Written by: Dimitris Manikis, President, Europe, Middle East, Eurasia, and Africa (EMEA), Wyndham Hotels & Resorts
If recent years have taught us anything, it is that consumers are seeking for experiences.
I am not just talking about our world of hospitality and travel. Across a huge variety of sectors – from retail and finance to healthcare and leisure – customers are placing more and more value on the experiences being offered to them by independent companies, operators and brands.
A near endless stream of consumer research backs this up. For instance, 80% of consumers are more likely to opt for brands that offer more personalised experiences, while more than six in 10 (61%) are willing to pay at least 5% more if they know they will be getting a good experience.
I could go on, but the point is that the perception of what constitutes value for money, and what triggers people to spend, has changed.
We have witnessed this first-hand across our portfolio of accommodation. Millennial and Gen Z travellers in particular are craving experiences – they are seeking out adventures and activities that will wow their friends and followers on social media platforms.
Experiences on a budget
At the same time, customers want to feel like they're getting good value for their money. Yes, they are willing to pay more for a superior experience, but that experience must still represent a sound financial investment.
It is here where I see a big opportunity for the mid-scale segment in our industry. This segment of the market is perfectly positioned to attract those guests who are looking to cut back a bit on spending, as well as those who want to splash out a little more than usual.
Sure, at the end of the day, price is still king and nobody wants to overpay. This is especially true in today’s economic climate where inflation has made everything more expensive, from eating out to booking excursions to air travel.
However, guests don't just look at the bottom line anymore. They want to feel like they're getting the most bang for their buck. For a leading mid-scale hotel brands owner like us, it's crucial that we go beyond just offering a clean room, a good sleep and some good food.
Indeed, we need to focus on creating a full experience that makes guests excited to come back again and again. Whether that's through providing great amenities, unique activities, or simply outstanding services that leave no stone unturned, we've got to give customers something memorable.
Succeed in doing this, and the mid-scale hotel segment will find itself in an enviable sweet spot in the market.
This is because it can capture demand from two previously disparate strands which are converging. Some who would ordinarily book a more exclusive upscale hotel may be looking to cut back, while those who would opt for an economy option are, in some instances, happy to spend a little bit more for simply a better experience.
For Wyndham Hotels & Resorts, we will continue to focus on everything from location, authenticity and relevance to local culture and destination to provide unique experiences. That includes the smaller details throughout our hotels, where we leverage clever design and relevant nods to local culture through as many touch points as possible, be it the F&B offering across our restaurants or the products and artwork we install in our rooms and public spaces.
I should also mention that travellers are being more selective in how they spend their money from a responsibility and sustainability perspective.
Today’s hotel guests are more environmentally conscious and want to support travel brands and businesses which align with their values. This is a trend which has been accelerated by the covid pandemic, an event which has given rise to a more conscious travelling consumer.
This is why for us our Wyndham Green program and platform is so important. Through this global sustainability programme, we are committed to providing places to stay that are socially, ethically, and environmentally responsible, and support the protection and preservation of the environments, societies, and communities in which we live and work.
Demand for mid-scale looks set to soar in 2024
The ingredients required for mid-scale to thrive all appear to be in place, and the appetite for travel only adds to the potential for this segment of the market to take off this year.
Despite the difficult macroeconomic context, more than eight in 10 consumers are (84%) are prioritising travel within their personal budgets, with factors such as social inclusivity and digital connectivity gaining prominence among younger generations of traveller.
In Europe, airlines are responding in kind and are anticipating record passenger numbers this summer, with European carriers setting aside more than 800 million seats between April and October.
It is extremely encouraging to see the post-pandemic bounce in full swing. This resurgence can help hoteliers, travel companies, hospitality businesses and the entire value chain of suppliers to recover amid rising costs and lost business suffered in recent years.
At Wyndham, we strongly believe that mid-scale hotels will be the future in key growth markets such as Saudi Arabia, the wider Middle East and across Europe.
We see strong growth opportunities across our TRYP by Wyndham brand, which fits the niche of being a stylish -focused, mid-scale offering in the sweet spot we have talked about. Meanwhile, Ramada by Wyndham will continue to be the largest mid-scale brand in our portfolio. Both brands are particularly well-established in the Central and Eastern European region, which we expect to continue to develop in the future. We also recently acquired the Vienna House brand. The epitome of the modern, mid-scale hotel that provides impeccable quality at an inclusive price point, I am excited to see how we develop opportunities to grow here.
Alongside enhancing and evolving our portfolio, we also strive to provide our partners with a competitive edge, whether that’s through our suite of tools, distribution channels or general support – the Wyndham Advantage.
This will help us to retain a strong position in the mid-scale segment as industry peers seek to make moves in this space. Competition will no doubt hot up, and that is a good thing for consumers as it will force us to bring out the best of each other. There are plenty of opportunities for hotel operators and owners to grab a slice of the expanding pie, and we are proud to be at the forefront of what is an extremely exciting mid-scale market.