The Sharing Economy: How Do I Trust Thee?

By Janet Gerhard Founder, Hospitality Gal, LLC | October 18, 2015

Its most basic definition, trust (noun) is the "firm belief in the reliability, truth, ability, or strength of someone or something." Look at the hotel industry. Inherently, there has to be a high level of trust in the guest-hotel relationship. After all, there aren't many other industries that involve you getting naked to experience their products and services.

But, according to the most recent AP-GfK General Social Survey, American's trust in each other has diminished…potentially irrevocably. Down from 50% in 1972 to only 1/3 of Americans stating that most people can be trusted in 2014. What? How is that possible? Isn't the entire premise of a shared economy built on trust?

Indeed trust is foundational to any brand. Does the product or service do what it says it is supposed to do? Do I trust that if something were to go wrong the brand would correct it? In our industry, most hotel brands garner trust. It's what gives one an advantage over others. More often than not though, they're also seen as indistinguishable and conformist especially within their respective segments. It's rare in our industry for a brand to achieve an emotional connection (dare I say love) with our guests.

Look at J.D. Power's most recent results from its North America Hotel Satisfaction Index. Hotel satisfaction is up across the board, but there is only one true standout in the dozens of brands measured. Reliability may be terrific in many circumstances, but it doesn't scream experiential. And whereas we spent the last two decades striving for uniformity, our customers have changed and their expectations go beyond the amenities we tout.

Travelers today are looking for authentic experiences. According to the latest consumer trends survey by JWT Intelligence, a marketing research firm, 73% of respondents said they would rather spend money on an experience than on a material item. And a desire for authenticity is leading customers to look for experiences that go beyond the cookie cutter. As Ann Mack, director of trendspotting, for JWT Intelligence, tells Travel Market Report, "People are looking for experiences that aren't too perfect. Some may prefer to stay in someone's home, rather than in a chain hotel. Or they're doing things like touring New York's Lower East Side with a graffiti artist – and doing some graffiti."

Which is where the peer-to-peer accommodations are winning. In 2014, 14% of travelers used some form of a home-sharing site to rent a house, condo or something similar (GlobalWebIndex). And Skift's "2014 State of Travel Report" revealed that 35% of travelers using this model are millennials. In the past year, more than one in five travelers under 35 have rented a home, apartment or condo. With Millennials expected to finance half of all travel spending by 2020, we all need to pay rapt attention because they are simply more accustomed to networking with and trusting peers as illustrated by the following 2013 data:

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Coming up in October 2018...

Revenue Management: Getting it Right

Revenue Management has evolved into an indispensable area of hotel operations, chiefly responsible for setting forecasting and pricing strategies. Because the profession is relatively new to the hotel and hospitality industries, a clear-cut definition of what exactly Hotel Revenue Management is has only recently emerged - Selling the Right Room to the Right Client at the Right Moment at the Right Price on the Right Distribution Channel with the best commission efficiency. Though the profession can be summed up in a single sentence, that doesn't mean it's easy. In fact, it's an incredibly complicated and complex endeavor, relying on mountains of data from a wide range of sources that must be analyzed and interpreted in order to formulate concrete pricing strategies. To accomplish this, Revenue Managers rely on an array of sophisticated technology systems and software tools that generate a multitude of reports that are central to effective decision-making. As valuable as these current technology systems are, much of the information that's collected is based on past historical trends and performance. What's new is the coming of big, data-driven, predictive software and analytics, which is likely to be a game-changer for Revenue Managers. The software has the capacity to analyze all the relevant data and predict occupancy levels and room rates, maximizing hotel profitability in the process. Another new trend that some larger hotel chains are embracing is an emphasis on Booking Direct. For Revenue Managers, this is another new channel with its own sales and costs that have to be figured into the mix. The October issue of the Hotel Business Review will address these developments and document how some leading hotels are executing their revenue management strategies.