European travellers would be willing to spend more on hotels in return for unbundled ancillaries, with one in three happy to spend up to EUR50

30 March, 2020

A new online report from Sabre Corporation has urged accommodation owners to improve personalisation and develop a holistic retailing model as its latest research suggests that European travellers would be willing to pay more for specific offers and services they value.

In an online presentation, 'The European traveller's behaviours: Trends, opportunities and challenges of the European hospitality industry', Frank Trampert managing director and chief commercial officer, APAC and EMEA for Sabre Hospitality Solutions, highlights that almost half of European adults would spend more on their hotel stay if they could choose and purchase unbundled offers and services to personalise their stay.

Travellers are looking for specific services and offers during the booking process, according to the research, as highlighted in the following slide.

The report is based on a Feb-2020 online survey of more than 5,000 people across the United Kingdom, France, Russia and Italy that had travelled within the past 24 months to identify emerging trends in travel spend and the booking of hotel rooms and extra products and services.

The research highlights a significant retail opportunity for hotel providers. Among the respondents who had booked hotel accommodation in the past, three in five said they would be likely to spend more if they could choose and pay separately for policies they value, such as flexible cancellation, pet allowance, early check-in / late check-out or insurance.

More than half (53%) claimed they would spend more at their hotel if they could book all components of the travel experience directly with the hotel (e.g. transportation, tickets for events, local guides, bike rental etc.).

An improved guest experience (e.g. butler service, baby-sitting service, daily fresh flowers in room etc.) and personalised offers within the hotel (e.g. yoga classes at the gym, painting classes, a concert in the lobby etc.) are also important for more than two in five respondents (45% and 40%, respectively).

It is encouraging that consumers are willing to spend more on hotel ancillaries, but it is just how much they are willing to spend that will grab hoteliers interest. According to the Sabre research, all respondents were willing to spend on ancillaries, with one third happy to spend up to EUR50, a further 10% would spend up to EUR100, while 4% said they would spend up to EUR150. A healthy additional income for any hotel.

It is clear from the research that travellers want to be offered a unique experience that is not necessarily tied to a room reservation. But what are the preferences in terms of extra spend? Well, as the following chart from the presentation highlights, these vary significantly between the four European countries.

"Technology advancements and fast-changing consumer expectations are continuously shaping the retail experience offered by brands in other industries," highlights Mr Trampert. "Consumers now expect that same level of service from their hotels, which is helping to fuel a transformative retailing revolution in the hospitality industry."

Based on the survey findings, Sabre believes that hoteliers willing to implement a holistic retail model will find "significant opportunities" to generate incremental income, while also "fulfilling or exceeding guest expectations".

It also appears that European travellers are willing to share personal data in return of personalised offers but don't know really what to share. One in four (24%) would be more likely to be loyal to a hotel studying previous booking details to offer even more personalised services - 15% are willing to share their location, while a quarter (26%) are willing to share basic personal data (date of birth, occupation, phone number, etc.) in return for a personalised service. As you would expect, Generation Z respondents ranked more highly across all three - 29%, 18% and 37%, respectively.

"The default idea is that the holistic retailing model is only appropriate for upscale or luxury properties, but in this holistic retailing model hotels are only limited by their imagination," says Mr Trampert. This is backed by the survey responses that show consumers increasingly do consider hotels for non-travel purposes paying to use a local hotel as a service provider to the nearby community. Using a hotel's pool tops the list (39%), ahead of property-based gyms (27%), laundry or cleaning services (23%) and car or bike parking (21%).