Modern Trends in the Hospitality Market

Under Globalization

Kseniya Bulatova O.M. Beketov National University of Urban Economy in Kharkiv

To be discussed…

• the media as a challenge and an opportunity

• emerging markets

• the future of the BRAND image

• demographic drivers of change

• the sustainability in the industry

• the benefit of loyalty programmes as the key differentiator for the consumer

The Hospitality Industry The Hospitality Industry is the friendly and generous reception and entertainment of guests, visitors, or strangers. (Oxford Dictionary)

Hospitality is an industry made up of businesses that provide lodging, food, and other services to travellers.

The game-changer’s agenda• Ability to understand

• Meeting the needs

Self-Actualization

Physiological

Safety

Belonging

Esteem

What are the new rules of the game?

Loyalty programmes as the key differentiator for a consumer

1. Measure customer spend

2. Understand Customer behavior

3. Reward performance

4. Motivate future behavior

5. Measure results Loyalty Program

Cycle

Social Media Frenzy

THE HOSPITALITY INDUSTRY

Emerging markets Time for a shift of emphasis

“Half of humanity is middle class …That middle class needs hotels.”

Frits van Paasschen, President and Chief Executive Officer, Starwood Hotels & Resorts Worldwide

“It is the domestic traveller who is the key driver of sustainable hospitality growth in many of the largest hospitality markets.”

Jean-Claude Baumgarten, President & Chief Executive Officer, World Travel & Tourism Council

Demographic drivers of change Targeting the elders and emerging middle classes

2030, the global middle class is expected to triple

BrandDifferentiate to survive

• Brands that can offer something truly unique or compelling are likely to win market share and the ability to innovate will be

crucial for success

• Brand is likely to become a more important choice factor for luxury travellers as key locations become increasingly saturated

BrandDifferentiate to survive

• Lifestyle brands try to create an emotional connection with their guests

• It is believed that much greater differentiation will be needed over the next five years to capture the loyalty of the luxury traveller

LIFESTYLE* BRANDS AND THE MASS MARKET

Mass market ‘Lifestyle’ brands will increase both in number and in scale by providing a differentiated offering to consumers and sufficient financial returns to owners and operators.

*Lifestyle hotels are the next generation of boutique hotels. Driven by the chains, they borrow the best elements of boutiques – small, intimate and modern – and throw in advantages only a chain can offer, like loyalty perks, consistency and economies of scale. As a result, lifestyle hotels are generally more affordable and accessible than boutiques.

• providing employee engagement correlated with customer satisfaction, customer retention and corporate performance

• evaluating talent management programmes

• developing innovative talent programmes and solutions aimed at reducing employee turnover as well as attracting and retaining top talent

HUMAN CAPITALA post-recessionary

strategy for talent

SustainabilityTaking a 360-degree view

Conclusions • The importance of brand in the luxury segment will

continue to grow in an increasingly saturated marketplace. • Brand is expected to play less of a role in the large mass

market segment. • The growth of social media in the last five years has been

staggering and will continue to grow up to 2016 and beyond.

• The most successful brands will be those that embrace and learn to harness social media rather than underestimate or fight against its influence.

Conclusions • Keeping up with technology is no longer an optional

decision for the industry. To be successful in future, hospitality companies must invest in technology.

• The battle to drive bookings through proprietary websites will continue, but all major operators will also develop applications and websites for mobile devices as consumers increasingly rely on their Smart Phones.

Conclusions• Looking further ahead, by 2030 the hospitality

landscape will change drastically.• Those who keep pace and effect change, embedding

sustainability across their businesses will be prominently positioned. Those who fail to do so, risk finding themselves lost in the landscape of 2015 and beyond.