Hotels — The Worst Innovators

The hotel industry is big business. According to IBISWorld, the global hotel industry makes a whopping $878 billion in annual revenue. And with tourism, business travel, and mobility climbing every year, it’s only a matter of time before it hits $1 trillion.

The funny thing about this industry is that despite its size, you rarely see any innovation in the space. Not in aggregate and hardly even in individual hotels. From one hotel to the next, they might change a thing or two. They might even have some cool architecture or decorate it in a more modern style. However, the experience you get in a hotel is almost always the same.

Why is that funny? Because we’re all so different! We’re supposed to be in the age of Instagram where we take pictures of unique things and share it with the world. We’re in the age of technology where business models change and customer experiences are significantly better.

Most of the tourism industry has figured this out. Restaurants have taken notice by turning food into an art with interesting food presentations and menu types. Ditto for cocktail and coffee makers. Even airlines have interesting setups (more for first class), good entertainment options, and good promotions.

Even the rest of the accommodation industry has figured it out. Property developers are using VR for sales and fitting their properties. Hostels have figured it out with more innovative spaces. Check out some of Generator Hostels’ properties…

Generator Hostels — Dublin
Generator Hostels — Madrid

Those sure look like places I’d want to stay, even though I don’t particularly like hostels. And look at Airbnb. They have innovated spectacularly compared to hotels by offering a real cultural feel and home-like amenities.

Hotels have hardly innovated at all. The major chains are most guilty of this. They have done really well with business travelers and loyalty schemes and seemingly feel no need to innovate. Boutiques generally don’t have the capital and investor appetite needed to try something unique (and perceived as risky).

The result is getting the exact same experience everywhere you stay…

  • You have a lobby where you check in and out
  • You have a small room with a bed, tv, desk, and bathroom
  • You might have extra facilities like a gym, pool, business center, and restaurant/bar
  • The reservation system is the same. The layout and features of rooms are mostly the same. Their offerings on-site hardly vary at all.
  • Some might decorate a little nicer than others. Some might even be picture-worthy. But it’s really just subtle background rather than any unique feature. The utility for guests is gone after the initial glance

When you really think about it, there’s not much difference between basic hotels and 5 star ones. The decoration might be a bit nicer, the staff a bit friendlier, the rooms more reliably clean, and things feel more luxurious. Maybe you even have a few extra features like a spa, nice pool, or fancy restaurant. But the EXPERIENCE is pretty similar. Rarely do you go to a hotel anywhere in the world and get something unique in exchange.

But remember, we like our individuality these days! Don’t we crave something unique, especially on vacation? Don’t we have different customs and priorities depending on where we come from? Not always, but often the answer is yes. Airbnb proves that. So why are hotels almost always a standardized service?

At some stage, the hotel industry will go through a rapid change. They’ll realize they need to cater toward millennials that want good on-site technology and interesting experiences. They’ll realize their pricing is uncompetitive with Airbnb. Formerly reliable business travelers will increasingly opt for VR telecommunication that replicates being on-site. And innovative companies will come along and disrupt the massive accommodation market.

So what will happen???

I travel a lot… over the last six years, I’ve spent about 90% of time on the road. I’ve stayed in all these accommodation types and have seen the best and worst offered by this industry. And being a business-minded guy, I’ve realized that this is one of the biggest opportunities to create something amazing.

And so I’m doing exactly that. It’s time to create a “modern accommodation” and actually innovate in the hotel industry. What will it do?

  • Differentiate between the hundreds of hotels in each city. When customers go to a booking site, there’s really not much difference beyond location, price, and reviews. This hotel will offer something unique.
  • Make much better use of facilities
  • Market to segments both on and off the travel booking sites
  • Create a unique and exciting experience for guests
  • Be price competitive with interesting revenue optimization strategies
  • Bring technology to the forefront of operations for both guest experience and profit maximization
  • Consider more sources of revenue than just overnight stays
  • Modernize accommodation with interesting decoration, experiences, services, features, and more

Want to learn more?

If you find this interesting, I would love to talk to you! I am looking for partners to make hotels more innovative. That might include implementing such ideas in a new hotel or applying it to an existing accommodation business.

For more, check out Modern Accommodation Group and contact Dan today!


About the author: Dan owns several businesses across the futuristic landscape.

Reverse Tide provides business and individual services in innovation. For businesses, this includes business strategy innovation, technology, people strategy and more. And for individuals, we help you innovate your skills-learning and career development.

RT Virtual Reality provides learning and business solutions in the VR space (the tech that will most change the world).

Startup Conception offers services to startups and small businesses including financial modeling & budgeting, investor decks, strategy, interim CFO/COO, international business, and IT outsourcing.

And Modern Accommodation Group seeks to apply future-proof concepts to the accommodation and real estate world.

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