CallisonRTKL Hospitality Forecast 2022

10 changes to guest expectations

1. Food & Beverage (F&B) scope - While the recovery has not been evenly distributed, Food & Beverage (F&B) will be the catalyst that changes this. The scope of these facilities will be extended to service both the guest and the community.
2. The comeback of the (traveling) salesman - Hospitality offerings aimed specifically at the lower and mid-tier business traveler will see a return in 2022, with group and business travel expected to recover well. There will however, be a new awareness for the sustainability and frequency of corporate travel with many organisations tightening policies around this to meet carbon positive targets.
3. Work From Anywhere (WFA) - With guests expecting to WFA and commercial real estate under stress, new demand is being created for hybrid hospitality/work spaces in central locations. Investing in membership programs beyond those that focus on loyalty will mean spaces that can be repurposed into co-working facilities stand to be easily monetised.
4. Hybrid hospitality - The move to remote services has culturally blurred the lines between work and play, between entertainment and exercise, and between many more previously opposing parts of life. Guests now expect hospitality offerings to accommodate this mix, make extended stays possible, and provide spaces for various activities and moods. Lifestyle hotels have the formula with enhanced F&B and entertainment options that amp up revenue and invite the community to participate in the energy. This will be a very powerful position in 2022.
5. Biometrics & data exchange - Gone are kiosks and touchscreen assistants. Guests now expect all hospitality services to be accessible via smartphone and to have the option of a completely contactless experience. This makes deploying digital far easier and cheaper, and data collecting far more consistent. However, care needs to be taken with the luxury traveller as high-touch experiences will continue to be the expectation.
6. Psychographics & behaviours over demographics - Rich data on guest behaviour gives us a much better view into their attitudes, perceptions, expectations, and aspirations - the “why” behind their hospitality preferences, and spending. This is what will be mined and analysed moving forward.
7. Profiling & personalisation - With the move to mobile, guest’s expect increased personalisation. Following in the footsteps of AirBNB, Netflix, YouTube and many more, available data will be analysed to shape a guest experience that is highly curated and able to refer guests to the services, amenities, and offers most relevant to them.
8. Transaction-less travel - Guests expect ease and convenience. They will spend more when you make it easy and pay a premium for a seamless door-to-door experience that removes any points of friction. Membership programs are moving to incorporate biometric technology into their room keys, identity cards, payment points, and more.
9. IRL over URL - Digitally native guests will also want real-life experiences. Invisible technology will make for effortless experiences and operational efficiencies, with employees focused on building rapport, pre-empting guest demands, and responding to their desired level of human interaction.
10. The local guest - Guests want to live as the locals do. There is no greater validation than becoming a local institution, a place where locals and visitors alike seek out. Hybrid membership programs that make hospitality amenities accessible to locals for work, entertainment, health, and socialising will increase the value of an asset and give it greater relevance among multiple audiences.

“To get ahead of changing guest expectations, design for attitude, not age, for co-working not business travel, for future uses not short-term pressures. Use tech to maximise experiences, not just minimise human interactions. Make the tech invisible and the data work harder. Create an offer as appealing to locals as to travellers and respect the ecosystem you are a part of,” says Paul Condor, CRTKL Principal.

How can you generate greater ROI and attract new demographics to your property?

More than just “heads in beds”, there are many opportunities for revenue generation beyond guestrooms. It is as much about the flexibility of individual spaces, as it is the flexibility of the hotel on the whole. Think about how underutilised portions of the property can be monetised. How lobbies, food and beverage areas, conference rooms, and leisure centres can serve dual purposes. Open up public areas to the exterior, activate street frontages, create sufficient space for locals to socialise and design these areas to accommodate multiple uses.

Using prefab components will mean shorter downtime, while incorporating sustainability into renovations will pay dividends in the long run by reducing energy, water, and waste. Integrating the latest technologies will improve the experience for all – employees are just as important as the guest in this sense, with the operational efficiencies they gain being passed onto the guest in the form of more personalised service from happier and more motivated staff.

Introducing flexibility into the rental model will also attract new audiences. Daytime room rates can appeal to those looking for private workspaces, while longer term leases for serviced and branded apartments will create a more blended residential offer. This overlap between hospitality and build-to-rent or multifamily can be explored further with later living and co-working.

Meanwhile creating a competitive advantage within the room might involve upgrading conventional models into ones that promote wellness. Growing at 50% faster than conventional tourism, wellness tourism is high yield tourism. More on this and the growth of the wellness economy here.

"Flexibility equals resilience and returns in the short, medium, and long term. Monetising underutilised space is the quick win, designing these spaces with the ability to pivot according to changing guest expectations and travel restrictions is the mid play. Together they buy time for informed decision making about the strategic repositioning of the whole asset in the response to macro behavioural trends and mixed-use opportunities,” says Todd Lundgren, CRTKL Principal.

How can F&B be used as a catalyst for hotel recovery?
Food & Beverage (F&B) is recognised as an essential contributor to a hotel’s positioning within the market. While consumers are becoming increasingly discerning, F&B presents hotels with unlimited opportunities for additional revenue sources.

While bars often lack underutilised space, kitchens have far more capacity than most would think. There is usually enough space to create other food programs and integrate ghost kitchens into the existing kitchen area. Kitchen take overs, culinary classes, and pop-up collabs with local institutions and chefs, will strengthen community ties and create stronger referral business. These affiliations with local restaurants and suppliers can be further leveraged to create localised minibars, grazing stations or grab-and- go selections, and to supplement room service hours where condensed menus can simplify operations.

Meanwhile, bars can leverage these back-of-house areas to introduce new food programs as different brands both within the bar itself and for the community. This allows bars to supplement revenue while capitalising on app-based ordering, pickup, and third-party delivery trends. On slower nights, the front-of-house can play host to tasting and ‘meet the maker’ events, with local producers invited to showcase their products and reimagine happy hour.

For some there is also the option to use low rooftops with raised pavers to create new entertaining with views and expand the scope of F&B venues beyond designated dining areas. Others can integrate dining into exterior landscapes, create independent physical entrances, establish street eateries, and push outdoor dining into sidewalks, alleys, and parking spaces with modular pop-ups like the Sidewalk POD.

“F&B is more than a hotel with a restaurant. F&B is a catalyst for recovery. Expanding the scope of these venues will introduce new revenue streams, elevate the guest experience, embed the hotel into the community, and give people a reason to come back time and again,” says Clay Markham, CRTKL principal.