Local hotels see an opening as luxury brands falter
Tuesday, October 29, 2019
Interbrand’s new ranking of the world’s top brands was a revelation. Tech companies ruled, but luxury travel brands did not make it.
A key takeaway was that people-centric brands stood out. Exceptional customer service and delivering an experience will help brands differentiate themselves and be profitable and sustainable.
Are the big names in the hospitality business doing that? The answer is, unfortunately, no. Luxury brands are still primarily sticking to their definition of branding and creating a ubiquitous atmosphere that, though impeccable, does nothing to distinguish one from another. They are at the other extreme of nondescript motels, which do nothing to stand out.
Local hotel brands have seen this and have seized the opportunity to offer locally curated experiences for new generations of customers. They are leveraging their presence within a neighborhood and are deepening their connection with their guests and the local community.
What triggered this strong demand for local flavors? The rise of millennials and Gen Z, who are looking for authentic and sustainable experiences, is reshaping the entire travel and tourism industry. But other factors are impacting it, too.
Thomas Cook’s recent collapse last month shook up the entire travel and tourism industry, and we are still feeling the aftereffects of that shock. The legendary brand revolutionized travel in the mid-19th century, and, since then, travel agents and tour operators have ruled the industry.
Before this, tourism and hospitality were localized, with inns and lodgings offering services to travelers. After the establishment of Thomas Cook, there was an emergence of a travel trade that managed hotels, transportation, and the entire travel experience. It seems, however, that the distinct local flavor is coming back.
What is travel trade?
In the pre-internet era, the industry was heavily reliant on traditional mail to build loyalty and stay in touch with customers. This was not the most effective way for outreach, and there were many missed opportunities.
Hotels and tour operators depended on each other and traded businesses to stay ahead of the competition. The growing network of offices and agencies that fell under the banner of tourism bundled deals and grew business through referrals. Leveraging this network was an integral part of hospitality marketing.
The advent of the internet changed the game. Hotels and customers now had direct access to each other. They could eliminate the middlemen.
Traders had to evolve fast, and online sites became the new middlemen in business. They partnered with hotels to offer cheaper deals and take commissions on bookings.
But even the promise of best deals and packaged vacations, which ruled the online bookings for over a decade, seemed to wane. The new generation of travelers wants a better experience than a better deal and focus suddenly shifted to micro-level, local flavors.
Destinations need to stand out, offer travelers more authentic local experiences, and align with originality and sustainability. This is where local hotel brands are making a comeback. They can provide the distinctiveness, unique character, and authenticity that can enhance travel experiences.
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