Hotel industry must face the challenges of the future
A new report on the hotel industry identifies six key factors that need to be addressed as it looks to meet the challenges of the future.
The report has been produced by leading Spanish hotelier Meliá Hotels International (MHI) – parent of the RCI-affiliated Club Meliá – and makes fascinating reading for members of the industry.
The hotel industry: modernisation or transformation?
Hotel companies cannot ignore major changes in our business environment: changes in geopolitical and economic scenarios, a digital transformation that is creating new paradigms, disruptive business models, and social and demographic changes that have generated hyper- segmentation of demand.
Meliá Hotels International is now over 60 years old, and over these six decades the “modernisation” of the hotel industry has been a recurring subject of conversation. The beginning of this 21st century, however, has seen the most rapid changes in the history of the industry, and today we can no longer simply talk about modernisation, but rather of a genuine transformation of the industry, affecting hotel design and attributes, service, technology, sales, processes, and last but not least, our customers.
From a global point of view, we believe that the transformation the hotel industry needs must address the following six factors:
1. Alignment with the digital ecosystem: A new communication and relationship model with global customers, multidirectional and highly customisable, allowing us to grow markets, penetrate new market segments, enhance direct sales over package sales, and use Big Data to optimize our planning and strategy as well as manage our resources. The Be More Digital project implemented by Meliá over the last three years has created a new business and customer relationship model and a profound cultural transformation at all levels.
2. Product and destination renovation: International competition and customer demand force us to constantly renew our products and services and, more importantly, to work with public bodies to enhance the renovation and sustainability of tourist destinations. As an example, company strategy to renovate and reposition hotels and mature destinations in collaboration with public institutions in Magaluf in Majorca, Santa Eulalia in Ibiza and Torremolinos on the Spanish mainland is proving to be extremely successful financially and also effective in maintaining our leadership and competitiveness.
3. Diversification and personalisation: Nowadays, customer segmentation is far more demanding. Brands and products are needed which are suitable not only for the different demographic segments (baby-boomers, millennials, generations Y or Z, etc.), but also for different psychographic profiles with different habits or lifestyles (different family structures, young people, singles, adventurers, empty-nesters, etc). The latest step in the growing diversification of our brands was in the ‘Sol’ brand, which now offer four different sub-brands, each adapted to a much more personalised and customer-focused experience, and much less focused on distribution channels as has always been the case in the resort industry.
4. The “bleisure space”: Cities focused on finance and business are increasingly aiming to enhance their tourism and leisure potential, becoming “bleisure cities” (business + leisure). In addition, segments such as millennials, which will account for 50% of the workforce in 2020, require a mixed experience for their business trips, extending and adapting their stays to discover and enjoy their destinations. City hotels therefore need to increasingly merge the leisure and lifestyle experience with modern workspaces equipped with the latest technologies. To attend to this complex and growing demand, Meliá has successfully applied its leadership and expertise in the resort industry to its best city hotels around the globe, creating benchmark hotels which fly the ME by Meliá, Meliá Hotels and Resorts, and Innside by Meliá brand flags.
5. Sustainability: Nowadays, tourism that is not responsible is unimaginable. Travel companies are increasingly integrated with responsible destination management and aware of their influence on communities and the environment. The public, our customers and even intermediaries and travel agents are also well aware of the need for responsibility and the impact of our actions at all levels. Meliá Hotels International is committed to the United Nations Sustainable Development Goals, and through our activity we aim to encourage respect for human rights, the working environment and environmental conservation, among other principles that constitute our corporate responsibility policies.
6. Brand: In the current globalised ecosystem, a powerful brand guarantees results, reputation, customer identification and loyalty. Brand, quality and service are the best ingredients for facing the challenge of disruptive accommodation alternatives such as holiday rental which tend to compete with hotels that are more of a “commodity”. At Meliá we have six extremely competitive brands adapted to the demographic and psychographic profile of highly defined travellers: Gran Meliá Hotels & Resorts, ME by Meliá and Paradisus by Meliá in the premium segment; Meliá Hotels & Resorts and Innside by Meliá in the upscale segment, and Sol Hotels & Resorts in the midscale segment.