Faultlines of disruption in global hospitality

Article by

Kath Preston
Marketing Lead

Kath Preston

Kath Preston

Marketing Lead

Skift has increasingly become one of our main go-to resources for up to date insights into the travel industry. So, we made sure we didn’t miss their ‘mini forum’ at World Travel Market London to hear the team explore the ‘faultlines of disruption in the global hospitality sector’.

We kicked off with a look at what exactly was meant by ‘faultlines’. Rather than fleeting headlines, Skift are interested in exploring where ‘faultlines’ emerge in the travel industry - in other words, where are the big clashes between the old and new ways of doing things, and how can we capitalise on them to create new and exciting industries?

Rafat Ali speaking at World Travel Market - 9th November 2016

Rafat Ali (CEO & Co-founder at Skift) shared with the audience the 13 most important ‘faultlines’ that Skift are following and reporting on:

  1. Customer Service vs. Customer Experience
  2. Alternative Accommodation vs Traditional Lodging
  3. Car Hailing vs Car Rentals
  4. Packaged vs Unbundled Travel
  5. Corporate Travel vs Business Traveller
  6. Sustainable Travel vs Consumer Apathy
  7. Cities for Locals vs Cities for Tourists
  8. Advance Planning vs Last Minute Booking
  9. Global Seamless Mobility vs Visa Regimes built for Security
  10. The Rise of Neo-Isolationism vs The Democratisation of Global Travel
  11. Iconic Destinations vs Young Experiential Travel
  12. Non Diverse Travel Executives vs Global Diversity
  13. Direct Booking vs Online Booking Sites

The session itself focused mainly on faultline number two (and issues around it). Since online booking of travel became mainstream, hotels are being rewired and rethought from top to bottom, and everything we thought we knew about hospitality is being questioned and retooled. The concept of ‘alternative accommodation’ has become (more or less) mainstream, technology is disrupting the very basics about how hotels are managed, and consumer choice is at an all-time high. Skift assembled three panels of industry figures to discuss three hot topics within this faultline.

Why boutique is the future of hospitality

There are certain features of hotels that have become more common-place of late; good coffee supplied by a local supplier, individual touches in your room, quirky decor. This concept of what ‘boutique’ means has arguably become mainstream, even co-opted by larger chains, leading to a trend of ‘faux’ boutique spaces.

But what does this expansion, plus the unstoppable force that is Airbnb (and other alternative accommodation trends), mean for the increasingly over-crowded boutique hotel sector?

Panel discussion with Josh Wyatt (President of Equinox Hotels) and Anwar Mekhayech (Principal of DesignAgency).

“Just as hardware is limited without software, truly great hotel experiences can’t exist without people; that’s the art.”

The panel (which included the President of lifestyle-led Equinox Hotels) were optimistic for the future - customers will continue to want more than just a place to sleep, and they remember personality rather than commodities.

They even framed the rise of Airbnb as a positive force for change - keeping the pressure on hoteliers to provide more differentiated design-led experiences, as well as a trend of ‘co’ companies (mixed use spaces that provide lodging, restaurants, workspaces etc).

However, what remains essential is having a strong point of view about what your accommodation stands for, and delivering on it consistently.

Big opportunities for ‘hospitality tech’

Over the past few years, developments in software-as-a-service and technology as a whole have undoubtedly led to more demanding and discerning consumers. Their benchmark isn’t another hotel experience; it’s Uber, Spotify. But for all the talk about businesses becoming more customer-centric, the behind-the-scenes systems that power the hospitality industry have been slow to catch up.

The legacy software (inventory, services management etc) is typically clunky and doesn’t allow hotels a single view on their customers (and the improved customer experience that comes with it).

Talking Hospitality Tech with Alexander Shashou (Alice), Alexandra Zubko (Triptease) and Marc Heyneker (Revinate).

It’s not the sexiest part of the industry - but as hotels have transitioned from being very asset-heavy to asset-light, they have to compete on customer experience rather than maximum yield.

The panel all agreed that if you can overcome the barriers to entry (slow decision-making, multiple stakeholders), this is where massive opportunity lies; the current lack of data is causing problems. As Skift themselves put in, “from the moment customers check in to the moment they leave, little effort has gone into understanding how guests behave. If hotels want to get a better grasp of who is staying with them and their preferences, this needs to change — and fast”.

What we can learn from innovations in the Food & Beverage sector

Looking outside your immediate sector for inspiration can often prove fruitful, and that’s exactly what the final session encouraged. Afroditi Krassa, Creative Director at design studio AfroditiKrassa, works with ‘category-defining’ establishments (such as Dishoom) to concept, design and execute new restaurants.

"Hotels today have to define themselves in terms of their customers, rather than real estate."
“People want a show, not a space.”

Afroditi explained how a change has taken in the Food & Beverage industry; we’ve moved away from the formal, stuffy dining rooms of the past towards more accessible vibrant spaces with what she termed ‘legal highs’. Whereas a few decades ago, young people with disposable income spent their time and money on ‘rock and roll’, now restaurants have moved into that world. You can see this in the key figures leading it. Famous, artistic chefs are lauded, the hotel world doesn’t have many strong visionary equivalents - as they’re often hampered by multiple stakeholders.

Some of the most popular restaurants today are in the business of doing things ‘money can’t buy’; they provide cohesive and differentiated end to end experiences. Hotels could stand to learn something from this; what ‘legal highs’ could they offer?

Big thanks to Skift for running a great session - you can read their takeaways here.