WASHINGTON, DC—Moving into 2017, the hospitality industry has been shaped and shifted by the changing tastes of travelers—namely, tech-savvy millennials who want customized services and experiences—with hoteliers watching the landscape very closely in this innovate-or-die world.
Conducted by STR and funded by the American Hotel & Lodging Educational Foundation (AH&LEF), the 2016 Lodging Survey reveals key trends in the hospitality industry. Some of the findings include a significant shift in mobile usage, the evolution of in-room minibars, a focus on energy management and the fact that there are still quite a few hotels out there charging guests for internet.
There are two ways to innovate in the hotel business, according to Jan D. Freitag, SVP for lodging insights at STR: “Some ways are expensive. You see them on upper scale at first and then it trickles down. Sometimes it comes from the bottom, where you take out bathtubs and put in showers,” said Freitag. “With data, it’s a trickling down where the owners of lower-end properties aren’t willing to put in the infrastructure or participate. I think as we go forward, it will become a brand standard.”
The Lodging Survey is released every two years and Freitag pointed out that for the last five iterations or 10 years, two-thirds of respondents said they are charging for internet service. It’s a different tact from other businesses where WiFi is free, such as restaurants, airports and coffee shops and even public transportation in major cities.
“Free WiFi is certainly available on the lower [end]and midscale. It’s implied and included. But as you pay more for your room, you pay more for your stuff,” he said. “Honestly, it’s because they can. It’s just something the guests are saying: ‘Look, I don’t pay my own bill; it’s something I need and that my company pays for, so…’”
The adoption and usage of mobile apps continue to climb steadily, with mobile check-in leading the charge—going from 3% of hotels in four years to 65%. Mobile apps use has peaked at 35%, so there’s still plenty of room to grow but the current progress remains noteworthy.
“We must have patience and give this another two years. When we talk again, we’ll see the number has changed drastically. Look at the trajectory. We haven’t asked this question of participants in a long time. It’s gone up by 10 points, which is a 50% increase if you look at the rate of growth,” he said. “The absolute level is small but if you break it out by luxury or upper-upscale hotels on the chain-scale side, I think it shows you these are trends that will be coming down into the midscale, limited-service segment and more.”
An interesting sign of the times is the disappearance of minibars in hotel rooms, with a paltry 3% of U.S. hotels still holding on to this amenity. This old-school perk got its start in luxury hotels in the 1960s and soon became a widespread feature for all types of travelers regardless of price point and status, while making an extra buck for the hotel. In the past few years, minibars have gradually fallen out of popularity as expired snacks, restocking labor and the overall costs of regular maintenance outweighed the intended benefits.
“We used to have minibars, but they’re so hard to maintain and then there’s the theft and guest disputes with charges. Some are automated and people try to beat the system, and then the Snickers are stale,” he said. “What hotels are doing now is inviting guests to the lobby for their grab-n-go, and it’s easy and convenient. I don’t have to have a guy go into each room to maintain the minibar. It’s is a huge waste of time and energy. Let’s yank out everything and call it a refrigerator. It’s still an amenity, so people can bring their own sandwiches and water.”
Sustainability initiatives in the hospitality industry are widespread and typically considered part of standard operations. The survey found linen towel reuse has continued to increase to a percentage in the high 90s and, according to Freitag, will soon be topping out because the industry is already at full participation levels. Elsewhere, efficient practices for energy management used to be a null response in the survey, and today, it’s at 48%. “It will be interesting to see if that will be an outlier. It could be one other brand that has participated,” he said.
It’s also no surprise that recycling will increase as it decreases the trash collection fees. He noted that moving forward, incandescent lights will get replaced and that the number of participants will continue to grow.
“The bigger the property, the more you will need. The older properties need energy management because they’re not built as efficiently, unlike the Tru by Hilton brands, which utilize the latest standards we have today,” he said. “Green certification has dropped. We have a problem defining what this is. It’s not a trend; it’s built into the fabric of the industry because it makes financial sense.”
Freitag found it interesting that the use of video-on-demand (VOD) systems—a feature that enables the guest to watch or listen to movies and TV shows in the room at anytime via a set-top box—appears to be cratering: Only 16%—down from 30% in 2014—of hotels in the U.S. offer it in guestrooms. The hyper-connected traveler now uses these services in the form of apps on their mobile devices.
“It’s a given that HBO and Hulu are part of what you get when you come in, and the on-demand service is falling by the wayside because people carry it with them on their device,” he said. “What I can get with Hulu or Netflix and other favorite on-demand services in some ways is vastly superior to what I can get in a hotel room. Why should I pay for it again in the hotel room? It’s an issue of internet connectivity and bandwidth.”
For the next iteration of the survey, Freitag is mulling the idea of brands overlaying an importance scale on all of these amenities. He’d approach it by asking brands about what they value most out of all that they’re doing.
“Because maybe the game console in the room went down 4% among participants and maybe your guests are saying ‘This is cool and I want to pay extra’ or the majority are saying, ‘Thanks, I’m playing on my iPhone and I’m good.’”