The peak around New Year’s Eve is a time for libationary holiday parties (albeit downsized this year due to Omicron), resolutions that are rarely kept and listicles that are merely skimmed. Our hope is that the brief words here will nudge you away from that last habit, helping you realize that one of the best goals you can set for 2022 is to devote more attention to fully comprehending each article to derive the grander trends with specific applications.
First, though, let’s look back in time a bit. In case you haven’t read Daniel Kahneman’s groundbreaking 2011 book “Thinking, Fast and Slow,” this was indeed the inspiration for the title of this article because there are many trends currently affecting hospitality that jive with the author’s overall thesis. After the immediate upgrades and changes in methodology were implemented to combat the spread of COVID-19, the prolonged spasticity of this pandemic has since led many hoteliers to ‘go to ground’ by doubling down on ingrained, antecovidian principles about how to run a hotel such as having an ever-scrupulous eye for cost savings and precise yielding to maximize occupancy.
Short-Term Virus, Long-Term Data
As we look ahead to a year that we all hope will see the final cessation of Greek-alphabet-styled variants and a full-fledged return of international travel, the battle is far from over. In fact, it’s only just begun.
The pandemic has accelerated the technological conquest of the world and the natural formation of data-oriented, winner-take-all industries. Things are changing so fast that unless you adapt quickly and instill new habits that allow for rapid adjustments to processes as future events occur – that is, convert conscious experiments and new activities at all levels of operations into updated patterns of automaticity – you, and perhaps entire companies, will be left behind in the ongoing ‘Great Tech Reset’.
Your first thought may be that this is yet another ominous warning against the continued loss of market share to Airbnb and the rest of the home sharing cohort. It is that, yes, but much more. It isn’t just that these Silicon Valley upstarts have converted nearly every millennial and centennial to think ‘Airbnb first, hotel second’, it’s the pace at which they’ve accomplished this change (under a decade, more or less) as well as the way these organizations are structured for exponential growth.
Airbnb has a leaner team than most other hospitality companies, excellent branding, better technology, more granular data on its customers and a larger network effect to scale faster than any traditional hospitality organization. While this company has expanded the total number of worldwide travelers, who’s to say that another voracious entrant doesn’t soon adopt the core practices of Airbnb and blindside our industry?
As boomers die off (sorry for the gloom, but this is an inevitability over the next three decades, longevity clinics notwithstanding), you have to start planting the seeds for the next two generations of travelers who are highly intelligent bargain hunters, exceedingly tech-savvy, obnoxiously impatient as a consequence of being glued to their phones all day and largely apathetic to most non-luxury, non-experiential hotel brands.
What to Do in 2022
This hellfire and brimstone stated, there are still many short-term trends for the year ahead that are relatively painless to incorporate into your operations and can build upon your already well-honed skills (fast thinking).
Let’s list them off with only passing descriptions so as to not interrupt the headline scanners among us:
- Minimize labor costs via automation. Lean teams are the new modus operandi for hotels to maintain some semblance of healthy margins in an erratic travel landscape. Outsource where you can to limit variable labor costs. With fewer managers, supervisors and frontline staff, there’s also a lot of repetitive work that is ripe for bots to commandeer. Management platforms must be integrated with each other or mapped to external channels so that manual data transfer is no longer needed, while setting up AI-based tools like smart voice technologies, chatbots or intelligent yielding programs are set to greatly enhance team responsiveness and occupancy respectively.
- Stayover cleaning opt-in as the new normal. Again, housekeeping costs must be kept low, not only to drive NOI but also because we’re still in a very tight labor market. To our advantage, though, a guest expectation that’s here to stay from the pandemic is that mid-stay cleans are no longer necessarily wanted (except perhaps for the luxury segment). Housekeeping opt-out was in vogue before COVID-19, yet now opt-in is fashionable, and you can deploy technology to render this a possibility while also saving on labor costs or perhaps making this an upsell.
- Continuing professional development. Employee churn or turnover is a death knell to progress because it costs too much to recruit and onboard new hires to the point where they are able to take on the complex work that will actually advance the organization’s strategic goals. Moreover, you can’t just keep offering higher salaries as that’s a surefire way to land in the red on any income statement. Rather, the solution is CPD; design programs that motivate your teams through the prospects of higher education, personal development and self-actualization.
- Garnering great reviews. We list this as a ‘low hanging fruit’ because often the difference between a two-star and a five-star review is a combination of fixing that maintenance issue in Room 237 and having an exceptionally attentive team to compensate for any shortcomings with genuine compassion. As many great hoteliers have said at various points in their careers, something as simple as greeting a guest by name goes a long way. Just as the pandemic has reset our behaviors in numerous other ways, as guests start to rediscover their travel options, they are also more intensely scrutinizing recent hotel reviews to see that properties’ service levels have likewise reset or even improved since 2019.
Thinking Beyond Next Year
Now for the long-term trends that hoteliers must be cognizant of, for which all will require deep ruminations (slow thinking), numerous discussions and, ultimately, actions. What we advise here is to pay attention to the overarching cultural narratives – the zeitgeist if you will – and not fight each as they take hold of the terrain. Of course, like a rower moving against the flow of a river, you can buck these trends, but you’ll be sweating buckets by the end of it and likely incur a lower back injury. The path of least resistance is to find ways to embrace these changes with bonus points for early adoption.
Given this, here’s what’s ahead over the next decade and what you will inevitably have to address:
- Technological and data consolidation. Hotel tech stacks are complex, with many prominent vendors now overlapping in features and capabilities. This will only progress even further until the point where all a hotel will need is a PMS with a holistic operations management system that sits on top of it as well as a customer data platform (CDP) to amalgamate everything CRM-related and all other disparate touchpoints in the value chain. Now is the time to start mapping out how to get to as simple a tech stack as possible so as to make these systems easier to use for managers, have better data on your guests and to reduce SaaS expenses.
- Experiential hotels. Heads in beds is a recipe for commoditization which unavoidably leads to more price elasticity and reduced rates all round as guests have fewer emotional reasons to select your brand over the nearest low-balling competitor. A prominent solution is to give guests an immutable justification for choosing your property over any other. What elevates your branding and property theme? What makes your hotel’s onsite experience irreplaceable? The tactics toward this are manifold such as having fantastic facilities, unique guestroom amenities or creating the best social atmosphere around.
- Climate change and sustainability. As weird weather and natural disasters increase around the world at a regular chip, companies in every industry will be called upon to do their part. While this may be easy to dismiss right now – unless you’re operating a hotel in, say, New Orleans where you’re living on borrowed time before the levees break again – there will come a time when your tax bill goes up precipitously due to new ‘carbon offset’ inclusions. Moreover, guests (particularly the more socially conscious ones in younger generations) are becoming increasingly sensitive to this issue and are voting with their wallets for businesses that show that they care.
- Blockchains and cryptocurrencies. There’s a lot of hype here and perhaps a huge economic bubble waiting to burst, but that doesn’t mean this technology won’t have enduring utilities over the long run. Will guests expect to be able to pay for their stays in bitcoin or ether within the next few years? Probably not, but maybe by 2030. Either way, this space is snowballing, so at the very least you must learn about how blockchains work as well as some of their most common applications such as smart contracts, nonfungible tokens or for the buzzy metaverse.
All the long-term trends for your organization can’t be solved in a day and thus require discipline and due process. To close, our advice is to, in a word, ‘leapfrog’ the competition. Right now, there are those trends that are hot for 2022 but – besides those that are compulsory such as those related to COVID-19 safety measures – you should already be looking ahead to 2023 or 2024.
If you have a visionary outlook (slow, deliberate thinking) that isn’t merely a weathervane to the trends of the week and a reversion to your preformed habits (fast, ingrained thinking), then you are going to get ahead of the next big thing rather than continually chase and play catchup. The next few years will see ongoing, rapid changes and we hope that you are able to take advantage of them and usher in a new era of success for your company. All the best for 2022!
Hotel Mogel Consulting Limited