Hospitality Verticals, Part 3

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01
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Part
01

Hospitality Verticals: Food & Beverage Trends

The key trends in the food and beverage industry include shifting consumer preferences and sustainability. Similar to the other sectors of hospitality, consumers are increasingly worried about how their food and beverage choices affect the environment. Many are opting for sustainable options to help the planet.

Shifting Consumer preferences

  • Consumers are gradually shifting towards healthy plant-based options. According to Grande CIG, more than half of consumers want to consume foods with specific nutritional benefits.
  • This is due to the rising health awareness of how certain foods/ingredients affect the body negatively. Consumers are working towards having healthier lifestyles. They are also adopting plant-based diets to help preserve the planet.
  • One-third of consumers are adhering to diet trends like keto, Whole 30, and paleo. They are avoiding ingredients such as sweeteners and flavors that may have negative impacts on their health.
  • The shift towards healthy choices also applies to beverages. Consumers' beverage preferences in 2020 will shift towards infused beverages and health-conscious drinks with bold, exotic, and uncommon fruit flavors such as prickly pear cactus, bergamot orange, and makrut lime.
  • Sugar-based and carbonated drinks are gradually being replaced by drinkable foods. Drinkable foods are the new fad as they contain the right nutritional value, can be used to substitute regular meals, and are healthy.
  • Veganism is gaining momentum in the industry, with many looking to live healthier lives by only consuming plant-based foods.
  • Companies in the food and beverage industry are expected to launch healthier consumables, to cater to the customer segment demanding them. This expansion may trigger mergers and acquisitions in the industry.
  • Ambronite and Soylent are two companies that offer drinkable food options. Ambronite's products are 100% plant-based, with no added flavors. Soylent's products are also 100% plant-based, however, they are infused with 26 vitamins and minerals.


Sustainability and Responsible Options

Part
02
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Part
02

Hospitality Verticals: Travel & Tourism Trends

The key trends in the travel and tourism industry are personalization and sustainable travel. Personalization is the overarching trend in the industry with more travelers demanding customized experiences during trips. Research has also shown that travelers are becoming concerned about the impact of their trips on the environment.

Personalization

  • According to the latest Virtuoso Luxe Report, personalization is the overarching trend in travel currently. A recent study shows that 69% of travelers are more loyal to companies that provide personalized services.
  • Consumers, just like they expect customized experiences from their banks and restaurants, now expect customized services from their travel companies. It has become an important pillar of customer strategy.
  • Luxury travelers are demanding personalized travel experiences. These services include specific seats on planes, VIP airport arrival services, and private helicopter trips.
  • Travelers' destinations vary according to their interests and bucket-list. Destinations vary from high-end stores and summer festivals to the Olympics.
  • Delta Airlines is implementing a service that will allow it to access detailed information about its customers. Access to this information will enable the firm to provide personalized in-flight services to its most frequent passengers.
  • EasyJet on its 20th anniversary sent personalized messages to 12.4 million customers who had flown with the airline. This earned the company 25% more clicks.


Sustainable Travel

  • Travelers have adopted the trend of sustainable travel. They are limiting their impact by visiting "under-sold cities" and destinations instead of popular destinations that are already suffering from the effects of over-tourism. According to Bookings.com, 54% of global travelers will be joining this trend in 2020.
  • They are also using less environmentally-harmful transport options such as trains and cars that lessen their carbon footprints. 48% of travelers plan to take slower modes of transport.
  • Sustainable travel as a trend is a result of the increased concern for the state of the planet, especially regarding climate change. 55% of travelers have become conscious of the impact their trips had on the environment in 2018. Western travelers are flying less often due to the environmental effects of such trips.
  • Travelers are becoming increasingly conscious of how and where to travel. They are also considering ways that their holidays can benefit communities after the pandemic.
  • Also known as eco-friendly tourism, responsible tourism, or philantourism, sustainable travel also includes doing away with environmentally harmful materials such as single-use plastics.
  • It is expected that the "under-tourism" trend will be on the bucket list of many travelers and will expect their travel agencies/advisors to help with it.
  • Travelers are now demanding more transparency around carbon offsetting. This helps reassure them of the impact they are making by supporting the trend.
  • Together with Climeworks, MT Sobek, a travel company is offsetting carbons and removing them from the environment.
Part
03
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Part
03

Hospitality Verticals: Lodging Trends

The lodging industry, although regarded as a slowly evolving one, has undergone tremendous growth with certain major trends leading the growth. The top trends driving this growth include increased consolidation and the adoption of new technologies. Consolidation has helped companies in the industry expand and increase market share, while the adoption of new technologies has helped lodging companies improve customer satisfaction and workflow.

Consolidation

  • Consolidation has become a major trend in the lodging industry in the last century. The industry features multiple mergers and acquisitions annually, with at least 21 major M&As in 2019 alone.
  • The key drivers of this trend are industry fragmentation, limited organic growth, and improved value creation.
  • Many lodging companies also view consolidation as an opportunity to expand their customer base, offerings, distribution platforms, integration synergies, geographic presence, market share, and loyalty programs. Other benefits that come with consolidations are improved pricing and reduced distribution costs.
  • The hotel & lodging industry has been generally regarded as one that is slow to evolve and grow. However, consolidation has caused aggressive growth in the industry — making growth mandatory as larger companies invest in smaller ones.
  • Third-party management companies are also acquiring hotels. An example is Best Western's acquisition of WorldHotels and InterContinental Hotels. This strategic acquisition allowed Best Western launch itself into the upper-upscale and luxury segments.
  • The consistent mergers and acquisitions are not limited within the industry alone. Hotel and lodge chains are now acquiring serviced apartments and boutique chains, both locally and internationally.
  • Consolidation also allows both parties to include missing concepts in their service delivery. For example, Wyndham Worldwide expanded into the "economy and midscale segment" with its $1.9 billion acquisition of 900 franchised hotels from La Quinta.
  • With a greater market share, consolidated companies can improve their "negotiating power with major travel agencies" globally. AccorHotels in 2018 acquired 5 different hotel brands including Mövenpick Hotels & Resorts and Atton Hoteles to increase its market share.
  • In comparison to other industries, the lodging industry is quite fragmented and is expected to see more targeted consolidations (M&As) in the future.
  • Some major consolidations in the industry in 2019 are Deutsche Hospitality's acquisition of a 51% stake in Zleep Hotels; InterContinental Hotels Group's purchase of Six Senses Hotels Resorts Spas; the merger between Waterford Hotel Group and Waterton; and Brookfield Asset Management's acquisition of India’s Leela Palaces & Resorts’ management business.


Adoption of New Technologies

  • Companies in the hotel and lodging industry are now adopting new technologies. This stems from the need to impress customers, adequately meet their needs, buy their loyalty, and improve workflow. More than 90% of hotel executives acknowledge that mobile technologies are crucial to improving guests' experience and cultivating loyalty.
  • Technologies including mobile smartphones, are now used by hotel guests as room keys. Such technologies also help provide access to other areas of the hotel, such as gyms and spas. Mobile phones are also used for mobile check-ins and food ordering.
  • China's Marriott Hotel uses facial recognition technology to check-in guests. This helps avoid the long queues as it takes only one minute to check a guest in. The technology can also be used for security access, payments, and customer service.
  • Wi-Fi, which is cheap and easy to install, has moved from being an added perk to a basic necessity required by guests in hotels.
  • To meet up with the fast and high-quality service demanded by guests, some hotels are now replacing their staff with robots. For instance, the Henn-na in Nagasaki hotel, a Japanese hotel has replaced its reception staff with robots, using them as customer information tools, luggage porters, and even front desk attendants. Hilton Hotels also use Connie, "an AI-powered robot" concierge that can answer basic hospitality/travel questions.
  • IoTs are another major trend in hotels. They extend internet connectivity to regular objects, devices, and appliances. This enables the hotel management to automate some functions such as reducing light intensity, adjusting room temperatures, and opening windows.
  • Many hotels are now utilizing chatbots to meet the needs of their guests. These chatbots powered by AI technology can deliver high-quality real-time interaction that customers value.
  • Hotels now provide prospective guests with a 360-degree view of their premise, a virtual tour made available on their websites. This technology can also be used to entertain guests through immersive experiences.
  • Hotels and lodges now have direct booking engines where guests can make reservations without the lodge/hotel having to pay commission fees or carry any additional costs.

Part
04
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Part
04

Hospitality Verticals: Recreation Industry Trends

Some top trends in the recreation or entertainment industries include technological advancements and the promotion of sustainability. Technological advancements have helped the industries evolve and attract younger generations. A milestone was achieved with the launch of the world's first public smart park in China.

Technological Advancements

  • Recreation centers around the world, parks, museums, and movie theaters, are embracing technological advancements.
  • Technological advancement in the museum industry is driven by the audiences' expectations. Audiences expect to see technology employed in cultural institutions of which museums are a part.
  • In parks and other recreation centers, tech advancements are implemented to please and attract younger generations, as well as engage them. For example, a survey showed that 77% of parents believe that the use of technology in outdoor recreation will encourage their children to play outdoors more often.
  • The world's first public smart park, the Beijing AI park, was opened in Beijing, China, in November 2018. This smart park is a prominent example of technological advancement in recreation centers. China's tech giant Baidu was one of the creators of the park.
  • The 34-hectare park is exclusively powered by artificial intelligence and attracted 10,000 visitors within the first 5 days of opening.
  • Meanwhile, recreation centers are now attracting youths with gaming integration, providing a balance of outdoor activities and socialization infused with digital applications and mobile gaming experience. An example is Pokemon Go.
  • Some parks now feature phone-charging benches and Wi-Fi to keep visitors connected while they relax.
  • Museums are also adopting technological solutions, such as digital systems and virtual reality. For example, the Van Gogh Museum in Amsterdam uses virtual reality to provide a unique view of painted artworks. The Cleveland Museum has an interactive digital map to help visitors navigate and find exhibits.
  • Some other tech solutions that can be found in parks and other recreation centers include drones, beacon counters, geo-fencing, solar-powered benches, and augmented reality.
  • Museums are now embracing social media and analytics to make better data-driven decisions.


Sustainability in Recreation

  • Sustainability has become a major focus point across most industries, and the recreation and entertainment industries are no different. The trend has seen recreation centers focus on nature-based recreation. This is due to rising concerns over climate changes and heatwaves and doubles as educational, teaching younger generations about sustainability. One of the goals is to maintain a sustainable environment that will ensure access to recreational activities in the future.
  • Several parks and recreation centers are now incorporating sustainable designs, such as bike loops, rubber surfacing, recycling bins, and water play.
  • With the current state of climate change issues, parks help cool the environment. According to a study by the National Oceanic and Atmospheric Administration (NOAA), large parks in Washington, D.C., "cooled the city by as much as 17 degrees Fahrenheit."
  • Sustainable recreation practices will help mitigate the effects of the dramatic changes occurring in the environment and encourage resilience in ecological systems, including human settlements.
  • In 2019, Bardia National Park was awarded the best sustainable destination in the Asia-Pacific region. The park has become widely known for its sustainability efforts, especially in wildlife conservation.


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