What will be the hotel industry’s talent demands of tomorrow?

The hotel business, like every other, is in a period of flux. Fundamental forces are reshaping every aspect of the industry. But, just what exactly are the key trends shaping the sector and what do they mean for the future of hotel talent?

First, digital disruption and the threat of Google, Amazon and Airbnb. The question facing all modern hotel companies is this: who gets to own the customer? To an outside observer, it might not make intuitive sense that the industry sees its biggest threats coming from pureplay digital businesses like Amazon and Google. But looking from the inside, they are fundamentally reshaping the way in which customers interact with hotel brands. Google and its ilk are now present at every stage of the travel journey, and they threaten to upend the hotel’s traditional status as a gatekeeper of local experience for travellers. The competition to appear at the top of the search results has increased and the traditional model of distribution has been transformed. With the development of voice search through devices such as Amazon’s Alexa, this challenge has been heightened, adding in another step between brand and customer and reducing the possibility that users will look beyond the first three or four options that appear in a search.

Hotels aren’t going to be replaced by Google or Amazon – of course not. They’re ‘digital-proof’ in a way many other sectors aren’t. Instead, hotels face the challenge of access. How do you reach the customer where they are so that they choose to come to you where you are? Can you own that journey, or at least compete for the important parts? This has been exacerbated by the development of loyalty programmes by online travel operators, and the attendant encroachment on a space that had previously been the hotel industry’s sole domain. Loyalty is now split between destination, venue and platform like never before. Beyond this, companies like Airbnb have even started to move into the provision of property management tools, competing with hotel companies not just on loyalty but on the whole offer.

Second, the explosion of brands. As hotels’ customer bases have become more differentiated and complex, the importance of creating a brand or portfolio of brands capable of covering the entire globe has grown in tandem. A major trend of the past decade has been the acquisition and creation of new brands to access new areas of the market; AccorHotels alone now has a portfolio of 32 brands after going on an acquisition spree that added at least one a month for the past two years. InterContinental Hotels Group acquired the Kimpton brand in 2014 and recently kicked off a global expansion drive for the brand in earnest with plans to launch in Germany, Japan and the UK.

Photo Credit: Amazon

Both of these trends would suggest that the market is in need of outside talent, whether that be the digital wizardry of the tech industry or the brand savviness of FMCG. And, in many ways, this is absolutely true. Claire Bennett joined InterContinental Hotels as their CMO recently after a career working in consumer businesses while Accor’s chief executive of new business, Thibault Viort, was appointed to the hotel company in January having cut his teeth in the tech startup world.

But underlying both trends is a deeper, broader movement within the sector, one built around the prioritisation of experience. Survey after survey finds that the average consumer cares more about authentic experience than ever before in their travel decisions. In the cases outlined above, it’s this experience that’s the key to unlocking value. Truly owning the customer means providing the experience they want in a way that ensures loyalty, while the best brands are those that connect with the consumer, and the route to that connection is through experience.

The challenge is that hotels are not packaged goods. Hotel brands can’t be standardised in a factory, wrapped up and sent to worldwide distributors in a way that ensures that buyers from Australia to Canada will ultimately engage in the same product made to the same specification. The task of creating authentic, customer-centric hotel brands that consumers feel as well as see is at root a question of transforming an idea into a physical reality through the organisation of a thousand different moving parts.

In other words, exactly what hoteliers and hotel industry specialists have been doing for decades. Outside talent is a welcome addition to the mix – of course it is. But that shouldn’t keep us from losing sight of the enduring value of deep industry-specific expertise. What my partner Elliott calls ‘domain knowledge’. To truly deliver on the potential of new brands, business models and digital approaches, ‘classic’ hotel industry experience will still be an absolute necessity.

InterContinental Hotels Group CEO Keith Barr

To illustrate this point, take industry veteran Keith Barr’s appointment as CEO of InterContinental Hotels Group. His promotion came after more than a decade and a half with the company across a variety of roles culminating in a stint as IHG’s chief commercial officer. As such, he was able to create change from the get-go, pushing through a new strategy at pace. Shortly after he started, InterContinental launched a new brand, Avid, to target the mass market and this year the business acquired a majority stake in Regent Hotels & Resorts. Both moves were the product of speedy diagnoses of the shifting sands of market conditions enabled by deep domain knowledge. Jennifer Fox’s recent appointment as Group CEO at Millennium & Copthorne Hotels, after leading Canada-based Fairmont Hotels & Resorts and previously, as COO of IHG in Europe – is another example of experienced industry talent being effectively deployed.

Of course, there are many examples of outside appointments that have catalysed critical transformational change. In the right roles at the right times, mixing up the executive committee’s skill set can provide a much-needed dose of fresh air and drive a company in new, profitable directions. The commercial value of having a diverse array of mindsets and experience is by now well-known.

Alongside this though we should ensure that we don’t overlook what candidates with deep domain knowledge can bring to the table. Transformation and disruption will be the watchwords of the sector for years to come, but to create change, you have to know what you’re changing.

Sam@thembsgroup.co.uk | @TheMBSGroup | The MBS Group