How can Hotels differentiate from the Competition in 2023?
Much has changed for hotels over the past few years, with some trends that were introduced during the pandemic seemingly here to stay. In this article, we take a look at the challenges hotels are facing today, and outline what hotels can do to differentiate themselves from the competition in 2023.
What are some of the Challenges and Concerns facing Hotels in the run up to 2023?
While 2022 has certainly been a record-breaking year for travel, there are a number of industry concerns arising for 2023, which are as follows:
The Price of Air Travel
In summer 2022, we saw record-breaking prices for air travel, and due to pent-up demand, guests had little to no issues paying more to get away.
Despite looming inflation and lower levels of travel during the autumn and winter months,
flight prices are predicted to hold or increase. According to a recent article published in the Netherland Times, ticket prices to fly within Europe will likely increase this winter by as much as 10% to 20% due to rising fuel costs, as well as fees and tax hikes.
Hotel ADR over the Winter
Demand remains high for the foreseeable future - some 25% above 2019 levels. However, as is the nature of the season, we expect demand to taper off somewhat. The burning question is whether hoteliers will maintain their hold on ADR, as they fight for smaller shares of business which are available to them.
At this stage however, pricing appears to be holding up and even increase over the next 12 months, according to our Hotel Business Barometer results published in the October 2022 edition of The Hotelier PULSE Report.
Guest Appetite for Sustainable Travel
Research by Skift shows that 83% of global travelers consider sustainable travel to be vital. In addition, according to Booking’s Sustainability Report 2021, 73% of travelers would be more likely to choose an accommodation if it has implemented sustainability practices.
We’re also seeing a lot in the RFPs for corporate rates and groups, where guests want to know what sustainable practices (either local or environmental) that hotels have in place. That may be a significant challenge moving forward, in terms of how hotels can and should be more connected to the local business environment.
The Level of Asian Travel into Europe
Another big question is what will happen in terms of Asian travel. At Guestcentric, we are currently seeing some groups traveling from India into Europe for really long stays (between 30 to 60 days). Does this indicate a resumption of travel on a wider scale will that resume on a larger scale during the autumn and winter of 2022 to 2023?
If this does resume during the winter, then both demand and ADR will remain high. Although we know that China is not resuming outbound travel in the foreseeable future, we must still consider other markets across Asia and whether we’ll see an influx of travel into Europe and the US.
How can Hotels differentiate themselves from the Competition in 2023?
While current market signals indicate positive things to come for hotels, it’s important to continue taking steps to differentiate your hotel from the competition. Below are some of our recommendations:
Maintain the Direct Connection with Guests
Informing your guests to what they can expect is critical. For example, if you are running a limited service, let guests know so that you do not receive bad reviews later on. In the same token, if you have full service, inform guests and highlight this information across your direct channels, such as your website or social media. Don’t rely on third-parties to interact with guests on your behalf, but instead continuously communicate with your guests at all stages of their journey from online search to check-out.
Incentivize Direct Bookings
Most importantly, hotels should also ensure they incentivise guests to book directly on their websites. In addition to special offers exclusive for direct bookers, some hotels are also strategizing Best Price Guarantee offers, declaring war on OTAs. These hotels challenge the consumers to find a cheaper rate on other websites and pledge to match the cheapest price.
This is a great way to increase hotel revenue. It also relays a message to consumers that booking directly with the hotel will be the most beneficial, because the hotel is willing to do what it takes to give the guests the best deal and experience.
Invest in Automation and Technology
Given current staff constraints, hotels should consider investing in automation to lighten the workload and respond to overwhelming consumer demand. While it’s impossible to know upfront everything there is to know about a prospective technology supplier or distribution partner, below are some core questions you should ask a prospective partner before investing:
- How will the new solution make hotel operations and commercial activities more efficient?
- How will the new solution save your hotel time and money going forward?
- How will the new solution help your business respond to overwhelming consumer demand and improve online business performance?
Of course, it goes without saying that you should only consider vendors who respond with a proven track record of how they can help your business in the long run.
Consider joining a Soft Brand
The last two years have seen a strong shift towards hotels joining soft brands, such as our own Great Hotels of the World (GHOTW) with its collection of some 60 characterful larger upscale and luxury Bleisure hotels worldwide. Membership of Great Hotels of the World provides them with access to our international sales offices; group sales and additional revenue generation; our signature GHOTW sales events; preferred partnerships such as American Express Meetings & Events; GDS connectivity under the GW label; as well as social media and communication to amplify their hotel’s presence.
We also tapped into a niche market looking for authentic and country-specific options with the launch of Small Portuguese Hotels, which now numbers some 140 properties nationwide. Member hotels benefit from an umbrella brand with professional digital marketing and sales support; PR and media relations; and economies of scale in preferred partnerships and suppliers.
Make sure your Hotel is optimized on Google
According to a recent consumer survey published by Hospitality Technology, nearly 40% of travelers research on Google prior to booking. Therefore, it is not only nice to have your hotel visible on the world’s leading search engine, but absolutely essential!
Hotels should first focus on their organic Google presence by continuously updating and engaging with Google Business Profile (formerly Google My Business). Make sure your Google Business Profile listing contains up-to-date information about your hotel and a direct link to your hotel website and booking engine, as this is the primary entry point for most Google users. You should also answer all questions on Google Business Profile and reply to the guest reviews.
Hotels may also want to consider competing on Google Hotel Ads or listing their property on Google Hotel Free Booking Links, both of which have a much lower cost structure in comparison to the OTAs.
Increase your Hotel’s Visibility on the GDS
In 2022, GDS (Global Distribution Systems, which connect over 40,000 agencies worldwide) bookings are making a comeback, even in resorts and other leisure-centric hotels. We also anticipate a significant level of travel from the US market into Europe via the GDS. Thus, we recommend that hotels be visible on the GDS, not only for corporate travel but also leisure travel.
The more agile and far-seeing travel agencies are developing strategic partnerships with corporations, even if not necessarily for corporate travel. These partnerships are proving to be an effective strategy in 2022 and beyond.
Highlight Sustainable Practices
Guests’ awareness of the environmental impact of their trips is at an all-time high, and your hotel should address these concerns by implementing and communicating sustainable practices and initiatives. Many hotels worldwide are actively communicating their sustainable practices to prospective guests. Below are just a few examples:
- Hotel Okura Amsterdam, Netherlands: Offers Green Globe certified facilities, saving energy and water resources, reducing operational costs, and positively contributing to local communities and their environment.
- Memmo Hotel Baleeira, Portugal: Achieved EarthCheck Benchmarking Certification, used to measure key environmental indicators including energy and water consumption; total waste production, and community commitment.
- Hotel Punta Islita, Costa Rica: Already won several sustainability awards due to their focus on wildlife conservation, reforestation, and local employment.
Be sure to actively highlight your hotel’s sustainable certifications and practices via all your direct channels.
Use Social Media as an additional Direct Traffic Source
Social media has significantly changed how travelers research before going on a trip. We are now encouraged to share our travel experiences, and this has transformed the way we make decisions as consumers. People build their trust in a hotel, airline, or travel agency based on the reviews of others.
Below are the big three in terms of social media platforms hotels should be visible on:
- Instagram: Thanks to its emphasis on dream-inducing imagery, Instagram is one of the most effective social media channels for hotels to engage with guests. Using Instagram helps Hoteliers attract travelers, especially the millennials who form a substantial and highly active group on Instagram. Be sure to both follow and use travel hashtags related to your destination and hotel. You can also create your own to maximize the popularity of your posts.
- Facebook: As one of the most prominent social media platforms, Facebook gives Hotels access to a wide variety of social groups. In addition, its recommendations feature enables travelers to share their experiences. Facebook is also an excellent source of information about what guests are saying about your hotel and destination.
- Twitter: This platform is essentially your voice, allowing you to talk about short travel tips and promos. Even though Twitter can be used for photos and videos of your brand, its actual strength is being especially useful for providing customer service.
Conclusion
The world of travel is never stagnant, and hotels that wish to differentiate themselves from the competition must be prepared and agile to adapt to the rapid pace of change.
A major trend to have emerged from the pandemic is the rise of hotel direct bookings. And although OTAs have reverted to more aggressive marketing tactics, hotels should continue to first and foremost prioritize the direct connection with guests who are now more than ever engaging with hotels directly prior to booking. In addition, hotels should invest in tools and solutions to make engaging with guests easier and less strenuous on human resources.
What is your hotel prioritizing to differentiate from the competition? Let us know in the comments thread below.
About GuestCentric
GuestCentric is a leading provider of cloud-based digital marketing software and services that help extraordinary hoteliers promote their brand, drive direct bookings and connect with customers on all digital platforms. GuestCentric's all-in-one platform provides hotels with the only unified solution for managing their guests' online journey: award-winning, high impact websites; an integrated, easy-to-use booking engine; social media marketing and publishing tools; a GDS chain code and a channel manager to offer rooms on Amadeus, Booking.com, Expedia, Galileo, Google, Sabre, TripAdvisor and hundreds of other channels. GuestCentric is a proud provider of solutions that maximize direct bookings to hotel groups and independent hotels from collections such as Design Hotels, Great Hotels of the World, Leading Hotels of the World, Relais & Chateaux, Small Luxury Hotels and Small Danish Hotels. GuestCentric is featured on Skift Travel Tech 250, a list of the top 250 travel tech companies shaping the modern-day travel experience.
Melissa Rodrigues
Content Manager
+35 196 157 3854
GuestCentric Systems
