By Charles de Gaspé Beaubien
CEO of Groupize Solutions
Accor CEO Sébastien Bazin, who is leading Accor’s massive digital transformation strategy, has identified three revolutions in the hotel industry, all within the last 15 years. The first revolution happened when the OTAs came on the scene, marginalizing traditional travel agents, followed seven years ago by the second revolution when aggregators came online, followed two to three years ago by the third revolution, the customer-to-customer model of Airbnb and Uber. The trajectory here, he notes, is increasingly customer-centric.
The digital transformation in the travel industry has happened at breakneck speed. It is a pace at which most hotels haven’t been able to keep up with the new technology demands – from an administrative standpoint (distribution, yield management, content, and so forth) and the new experiential desires of a tech-savvy guest.
Hotels must acknowledge the full spectrum of ways the C2C economy is disrupting the hospitality industry. The quakes go much further than the stiffening competition for leisure travelers. Last summer, Airbnb launched a business travel portal for companies looking to cut traditional hotel costs while still offering their staff comfortable, even luxurious, accommodations. Just last month, in his article “The Sharing Economy is on the Brink of Disrupting Business Travel,” RocketTrip CEO Dan Ruch argues, “Traditional travel vendors – hotel chains, in particular – will challenge the sharing economy’s rise,” but this will require that they “compete more aggressively on prices and extend their lead in services.” At the end of the day, he says, “travel managers and business travelers will ultimately win.”
If it seems like group business will be unaffected by these developments, look at Inspirato. The company, which initially specialized in luxury rental villas for upscale family vacations, launched Inspirato for Business in 2013 as a way to reach the Executive Corporate Retreat market.
Fundamental to the success of the collaborative consumption model is the two-way dialogue between host and guest, as well as the instantaneous service provided by mobile devices. The assumption is that the supplier has the same or better technology than the traveler in order to do business. Travelers desire this same thing of hotels-the dialogue, the instantaneous service, the real-time everything-and right now they are mostly disappointed.
The desire for experiential travel that Airbnb has tapped into will continue to increase as Millennials travel in greater numbers and spend more (they are expected to outpace Generation X in travel spend in 2015). An upward trend in group travel will continue, as well. Millennials are marrying and having children. They have friends around the world that they connect with regularly via social media, and nearly 60% of them like to travel together in groups.
The key for hotels to unlock their full group potential in this new economy is in technological savvy. This means providing sales teams with the tools they need to quickly and easily field inquiries via social media, online, email, and mobile – while giving group travelers the same level of real-time access that they are getting from the C2C travel suppliers. The effort to do so is the single most important way for hotels to stay competitive as the sharing economy transforms the hospitality market.
