In the hospitality industry, service and innovation have always been the name of the game. But in 2018 competition to exceed customer expectations for authentic, personalized experiences will push the industry to new limits.
Ensuring the best possible guest experience has never been more challenging because it extends beyond the walls of your establishment. Hotel and restaurant operators need to meet increased customer demands for quality, transparency and timeliness from the materials and ingredients they source to how they respond to reviews. Serving good food or preparing a clean room is just the tip of the iceberg in terms of customer expectations and touchpoints.
So how does this impact hospitality industry trends in 2018? Competition will pressure owners and operators to provide even more services than they currently do, creating additional challenges in an already tight labor market with high turnover. But adding more services doesn’t necessarily mean adding employees. You may be able to leverage technology and refocus staff attention elsewhere, but this means introducing new risk to your operation through vendors and new tools.
1. Local experiences – Hoteliers are taking a page out of Airbnb’s marketing playbook to create an atmosphere of authenticity. With boutique hotels and homestays gaining popularity, guests now expect something unique. The increased focus on food and beverage programs at hotels and entertainment venues in the last several years has also created momentum around the concept of “local”. It’s more than just having a farm-to-table restaurant on premise, it’s about providing one of a kind experiences to your guests.
Keep in mind, when you organize an offsite group tour with a local guide or bring in a complimentary food truck for happy hour, you’ve given up control over the experience, but not necessarily the liability.
2. Upgraded meals of convenience – In our on-demand world, consumers want their meals when and where they choose and at the same quality. For many hotels that have struggled to make room service economics work, that means investing in grab and go counters with upscale offerings.
Online ordering and delivery through services like GrubHub and the upmarket provider, Caviar, is accelerating growth beyond pizza and Chinese in an already growing restaurant delivery segment. Restaurants are even redesigning their spaces to make more room to handle delivery and take-out logistics. Although some delivery-only restaurants backed by venture capital and the likes of David Chang have shuttered (Maple) or changed models (Ando), businesses continue to invest because off-premise consumption is a staying trend. Even full-service chains are testing concepts with Red Robin opening a ‘virtual’ restaurant and Bloomin’ Brands creating an Outback – Carrabba’s take out only location.
These new hospitality industry trends bring even more food safety challenges. Food may sit waiting for purchase or pick-up and is out of your control when it’s with a third-party. It’s early, but it’s coming, so we’re already thinking through your risks for drone delivery.
3. Service oriented technology – A lot of the technology investment in the hospitality industry has been centered around convenience thus far. Customers can order at a kiosk or in-app and pay seamlessly without waiting for a check. Hotels know room preferences so guests can check-in on mobile and maybe even use keyless entry. All of this convenience introduced new responsibility for organizations now entrusted with credit card records. With keyless entry, there is added concern that a hack could mean a physical break-in, which has not been lost on the guests leery to adopt.
Technology investment is now being directed towards service and experience elements more explicitly. The smart home is becoming the smart room at hotels installing Alexa, Nest thermometers, and easy ways to sign in and out of streaming accounts. At the simplest end of the spectrum, it can mean being able to track food delivery or texting or messaging in app with guests, and taken to an extreme, robots acting as servers or delivering room service. It may be early days to judge the acceptance of robots, but generally speaking, consumers will benefit from an experience upgrade. Hospitality groups need to consider how these Internet of Things (IoT) devices open their organizations up to increased cyber vulnerabilities however.
4. Service oriented employees 2.0 – What does offering more technology-supported services mean for your workforce? Some believe millions of jobs will be eliminated, while others suggest that employees need to be upskilled from tedious roles to more service oriented roles that tech won’t replace. It’s early to definitively project the outcome – recall the 180 the retail industry did on self-checkout. For 2018, with many technologies still developing, it may be a way to retain your best employees by providing them opportunities to help develop how your organization responds to new ways of working. What does the most effective to-go order prep station look like? Your best expeditor probably has ideas.
Competition is continuing to grow within hospitality and with more emphasis put on quality and service, margins will continue to be tough. The silver lining is that there are opportunities to grow your business through potentially unexploited revenue streams in prepared food and unique experiences at hotels and growing off-premise consumption for restaurants.