As such, the hotel market is one that is in a perpetual state of change, needing an almost constant revamping of its offers and services to keep the attention of its fickle users.
In order to understand a little better this subject, we spoke to experts Chantal Eckel, Senior Consultant National Hotel Services and Alexander Trobitz, Head of Hotel Services from BNP Paribas Real Estate Germany about the hotel sector and the most significant trends that we should be aware of in Germany.
The needs of guests have changed. Today’s guests want fresh, unique and unusual hotel concepts. At the same time, start-ups have been flooding onto the hotel market for several years now, occupying this segment with innovative concepts and redirecting guest flows
Hotels: the constant evolution of the market
The consumer landscape of the hotel market is of course driven by a variety of sources. There are generation Z who want ‘instragram worthy’ places to stay, millennials who desire unique and quality experiences and the baby boomers who seek out stays of a certain calibre and are willing to pay for them. This combined with a greater need for architectural design and the increased integration of technology, not just in the hotel but during the whole experience (booking via a chatbot for example) means that the market is having to work hard to satisfy the hunger of all of its consumers.
As Chantal Eckel points out, “Competition on the German hotel market continues to intensify, particularly for established hotel companies. The needs of guests have changed. Today’s guests want fresh, unique and unusual hotel concepts. At the same time, start-ups have been flooding onto the hotel market for several years now, occupying this segment with innovative concepts and redirecting guest flows.”
Alexander Trobitz points out one example of a notably innovative hotel concept in Germany, “One particularly well-known example is the 25hours Hotel Company. All of their boutique hotels feature exclusive design concepts, none of which resemble the others. Each visit to one of their hotels is unique, sometimes even with a bathtub on the balcony. prizeotel is also a very successful competitor with its economy design strategy. Top designer Karim Rashid’s extraordinary design concepts combined with extensive digitalisation including check-in via smartphone sets prizeotel apart from more traditional market players.”
Major market players often have a hard time responding fast to the changing needs of their guests without outside help, which inhibits further growth. Nevertheless, many established hotel chains have realised that it is time to take action
Hotels trends: how to stay afloat?
So how do hotels keep up with changes to the market and evolving trends? What is certain is that we have been witnessing a significant amount of branded hotels coming onto the market which are proving popular due to the identification that people associate with a brand. We are seeing this happen in the hotel market in different ways, either with brands that have worked in one country being set up in another or the creation of brands through the coming together of other brands to create one solidified offering.
As Alexander Trobitz points out, “Major market players often have a hard time responding fast to the changing needs of their guests without outside help, which inhibits further growth. Nevertheless, many established hotel chains have realised that it is time to take action. At the moment we are seeing two options. The first is to create new niche brands within the company, like the InterContinental Hotels Group with their new brands vovo and avid. The second option is consolidation, which is proving quite popular. The idea is to attract new customer groups to a brand and expand the hotel portfolio.”
Chantal Eckel backs up the point by saying, “Established hotel companies acquiring other brands is not a new trend. However, acquisitions within the hotel sector increased in 2018 to a new record high in terms of consolidation with around 20,000 hotel rooms changing hands (pro rata).
Strong brands that have already proven successful on the hotel market are a major factor behind acquisitions. Brands serving a niche market that is not yet covered by a hotel company’s portfolio are particularly attractive. Hotel chains can benefit from their smaller competitor’s brand image by keeping the names of the acquired companies.”
What is sure about this is that hotels are going much further than just providing a bed for a night and with a market that is already saturated in many key cities and locations, companies are having to figure out exactly how to revamp their offering and find new niches in the market which will help them get away from the competition.