Curious about the hospitality trends shaping 2016? Come, peer into our crystal ball — although with all the shakeups in the industry, it's looking more like a crystal snow globe. From the growth of AirBnB to the explosion in hotel brands, here's what you need to know for the year ahead.
1. Room-demand growth will continue.
One of the most encouraging hospitality trends for 2016: across-the-board growth. Experts say they expect 2015's robust performance to continue.
“Continued record-breaking demand across all chain scales and regions continues to drive RevPAR performance above the long-run average,” Jan Freitag, STR’s senior VP for lodging insights, told HotelNewsNow in November 2015. STR predicts a 0.8 percent increase in occupancy to 66 percent; a 4.8 percent increase in ADR to $126.28; and a 5.7 percent increase in RevPAR (revenue per available room) to $83.39. While new hotels are being built at a fast clip, demand is still expected to outpace supply.
2. New hotel brands will compete for recognition.
Seeking a competitive edge in the millennial market, established hotel brands are trying new lines. Here are just a handful:
- In 2016, Marriott's launching Moxy Hotels, a budget-priced brand that promises modern style and luxe touches. "It's just like home... but with a bartender! ;)" Moxy's marketing copy says cheekily. The first U.S. locations include New Orleans, Nashville and Tempe.
- Best Western recently unveiled Vīb (pronounced "vibe"), a boutique brand aimed at the upper midscale market. Special features include a "zen zone" for relaxation and gaming pods. Several locations are expected to open in 2016, including Los Angeles, Staten Island and Little Rock.
- Centric by Hyatt takes a localized approach, matching each hotel's decor, drink offerings and amenities to its city. Centric had five locations in 2015, with more scheduled for 2016.
- EVEN Hotels by IHG seek to capture health-conscious travelers with fitness classes, a spacious athletic studio (don't call it a gym) and nature-inspired decor. The in-house Cork & Kale Market and Bar prepares smoothies, fresh juices and other healthy snacks. Four locations opened in 2015, including Brooklyn and Rockville, Maryland.
As these lifestyle brands elbow each other for room, however, how can they distinguish themselves in the market? Guy Langford, vice chairman and U.S. leader of travel, hospitality and leisure at Deloitte, tells Travel Weekly loyalty programs are key: "What it's also going to boil down to is, where does the loyalty lie? With an individual brand, a macro brand or an OTA [online travel agency]?"
3. Hotels will work harder to court millennial travelers.
As the buying power of 20- and 30-somethings increases, hotels are continuing to adapt to their preferences. One ongoing hotel industry trend is updating the decor for millennial tastes. Hotel professionals tell us they're adding charging stations, "extra set-down space," lobby workspaces and in-house markets.
But capturing the millennial market's not as simple as modernizing the ambience. Younger travelers also prioritize convenience, technology and affordability. Not only that, but they want the customer experience to delight them and inspire them to share it with friends.
4. Hotels will take AirBnB head-on.
One of the biggest hospitality trends continues to be the rise of AirBnB and similar sites. Attracted by low prices and the promise of a unique experience, more and more travelers are choosing shared accommodations over traditional hotels. According to BDRC market research, 19 percent of U.S. travelers used some shared-accommodation site in 2014, and 44 percent of consumers said they would consider using one in the future.
How can hotels hold onto market share in the sharing economy? Some are hoping that sites like AirBnB will find themselves fettered by outside forces, such as local legislation, tax and liability issues. Others say hotels should join forces with shared-accommodation sites by using them to list unsold rooms. Either way, AirBnB can no longer be dismissed as an upstart.
5. Hotels will have to meet guests where they are: on their phones.
"I truly think that 2016 is the year that the wait in line to get your key will finally end," STR's Freitag says in his year-end hotel trend predictions. A few chains have already made this a reality. Starwood's SPG app allows not only mobile check-in and check-out, but also enables keyless entry at Aloft, Element and W Hotels. The Marriott mobile app enables mobile check-in and lets guests message staff.
Guests desire even more options on their mobile devices, however. A 2015 report on mobile use from the Cornell University Center for Hospitality Research found that guests also want hotel apps to let them upgrade rooms, have the valet bring their car, schedule a taxi and reserve a spa appointment, among other things.
There are some obstacles to widespread mobile-technology adoption by hotels, however. One is the "personalization-privacy paradox." Mobile users are overwhelmingly concerned about their privacy when using apps, but they're also happy to receive personalized offers and discounts, the Cornell study notes. Mobile security is a concern as well.
What are your big plans for 2016? Tell us about your brand's innovations and we may feature your story in an upcoming post.
