MEWS' George Barker: Hotels are more than just a place to stay
Mews is a startup that provides accommodation establishments with a system for managing reservations, receiving payments, handling guest requests or dealing with the complete management of the hotel, including staff. In order to do their job in the best possible way, they need to keep a good overview of everything that is happening in the hospitality industry and what current trends need to be taken into account. We spoke to head of communications and regional marketing George Barker about how stay times have increased following the pandemic, the strategy behind loyalty programmes and how sustainability in hospitality is not just a short-term trend.
Have you noticed a change in shopping habits over the past year? How are hoteliers having to adapt to them? Has the target group changed?
Guests were booking stays increasingly later even before the pandemic because they had been taught to wait for bargains, but the uncertainty in travel over the past 18 months has meant that booking intervals are now shorter than ever and anything is increasingly difficult to predict. We have seen some interesting innovations in business models that could persist, such as the introduction of a subscription model to offset revenue. For hotels, reducing acquisition costs through loyalty programs and repeat bookings is an ongoing goal, and we help them create experiences that build guest loyalty. The sudden decline in corporate travel has turned the spotlight on leisure guests, who, although they bring a higher return on accommodation, are more difficult to acquire and predict their behaviour. For hotels, this simply means that they are focusing less on loyalty programmes aimed at business travellers and more on leisure customers whose requirements are different.
What do you think is the most important strategy in the hospitality industry today?
The pandemic has forced many accommodation establishments to review their revenue sources and realise that a hotel is more than just a place to stay. They can be an office, a meeting place that serves local communities. They can be much more than a room with a bed within 24 hours. The industry needs to rethink its view of pricing and how it approaches room sales. With leisure travel at the heart of the business being predominantly by local guests, with less longer distance travel for business and hotels concerned with margins and operational flexibility, the traditional occupancy-based model needs to be rethought. Subscriptions and other membership-based strategies are great for balancing revenue streams while also being an effective tool for building loyalty. As hotels evolve with their guests, it's time to stop clinging to old strategies and build new ones.
Which current trend in the hospitality industry do you think will not last long and which, on the other hand, will persist?
We'd love to see a return to hassle-free travel, but we're still too far into the pandemic to see the end of it. Changes are likely to persist in the area of business travel. Those who do travel are currently doing so for longer periods rather than flying back and forth. The unstable nature of the global economy suggests that companies will not want to return to the pre-pandemic form of travel anytime soon, so trips will be longer and more meaningful. For hotels, this means they need to adapt their offerings slightly as guests increasingly live with them rather than just stopping by.
Do you have interesting numbers or results of your own research that you would like to share?
We recently undertook a study on sustainability and found that it really is not just a fad, but the next step in the industry as the world reopens and people travel more consciously. Energy-intensive operations are not only damaging the environment, they are also holding hotels back from offering great service and creating experiences that lead to lifelong loyalty. We've come up with a number of ways hotels can reduce energy costs and increase efficiency. One of the easiest first steps is to move to a paperless, cloud-based PMS. We've also found that a focus on sustainability can help attract and retain employees. You likely have team members who are green enthusiasts and will have great ideas for changes that can be made to the operation. A more engaged team means your sustainability strategy will be maintained and employee turnover will be reduced.
What are the most significant things that will change in the hospitality industry after the pandemic experience?
The pandemic accelerated changes that guests have wanted for a long time and that they are used to, for example, from the e-commerce sphere. Hotels have been reluctant to digitise their operations, fearing it detracts from service, but offering seamless check-in, keyless entry, freeing staff to be more autonomous, is what makes good service today.
What type of accommodation has decreased/increased in the last two years?
The need for space and the demand for longer stays has made the shared economy and extended stays the most successful segment of the last two years, and they are growing as a result. As well as being able to provide accommodation during lockdown, the operational side of this area is more profitable than a traditional hotel and guests are reassured by the greater personal space and the ability to dictate more within their own stay, rather than being restricted by set meal times, for example. Hotels in city centres have suffered the most, especially those catering to a business clientele. However, it is here that we have seen the most innovation as a result, as alternative uses for rooms and meeting rooms are sought. Those hotels that were hit hardest are starting to come back and we are all benefiting from their lessons learned.
What are hotels trying to do to optimize direct bookings? Has investment in advertising to support direct bookings increased in recent years?
Hotels, especially those in the branded sector, use loyalty programmes to encourage direct bookings. During the pandemic, we have seen more efforts by the big players to keep their loyalty programmes active, for example Marriott International is increasingly focusing on its fintech offering to drive revenue, and has recently announced plans to expand its offering to include insurance. We think there will be more of these personalised offers to come. We have seen a shift to direct bookings with hotels that have offered flexibility. Travelers are often reluctant to book stays directly because of ever-changing government policies. If a hotel can provide clear cancellation or refund terms, they are more likely to win the guest over, and at a lower cost than through the traditional advertising model. Direct bookings are on the rise, which means better revenue for hotels, as well as the opportunity to establish a relationship with the guest before the stay. In addition, guests booking their stays directly have seen a decrease in cancellation rates since the pandemic.
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