Boutique Hotel News hosted a discussion on the future of leisure travel and hospitality recently, at the Apple Store on London’s Regent Street.
BHN’s Piers Brown was joined by Karen Mullins, UK marketing director for HomeAway.com; Ben Waters, digital marketing manager for Generator Hostels; and Debbie Wosskow, CEO of Love Home Swap; to discuss how the collision of the business and consumer worlds is shaping their industry, and how innovation helps them ride the waves of disruption in the industry.
Brown kicked off with some thought-provoking figures, revealing that the global leisure travel market is worth $645 billion annually, and that in the US mobile bookings represent 25 per cent of all travel transactions, a figure set to rise each year.
Ben Waters pointed out that the emerging middle classes in the BRIC countries are fuelling the global growth of the hospitality sector, providing a stream of new travellers, while Karen Mullins pointed out that travel is being made easier by the constant launch of new online services and apps, citing Uber as an example.
Debbie Wosskow, who has recently written a report for the UK government on the sharing economy, said the home swap sector is growing at an incredible rate – and warned that some of this growth will be at the expense of traditional hospitality companies.
“People will have a portfolio of choice – where they stay will vary according to the reason for their trip,” she said. Wosskow also emphasised how mainstream sharing economy companies have become, pointing out that the average age of an Airbnb host is 40, the average guest is 38, and that 40 per cent of Airbnb trips are booked for business travel.
The sharing economy needs “the currency of trust” to flourish, said Wosskow, who said that Sharing Economy UK – a new trade body for the UK’s sharing economy – is developing a trust kitemark for member companies.
Moving on to the question of customer loyalty, Ben Waters said: “The ‘points mean prizes’ model is dead, particularly in budget travel. The millennial audience wants to be involved in a community. Generator offers softer benefits such as invitations to events, rewarding brand ambassadors and repeat visitors. The people who are loyal want to feel part of the brand.”
All three panellists, while noting that the number of mobile bookings is on the rise, suspected that booking apps are not the best way to process them. Waters said: “Generator is developing an app for helping social interaction before, during and after a guest’s stay. It will not be a mobile booking platform. We have to be aware of the PHOBO phenomenon – the millennial fear of being offline.”
Mullins said HomeAway is seeing 65 per cent year-on-year rise in mobile bookings through its website rather than its app, while Wosskow said her company has “no huge impetus to develop an app as we have had a mobile responsive website for so long”.
Wosskow also said the most proactive hospitality brands are already looking at how they can work with the sharing economy: “The major hotel brands are looking at how they can incorporate sharing models in to their businesses. Clever hoteliers should think about the elements they do really well and see how they can link those up with the new disruptive companies. Hoteliers who dismiss the sharing economy as being limited to under 30s and cheap stays do so at their peril. There will inevitably be partnerships between the marketeers in the hospitality business who have brands but no property assets, and sharing economy companies who work in a similar way.”
Waters reminded the audience that millennials are now coming in to their peak spending power, and that their three biggest concerns when travelling are safety, cleanliness and free wifi.
The informative session was then wrapped by Piers asking all three panellists to name a hospitality brand they really admire. Wosskow chose the Soho House Group, Waters’ pck was the Ace Hotel Shoreditch and Mullins settled Onefinestay.