What happens to the hotel of the future when the traditional business model for hotels starts looking hazy? A fusion of external and internal factors has been gnawing at the traditional business model. This has not been a steady and gentle reshaping. Over the decade, the rise of social media channels, the global pullout and the rise in technological advancements have fused with innumerable other factors to reveal the new angle of the business. The hospitality industry is gradually adapting to these changes. We can ponder about what will the new face of the hospitality industry look like.
- Greater efficacy on a global level: An efficacious business in a business that is cost-effective. The hospitality industry is moving away from the ‘cookie-cutter’ approach that was popularized during the second world war which concentrated mainly on western, particularly American consumer expectations. They are now moving towards a more international experience. Hotel suppliers play a crucial role in the whole process.
Be it time or resources being wasted, hospitality institutions are re-imagining what a thriving business model for hotels will look like, in the future. All this is to stay aligned with the new global economy which now includes the BRIC and CIVETS nations. Big hospitality institutions now need to come up with the most fruitful way to target numerous markets without sacrificing readily available services for each market. One such market is the hotel linen market which provides commodities such as Hotel towels, and so on.
- Managing the Brand portfolio: Hospitality institutions are not static, they are dynamic. They keep moving into new territories. Hospitality institutions from the west move to Asia, Middle-eastern chains move into the west, thus, they have to keep re-evaluating their existing portfolios to ensure that their brands fit the regional demographics. Brands have to master the art of providing global services with a local feel.
Incidentally, there is a need to span the full range from budget to luxury which puts new demands on portfolio management. Hotels will manage this by moving towards a management system that will include various strategies and various operating processes to make sure that the needs of all the sub-brands are catered for.
- Inclusion of new revenue channels: Exploration and experimentation will lead to new customer services and offerings. This may even encourage the diversification of the brand strategy. Hotels will start with small experimentation methods and if they prove to be successful, they will work their way up the chain. This low-risk approach will go a long way and lead to a rejuvenation of innovation.
Some examples of such methods have already been incorporated in existing hospitality institutions. They include hotels that offer 24-hour check-ins, low-cost carrier-style pricing models, room auctions, hotel ancillary services like selling products in the hotel, and so on. Some hotels sell their own branded beds and pillows to the consumers and some even resell high-end luxury brands. This model will focus on the overall experience and not a single category of services.
The future hotels will be multi-faceted and combine numerous strategies to globalize themselves. The new model will be more flexible, broader and demand-oriented. It will be a whole package in itself.