Something to look forward to in 2019
A review of 2018
By Linchi Kwok, Associate Professor at The Collins College of Hospitality Management
The holiday season is around the corner. It is a good time for us to review the major events discussed in 2018. A quick overview will very likely inform us what we can expect in 2019.
Airbnb: Into which market will it expand in 2019?
This year marked the 10th birthday of the company. I wrote 24 commentary articles (excluding this one) in 2018 about the industry updates and trends, among which six (or 25%) was about Airbnb.
Looking forward, Airbnb and hotels will fight in a bigger battleground in 2019. On one hand, more hotels, including Marriott, have entered the short-term residential rental market. On the other hand, Airbnb introduced two new brands --- Airbnb Plus and Beyond by Airbnb, which offer many "certified" enhanced services that are usually found in a traditional hotel.
In February, Brian Chesky, the company's CEO announced "Airbnb for everyone." Besides the new products of Airbnb Experience, Airbnb Plus, and Beyond by Airbnb, Airbnb has also taken on several new initiatives, including adding hotels to its listings, teaming up with local hotels to ease the check-in and check-out experience, building peer-to-peer residential-rental-ready properties, and rewarding Airbnb's loyal customers. As an enterprise in the tourism industry, Airbnb is competing directly with OTAs (online travel agents), such as Expedia and Priceline.
The most recent update is Airbnb is set to enter the real estate market as early as in 2019 --- Airbnb will soon design and sell residential homes. Airbnb is definitely more than just a room-sharing company. The question is what new territories will Airbnb get into in 2019.
Other discussions about the room-sharing business in 2018 include the similarity-attraction effect in short-term residential rentals, price positioning on Airbnb, and buyer-seller similarity in room-sharing business.
Tech trends: What can't be replaced by machines?
Technology appeared to be another hot topic in our discussion in 2018, with five (about 20%) commentary posts. Technology products are helpful in at least four major areas: enhancing the guest experience, improving service operations, supporting sustainability, and protecting cybersecurity, according to my observations in HITEC Houston 2018 and the Hotel Experience Show in New York City.
Many hotels and restaurants, however, focus more on using technology to enhance guest experience and improve operations; they might have underestimated the risks of cybersecurity. For example, McDonald's opened a new headquarter and planned to add more self-service kiosks to its stores, aiming to provide better service to the customers, and companies can now use AI in hiring and selection. Nevertheless, if companies have invested more in cybersecurity, the recent data breach in Marriott could have probably been avoided.
For most workers, the advancement of technology creates major concerns to job security. The fact is machines are replacing more and more humans at work. Most recently, we also heard about the concept of self-driving mobile hotel rooms. Machines will soon complete most tasks that are perceived to be performed by human beings only.
One reason why Marriott workers participated in the largest hotel strike in the U.S. history in 2018 was they worried if their hours would be cut. I am glad the strike is finally settled, but nothing can stop the advancement of technology. Tech trends will forever remain to be a hot topic.
Hotel loyalty programs: Is bigger necessarily the better?
Almost every hotel wants to be the "big" player in the market. This idea was supported by numerous examples of hotel mergers and acquisitions.
When hotels are getting bigger, so do their hotel loyalty programs. Marriott, Accor, and Hyatt, for example, have introduced their newly combined loyalty programs. As a matter of fact, Hilton, without any big acquisition or merger in 2018, also updated its Hilton Honors Program. Even though there were glitches and confusions among the travelers for the new Marriott Reward Program, the problems are expected to be solved soon (hopefully). Let's see how being bigger will play out in 2019.
Gen Z: They are taking over.
Gen Zers, either defined as those who were born after 1996 or 2000, are growing up. This generation is even bigger than the Millennials in the world population. They also began entering the workforce. More discussions will probably follow in 2019 as we get to know more about this generation.
Innovations and sustainability: They will never go away.
Innovations and sustainability are closely related to the advancement of technology. As shown in the example of McDonald's flagship store, technology plays a critical role in service innovations. In another example where airlines, restaurants, and hotels are switching to more sustainable products, the development of green products also relies on the advancement of technology.
In terms of business strategies, I discussed the dynamic pricing strategies for restaurants, hotels, and Airbnb listings. Suggestions are made for DMOs (destination marketing organizations) to improve their service to hotels. Additionally, I reviewed two predictions, one for the travel industry and the other for the restaurant industry. Lastly, I offered travelers some tips to avoid hotel hygiene horrors.
As a review, what event(s) happened in 2018 caught your attention? Looking forward, what are your predictions for the travel and hospitality industry in 2019?