By Giovanni Angelini
RESPONDING TO CHANGING CONSUMER BEHAVIOURS
How to overcome challenges and capitalise on new opportunities
Times of great turmoil always bring with them deep and lasting change, and the global pandemic is no different. Impacting almost every aspect of our lives, COVID-19 has turned the travelling world upside down and brought with it an accelerated shift in consumer preferences, behaviours, and needs. Just some of the areas impacted include:
- Hygiene – safety – security – indoor air quality (essential)
- Trust and confidence (more important than ever)
- Value for money (guests expect nothing less)
- Digital – Data – Automation – Virtual IT services (more required)
- Wellness and mental health (becoming a core expectation)
- New experiences (guests want more memorable moments during their stays)
- Leisure spending (vastly reduced)
- Brands and loyalty programmes (consumers now have higher expectations of them)
Understanding how consumer behaviour has changed, and responding to these changes effectively, will be crucial to recovering business in the post-pandemic economy.
Hospitality leaders have found themselves under immense pressure trying to navigate the challenges of a zero cash flow environment that has lasted longer than anticipated. Among the most pressing concerns is the ongoing need to conserve capital, cut costs, upgrade products and technology, and, of course, respond to changing consumer behaviours.
'Difficult times call for difficult actions,' and, in this period of extreme pressure and uncertainty, there is no time to lose.
Hospitality organisations seeking to survive, thrive and grow in the new normal must understand how our industry has changed, how it will continue to change, and position themselves accordingly. Reacting to the situation is not enough; leaders must anticipate industry trends and set clear priorities to give their organisations a strong post-pandemic competitive advantage.
Now, more than ever, consumers and the market want to know what distinct benefits each service provider/hotel can provide – i.e. what is their unique competitive advantage – and the answers they find will shape their booking decisions.
In times of social or economic uncertainty, businesses typically reduce their spending. However, the smartest will also take the time to reevaluate their products, offerings, values, and priorities, and see what they can improve to enhance their capacity for value generation. This includes reimagining strategies with the aim to target new segments, new sources of business, and implement new services.
Travel organisations that pay attention and adapt to shifting customer expectations will be the ones that go the distance in the new normal. Customers will gradually return, but hoteliers have to accept that they will have much higher expectations – especially when it comes to loyalty programmes – and their needs must be met.
In doing so, hoteliers should aim to shift away from traditional business and operating models and instead embrace the radical. The goal is to find new ways to deliver unique experiences that will differentiate products, strengthen customer relationships, and build loyalty.
Clear business values, passion, agility, organisational efficiency, accountability, creation of niche markets, and resilient business models must all come into play. Generic or impersonal organisations may struggle to survive in the future, as may those which fail to maintain or improve their facilities.
In addition to offering memorable new experiences, hotels will need to focus on safety/security, value, comfort, inventive design, sustainability, advanced technology, and, of course, clean indoor air. A highly-trained and motivated workforce will be essential to making all of this happen.
Steps towards effective recovery
First and foremost, the industry must adapt and reinvent itself to align with shifting consumer behaviours, expectations, and trends. The majority of customers will still be looking to experience new things, and hospitality organisations must 'go above and beyond' to delight them.
By developing and implementing the right strategies and taking things up one-or-two notches, hotels can stay ahead of the game. Innovation, flexibility, speed, and clarity in leadership are necessary to navigate these difficult times effectively. Time is precious, and sometimes it is better to replace than to modify.
Talent: In some cases, qualified talent is as scarce as financing. Attracting, training/developing, motivating, and keeping the right talent with the right attitude remains a challenge in the hospitality industry. In fact, managing talent is probably one of the most difficult tasks facing any hospitality leader.
The days of hierarchical management styles and long-serving-yet-unproductive employees are long gone. The structure of the future is fitter-flatter-faster. People who cannot shift gears and adapt to the needs of the company simply don't belong.
Brands: Some smaller and independent brands may struggle in the face of fierce competition and increased risk of acquisition/consolidation. As brands look beyond the pandemic, they will have to evolve their approach, understand their customers and changing demographics/markets, and position themselves away from the masses. The offer of personalised services will be key.
Most importantly, brands must create value. In a saturated market, any offering that elevates one brand above another is a major win. (An interesting question to ask: "What do small/individual brands have to do to challenge the dominance of global brands?" Could this be the other way around?)
Brand Standards: Standardisation can no longer be the norm. Brand standards, supported by controls and policies, must always be present in some form, but operators must constantly look to improve beyond brand standards when responding to the needs of paying customers. Innovation, personalisation, empathy, and adaptability all come into play when striving for customer satisfaction.
Trust: Building and maintaining trust is essential for any organisation, no matter the size. The hospitality economy is built on trust and confidence, and organisations will need to reimagine their respective customer experiences to maintain and enhance trust amongst consumers and employees.
Communication: Remember that an extra level of assurance beyond a simple marketing message is what today's customers need and expect. Health-hygiene-cleanliness and safety must be front and centre. Clear communication of the steps your brand is taking is essential; so is consistency and execution. Stay away from confusing and standard messages, and always aim to build high confidence.
Database: One of the most valuable assets of any hospitality organisation is a complete and updated customer database (loyalty). Customers have grown to expect to be recognised and treated as individuals. Fail to meet their needs in the post-pandemic world, and they will simply move elsewhere. Hotels must learn how to use and leverage data to its fullest potential. Many improvements can be made in this area.
Technology: There has and continues to be a major shift towards digital transformation in our industry. The use of technology to optimise revenue, accelerate personalisation, enhance customer satisfaction, alleviate expenses, improve operational efficiency, promote safety, and others, is now the norm.
Cloud-based technology, 5G, virtual and augmented reality, seamless guest experiences (touchless/contactless services), robots, chatbots, video/hybrid conferencing, streaming services, machine learning, and others will all have to be considered by owners and operators seeking to remain competitive in the future.
Wellness: One of the biggest trends in recent times is wellness travel. Consumers are looking beyond traditional spa/gym facilities for unique ways to stay active and healthy during their stays. Nutrition plans, yoga, tai chi, meditation, breathing exercises, sleeping programmes, and many other wellness-focused programmes can help a hotel to stand out from the crowd. Travellers are certainly becoming more health-conscious, and this is a clear opportunity for hotels to respond.
Online Travel Agents (OTAs): These are here to stay. With large cash flows and better use of technology, OTAs are more efficient than hotels at customer acquisition, targeted marketing, and personalised offers. Perhaps the time has come for hotels to reevaluate their relationships with OTAs and develop win-win scenarios.
Empowerment: Putting customers first and fully empowering employees to take care of them is essential in our business. But there is much work to be done in this vital area.
Food, glorious food
The frills of fine dining with diverse cuisines and curated wine lists will always be a feature of the best hotels. Dining out is a vital part of the travel experience, and hotels must pay more attention to this area and invest in facilities and – most importantly – skilled staff who can elevate the experience (and do what autonomous functions can't).
Dining experiences are becoming a key factor in booking/travel decisions, and, as one recent industry-related survey stated: "Hotels with great restaurants are more memorable than those without."
This is another clear opportunity for hotels to enhance their competitive advantage and drive revenue. Hoteliers must view food and beverage as a differentiator, not as a necessity, and ensure uninspiring and overpriced food becomes a relic of the past.
Rising demand for healthier-fresher foods during a pandemic is hardly surprising, but don't dismiss this as a fad. Before COVID-19, diners were already moving in this direction, craving plant-based food items, vegetarian and vegan options, gluten-free bites, and similar healthy options. Expect this to continue for the long-term, with Grab-And-Go self-service offering fresh/seasonal products becoming an expected hotel feature.
Requests for buffets are declining, and this concept is likely to be replaced by staffed stations. Alfresco dining with plenty of space will continue to be prefered, while take-out/delivery will become a standard service for hotel restaurants seeking to maximise their reach and revenue.
Hotels restaurants are profit centres occupying prime locations within the property, and management must ensure they are profitable. From design and USPs to food selection/quality and style of service, everything has to be considered to maximise value creation.
There is no need for hotel restaurants to be more expensive than standalone competitors; customers expect value for money and memorable experiences. Away from the bureaucracy of traditional hotel structures, restaurant chefs could be incentivised and encouraged to procure fresh/quality products directly from the market.
With today's diners more conscious about what they are consuming, they are shunning processed and long-lasting foods in favour of fresher, healthier produce. The so-called 'farm-to-table' concept is very much in demand, and hotels will do well to cater for this.
In addition to in-house guests, hotels must also promote their offerings to the local community. Exciting, health-focused offerings and an attractive loyalty programme can help drive regular patronage from local diners.
The pandemic will eventually fade, the economy will recover, and gradually, travellers will return – but not automatically, and not so soon.
To stay relevant, brands need to find ways to stand out and identify clearly who their guests are and what trends and strategies apply to them.
Now is the time to strategise, organise, recalibrate and put in place an effective masterplan to respond to changing consumer behaviours and preferences. Creativity, speed, and accountability will be essential to remaining relevant.
Keep in mind that travellers need a clear reason to select a specific destination or hotel. What are you offering? And what must you do to stand out?