The market of opportunity: Tracking consumer sentiment and attitudes in order to plot future travel and hospitality trends

In order to provide the PACE Dimensions community with a broad range of in-depth market commentary, trend prediction and analysis, executive interviews are conducted with leaders in the travel and hospitality industry. In this interview, Cris Tarrant, CEO of the insight consultancy BVA BDRC shares what sentiments are most relevant to customer-centric businesses as they work to develop a competitive edge for recovery.

When measuring customer insights is your business, yet most of your clients do not have any current customers, life can get a little bit challenging. Luckily for Cris Tarrant, CEO and founder of consumer and business insight consultancy BVA BDRC, the demand for tracking consumer sentiment and its influence on travel and hospitality behavioural intentions is big. Customer-centric businesses are looking at how they engage and interact with people as the world gradually begins to open up. Looking at what people think and feel, and measuring attitudinal data, is a major work stream for the business, particularly in the UK and the USA.  

Measuring sentiment and getting under the skin of people’s thought processes is important, not least in the wake of fundamental changes around how we live our lives.  Commencing in the UK and since extended to the USA, BVA BDRC launched regular consumer sentiment tracking in the early days of the pandemic, at a time when collecting data to track transactions and opinions as a result of a stay or visit was impossible. 

Critical to Tarrant was shutting out the ‘noise’ of the Covid-19 crisis; “We needed to use all our skills to distinguish signal from the noise; it is potentially dangerous to assume that every piece of information is giving you a true signal.”  There is a need to identify long-term trends that are emerging as a result of the pandemic in terms of what consumers are looking for. In the early days hygiene as an influencing factor was at the top of the charts, but over time it has moved to become a given and an expectation; it isn’t the information that consumers want to know in the long term. “Dare I say it, hygiene has become a hygiene factor” quips Tarrant, “it’s not unimportant, but in itself it doesn’t relate to the experience the consumer is looking for.”

 

Factors affecting consumer behaviour in the hospitality industry: building in how travel behaviour is itself a force for change 

One challenge for anyone trying to track changes and real trends are the transaction spikes triggered by any relaxation of the rules. But these waves of change tend to be short lived and are not an accurate measure of the future. Separating out the more meaningful and permanent changes is tough. As Tarrant puts it, “transactional facts don’t explain underlying thought processes.”

The sentiment research Tarrant is digesting daily highlights that many of the trends here to stay are those that were already in play pre-pandemic. He explains, “The pandemic hasn’t hugely changed the course or direction of anything, but it has massively accelerated a few things, particularly those that are technology enabled. For example, we see consumers demand frictionless, and commonly contactless, transactions so self-serve kiosks and mobile controlled services are now much more expected as the norm.” 

As vaccination programmes power ahead in the western world, living with the virus is something consumers are getting their heads around. The last year and a half has given reason for reflection. “Increasingly our research shows us that people are thinking carefully about how they interact with the world. There is considerably more thought going into the consequences of behaviour. This translates to a society that is more aware of factors such as sustainability, and corporates really need to take this into consideration as we move into a new normal,” outlines Tarrant. He continues, “We have a whole generation greatly shaped by what has happened, and they are re-thinking the world and the environment. It’s a theme that is sticking around for the long term.”

 

Future trends in the travel and hospitality industry: moving from a market of reflection to a market of opportunity 

What to do in order to be successful in the next 12 months is a very hot topic for any business. Tarrant explains, “Businesses have to start to look at how consumer decisions are influenced by their future concerns and considerations, rather than simply casting forwards on historical data.” There are few certainties, other than that consumers now think major disruption is a likely event. As Tarrant outlines, “Consumers are asking for a range of possibilities to be taken into account, and for more flexibility and more adaptability to be built into buying options. We all need to be less rigid in our assumptions.”

Looking ahead, Covid-19 isn’t going away, and its course will be interconnected to everything.  Many people are inherently cautious. Tarrant notes the shifts and changes in attitude to vaccinations in the UK. As they first became available, only around four-in-ten consumers were tracking as wanting it immediately. Within a few months, this desire to have the vaccine sky-rocketed. “Uncertainly rolls into relief,” said Tarrant, “Innovation means trying new things, and the same is true for businesses as it is for consumers. We all have to accept that they may not work.”

There is a new spirit of community and fairness, that Tarrant explains as the ‘equality contract’ between the corporate provider and the customer. Interestingly, it is exposing businesses who were not truly customer-centric. “All businesses claim to be about customers, but in this environment corporates have to do more to show they have truly put the needs of their customers front and centre of what they do. It’s about two-way engagement, and doing it better. Changes have to be more visible, businesses have to put something back into communities, they need to claim a different bit of ground.” There’s a huge market of opportunity for those who get this right.

 

Blurring the lines: changing market definitions and changing needs for travel  

When looking at trends it often suits market commentators to simplify and categorise, but Tarrant is keen to outline that there is significant blurring of the lines going on and one supposed ‘category’ may be stealing market share from another.  Take hotels, villas, serviced apartments, and extended stay businesses these are products on a continuum that to the consumer are not necessarily discrete categories.  Likewise, when assessing competitor sets, businesses need to take into account competing distribution channels and loyalty programmes that may package up a variety of properties or brands that then come into play.

Tarrant says, “We need to think in broader definitions and to envision the industry as all away from home paid-for accommodation. The pandemic has created a ‘work from anywhere’ culture for swathes of society, and this brings huge opportunities for the travel and hospitality industry. Combination trips could become much more mainstream, with the market segments businesses are trying to target being varied and blended. With travel likely to be fraught with restrictions for some time, when people do travel for work or leisure they may either do short and sharp trips away, or go completely the other way and stay somewhere for much longer. Setting up home somewhere else for a period of time is a consideration for the industry. Importantly, trusted brands can provide a real anchor point in how decisions are made.”

 

Brand power: cultivating emotional guest engagement in hotels 

As any travel and hospitality business leader knows, brand engagement and perception is at the core of the guest experience. “Brands provide a mental short cut to ease the cognitive load of making a decision,” says Tarrant. “Consumer understanding of a brand is therefore a fundamental metric to measure. Strong brand value means people will pay more to stay. Over the pandemic strong brands have been able to get stronger, they have been able to engage emotionally with guests despite those people not being able to stay with them. To property owners, this is a major factor as when travel resumes strong brands can bring both value and volume to a property.”

In terms of what this means for the future, Tarrant observes major brands initially being regarded as marques of trust. They can use their standing and scale to offer experiences based on the reassurance purely of it coming from their stable, rather than anything necessarily innovative or different. Looking ahead, Tarrant predicts brands requiring fewer hard criteria for brand compliance as properties embrace being focused on consumer engagement and experiences, rather than a set of physical product criteria. 

He explains, “The market is running out of things to hard-brand. If customers have trust in a brand, then it has capacity to offer new things that match the underlying truths of the brand promise. This affords brands a degree of latitude to do things differently or explore new affiliations. The rules of engagement have changed, and as long as a thread runs through everything, it is possible to retain the brand trust and in fact grow engagement.” 

 

Corporate re-evaluation: putting back into communities and taking sustainability seriously 

“The pandemic has heightened the attention and understanding of what businesses put back into society, against what they take out,” continues Tarrant. “These attributes fundamentally reflect on a brand. Across many business sectors, from financial services to hospitality, sustainability is a heightened trend as we move ahead towards life with Covid-19. Consumers want to know transparently what a business does for the communities around it, and how this translates across a brand and its values.”

Read more: sustainability in the luxury market in this blog post ‘The price of purpose: How luxury brands stay sustainable and valuable’.

And sustainability is not just a buzzword, it is intrinsically related to brand trust and is a sentiment that cannot be ignored. A whole generation has their perception of the world heavily impacted by the pandemic, and as they move into business and future leadership, it is arguably the most powerful shift in the purpose versus profit debate for decades. Where and how travel is possible will be determined by governments and global health bodies, but the type of travel and the places to stay will be determined by consumers and how they choose to spend their money. Understanding what consumers think and feel is essential to plotting future investments and brand developments. As Tarrant sums up, “A crisis is the right moment to shift, and to think about changes.” 

To explore the market dynamics and trends across different sectors of the travel and hospitality industry, PACE Dimensions’ interviews successful business leaders to bring to life the hot topics having an impact on the sector. These interviews highlight the latest insights around the industry, and share a view on the opportunities and issues pertinent to those working or investing in travel and hospitality. The series of executive interviews are just one area in which PACE Dimensions provides thought leadership and advisory services to its clients. For more insights from our executive interview series please click here. 

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