What Is the New Consumer Trends in Hospitality Industry?

Consumer Trends in the Hospitality and Tourism Industry:

Effects on Hospitality and Tourism

The purpose of this work is to identify present consumer trends and to examine the facts and upon gaining understanding, explain the effects that consumer have upon trends in the hospitality and tourism business.

According to a Marketing Insight report of October 3, 2003, research that had been recently released stated that one in five Americans would be using the Internet for their personal and business booking and reservations. The recent report states that:

The online travel business is already the leading online revenue producer, but news of Cendant's pending acquisition of Orbitz, announced earlier in the month, has injected new vitality into the market, according to the latest eMarketer analysis. The Online Travel: Marketing and Selling report, released today, discusses strategies that are working in the space and offers insight for agencies looking to attract consumers who increasingly want a personalized experience. eMarketer is predicting that leisure and unmanaged travel bookings in the U.S. will total nearly $50 billion in 2004.

News Article #1: dBusinessNews

"Starwood Hotels & Resort Select HP for $100 Million Services and Technology Contract"

An online news article at dBusinessNews dated October 27, 2004, states that:

" HP and Starwood Hotels & Resorts Worldwide, Inc., today announced a broad technology agreement that will enable Starwood to deliver an improved guest reservation experience to its customers around the globe. As part of a seven-year, $100 million contract, the companies are pooling resources and expertise to build a new global reservation system that will be managed by HP. In addition to vastly improved functionality, Starwood anticipates savings of $15 million to $20 million annually on its technology operating costs."

Starwood

is not only one of the world's largest hotels as well as leisure companies but Starwood is also, within the hospitality industry, a leader. Competitive success, used to name leaders in the industry is the measure of the hotel in the attracting and retaining of guests. In this report Starwood executives stated that in order to increase occupancy rates, enhance Starwoods Preferred Guest Program (customer loyalty program) and to reduce operational expenses, the adoption of the HP

CRM, Customer Relations Package, seemed to be the best move on the part of Starwood.

The new system is expected to streamline the reservations process. Several available languages in the system will "further expand Starwood's reach in the global marketplace." Robert Cotter, President and CEO of Starwood stated that:

"Starwood selected HP as our technology partner for this engagement based on its vision, expertise, flexibility and understanding of the consumer market, as well as its broad portfolio of consumer and enterprise technology and services offerings."

Agreeing with Cotter, Jack Novia, Senior Vice President of Customer Solutions Group as well as being Managing Director for Americas HP stated that:

"HP is unique in that unlike our competitors, we offer highly flexible, collaborative and cost-effective services and solutions that deliver a richer consumer experience, a more innovative platform and the ability to ensure that customers such as Starwood can synchronize business and IT, all part of achieving an Adaptive Enterprise,"

News Article #2:

Online Travel Industry to Approach $50 Billion in 2004 Hospitality Trends

According to this news report concerning hospitality trends:

"Online travel agencies have been successful in further reducing margins in what is already a low-margin business," said Senior Analyst Noah Elkin, the author of the report. "But as travel matures as an online industry, distribution alone will not be enough, and neither will low prices." Online travel agencies have been successful in further reducing margins in what is already a low-margin business," said Senior Analyst Noah Elkin, the author of the report. "But as travel matures as an online industry, distribution alone will not be enough, and neither will low prices. "Strategies such as aggregating fares allow consumers to compare rates for themselves, which is why they're working," Elkin said. "Online travel is a huge industry driven by 41 million online travel buyers, and despite ongoing economic and safety concerns, we expect continued growth."

Article #3: Ground Transportation:

Statistics & Trends:

"KDS offers its customers a direct access to the Europcar central reservation system" Travel Daily News.

This news article states that KDS, a provider of online business travel management in Europe and Europcar are joining as partners in providing direct access to customers for online vehicle reservations. Jean-Francois Vergnangeal, Senior VP Marketing & Strategic Alliances at KDS stated in the article that:

"This partnership is perfectly in line with our policy to develop direct links, which is one of the major facets in the strategy of KDS, an independent actor. Indeed, we wish to multiply the number of accesses to the various distribution channels, thus providing our customers with the greatest freedom of choice when reserving their travel. By offering this new direct access to the Europcar central reservation system, we are responding to their request and to the market's expectations."

Advantages are stated to be:

A more economical solution via access to the best rates, linked to the lower distribution costs provided by the Internet.

A more flexible solution in terms of the services and functions available to the users.

Article #4:

Statistics & Trends: "Tourism Trends by Tourism Control Intelligence KDS & Deutsche Bahn further extend their partnership for best online services to German corporate travelers" Travel Daily News 77

This is a report on "global megatrends" that are "revolutionizing the tourism industry" according to the consultant and director for the Tourism Control Intelligence in France and the U.S.A., Michael Nowlis. In this report

Nowlis emphasizes the following as trends:

The Internet will become the dominant distribution channel for all travel and tourism products eliminating most intermediaries.

Consumers will systematically consult travel health sites before checking ticket or room availability.

Critical shortages of skilled staff will encourage hospitality corporations to develop or outsource proprietary training centers.

The introduction of new technologies in the upscale tourism industry will not replace the human element in service delivery - to the contrary, it will gain importance.

Hotel companies' PMS standardization will result in the transfer of database and data warehousing responsibilities to CRS for greater operational and marketing efficiency.

Travel guidebooks will become highly specialized and more frequently consulted - primarily on the web.