4 Predictions for the Hotel Industry in 2019

 

1. Things continue to get nasty between hotels and Airbnb

AirBnB is in a unique spot heading into 2019, but may be poised to take a beating. As hotel brands and other startups continue to grey the area between residential and hotel accommodations, and local governments continue to crack down on short term rentals, it seems as though things are turning against Airbnb as we head into the new year.
Expect AirBnB to be the first scapegoat if hotel demand begins to decline at any point in the near future. The real issues of hotel over-supply and over-saturation in some markets will likely be blamed on Airbnb instead of the underlying issues within the industry.
AirBnB has critics on all ends of the political spectrum for myriad reasons, with some arguments including Nathan Robinson of Current Affair’s well-written take on why Airbnb erodes a city’s sense of community, or this article on the gig-economy which highlights the fact that Airbnb’s are frequently used by people with multiple properties to skirt existing rules and regulations of the traditional landlord-tenant relationship.
In fact, in our office’s very own home-city of Grapevine, TX, AirBnB is soon to be banned with the city council explaining that the ordinance is “…to protect the integrity of residential neighborhoods, and to preserve important public safety resources”. While banning is obviously the nuclear option, cities have a number of levers they can pull to control short term rentals, including limiting the number of nights a homeowner can rent their property (Paris), forcing hosts to register their homes as rentals (New York City), and making listings abide by the same safety rules as hotels (Japan).
Whether you support Airbnb (I personally use the service and haven’t had a bad experience yet) or despise the platform as a hotel owner or investor, it’s obvious that there is a giant target on Airbnb’s back heading into 2019.

2. Big Brands continue to chase after the unicorn “Millennial Consumer”

Big brands keep falling for the snake-oil approach of scarfing down consulting-agency-peddled-generational analysis to build brands which chase a target consumer that never really existed in the first place. With millennials being defined as the cohort being born at any time between 1980-1994 (although I’ve heard ranges from 1977 to 1996), it becomes increasingly entertaining to watch big brands try to build catch-all lifestyle brands that appeal to a massively broad group of people that on the oldest end are turning 40, and on the youngest end are currently dabbing while playing Fortnite.
Expect these brands to work only based on the strength of the brand, meaning Hilton and Marriott iterations will survive, while weaker brands will copy and fail.

3. The Subscription model may rear its head again in hospitality

As more businesses continue to push the hydra-inspired subscription model, expect for brands to attempt new spins on this approach either on a small scale (small monthly subscription for loyalty benefits) or on a large scale (perhaps like a movie pass but for hotels where, for a monthly fee you can book a certain amount of room nights a year at the brand, but you can only make the reservation same day or with some other fence). It appears that the model has been tried in the past and failed, but may be back in another form in the near future.

4. Heyyy… r u up rn? lol

Expect increased guest profiling and personalized communication between hotel and guest.
For example, upon booking a hotel room, anticipate that you may be prompted to opt in or out of many different offerings and expected to offer lots of different additional information about your stay. For example, you may find yourself pre-selecting an actual room number (like you can currently select your seat on an airplane – I think you can already do this at Hilton using digital key), opting in or out of text alerts, option to download that brand’s app, selecting check-in and check-out times. Basically, whatever can be done to streamline the check-in and check-out process will be paramount for hotel brands in the near-to-medium term.
Also expect hotel brands to begin asking other seemingly unrelated information upon booking. For example, are you traveling for business? What kind of car do you drive? How far is your primary destination from the hotel? Just to name a few. This kind of data is invaluable to hotel companies and can be used to build guest profiles and demographic information that major companies love to harvest.
Regarding the actual in-house experience expect a level of digital interactivity never before seen: Need a fresh towel? Request it through the app. Air conditioner too high? Turn it down with a smart-phone controlled digital remote.

But enough about what we think – What do you think will happen in 2019?

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