Hospitality in the News - 23 January 2020

TW: thinkingdifferently

Predictions for 2020

As we move into 2020, we thought we'd make 10 predictions for Google Maps, the Netflix Effect, TravelTech, sustainability, plant based meat, Brexit, consolidation, Branded Residences, stakeholder capitalism and the Human Experience.

• Successful businesses will need to have a clear sense of purpose – capitalism has changed. It has moved away from "shareholder capitalism" and the obsession with profit, irrespective of impact, to "stakeholder capitalism" where businesses will be judged on their wider impact on employees, society and the environment. Consumers expect businesses and brands to have a sense of purpose and align with these values. Businesses that don't will get left behind.
• Sustainability – last year, businesses got rid of plastic straws and stopped using plastic bottles for shower gel. Consumers will expect more. Much more. This sustainability is environmental as well as social and economic. From overcrowding in Venice, to a queue of climbers waiting to summit Everest, the challenges are multiple and now.
• Plant based meat – this will be become mainstream.
• TravelTech – this will continue to boom for B2B and SaaS businesses as well as consumer centric offerings. Especially those with a clear and easy to use mobile app, and which bring together fragmented components such as trips and excursions.
• Google Maps – the opportunity to monetise your desire to know where you are in a new city with the ability to alert you to that nearby hipster coffee house, "must see" tourist sight and "local experience" to Instagram your friends will see Google really start to be the go to portal for the hospitality and travel space.
• Netflix Effect – this so-called "paradox of choice" is where consumers have so much choice they scroll through all the options and either give up or watch a film they have seen before. Anyone booking a trip will know that the problem is not getting information, it's sifting through the mountains of data available. Artificial intelligence is seen as the solution to this – but this is still a few years away. In the interim, savvy online businesses will start to filter the information they provide – in part based on consumers sharing more information about themselves at the outset so the search results are relevant. If you are booking a romantic weekend away in Paris, are you really interested in knowing the cheapest hostel to stay in?
• Brexit – this has not gone away. Expect a lot of noise in the late Spring/early Summer when the EU and UK's divergent views on regulatory alignment become very apparent and the cliff-edge of 31 December 2020 looms large. History would tell us that a deal on the future relationship of the EU and UK will be agreed, but only after a lot of brinkmanship.
• Consolidation – the hospitality and travel industry is still very fragmented. We would not be surprised to see a mega merger of a hotel group (product consolidation) and on-line retail/distributors joining forces (retail consolidation). The latter in particular will be driven as a response to WeWork and venture capitalists wanting to mitigate the cash burn of many fast growth businesses in the race for market share as well as lower margins due to the declining commission levels paid to retailers.
• Branded Residences – it's been an anomaly for a while that branded residences, where apartments and villas are sold as part of a branded hotel & resort, have been huge in Asia and the US but had so little traction in Europe. This is changing as the win-win-win opportunity is realised – they are a win for buyers, developers and the brands.
• Human Experience – whilst the word "experience" is completely over-used, everyone wants great memories from their travels and holidays. And whilst technology saves you time (which makes you happy), it's very hard to deliver a memorable "experience" through an app and technology. The importance of people interacting positively with you to deliver hospitality will grow and grow. Robots can't serve with a genuine smile!

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