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Article Review

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Article Review

In recent years, the hotel industry has seen many changes, chief among them being the

various ways in which people communicate and what they expect from brands. As demographics

age and their income grows, that money is spent on leisurely experiences like travel and tourism.

Now, consumers are expecting personalized experiences from brands that meet their diverse and

unique needs. Generations are wanting seamless travel experiences from check in to check out

and want to use their personal technology to do so. In the United States especially, user behavior

is constantly changing and with the advent of newer technologies that digital natives are easily

adopting, hotels must keep up and bring a new form of modern hospitality to travelers. This, in

addition to competition from lodging service Airbnb which has entirely disrupted the lodging

industry, is forcing hotels to have to uniquely keep up in several ways. Hospitality and

technology are aligning in ways unseen before.

The key value proposition has had to evolve as generations change and to combat the

impact of Airbnb. Millennials and Gen Z are technologically savvy in ways that few other

generations are and as they age, their income increases, and they look to travel, they want their

technology to be automatically integrated into their travel experience as it is in every other facet

of their lives. An article in The Economist discusses the recent peak in travel satisfaction and

desire among North Americans and how it was then in 2018 expected to decline; the current

coronavirus pandemic is also showing signs of decimating travel greatly. Citing a survey from

J.D. Power, hotel patrons once lured in by amenities are looking for something new. Now, a free

breakfast and free wireless internet in room are to be expected; they are now basic amenities.

Travelers want a more engaging experience than hotels offer, such as them being located in

bustling parts of major cities where natives are rather than hotel districts, being able to cook
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meals in their rooms, and to engage in the local culture. This is part of the allure of Airbnbs

which have disrupted the hotel industry (Mody & Gomez, 2018). Airbnbs double as people’s

fully equipped homes that are in local neighborhoods with activities that local people participate

in, in addition to having full kitchens and a relaxing experience that is not disturbed by guests

with whom they share walls. Airbnb also offers this intangible value for tangibly lower prices,

and the perks the hotels offer are no longer exciting.

The value propositions of hotels have changed in response to demographic changes.

Regarding hotel rewards programs, fewer than half of Millennials have signed up, totaling only

39 percent (The Economist, 2018). While satisfaction is higher among guests who are in the

reward program, this does not correlate to higher satisfaction among certain demographic groups.

For example, some hotels have begun to cater to a “Millennial mindset” of travelers and offer

minimalistic, immersive, and personalized experiences. Hilton and Marriott, two of the largest

hotel brands, have created their own iterations of Millennial appealing spaces: Tru by Hilton and

the Moxy Hotels, respectively. They have emerged as midscale places that are sleek and modern,

equipped with 24/7 food and alcohol availability, and have no front desk personnel—travelers

check in with their mobile phones and get guaranteed free wireless internet. The brand director

of Moxy Hotels, Vicki Poulos, has admitted that the development of the hotels was in response

to research showing Millennials’ lack of want for a “cookie cutter experience” (Bond, 2017). The

Moxy Hotels are also equipped with Keyless entry, Internet television that is partnered with

multiple streaming sites, and mobile check-in and check-out. Another example of adaptation to

changing consumer behavior is the Radisson RED, a Millennial-targeted hotel chain regarded a

“hotel-Airbnb hybrid” (Herrera, 2017). The Radisson delivers a warm welcome from its front

desk that enables guests to check in through a mobile app, provides a multipurpose table in each
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room, and the lobby is built as a “social hive” and invites guest interaction. The first Radisson

RED opened in Miami, Florida, the fourth largest national market for Airbnb, showing that it can

respond directly to the competition.

The value of a hotel in today’s time is only as strong as what it offers and its value

proposition. A value proposition is not always tangible like when selling a physical product, but

it can be felt. The value proposition is the intersection of a consumer’s needs, wants, and desires

and what a hotel provides and how that traveler benefits. Hilton Hotels, for example, boasts a

value proposition that is rooted in emphasizing brands and developing new ones that target

smaller segments of the consumer market. Its newer brands including Tru and Home2 appeal to

consumers who like a modern approach to traveling and those looking for more minimal

experiences, respectively. Today, hotels must provide more than just a resting place for guests.

They must provide immersive, technological, and personalized experiences that fit their needs.

Lodging today is about enabling travelers’ sense of exploration and allowing them to participate

in cultural activities with the bare necessities of what hotels provide. The more that traditional

hotels can respond in kind, the better they can compete in a volatile market. However, the effects

of the COVID-19 pandemic have already tremendously changed travel and it is likely that both

hotels and Airbnbs will have to adapt to the new normal of distancing, protection, and

disinfecting.
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References

Bond, S. (2017, May 7). A night at the Moxy with Marriott's brand leader, Vicki Poulos.

http://www.dotwnews.com/debut/a-night-at-the-moxy-with-marriott-s-brand-leader-

vicki-poulos.

Herrera, C. (2017, January 17). Radisson RED, a hotel-Airbnb hybrid targeting millennials,

opening in Miami in 2018. miamiherald.

https://www.miamiherald.com/news/business/article127065634.html.

Mody, M., & Gomez, M. (2018). Airbnb and the Hotel Industry: The Past, Present, and Future of

Sales, Marketing, Branding, and Revenue Management. Boston Hospitality Review, 6(3).

The Economist. (2018, July 16). North Americans feel better about hotels than ever. The

goodwill is unlikely to last: Future reservations. https://search-proquest-

com.libraryresources.columbiasouthern.edu/docview/1805954611?accountid=33337