On the day that the UK’s ex-Prime Minister David Cameron releases his memoirs, and among key subjects under discussion are the part he and his cabinet played in austerity and the Brexit referendum, my mind has turned once again to how we’ve been in a kind of paralysis for a decade. What has happened during that time to our industry. And what will happen over the next decade – and the one beyond.
There’s no denying that the years since the global credit crunch have had a massive influence on the hospitality sector. Of course, in the end many things have returned to their pre-crunch levels. We fly more than ever, emerging nations are finding their travelling feet, younger people are looking for experiences and sustainability rather than luxury, and currencies are more volatile than ever before.
And that’s even before we bring blockchain technology and driverless cars into the equation!
I wonder whether we’ll look back over these eleven or so years with a small amount of shame. Before that time, in many countries globally, you could barely walk past a bank without being offered a business loan or a mortgage at a ridiculously low repayment rate. I myself once went to ask my business advisor about a form of words for a contract, and about what interest rates I should quote; and without seeking either, I came out with a new credit card and a shiny new pen! And of course, what led at least in part to the whole shebang was the availability of 110% mortgages and property bought off-plan ‘that couldn’t fail’ as an investment. It was everywhere, given a kind of respectability because everyone was in on it. How stupid it all seems looking back.
So I won’t be nostalgic about the bad old days!
But one impact this did all have on our own industry was the need to get creative. If guests weren’t staying at hotels, had less money, or were working on zero-commitment contracts or short-term assignments, we had to adapt and move with what people actually needed, rather than assuming they’d come running as before.
It wasn’t just our sector. It affected every part of disposable income. Like, people used to change their car every two years as a matter of course. Leasing, upgrading, changing to latest models and in-car tech. Maybe they just enjoyed the smell of a fresh dashboard. But as the demand was always there, so the creativity stalled accordingly. There was a certain competition within the industry, but no real driver (excuse the pun) for massive change. Except at the gas-guzzling high end or F1, at least. Now you rarely see car transporters on the road. People are making a virtue of making things last longer – by necessity, becoming more sustainable.
(As an aside, I was thrilled to watch the pure-electric VW prototype racing car record the fastest ever time up the hill climb at Goodwood. I was less thrilled by the fumes from the lorry-sized diesel-powered generator it needed to recharge it between races. There’s still work to be done to become fully environmentally-friendly, it seems!)
Likewise in our own hospitality industry there suddenly wasn’t the same amount of disposable cash. Prices had to be lowered or new ways of building and using space better. And the need for new ways gave rise to the sharing and gig economies. I actually believe there will eventually come an end to this, at least to the stratospheric rise. It’s less about ‘sharing’ spare rooms, now, and more about making money, about investment, about Airbnb even building properties to rent via its own platform, and controlling every penny. And many of its listings are gradually morphing into hotels and serviced apartments anyway. Airbnb Plus and Luxe are pretty much identical to luxury hotels – we write about cities worldwide where Airbnb rooms are actually more expensive than either hotels or apartments, simply because of the cost of housing stock in the first place, and the harshness of local regulations controlling them.
On top of which, we’re far more aware now about the different ‘generations’ of consumers, and how they are defined. How they are similar, and how they differ. And how we need to approach their needs as they become the leading consumer groups, so we stay ahead of trends, future-proof our offering and our services.
There’s been a subtle shift in power away from the parents to their Millennial children, who see 9/11 and the change in world travel as something that happened before they could have any influence over it, as something historic. And to Generation Z, those aged under 23, this is about as real to them as the Beatles were to my generation – something that had a massive influence, and which you may choose to find out about, but which actually happened to your parents.
Millennials generally see many things in life as rentable, impermanent. They don’t expect to own property, or have jobs for life – most change jobs every four years and would happily change to a less well-paid or prestigious role if it improved their work-life balance or their sense of self-worth. And that attitude translates to how they travel, what they expect from a home-like, high-tech, sociable, collaborative environment. Meanwhile Gen Z kids are starting to travel, with the health of the planet, gender neutrality and equal opportunities for all at the forefront. Give them another decade and Millennials will make up more than 50% of all workers and Gen Z will be in senior executive jobs. How life will be different, then!
So we are constantly being told that something has to change.
Because it was us, and our parents, who have greedily indulged our every travelling whim and our consumerist instincts, who have messed up the planet for the Gen Z and Alpha kids who may, themselves, find they can’t even get to the places where we unknowingly dropped our plastic and our aviation fumes.
I’ll get off my soapbox now. But I do find all this fascinating.
We’ve not moved on a lot in some ways while we’ve been debating austerity and Brexit, although our own sector has been one taking advantage and becoming stronger. But the next decade will likely see things accelerate in the blink of an eye. We’re poised for new technology – AI, automation, everything digitised – and sustainable practices to run side-by-side. Next year in June we’ll be celebrating the next set of ASAP Serviced Apartment Awards with new categories recognised and in an astonishing new venue. We’re getting geared up here for a lot of change. And we’re going to be talking about it next week at out Member Meeting in London on Monday.
If we stand back and look at it all in context, it seems clear that something’s got to change. Tomorrow, Friday 20th September, sees marches in towns all over the UK against climate change. As an Association and as a sector, I think we are looking to become more sustainable.
Let’s see if we can actually help make it happen!