From hybrid hotels and hostels to coliving and coworking spaces, concepts are continuing to merge as consumer behaviour changes faster than ever before.
In this series, we’ll help you stay ahead of the curve as we look at the latest industry news that highlights the changing nature of how people stay, live, work and play – and offer our insights on what this means for the hospitality industry.
1. DIRECT BOOKING STRATEGIES PAYING OFF AND CHANGING GUEST BEHAVIOURS FOR 2022
There’s no doubt that the pandemic has impacted consumer behaviour when it comes to researching and booking travel. In response, hotels have become more strategic about how they market and sell their rooms as demonstrated in SiteMinder’s latest report.
The good news is that direct booking strategies are working – in 12 markets, direct bookings are ranked as the second-top producer of booking revenue for local hotels, up from five markets last year and just two in 2019. This is the case for the UK along with Australia, Austria, France, Germany, Ireland, Italy, Denmark, New Zealand, Portugal, South Africa and Spain.
The report also found that Airbnb is increasing in popularity as a distribution channel as hotels diversify their revenue streams to reach today’s travellers.
As well as diving into distribution channels, the report also looked at 2022 traveller trends, predicting that in the future we will look back on this time as “one the biggest shifts in consumer behaviour of the modern-day”. The key takeaways are:
- Guests are expecting more from their stay with 52% demanding higher standards from accommodation providers than they did pre-pandemic.
- For a third of global travellers, the ability to freely cancel or modify a booking is a top-two priority when making a booking.
- The worlds of work and travel are colliding, with 30% of global travellers planning to fit some work into their next trip with many opting for longer stays that blend work and leisure.
- Guests want unique experiences more than ever, with 38% of global travellers listing a ‘bucket list item’ as one of the key factors in deciding where to visit next.
- Sustainability is key – as well as environmental impact, guests want to know what hotels are doing to help, sustain and support their local communities and their employees.
2. FLEXIBLE WORKING CONTRIBUTES TO SHORT-TERM RENTAL RESILIENCE
New research from AirDNA shows that the short-term rental industry had a record year in 2021, despite the ongoing pandemic.
The data shows a 22.5% increase in nights stayed in 2021 compared to 2020, and a 2.7% increase on 2019. Revenues also rose alongside bookings and occupancy as hosts charged higher ADRs in response to demand.
The report credits the changing nature of the way we work among the major drivers for this, stating that the “flexibility of remote work gave guests greater ability to travel outside of typical peak seasons, which boosted occupancy in the shoulder seasons to near peak-season levels”.
Other factors included scarcity of available rentals in high-demand markets during peak season and the recovery of demand in large cities which allowed hosts to increase rates following a drop in 2020.
And the stats show that the Omicron variant has done little to slow this momentum as we head into 2022. For the first quarter of 2022, nights booked are 17% higher than in 2019 and 72% higher than at the start of 2021.
It will be interesting to see the ongoing impact on this sector as travel restrictions ease and people are able to fully experience what remote work could mean for their lifestyle and location.
3. NEW EXPEDIA SURVEY HIGHLIGHTS THE VALUES AND NEEDS OF TODAY’S TRAVELLER
Expedia Group’s 2022 Travel Value Index – which surveyed 5,500 adults across eight countries in collaboration with Wakefield Research – sheds a light on what the traveller of today wants.
The findings are positive and suggest that after two years of enduring the global pandemic, people value travel and personal time more than ever.
The survey showed that today’s traveller…
…wants to blend work and leisure
With remote and hybrid working opening the door to increased autonomy, it’s no surprise that 56% of those surveyed who often work away will plan a “leisure” trip – extending a work trip into a longer holiday.
…is prioritising their wellbeing
With a heightened focus on health and wellness emerging from the past two years, 36% of those surveyed are searching for a sense of contentment and mental well-being on their next trip.
…plans to spend more on travel
54% of respondents said they plan to spend more on trips than they did prior to the pandemic.
…is committed to sustainability
Over half of those surveyed (59%) are willing to pay more to make a trip sustainable, and 49% would choose a less crowded destination to reduce the effects of over-tourism.
…views flexibility as an absolute must
With all the uncertainty of the past two years, the ability to make changes to trip itineraries is an absolute necessity.
4. INVESTORS BACK FLEXIBLE-TERM RENTALS FOR THE REMOTE WORK REVOLUTION
Flexible housing marketplace Anyplace has raised $5.3 million in a Series A funding round, taking its total financing to date to $8 million.
Anyplace began its life back in 2017 as a marketplace giving people the option to book hotels or rentals for 30 days or more nearly “anyplace” they want to. Today, that marketplace spans over 60 countries in more than 450 cities.
Last September, the company launched its hugely successful new offering – Anyplace Select – which provides accommodation designed for remote workers, digital nomads and business travellers who wish to work from anywhere.
Partnering with real estate developers such as Greystar and AvalonBay, Anyplace rents units, furnishes them with a fully equipped office set up, and then master leases them out at a higher price on flexible-term contracts.
Launching in San Francisco, New York, Los Angeles and San Diego, the scheme achieved a $1 million run rate within seven months of its launch.
With the goal of becoming the go-to accommodation platform for remote workers, Anyplace plans to use this latest round of funding to aggressively expand its inventory and capitalize on the rising demand for flexible living.
5. Sonder CEO speaks on knowing your customer
Francis Davidson – the CEO of hybrid hotel and short-term rental company Sonder – sat down with Skift earlier this week to discuss the generational divide in hospitality. He spoke about the importance of understanding your specific target audience – in this case, Millennials and Gen Z – versus trying to appeal to everyone.
Here are some of the key takeaways:
On appealing to Millenials and Gen Z:
“I think we’ve got a lot of hospitality brands right now that focused on a customer base that’s becoming a smaller and smaller share of the travel wallet. Millennials and Gen Z are going to be the majority of spend within just a few years… Traveling is kind of the ultimate experience for that demographic, and there really isn’t a brand on a global scale that focuses on that demographic’s specific needs.”
On technology disrupting traditional hospitality:
“Instead of saying that really great service is white glove service, we say it’s frictionless mobile technology that provides the best kind of service for that demographic… Between the old guard hospitality, which we’ll say it’s about like a smile and a person face to face, and we say it’s about like an emoji and a giffy and no check-in line. So it’s a very different kind of mindset. And both, I think are right, but for different kinds of consumers.”
On building a loyal community of the right customers:
“Right now, Sonder is not a brand that’s got global recognition. Although, that’s our aim. We have 45 per cent of our revenue that, as of Q3 of 2021, was generated through direct channels. And so despite the fact that we are not known to very many people, the people that do know about Sonder really love Sonder and keep our properties highly occupied”.
6. CITY HOTELS TARGETING WORK FROM HOME COMMUTERS WITH MID-WEEK SPECIALS
A recent article in The Times highlighted that UK city hotels are targeting remote workers looking for mid-week stays – a demand that has increased over the past 12 months as a result of people moving out of cities during the pandemic.
With flexible working becoming the norm, many former 9-5ers are making their way back to the city to be in the office mid-week and looking for mid-week deals in hotels that feel more like a home away from home.
The piece makes reference to the bigger chains that have already capitalised on this behavioural change – from Yotel London introducing the Hybrid Half with half-price midweek rates to Accor’s commute-and-stay package giving 15% off two-night breaks.
It then goes on to list seven hotels around the UK that are looking to attract this segment, including Newcastle newbie INNSiDE and Moxy Manchester City.
You can read the full list here.
7. WORLD’S FIRST DIGITAL NOMAD VILLAGE PROVIDES INSIGHTS INTO BUILDING COMMUNITY ONE YEAR ON
Community is the word on everyone’s lips in hospitality right now – but it remains to be seen which brands which be successful in going beyond the buzzword to build authentic, engaged communities.
In this recent article, a reporter from Sifted spent a week in the world’s first digital nomad village in Madeira almost a year on from when it was set up.
There are some great insights into what building a community really looks like and what digital nomads want as part of their day to day, including:
- Unique programming – from early morning yoga and dog walking meetups to evening open mic nights and dance events, the social calendar is packed with activities to bring the community together around their shared interests
- Opportunities for personal and professional development – workshops on practical topics like how to navigate digital nomad visas
- Wellness as a given – as Community Manager Merle says; “people are looking for experiences, but they’re also wanting to live with high standards and health and wellness is part of it.”.
- A diverse community – people associate digital nomads with a certain demographic, but nomads registered here come from 108 countries and range from 18-80 years old.
We hope you enjoyed this round-up and we’d love to hear your own insights into the topics we’ve covered here, in the comments or on our social media channels.
And if you have any news to share that you’d like to see included in the next round up, drop us a line to hello@staythenight.net.
