‘YOLO’ Spending and the Travel Surge: How Brands Can Tap Into the Hospitality Goldmine
Key Takeaways:
- The hospitality sector is expected to outperform the broader U.S. economy in 2024, driven by a significant rise in consumer spending on international travel and live entertainment.
- Brands should seize the growing demand for unique experiences by entering the hospitality market, leveraging partnerships, and creating compelling value propositions.
- Successful examples include illy Caffè’s partnership with United Airlines for premium in-flight coffee and The Standard Hotel’s collaboration with Onia Swimwear for exclusive fashion collections.
- Practical steps for brands to establish a strong presence in hospitality include conducting thorough market research, identifying potential partnerships, building a believable story, and combining customer experience with brand education.
The hospitality sector is on the brink of a remarkable boom, poised to outperform the broader U.S. economy in 2024. With consumer spending on international travel and live entertainment rising by nearly 30% in 2023, this surge in “YOLO” (you only live once) spending represents a golden opportunity for emerging and legacy brands to carve out their niche in the thriving hospitality market.
As the world rebounds from the pandemic, people are eager to explore new destinations and experiences, driving unprecedented demand for accommodations, dining, and leisure activities. Brands should seize this opportunity to enter the hospitality market and take practical steps toward establishing a strong presence in a growing industry.
How Brands Can Thrive in the Hospitality Market
Several brands have already successfully tapped into the growing trends in hospitality, establishing strong presences and creating unique value propositions for customers. For example, illy Caffè recently collaborated with United Airlines to provide premium cold brew coffee on flights. This partnership elevates the in-flight experience, catering to the modern consumer’s preference for high-quality products and luxurious in-flight experiences. Given that spending on experiences increased by 65% from 2019 to 2023, such enhancements are well-received by passengers looking for added value during their journeys.
In another example, The Standard Hotel partnered with Onia Swimwear to create an exclusive capsule collection inspired by the hotel’s aesthetic. This collaboration merges fashion and hospitality, providing guests with a unique, branded opportunity that goes beyond traditional hotel amenities. In a market where modern consumers prioritize convenience and experiences— such as product exclusives and limited edition drops—these partnerships help create memorable stays that attract and retain guests.
4 Steps to Establish a Strong Presence in the Hospitality Industry
Brands looking to make a mark in the hospitality industry can follow several practical steps to establish a strong presence and capture market share:
1. Conduct Market Research.
Understanding the current state of the hospitality industry is crucial. This includes analyzing trends, challenges, opportunities, and competition and identifying gaps in the market where your brand can enhance the guest experience.
Take time to understand which hospitality establishments already have partnerships in place with brands, and who would be open to considering new ventures. Assess which hotels, restaurants, bars, or lounges align with your brand aesthetic, messaging, and values.
2. Identify Potential Partnerships.
Be open to collaborations and products exclusive to brands already in the space. Weigh partnership options carefully, ensuring that brand values and target audiences align. Collaborations with financially stable partners can provide a positive ROI and facilitate smoother market entry.
3. Build a Believable Story.
Developing a compelling narrative about why and how your product enhances the guest experience is essential. Clearly communicate the unique value your product brings to the table and highlight the specific ways in which it improves the overall guest experience.
When building a story for your product, take time to explain why it’s a perfect fit for the hospitality industry and how it aligns with your brand’s aesthetic, messaging, and values. You can showcase success stories, testimonials, or case studies that illustrate the positive impact your product has had on guest satisfaction. A believable story will not only capture the interest of potential partners, but also resonate with guests, driving loyalty and repeat business.
4. Combine Customer Experience With Brand Education.
Merging customer experience with brand education is a powerful strategy. It involves creating meaningful interactions that inform guests about your brand while enhancing their stay. This approach enriches the guest experience while fostering brand loyalty.
For instance, if a luxury bedding brand partners with a hotel, every bed could feature the brand’s sheets. In-room materials could educate guests about the brand, offer insights into the product’s benefits, and provide information on how to order the sheets for home delivery. This way, guests can extend their luxurious experience beyond their stay.
Similarly, a partnership with a skincare brand might involve complimentary mini in-room facial kits, along with branded experiences in the hotel spa. Guests could enjoy personalized treatments and have the option to order customized kits for home use, maintaining their skincare regimen after their visit.
These initiatives combine experience and education, creating value for the guest, selling points for the hotel, and increased exposure for the brand. By engaging guests in this way, brands can reach new, like-minded audiences who are already inclined to appreciate what they offer.
Seizing the Golden Opportunity in the Hospitality Industry Today
The hospitality industry presents a golden opportunity for both emerging and legacy brands to tap into a market experiencing significant growth and transformation. With spending on travel and live entertainment on the rise and changing consumer preferences favoring experiences over material possessions, the time is ripe for brands to enter this growing sector.
By leveraging partnerships, embracing innovation, and maintaining a sharp focus on customer satisfaction, brands can thrive in the hospitality industry and create lasting value and memorable experiences for their customers. As we look ahead, the brands that effectively capitalize on these trends now will be well-positioned to reap the rewards of the hospitality industry in the coming years.
