The definition of hospitality as per the Oxford dictionary is:
The friendly and generous reception and entertainment of guests, visitors, or strangers.
While the hospitality industry has been focused on rooms and food & beverage, it has eliminated entertainment, and therein lies the opportunity for a fresh approach.
Entertainment appears to be difficult to manage, with multiple vendors for
multiple locations, selecting the specific entertainment for each venue, managing the payments, and tax paperwork, and then scheduling and confirming events.
Airbnb has a market cap of 73.39B USD, Hilton 37.16B USD, and Marriott 53.66B USD. The market cap is an indication of the trend and what is going on in the market.
Market Capitalization in USD (Billion Dollars)
Uber and other delivery services are also disrupting the restaurant business and Uber at its peak in 2020 had a market capitalization of 80B USD vis-a-vis 110B market capitalization of McDonald’s.
One can compare this to Blockbuster vs Netflix, while Blockbuster was a dominant brand and Netflix was a new entrant. Netflix was operating with an asset-light model and Blockbuster had an asset-heavy model with stores and assets.
Looking back Blockbuster could have done one of the two things, leverage the assets and work on getting bigger locations, and add innovative forms of entertainment to their facilities. Rent a Blockbuster theater room with your friends and so on. Blockbuster could also have adopted an asset-light model by selling all its locations and becoming another Netflix, which is a very difficult strategy to follow.
The Hospitality industry is at the same point on the road right now, either going full service with entertainment and keeping the customer (increasing their on-property spend), which they can do by leveraging their assets or following the strategy of the online players, which is more difficult because hospitality industry has higher CAPEX and hold bigger assets.
The strategy followed by Hospitality
Online players are playing a long-term strategy called low-end disruption, this helps them leverage the Internet and collaborations to disrupt the incumbents. Hospitality is responding with tactical improvements like improving rooms and facilities, surge pricing (as seen after COVID), and adopting some of the strategies used by online players like providing ghost kitchen service (as done by Graduate Hotels), etc.
The current strategies followed by the hospitality industry don’t leverage the inherent strength and capability, which comes with the ownership of assets. Companies like Airbnb understand that this is the next need and have already started programs like “Experiences”. Rather than trying to emulate the new entrants (with sharper technology), the call of the hour is to become full-service with entertainment being an essential part of the offering. The idea is to give the customer an experience they cannot have by ordering food from a food delivery service or living in someone’s house.
Why has entertainment never been leveraged to the fullest by hospitality?
Entertainment has been a part of some of the restaurants and hotels. Most of the hotels in Vegas have entertainment and some innovative restaurant chains like Hill Country and Fig & Olive understand that entertainment has to be a part of hospitality.
Arranging entertainment comes with a cost of:
- Additional staff
- An additional problem with accounting
- Hassle of managing schedules
- Hassle of promoting the entertainment to get more customers
Creative Xchange(CX) and what are they doing?
What do musicians and venue managers say about CX? Click on the picture
Creative Xchange understands that it’s a hassle arranging entertainment and works on arranging live music end to end for the hospitality industry.
Engaging Creative Xchange helps you organize live music events in your location or multiple locations in case of a chain:
- No need for additional staff
- No contractual obligations
- Easy accounting and payment
- All events are promoted by 3 parties CX, musician, and hospitality
- Schedules are managed and in form of a calendar
More than this CX is also looking at advancing the existing tech with live streams, notifications to app users, rating and curation of music, etc.
CX managed service takes it to the next level, they do the curation and handling of music all you have to do is determine a budget for live music and watch your revenue growth and give them feedback so that they can improve the service.
How does hospitality benefit?
Working with insiders in the hospitality industry Creative Xchange has discovered that a hotel or restaurant will make a minimum additional revenue of 10%, with an upside of up to 50%.
Besides this, Creative Xchange also helps promote the venue and in this case Hotels, Resorts, Bars, and Restaurants become more appealing to potential customers and stay appealing to the existing customers.
Creative Xchange is constantly innovating and upgrading its technology to be more interesting to the customers of the hospitality industry.
Over to you
The hotel industry is always changing, especially during a time of crisis. Make sure to future-proof your business and continue attracting new guests by investing in these solutions.
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Related article: Digital Transformation for Hotels
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About Are Morch
Are Morch is a digital transformation coach helping hotels open their digital gateways, reimagine their processes and culture, and transform experiences in a fast-paced world while earning more direct bookings without competing with the OTA!