Tech Megatrends for the Travel Industry in 2017
Sabre Labs’ Emerging Technologies in Travel report recently identified three megatrends it believes will heavily influence the travel industry in 2017. Those megatrends are:
- Connected Intelligence: New, tech-driven means of communication will increase and improve customer engagement. Hotel guests can share their location, which will allow for improved guest experience (for example, knowing when to clean their rooms). Bots will also be able to increase convenience for travelers by performing hotel deliveries. Lastly, hotels can encourage future returns and increase revenue via targeted promotions
- Conversational interfaces: Companies can decrease their social complaints by offering support and services via a messaging service. Support platforms will take place on apps such as Facebook Messenger and WeChat (which is convenient for travelers, who won’t have to download an extra app or access additional sites). Auditory dashboards (ie: Amazon Echo) can offer agents quick and hands-free access traveler information.
- Digital Reality: Augmented Reality (AR) and Virtual Reality (VR) will play a vital role in developments. Companies can use VR to power advertising platforms and upsell content to their customers. Hotel dynamics will continue to change trough smartphone-enabled AR thanks to location-specific digital content. And real-time translation (such as that offered by Google Translate) will become a necessity for international travelers. Instant voice translation will the trailing along closely. Hotels will continue using VR to showcase their rooms and spaces in order to upsell the experience to first-time guests.
Accompanying these megatrends, this 86-page report highlights six technologies believed to be driving one or more megatrends each:
- Augmented reality
- Indoor location
- Message based interfaces
- Voice based interfaces
- Virtual reality
The report, summarized here, not only breaks down each trend and its accompanying technology, but provides specific examples of how various players in the travel industry can use these tech trends to enhance the experience of users and customers throughout 2017 and the years to come.
Expedia Study Reveals Habits of Bleisure Travelers
A new study conducted by Expedia Media Solutions (the advertising sales division of Expedia, Inc.) and Luth Research reveals the travel habits of the “bleisure” market – business travelers who extend their trips to include leisure. The results shed light on how the destination, activities, and costs are all leading factors in the choice to extend a business trip into a leisure trip. This gives companies the opportunity to leverage their marketing, allowing hoteliers to be more effective at targeting their deals and information toward business travelers.
The Profile of the American Bleisure Traveler study offers insights which will assist travel marketers understanding and influencing their target audience.
A Brief Summary
- 43 percent of all business trips (domestic and international) become bleisure trips.
- Bleisure travelers often have complex purchase patterns, being influenced by a variety of factors like location, proximity to the weekend, and availability of activities.
- Bleisure travelers tend to be frequent business travelers; 32 percent travel for work 1-2 times per month, and 71 percent of business trips are 2-3 nights in length.
- International travel may increase the likelihood of bleisure bookings.
- 66 percent of bleisure travelers say they spend more money on leisure activities because business trips save them money on travel.
What Inspires a Bleisure Trip?
- 37 percent said the leisure portion equals the business portion of the trip; 21 percent spend more days on leisure than business.
- Business trips lasting three or more days are 30 percent more likely to become bleisure trips.
- Business trips for conferences or conventions are more 43 percent more likely to turn into bleisure trips.
- 84 percent of bleisure trips are spent in the same city/region as the business trip
When Business Becomes Bleisure
- More than 80 percent of bleisure travelers stay at the hotel they have for their business trip
- For those who stay at different hotels, the biggest factors in that decision include the hotel price, and whether they have family or friends in that area.
- Destination is the leading factor converting business into bleisure
- Of those considering destination a factor in their decision, 85 percent named great sightseeing as their preference, followed by beaches, food/restaurants, museums/art scenes, and outdoor adventures.
- One-third of respondents were influenced to extend their business trip into leisure by events taking place nearby.
Mobile App Turns Phones into Room Keys
A major hotel and resort company has figured out a way to cut out the middle man between the hotel guest and their bed by eliminating the need for a front desk person. And now, they are opening up that service to other companies.
Starwood Hotels & Resorts has developed a high-tech app called SPG Keyless, which turns mobile phones into room keys.
The app allows guests to check into their hotel, obtain their room number, and unlock the room door. Users must first download the app, create an account, and allow push notification. 24 hours before the reservation, the guest will receive a notification asking them to opt into the SPG Keyless program. Once an estimated time of check-in is specified, notification of room number is sent. To unlock the door, users must hold the phone up to the lock. As the door unlocks, the user’s phone vibrates (Bluetooth must be enabled).
The app, which was updated this month, is available in the for free in the Apple App Store and on Google Play. This service, once only available at select locations, is now available at the following hotels and chains: Aloft, W, Element, Four Points, Le Meridien, Sheraton and Westin. All participating locations (as well as establishments using similar apps) can be found here.
Expanding the availability of SPG Keyless is just one improvement; other improvements include enabling more than one phone to enter a room, as well as eliminating prior glitches. Users can also use this app to book hotel stays at other resorts, get offers and promotions, and review hotel information (such as directions to and from). This app works not only on mobile phones, but on iPads and Apple Watches as well.
Restel Becomes First Hotel Reservation Center to Incorporate Cuban Hotel Chain
Restel, the Grupo Hostusa hotel reservation center, has integrated the 50 establishments within the Cubanacan chain. This agreement makes it the first international operator to integrate a Cuban hotel chain.
Currently, Restel markets over 200,000 hotels globally on its platform. Restel’s general manager Carlos del Estal stated that his company was proud to hold the spot as the first-ever hotel reservation center to directly establish integration with a Cuban chain, and said it now marks Restel as one of the most qualified hotel distributors in the world for travel agencies in Cuba. According to Estal, this move forms part of global strategy which serves to up the presence of Hotusa Group’s different business lines in that destination.
Cubanacan’s Sales director, Niurka Perez Denis, stated that over the last decade, Cubanacan Hotels has worked with the latest technology related to the development of its tourist accommodation capacity distribution with two goals in mind; the first was to achieve the maximum reach of the chain’s worldwide presence in the tourist industry. The second was to maximize the occupation and profitability of each establishment under the chain via the distribution of these capabilities. It sought to accomplish this maximization through sustained growth in a destination such as Cuba, which in the past few years has already seen over 3 million visitors.
Teams from both companies began their mutual work toward this goal months ago. This week, the direct integration agreement with their reservation systems finally came to fruition. This agreement will allow the hotel reservation company to offer their 9,000 rooms to more than 30,000 travel agencies with whom they have agreements, and this will in effect enable Restel to reach the Cuban chain’s inventory in a way which is much more efficient and direct.
Increased Demand for Airbnb Rentals Negatively Impacting Hotels
Hotels are suffering more than industry experts originally predicted, due to increased demand for Airbnb as the choice for accommodation.
Global financial services company Morgan Stanley’s recent Alphawise survey had results which revealed that Airbnb’s penetration into the accommodation center this year is approximately 18-19 percent, as compared to 12 percent last year. The main factors for this include increased consumer awareness, and higher levels of customer satisfaction.
The survey, conducted among more than 4,000 Airbnb customers in the U.S., U.K., Germany, and France, projects that next year’s penetration rates will swim at around 23-25 percent.
This rapid hike in the preference for alternative accommodation is affecting both business and leisure travel. Almost 20 percent of travelers in both sectors are now being hosted by a member of Airbnb.
Morgan Stanley’s analysis suggests that growth in hotel revenues may decrease by up to 80 percent more than previously forecast, with a 9 percent increase in the number of people who would have stayed in a hotel had it not been for Airbnb. This growth decrease is nearly double that which was originally predicted.
For the first time since 2009, there has been a decrease in the number of nights in which the top 25 US marketers neared hotel capacity. This is accompanied by a fall in compression nights (nights when hotels upcharge due to being near capacity).
According to the report, 49 percent of those surveyed said they had changed over from staying in traditional hotels during the past year. The same numbers are expected to play out 2017 as well.
It would be expected that along with hotels, OTAs such as Expedia and Booking.com might suffer as well. But surprisingly, Morgan Stanley’s analysis states the contrary. This would be due to the fact that OTAs are learning how to accommodate short-term rentals and homestays into their operations. This stands to make them a fiercer competitor to Airbnb in the near future. In addition, the major OTAs still carry the big guns in the form of their marketing spend, which is something Airbnb cannot yet compete with; therefore, the online penetration for OTAs will still have plenty of fuel going forward.