Luxury 2025 — Challenges and Opportunities for your Hotel
Luxury consumers today need more than just expected amenities and wake-up calls. While hotels have certainly switched to branding in place of simple accommodation, there is still a need to keep evolving. Accordingly, luxury hotels have to adapt themselves with the changing times.
The current business models used by luxury hotels are outdated. While they helped growth yesterday, today they are limiting it. Consumers are in search of an experience rather than a brand flourish. More than 75% of luxury consumers find more of an appeal in hotels that give them something new. This is where luxury hotels need to focus upon in 2025.
These challenges can be met by working with visionary partners for a unique experience. Luxury consumers want their time to be fulfilling throughout their journey and hotels can cater to them better by such creative associations. But first, the challenges need to be understood properly:
1. Increasing Competition
Online Travel Agencies (OTAs) offer an overwhelming variety of options on one single platform. While it seems convenient for the consumers’ choice, it poses a threat to brand loyalty.
For instance, Trivago, a price comparison platform, compares the prices on various booking platforms as shown below.
To succeed over the myriad options, luxury hotels need to develop, extend, and maintain earnest relationships with their customers. Customers value mutual respect, and brands can retain them with their sincerity.
To stay relevant, brands need to extend and maintain a deep customer relationship to retain ardent customers.
1 in 4 travellers allocate more than 75% of their share of wallet to their preferred hotel brand — Deloitte
2. Market Disruption
Airbnb and OYO Rooms are startups that provide new and different value proposition and business models. By their very nature, such ventures become a problem to the traditional way of business for luxury hotels.
However, this challenge can be met by competing in a much more direct way. In April 2019, Marriott International started offering hotel residencies at scenic locations in their ‘Homes and Villas’.
3. Traditional Hospitality
Hotels have to maintain that loyal connection with their consumers, as noted earlier. But is it enough to follow this traditional tried-and-tested route?
A Deloitte report puts ‘empower me’ as the most appealing guest attribute for consumers out of others like ‘engage me’ , ‘hear me’, and ‘know me’. Luxury consumers want an interconnected experience of flair and potential. The luxury hospitality is expected to be integrated into this new age fulfilment.
4. Technology Advancements
Accessibility to consumers has increased with technological progress. More than 50% luxury consumers were found to be more receptive to adopting new apps and online services. The younger generation discovers most brands and services through digital platforms. Their circle has its own growing numbers of luxury consumers at the moment, which is where brands should target their business. Customisation and innovation is the name of the game.
Everything everywhere will be available on-demand in real-time
Luxury hotels have to consider these 5 major technological props:
i. 5G Wireless Tech Connectivity — to provide the fastest data speed in the consumer circle.
ii. Conversational Commerce (chat bots) and Voice-enabled Systems — customisation and engagements with consumers in the new age.
iii. Digital Platforms — joining up with creative partners and travel brands to deliver directly to your customers.
iv. Travel Portals — partner with global travel ecosystems to provide tours and journey activities around the world.
v. AI-Powered Digital Assistants — stepping into tomorrow to serve towards consumers’ unique experience.
Luxury is up for a make-over and evolution is key. The next 5 years will see a long-due overhaul in the way luxury hotels have done their business up until now. Addressing these new consumer demands and expectations is the stepping stone to thriving in the future.
