2019 Top 10 Hospitality Trends

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By Jean-Philippe Weisskopf, Assistant Professor of Finance at Ecole hôtelière de Lausanne (EHL) and Philippe Masset, Assistant Professor in Finance at the Ecole hôtelière de Lausanne
7/1/2019


The hospitality industry has been undergoing tremendous changes and disruptions over the last two decades.What key trends have been steadily reshaping the industry and where is hospitality heading in the near future? A study conducted among EHL faculty in the fall of 2018 provides insights on past and new challenges (as well as opportunities) hospitality players need to take into consideration.

The TEN trends that have reshaped (and are still reshaping) the industry:

#1 - Virtual communities

Social networks and in particular TripAdvisor have had a profound impact on customers. This has led to more transparency and, overall, to an improved quality of the services provided by hospitality companies.


#2 - Sharing economy

Airbnb represents a major disruption in the hotel industry, making the competitive landscape tougher than ever. This is further reinforced by the fact that lodging properties listed on Airbnb do not necessarily have to comply with the same rules and regulations than traditional hotels.


#3 - Online Travel Agents (OTAs)

  • They have had at least three major impacts on the hospitality industry.
  • First, they have altered distribution channels and consequently taken value away from hoteliers.
  • Second, the notoriety of brands owned by Booking Holdings and Expedia are such that these companies have almost replaced hotel brands.
  • Third, they have built solid relations with travelers. Now, hoteliers have to pay to get access to these customers, thereby leading to a thinner profit margin for the former.


#4 - Digitalized guest experiences

Apps, in particular, are increasingly important in the way hoteliers manage the services they provide to their customers and can now control many aspects of the guest cycle and experience.


#5 - Booming global tourism

Low cost carriers enable more people to travel the world at a reasonable price. Moreover, several emerging markets have seen their GDP increase at a rapid pace, thereby enabling their citizens to travel the world. Customers from South Korea, China, India, and others, now constitute a large body of potential travelers. Their demand, of course, has a big impact on the offer.


#6 - Experience economy

Customers request extreme personalization, unique experiences, and so on. This could very well lead to the death of the travel agent and the rise of the independent traveler.


#7 - Asset management practices

The asset-light approach has become prevalent in the industry. The separation between the management of operations and real-estate assets now allows hospitality companies to focus on their core business, thus improving efficiencies.

It however induces additional complexity and potential agency problems, explaining the emergence of new types of jobs, such as asset managers.


#8 - Professionalization

As stated above, new job profiles have emerged following the increasing complexity of the hospitality industry. In parallel, the need for quantitative competencies (for forecasting, budgeting, etc.) has also increased.


#9 - Generations Y and Z

These new generations have different requirements and needs compared to older generations. A respondent said "Older generational think about hotels and car rentals. Younger generations think about Airbnb and Uber."


#10 - Sustainability

People are becoming increasingly sensitive to environmental and social issues. A respondent said that this "has to be considered in branding, but beware of green-washers: consumers are now well-aware that window-dressing exists, and they will not buy it."