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We draw inspiration from the world around us and we want to share our knowledge with you. Tap into our latest thinking on the issues that matter most in hospitality today and find out what trends are going to shape our industry in the future.

Hospitality in 2018: The Year in Review - Part 1
20 December 2018, by Arjun Puri in Trends
Hospitality in 2018: The Year in Review - Part 1

It’s 2018. Cars drive themselves; sustainable is the status quo; technology is fundamental. The digital ecosystem has brought about monumental shifts in consumer behavior. The supremely catalyzing behaviors of the new-age consumer have shaped the hospitality industry. With the end of the year upon us, it’s important to reflect on what’s passed and to open up discussion for what lies ahead.

This is the first of a two-part series, feel free to check out part two here.

 

1. Consumer behavior isn’t behaving the way it used to

Millennials. Entering the market a little over a decade ago, today the oldest millennial is in their late thirties. They’ve pioneered the creation of the experience and sharing economies which have undoubtedly had a monumental impact on the hospitality industry. From the introduction of Airbnb and Uber to lifestyle brands and experiential marketing, the millennial generation forced brands to reinvent themselves. 78% of them will pay more for experiences than material items. Another defining metric is the fear of missing out, or FOMO, with 69% of millennials agreeing to be driven by this emotion. Brands responded by including more technology in their hotels, creating experiences and bolstering loyalty programs (think SPG Moments), and by internalizing local communities and reflecting their values through multiple ways. But what’s next? Are we correct in assuming today’s 21-year olds are still millennials? Guess again.

In a frenzy of catering to all things millennial, another generation has flooded the market. Enter Generation Z. Born just a few years after their youngest millennial counterparts, 2018 saw the oldest Gen Z’er turn 21.

What defines Gen Z?

Unlike Millennials, Gen Z’ers grew up in a depressed economy. The resulting frugal mindset defines their consumption patterns. They’re also not afraid to loosen the purse strings if they see value. Vacations and the associated experiences are an example; they love to get away, with 99% of Gen Z’ers saying they love to travel according to a report. The same report mentioned that 58% of Gen Z’ers prefer staying in hotels over Airbnb. This combination of frugality, a strong desire to travel, the intention to stay in hotels, and the fact that 76% say the price is a key motivator, brings midscale and budget brands into the spotlight. This doesn’t insinuate that other scale segments stand to lose out. Two factors come into play here; Gen Z’ers have significant influence within their families and are usually tasked with planning entire holidays on their parent’s dime. Now they not only have influence, but they have it over a market with a higher purchasing power, making them an attractive target market for all brand segments. The second factor is their age; Gen Z’ers are perfectly positioned for brands to target with the goal of acquiring customer lifetime value. Appealing to this group from an early stage pays off in the short and long run.

Marketing efforts need to be created keeping in mind that Gen Z’ers are digital natives. It’s mobile or nothing. They’re less brand conscious (and loyal); individuality trumps conformity — think limited edition. They place immense value in experiences; it’s vital for brands to give their Gen Z guests every chance to experience the local community. They place more value in micro-influencers over celebrities as they are more relatable and will respond well to brands that utilize this in their marketing. Remember that privacy is critical; having grown up in a technological era, they are much more sensitive to sharing their information online, and brands must be careful in crafting hyper-personalized offers to avoid potential backlash.

 

2. Sustainability is the new profitability

That’s right: it’s no longer just another initiative on your CSR list. 2018 has seen the entire ecosystem of “sustainable business” boom, to an extent where it becomes a core success driver. Hospitality is no exception. Fueled both by the kaleidoscopic expectations of the new-age consumer and a moral commitment to our planet, sustainability has been central to defining hotel design, technology inclusion, facilities, energy and utility management, and that’s just the tip of the iceberg. As per the UN’s definition of sustainable tourism[1], the concept goes beyond inward practices. Outward practices like giving back to the local community and ecosystems are an integral part of a robust sustainability initiative.

Six Senses is miles ahead of its time. From their conception in 1995, an unwavering commitment to Mother Earth has made them synonymous to sustainable luxury. With the Earth Lab, Six Senses approaches sustainability with a 360-degree view. Bottling water on the premises, creating natural insecticides (for their gardens), replacing chemical cleaners, growing fresh produce, and a commitment to renewable energy are just a few things Six Senses does to ensure a better tomorrow. By inviting local communities to learn and share traditional knowledge and creating DIY videos for their guests (or anyone!) to be more sustainable at home — they’ve gone full circle. They’re not the only kids on the block though; Hilton’s LightStay environmental and energy management system has saved them an average of 18% on energy, water, and waste output. If that’s not convincing, maybe the half billion dollars LightStay saved them since its inception is! 2018 has seen climate change, food waste, and pollution (to name a few) shift consumer perceptions further toward sustainable consumption with huge (125%) increase in travelers looking to minimize their globetrotting footprint. As far as profits go, the cornerstone of any hospitality business is serving its customers’ interests. Today’s customers’ interest? Sustainability.

 

3. Workplace Wellbeing is booming

Performance is no longer solely linked to one’s ability to complete a set of tasks. The shift now considers performance to be a function of a person’s entire state of wellbeing. It’s not surprising; the global health and wellness industry grew to over $4 trillion last year, and that number includes workplace wellbeing. Recent times have seen stress become more prevalent, and it’s logical if you think about the ‘always-on’ nature of the world we live in. For example, during peak season, front office employees have to check-in/out, deal with complaints and conflict, handle administrative tasks, deliver excellent service, and much more all while keeping a smile on their face. Good day or bad day, hotel employees are always expected to be at their best, even if they may not be internally. Understandably, this has an impact on mental wellbeing (and consequently service delivery). All of this is propagated by positive economic times (more money, more travel). Hotels must react in kind by investing in training that bolsters the importance of employee wellbeing; this considers nutrition, mental health, spiritual health, and most importantly, physical health.

This is especially important for hotels, as housekeepers boast the highest injury rates in the U.S. for the entire industry. At 25% of the 1.8 million the U.S. hotel industry employs, housekeepers are the single largest occupational segment. Consequently, injuries have an exceptionally high financial cost and a troubling personal cost. Being out of work means being out of pay. For a segment that’s sometimes working two jobs to support their families, an injury is much more than its physical pain; it’s an inability to work, a susceptibility to worse injury, a lack of pay, and a significant cause of stress. It’s clear that hotels must invest in training which considers the importance of ergonomics and aims to reduce injuries — a healthy employee is a happy employee (read: customer). It’s quite intuitive actually. There has been a societal shift toward healthier lifestyles in recent years. It’s understandable that individuals that value personal health and wellbeing would value the same in their professional lives, as it all connects to one’s entire state of wellbeing. With that in mind, the future will see workplace wellbeing become central to organizational culture, a metric that defines a business’s commitment to its talent, and one that will determine a company’s attractiveness to the labor market.

 

4. California sets the standard in housekeeping injury prevention

Talking about wellbeing — For years, decades even, housekeepers have relentlessly endured copious amounts of pain and strain in the name of guest satisfaction. Why? Because 90% of travelers will avoid hotels described as dirty; because 97% consider cleanliness to be a crucial determinant of a booking, and because at the end of the day, the quality of housekeeping defines a hotel’s first impression. Housekeeping is, without a doubt, the most injurious department in a hotel. Factors such as (but not limited to) excessive physical strain due to repetitive motion, cause what are known as Musculoskeletal injuries[2]. If you still think it can’t be that bad, let’s look at some facts:

  • A housekeeper will lift mattresses 150-200 times a shift, a combined weight of 7000 kg a day (circa. 15000 lbs.)! That’s roughly the weight of an African elephant.
  • A full stocked housekeeping trolley can weigh 135 kg (circa. 300 lbs.)

Let those numbers sink in.

If that doesn’t concern you, maybe this will: According to the U.S. Bureau of Labor Statistics, the hospitality industry pays out $500 million annually for repetitive motion injury claims. 70% of them are from housekeeping. All these numbers point to one thing — Housekeeping injuries are no joke. In 2018, however, it seems like our heroes behind scenes’ prayers have been heard. The state of California has passed a law requiring all lodging establishments to implement and maintain a Musculoskeletal Injury Prevention Program, specifically for housekeeping departments. The law took effect in July of this year, and October 1st was the cut-off date for establishments to have their programs in order. It centers around three pillars: worksite evaluations, training, and reporting. California’s efforts to pioneer a standard such as this one has set a new precedent in the industry. Intuitively, one would expect to see other states follow in the same footsteps down the road. It’s time for hotels to realize the importance of this issue, and to look toward implementing procedures, programs, and training to minimize injuries. California or not.

 

Consumer behavior; sustainability; wellbeing; legislation. It’s safe to say they were significant to hospitality in 2018 and will only become more pivotal in the future. That’s not all though. Technology and data have played a focal role as well and will continue to do so for many years. If you’re interested in reading part two of hospitality in 2018, follow the link, sit back and let the inspiration flow.

 


[1] Sustainable Tourism - Tourism that meets the needs of present tourists and host regions while protecting and enhancing the opportunity for the future.

[2] Musculoskeletal Injuries: Acute injury or cumulative trauma of a muscle, tendon, ligament, bursa, peripheral nerve, joint, bone, spinal disc or blood vessel

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