Innovation from Disruption in Travel

While the number in the name of the Pandemic that we are tackling right now might be misleading – since the impact hit us in 2020 rather than 2019 – its actual aftermath and consequences are expected to flow through beyond 2022. Unfortunately, a lot of press and media around the impact of the pandemic on the Travel industry has focused more on the doom and gloom, and not given enough coverage to potential innovations that might emerge out of this. 

While there are a lot of peripheral and ancillary innovations that are popping up every other day, I expect (and hope) to see some sustainable ideas come out of the various areas in the Travel domain. This article captures my viewpoints around this. Interestingly enough the Hospitality sector is way ahead of the rest of the Industry in pouncing on the potential opportunities and coming up with long-lasting innovations!

Hotels Going beyond Hotel Guests 

Hotels have started targeting Non-Guests (People who are not a hotel’s direct guests) by offering them many of the in-house facilities. This is a trend that will only continue to evolve further beyond pandemic times. Until now, Hotels have been usually looking at ‘Ancillaries’ as revenue-sources from things outside the rooms(and the property) being sold to their own guests. As a consequence of the pandemic, a lot of properties have started to take a fresh look at this, and most likely will continue to explore the non-guest channel further.

Opening up Hotel Assets to Locals: While the idea of unbundling hotel services and making them available to those not staying at the hotel might be new in the 'west', this has been practiced for a while in the Middle East & Asia - where it is common for ex-pats to buy subscriptions to hotel's gyms since there weren't as many standalone sports clubs. If locals are becoming hoteliers through Airbnb and the like, why shouldn't hotels offer local services as well?

Accor hotels Chain has been a first mover in this play with its AccorLocal initiative. A program designed to integrate the brand's hotels into their surrounding communities, AccorLocal is meant to look at the locals through a different lens - and as much weightage as the visitor/traveler. The idea and mindset are simple. The guy living next door and the destination’s local inhabitants should be lured into the property as much - if not more - as the people coming from outside the destination. While they might not be necessarily interested in a room(the current craze of ‘Staycations’ notwithstanding!), they may desire any one of the services offered at the property.

By thinking beyond the geographical origins and broadening the definition of a hotel guest, there are now exciting opportunities for hoteliers to tap new revenue streams and engender loyalty. Hotels can woo the locals with tempting deals on a wide variety of their services outside the room that is available at the property. Food & Beverage, Dry cleaning, Key service, Fitness Center, Swimming pool, Spa deals, Parking Lot & Garages, etc. The list is endless. 

An example of another big player entering this universe: Marriott hotels in India recently launched an initiative called 'Marriott on Wheels', a food delivery service, via delivery app Swiggy

Giving a new meaning to WFH 

During the period when most offices shut down due to the Covid-19 pandemic, many workers have had no choice but to adapt to working from home. And the lack of structure and boundaries are not conditions that settle well with everyone. And a new option that emerged recently - to shake up your WFH routine – is the Work from a hotel option. Some hotels in the U.S have already taken the plunge into this opportunity by offering their rooms as day-use offices. Even Big Chains like Marriott and Hyatt have tapped into this growing demand. 

Similar trends are emerging in other places like Germany – where properties have already started offering an alternative to working from home during lockdown by proposing 'hotel offices', including fast WIFI, a desk, telephone and fax, parking space in front of the door, and lunch, snacks and drinks delivered to the room. 

The Netherlands based CitizenM chain has taken this a bit further by even targeting remote workers to sign up for a Monthly Subscription plan. Some folks have taken this concept so far ahead they are even targeting Children with so-called “Schoolcations” by building spaces out of large conference rooms and repurposing them to be a socially distanced learning space for children !!!

The Work-From-Hotel package offering is an innovative trend that could very easily outlive the pandemic itself and be a permanent semi-ancillary option for hotels – especially during low-occupancy periods.

New Breed of Providers for Activities and Experiences

As we enter into the new world of Experiential Travel, everyone in the Travel Industry is going to want a piece of the ‘Experience Industry’ Pie. Offering Unique Destination experiences is not going to be limited to traditional Tours & Activities players. Even hotels and resorts would get into this gradually and create experiences built around their assets(like Bars, Restaurants, Staff, etc). 

Examples: Nothing stops a Whiskey Club housed in a Hotel from offering Whiskey Sampling Experience like these. They might not choose to offer this at all times but specifically choose to host it during days/times when they have low interests from customers. And since this is a ‘Hotel experience’ that is not just for visitors/guests, but also for Locals this is a win-win for both Hotels and Locals(and even travelers). Regent Hotel in Singapore is already doing this through their super popular Manhattan Bar

This concept of hotel-as-an-activity-hub is already being practiced by creative chains like Ace Hotels. Indeed, for years, boutique hotels have led the charge in this regard, serving as hotspots for nightlife and entertainment. Take The NoMad Hotel here in New York, which knocked out two of their worst bedrooms to make a stage for a 40-person magic show that has been sold out for three years. It is left to be seen how many more creative hospitality players jump on this bandwagon and think beyond beds!

Book Now, TravelLater 

A Concept that was not pushed too much (or barely pitched), before the pandemic is getting a lot of love recently. Travel may not be on most people's minds right now, given how there seems to be no clear end in sight for the ongoing pandemic. After all, it's hard to get excited about that beach holiday you're so desperately craving, if you have no idea when that would be. Some creative players in the Hospitality sector are trying to tap into this anxiety by offering a slew of "book now, travel later" deals that would normally be considered too good to be true in normal circumstances. 

By offering steep discounts on future travel, hotels have figured out a way to get money in their pockets now at very little cost, and to combat historically low occupancy rates! And these package deals are just irresistible from a price point (some of them offering all the way to 75% off), they also pack in attractive freebies such as Spa deals, Complimentary Meals, etc. Here is a good example of such kind of offer.

Airlines are also getting into the "book now, travel later" game, although in a different way. Since it is more difficult for airlines to commit to steep discounts - given the razor-thin margins that they operate on - they are seeking to entice future travel by promising unheard-of levels of flexibility on their tickets. While most discounted tickets are normally non-refundable, with changes allowed for a fee, some airlines have started offering complimentary re-booking(regardless of fare type), in order to assure customers.

For example, earlier in the year Singapore Airlines (SIA) offered unlimited rebookings - with all change fees waived - for bookings made within a certain date. While this created a ‘sense of urgency’ it also encouraged customers to buy tickets from SIA with peace of mind. Qatar Airways went even further, by not only allowing unlimited date changes but also allowing passengers the flexibility to change their destination if it was within a 5,000 mile (8,047km) distance of their original destination. 

My prediction is this kind of “Book Now, Travel Later” pitches might not be just seasonal or situational, but might be used to lure guests into properties and planes during seasonally low periods by offering Flexibility as a key lever.