This Week's Herman Trend Alert

Using Simulation
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  The Herman Trend Alert

January 17, 2018

Insights into The Future of Hotels

In December, we caught up with hotel expert Larry Mogelonsky. His insights into the present state of the hospitality industry and its future are fascinating. This Herman Trend Alert is mostly his views; building on Mogelonsky's thoughts, we have added our forecast.

Applying package goods strategy to hospitality
Originally, the goal of hotel brands was to apply package goods strategy to hospitality, to approach the business from a more logical point of view. We have moved to a situation where to optimize profitability, everything must be measured. Why? Because according to management guru Peter Drucker, "What gets measured gets done".

Using logic on illogical decisions
By the same token, we should be able to apply measurement and logic to our understanding of consumer hospitality purchasing decisions. The problem is that, "Purchases are illogical". When we think about why we buy the cars we do, we begin to understand the complexity of purchase decisions; we need to keep asking questions, until we get to all the reasons for our purchase decisions.

Transition from traditional marketing to digital marketing
Mogelonsky believes that we are in a transition from traditional marketing to digital marketing. The problem, he adds, is that "culture is not built in digital marketing and what we're selling is culture". "Ultimately, it's the customer-oriented culture that makes the difference"; the goal is to "convert hotel guests into ambassadors", concludes Mogelonsky.

Hoteliers are in trouble with Millennials
Though some Millennials are attracted to the lifestyle brands like Aloft and Element, many are choosing home-sharing apps, like AirBnB and Homeaway. They are making these decisions not only on the basis of price, but also because they "felt more comfortable with individuals than with a large company". Bottom line, although some brands are eliminating desks and making media screens larger, Millennials are still challenging hotels to create cultures that work for them.

Customer-centric cultures mean memorable guest experiences
Hotels can create customer-centric cultures in a number of ways. Some hotels, including Renaissance, provide experiences called "activations". Based on local culture, these onsite "happenings" often include giving guests exposure to some aspect of local color that they would probably have missed. Another way is to offer language or culture classes, like the Westin Ka'anapali Resort in Maui. Other hotels, like Wintergreen Hospitality in Chapel Hill, North Carolina and the Nostalgia Hotel in Singapore train their people to "do whatever it takes" to delight guests by "going the extra mile" to cater to their needs. Still others, like the Montage Laguna Beach, use a different effective approach. After you have checked out, the front desk person at escorts you to your car with logoed hats and water bottles, penny candy, and a map to the airport.

The bottom line for hoteliers
With the growing competition for staff and guests, hotels will only survive by adopting a guest-centric culture. Expect to see more hotels creating positive guest experiences; those not able to adapt, we anticipate seeing turned into assisted living facilities.

Special thanks to Larry Mogelonsky whose regular columns may be found weekly in

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