Last updated on 19 Jan 2023
The Indian populace has been evolving steadily and the pockets of disposable income have been shifting to accommodate leisure travel. The Millennials are dictating the spending habits in the market and are not weary of spending a little extra on small creature comforts. That being the domestic scenario, the travel and tourism sector is doing quite well roping in foreign tourists as well as investments. Between April 2000 to August 2014, the sector attracted US$ 7.4 billion of FDI and Foreign Tourist Arrivals witnessed a growth of 12.9% between July 2013 and July 2014.
While the numbers depict solid growth in the sector, the paradigm shift expected in the coming year is the rise of the consumer-led brand focus. The year will mark a change in the perception of luxury from product design to experience, making it all the more important for industry operators to identify and leverage consumer behavior trends in the hospitality market.
Here is our assessment of the top hospitality trends that are going to dominate the Indian traveller's experience:
Everything Online
The most significant development is the increased use of internet, particularly social media, and technology by consumers while taking decisions pertaining to their travel itinerary.
The fascination of the millennial with their digital devices is not a mystery. The e-commerce boom in India brought confidence — it seems even those less trusting of the faceless internet trust it with their money now. The convenience is unquestionable. In a survey by Google and Ipsos MediaCT, 70% of respondents claimed to begin researching online before deciding where or how they want to travel. More and more Indians are looking up to the internet to find new experiences to enjoy.
What it means for Hotels: Hotels need to point out local attractions and evolve from accommodation providers to tourism promoters online. They must optimize their online assets to be found easily. Presence on social media platforms can be a great way to stay in touch and inform guests about upcoming events, offers and packages. Presence on Meta-search engines and OTAs is a must. To avoid losing revenue in commission to OTAs, a strong integrated marketing approach must be taken with a versatile and user-friendly booking engine. Cloud-based software such as DJUBO — a channel manager and centralized hotel reservation system — allows revenue managers to identify online channels that deliver the most value.
Digital Transparency
With large capital infusions by hoteliers into new properties at almost every price level in recent years, a situation has arisen where supply exceeds demand and shifted the pricing power to the consumer.
With competitively priced rooms in every market segment, the choice of a hotel boils down to service. And how does one learn about the level of service without even visiting? By simply experiencing it vicariously through other's reviews.
The internet has left no dearth of platforms, from social media to blogs, for consumers to voice their opinions. Reviews from meta-search engines like TripAdvisor and OTAs like MakeMyTrip are a decisive factor while making hotel purchases and often trump price. In a research study by SAS, it was revealed that a negative review, more often than not, removes the hotel from a consumer's consideration set.
People are no more silent about a bad experience. Online opinions by guests play a very important role in guiding purchase behaviour. From aggregated ratings to extensive reviews, a single disappointed guest could result in a butterfly effect leading to a lot of lost sales. Hotel managers need to be on their toes and deliver beyond a guest's expectations.
What it means for Hotels: This essentially means that now the only thing hotels need to focus on is hospitality — and guests will automatically provide you with the marketing you craved for. Even budget-level hotels have fun zones complete with pool tables, electronic dartboards and gaming consoles to enhance the guest experience.
Rise of the Meta Search
The desire for instant gratification of the Millennials has spawned a new breed of web properties that cater to their need for instant and more efficient ways to access information. These digital properties are meta-search engines. Meta-search engines like Google Hotel Finder, TripAdvisor, Kayak & Trivago offer users the ability to take informed decisions on booking hotel rooms without having to jump around from one hotel's website to another. These meta-search engines offer real-time room availability and pricing from multiple sources along with pictures and detailed information about the hotels.
The popularity of metasearch engines becomes evident with just one visit to TripAdvisor's website. More than 190 million reviews left by users showcase their belief in the platform. The TripAdvisor family of apps has had 150 million downloads and the website receives 315 million unique monthly visitors.
More and more people in India are shifting over to meta-search engines rather than OTAs for booking hotels. In fact, the web traffic from desktops only on Tripadvisor.in jumped from 5.8 million in January 2014 to 7.4 million in May 2014.
What it means for Hotels: Hotels need to get on to metasearch. Fast. Really fast. They need to upgrade their pages with the latest information and make their page visually appealing. Hotels should also focus on getting more guest reviews if they want some of that web traffic. What's better is that the hotel gets direct bookings from their own booking engine, thereby creating an opportunity to build relationships through email marketing and customer relationship campaigns.
The Search for an Experience
As the meaning of competitive advantage undergoes a change, a new opportunity has come up for the Davids of the accommodation industry to beat the Goliaths.
While earlier large marketing budgets decided which hotel offered a richer experience, today it is not the case. Today the consumers tell the story in their own words and there are always prospective guests listening.
The availability of wide choice in the travel market has resulted in travelers — even business travelers — wanting an experience rather than accommodation. Travelers today do not shy away from smaller independent properties for the sake of experiencing something new. The popularity of Airbnb is a testament to this fact.
What it means for Hotels: As more and more purchase decisions become instantaneous, it is important to have your product in the center of a consumer's choice. This means maintaining a continuous online presence on a variety of platforms and showcasing the unique experience a hotel provides.
Offline Means Off
The woes of the traditional offline travel agents are going to continue. According to Internet and Mobile Association of India (IAMAI) and IMRB, the air tickets booked online in April 2014 were 1.78 million compared to 0.78 million in the corresponding month the previous year — registering 110% growth. Another survey by MakeMyTrip revealed that 97% of Indians preferred booking hotels online.
The travel agents had their moment in the pre-internet days. The ease of booking flights and hotels without any intervention is more convenient for the modern-day traveler.
What it means for Hotels: Hotels now need to focus on improving their position and ranking on OTAs. Revenue Managers must learn to leverage technology to build an online presence and use sophisticated tools to counter the rate parity observed on OTAs in order to maximize revenues.
Going Mobile
The desktop, the laptop and now smartphones. The power to the consumers seems to be increasing inversely to the package size. Every user with a smartphone has access to a rich world of information. With just a few taps, the modern-day traveler can compare rates and amenities offered by hundreds of properties. One can locate rooms as per their needs, compare them for the lowest rates and book for themselves on the ride from home to the airport. In a statement by MakeMyTrip, one-third of their online monthly unique visitors came from mobile and constituted 24% of all online transactions. Mobile bookings will see a jump and may even surpass online bookings from other devices.
Bookings are just a part of the story. Hotels are also using mobile devices to enhance the guest experience during the stay. The Starwood Hotels have been testing Apple iWatch's functionality to implement keyless entry for guests.
What it means for Hotels: Hotels need to develop mobile-friendly websites and booking engines if they want to stay in control of their direct bookings. Other opportunities exist in creating previously unavailable levels of engagement, touchpoints and service by developing intuitive and innovative mobile applications.
Healthy Holidays
There is a marked rise in concern regarding health in India. This trend brings with it a wave of health-conscious travelers — from guests who need their morning yogurt to travelers wanting to get away from the unhealthy lifestyle. The health mania is sure to affect hotels and they need to be ready to cater to them. While most large chains that cater to international travelers carry an option of healthy food items, the smaller independent hotels need to put it into consideration as well. Ganga Kinare, an independent hotel in Rishikesh, hosts the annual International Yoga Festival held there. It sees participation from over 200 participants around the globe — seamlessly transforming from a boutique hotel to a health retreat.
What it means for Hotels: Hotels must think in more holistic terms about their guests. Enjoyment means different things for different people. Not all people want a lazy holiday. Organize health-focused events and incorporate healthy menu items to cover your entire guest base. In the war for market share, every guest's loyalty earned is a battle won.
Let's Gear Up
All in all, the coming year will bring in a lot of new technology to be adopted. Most of the trends pivot around the increased proliferation of the internet and technology in India and so must be embraced by hoteliers as well. It's no longer about just the product, price, service or feature on offer. Rather it is about building a rapport and trust with the new generation customer in a world that is always on and always connected.
