The pandemic’s dual role as an accelerator of transformation and amplifier of disruptive forces is the thread that runs through the hospitality industry. Even before 2020, the hospitality industry was simultaneously experiencing growth and disruption from companies such as Airbnb.
The Good News: Hotels have a clear path to recovery after a rocky year if they continue their technology transformation and flexibility for serving a hybrid customer base. There is a reason for optimism, and the hospitality industry is welcoming the slow but steady signs of recovery. Helping the hospitality recovery, more customers are taking advantage of the flexible cancellation policies that encourage guests to plan with confidence.
In 2020 hotels launched programs focused on cleanliness and safety to reassure guests that their health and safety were number one priority. According to a PWC Consumer Sentiment Study, trusted brands have a competitive advantage. With more than double the number of consumers surveyed saying they will avoid spending the night in a short-term rental property (37%) versus a brand-name hotel (16%).
While 2020 became the year of the virtual event, 2021 will be the year of the hybrid event. More than six thousand marketing professionals attended the 2nd (Almost) HYBRID Virtual summit, where the focus was creating successful hybrid events in 2021 and beyond. Some key themes emerged from the summit:
- Technology will continue to play a critical role in future events. IT bandwidth, connectivity, and infrastructure were tested in 2020 when all meetings moved to online platforms like Zoom, Webex, Microsoft Teams, etc. The demand for technology will only increase as hybrid events become the norm in 2021 and beyond.
- Success will be measured by the Engagement of both in-person and virtual attendees. Event planners should not treat virtual participants differently from those in person.
- As audience preferences will continue to evolve, hybrid event planners will be required to remain committed to innovation and agility.
Marriott launched its ‘Connect with Confidence’ program in November 2020 at The Ritz-Carlton, Tysons Corner, in Virginia with 28 in-person attendees and 180 virtual participants. Marriott gave UberEats credits to the virtual participant for lunch so that they could enjoy a meal as the in-person participants did.
Other hospitality leaders also introduced hybrid events. Hilton’s EventReady Hybrid Solutions provides event planners with opportunities to plan hybrid events. And Intercontinental Hotels Group launched Meet with Confidence, a hybrid meetings and events solutions. IHG partnered with William Sonoma to offer a curated digital catalog of food and beverage experiences for virtual attendees.
Hotels are expanding their hybrid event capabilities by partnering with companies that can provide tools for digital, touchless, and paperless meetings. And the top hospitality players are expanding technology investments to ensure an exceptional hybrid event experience.
Many in the hospitality industry are adapting their space to deliver a ‘hybrid hospitality’ concept to harness the remote work trend. Colliers’ Hybrid Hospitality report described the experience as the perfect mix of work and overnight stay. Hotels are providing “shared workplaces, meeting rooms and co-working spaces.” And “some of the hotel rooms should be made suitable for working, with the bed concealed, so that you can receive visitors.”
The change to hybrid hospitality will take an industry mind shift. Common areas will need to be reimagined and flexible to include office space and co-working space. The hospitality industry can capitalize on its real estate by expanding beyond the conference and banquet offerings. Several companies are embracing the hybrid hospitality model. In Europe, Hoxton/Ennismore, Accor, Ace Hotels, citizenM and Kerten Hospitality focus on the mix of work and overnight stays and have had success over the last few years.
Hybrid, Innovative and Creative
As the chart below shows, BEACH stocks which include hotels, are bouncing back. The winners in the hospitality sector will be companies that embrace the changes and adapt their business models to capture the wins of a market in transition as they navigate the next few years.