2016 trends in corporate hotels and ground travel

Hotel Trends
Travel News 30 Mar 2016

Corporate travellers can experience, expect and enjoy more in their accommodation and ground transport this year. From industry consolidation, to exciting product enhancements, 2016 is shaping as the year to give travellers a more seamless and pleasantly surprising journey.

Industry Developments

More choice than ever
 
Unprecedented choice of accommodation and ground transport products is now a staple in the business travel environment. Greater choice shines the spotlight firmly on what expert knowledge and value a corporate travel consultant can bring to the business relationship. Transactional service has given way to a less homogenous and more empathetic service. With a strong focus on truly understanding individual customers needs, corporate travel consultants now offer the widest range of hotel and ground transport inventory, ranging from client negotiated hotel programs to low-cost last minute options.
 
The age of consolidation
 
The hotel industry has seen a recent spate of ‘marriages’, including Marriott’s acquisition of Starwood, ACCOR’s acquisition of FRHI Holding (owners of Fairmont, Raffles and Swisshotel), and Expedia’s acquisition of rival online booking companies. These mergers, devised to consolidate marketshare and control inventory, change the industry dynamic. Fierce competitors now become valuable knowledge banks.
 
In large corporate cities such as New York, where Marriott’s recent acquisition of Starwood has resulted in the company now owning 170 of the 550 corporate style hotels, the company is now able to control pricing between properties, more strategically. This could see The Average Daily Rate (ADR) creep upwards as yield management becomes more effective. Industry insiders believe more mergers are in the pipeline for 2016 as the mega companies make their grab for marketshare, a larger global footprint and control.
 
Greater investment in sustainability
 
The global warming pact struck at the COP21 Climate Conference in Paris late in 2015 will almost certainly re-focus the sustainability commitment of hotels, car hire companies and their corporate clients. All parties will be encouraged to invest more in helping to reduce emissions and environmental impacts and support communities where they operate and travel.
 
In the US, 16 New York hotels have committed to lowering their greenhouse gas emissions by 30 per cent in the next decade. Other hotel companies have already made significant inroads, including Wyndham Worldwide, which recently hit its target – six years early – of reducing its operational carbon footprint by 20% by 2020.
 
2016 is expected to be a transformative year for the introduction of similar sustainability and community-focused initiatives across the corporate travel industry.
 
Stays becoming more personalised
 
Hotels are increasingly positioning themselves as destinations, offering more personalised experiences for each guest, rather than ‘just a room’. A hotel’s ability to know their guest will become the strongest deal breaker for guest loyalty.
 
Loyalty and status will remain a strong influencing decision factor in 2016, with guests preferring to stay in properties that reward repeat visits. Hotels will pursue their loyalty customers more aggressively through bonus points, status matching and partnerships with associated businesses.
 
Airbnb spurring flexible check-in and check-out
 
In response to Airbnb, travellers can expect to find more hotels offering flexibility with their check-in and check-out times. Many hotels are already providing late check-outs at no extra cost, while others are adopting the concept of 24-hour blocks in which travellers are welcome to stay for a full 24 hours from the time they check in, even if it’s late in the day. This will benefit travellers who arrive in a city early and have time for a shower/freshen up before their first meeting, or want to unwind in their hotel room after a busy work day.
 
In addition to flexible hours of stay, the world’s more innovative hotels will ensure they consistently provide quality alternatives to Airbnb, including easily accessible properties in key areas and desirable amenities such as mobile/digital check in and reliable and fast Wi-Fi.
 
Door-to-door car transfers on the rise
 
Over the past year, there has been a surge in door-to-door transfer services which is set to continue into 2016, as companies increase their commitment to duty of care for their travellers. The introduction of Uber has drawn attention to the true cost of door to door services for businesses. Car transport is becoming more important to customers who are taking a holistic approach to their travel program. More companies are now recognising that the benefits of booking transfer services, including reliability, safety, cost and time savings/productivity, outweigh using on-the-spot alternatives such as taxis. Savvy ground transport companies are utilising advanced technologies to secure more customers, on the back of the Uber phenomenon.
 

Demographic Influences

Millennials shaping service delivery
 
With their desire for hi-tech and hi-touch experiences at a good price, the highly mobile ‘Millennials’ (18 to 35 year olds) will continue to be the biggest influencers of hotel design and service delivery. 2016 will see a greater focus on technology advancements and digital marketing, with hotels using more social media and mobile and video technologies to shape the way they interact with this tech-savvy market.
 
And while the Millennials are transforming the hotel dynamic, the well-travelled ‘Road Warrior’ remains the largest travelling hotel market segment. 2020 should also see the rise of Generation Z – characterised by the speed with which they can process information. The challenge for the hotel industry will be to ensure it can still meet the needs of these very different markets, without compromising individual market share.
 

Product Enhancements

Smarter technology in smarter hotels
 
Mobile technology will see game-changing development in the hotel industry, offering seamless and empowering experiences for travellers by putting greater control and flexibility in the palm of their hands.
 
More hotel groups will implement technology that recognises a returning guest’s mobile device the moment they arrive, and instantly connects their phone to the hotel’s Wi-Fi. From here, the sky is the limit as guests will be able to use their mobile devices to check in and out, select and customise their rooms, and unlock their rooms – solutions already being offered by the likes of Hilton Worldwide.
 
Guests are now able to use their mobile devices to make virtual payments, access concierge, order room service, adjust room temperature and lights, and enjoy their own choice of video entertainment using Netflix, Apple TV or similar. Every detail of their room preference will be remembered and customised for their next visit.
 
Connectivity will continue to improve, with stronger Wi-Fi expected to find its way into the more mainstream hotels. Li-Fi technology is slowly being introduced enabling the transmission of 5G technology through lights, providing unprecedented connection speed in hotel rooms.
 
Living like a local
 
Lifestyle-focused brands such as InterContinental’s EVEN, TRYP by Wyndham, and Westin (with its runWESTIN program) will raise the bar on traveller wellbeing with more options for guests to maintain their health and fitness. This includes everything from healthier food and beverage (F&B) choices, to dedicated fitness rooms, programs and running groups led by a ‘run concierge’.
 
In F&B, the lifestyle revolution includes the dramatic transformation of old-fashioned food buffets into contemporary ‘gourmet bars’. Hotel chains are turning the tables on traditional hotel dining by introducing high-profile chefs to spearhead their F&B offerings for guests and the broader local community.
 
Examples range from individual restaurants like The Roux brothers’ father and son combination at The Landau in Langham London to entire hotel chains including Denihan Hospitality in the US, which currently has three of the country’s most recognised chefs operating iconic restaurants and bars across their properties.
 

Business Retailing

SmartSTAY Expansion
 
FCM’s exclusive SmartSTAY program, which partners with preferred hotel properties worldwide to offer value-added extras in accommodation, has seen unprecedented success over the past year. 2016 is set to bring an additional 4,000 hotels to the program, giving corporate customers a choice of almost 5,000 properties around the world. With complimentary services ranging from Wi-Fi, breakfast, car parking and late checkout, travellers are appreciating the benefits while companies are enjoying the savings and productivity.
 
Travel Booker Training
 
TMCs are taking a fresh approach to the way they interact with their customers. 2016 will see FCM’s corporate brands provide a more personalised service that is consultative, empathetic and engaging. With a stronger push to offer a wider product choice, corporate teams will provide more training to customer travel bookers to improve their knowledge of the best rates to suit their individual needs.
 
From client negotiated rates to value-added flexible rates, SmartSTAY rates and special promotions, training will help travel bookers understand what the choices are, when to use them and why. This is aimed to maximise the value of their hotel spend, comply with their company’s travel policy and provide customers with the best possible travel experience.