What are the latest trends in the hospitality industry? As a testament to its resilience, agility and innovative spirit, this article reflects today’s increasingly dynamic hospitality industry in terms of its long, medium and short-term evolution. Discover the industry’s adaptability and forward-thinking approach, shaping its trajectory in the face of challenges and opportunities, while staying attuned to the latest hospitality trends.

Best-selling author, Will Guidara, claims “We are entering into a hospitality economy” – suggesting that what underpins the essence of hospitality, (service excellence, human interaction, personalization and the co-creation of memorable experiences), is actually what many sectors of industry are desperately in need of today.

As we charge at break neck speed towards an ever-more

The effect of economic uncertainty on hotels, restaurants and fine wines

5. Fine dining: In need of reinvention but full of potential

The pandemic has unexpectedly affected consumer behaviors: they now organize themselves on short notice, have become increasingly spoilt for choice and no-shows are today the norm. More and more restaurants are responding by asking for a credit card at the time of reservation. But this only treats one of the symptoms without solving the problem. “A full house one day, but only four tables occupied the next”, is an observation that led Antoine Lecefel to shut his restaurant – sadly one of many fine dining establishments to do so.

Inflation and declining purchasing power play a part, but more generally, the fundamental problem lies in the inability of fine-dining restaurants to reinvent themselves. Unlike hotels and other players in the hospitality industry that increasingly compete with them through ambitious and innovative culinary projects, they have to contend with limited financial and human resources. They have neither the capacity to implement and manage a proactive strategy nor the means to invest in cutting-edge, highly experiential concepts. Initiatives such as Eatrenalin, which create a unique experience by combining gastronomy, décor and entertainment, offer a glimpse of this changing industry and the new competition facing traditional players.

Solutions? A strong, contemporary concept plus a business-oriented management that understands consumers, connects with them and is thought through from the outset to generate margins and create synergies and/or economies of scale. The Igniv chain is a shining example of this, driven by an extraordinary chef and based on the principle of “we love to share”, Andreas Caminada has created a unique and fully coherent concept, the success of which is now being rolled out in various locations, all of which have been rewarded with rave reviews from customers and expert guides.

6. Fine wine prices: Navigating the fluctuating vineyard market

Another challenge facing restaurants is cellar and wine list management. Restaurants with limited financial resources may even wonder whether fine wines still have their place on their menu. Indeed, fine wine prices have risen almost exponentially since the Global Financial Crisis of 2008. But here, too, the situation appears to have changed.

A year ago, fine wine prices were at record highs. Demand for rare, artisanal wines from regions with long-standing terroir reputations was at its peak. One could go on about Burgundy, but many other examples are as revealing. For example, the Châteauneuf-du-Pape Réserve cuvée from Rayas, worth between 150 and 200 euros (for young vintages) less than a decade ago, has soared to reach and exceed the 2’000 euro mark. At this point, voices suggested that this was normal; inflation should also positively impact the prices of fine wines. But there is no reason this should be the case: demand drives prices, not production costs. Fine wines attract wealthy people, collectors and investors. For them, the resources that can be invested in wine depend on economic conditions and financial markets. The latter have fallen sharply since the beginning of 2022. Not surprisingly, wine prices have followed the same trend.

The most spectacular move was in Burgundy wines. Prices had become so high that these wines had detached from the rest of the market. Just a year ago, many wines from the 2019 vintage were selling for several thousand euros a bottle. One wondered whether these wines had permanently changed their status and would never be traded at lower prices again. Today, the trend has abruptly reversed, and it appears more like a speculative bubble that has begun to implode. Time will tell. The fine wine market offers an almost perfect setting for this kind of phenomenon: herding behaviour is common, and, in the end, price levels depend not on financial arguments but simply on what people are willing to pay for a bottle.

7. Rising interest rates: The impact on hotel property values and transactions

As we have seen with wine, economic conditions considerably impact on the value of tangible assets. The same applies to real estate. The market proved relatively resilient last year, thanks to the ability of hotels to pass on (sometimes more than proportionally) higher costs to their customers, while maintaining high occupancy rates. The increase in RevPar thus more than offsets the rise in discount rates.

Today, consumers having finished dipping into their COVID-19 savings and interest rates remaining high, the very long upward cycle in hotel property values has ended. What remains as a stabilising factor is the fact that the pipeline of hotel projects is thin. In other words, supply is likely to stagnate over the coming years and should thus not contribute to aggravating the supply-demand imbalance. Nonetheless, we can expect pressure on prices. Refinancing transactions will further exacerbate this, which will take place on far less favourable terms over the next 12-24 months. As is always the case in this type of environment, we can expect forced sales, sometimes at substantial discounts to current valuations.

Another consideration is sustainability. The residential real estate market is becoming highly selective, making it hard to rent and make profitable properties with an unfavourable environmental record. This trend has already begun and will likely intensify, affecting commercial real estate in a major way. In other words, hotels that have not been renovated and adapted to today’s standards and expectations will likely suffer more than proportionately.

Other trends that have been, still are, and will continue to shape hospitality

8. Green hospitality: Beyond sustainability to net positivity

After a period of harvesting low-hanging fruit, hospitality groups are increasingly looking for more innovative and meaningful ways to implement, measure and communicate their sustainability practices. In the F&B industry, local sourcing has become standard in many outlets. However, it has now started to scale up more by offering better traceability of products (e.g., The Europe Hotel in Ireland has its own farm with livestock, fish, and produce). In addition, guests are increasingly being educated on sustainable practices, e.g., cooking classes on how to use the entire ingredients and avoid food waste. It is no longer about doing good but rather showing customers how to do good.

Hospitality groups are also increasingly adopting sustainable building techniques and are generally trying to adopt a 360-degree strategy that allows them to be sustainable from the first brick up to the operation (e.g., the Beyond Now Networkwhere industry experts have joined forces to transform hospitality businesses into environmentally friendly, efficient and profitable enterprises). Some are going even further, not content with being net zero but aiming to become net positive, exemplified by ‘regenerative tourism’ practices.

9. Data-driven decision-making: Data-analytics for optimum personalization

“Information is the oil of the 21st century, and analytics is the combustion engine” (Peter Sondergaard, senior vice president and global head of Research at Gartner, Inc.). The current trend is moving away from simply collecting data to engineering and analysing the vast amount of data efficiently into actionable decisions and gaining an edge over competitors.

Today’s successful early-adopter hospitality companies have a data-driven business model. For example, through its platform, Booking.com has extensive knowledge of guest and hotel behaviour, which it can use in real-time to adapt its offers and displays and negotiate better deals with hoteliers. The Marriott International hotel chain uses data analytics to personalize guest experiences, with their loyalty program as a major source of data collection.

Data is reshaping hotel marketing, allowing hotels to better monitor guest satisfaction and desires to personalise experiences and better target the customer base. Finally, it enables hotels to increase revenue through more accurate yield and revenue practices by better forecasting demand and thus offering more dynamic pricing strategies.

10. The power of social media: Crafting authentic narratives

This consistent trend is entering a new phase of maturity. First, marketers need to find more innovative ways to capture the attention of customers who are constantly bombarded with messages. With their short video content, the rise of TikTok and Instagram seems promising. It allows the sharing of stories to enhance the storytelling of hospitality outlets (e.g., the customer becomes part of the act through employee or behind-the-scenes videos).

Second, the use of influencers has gained traction in the industry. On average, businesses generate $6.50 in revenue for each $1 invested in influencer marketing. Here, marketers need to find the needle in the haystack with influencers who have enough reach and best fit the hotel’s values and story.

Third, with advances in technology and the many options available, marketers need to accurately measure the impact of their social media efforts and finetune the message accordingly. They also need to balance customer and organic content creation and paid or free content. Overall, the cost of social media must be commensurate with the benefits, be professional, authentic and follow a clear strategy in line with traditional marketing efforts.

Key takeaway from EHL’s hospitality industry trends 2024 – Crafting experiences, influencing lives, and paving the way to tomorrow

In today’s hospitality landscape, it is difficult to confine ourselves to an annual update. Certainly, several general trends have been in place for years and continue to evolve, but by and large, this once cozy industry is constantly innovating and reinventing itself. It is not just adapting to customers. It is creating its own momentum, helping to shape the society and economy of 2024 and beyond.

From computer games to popular films and TV shows, the hospitality industry impacts our daily lives more than we realize. As a sector that thrives on personalized, immersive encounters, it caters not just to our desires for leisure, travel and memorable life experiences but also influences the way we interact, socialize and dream.

https://hospitalityinsights.ehl.edu/hospitality-industry-trends – extracted

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