Intercontinental Hotels Group Predicts 2010 Travel Trends

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Categories: Trends & Research

Nick Rich, IHG's director of consumer insights for Europe, Middle East and Africa gives his predictions for business and leisure travel in 2010

Introduction from Kirk Kinsell, IHG's president for Europe, Middle East and Africa

"The long-term future of the travel industry looks healthy. The internet is making travel more accessible, passenger numbers continue to rise on low cost airlines and people are now living longer than at anytime in our history — when you retire you don't go to the old people's home, you head for the airport! On top of this, new markets are beginning to travel. The number of outbound trips from China is set to increase from 20 million a year to 100 million every year by 2015. That alone will grow the outbound international travel market by 25 per cent. In spite of the recession, in 2009 we opened more than one hotel a day somewhere in the world, creating over 25,000 new jobs. We're planning and shaping our business for the recovery when it comes."

1. Travel Loyalty
With tighter travel budgets, business and leisure travellers are playing it safer with their choice of destination, airline and hotel. This year we've seen more guests returning to hotels they've stayed in before. We anticipate this trend will continue into 2010 as travellers are drawn to the "hotel where they know my name".

There are two factors driving this trend. The first is the growing popularity of brands, as consumers seek the security and familiarity of the names they trust safe in the knowledge they know what to expect wherever they are in the world.

The second is that consumers are making decisions based on value not just price, and savvy guests are coming to expect a greater return on their loyalty. Our 47 million member strong Priority Club Rewards loyalty scheme has seen a record surge in people signing up and spending their points this year with three million new members signing up in the last three months alone. In fact, Priority Club Rewards members now account for one third of all nights spent in IHG hotels every year.

More members than ever are cashing in the points they've been collecting, taking advantage of free nights, free flights and offers through high street retailers such as John Lewis and Boots. Members value the flexibility of loyalty points and the ability it gives them to treat a loved one when disposable income is under pressure.

2. Always On
With consumer technology continuing to evolve at a rate of knots and the average person carrying £850* of gadgets every day, keeping in touch is key for travellers.

Hotel designers and operators are adapting to keep pace with technological developments. In our view, it's less a case of how much of the latest kit you provide in hotels but more about how the hotels themselves use technology to enhance the guest's entire experience. From user-friendly websites that simplify the booking process to the check-in experience, our focus is on making our guests stay as relaxed and engaging as possible. We're trialling touchscreen kiosks where guests can now check themselves in and out.

In 2010, there won't be an hotelier anywhere in the world who doesn't appreciate the influence and power of TripAdvisor. We monitor review sites like TripAdvisor to understand where we're going right and where we can improve. We know that an unhappy guest can become a loyal guest if we address their issues properly, even if it's after their stay.

Twitter offers hotels opportunities to reach more guests. A number of our hotels tweet special offers at their restaurants and spas for the first people to respond to tweets. As a business we understand the power of social media which is why we announce our financial results on YouTube at www.youtube.com/ihgplc as well as via the more traditional stock exchange announcement.

3. Luxury Snacking
People have had less money to spend in 2009 but that doesn't mean they don't still want to treat themselves. We're seeing an increase in 'luxury snacking', or quick fix indulgences. Some of our spa resorts in locations such as the InterContinental Berchtesgaden in Germany have seen consistent uptake of weekend breaks throughout the downturn.

And although business custom has declined over the last year, we've seen a new type of savvy guest who takes advantage of competitive rates, spending the same as they did before but seeking more luxury for their money. We've seen people trade up from a Crowne Plaza to an InterContinental hotel to enjoy a more luxurious break with us.

4. The 'bleisure' trend continues
One of the bigger trends of 2007-2008 was 'bleisure' — businesspeople extending their business stay by a few days, often inviting a partner or friend to join them.

This trend has held relatively firm with the proportion of European travellers that have extended their business stay with a leisure trip rising to 6.7 million adults, 70% of them remaining in the same hotel for an extended trip.

5. The Staycation is here to stay
There were 2.6 million additional trips within the UK last year, and despite the conflicting reports you'll read, this trend looks set to remain as families rediscover the joys of 'staycationing' in the UK.

We expect to see this upward shift in domestic travel maintained throughout 2010. We're aware of the need to cater for hard-working families on a budget and with initiatives such as 'kids stay and eat for free', we're trying to reduce some of the financial pain.

6. Pop-ups and third spaces
We'll start to see pop-up hotels appearing at music festivals, big sporting and outdoor events and even ad-hoc meeting spaces appearing wherever there is a demand, enabling brands to take the hotel to the guest rather than be limited by the location of their bricks and mortar.

Starbucks championed the concept of a third space. There is an opportunity for hotels to open up their public spaces to be used as community meeting points. In the eighteenth century, inns were the heart of the local community, a place where people could meet, share news and do business. Today's hotels could do well to offer their space for this type of use. During British Tourism Week in March 2010, we'll be opening up our hotels to local businesspeople to gather and network.

7. Starting the day the right way
Everyone knows that breakfast is the most important meal of the day. Many travellers also know that a hotel breakfast can be an expensive supplement to a seemingly cheap room rate. So much so, that only 65% of hotel guests regularly have breakfast every time they stay at a hotel.

Holiday Inn Express has always included breakfast in its room rate and in 2010 we will be relaunching our breakfast offer to include a hot item and an improved continental breakfast. Our consumer research has shown that guests want a wide choice of breakfast items and even the most hardened business traveller does not want bacon and eggs every day so it's important that we offer a breakfast that covers a variety of tastes and dietary requirements.

8. The next hotspots
We position our hotels in locations that are popular and convenient for both business and leisure travellers. The Eastern Mediterranean has fared well in 2009. We believe cities such as St Petersburg and Moscow, where we've just opened our fifth Holiday Inn hotel; areas in the Commonwealth of Independent States; Turkey and less travelled parts of the Middle East, are going to be future hot spot destinations.

9. The female business traveller
The first women only hotel opened up in Saudi Arabia in 2007 and with growing numbers of businesswomen travelling, there are plans to further develop the concept.

In the rest of the world, we'll see a greater focus on meeting the needs of female guests. From arrival and check-in through leisure facilities, bathroom amenities and restaurant and public area layouts, we think there are more ways to ensure the lone female business traveller feels more relaxed and secure than she once might have done.

10. It's all about productivity
With the decline in business travel, and less frequent but shorter and more intensive meetings taking place, the business traveller is under increased pressure to perform.