Hotels in 2017: Which Trends in Service and Experience Are Worth Watching?

Shared public spaces, sharing everything; hotels as local community centers; more digitization and smart technology; and lifestyle brands opening hotels

The sharing economy, digitization and smart technology are remaking the hotel experience.

Euromonitor forecast that the global hotel industry would take in US$490 billion in 2016, close to the 2015 figure — in other words, flat. Airbnb's revenue, by comparison, rose about 89%. Morgan Stanley research found that Airbnb is the lodging choice of roughly 18% of travelers, and that the threat it poses to hotels has doubled.

Airbnb has shaken the hotel business, above all on the question of what it feels like to stay somewhere.

Airbnb can put a guest in a courtyard house in a Beijing hutong, a Shanghai villa, a yurt or a castle. Hotels can hardly do the same. Independent boutique hotels, meanwhile, have taken away some of the guests who care about quality and design.

To serve this taste for the personal, hotel groups keep launching new brands. Besides staking out different price points, they are chasing millennials, who like to show their individuality and are the fastest-growing group of hotel customers. Hyatt launched a brand called Centric in recent years, aimed, it says, at consumers with "a millennial spirit and lifestyle." Centric hotels usually sit downtown or at the center of a tourist area, which suits young travelers. Carlson's Radisson RED and Hilton's Canopy also target young guests.

As for the sociability Airbnb brought with it, hotels are responding this way: play up offline socializing, expand shared space — living-room-style lobbies, for instance, are replacing the traditional kind. Jesse MacDougall, director of strategy and brand development at the design innovation studio ICRAVE, says: "Hotels and we have put a lot of work into getting guests out of their rooms and into social spaces."

Smartphones and the internet, meanwhile, have made the hotel experience more complicated — and longer.

It now starts with booking and customer service before check-in, and it seems never to end: think of the reviews and the exchanges on social platforms afterwards.

One clear shift in recent years: the big hotel chains are fighting third-party booking platforms (Trip.com Group, Booking.com and the rest) for the point of entry. They want to be closer to the customer, to control the experience, and to keep loyal guests of their own brand. We once tested the apps of several major hotel groups against third-party platforms and found the third parties still ahead on Chinese-language localization and on price. Hotels, in other words, still have some distance to cover on digital.

These forces will likely keep shaping what it feels like to stay in a hotel. Drawing on QDaily's reporting on the industry and on the travel trade publication Skift's forecast of hotel experience trends, here are a few things that may be worth watching —

Shared public spaces, sharing everything

Space to work together, such as the café inside the hotel. Space for leisure, such as the pool and the bar. And the hostel's signature: shared washrooms and kitchens. The principle of "living together" is spreading into more and more of the hotel experience.

Home-sharing platforms such as Airbnb and HomeAway connect guests with hosts. Shared cafés, bars, even kitchens and washrooms do something different: they strengthen the ties among guests themselves. That may be how hotels set themselves apart from Airbnb.

On shared space, nothing makes the case better than the youth hostel, where the kitchen, the bathroom and even the bedroom are shared. Little wonder that AccorHotels announced in September 2016 that it was starting a hostel brand called Jo&Joe, reportedly in response to "millennials' desire for sharing and experience." Beyond the usual shared rooms, Jo&Joe will have yoga studios, live-music spaces and DIY workshops; its public areas will offer yurts, hammocks and caravans to get young guests mixing.

Jo&Joe (Image: AccorHotels)

Even midscale hotels are now taking shared space seriously. Tru, the midscale brand Hilton announced last January, is one example. The renderings show how it departs from the midscale hotels of the past: the lobby is broken into zones for eating and drinking, play, rest and work, apparently to make guests linger instead of passing through. The old front desk has been rebuilt as a ring that handles check-in, shopping and drinks at once.

Worth noting: companies positioned differently can also open their space to each other. The hostel The Hollander and the Robey, a hotel for business and middle-class guests, belong to the same company, and their Chicago guests share a rooftop pool and public areas.

Ron Swidler, brand director at the design firm The Gettys Group, thinks hotels can learn from retail. "Maybe the hotel industry can learn something from retail and become more dynamic," he says. "The opportunity right now is to pay attention to the public spaces that signal that change."

Lifestyle brands crossing over into hotels

Whether or not hotels have started learning from retail, some retailers and brands have already started running hotels.

In 2016 a good number of lifestyle brands said they were going into the hotel business: the American high-end gym chain Equinox, the furniture retailer West Elm, and IKEA and Muji, the last two of which said they would open their own branded hotels in China first. Without exception, all of them are using hotel operators independent of the brand.

Even Karl Lagerfeld, the designer at Chanel, has begun opening hotels and working on hotel design. There is precedent: Giorgio Armani, Bulgari and Versace all have hotels under their own names. For luxury brands, the point is mostly to cash in on the brand premium.

Bjorn Hanson, a professor at New York University's Preston Robert Tisch Center for Hospitality and Tourism, believes that fashion and design brands moving into hotels does not strike consumers as odd, and that these lifestyle brands can bring a "halo effect" — the brand effect, in other words.

The brand's fans will probably be the first guests. The reason is simple: if you like sleeping in the showroom that much, here is your chance to sleep in it all you want.

Luxury goods or housewares and furniture — retail is under pressure either way. Its answer has been to add more experience, and opening a hotel may be the extreme form of that. For a brand that sells home furnishings, a hotel is an advertisement you can walk into, because guests use the products themselves. And if hotel brands have started selling their own amenities, why shouldn't retail brands go the other way and open hotels?

The trend is also indirect proof that guests want something more personal from a hotel stay, and that the market is splitting into finer segments.

Not just for out-of-town guests: hotels could become local community centers

"Farm to table" localization swept through restaurants. A hotel's version of localization is slightly different: not only local sourcing, but paying attention to the market it sits in.

Sébastien Bazin, CEO of AccorHotels, says: "For the past 50 years, 100% of what we did was aimed at winning over travelers from elsewhere… What we missed was a better and more easily reached group: the residents who live near our properties." Bazin thinks they can start with "countless services" — holding luggage, recommending things to do and buy nearby.

Beyond free conveniences, hotels can also sell things to the people who live around them. Luxury hotels are probably better at this than midscale ones, and the reason is that their revenue per available room (RevPAR) is higher. Midscale hotels, whose per-room revenue is less impressive, may not have the room to bother.

We have reported before on how The Peninsula Hotels has pushed its non-room services — restaurants, spas, luxury shopping, afternoon tea — to local customers. Zheng Zhaowei, vice president of marketing at The Peninsula, once told QDaily that non-room revenue is about 50% of total revenue at The Peninsula Hong Kong. The spa is what Hong Kong residents buy most; only about 5 to 10% of spa spending comes from hotel guests.

Good design is no longer the preserve of boutique hotels — it is the price of entry

Design has always mattered in this business; it is one of the things that gives a hotel brand its character. Whether the hotel is ultra-luxury or a basic budget property, guests expect it to look good and feel comfortable. But boutique hotels, where every room can be different, have raised the bar for what counts as good-looking. More and more hotels are now rethinking their design, stressing the non-standard and the individual.

The traditional luxury chains, for instance — Marriott, Hyatt and Hilton have opened or renovated a batch of hotels — emphasize more current design and a more social experience. Consumers once had a single definition of luxury; now there are two. "Traditional luxury" is represented by hotels like Shangri-La and The Peninsula, "distinctive luxury" by high-end boutique brands like W and Edition.

Guests always read a hotel's design through their own idea of what a hotel should be, and they judge from the decor whether the place suits them. Muriel Muirden, operations director at the design firm WATG, says: "Hotel guests hate designs that have no character, or that are over-decorated."

The definition of a "design hotel" is changing. The British designer Philip Watts says: "You'll see more hotels emphasizing the design itself rather than just the designer, and the trend is strongest in budget and midscale hotels."

Design-led boutique hotels have appeared in China too — Maijian and the Hedouli Paddy Field Hotel, both of which we have written about. Their arrival has probably raised the threshold for hotel interiors. Some midscale hotels have started upgrading their design in turn, and many chains now look like this: raw-wood veneer, sofas and carpets in light gray, light green and other colors close to nature, plus themed rooms built around photography, the humanities, technology or industrial style.

Continued digitization and smart technology

The smartphone will matter more and more. From booking, to talking with customer service before check-in, to using the hotel's services during the stay, guests can do more and more through each hotel's app or through social apps such as Facebook Messenger.

In a survey of more than 1,600 consumers by Zebra Technologies, a hotel technology supplier, 68% said they wanted to check in by smartphone and cut the wait, and 66% said the experience felt better when hotel staff used new technology.

The same study covered more than 1,200 hotels, 74% of which said they would turn on more location-based services: checking in through an app, pushing coupons and discounts, tracking where guests are, mobile payment. Given how much more time people spend on their phones, this will continue.

We have tested the apps of several major hotel groups and found they still need work; the big chains have some distance to cover on mobile.

Beyond the standard features — booking a room, checking points — extras are making their way into hotel apps. Starwood and Hilton have both put mobile room keys in theirs, so a guest's phone opens the door. Guests at Virgin Hotels can use its app, Lucy, to set the room temperature, order room service and find out what to eat, see and do nearby.

Hotels like to call themselves a guest's second home, and as more households buy a Google Home or an Amazon Echo, smart-home control systems are turning up in hotels. There may be more of them in future, but cost will keep the spread slow — only a luxury property like the Wynn in Las Vegas can put an Amazon Echo in all of its 4,000-plus rooms.

Aloft, a Starwood brand, recently said it had given two of its hotels a smart makeover, tying the thermostat, sound system and lighting into one system it calls "the world's first voice-activated hotel room." Every room has an iPad to control different parts of it, and guests can ask Siri for nearby sights or restaurants.

Robots have entered the business too — less to make staff more efficient than to make marketing noise.

In 2016 Hilton tested a robot receptionist at a hotel in Virginia; Crowne Plaza, part of InterContinental Hotels Group, brought in a robot called Dash that does much the same thing; and some Aloft hotels have started using a robot named Botlr to deliver small items to rooms. These are still one-offs, and it is hard to say whether more hotel robots will show up this year.

There is also a right amount of smart, and it has to be judged. Guests still want to deal with hotel people who are attentive and pleasant. Imagine the extreme: everything from check-in to check-out handled by technology. That kind of cold experience would not be much fun.

Cover image from Pexels and Bacara Resort & Spa