As the last decade has drawn to a close, we turn our thoughts to the 10 years that lie ahead. Here, Fran Milsom, co-founder and director of Nestor, a hospitality business in the alternative accommodation sector, offers his predictions for 2020 and the next decade in the industry.
“At the start of the decade, Airbnb was in its infancy and alternative accommodation was limited to vacation rentals. We’ve seen unprecedented change in the hospitality sector. In order to thrive, businesses must continue to adapt to suit the needs of the modern-day traveller".
Technology – pivotal for the guest experience
The sector has made huge advances in technology, and in the next decade, technology will be imperative in order to carve out a competitive edge when it comes to efficiency and providing the best guest experience.
Today, it’s about offering more than just accommodation, and incorporating technology to make guests’ lives easier. This could be anything from smart locks instead of a traditional key system for speed and flexibility, to a computerised concierge type service with curated local guides and easy booking of tours, taxis and other services as well as discounts from partner collaborations.
Brexit hasn’t – to date – impacted our sector a great deal. However, it is likely to present challenges from a labour perspective, which will have to be managed accordingly.
I do believe that Brexit has had a negative impact on the British brand, but a weaker pound has also led to higher tourist numbers. Post-Election Brexit is imminent, but it’s about being nimble enough to adapt to the changes.
This is a saturated industry, and whilst many alternative accommodation providers and management companies started out as a B2C proposition (jumping on the Airbnb bandwagon), they have struggled to make this work. As a result, there has been a marked movement towards B2B in order to achieve volume in bookings. We are even seeing many pivoting into completely new areas – with some becoming pure technology Property Management System (PMS) players.
Some larger hotel groups are now also beginning to offer different types of accommodation. This blurs into one product but appeals to a wide(r) customer base of people who want different experiences. This all indicates that alternative accommodation is being less alternative, with the likes of some very large brands now investing.
Industry consolidation and investment
Over the next decade, I believe we will see a great deal of consolidation in the sector – it is currently very fragmented and there simply isn’t capacity in this saturated market. Larger operators are already very active, and we only have to look at the impact that Booking Holdings apartment-rental business has had. Online travel agencies are seeing this as a viable sector, and this isn’t going to change.
Investment will continue at a pace – as per some of the announcements made this year.
Serviced Apartment Sector must evolve
I believe we will see the serviced apartment sector adapting to suit the millennial traveller, with a move away from cold and sterile environments – creating trendier, community-led accommodation in a bid to attract tech-business travellers. Unlike 10 years ago, it’s now not unusual to see co-working space and accommodation combined. I think we need to see more of this flexible working and accommodation combination for this sector to thrive.
Student accommodation providers are now entering the hospitality space, short-letting bedrooms that are empty during the summer months to create extra revenue and save students money at the same time. Some providers are now offering nine-month tenancies to students – making them financially more accessible for students in larger cities like London. We are increasingly working with student accommodation providers to manage these short-term lets with rooms in cities such as Edinburgh, Manchester, London and Dublin and we expect this trend to continue into the next decade.
Fran Milsom’s tips for success in 2020:
Be clear on your vision and what you are trying to achieve
Be focused on what is working and what isn’t
Adopt and update technology to lower your costs and improve the guest experience
For further information, please call Nestor on 020 3868 6178 or visit www.nestorstay.com