2016 Trends in Hospitality and Travel

January 18, 2016

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The hospitality and travel industry is evolving rapidly. Executives and organizations hoping to increase relevance in today’s extremely competitive market must commit to implementing strategies that take into account the ever-changing ways people travel.

The year 2015 saw a marked increase in international leisure travel, as well as stronger focus on the Millennials as a growing customer segment within the industry. Reputation management became a key investment area for hotels and hospitality companies, and decreased reliance on online travel agencies (along with more emphasis on direct booking) led to a banner year in occupancy for many businesses. In 2015, we also witnessed the hospitality industry embrace online reviews as part of their marketing, sales, and customer experience strategies.

2016 Trend in Hospitality and Travel infographic

What can we expect in 2016? Here are 5 trends to watch out for:

Trend 1: Increase in travel budget

According to the 2016 TripAdvisor TripBarometer survey, which is based on the responses of over 44,000 travelers and hoteliers, 1 in 3 travelers are planning to spend more in 2016 than last year. Of these,

  • 49 percent say they are increasing their budget because “I or my family deserve it”; and
  • 31 percent say they are planning to spend more because travel “is important to my health and well-being.”

The rise of the Millennials (young adults aged 25 to 30 years old) as travel’s biggest spenders is expected to continue this 2016. TripAdvisor found that 2 in 5 Millennials plan to increase their budget. Also, according to Killarney Hotels’ research, the Millennial generation will replace the Baby Boomers as the industry’s dominant consumer group within two years.

Trend 2: More healthy options for travelers

Travelers’ reasons for increasing their budget this year — not least, the ones listed above — may have a lot to do with another hospitality trend that began to develop in 2015: a growing number of consumers are committed to taking control of their health and well-being.

Indeed, more people are seeking healthy options while traveling. From in-room exercise equipment, detox menus, and healthy vending machines to medical spas, yoga spaces, and access to telehealth (remote consultations), expect the availability of personalized health and wellness services to rise within the hospitality industry.

“This year’s TripBarometer shows that travelers continue to recognize the importance of treating themselves to travel,” said Barbara Messing, chief marketing officer of TripAdvisor. “With one-third of survey respondents planning to spend more this year, we expect to see even more travelers checking both domestic and international destinations off of their wish lists.”

Trend 3: Traveling for the experience, culture, & adventure

Not many travelers will be chilling by the swimming pool with a piña colada and a paperback. Travel is poised to be more experiential and adventurous this year, and people will choose destinations in order to do something for the first time, like attend a music festival, watch a sporting event, and discover cultures outside their own.

Here are some figures, again from the TripBarometer survey:

  • 69 percent of global travelers plan to try something new this year. 20 percent said they would go on a cruise for the first time, 17 percent would try traveling solo for the first time, and 15 percent would try adventure travel for the first time.
  • 47 percent of travelers today say they have traveled to a destination to experience the culture and see the people of a specific country, and 36 percent have chosen a place because it was recommended by family and friends. (It’s worth noting that these aforementioned reasons — culture and personal recommendations — are more potent than special packages and offers, which were cited by only 27 percent.)
  • 1 in 5 travelers have visited a destination after seeing it on a TV show (great news, surely, for the likes of Rajan Datar and Anthony Bourdain).   

Trend 4: Tech to shape travel

Technology is already one of the most influential factors affecting how people travel. In 2016, tech is set to play a bigger role than ever.

According to TripAdvisor:

  • Air conditioning (63 percent) and free in-room Wi-Fi (46 percent) are the top amenities travelers will look for when they make a booking in 2016 — outranking breakfast (40 percent) or a swimming pool (26 percent).
  • 26 percent demand super-fast Wi-Fi, and of these, 11 percent are willing to pay extra for the service.

HospitalityNet adds:

  • Mobile devices and apps will enable personalized guest services and customer experiences. Hotels and travel companies with mobile apps like check-in and e-menu are considered at an advantage when travelers make decisions on where to stay.
  • More than 3 in 4 travelers agree that their smartphones are “very important, even critical”; meanwhile, over 33 percent admit that they use smartphones more when they travel than when they’re at home.
  • More than 50 percent are also expected to make hotel bookings online.

Businesses also plan to step up their technology game, and are looking to invest specifically in Software-as-a-Service (SaaS) solutions. Hotel software company Infor says that 85 percent of their queries from hotels and hospitality businesses are about SaaS.

Trend 5: Reviews and reputation more important than ever

If 2015 was the year the industry wondered whether or not they were managing their online reviews and reputation effectively enough, 2016 will be the year that execs fully embrace the review revolution and seek to do review management better than their competition.

  • Considering that more than 50 percent of global travelers made a purchase decision based on online reviews and recommendations, companies will increase their budget in order to invest more in engaging with customers via online channels and review sites.
  • Online reviews (88 percent) rank second only to price (93 percent) as the most important factor considered by travelers looking for accommodations. Other factors that are important to consumers include: proximity to key attractions, photos and videos posted online, and proximity to transport options.
  • 93 percent of hoteliers agree that online reviews “are important for the future” of their business. And just like last year, online reputation management will be the biggest investment priority of businesses in the hotel and hospitality industry, with as much as 59 percent planning to invest more in this area than they did in 2015.

TripBarometer respondents were also asked to rank the importance of multiple factors to the future of their business, and the results are as follows:

  • Improving and managing online reviews (93 percent)
  • Increasing repeat business (92 percent)
  • Increasing direct bookings (91 percent)
  • Differentiating themselves from the competition (90 percent)
  • Enabling ease of access from any device (90 percent)
  • Enabling online bookings (89 percent)

Top investment areas include:

  • Online reputation management and review management (59 percent)
  • Small-scale renovations (52 percent)
  • Marketing and advertising (48 percent)
  • Traffic acquisition (47 percent)
  • Staff training (46 percent)

As the whole industry prepares to invest more in reviews and reputation, we expect more organizations to be savvier and more sophisticated with managing their data. Beyond simply monitoring reviews and ratings, execs can now also implement strategies that involve:

  • Gauging guest satisfaction levels and customer experience through data;
  • Conducting surveys to collect customer feedback and identify satisfied and dissatisfied customers (e.g. Net Promoter Score and System);
  • Integrating online and mobile booking platforms and SaaS solutions for online review management with hotel management software; and
  • Enhancing online visibility and digital reputation through systematic review generation, local search optimization, and listings management.

2016 is an exciting year for hospitality and travel, and business owners are optimistic about their expected performance this year. 3 in 4 hoteliers are optimistic about profitability, and for good reason. With a solid strategy that rides the wave of new industry trends, tools, and technologies, you can position yourself to succeed this year and beyond.

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