The Status of the Hospitality Industry in 2019
24th January 2020
1. Global Traveller traffic
With ongoing traveller number growth driven by a broader reach of inbound travellers from new markets like South America and Asia, and outbound travel flat lining the UK market is expected to grow through from 2019. Hoteliers that are ready with the right technology to service more diverse guest expectations will thrive and continually improve the delivery of the guest experience from booking to post-stay.
➢ Having reached 8.8 billion in 2018, global traffic is forecast to double by 2037. Over the long term, it is projected to grow at an annual rate of 3.7%, reaching 19.7 billion by 2040 (source).
➢ UK travel market expected to grow by 1.7% in 2019
➢ Inbound travel volume was projected to grow 3% in 2019
2. The hotel economy
According to industry data the UK hotel market continued to grow with the sector enjoying an increase in profit per available room.
➢ UK 1.6% YOY GOPPAR
➢ Europe: 3.9% YOY GOPPAR
The UK Hotel Market Tracker Q3 2019 reports that London's performance is outshining the regions.
Q3 Average Room Rate Change
➢ London: 5.3%
➢ Regions: -0.9%
3. Traveller expectations
Travellers are increasingly prioritizing value over cost, according to Travelport’s Global Digital Traveller Research 2019 - they are also expecting more from their booking experience with trust being a major issue especially due to the influence of review sites. Travellers are also expecting travel providers to be more tech-savvy.
➢ Only 18% now book solely on cost
➢ 42% want to personalise their travel with extras
➢ 45% (up 9% on 2018) reported being frustrated when they can’t access their booking information 24/7 on their mobile device.
4. Guest preferences
CBRE’s annual Trends in the Hotel Industry 2019 looked at respondent data as far back as 2007 to see the changing trends in the hotel market. The report found that food and beverage revenue has marginally increased over the last decade marking the change in expectations as guests look for less formal and quicker dining experiences. Furthermore, technology has had a massive impact on revenue sources with the use of smartphones and tablets - guests are looking for seamless integrated digital experiences at the cost of hotel revenue.
Compound annual growth rate (2007 - 2018)
➢ Food and Beverage: 1.1%
➢ Telecommunications: -17.9%
➢ Movie rental: -12.6%
➢ Retail: -2.3%
➢ Parking: 3.4%
5. Investment in tech
According to The Hospitality Technology Sentiment Survey Report 2019 hotels are increasing their technology investment with guest experience and the overall technology stack taking centre stage. Yet, hotel executives remain concerned about whether they have the internal talent to achieve their IT goals and innovate the guest experience.
➢ IT budgets on the rise: 43%
Of importance to investment:
➢ Guest experience: 47%
➢ Technology stack 26%
➢ Distribution 12%
Main system due for replacement:
➢ Operations tech replacement: 32%
➢ Concern over digital talent: 61%
How Criton can help you
Criton is an award-winning technology provider which enables hotels and serviced apartment operators to take the guest experience to the next level with a sophisticated mobile app. Criton helps hotels to streamline the entire guest journey and maximise in-stay revenue. Get in touch today to find out how we can help your business.