Hotel Management

6 Hotel Industry Predictions for 2018

Published by in Hotel Management

The past eight years have been pretty good for the hotel industry. As the economy recovered from the housing collapse, the industry posted big growth numbers (growing by a staggering 19.71% in 2011 and 19.47% in 2012).

While the industry has stayed in the black, there’s been a clear declining trend since 2013. Market research website Statista projects that we’ll see a slight contraction of -1.7% in 2018.

This doesn’t mean that the hotel industry is in trouble; more likely, it indicates a leveling off after nearly a decade of explosive growth. But, it’s certainly a sign that things are changing.

And as a hotel manager, you should stay on top of industry trends as much as possible. Hospitality is often at the mercy of outside pressures, as even the slightest whiff of an economic downturn causes consumers to cut back on travel spending as a first resort.

Hotel Industry Predictions for 2018

With that in mind, what should you expect in 2018? We’ve got six hotel industry predictions for you to keep an eye on in the coming year.

1. Millennials will become a bigger part of your clientele

Millennials are a growing share of the U.S. economy, and that’s only going to continue. Not only will millennials make up a larger part of the U.S. workforce in the coming years, but they’ll also take over most of the travel market.

Photo of two women taking a selfie via Pixabay

(via Pixabay)

A major part of the millennial identity is travel and experiencing other cultures, which certainly has ramifications for hotel managers. In a recent interview, Berkshire Hathaway Travel Protection president Dean Sivley told Forbes:

“Millennial travelers are looking for transformational experiences while they travel, even if it’s only during a seven to 14-day trip. Second, Millennials are seeking highly specialized trips. Millennials are increasingly seeking trips that cater to a specific interest such as photography, paddle boarding, cycling or trekking.”

2. Tech will become even more important

These days, it’s not good enough to provide a bed and 12 cable channels in your hotel rooms. Guests want modern technology and associated amenities, and you should provide them. At the same time, don’t invest in technology just so you can say you have cool gadgets. Your gizmos must have a purpose.

Hilton is working on a “Connected Room” for 2018 that will allow loyalty program members to control room lighting, HVAC systems, and even entertainment options through a mobile app.

Be on the lookout for new tech offerings in the industry, and ask yourself how you can adapt it in your hotel. Don’t be afraid to survey guests and ask them what they think about new technologies, and what they wished you offered in your hotel.

3. Green/sustainable hotels will have an increasing advantage

We’ve said it several times before: green and sustainable hospitality is hot right now, and is getting hotter. Today’s travelers are more eco-conscious than ever before and want authentic travel experiences that leave a positive impact on the surrounding area, rather than a negative one.

According to the Center for Responsible Travel, the percentage of consumers willing to pay more for sustainable brands jumped from 55% to 66% between 2014 and 2015. That’s a sizable increase, and shows that there’s money to be made in ensuring your hotel is socially and environmentally responsible.

Photo of hiker via Pixabay

(via Pixabay)

4. International travelers will make up a bigger share of your guests

The U.S. economy is doing well right now, and the global economy is chugging right along. China and Southeast Asia are areas of particularly strong growth, and people from those areas are more willing to travel. The U.S. Travel Association expects the number of people traveling internationally to the United States to jump from 62.8 million in 2011 to 90.3 million by 2020.

Look for opportunities to woo these foreign travelers. Use Google Analytics to see where your visitors are clicking from, and then post targeted ads to lure travelers in that area. Consider inviting a travel blogger who is influential in the market you’re targeting to stay at and review your hotel. Whatever you ultimately choose, start by determining the most realistic and affordable options for your hotel to increase its attractiveness to international travelers.

5. You’ll see more competition from home-sharing companies

If you’ve lost business to sites like Airbnb and HomeAway, don’t expect that trend to die off anytime soon. Airbnb expects to earn as much as $3.5 billion per year by 2020, a 3,400% increase over the company’s profits in 2016.

Screenshot of an Airbnb listing via Airbnb's website

Screenshot of an Airbnb listing

Don’t panic; you can turn these lemons into lemonade if you go the way of hotel chains such as Hyatt, Wyndham, and Accor, which are partnering with home-sharing companies to offer more options for guests and advertise to a wider audience.

Boutique hotels are increasingly using such platforms similarly to the way they use Expedia and Priceline to grab more reservations, and are benefiting from Airbnb’s lower listing fees.

6. Even more hotel management software will hit the market

Since the start of 2017, we’ve added 47 new options to Capterra’s hospitality property management software directory, bringing the total to 349 options as of December 2017.

This is a trend that’s almost certain to continue in 2018, as more software companies seek to meet the growing needs of hospitality managers who want to better organize their hotels.

Tell us your predictions

You’re the one in the trenches, managing hotels and booking guests from all over the globe. We want to hear from you! What trends have you noticed over the past year, and what are you expecting in 2018? Let us know in the comments below.

Looking for Hospitality Property Management software? Check out Capterra's list of the best Hospitality Property Management software solutions.

About the Author

Dan Taylor

Dan Taylor

Dan is a content writer at Capterra, specializing in hotel management, construction and real estate. Outside the office, he enjoys spending time with his family and friends, catching up with the latest offering from HBO or paying a visit to a new place.


Comment by Sunrise Villa on

Excellent Article Dan.
I believe that in 2018 as well, cloud solutions will continue growing over legacy solutions, and as you said there will be more players in, it will get more competitive and hence it might become more affordable :-).

The cloud solutions are preferred as there are no hardware costs, no need to hire an IT support guy, no initial hefty fees. Hence more reasonable and the flexibility to pay as we go is deal breaker for small hoteliers like me. These are few of the reasons why I went with a cloud solution eZee Absolute in early 2017.

Also, I had opted for eZee Reservation along with the PMS and got enrolled with Google hotel ads program. Google Hotel Ads has helped me in getting higher bookings in 2017. As you have mentioned I look forward to virtual reality, wearable technologies, voice assistant and robotics to adapt in 2018 and in coming years.


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