By Robert Rauch
The hospitality industry transformed in 2023, driven by technological advancements and evolving guest demands. We’ll explore the ten emerging trends for 2024 in the hospitality industry.
Artificial Intelligence
AI in the hospitality industry will enhance revenue management, menu development, employee and guest education, marketing, sales, and more. We are at the very beginning of this exciting technology that comes with some cautions ahead–cybercrime and terrorism for starters. This technology is growing 10 times faster than the iPhone, Android, and others when they launched circa 2007.
Wellness, Fitness, and Diet
Hotel properties that expand fitness centers, personalize spa treatments and craft healthy food and beverage menus will rule. While luxury travelers have already been seeking wellness, a basic hotel gym with simple exercise equipment is not going to be acceptable to the masses either. Consider wellness offerings like aromatherapy, mindfulness classes, daily yoga, and Pickleball – the fastest-growing sport in America.
Personalized Service
Hotels have an opportunity to offer personalized interactions beginning with the day a potential guest visits our websites, and extending long after a guest leaves our properties. When it comes to in-person experiences, guests want to be treated as special when they pay top-dollar. Consider leaving a chilled bottle of bubbly in their room on their anniversary or help them discover experiences that align with their interests.
Training
Hoteliers, it’s time to focus on talent. Generation Z will require competitive pay, extensive training, and flexibility. The metaverse is reshaping the employee and guest experience. Airlines, hotels, restaurants, and more travel providers are leveraging this platform for employee onboarding and training. Hilton Worldwide was among the first hospitality brands to embrace the metaverse to develop a virtual training program, which is particularly effective when it comes to younger employees, who tend to prefer digital learning and gamification.
Robotics
Embrace robots in hotels to help with customized service, staff support, and continued guest loyalty. They can vacuum, quickly deliver room service directly to the guest room, and provide concierge services. The global market for hotel robots is expected to grow from $79 million in 2020 to $338 million by 2025, at a compound annual growth rate of 32.8 percent, according to a report by MarketsandMarkets.
Chinese Travelers
Chinese travel to the US will increase dramatically as China was the last of our strong markets to return to outbound travel due to COVID-19. Research by MMGY shows a strong intent to travel and the Chinese government is relaxing rules around visa renewals (shortening the wait times for new visas). Expect strong growth in this sector, perhaps close to 20%.
Diversity, Equity, and Inclusion (DEI)
DEI is now mandatory training for most companies. More women will be presenters and panelists at conferences and will have more responsibility in their positions. Women in Tourism and Hospitality are making a big hit and diversity is the driving force. People of color are being hired more frequently and are rising in the ranks more quickly. Take a look around you—it is already happening!
Sustainability
Environmentally conscious travel is a key concern of 76% of global travelers, according to the American Hotel & Lodging Association (AH&LA). Hoteliers are trying to reduce their properties’ carbon footprints and AH&LA just launched the Green Key Global certification program. There are expectations that hotels have programs that reduce waste and energy consumption, use eco-friendly materials, follow environmentally sensitive practices, and support local communities. Showcasing this on your website is critical today.
Debt
Debt is expensive for new construction or acquisitions which makes the math difficult for developers and buyers. Most debt is priced in the 8% range with 60%-70% loan-to-value. The Commercial Mortgage-Backed Securities market appears to be picking up momentum for five-year fixed-rate debt, slightly lower than the 8% range. Hotel construction will likely include a mixed-use component to integrate spaces that cater to the multiple needs of an urban mixed-use development. These may include residences, wellness hubs, serviced offices, and private member clubs.
Remote Workers
Remote-work flexibility is also an overall benefit to the travel and hospitality industry, according to Tourism Economics. The number of days worked from home grew from 5% before the lockdowns to 28%, more than 1 in 4 days. Thirty-four percent of leisure travelers said they plan to travel while they work remotely. Airbnb has said its guests are extending typical weekend stays a night or two over the shoulder days.
In addition to the 10 Trends, The Federal Government plans to improve the overall air travel experience through the Federal Aviation Administration reauthorization bill, lower U.S. visitor visa interview wait times, and reduce Customs wait times at U.S. airports and ports of entry. This is being done by other countries already. These trends are either on the horizon for 2024 or are already underway. Wishing you a fantastic 2024 with no recession in sight!
