10 Things to Know: Industries Affecting Hotels

By Samantha Worgull
Editorial Assistant
Hotel News Now

Photo: Kerry Woo

Experts from outside the hotel industry shared outlooks and market trends that will have an effect on hotels last week during the closing general session at the 6th annual Hotel Data Conference presented by STR and Hotel News Now.

During the panel titled "Information, insights and innovation: Other industries' effects on hotels," experts shared some key insights on how trends such as increased consumer confidence, the airline industry and the sharing economy are affecting the hotel industry.

The following are 10 key takeaways from the panel:

1. Travel is ranked No. 1 among all United States' industry exports.
2. The U.S. Travel Association launched the "U.S. Travel Barometer," which measures travel intent to the U.S.
3. The check-in and check-out experience matters most when it comes to guest satisfaction, according to J.D. Power's Richard Garlick.
4. There are six types of guests in the hotel industry, according to Garlick:
5. Garlick said the percentage of price buyers is dropping and the percentage of scrutinizers is rising.
6. Four airlines now offer 87% of airline capacity in the U.S., according to Diio's Jordan Kayloe.
7. STR Analytics' Carter Wilson took a look at union hotels' profitability when stacked up against a comparative set.
8. Private home, apartment or condo rentals are growing in volume. "Social is so engrained in our daily lives it seemed like all that needed to happen was for developers to come in and create these kinds of marketplaces," said Marcello Gasdia, senior analyst of consumer research at Phocuswright. "People are sharing everything now."
   
   In 2010, 8% of those surveyed in the Phocuswright report titled "Share This! Private Accommodations & the Rise of the New Gen Renter" rented out a room in their home, apartment or condo. In 2014, that percentage has grown to 14%.
9. And more people are renting them. According to the same report, 17% of U.S. leisure travelers rented in 2013. That's 22 million renters, Gasdia said.
   
   Is this cannibalizing the hotel industry? Not really, Gasdia said, as the hotel industry is stronger than ever as evidenced at the opening general session of the Hotel Data Conference.
   
   However, one-third of renters considered a hotel before their last rental. This could be revenue loss for a hotel, Gasdia said, but 46% of leisure renters surveyed did not consider a hotel in their planning process.
10. Gasdia offered some insights on the profile of the "next gen renter," who is passionate about travel. Of next gen renters, 50% have a desire to see as much of the world as possible, he said. More than 50% of next gen renters are millennials aged 18 to 34. More than one in five millennials rented in 2013, according to Phocuswright research.
    
    "There's a common misconception with millennials and why they're renting so much," Gasdia said. "Their average leisure travel spend is relatively high."
    
    Following are some additional characteristics of next gen renters, according to Gasdia:
    • they're seeking a unique, authentic experience;
    • they prefer to stay at smaller, boutique properties versus the larger hotels;
    • they're spontaneous with their travel plans;
    • they believe in the old adage of "the more the merrier" and they look forward to meeting new people and sharing experiences;
    • but they're happy to travel solo as well; and
    • they're big on digital.

Read about all ten trends at www.hotelnewsnow.com