Just 27% of UK travellers have rebooked the same hotel due to the cost-of-living crisis

Rhea-AI Summary

Agilysys (AGYS) announces the results of the 2023 UK Hospitality Impact Study, revealing that just 27% of UK travelers have rebooked a hotel in the last year. The study also highlights the impact of the cost-of-living crisis on leisure spending and travel patterns, emphasizing the need for hotels to provide a seamless guest experience through technology and personalized service. The report underscores the importance of reducing wait times, tailoring experiences, and implementing strong loyalty programs to increase guest retention and returns. It also emphasizes the role of technology in empowering staff to create unforgettable memories and lasting connections with guests, ultimately boosting economic returns.

Insights

Market Research Analyst

The hospitality industry's pivot towards technological enhancement to improve guest experiences is a strategic response to the changing consumer behavior highlighted in the 2023 UK Hospitality Impact Study. The report's findings that a significant portion of UK travelers have altered their travel plans due to the cost-of-living crisis align with broader economic trends affecting discretionary spending. The correlation between guest retention and profitability, as estimated by Bain & Company, underscores the importance of understanding consumer preferences in a highly competitive market.

From a market research perspective, the data suggesting that improvements in guest experience can lead to substantial increases in profits is a compelling argument for investment in customer relationship management (CRM) systems and other technology that can personalize the guest experience. This trend is reflective of a broader shift in consumer expectations towards personalized services across various industries. Hotels and resorts that can leverage data analytics to tailor guest experiences and streamline operations are likely to see a competitive advantage.

Financial Analyst

Agilysys's focus on the intersection of technology and personalized service as a driver for guest retention is financially significant. The study's indication that a mere 5% increase in guest retention could potentially increase profits by up to 25% presents a strong case for investment in technology that enhances the guest experience. This figure, however, should be viewed in the context of the initial costs of technology implementation and the ongoing expenses related to maintaining and updating such systems.

For investors, the key takeaway would be the potential for long-term revenue growth and margin expansion for companies like Agilysys, which provide these technological solutions. The financial performance of such companies could be positively correlated with the adoption rates of their hospitality software solutions. It is also important to monitor consumer spending trends and economic indicators that influence the hospitality sector's recovery and growth trajectories.

Economist

The study reflects broader economic challenges, such as the cost-of-living crisis, which are influencing consumer spending habits and leisure activities. The reported decrease in leisure spending and travel frequency among UK consumers is indicative of a contraction in the hospitality sector's market size. This contraction could have downstream effects on employment, supply chains and related industries.

From an economic standpoint, the resilience of the hospitality industry through technological investment can be seen as a form of adaptive efficiency. By enhancing loyalty programs and reducing wait times, businesses can potentially mitigate the impact of economic downturns on their operations. The emphasis on personalization and technology adoption may also lead to increased productivity and cost savings in the long run, contributing to the overall economic recovery of the sector.

Leveraging technology to deliver an exceptional experience from booking to check out is key to ensuring guests rebook in the current economic climate.

LONDON, Jan. 18, 2024 /PRNewswire/ --  Agilysys (NASDAQ: AGYS), a leading global provider of hospitality software solutions and services, today announces the results of the 2023 UK Hospitality Impact Study, which revealed that just 27% of UK travellers have rebooked a hotel in the last year. The study, which canvassed the opinion of 1,000 UK consumers who have travelled frequently in the last year, revealed that 85% have made changes to their holiday plans in response to the cost-of-living crisis during the last 12 months.

Almost half (44%) of UK consumers agree their leisure spending has decreased in the last year, with a third (36%) saying it has stayed the same, while two in five (41%) of respondents claimed they had travelled less. Guests also cited taking fewer holidays (38%), taking shorter breaks (18%) or opting for staycations (16%) as personal strategies for combating the cost-of-living crisis.

"Consumer economic concerns have escalated the need for hotels and resorts to provide a seamless guest experience through every touchpoint," said Matthew Prosser, Regional Director UK, Agilysys. "While some tend to think this can be achieved through personal high-touch service alone, research shows the most impactful way to increase guest retention and returns is to combine technology advances with personal and attentive service so that guests are surrounded by choice, convenience, and personalised encounters.

Improving guest retention by as little as 5% has been estimated to increase profits by as much as 25%, according to Bain & Company, so it is essential that hoteliers understand why guests are not returning to their venues so they can address the problem," Prosser added.

When asked what would make them more likely to rebook a venue, respondents who did not rebook the same hotel cited various factors, including:

• 64% said reducing wait times across all touchpoints would make them more likely to rebook.
• 62% said tailoring experiences to their individual preferences would make them more likely to rebook.
• 62% also said a strong loyalty program would make them more likely to rebook.
• 61% said having the flexibility to manage their stay via hotel staff or via technology was important.
• 58% said little surprises, such as having chocolate left on their pillow, would make them more likely to rebook.

For those that did rebook at the same hotel this past year, the reasons they cited were similar:

• 48% said the hotel or resort delivered an exceptional experience end-to-end, from booking to check-in to services to dining and activities to check-out.
• 42% said the staff was friendly and courteous and went "above and beyond" to make my stay memorable.
• 24% said every touchpoint from staff to self-service and mobile was tailored to my preferences.

"The survey emphasises the need to create an exceptional experience for every guest, every chance a hotel gets," Prosser noted. "UK travellers have high expectations when it comes to personalisation and flexibility. Investing in the right technology platform is key to empowering staff to create unforgettable memories and building lasting connections with their guests. Hoteliers then can focus on developing brands that are well-loved by all guests, boosting return on experience in the form of positive reviews, return stays and, ultimately, high economic returns," Prosser added.

Jane Pendlebury, Chief Executive, HOSPA said: "This research has confirmed what we always suspected; hospitality can be a tough industry. Hospitality has often proved to be an early indicator of an economic downturn and these businesses, sadly, are also usually slow to recover as consumer confidence catches up with an improving economy."

Pendlebury added: "However, small tweaks to business models can substantially increase profitability. Loyalty is a major player in the key to success and if that aspect can be enhanced by clever technology, then why not consider the benefits of increased automation?"

Please click here to access the full report: The 2023 UK Hospitality Impact Study.

About Agilysys 

Agilysys exclusively delivers state-of-the-art software solutions and services that help organizations achieve High Return Hospitality™ by maximizing Return on Experience (ROE) through interactions that make 'personal' profitable. Customers around the world use Agilysys Property Management Systems (PMS), Point-of-Sale (POS) solutions and Inventory and Procurement (I&P) systems to consistently delight guests, retain staff and grow margins. Agilysys' 100% hospitality customer base includes branded and independent hotels; multi-amenity resorts; casinos; property, hotel and resort management companies; cruise lines; corporate dining providers; higher education campus dining providers; food service management companies; hospitals; lifestyle communities; senior living facilities; stadiums; and theme parks. www.agilysys.com 

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SOURCE Agilysys

FAQ

What are the results of the 2023 UK Hospitality Impact Study by Agilysys (AGYS)?

The study revealed that only 27% of UK travelers have rebooked a hotel in the last year, and 85% have made changes to their holiday plans due to the cost-of-living crisis.

What are the factors cited by respondents that would make them more likely to rebook a hotel?

Respondents cited reducing wait times, tailoring experiences, implementing strong loyalty programs, and having the flexibility to manage their stay via hotel staff or technology.

What is the importance of technology in improving guest retention according to the study?

The study emphasizes the role of technology in empowering staff to create unforgettable memories and lasting connections with guests, ultimately boosting economic returns.