Impact Of Current Trends On Tourism And Hospitality Sector

Current Trends Affecting Tourism and Hospitality Organisations

The International Tourism and Travel industry have witnessed drastic changes in respect to the booking of accommodation facilities. Consumers are not reliant over one booking channel. Instead, they follow several channels such as online travel agency, global distribution systems and a hotel’s own website or over the phone. It means that there are two ways such as direct or indirect distribution channels through which products and services reach a customer. Direct distribution is a way to book accommodation facilities through a website or phone (Stangl, Inversini and Schegg 2016). Despite a growing hype surrounding the direct booking, OTAs are still the dominating choice for booking. According to a few scholars, consumers have this perception that online travel agencies offer the best rate. However, hotels are also responsible for attractive charges for products and services (Stangl, Inversini and Schegg 2016). According to a report OTAs currently captures 39% of the whole U.S. booking market. This is expected to grow by 2% percent in 2020. According to a survey, 52 % of the total OTA visitors visit the hotel website to know a more about the hotel and offers. This is where hotel brands such as Marriott and Hilton can take advantage of. They need to convert these clicks into opportunities to support direct booking to groom (Hunold et al. 2018).

A direct booking option is fruitful to Hoteliers; however, they are denied by OTAs to leverage the benefits. Hoteliers on an average losing a close to 12-35 % on each one of the bookings due to the commission paid to OTAs (Pilepi?, Šimuni? and Car 2015). Travelers have become more concerned about search engines such as Booking.com, Trivago and Priceline. They do it to search and compare the offers from different hotels. Hence, hoteliers are forced to compete on offers compared to brand differentiation. According to stats, a holiday is planned after visiting 38 different OTAs in search of better packages. Hotels those who get the highest number of booking request can be called as lucky. The competition between different hotel brands for the most competitive package has affected loyalty programs that once were integral to hotels (Sotiriadis and Fotiadis 2017). These all indicate that hoteliers are under pressure to compete against OTAs. These hoteliers have no other option than popularizing direct booking.  

Hoteliers were first attracted to OTAs as the commissions were also quite lower. Now, the commission has increased with growing popularity of a number of OTAs. The commission could be assumed around 20% against one booking (Hunold et al. 2018). Hoteliers have understood that they are so far wrongly being treated by OTAs. As a result, many petitions have been signed by thousands of hoteliers across the globe. They are gearing up against brand hijacking and rate parity clauses. Articles are being posted in media against these unfair practices of OTAs. Hoteliers are now inclining more than ever towards improving their official websites to make those look attractive to visitors. Consequently, official sites are being integrated with improved user-interface, attractive offers, 24/7 customer service and others. These hoteliers are focussed on building up a community to allow hoteliers and guests interact with each other (Pilepi?, Šimuni? and Car 2015).

Impact on the Business Environment

It is very difficult to say anything at this point in time about OTAs and hoteliers. However, it is for sure that there is no such story of declination of largest OTAs. In addition, there is no such sign that hoteliers will not be able to see a revival from the challenge. Instead, a no-commission model is a booming concept for hoteliers. This can become a growing trend for the hospitality sector.     

One of the crisis management frameworks is “Coombs’s Framework”. This is a noteworthy framework especially because it covers many recent issues. According to the framework, a crisis can be classified as follows (Coombs 2014):

• Attacks on organizations: It says that in most cases crisis is generated from the outsider. Hence, OTAs are nothing but outsiders who work in collaboration to hotel brands on a basis of supply and demand.
• Wrongdoing: It defines risks as a result of wrongdoing from the outsider. In context to the hospitality industry, OTAs are assumed to be at fault. OTAs became a part of the travel and tourism industry to act as a mediator between hotels and customers. They were fulfilling the supplies for hotels and demands for consumers.

In order to manage the crisis as stated in the aforesaid-section, hoteliers will need to use a range of tools, skills and techniques. Those are (Ritchie et al. 2014):

Website Optimization: The hotel website should be well managed at various popular search engines, so that, the hotel is easily visible on the selected range of search engines. Website traffic should be increased with engaging, meaningful and relevant contents. Hotel website must also be mobile responsive as bookings from mobile have increased these days.

Promote positive reviews: Promoting reviews of guests can also encourage to give a try to the website. It creates curiosity to find why there are so many positive reviews for a website.

Clear offers: The website should clearly communicate perks and benefits that visitors will get if they consider a direct booking through the hotel website.

Loyalty programs: Incentivising guests with loyalty programs is also a very handful option. It needs to be made clear to winners that they can redeem their points not just on other branches of the hotel, but also on outlets of their choice.

References 

Coombs, W.T., 2014. Ongoing crisis communication: Planning, managing, and responding. Sage Publications.

Hunold, M., Kesler, R., Laitenberger, U. and Schlütter, F., 2018. Evaluation of Best Price Clauses in Online Hotel Bookings. International Journal of Industrial Organization.

Pilepi?, L., Šimuni?, M. and Car, T., 2015. Online hotel’s sales strategies with emphases on web booking. Journal of Technology Research (2327-5359), 6, pp.1-12.

Ritchie, B.W., Crotts, J.C., Zehrer, A. and Volsky, G.T., 2014. Understanding the effects of a tourism crisis: The impact of the BP oil spill on regional lodging demand. Journal of Travel Research, 53(1), pp.12-25.

Sotiriadis, M. and Fotiadis, A.K., 2017, June. The hybrid era in online tourism distribution channels: Disintermediation and Re-intermediation. In 5 th International Conference on Contemporary Marketing Issues ICCMI June 21-23, 2017 Thessaloniki, Greece (p. 657).

Future Trends

Stangl, B., Inversini, A. and Schegg, R., 2016. Hotels’ dependency on online intermediaries and their chosen distribution channel portfolios: Three country insights. International Journal of Hospitality Management, 52, pp.87-96.

The growing diversity of tourist profiles is also impacting the travel companies. They are more now than ever are forced to adapt to that increasing segmentation. For example, a male Baby Boomer has different food choices than a millennial woman. Gen X family with kids love to explore food stalls found in hawker streets. All these generations carry the same passion for local dishes: however, they are willing more so ever to spend extra money on travel companies that offer foods relevant to their personal tastes (Schänzel and Yeoman 2015). Trendy, creative and experimental dining is high in demand. According to a report submitted from the World Food Travel Association (WFTA), few of segments are increasingly growing in demands in tourists such as social, organic, novice, localist, adventure and budget food tourism. Food tourism like the “Adventure Travel” has changed from what it was believed so at the beginning (Pyke et al. 2016). Actually, travel companies had their focus on just offering too many foods. Instead, a gap is evident between the traditional viewpoint of travel companies and the existing demands for varieties of foods.

Food demands of tourists are diverse in nature. In addition to local foods they are also willing to taste a diverse range of foods. The train is impacting the think tank of travel companies. They are now more than ever focusing on different types of cuisines to attract visitors. Food tourism has actually become a factor to compete for. It is not just because travelers want a variety of foods but also due to a fact that these tourists share thousands and millions of photos of foods on a daily basis across different social platforms like Facebook Twitter and Instagram (Lee et al. 2014). The trend is shifting from expensive dining to more authentic experiences of foods. Some websites are working towards exploring a wide range of food options available on streets and in homes to tourists. This trend is impacting travel companies across the globe in a way that visitors plan their trips while keeping in mind the culinary offerings. The trend is going to favor travel companies and countries, which provide a unique cuisine experience. Considering the stated fact, Japan will be of particular interest for travelers for its traditional markets, unique cuisine and innovative and themed dining experiences (Blay-Palmer, Sonnino and Custot 2016).

As food tourism is a developing concept across worldwide destinations, Hotels can promote certain foods selected for specific nations by using data on the rising trend. For example, the Four Seasons Hotel in Hangzhou, China, also offers opportunities for their visitors to visit neighborhood areas to help them get true Shanghainese and Cantonese foods (Filimonau and Krivcova 2017). This is a kind of strategy that hoteliers can adapt to show their response to the rising food culture.  Moreover, such a strategy might also boost their profit-making capabilities.

 Food tourism is emerging to be the most preferred tourism product for tourists as reported from a recent study conducted by the United Nations World Tourism Organization (UNWTO). The study had also involved the UNWTO Affiliate Members working as part of different sectors or domains. Travel companies are allowing some food bloggers to write contents for them. Few of such bloggers have a strong online following. In 2016, blogging was identified as the second best marketing mode (Marsden and Arce 2017). Food tourism has actually become a resource to promote tourism.     

There are several numbers of tools to address crisis management and risk assessment. One of such frameworks is “ACT” crisis management framework. The framework suggests addressing the crisis in three different types such as the follow (Freedman 2014):  

• Acceptability and approachability towards the crisis
• Quickly and effectively communicating with stakeholders
• To assume the crisis as the opportunity and take the advantage from

It means that the framework suggests to accept the emerging trend such as in case of this task is food tourism. A significant population of tourists wants healthy foods. Apart from a diverse range of foods, they want to avail necessary ingredients such as protein, carbohydrate, vitamins and lots more from foods that they consume. These needs can only be supplied with healthy foods. Travel companies in addition to offering a diverse range of foods will also need to ensure that foods are contained with highly beneficial elements. This is necessary to take advantage of the rising trend for healthy food.

An increasingly growing awareness in tourists for keeping them healthier while during the tour has created enormous challenges to travel companies. While this may sound very strange to people that health can also be maintained with street foods. However, this is not impossible as well. There are travel companies those are flocking to this trending change in tourists. In response to the awareness, travel companies across the globe are now also putting their focus on offering healthy foods. According to the American Heart Association, travelers these days are educated and are informed on nutritional benefits of foods that they consume (Liou 2015). This is also why travel companies apart from offering healthy foods are also focussed in menu design. They are doing it to create attraction in tourists for the concerned hotel. The physical benefits of tourists have grown in popularity leading to a notable change in the food menu (Liou 2015).   

References 

Blay-Palmer, A., Sonnino, R. and Custot, J., 2016. A food politics of the possible? Growing sustainable food systems through networks of knowledge. Agriculture and Human Values, 33(1), pp.27-43.

Filimonau, V. and Krivcova, M., 2017. Restaurant menu design and more responsible consumer food choice: An exploratory study of managerial perceptions. Journal of cleaner production, 143, pp.516-527.

Freedman, L., 2014. Ukraine and the art of crisis management. Survival, 56(3), pp.7-42.

Lee, K., Conklin, M., Cranage, D.A. and Lee, S., 2014. The role of perceived corporate social responsibility on providing healthful foods and nutrition information with health-consciousness as a moderator. International Journal of Hospitality Management, 37, pp.29-37.

Liou, Y.H., 2015. School crisis management: A model of dynamic responsiveness to crisis life cycle. Educational Administration Quarterly, 51(2), pp.247-289.

Marsden, T.K. and Arce, A., 2017. The social construction of international food: a new research agenda. In The Rural (pp. 87-106). Routledge.

Pyke, S., Hartwell, H., Blake, A. and Hemingway, A., 2016. Exploring well-being as a tourism product resource. Tourism Management, 55, pp.94-105.

Schänzel, H.A. and Yeoman, I., 2015. Trends in family tourism. Journal of Tourism Futures, 1(2), pp.141-147.