Outlook on the Hotel Industry in 2016 and Beyond

The hotel industry is ever-changing, and it’s difficult to predict exactly what’s going to happen to it, particularly as technology plays an increasingly larger role in this field. A hotel consultant strives to stay on top of these changes, and the several (both positive and negative) that have happened in 2016. We can likewise expect to see even bigger ups and downs as 2017 draws near.

Facts and Statistics

One of the biggest things that happened in 2016 was the loss of revenue from Hurricane Matthew, which struck Florida, Georgia, Virginia, North Carolina, and South Carolina in the early parts of October. The hurricane has caused immense property damage and even lead to numerous injuries and deaths. It has also severely affected the hotel industry, causing these five states to lose around $50 million in hotel revenues. This doesn’t even include future revenues, which would undoubtedly be affected since hotels have incurred extensive damage and would need to do major repairs and renovations.

It’s important to note, though, that the hotel industry has slowed down even before Hurricane Matthew arrived. According to reports, the first half of 2016 has seen reduced growth and revenue compared to the same time frame in 2015. Despite this, leisure travel has increased, probably due to lower unemployment and better consumer confidence. Business travel has also increased, although not as much with a growth of just 1 to 2 percent.

Challenges Faced by Hoteliers

This slowed-down growth can be attributed to many factors. China’s economic slowdown as well as Britain’s exit from the EU have both contributed to the slump. The hotel industry has also taken a beating from Airbnb and other home-sharing companies, which allow travelers to stay in private homes during many holiday destinations. This type of service is preferred by many people since it’s often cheaper and offers a more personalized experience, which is why it’s not surprising that many large hotel chains (such as Hyatt Hotels Corporation) are getting into the home sharing business.

Hotels in oil markets, meanwhile, have been hit by a decrease in oil production that slowed down hotel demand. These include hotels that are located in Louisiana, North Dakota, South Dakota, and the western part of Texas.

Plan for the Future

Fortunately, it’s not all bad news! There are several ways we believe we could go to improve the hotel industry. Increasing and enhancing hotels’ social media presence should be a priority. In this day and age it has become essential to reach out to millennials and attract their attention. Franchising brands can also be an option, since it allows hoteliers to expand their reach without having to invest millions in real estate.

Tying in hotel services with technology is also important. Mobile booking, for example, allows hotels to cater to people who always have their smartphones on hand. Sometimes these folks simply don’t have any other means to connect to the internet. Making services available through apps is also helpful; users could use a mobile application, for instance, in order to easily check their loyalty points and redeem them.

Hoteliers can also get the help of a hotel consultant such as Perry Group International. Through our services, we can help you create and test plans for improvement or expansion. One of our goals is to help you increase your market share and revenues. Contact us today for a no-cost consultation and see how a hotel consultant could help you. And if our services don’t meet your specific needs we can help you find a hotel consultant company that can.

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