WHO ARE YOUR GUESTS & WHAT DO THEY WANT?

Branding & the Guest : Hospitality in Japan series no.6

And so, with this seventh article in our series, we come to the end of our Branding and the Guest journey for now. And rather neatly, at the end of this series, we come full circle to where we began, as every hospitality customer journey should, with the guest and their needs, wants and desires. Since much of the year has passed since we looked at the guest in any detail, let’s see how things have evolved, and try and answer the following questions:

• How well do you know your guests in a post pandemic world?

• Have their reasons for travel changed?

• Have their needs changed?

• What do they expect from their experience, and the brands that deliver them?

• Are the changes a permanent correction, or a just a temporary reaction?

Travel is back! 

Asia Pacific lags the rest of the world, but as regional restrictions ease and confidence grows, despite inflationary headwinds, so too will APAC travel. Even with China emphasizing its Zero Covid policy again this month, the fact that it has adopted a dynamic restrictions strategy means we should be optimistic for a gradual easing of restriction in 2023.

Source: Skift Travel Health Index, October 2022. All data vs same month in 2019.

SiteMinder analysed trends in traveller habits before and during the pandemic, drawing five significant and interesting conclusions. Firstly, it’s clear the desire to travel outweighs any price increases. ‘Revenge Travel’ motivates travellers to forego cost-cutting in anticipation of a holiday. Then there’s the increasing influence of social media over individual decisions 78% of travellers are interested in receiving personalised suggestions and recommendations from internet communities.

For accommodation, a blend of Business + Leisure is one of the most sought-after, especially among Millennials and Gen Z travellers who like to mix business with pleasure. Both connect another trend gaining traction: hotels using technology to provide more amenities and a better experience. Perhaps a metaverse version helps the decision-making?

Finally, a contradictory but increasing emphasis on interpersonal connections. Technology and contactless services are important but the need for human connection is paramount, and tourists demand it by engaging with locals and forming bonds that make them want to return.

Key drivers now and looking ahead to 2023

If 2022 was about the return of travel, 2023 will be about reimagining it amidst chaos. People are feeling overwhelmingly more optimistic about travelling in 2023 compared to 2022 and, despite current global instability 72% say travelling will always be worth it. At a time of upheaval - social and geopolitical polarisation, war (and threat of war), rising inflation, urgent climate concerns radically changing the world, people are trying to reconcile what’s important to them with the demands of everyday life.

Save to splurge

With a background of global economic uncertainty, travellers still prioritise travel but also how to make the most of their budget. 50% say investing in a holiday remains a top priority, but 70% seek more ‘bang for their buck’ with itinerary curation. 63% take advantage of deals, 64% seek value for money with loyalty programmes, 58% save money by smartly timed travel like off-season destinations or longer routes, while 66% plan further in advance for a better deal. 64% believe one or two longer trips are better value than several short breaks.  Even so, travellers are still prepared to spend more – 53% plan to be more indulgent to make up for recent lack of travel, while 50% plan lavish spending to maximise their experience.

Nostalgia trips

Global instability and the need for escapism means travel experiences that recall simpler times, with 90% seeking nostalgic getaways that relive better times. There is a desire – even among Millennials and Gen Zs – to disappear into the romanticism of the pre-digital era, with 21% chasing experiences that evoke memories (or the idea) of days gone by, while 60% seek ‘old fashioned’ adrenaline adventures that physically stimulate mind and body.

Off-grid (sort of)

58% want ‘off-grid’ holidays to escape modern reality, 39% want to switch off for more back-to-basics experiences with only the bare necessities. Travellers keen for eco-friendly and earthly stays will use travel as an opportunity to learn new things, like survival skills (60%) - how to source clean water (44%), light a fire (39%), forage for food in the wild (35%) and even prepare for apocalypse (40%). Off-grid doesn’t necessarily mean roughing it though. 59% agree this means giving up luxuries but 57% also expect a more indulgent stay. For 65% phone/internet connection is non-negotiable so ‘off-grid’ really means remote, perhaps isolated from people, even without restaurants, but not with disconnected from the world.

Virtual voyages

With 50% suggesting they will use VR to inspire holidays, travel enters the evolving 3D space of the metaverse. 39% are keen to try multi-day VR or AR experiences – whether to try-before-you-buy, for education, entertainment or inspiration, travellers will not be limited by physics and can experiment with different experiences. 57% feel bolder and are more likely to try new destinations after virtually tours, and most of them (51%) believe virtual experiences won’t replace the real thing so they will still book.

The last few years have taught us travel should not be taken for granted. This year’s research shows the undercurrent of intentional paradoxical behaviours that put travellers more comfortably in the driving seat amid relentless instability, the desire for travel to seek unapologetic moments of happiness and escapism to counteract the heavy realities of our news feeds.

Laura Houldsworth, Managing Director APAC, Booking.com

In the discomfort zone

Pent up energy means travellers are ready to dive into new cultures and experiences. 48% want a complete culture shock, travelling somewhere completely culturally and linguistically different (54%), or discovering hidden gems and unique experiences (25%) that surprise and delight. 79% are looking forward to ‘out of the comfort zone’ travel that pushes them to their limits, while 49% seek exotic delicacies and 27% want a one-way ticket to follow their instincts and see where it takes them. 

Escape the grind

Now Work from Anywhere (WfA) policies are almost as commonplace as annual leave, employees want holidays to mean escape from work. 70% want holiday travel to be work free and while 51% prefer not to work away, they would travel for a company retreat. Business travel is higher on the agenda in 2023 for building culture and collaboration in a WfA world. Business travel grows to include more than sales functions, involving more holistic groups of corporate travellers.

Unlike business trips before Covid, where blended or ‘bleisure’ trips were on the rise to destinations like Japan, 48% are seeking employer-led team-building travel, while 55% want to see money saved from remote/hybrid working models spent on corporate travel. This means a rise in destination business retreats focused on strengthening relationships and recreation rather than work. Businesses benefit too – 62% believe exploring new places inspires productivity at work. Blended trips also continue to rise with business trips containing a weekend rising steadily from 31% in 2019 to 38% in 2022.

Source: Skift Research US Travel Tracker, January 2021-July 2022. N = 1,000 per month. WfA enables even the average traveller to take longer, more frequent trips.

Peace of mind

Travel will take ‘mind, body and soul’ wellness up a level, from the fully immersive to the non- conventional. 45% seek to recentre the mind with meditation and mindfulness getaways, while 42% hope to find inner peace at silent retreats, with 39% keen holidays that focus on mental or transformative health or help with life milestones like menopause and pregnancy. 

This is the ideal backdrop for a boom in experiential travel. With micro and niche trends, hobbies and personal passions leading the way, tailored experiences will be taken to the next level, paving the way for operators to explore new territory and how local surroundings can enhance unique adventures for tomorrow’s traveller.

Arjan Dijk, Chief Marketing Officer, Booking.com

Slow and sustainable 

Holidaymakers seek more meaningful escapes. American Express Travel “2022 Global Travel Trends” confirms widespread changes in traveller behaviour – 76% plan more family travel, and 81% want to immerse themselves in local culture. “The past two years proved how special exploration can be, as well as the weight our travel decisions hold for local communities. Looking ahead, travellers are making decisions with purpose in mind – from understanding where their money is going to finding time to connect with loved ones,” Audrey Hendley, president of American Express Travel.

Crafting the Guest Profile

So, if all this paints a complex picture, both contradictory and unpredictable, that’s because it is. Future historians we will look back on this period in the same way we might view the first world war and the influenza pandemic, or before that the industrial revolution – a period of extraordinary and accelerated change in the way people live and work.

The question is, how do you make all this work for you, so you understand YOUR customer and target the right the guest in the right locations for your brand?

Given how fast the digital transformation of our lives has been these past years, and how far behind ‘traditional’ industry in general and the hospitality industry in particular is from the way consumers now live, understanding customer behaviour is more important than ever. We believe this is the heart of ‘branding’. Without deep, ongoing understanding of the customer, brands and businesses are more vulnerable to challenges in the market, like the headwinds we face now, and the threat of challengers coming into the market, chasing your customers. And the customers know this, they are more sophisticated, and whether we like it or not, they expect us to work harder for their patronage.

In last month’s article we discussed the importance of ‘digital’ generally, and data particularly. While many hotel brands capture and make use of limited guest data, historically we find that hotel brands have struggled to segment their guests in depth. Some Japanese hotel brands we have met segment their customers as loosely as ‘wealthy tourists’ or ‘businessmen’ or ‘fashionistas’ - we understand this categorization of course, not all wealthy are alike of course, so it’s not detailed enough to win their business and hang on to it in the face of challengers offering deeper understanding. Simplistic segmentation also means that brands waste a lot of their marketing budgets, spending limited resources in the wrong places!

We go deeper. We craft ‘stories’ and ‘mood boards’ for various guest profiles, including for example, their names, where they are from, their profession, family lives, respective ages, genders, what they do for fun, what media they consume, how they make purchase decisions. Using quantitative analysis of data points like those outlined above and in our previous article, and qualitative research of behaviour, we try to understand and articulate who they are, what their values are, what’s important to them, what they like and dislike, what they need, what they want, and we do this so we can make better decisions where to find them and map out their guest journey in detail. This helps us to understand how to communicate and when to engage with them, and most importantly how to look after them better once we persuade them to stay with us, so we, just like our guests, have better value for our spend.

Thank you for sharing this journey with us, we hope you found our initial report and this series useful. We sign off wishing you safe travels and a wonderful stay wherever you go!

HOTERES X TARO X KATANA BRAND SERIES

Resources: Skift, Booking.com, American Express Travel, Travel Daily, SiteMinder

Luxury Travel in a Post Pandemic World – KCM for Hoteres, March 2022