22 Dec 2020
Posted in Travel & Tourism
Increased privacy and flexibility to characterize lodging industry in 2021
Increased privacy and flexibility are two of the stand-out trends that leading data and analytics company GlobalData notes will shape the lodging industry in 2021, alongside longer stays, improved hygiene procedures and more no-touch technology. As 2020 draws to a close, Travel & Tourism Analyst Ralph Hollister offers his view on these trends.
Hollister notes: “Hotels that cannot provide more secluded spots or offer increased booking flexibility could be at risk of losing out even further in 2021. Rate plans to accommodate longer stays need to be offered, whilst the marketing of no-touch technology and increased hygiene procedures needs to be increasingly visible.”
“We have come to the realization that 2021 will not be free from the effects of COVID-19. Travelers will be looking to take fewer trips – if not forced to due to ongoing travel restrictions – but those that do travel are expected to also stay for longer to grab what they can when they can. Uncertainty is strife and it may lead to people going ‘all out’ on one big trip, rather than risking several smaller ones that could be canceled.
“Lodging providers need to prepare by creating rate plans for extended stays in order to offer increased value. In fact, this is one method already being explored by major players such as Booking.com, which introduced two new rate plans to satisfy this need. The weekly rate plan requires a minimum length of stay of seven nights, and for the monthly rate plan, a length of stay of 28 nights is the minimum requirement.
“Long stays will be particularly popular with digital nomads, students and business travelers.”
The need for more private forms of accommodation has surged during the pandemic, which is understandable given that 79% of global respondents to a survey* by GlobalData noted they are still concerned about the outbreak. The privacy trend has benefited companies such as Airbnb, which posted a surprise profit for Q3 2020. However, many traditional hotels that naturally cannot offer the same levels of privacy have not witnessed similar growth.
Hollister notes: “The likes of Vrbo and Airbnb can offer an abundance of accommodation types in more secluded areas, while many major hotels are stuck with city-center properties. In the short term, travelers may feel there is little sense in risking a city-center location when the main attractions are closed. Demand for city breaks will slowly return in the coming years as the dust settles, but domestic breaks in rural locations are likely to be the preference and return at a much quicker rate.”
Improved Hygiene Procedures
Improved levels of hygiene and sanitation will continue to be required by guests in the coming years. According to a GlobalData survey*, 59% of global respondents are concerned about their physical fitness and health during COVID-19. This significant level of concern has meant that lodging providers have had to dramatically improve hygiene and sanitation procedures. However, it is not enough to just have these in place – they have also had to effectively market these changes to gain customer confidence.
Hollister notes: “All major players in the lodging industry have been implementing and showcasing their new hygiene procedures this year – for example, Hilton’s partnership with healthcare professionals Mayo Clinic, which has helped increase consumer confidence. These procedures will continue to be refined in 2021 as the pandemic continues.”
More No-Touch Technology
Technology in lodging that reduces customer contact with frequently touched surfaces and other humans will be positively received – especially considering a total 60% of global respondents are ‘somewhat’ ‘often’ or ‘always’ influenced by how digitally advanced or ‘smart’ a service is, according to a GlobalData survey**.
Hollister continues: “In 2021, hotels will increase their adoption of technology that reduces the number of touchpoints. Abilities such as online check-ins and check-outs, mobile keys and room settings controlled by Internet of Things (IoT) technology will become much more commonplace.
“Using IoT to control room settings also allows hotels to gather more data on guests, creating a more personalized experience when they next return. According to GlobalData’s lodging scorecard, Marriott is one of leaders in the adoption of IoT, scoring the maximum of ‘5’ for the adoption of this technology. The company recently revealed an IoT focused hotel room, in partnership with Samsung and Legrand, personalized by the needs and interests of the individual guest.”
There has been significant uncertainty for travelers in 2020, which has deterred them from booking accommodation in case they cannot later get refunded. According to the GlobalData survey*, 56% of global respondents are concerned about domestic travel restrictions, and 52% echo the same sentiment for international travel.
Hollister adds: “Having a flexible cancelation policy on a hotel website will be vital in ensuring direct bookings, and these relaxed policies will continue in 2021. For example, Marriott International has just extended its 24-hour global cancelation policy through March 31, 2021. This extension into next year will be emulated by its rivals in order to remain competitive.”
* – GlobalData’s Week 11 COVID-19 Recovery Survey (2-6 December 2020), ‘quite concerned’ and ‘extremely concerned’ responses combined
** GlobalData’s Week 11 COVID-19 Recovery Survey (2-6 December 2020)