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  • 15 Hospitality Trends for 2020: Future Forecasts According To Experts

15 Hospitality Trends for 2020: Future Forecasts According To Experts

Category: B2B News

Mention far-and-wide disruptions and the hospitality industry easily comes to mind. No aspect of the industry is left untouched, save for the basic principles of hospitality. Safe to say, today’s business models in the sector look like entirely different animals from their predecessors. Airbnb is just one earthquake that has jolted (and is jolting) the landscape. There are many more hospitality trends, which you’ll find out below.

As a business owner, keeping an eye out for the latest trends can help you stay on top of all the changes in the industry, events that impact how you do business. In this hospitality trends report, we will delve into the latest and most significant developments that are reshaping guest experience, tech adoption, and tourism, among others.

latest hospitality news and events

The hospitality industry is extremely competitive. It is a bustling line of business with myriad categories—from hotels and other accommodations to bars, restaurants, tour operators, and travel agents. And their race to ensure an exceptional customer service never ends.

Nevertheless, several disruptions tend to shake up the hospitality industry from time to time. For one, startups like Airbnb have created a significant impact on hotel businesses. Airbnb’s ability to provide more affordable accommodations is advantageous for customers, but not so much for branded hotels. Moreover, most hotels have yet to incorporate cultural experience offers similar to what startups like Homestay or Onefinestay do.

Digital hotel booking has also shifted from desktop to mobile. This led to hotel brands and booking engines quickly re-engineering their sites to keep up with this current trend. Additionally, mobile hotel sites now make sure to provide translations to encourage more overseas mobile bookings.

mobile bookings in travel

With the hospitality industry’s diversity comes a wide array of trends that you, as a business owner, should consider when developing your strategies to stay on top of the game. In the following sections, we will go through some of the trends shaping today’s modernized hospitality industry.

1. Online Communities

Concerning the hospitality industry, online communities changed the way businesses in the hospitality field interact with customers. Company websites, social media networks, and travel websites like TripAdvisor contribute to hospitality facilities’ take on transparency, leading to an improvement in the quality of services they offer.

Online marketing also heavily relies on multi-user interactivity. Hence, reviews found on the internet heavily affect a customer’s booking decisions. Word-of-mouth remains a powerful marketing tool, and combined with today’s digital platforms; customers can easily share their experiences in hospitality facilities. For business owners, this means they can easily find unique selling points.

Needless to say, positive reviews convert to economic value for your business. Potential guests are more likely to rely more on the reviews made by current or previous hotel customers. Moreover, the information you can extract from online communities, like the reviewers’ age, lifestyle, job, gender, and hobbies, will give you valuable insights. This way, you get updated with the current trends in competition and the upgrades you need to deliver better services.

Online Community Trends Highlights

  • Customers spend 19% more after engaging in a company’s online community. (University of Michigan)
  • Approximately 70% of companies believe that their credibility, brand exposure, and awareness can be significantly improve through online communities. (Martech Advisor)
  • The global online community market will reach approximately $1.2 billion by 2019. (IDC)
  • About 70% of large companies have online communities that are established, while only 40%t of small business has one. (Demand Metric)

2. Sharing Economy

The sharing economy is way past the experimental stage in the hospitality industry. It has been redefining the industry and is expected to grow in the coming years. Derived from the notion that mutual parties can share an unused asset or property, the sharing economy leverages technology to facilitate value exchanges. This could be through peer-to-peer applications, collaborative platforms, or shared marketplaces.

In the sharing economy, you can easily coordinate transactions via the internet. Although this occurs among private individuals, it has nonetheless created an economic impact for major and leading brands in distinctive industries. Airbnb, Expedia, and other sharing economy platforms are currently providing new hospitality experiences for customers.

For hoteliers as well, the sharing economy allows more flexible management. Lodging properties and accommodations listed on such platforms are not required to follow the same rules and regulations as traditional hotels. Thus, they can deliver more consistent and better customer services and vacation experiences compared to local hosts.

sharing economy trends

Sharing Economy Trends Highlights

  • The sharing economy is seen to grow from $15 billion in 2014 to $335 billion in 2025. (Forbes)
  • 44.8 million adults were using sharing economy services in the US in 2016. In 2021, however, this figure is expected to increase to 86.5 million. (Statista)

3. Voice search

Voice search is the current trend that cuts across different industries. Technology, after all, tends to be limitless in capabilities. Amazon’s Alexa, Apple’s Siri, Google Assistant, and Microsoft’s Cortana are the latest digital assistant technologies on the rise.

Though many consider this AI to be in its early stages of development, the model is based on conversational language. It aims to understand the intent and context based on previous queries. Furthermore, it wants to achieve perfection in contemplating multiple steps and queries, with more focus on actions, tasks, and transactions.

In the hospitality industry, voice search is increasingly transforming the booking process. Via smartphones and tablets, customers can now research and book their holidays. With the use of voice search, your hotel website conversions can increase as it connects you to qualified leads.

What voice-activated speaker owners would like to receive from brands

Information about sales, deals, and promotions

%

Personalized tips and information to make my life easier

%

Information about upcoming events and activities

%

Options to find business information (e.g., store location, opening hours)

%

Access to customer service or support

%

Source: Think with Google (2018)

Designed by

Voice Search Trends Highlights

  • About 16% of the US population own a smart speaker, that’s around 39 million people. (NPR and Edison Research)
  • Approximately 30% of browsing on the web will be done without a screen by 2020. (Gartner)
  • A study in 2019 revealed that purchases of everyday household items are made through voice search. (Search Engine  Journal)

4. Sustainability

As we face more environmental issues each day, sustainability becomes a primary concern. Thus, a large section of the hospitality industry participates in Go Green acts to lessen negative environmental impact. This proved good for the planet and also for businesses. It brings and attracts more hotel guests. Also, customers are more willing to pay for products and services from companies with sustainability practices.

In the last 10 years, hoteliers applied sustainability practices to their properties. This granted a significant impact on the environment, enhanced guest experience, and drove overall revenue.

Constantly developing environmental technologies reduces costs for hotels and improves efficiency. Governments have also started giving out economic incentives for the construction of properties that incorporate green technology. These incentives range from tax write-offs, expedited regulatory permitting, financial grants, and premium discounts for insurance.

A sustainable business culture influences customers’ booking decisions. Studies also noted that younger employees are more willing to work in industries whose focus is extended to the community’s development.

Sustainability Trends Highlights

  • In 2019, tourism contributed about 5% to global greenhouse gas emissions, and it is expected to grow to 130% in 2035. (Cambridge Institute for Sustainability Leadership)
  • The global hotel industry has grown by 2.3% in the past five years, reaching revenues of over 1.28 trillion EUR in 2018. (IBISWorld)

5. Virtual Reality

Virtual reality (VR) transformed and enriched the hospitality industry. It is one of today’s biggest emerging technology trends. Thus, many businesses incorporate VR for the various opportunities it creates. VR in the hospitality industry is applied in travel experiences, hotel tours, and booking processes.

High-quality VR headsets are now a mainstream consumer product, thanks to the increased investments from the likes of Samsung, Facebook, and Google. Along with augmented reality, VR allows customers to virtually experience a recreation of a hotel room or explore nearby attractions.

In recent years, VR enhanced customer experience when exploring the surrounding area. For an average customer, VR provides more accurate information related to booking a hotel room. Reading through descriptions pales in comparison to VR, which offers customers the opportunity to virtually experience things for themselves. This way, hotels benefit from the try-before-you-buy concept of marketing.

vr market trends

VR Trend Highlights

  • This year, 42.9 million people in the US will use VR. Meanwhile, 68.7 million people are to use AR at least once per month. (eMarketer)
  • A growth of 7.7x is forecast for the worldwide AR and VR market size between 2018 and 2022. (Statista and Greenlight Insights)
  • In 2019, 14 million AR and VR devices are expected to be sold. (CCS Insight)
  • According to VR research findings in 2019, worldwide spending on VR content and apps is forecast to reach $1.84 billion. (Statista)

6. Mobile Technology

Hotels and resorts are now leveraging mobile platforms for their guest loyalty, company branding, advertising, cross-selling, and marketing programs. Mobile apps are now a must-have for hotels and other related businesses. Various hotel management software platforms are also available in the market today.

Mobile apps in the hospitality industry have been tested and proven to deliver excellent customer experience. Mobile-friendly websites and apps, as well as live and updated information, drive growth in the overall business. Moreover, mobile technology bridges the gap between the customer and the hotel itself.

Studies reveal that there is a steady rise in guest preferences for mobile apps related to the hospitality industry. Mobile technology, more specifically mobile marketing software, revolutionized the presentation of guest services through high-quality images and videos. Moreover, exposure and usage can increase for hotels when their facilities such as in-room dining, concierge, or other travel services are presented in high-quality multimedia formats.

Mobile broadband Internet Subscription by Region

Rate per 100 inhabitants

America

Europe

CIS

Asia & Pacific

Arab States

Africa

Source: Statista (2018)

Designed by

Mobile Tech Trend Highlights

  • Last 2015, it was reported that mobile internet user penetration was already at about 52.7%.  (Statista)
  • In a February 2019 report, mobile devices accounted for 48% of worldwide web page views, with Asia and Africa leading the pack. (Statista)
  • About 81% of Americans currently own smartphones, up from just 35%, according to Pew Research Center’s first survey in 2011 about smartphone ownership. (Pew Research Center)

7. Personalized Guest Experience

The struggle to attract, convert, and retain customers is always present in the hospitality industry. Personalization of services is the latest development to transform the hospitality sector.  Thus, going after a personalized guest experience has become a powerful and transforming trend in the hospitality business.

With the diversity of the hospitality industry, personalization of services was not possible until recently. Capturing and using guest data for more relevant engagement can be a complicated task. But once done, however, hotels realize it is well worth the effort.

Guest data can be used to provide a personalized experience for your customers. It helps you anticipate their needs, send them relevant and related offers, and customize their stay in your property. By using data analytics software available today. This can be done by tracking and analyzing customer behavior and trends across multiple hotel properties. AI technology can also help you develop targeted and relevant sales and marketing materials differentiated for specific individuals or groups.

Studies reveal that customer experience can soon overtake price and product as a key brand differentiator. Thus, it is now more necessary for hotels and other related businesses in the hospitality sector to deliver satisfactory services.

personalized experience data

Personalized Guest Experience Trend Highlights

  • About 91% of consumers are more willing to consume products by brands that provide relevant offers and recommendations. (Accenture)
  • Approximately 90% of consumers are willing to share behavioral data if it would, in turn, allow them to have a cheaper and easier brand experience. (SmarterHQ)
  • In a survey conducted by SmarterHQ, Cheetah Digital, Liveclicker, and MailCharts, the travel and hospitality sector reports the highest shift toward tailored messaging. About 63% of their communications catered to individual customers, while 38% of their marketing mix are directed to individual shoppers. (Liveclicker)

8. A New Generation of Travelers

While reports vary on traveler characteristics and demographics, they all agree on one thing: the new generation is leading the pack in shaping the industry. Likewise, for hospitality businesses around the world, change is the new norm. To keep the business stable, developments must be made to attract this new generation of travelers.

Industry leaders now carry the burden of understanding this new generation’s characters and preferences, which seemed to have changed rapidly, from Millenials and now to the so-called Generation Z. According to several reports, Generation Z is about to take over Millenials in population numbers and their estimated buying power.

According to Forbes, the Gen Z buying power in direct spending is from $29 billion to $143 billion. With this, youth travel also becomes the fastest-growing sector in tourism. Hence, the market sees the need to apply tremendous changes based on the new generation’s likes and dislikes.

Generation Z Trend Highlights

  • Gen Z travelers are taking 2.8 leisure trips per year. (Travel Agent Central)
  • Reports say that 15% of Generation Z will choose an Airbnb while 57% will choose a hotel. (PR News Wire)
  • When planning a trip, 77% of Gen Z travelers are open to help and inspiration. (Travel Agent Central)

9. Global Tourism

In the past years, the rising global tourism fueled the growth of the hospitality space. Now, it has spanned into a broader range of services that accommodate the needs of each and every unique traveler.

Technology, affordable transportation, and enriching travel experiences are only some of the factors that have driven global tourism into its current state. Aside from that, several studies take into account the fact that people are incredibly wealthier than before. With this also comes more disposable income and plenty of time for leisure activities, the reason global tourism remains ever more resilient.

Needless to say, the relationship between the tourism and hospitality sectors are now more relevant than ever. This is proven by the growing number of tourists that require hospitality services such as accommodations, restaurants, transportation, and leisure activities.

International tourism market share

Middle East Africa Asia and the Pacific Americas Europe
Middle East (4%) Africa (5%) Asia and the Pacific (24%) Americas (16%) Europe (51%)

Source: UNWTO

Designed by

Global Tourism Trends Highlights

  • In 2018, 1.4 billion international tourist arrivals were recorded, and the figures continue to vastly exceed expectations. (UNTWO)
  • International tourist arrivals are forecast to exceed 1.8 billion by 2030. (Statista Research Department)

10. The Advent of Unique Tourism Products

Unique tourism products provide physical and psychological satisfaction to travelers. Some examples include sports tourism, health tourism, and more. These products allow travelers to choose specific destinations and the things that they expect to do when they get there.

This trend brings to the industry several opportunities to expand a particular business. However, unlike the usual travel types, these products cannot be forced upon a traveler. In most cases, the traveler must be the one to seek it. This is why it requires in-depth studies on customer behavior, preferences, and expectations.

Another thing to consider in this trend is its tendency to have an unstable demand. Seasonal, economic, political, and other factors greatly influence some tourism products. Take, for example, the safari tourism that is dependent on seasons when game viewing is at its best. This reflects that some tourism products see higher demand than others at certain times of the year.

Here are some types of unique tourism products:

  • Sports tourism
  • Health or medical tourism
  • Adventure tourism
  • Recreation tourism
  • Cultural tourism
  • Pleasure tourism
  • Religious tourism
  • Adventure tourism

11. Emerging Popular Destinations

When tourists spend their money on hospitality services like hotels, restaurants, and entertainment venues, local economies generate more revenues. In this sense, popular destinations worldwide are gaining more advantages from the economic perspective, propelled by the continued rise of tourism and hospitality services offered by each country.

This led to some countries being more reliant than others on the hospitality and tourism sector in terms of the country’s total gross domestic product (GDP). As reported in The Telegraph, in the Maldives, tourism counts for about 39.6% of their total GDP, whereas tourism accounts for just 3.7% of the UK’s economy. In the US, the figure is even lower, which is at 2.6%.

As of 2018, however, Europe still emerges as the top destination, seeing the most overseas travelers, with about 713 million visitors. France leads the pack in terms of number of tourists, followed by Spain, the US, China, and Italy. Meanwhile, the United Kingdom is the country most visited in the world.

tourist spending trends

Emerging Destination Trend Highlights

  • About four-fifths of tourists travel within their region.  (UNTWO)
  • In 2017 alone, $1,036 billion was spent on traveling. (US Travel Association)

12. Niche Markets

The hospitality industry is also exploring niche markets, a smaller group of customers whose needs are different from the larger market. Niche markets allow businesses in the hospitality space to offer the best services to a group of customers by covering all their specific needs.

One great example of this is Southwest Airlines, an economy airline serving peanuts instead of the standard meals. Southwest Airlines caters to customers looking for an efficient and affordable travel experience, and they are now the world’s largest low-cost carrier.

Another example is how hotels are appealing to professional and amateur musicians by offering music studios with state-of-the-art equipment. Hotel customers can now also order drinks and a guitar as part of room service.

With this strategy of going after niche markets, hotels can open up more opportunities to serve their guests and at the same time, face less competition.

U.S. Customer Satisfaction Index Scores for US Hotel Companies, 2019

(0-100 score)

Hilton

Mariott

Hyatt

InterContinental

Best Western

La Quinta

Source: Statista Research Department

Designed by

Niche Market Trend Highlights

  • Niche markets cater to groups whose demands are more specific than the larger market.
  • With hotels and other related businesses going after niche markets, more opportunities to attract new customers open up.

13. Smart Technology

Technology revolutionizes many types of businesses, especially in the hospitality space. It not only offers a variety of cost savings but also opens up better revenue opportunities. Hotel technology covers operations, guest services, and marketing, and it further allows hotel owners to achieve higher levels of profitability.

Moreover, smart technology enhances guest experiences. Occupancy sensors, for example, can better cater to guest needs, and they can also automate guest interactions. This allows hotels to stay informed of their guests’ preferences and personalize their services for specific individuals based on the guest’s previous visits.

Also, hotels are now shifting to become “smart hotels.” This is done by offering Wi-Fi throughout the property, a mobile guest app allowing check-ins and check-outs, direct messaging, as well as a mobile key. These smart hotels are also incorporating in-room technology that uses a tablet to replace the printed compendium, collateral, and alarm clocks. By using these, guests will have direct digital access to hotel staff.  In-room dining, making reservations, submitting service requests, and controlling room environment are also possible through the use of tablets.

Smart Tech Trend Highlights

  • Smart hotels enhance guest experiences, attracting more customers, and leading to higher levels of profitability.
  • Hotel technology covers operations, guest services, as well as marketing.
  • Smart hotels use in-room technologies, such as tablets, mobile keys,  and digital access to the hotel staff.

14. Online Travel Agents

The hospitality business is also seeing a trend in online travel agents or OTAs. In the past decades, OTAs merely handled organizing hotel accommodations. Fast forward to 2019, and OTAs are diversifying their businesses, expanding into apartments and vacation rentals, as well as activities and tours, ride-sharing, food delivery, and restaurants.

Popular mostly among Millenials, OTAs have seen a greater rate this year compared to the past. Furthermore, L.E. Hotels report that 51.5% of travel agents saw an increase in the number of Millenial clients in the past 2 years. This figure shows that clients are consuming more OTA services today. Online travel agents also benefit more from niche travel markets as well, such as culinary and wedding vacations.

booking online trends

OTA Trend Highlights

  • Online travel agents (OTAs) have expanded into offering apartment accommodations and vacation rentals.
  • OTAs saw an increase in demand this year, thanks to Millenial clients, who are also growing in number.
  • Niche travel markets contribute to the growth of OTAs.

15. Big Data

More on the technological side, hotels and other related businesses are grasping the concept of big data. Big data, by definition, refers to an extremely large and varied set of data that businesses come across daily. In the hospitality industry, these data sets are often about customer interactions and customer behavior.

Big data is now a key concept that those in the hospitality sector must be aware of. Moreover, it identifies patterns and trends in the business. It also brings various benefits to a company. Among these are improvements to revenue management, targeted marketing, customer experience, additional services, and competition information.

Big Data Market Size Revenue Forecast, 2018 to 2022

In billion USD

2018

2019

2020

2021

2022

Source: Statista Research Department (2019)

Designed by

Big Data Trend Highlights

  • In 2017, 53% of companies were adopting big data analytics. (Forbes)
  • In 2019, about 45% of companies run at least some big data workloads in the cloud. (ZDNet)
  • By 2023, the big data industry is forecast to be worth $77 billion. (Entrepreneur, 2019)

Keeping Up with the Latest Hospitality Trends

The hospitality industry is no stranger to disruptions. We can say the pendulum of change here has swung the wildest. Rightly so, the hospitality sector of just a few years back looks almost archaic, what without mobile bookings or property rentals that we have since been familiar with.

It doesn’t mean you have to adapt to all these trends to remain competitive. On the other hand, you simply have no choice as some of these trends are already the norm and are evolving into their finer versions.

Similarly, technology heralds most of the trends above, so make sure to use them to your advantage. For instance, horizontal solutions like CRM software can help you nurture long-term customer relationships, or you can learn how companies are using chatbots to provide solid customer service.

By Nestor Gilbert

Senior writer for FinancesOnline. If he is not writing about the booming SaaS and B2B industry, with special focus on developments in CRM and business intelligence software spaces, he is editing manuscripts for aspiring and veteran authors. He has compiled years of experience editing book titles and writing for popular marketing and technical publications.

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