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Business Briefing Hospitality Special: Trend and behavioural analysis to navigate crisis and recovery

Harriet Nicholson
Harriet Nicholson
Head of Strategy 22 May 202010 minutes read

Welcome to the latest Etch Business Briefing. In this sector snapshot, we share the latest thinking from our hospitality behavioural analysis and recovery planning workshops.

WEEKLY DIGEST

As the government slowly relaxes travel restrictions, the hospitality industry is gearing up to reopening. Now begins the very real challenge of clawing back months of lost revenue while protecting guests’ safety. Social distancing presents major commercial concerns, not least in limited restaurant capacity and – at least immediately at reopening – reduced room availability. 

Even if you can overcome the viability issue, there’s the further difficulty of pitching to anxious prospective guests, not least when tourism boards are actively dissuading travel to key hotspots. This is further complicated by staff furloughs, the day-to-day challenges of decision-making with skeleton teams and closer revenue management scrutiny. 

At Etch we’re long-time partners to some of the UK’s leading premium hotel brands. Since March, we’ve been conducting trend and behavioural analysis to help steer our partners through the crisis and into recovery, both in strategic communications and digital strategy. In this Business Briefing, we share some of the headlines from that work.

THE QUICK READ

Short on time? Here are this week’s headlines… 

  • Burgeoning future travel optimism: Travel interest is piquing with easing restrictions. With international travel impossible in the immediate term, we expect the staycation to fill the foreign holiday void.

  • Instilling confidence and understanding motivations: Travellers need confidence in their holiday choices on three levels. At a base level, they need reassurances in hygiene and also flexible cancellation. But that’s just the start. They also need the confidence that their holiday choices will fulfil new and more complex emotionally-charged needs.

  • ‘Think for me’ – removing holiday inspiration frictions: In short, travellers are finding it difficult to find the perfect holiday experience that’s both safe and meets their unique needs. We believe this could accelerate new behaviours in holiday inspiration search, not least a reliance on burgeoning technology solutions to make travel discovery faster and less burdensome.

  • Planning for recovery: Hospitality brands are facing the immediate struggle of positioning their destinations as both safe and alluring, within a context of heightened competition from OTAs. At the same time, leaner operational teams and a greater focus on total profit optimisation are spurning broader conversations in digital strategy realignment and smarter data capture. Fortunately our PAUSE, PLAY, POWER-UP model is here to help…

Accurate as of midday Thursday 21st May 

BURGEONING FUTURE TRAVEL OPTIMISM

Lockdown put an abrupt stop to the UK’s holiday plans, not least over the Easter break. Either unable to travel or concerned about future travel restrictions, 46% of British consumers delayed trips due to the outbreak. Unsurprisingly, UK searches for holidays decreased drastically at the beginning of the pandemic.

But we’re starting to see behaviours shift. From the end of April, UK holiday searches started to creep back up, spiking in early May. Pinterest data nods to a similar theme. Throughout most of the pandemic, consumers have turned to the platform primarily for very immediate lockdown needs, such as activities for children, easy pantry recipes or mask making. Since the beginning of May, there has been a shift as searches for future needs climb back up towards pre-crisis levels. We’re seeing interest pique in event planning, summer, fashion, future family and, importantly, travel. The future optimism will no doubt be music to the hospitality industry’s ears. After all, 30% of British consumers have said that they will prioritise holiday spending post-outbreak.

However longingly we’re eying up far-flung international beauty spots, foreign travel just isn’t going to be viable in the very immediate term. This means we’re anticipating travel shifting, with domestic holiday replacements filling in for our cancelled trips abroad in the immediate term. 22% of British consumers believe that they’re going to take more holidays in the UK rather than abroad as a direct consequence of the crisis. We’re seeing this borne out in search behaviours. Searches for ‘cheap flights’ are down 87% (versus April 2019), while searches for ‘staycation’ are up 23%.

INSTILLING CONFIDENCE AND UNDERSTANDING MOTIVATIONS

In the very immediate term, we’re seeing that consumers are lacking confidence in their holiday choices in three ways. Firstly they have, and understandably so, very legitimate health and hygiene concerns. According to Deloitte’s anxiety tracker, only 23% of British consumers would feel safe in a hotel right now. According to research from Canopy and Stars, property hygiene has become the single most important factor for travellers when thinking about booking a holiday.

Secondly, while government restrictions remain vague and tourism boards continue to dissuade travel to tourist hotspots, travellers need confidence in flexible booking terms and cancellation policies.

Finally, travellers need the confidence that their holiday choices will still satisfy a myriad of complex needs. Sure the holiday experience has to be safe at a fundamental level – and we’re encouraging our hospitality partners to over communicate their hygiene credentials – but that’s just the start. 

Understanding travellers’ motivations is now more important than ever. Does the holiday need to offer escapism? Relaxation? A chance to rekindle strained relationships? A chance for personal development and growth? Are they looking to bond with extended family members? Our research has been fascinating in this area and shows a complex and nuanced landscape with sweeping implications for hospitality brands’ post-crisis communications strategies. (If you’d like to talk to us about our research into traveller motivations, please get in touch! – not a plug, but sort of a plug). I digress. 

‘THINK FOR ME’ – REMOVING HOLIDAY INSPIRATION FRICTIONS

The need to juggle safety needs with new travel motivations has exacerbated an issue that fascinated us pre-crisis. Back in January, we were talking to our hospitality clients about the ‘think for me’ trend – the rise of new technology solutions and services to make travel discovery and inspiration faster and less burdensome.

We’re seeing signs that holiday research has become much more difficult under these circumstances, accelerating the ‘think for me’ trend. Searches for ‘staycation ideas’ are up 128% and staycation conversations are up 41% on social media. 88,000 conversations are from users seeking help from their network in coming up with staycation ideas. In short, travellers are finding it difficult to find the perfect holiday experience that’s both safe and meets their unique needs. To quote one of our qualitative respondents, 

At the same time, we’ve seen new behaviours emerge in virtual travel voyeurism, as travellers turn to live stream and virtual experiences to immerse themselves in aspirational travel destinations.

PLANNING FOR RECOVERY

From a communications standpoint, we know hospitality brands are in a trying situation. Positioning a destination as both safe and alluring is not easy. Neither is revealing higher price points for rooms at the same time as lower on-site service availability. All this against a backdrop where every hospitality brand who can will turn the lights back on at the same time. Competition will become fierce, and hotels, in particular, will run even greater risks in losing vital revenue to the mighty OTAs. To tackle these issues and navigate through the coming months, we’ve created the PAUSE, PLAY, POWER-UP model for immediate recovery planning. Please drop us a line if you’d like to know more.

But this is just the start. While we could see a flurry of initial travel activity, a recession is looming, budgets are tightening and travellers’ expectations are mounting. At the same time, hospitality brands will be operating to tighter budgets with leaner – and more stretched – teams. We’re seeing a growing appetite for smarter total profit optimisation and with that the need for a more holistic view of guest spending – including food, drink and spa usage. We’re equally seeing the need for smarter customer data platform solutions to improve the front of house customer experience and better understand loyalty behaviours. Lighter in-house teams create new requirements for improved automation, not least in guest correspondence, email marketing and social media. The role for site and online experience is also being reappraised in a bid to drive direct bookings and prevent revenue loss to OTAs.

The 'new' normal that awaits the hospitality industry can be very daunting, however it also offers an opportunity to adjust, innovate and think differently. 

If you’d like to know more about how we’re helping hospitality clients reset their digital strategies, please get in touch.

FROM THE ETCH TEAM THIS WEEK 

  

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