Key Take-Outs From The Annual Hotel Conference 2017
Having both attended and participated in panel discussions at the AHC over the past five years, it’s great to be able to draw conclusions from not only this year’s speakers & debates, but also from the difference in sentiment over the years.
The overall consensus is that it’s been a good year for the sector within the UK. Staycations have been fuelled by the uncertainty of world events and Brexit whilst disposable income has remained favourable. Revenue per available room (an industry used performance indicator known as Revpar) is up 3%.
Whilst there was caution that the honeymoon period following Brexit may not last, there seemed to be a consensus that the sun will shine for the next 12 months as the weak pound continues to make it expensive to travel abroad.
Cheap debt and equity coupled with investment from across Asia means that the growth in rooms shows no sign of slowing. This is across the provinces as well as London, something that hasn’t been the case in years gone by.
I didn’t get to attend every panel and see every speaker, so below are some of the key take-outs from those that I did get the chance to attend;
To Brand Or Not To Brand
There were interesting insights, from an acknowledgement that a brand adds value to a room rate, to examples where the brand doesn’t fit, either because the optimal room rate in the area is already being hit, or because the physical environment doesn’t allow for it.
Meetings & Events
This area is still recognised as a core opportunity for hoteliers, but one that is being eaten away by newcomers offering flexible meeting and innovative event solutions. Ziferblat would be a good example of this - simply turn up and pay by the minute.
Online Travel Agencies (OTA’s)
Attending the earlier AHC conferences, it was clear that these were the noisy neighbours - the organisations that only existed to ruin the hotel sector. An evil that hotels were putting up. Not only was there a representative from an OTA, Trivago, on a panel this year, there was also a quiet acceptance that the OTA’s are brands within their own right and do serve a purpose.
Trivago talked about supporting independent hotels to deliver online experiences that can only be provided by the big brands, whilst brands talked about partnering with OTA’s to drive revenue in different countries - or to package trips including travel and excursions in a way that the hotel brand alone simply can’t. For the big brands wanting direct bookings, the opportunity is to offer a level of content that encourages visitors to turn to the brands website, rather than using the more aggregated view of the OTA.
The Sharing Economy
It felt like Airbnb is in the same position as the OTA’s a few years ago - here to stay but no one really know’s what their true effect is likely to be. Are they building a market or eating into an existing one? Airbnb have recently launched a service targeted at business travellers and groups that is tailored to the well-known needs of the business traveller - 24/7 access etc.
Food & Beverage
The food and drink offering in a hotel is affectionately known as food & beverage (F&B), and even the description serves as an example of how far behind hotels have got versus the diverse offerings available around any hotel. Moreover, in-room catering now competes with the likes of Deliveroo and Just Eat, and no hotelier wants to see one of these in reception. Claridges have in fact just announced the appointment of a second chef to meet the round the clock requirements of guests;
There are a number of trends, aside from the above, that have driven a very different landscape;
Proliferation of casual dining experiences and options
Massively improved service from restaurants offering different experiences
Mealtimes merging - we want to eat on our terms, not at the set times often dictated by the hotel
The hotel was once the centre of the community, the place to go for special occasions, for example, The Ritz, London, but consumers are now faced with much more choice.
Robbie Bargh of Gorgeous Group believes that it’s about a little bit of soul - not just a space but an experience. Northcote, essentially a restaurant with rooms, has successfully cracked the lunchtime market and created a cocktail bar concept - something that Craig Bancroft believes is fundamental to Northcote’s on-going success.
There was also consensus that getting a few things right is so much better than offering a full service and doing it wrong.
No conference would be complete without a futurologist, and this year’s didn’t disappoint. Tracey Fellows of Futuremade began with insight into the proliferation of Wellness, a market that will grow by 17% over the next five years. This emergence arrived with Millennials, but will be driven forward by Generation Z who’ll seek unique wellness environments that feel ‘boutique and unique’ - think yoga meets creamfields. Unsurprisingly, digital will revolutionise the way hotels operate from what we know about the consumer (AI is already informing this), to the way they are treated. From keyless to concierge, it’s obvious that the mainstream in ten years will be very different to what we know today.
The Annual Hotel Conference 2017
So in summary, the hotel sector remains buoyant but is also buoyed by a number of factors that it’s not sure how to deal with;
It’s easier to order from Deliveroo from my room than it is to order room service and it’s likely to be better quality, what’s the alternative?
I want soleful experience, not beige box restaurant, how to hotels tackle this head on?
“Have you visited the hotel before?” says reception. But I expect you to know that already and moreover, do I really need a reception?
How do hotels deal with the threat of Airbnb and use OTA’s to their advantage?