, while another third said that loyalty programs
aren’t as important because guests are booking through online travel
agencies (OTAs). That indicates that hotels need to work harder than
ever to make their loyalty programs more attractive.
Trend 6:
New Ways toReward Loyalty
What trends have you noticed inyour loyalty program?
We’ve seen increased membership
33%No changes12%
We’re o�ering moreperks to elite members
21%
More guests are booking throughOTAs, so loyalty isn’t as important
33%* Totals don’t equal 100% due to rounding
10
Offering a guest experience that focuses on health and
wellness will continue as a top trend in 2015. While
hotels have launched various initiatives — such as
Hilton’s designated hypoallergenic hotel rooms that
have special air-filtration systems and Omni Hotels and Resorts’ Get
Fit Kit with free weights and yoga mats — the movement is now
growing to include entire hotels. This year, IHG launched a new
brand, EVEN, with a wellness focus. The first two locations opened
this summer, and three others are in the pipeline. The properties
offer guests upgraded fitness centers with trained staff, guest rooms
that offer natural materials, and healthy food and beverage options.
Other health and wellness initiatives are being folded into existing
brands. This summer, Marriott debuted a healthy-foods vending
machine serving items such as kale and quinoa salad, Greek yogurt
with berries and lemon-pepper chicken. The initiatives are another
facet of the Travel Brilliantly campaign.
In the luxury category, Six Senses Resorts Hotels Spas debuted a new
wellness amenity: LED lighting that can help guests fall asleep at
night and feel alert upon waking. At night, the Definity Digital Good
Night bulb — using technology developed for NASA to help
astronauts manage their sleep cycles — emits less “blue” light to
encourage the body’s natural melatonin, which helps guests get
better sleep. A companion bulb called the Definity Digital Awake &
Alert, has the opposite effect and is installed in fitness centers.
Trend 7:
Health andWellnessRemain Huge Given the industry’s strength and momentum,
hotels have a great opportunity in 2015 to invest in their businesses, adding amenities, services and other perks to attract and retain customers. Understanding which trends will continue and will be most important will help hoteliers create a unique guest experience, and win repeat business.
11
SmartBrief is the industry leader in curated business news and custom content.
Serving more than 5 million senior executives, thought leaders, and industry professionals,
SmartBrief is the leading online publisher of targeted business news and information by
industry.
Our editorial experts have knowledge across industries and sectors, ensuring your content
is relevant, timely and high-quality. SmartBrief is ready to partner with you and your
organization on all your content needs.
From its inception in 1889 to today, The Wall Street Journal continues to be one of the most
influential and respected news publications — and is America’s top-selling newspaper.
Winner of 35 Pulitzer Prize awards and considered the gold standard of journalism, The
Wall Street Journal is the industry leader delivering the most crucial news of the day,
insightful opinion and fair-minded analysis. More than 2 million people read The Wall
Street Journal every day, including travelers staying at your properties. With surprisingly
affordable options, The Wall Street Journal, available in both print and digital editions,
keeps your guests up-to-date on everything from global news to sports, travel, fashion and
entertainment. To request further information, click here.