Call it bleisure or hybrid travel, and look out for new segments like digital nomads and workcations who can work from anywhere. Overall, for the remainder of the 2020s, the hotel industry will move away from the era of completely separate meetings and events (M&E) and leisure travel segments and towards a blending of the two as travel becomes more experiential and purpose-driven. Hotels will need to align their commercial strategies and property improvement plans (PIPs) with this trend. Read on for guidance on navigating this major shift with what the Marriott team has observed.
Let’s say a business professional visits another city for a conference, then stays over the weekend to meet up with friends. Or maybe a nomadic executive chooses to stay in a particular market for an extended period of time for lifestyle reasons, and has a few meetings with clients who happen to be in the area. Or maybe a meeting attendee’s spouse decides to tag along, with one person working and the other doing remote work while enjoying the amenities of the hotel. All of this, and many more, is possible today.
Whatever the purpose, the future of travel will increasingly merge two primary purposes: business and leisure. And that means new ways for hotels to stimulate new customer segments, extend length of stay (LOS), upsell add-ons, drive direct bookings through tailored offers, and increase ancillary spend per guest (TRevPAR or RevPAG). Of course, this has major implications for services, amenities, operations, space design, and renovations.
To understand just how big this opportunity is for hotel brands and specific properties, and to highlight some success stories, we spoke with Julius Robinson, chief sales and marketing officer, U.S. and Canada, Marriott International. The key takeaway is that based on Marriott’s projections, mixed travel is only just beginning to have an impact on the hotel industry, both at the property level and across markets.
The current boom in blended travel
First, why is the term “blended travel” the best way to describe this evolution? This is the first distinction Robinson highlighted in our interview, and it’s an important one for readers to keep in mind. First, “bleisure” is a bit too strong an industry term, but more importantly, it doesn’t fully encompass all of the different primary and secondary travel objectives that people combine when designing their personal itineraries. That’s where the term “blended” comes in – it’s a simple and universal term.
Exceptional cases aside, one of the most obvious major travel purposes for 2024 and beyond is business travel. It is one of the market segments that continues to surge in the post-pandemic era even as others normalize. According to a report last year by the Global Business Travel Association (GBTA), the segment is expected to recover to its pre-pandemic total of $1.4 trillion this year and continue to grow to nearly $1.8 trillion by 2027. Furthermore, among business traveller respondents surveyed, 62% said they are combining business and personal travel more frequently than in 2019, 42% have added leisure days to their business trips, and 79% of these travelers are staying at the same accommodations for their business and leisure portions.
However promising these indicators may seem, they may be downplaying the many emotional aspects of travel that are truly coming into focus given pandemic lockdown policies and the resulting rise in remote and flexible working. After all, humans crave social and in-person connection; it’s in our DNA. As recent events have shown, isolation can take a toll on our well-being, and corporate executives are now well aware that poor mental health has a detrimental effect on productivity and team retention.
As remote work is a trend that is here to stay, with personal incentives centered around improving work-life balance, hotels will play a key role in facilitating personal connection at a time when most employees work from home offices and do not meet in person on a regular basis.
Robinson comments that “the role of MICE hotels has changed significantly with the introduction of remote work.” Previously, events were primarily planned around single-purpose meeting and event venues, but now they are being sought out and planned around more dynamic, experiential spaces that help foster team building, group activities, breakout sessions, and collaboration. In many ways, hotels are becoming a company’s best ally for fostering team bonding when employees are all remote or working hybrid.
Intergenerational mixed travel
The rise of flexible and fully remote working arrangements is just one of the trends driving the recovery in corporate and MICE travel demand. As Robinson makes clear, this is just the beginning, with many markets across the continent looking for consistent growth in M&E of all sizes. In the early stages of the recovery, most group demand was for small and medium-sized businesses, but this year we have seen a return of large conferences, with bookings for the coming years on a strong pace. By the end of the year, 2024 could see the highest MICE travel revenues ever.
But the nature of M&E is changing. Planners are calling for non-traditional venues with outdoor setups, intricate audiovisuals, and elaborate F&B stations to showcase local culinary excellence and reimagined creative spaces. As one example (and a show of national pride in Canadian ingenuity!), at Muir, Autograph Collection in Halifax, groups can combine meeting space with the rental of the hotel’s 36-foot private yacht. As another example, Gaylord National Resort & Convention Centre recently unveiled Harbour Social, a dedicated networking space with shuffleboard, air hockey tables, duckpin bowling, and a sports bar. It’s open to the public, but can also be sold as a breakout space.
Source: Hotel Mogel Consulting Limited
In a nutshell, Robinson said travelers are looking for “moments” – the micro-meetings and new experiences that only a hotel with a wide range of amenities can provide. Psychology shows us that changing the environment creates space for new moments to form and shifts the energy. That’s why traditional dinner party etiquette dictates that a good host should never serve dessert in the same room as the main course. And it’s why events that use multiple venues on the same property tend to be more satisfying for each individual attendee and ultimately more profitable for the hosting company.
While I support this trend towards more experiential and moment-driven venues, I also find that we live in a very interesting time in history where there are four distinct generations in the workplace: Baby Boomers, Gen X, Millennials and Gen Z. While each has different values and travel motivations, it is the younger generations that are driving much of the current evolution, with hotels looking to engage Gen Z with shorter sessions and more gamified, interactive activities.
Millennials and Gen Z really want to get to know the destination, Robinson noted. They want local events from their host hotels. But to encourage them to stay longer, hotels need to provide information about local events and help them plan their itinerary before they arrive.
Marriott’s Guidance for Overall Travel Revenue Growth
With access to aggregate demand data and a deep knowledge of what’s working at various properties across the U.S. and Canada, Robinson offered some excellent advice for hotels looking to increase mixed travel revenue. Whether it’s encouraging pre- or post-conference stays or better catering to the “plus one travel” persona with more on-site ancillary services to enhance their day while their spouse is at a conference, this approach typically combines advanced use of technology with PIPs.
Marriott’s team of local representatives provide salespeople with customized advice and best practices while considering market trends and popular F&B programs, but that’s not all. As an example where automation comes into play, the Sheraton Orlando Lake Buena Vista has become a popular meeting spot because corporate travelers can bring their families to splash around in the pool or go to kids’ camp during the day. And as an added bonus, planners can offer complimentary e-tickets to Walt Disney World Resort for the whole group.
Going even deeper than this, in addition to the ancillary usage that integrated business intelligence (BI) can provide operators, the Marriott team also conducts site surveys and detailed consultations prior to FF&E upgrades to modernize properties to meet mixed travel demand while reflecting the brand and local flavor. As another Florida example, the recent renovation of JW Marriott Marco Island Beach Resort introduced a new restaurant concept, 10K Alley, as a pseudo Dave & Buster’s with arcade, bowling and mini golf. It fills the need for a dynamic breakout space, but because it’s all indoors, it also helps with resort M&E during the sweltering off-peak summer weeks.
As a final case study of how PIP can intentionally drive blended travel revenue, Robinson described the Westin Washington, DC Downtown, which renovated newly-built, windowless, wellness-oriented spaces on the lower levels and installed an elaborate lighting system to give these meeting spaces natural light and help refresh all meeting attendees. However, because these spaces are designated as wellness, they also have the ability to be flexible when no events are taking place.
Ultimately, as these examples show, blended travel offers many opportunities for hotels that embrace its experiential, flexible and energetic attributes at a strategic level. While some capital investment may be required to modernize your spaces, the rewards will be real as long as you revitalize underperforming or non-revenue generating parts of your hotel.
And as this trend continues, and as Robinson emphasized, guests will continue to crave dynamic events and will want to design itineraries that combine business objectives with personal expansion and other ancillary add-ons. But to realize the big benefits from blended travel, hotels will have to cater to travelers with great amenities and spaces, as well as the seamless technology to bring all these experiences together.
Larry Mogelonski
HOTEL MOGEL CONSULTING LIMITED.
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