Top Trends to Look for in 2015The Guest Experience:

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So far, 2014 has been a strong year for the hospitality industry. Hotels are poised to invest in their properties with amenities, services and designs that will attract and retain guests. Staying on top or ahead of these trends will give hoteliers the edge over the competition.

Data from Smith Travel Research (STR) show growth in demand, occupancy,

average daily rate (ADR) and revenue per available room (RevPAR) at hotels

in the United States for the 12 months ended in July 2014. With 6.9 percent

RevPAR growth in 2014, those gains are expected to continue into 2015, the

company said, estimating a 5.2 percent gain next year. It also estimates ADR growth of

4.2 percent in 2014 and 4.4 percent in 2015. Data from August show that U.S. hotel

occupancy is 66 percent, the strongest performance in the last 17 years, STR said.

STR noted in its August 2014 hotel review that none of the top 25 markets recorded an

ADR or RevPAR decrease during the month. And Atlanta; Nashville, Tennessee; Tampa/

St. Petersburg, Florida; and New Orleans saw RevPAR increases of more than 15

percent. Factors such as relatively slow supply growth and rising group business have

contributed to the positive numbers.

When SmartBrief asked hotel professionals whether they felt optimistic about business

in 2015, nearly half said RevPAR will be better than 2014, and 36 percent said they felt

business would be just as good as 2014. Only 9 percent thought it would be worse, with

the rest unsure.

State of the Industry

Are you optimistic about business in 2015?

49%Yes, RevPAR will

be better than 2014No, it will be worsethan 2014

36%

9%

7%Yes, it will be justas good as 2014

I have no idea

* Totals don’t equal 100% due to rounding

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The next generation of business travelers is the

millennials, a group of 77 million commonly defined as

those born between 1980 and 2000. Because they grew

up in a digital era, they expect to be able to stay

connected wherever they go. Hotels that want to capture this

business are adding tech-forward amenities, including mobile

check-in and the must-have free Wi-Fi.

Another strategy is to capture the attention of millennials through

new experiences. Marriott Hotels in September launched a 4-D

virtual travel experience that uses the cutting-edge Oculus Rift

technology. The immersive experience comes in the form of a virtual

reality booth that “teleports” people to three sites: a freshly designed

Marriott Greatroom lobby, a beach in Hawaii or a London skyscraper.

Users have sensory experiences by actually hearing the buzz of the

lobby, feeling the ocean breeze or seeing the view from the top. The

experience, which launched in New York and travels to cities across

the United States through November 2014 could reach as many as

1 million people.

The idea is to appeal to next-generation travelers who are curious

and respond to experiences such as virtual reality, said Michael Dail,

vice president of brand marketing for Marriott Hotels. The company

worked with the same agency that created a popular virtual reality

experience for the HBO program Game of Thrones. “We love to be the

first to do [a virtual experience] because we’re talking about the

future of travel,” Dail said.

Brands also are actively marketing to millennials at major events

that appeal to their generation, such as South by Southwest and

Comic-Con. Courtyard by Marriott created a mobile activation with

engaging activities at this year’s San Diego Comic-Con dubbed the

Trend 1:

WhatMillennialsWant

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Courtyard@Super Hero HQ experience. Located at Petco Park, the

event offered attendees free experiences such as makeup

applications from a top Hollywood special FX makeup team, a

costume play contest judged by The Walking Dead actor Norman

Reedus and a lounge in a prototype of the brand’s next-generation

guest room. Anyone could experience the activation, but in a

strategic move, Courtyard offered a “fast pass” to skip lines to select

Marriott Rewards members.

Beyond marketing, innovations in hotel design are also appealing to

millennials, who seek unique experiences rather than cookie-cutter

properties. The new brand 21c Museum Hotels, with three properties

open and two in the pipeline, makes art an integral part of the

experience. At 21c Museum Hotel Louisville, guests can book an

unusual hotel suite called Asleep in the Cyclone. Designed by New

York-based artists Jonah Freeman and Justin Lowe, the basement

hotel room doubles as a site-specific sculptural installation.

Constructed of repurposed barn wood, custom textiles, original

sculptures and other artworks, the room features a domed ceiling

sculpture that recalls the geodesic designs of American architect

Buckminster Fuller and includes multipurpose furniture and surfaces

designed by the artists. Engaging all the senses, the room also

features a selection of records chosen by the artists and a custom-

built cabinet of artistic curiosities.

Commune hotels will launch its first two Tommie brand properties in

2015. Tommie will have a lower price point than its Thompson Hotels

brand but offer amenities important to millennials, such as games

and other social programming in its lounges, self check-in and

communal dining. The brand is trying to emulate a startup company

with youthful energy and innovative ideas.

Most hoteliers have not yet made any changes to specifically target

millennial travelers, according to a recent SmartBrief survey,

although among those who had, upgrading the technology was the

top focus, followed by lobby and room design. When asked which

tech upgrade they specifically wished they had the budget for,

64 percent of respondents said a faster Wi-Fi network.

Have you made any changes to your hotelto specifically target Millennial travelers?

What tech upgrade do you wish you had the budget for?

No, we haven’t focused on millennials as a group

59%

Yes, through lobbyand room design

Faster wi-fi

11%

64%

In-roomentertainment

16%Virtual concierge services

4%

Digital signage

12%Mobile check-in

4%Yes, through better technology

30%

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Hotels are adapting to cutting-edge payment

technologies driven by the ubiquity of smartphones.

According to a September 2014 report from Nielsen,

171.5 million people in the United States own a

smartphone, or about 71 percent of the population. In particular,

85 percent of millennials 18 to 24 have them. But other age groups

have made the devices an essential part of their lives as well.

About 86 percent of Americans 25 to 34 own them, as do

80 percent of Americans 35 to 44. Research by IHG Rewards Club

revealed that nearly 40 percent of vacationers say their

smartphone is the most important item to take on vacation, and

67 percent use it every day.

One of the biggest announcements to come from Apple’s product

launch event in September 2014 was the company’s mobile-

payment system, Apple Pay. Using near-field communication

technology, the concept allows users to wave their smartphones,

smartwatches or other enabled devices near a hub to have a

transaction recorded.

At the same launch event for Apple Pay, Apple debuted Apple

Watch, a wristwatch that functions as a small computer. Apple was

clearly thinking about its applications in the hospitality industry,

using an example from Starwood Hotels and Resorts to show off

the device’s capabilities. Starwood is creating an app for the watch

that will allow guests at its W Hotels brand to use it as a digital

room key. The function is estimated to be available in spring 2015.

Apple isn’t the only company innovating in this area. Google

introduced its mobile-payment system, Google Wallet, in 2011,

and other companies are experimenting with the concept. While

there are concerns about credit card security and adoption from

businesses, it’s clear that mobile payments are a developing and

potentially huge technology for the hotel industry.

Trend 2:

Apple Pay,Google Walletand OtherMobileAdvancements

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A nother defining characteristic of millennials is their

social consciousness. The 2014 Millennial Impact Report

by consulting firm Achieve found that 47 percent of

millennials surveyed volunteered for a cause or

nonprofit organization in the past month, and nearly 60 percent

wanted their employers to offer more companywide volunteer

opportunities. This finding is key for hotels that want to appeal to

potential guests as well as potential employees.

Millennials want to feel good about businesses they support,

including the hotels they choose. To register as making a difference,

hotels will have to go beyond offering linen reuse or recycling

programs. Hotels have responded by developing and publicizing

corporate social-responsibility programs.

Many hotels have started coordinating philanthropy or community-

engagement events. According to a SmartBrief survey of lodging

professionals, nearly half of respondents reported developing such

programs on their own, while an additional 29 percent started

initiatives because of brand requirements.

For example, the Westin Beach Resort & Spa designated three

poolside cabanas that benefit nonprofit organizations: The Rock the

Ocean Foundation, the Guy Harvey Ocean Foundation and The Art

Institute of Fort Lauderdale. Each cabana features unique artwork

and décor that reflect the organizations, with a portion of all

proceeds from the cabana rentals are donated to the corresponding

partner.

Another example of property-level philanthropy comes from the

Wyndham Grand Jupiter at Harbourside Place. The resort opens this

fall, but staff already started introducing the property to the local

community through initiatives such as volunteering on Habitat for

Humanity projects.

Trend 3:

Giving BackTrend 4:

CustomizationIs King

Does your hotel coordinate any philanthropy or community engagement events?

Yes, we do it on our own49%

No, but we supportemployees who do

10%

Yes, our brandrequires it

29%No, it’s not partof our mission

12%

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Today’s hotel guests want personalized experiences. That

will continue into 2015, with some hotels beginning to

offer niche concierges who focus on one specialty.

Perfectly suited for its location, the Epiphany Hotel by

Joie de Vivre in Palo Alto, California, has a dedicated Technology

Concierge in addition to its full-service hotel concierge. The hotel,

which opened in March 2014, offers the service to help guests make

the most of technology offerings, which include a G-Link dock to

stream movies from devices to the in-room television.

Another tech-forward concierge service is Novotel’s Virtual

Concierge. The Accor brand implemented the smartphone app in

2013, allowing guests to access services such as information on

restaurants and cultural activities near the hotel, weather

information, flight schedules and virtual postcards, which have

been popular with guests, who have sent more than 300,000.

Some concierge services cater to a more fun guest experience.

Hotel Vermont in Burlington has a Beer Concierge, who can

provide insight into the area’s craft beer scene, including guided

tours of several local breweries. Other niche concierge programs

include the Constellation Concierge at Montage Deer Valley in

Utah, who guides guests in navigating the stars; and the Sneaker

Concierge at the hip Dream Downtown in New York, who provides

clients access to rare and limited-edition sneakers. The new Gates

in Key West offers an Island Host, a specialist who steers guests to

hot spots for nightlife, culture and wellness. A few properties in

sun-drenched locations even have Tanning Concierges. At the

W Scottsdale, this person can counsel guests before they arrive

on what to pack to either protect them from the sun or help them

get a perfect tan. The concierge can also provide in-room

airbrushing sessions.

The point of these niche positions is to provide custom services

that make guests feel as if they are getting personalized and

unique travel experiences. Any hotel can create such a role by

identifying one of its region’s defining characteristics — beer, sun,

shopping — and designate a knowledgeable employee to assist

guests. Another bonus: Fun and offbeat titles are irresistible

feature stories that can garner properties publicity.

Trend 4:

CustomizationIs King

Have you ever tried o�ering aspecialty suite, with its owndesign and amenities?

Yes, and our guestsloved it

47%No, but wewould like to

10%

Yes, but itdidn’t take o

13%

No, it’s too much eort/expense30%

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Hotels are constantly inventing ways to make life on the

road easier for business travelers at all price points. A

pilot program between the Cambridge Marriott and the

Massachusetts Institute of Technology called Six Degrees

aims to create networks among hotel guests. Guests who join the

program will have the ability to connect with others based on similar

interests and experiences. For example, runners could connect with

others and plan a morning jog, or alumni of a particular university

could arrange to meet for drinks in the bar. The program, a benefit

for business travelers and solo leisure travelers, tests the notion that

people want to connect with one another.

Recognizing that business travelers are dependent on their devices

— and often travel with more than one smartphone, tablet or laptop

— Marriott has started offering mobile charging stations. Associates

can identify potential users and offer them one of the units from

Kube Systems, which are about the size of a router. The guest can keep it all day (the units

need to be charged in a special base, mitigating the risk of theft). Marriott began rolling out

the initiative in September.

It is part of Marriott’s Travel Brilliantly campaign, which invites guests to brainstorm ideas on

how to make travel better. “We’re not only engaging consumers in what they would want to

see but delivering on those promises,” said Marriott’s Dail. “We’re talking about the future of

travel and how we’re changing the brand.”

Other hotels have developed perks specifically designed for business travelers. Loews Hotels

is offering a program for frequent business travelers called “Wrinkle-Free Travel.” The

complimentary service stores travelers’ toiletries, clothing and shoes until their next stay.

Another perk for luxury guests comes from The St. Regis Atlanta. The property offers a

business-centric room service menu that has amenities such as phone chargers, tailored Sid

Mashburn suits and juice cleanses.

Trend 5:

Customizationfor BusinessTravelers

What guest amenity will you invest in next year?48%

12%

6%

6%

27%All of the above

Digital services like newspapers

iPads/tablets

In-room charging stations for smartphones and tablets

Free Wi-Fi

* Totals don’t equal 100% due to rounding

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L ooking to build their market share, hotel brands are

revamping their loyalty programs to compete for

customers and retain guests who drive other decisions,

such as where to hold meetings.

Hotel brands should consider the preferences of millennials when

crafting their loyalty programs, said Guy Langford, vice president of

travel, hospitality and leisure at Deloitte. The firm surveyed 3,001

millennial travelers who book 26 room nights or more a year, and

Langford noted that price isn’t the only thing they watch.

“Focus on fostering your fanatics,” Langford recently told Hotel News

Now. “Find out what they want, form a customized guest experience;

fine-tune your offering and feed the virtuous data cycle as the

process of consumption and travel preferences will continue to

constantly change.”

The most recent example of a loyalty-program revamp comes from

Starwood, which in September announced that SPG Pro would

combine three existing programs — Starwood Preferred Planner, Star

Choice and Starwood Pro — into one. It is the largest expansion of its

loyalty program and backed by a $30 million marketing campaign.

The program is notable because it rewards guests for their personal

stays as well as meeting business they drive to Starwood.

“Over 50 percent of our occupancy is driven by SPG members. That

number is even higher in our luxury brands,” said Chris Holdren,

senior vice president of global and digital at Starwood Preferred

Guest. “Through the relationships we’ve built with our most valuable

guests, we continue to learn what’s important to them. One-third of

our elite guests told us they also are responsible for booking

meetings at our hotels.”

Demand for small meetings, those of 50 rooms or less, is growing,

Holdren said. These meetings account for 80 percent of Starwood’s

volume. Because the company’s sales staff often focuses on large

conferences, Starwood is able to extend its sales operations by

offering rewards to loyalty-program members for bringing in

meetings. The bottom-line possibilities are significant. Holdren

noted that a 1 percent share gain would equal $80 million to

Starwood’s revenue.

At the property level, hoteliers are reporting competing trends in

their loyalty programs. One-third of respondents to a recent

SmartBrief poll said they have noticed increased membership in

loyalty programs, while another third said that loyalty programs

aren’t as important because guests are booking through online travel

agencies (OTAs). That indicates that hotels need to work harder than

ever to make their loyalty programs more attractive.

Trend 6:

New Ways toReward Loyalty

What trends have you noticed inyour loyalty program?

We’ve seen increased membership

33%No changes12%

We’re o�ering moreperks to elite members

21%

More guests are booking throughOTAs, so loyalty isn’t as important

33%* Totals don’t equal 100% due to rounding

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Offering a guest experience that focuses on health and

wellness will continue as a top trend in 2015. While

hotels have launched various initiatives — such as

Hilton’s designated hypoallergenic hotel rooms that

have special air-filtration systems and Omni Hotels and Resorts’ Get

Fit Kit with free weights and yoga mats — the movement is now

growing to include entire hotels. This year, IHG launched a new

brand, EVEN, with a wellness focus. The first two locations opened

this summer, and three others are in the pipeline. The properties

offer guests upgraded fitness centers with trained staff, guest rooms

that offer natural materials, and healthy food and beverage options.

Other health and wellness initiatives are being folded into existing

brands. This summer, Marriott debuted a healthy-foods vending

machine serving items such as kale and quinoa salad, Greek yogurt

with berries and lemon-pepper chicken. The initiatives are another

facet of the Travel Brilliantly campaign.

In the luxury category, Six Senses Resorts Hotels Spas debuted a new

wellness amenity: LED lighting that can help guests fall asleep at

night and feel alert upon waking. At night, the Definity Digital Good

Night bulb — using technology developed for NASA to help

astronauts manage their sleep cycles — emits less “blue” light to

encourage the body’s natural melatonin, which helps guests get

better sleep. A companion bulb called the Definity Digital Awake &

Alert, has the opposite effect and is installed in fitness centers.

Trend 7:

Health andWellnessRemain Huge Given the industry’s strength and momentum,

hotels have a great opportunity in 2015 to invest in their businesses, adding amenities, services and other perks to attract and retain customers. Understanding which trends will continue and will be most important will help hoteliers create a unique guest experience, and win repeat business.

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